Consorcio Ara Sab De Cv · BMV:ARA
Consorcio Ara Sab De Cv — Investor Presentation (December 2008)
36 slides from Consorcio Ara Sab De Cv's investor presentation, December 2008
Slide 1: December 2008
December 2008 a EMPRESA cons OR C10 é SOCIALMENTE G7~ RESPONSABLE r=. RA
Slide 2: Disclaimer
Disclaimer This presentation contains certain statements about future plans and expectations which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements are generally stated in terms of the Company’s plans, e
Slide 3: Contents
Contents I Investment Highlights II Solid Foundations of the Homebuilding Mexican Indrustry III ARA’s Strong Track Record IV Strong Balance Sheet V Integrated Business Model VI Diversified Product Offerings VII 2005-2007 Units & Revenues Mix VIII ARA’s 3Q 2008 Results 3
Slide 4: I. Investment Highlights
I. Investment Highlights • Focus on Developing High-Quality Houses • Dividends: only publicly traded Mexican and Integrated Communities with homebuilding company to pay significant value added for our customers. dividends. • Strong Record of Profitable Growth: 1996- • One of the Best Return on Asset
Slide 5: II. Solid Foundations of the Homebuilding Mexican Industry
II. Solid Foundations of the Homebuilding Mexican Industry Sustained economic growth and accesible Macro- economic enviroment interest rates Dynamic growth in the 25-50 years old Favorable demographic trends segment of the population Housing as a trigger for social and economic Suitable Public Polic
Slide 6: Employment and Daily Wage
Employment and Daily Wage 222.29 13.00 220.00 209.19 198.50 Average daily wage Workers (millions) 188.89 200.00 12.00 178.62 12.78 180.00 12.51 168.36 12.04 11.00 11.59 158.04 11.28 146.19 10.73 160.00 10.86 10.69 10.00 140.00 Variation (% ) 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 200
Slide 7: Favorable Demographic Trends: Population Projections
Favorable Demographic Trends 2005-2020 Population Projections Figures in millions 2005 Population 103.9 million 80 o más Men Women 70-74 2020 Age groups 60-64 Population 115.8 million 50-54 40-44 25-50 • At the beginning of 30-34 2007 it was estimated 20-24 that roughly 800,000 10-14 new families we
Slide 8: Favorable Demographic Trends
Favorable Demographic Trends 2030 60.0 2030 33.4 2020 55.3 2020 32.1 2019 54.6 2019 31.8 2018 54.0 2018 31.5 2017 53.3 2017 31.2 2016 52.5 2016 30.9 2015 51.7 EAP/ 2015 30.5 30.7% 2014 50.8 2014 30.1 21.5% 2013 50.0 EAP (25-50 years) 2013 29.7 2012 49.1 2012 29.2 2011 48.2 2011 28.8 2010 47.4 2010 2
Slide 9: Housing Needs 2001-2010
Housing Needs 2001-2010 4.3 Accumulated deficit 0.2 0.3 0.3 0.4 0.3 0.4 0.6 0.6 0.6 1. 1 0.7 2000 0.9 0.9 0.8 0.8 0.7 0.5 0.5 0.4 0.3 22001 0 0 1 2002 2002 2003 2003 2004 2004 2005 2005 2006 2 0 0 6 2007 2 0 0 7 2008 2 0 0 8 2009 2 0 0 9 2010 2 0 10 New homes 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.8 0.8 0.8
Slide 10: Subsidies and credits granted January-October 2008
Subsidies and credits granted January-October 2008 New Upgraded Institution Total Homes Units 100% 5% FOVISSSTE INFONAVIT 383,852 4,352 388,204 90% 10% SHF Financial 183,309 61,316 244,625 80% 16% Institutions OTHERS 70% CONAVI 103,509 98,822 202,331 60% 17% CONAVI Others 33,960 158,160 192,120 50%
Slide 11: Mortgage Supply: Mortgage Availability in Mexico
Mortgage Supply Mortgage Availability in Mexico 1,425 1,425 e 1,225 Number of Mortgages (thousands) ’08 – ’12 CAGR: 12.2% 1,200 1,020 800 800 800 700 700 400 ’08 – ’12 CAGR: 7.0% 650 570 500 500 0 2008 2009 2010 2011 2012 2013 INFONAVIT 2/ Other Mortgage Institutions 1/ 1/ CONAVI (Figure in Thousand
Slide 12: INFONAVIT's Mortgage Program 2009-2013
Mortgage Supply INFONAVIT´s Mortgage Program 2009-2013 700 240.0 Number of Mortgages (thousands) 229.5 221.3 Billion Mexican Pesos 1/ 600 199.9 180.0 700 700 166.9 500 650 138.0 570 120.0 500 400 300 60.0 2009 2010 2011 2012 2013 ’09 – ’13 CAGR: 8.8% ’09 – ’13 CAGR: 13.6% 1 / Includes investment thr
Slide 13: III. ARA's Strong Track Record: Revenue Growth
