Consorcio Ara Sab De Cv · BMV:ARA
Consorcio Ara Sab De Cv — Investor Presentation (May 2009)
36 slides from Consorcio Ara Sab De Cv's investor presentation, May 2009
Slide 1: Consorcio ARA May 2009
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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 Industry III ARA’ s Strong Track Record IV Diversified Product Offerings V Integrated Business Model VI Strong Balance Sheet VII 2005-2009E Units & Revenues Mix VIII Dividends IX New Accounting Policy X Experienced Man
Slide 4: I. Investment Highlights
I. Investment Highlights • Focus on Developing High-Quality • Strong Operating Performance: Vertically Houses and Integrated Communities with integrated, savings through economies of scale, significant value added for our customers. 5th largest concrete producer in Mexico. • Strong Record of Profita
Slide 5: II. Solid Foundations of the Homebuilding Mexican Industry
II. Solid Foundations of the Homebuilding Mexican Industry Favorable demographic trends Dynamic growth in the 25-50 years old segment population Mortgage credit expansion 2009 national goal: 720,000 mortgages for new homes Strong housing needs 800,000 new families are created every year plus a large
Slide 6: Solid Foundations of the Homebuilding Mexican Industry
Solid Foundations of the Homebuilding Mexican Industry Demographic forces supporting demand • It is estimated that roughly 800,000 new families were forming each year. Strong institutional framework • A robust credit supply structure, not highly dependant from capital market • Strong Federal governm
Slide 7: Favorable Demographic Trends: Population Pyramid
Favorable Demographic Trends Population Pyramid (2009) 65 + 60–64 55–59 50–54 Age (years) 45–49 40–44 35–39 57 30–34 million 25–29 20–24 15–19 10–14 5–9 0–4 6,000 3,000 0 3,000 6,000 Thousand inhabitants Men Women • Mexico´s still young population translates into strong household formation rates for
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 30.1 21.5% 2014 EAP (25-50 years) 2013 50.0 2013 29.7 2012 49.1 2012 29.2 2011 48.2 2011 28.8 2010 47.4 2010 2
Slide 9: Housing Needs
Housing Needs Housing Needs Housing Credits 2001-2008 and Subsidies 2001-2008 12,000,000 10,000,000 8,000,000 Lack of Housing 6,000,000 2008 Lack of Housing 2000 3.2 4,000,000 million Improvement 2,000,000 2.3 New House million 0 • Housing deficit is estimated to range, at least, between 5 and 6 mil
Slide 10: Mortgage Supply
Mortgage Supply Mortgage Availability in Mexico 1,4 2 5 1,2 2 5 1,0 2 0 ’09 – ’13 CAGR: 18.6% Number of Mortgages (thousands) 1,200 800 800 72 0 400 650 700 700 ’09 – ’13 CAGR: 8.8% 500 570 0 2009 2010 2011 2012 2013 INFONAVIT 2/ Other Mortgage Institutions 1/ 1/ CONAVI (Figure in Thousands) Publish
Slide 11: Mortgage Supply: INFONAVIT 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/ 600 199.9 180.0 166.9 700 700 500 650 138.0 570 120.0 500 400 300 60.0 2009 2010 2011 2012 2013 ’09 – ’13 CAGR: 8.8% ’09 – ’13 CAGR: 13.6% 1/ Includes investment thro
Slide 12: III. ARA's Strong Track Record
III. ARA´ s Strong Track Record • More than 230,000 housing units built over the last 31 years • Approximately 1,150,000 Mexicans are living in an ARA house 12
Slide 13: Revenue Growth
ARA’ s Strong Track Record Revenue Growth 10,000.0 1% 10 . 8,000.0 % 19.4 G R Revenues (Million Mexican Pesos) 6,000.0 CA 9,257.3 8,786.2 7,657.9 7,312.9 4,000.0 6,958.7 6,445.9 5,659.6 5,108.3 4,940.5 4,488.0 3,786.4 2,000.0 2,678.4 IPO 1,977.8 1,313.4 0.0 1996 1997 1998 1999 2000 2001 2002 2003 20
Slide 14: 1Q 2009 Land Bank: 167,055 master plan units
1Q 2009’s Land Bank: 167,055 master plan units • 42 million m2, enough to build 167,055 master plan units • Including 3.4 million m2 for other real