III. ARA’ s Strong Track Record Revenue Growth 10,000.0 9,000.0 Revenues (Billion Mexican Pesos) 8,000.0 CAGR 19.4% 7,000.0 6,000.0 9,257.3 8,786.2 5,000.0 7,312.9 6,445.9 4,000.0 5,659.6 3,000.0 5,108.3 4,488.0 4,940.5 3,786.4 2,000.0 IPO 2,678.4 1,977.8 1,313.4 1,000.0 0.0 1996 1997 1998 1999 2000
Slide 14: ARA's Strong Track Record
ARA´ s Strong Track Record • More than 220,000 housing units built over the last 31 years • Approximately 1,100,000 Mexicans are living in an ARA house 14
Slide 15: Sustained Growth
Sustained Growth Gross Income Net Income 2,717.3 1,387.8 1,368.6 2,597.9 1,229.6 2,113.2 2005 2006 2007 2005 2006 2007 Ebitda Ebitda Margin 2,169.9 23.60 23.40 2,074.1 22.50 1,646.8 2005 2006 2007 2005 2006 2007 • Figures en million pesos as of December 2007 15
Slide 16: IV. Strong Balance Sheet
IV. Strong Balance Sheet Cost Bearing Liabilities /EBITDA Cost Bearing Liabilities /Total Assets 0.90 0.14 0.83 0.13 0.10 0.57 2006 2007 OCT 07-SEP 08 2006 2007 OCT 07-SEP 08 Cost Bearing Liabilities / Equity 0.21 0.21 0.16 2006 2007 OCT 07-SEP 08 16
Slide 17: 3Q 2008's Land Bank
3Q 2008’s Land Bank 3,883 Total: 156, 665 Residential Middle Income 11,260 Affordable Entry Level 75,591 Progresiva 65,931 0 20,000 40,000 60,000 80,000 Units % Units % • 38.5 million m2, enough to build 156,665 master Edo. De México 65,580 41.86% Morelos 2,093 1.34% plan units Quintana Roo 44,179 2
Slide 18: ARA's Largest Housing Development
ARA´ s Largest Housing Development • 4.3 million m2 in Huehuetoca, Estate of Mexico. • The urban characteristics of the land reserve, which may be developed by up to 100% make possible a sustainable, large-scale integrated urban development, with the potential to accommodate up to 26,000 homes. 18
Slide 19: V. Integrated Business Model
V. Integrated Business Model Focused on net income and net margin: Wide range of real estate and housing products Geographical diversification within ten business units Strong operating performance: Vertically integrated Savings through economies of scale Corporate-share-service units Centraliz
Slide 20: ARA's Value Chain
Market Research Land Acquisition Architecture & Urban Design Permits ARA’ s Value Chain Supplying Marketing Construction Sales Titleing Post Sales Services 20
Slide 21: Management Information Systems
Management Information Systems ARA Net (BI Platform) • Strengthens control and follow up of operations • Consolidates data and functions as a key source for decision making • Distributes information to the different operating areas • Improves response time • Implementation of project cycle planning
Slide 22: VI. Diversified Product Offerings
VI. Diversified Product Offerings Construction Land Mortgage Product Type Price Range (MXN) m2 m2 Source $200,000 Progresiva to 35 to 45 50 to 90 $250,000 Affordable $250,001 Entry Level to 45 to 70 60 to 120 $400,000 Banks & Sofoles Middle $400,001 Income to 71 to 160 96 to 200 Banks & $1,000,000 S
Slide 23: RIALTA: New Brand Name for the Residential Segment
RIALTA: New Brand Name for the Residential Segment 23
Slide 24: Paraiso Country Club: The First Development with Golf Course
Paraiso Country Club: The First Development with Golf Course • RIALTA opened its first golf course community Paraiso Country Club. • One of the most ambitious projects with an investment of around 1.70 billion pesos. • Located in Cuernavaca, 50-minute drive South of Mexico City • Town houses and fai
Slide 25: Shopping Malls
Shopping Malls •Centro Las Américas •Centro San •Centro San •Power Center •Fashion Mall •Plaza Oasis Miguel Buenaventura CITY CITY •Cuatitlán Izcalli •Ecatepec •Ecatepec •Ixtapaluca •Tijuana STATE •Edo. De México STATE •Edo. De México •Edo. De México •Edo. De México •Baja California •Centro •Centro
Slide 26: VII. 2005-2007 Units & Revenues Mix
VII. 2005-2007 Units & Revenues Mix UNITS REVENUES (In constant million Mexican Pesos at Dec. 2007). CAGR (05-07)=9.55% CAGR (05-07)=11.83% 0.6% 1.6% 5.4% 6.1% 0.9% 1.3% 100% 100% Residential Others 4.3% 3.2% 5.2% 13.2% Residential 20.7% 25.7% Middle Income 23.1% 80% 12.6% 80% 29.5% Middle Income 7.
Slide 27: Dividends
Dividends ARA is the only publicly traded Mexican homebuilding company to pay dividends. 2005 2006 2007 2008 Shares 1,312,847,496 1,312,847,496 1,312,847,496 1,312,847,496 Dividend´s Amount 1/ 156.1 1338.9 207 204.5 Dividend per Share 2/ 0.1189 1.0198 0.1576 0.1558 Stock price (previous 8.38 11.25 1
Slide 28: Experienced Management Team
Experienced Management Team • On-going commitment from founding shareholders • Significant depth experience in the Mexican housing industry • Strong culture of accountability, performance and innovation • Best practices of corporate governance: 8 out of 11 board members are independent • “Socially R
Slide 29: ARA Foundation 2005-2008
ARA Foundation 2005-2008 • 6,264 houses were built and given to families that earn up to 3.0 minimum wages. • House market prices were equivalent to “economic housing” $188,000 (117vsm) Houses were delivered for $ 8,250 pesos. • Land was donated by federal, state or Jalisco 600 municipal governments
Slide 30: Bottlenecks in the Mexican Housing Industry
Bottlenecks in the Mexican Housing Industry Construction Urban Land Permits Subsides Financing Structure A lack of urban infrastructure and permits For low income constrain the adequate development of cities. people 30
Slide 31: VIII. P&L Statement 3Q 2008
VIII. P&L Statement 3Q 2008 Figures in million pesos Variation 3Q08 3Q07 % $ % Revenues 2,304.9 100.0% 2,298.1 100.0 6.8 0.3 COGS 1,696.9 73.6% 1,625.6 70.7 71.2 4.4 Gross Income 608.1 26.4% 672.5 29.3 -64.4 (9.6) SG&A 174.4 7.6% 173.4 7.5 1.0 0.6 Operating Income 433.7 18.8% 499.1 21.7 -65.4 (13.1)
Slide 32: P&L Statement (LTM)
P & L Statement (LTM) Figures in million pesos Variation Oct 07-Sep 08 % Oct 06-Sep 07 % $ % Revenues 9,720.0 100.0% 9,234.3 100 485.7 5.3 COGS 7,005.0 72.1% 6,508.5 70.5 496.5 7.6 Gross Income 2,715.0 27.9% 2,725.8 29.5 -10.8 (0.4) SG&A 704.8 7.3% 646.3 7.0 58.5 9.1 Operating Income 2,010.1 20.7% 2
Slide 33: 3Q 2008 Results: Product Mix
3Q 2008 Results Product Mix Average Price Gross Units % Revenues % (thousand) Margin Progresiva 243.4 2,094 39.4 509.7 22.1 23.1% Affordable Entry Level 391.2 1,872 35.2 732.4 31.8 26.0% Middle Income 604.5 1,186 22.3 716.9 31.1 27.6% Residential 1,753.8 159 3.0 278.9 12.1 27.5% Land Sales and Rent
Slide 34: Balance Sheet 3T 2008
Balance Sheet 3T 2008 Figures in million pesos 2008 2007 $ % Total Assets 14,770.0 13,444.3 1,325.7 9.9 Assets 13,510.9 12,530.2 980.6 7.8 Cash and Temporary Investment 1,035.6 1,736.2 (700.6) (40.4) Accounts receivable Accounts receivable 6,114.7 4,371.7 1,743.0 39.9 represent 7.7 months Land 4,5
Slide 35: Relative Performance vs Peers 3Q08
Relative Performance vs Peers 3Q08 Acumulated Profit Return on Assets (ROA)-LTM Million pesos 10,000 9,485.4 9,362.9 8,036.4 8% 7,314.0 7,500 6% 9.0% 9.0% 5,000 7.5% 6.9% 4% 5.8% 2,014.4 2,500 2% 0 0% ARA URBI GEO HOMEX SARE ARA HOMEX URBI GEO SARE ARA’s accumulated profit includes 1.907 billion pes
Slide 36: Contacts
Contacts Jaime del Rio Investor Relations Director E-mail: jdelrio@ara.com.mx Phone: (+5255) 5596-8803 Daniela Rodríguez Investor Relations Manager E-mail: drreyes@ara.com.mx Phone: (+5255) 5596-8864 x 4097 Address: CONSORCIO ARA Torre Arcos I. Paseo de Tamarindos 90, 24th floor, Bosques de las Loma
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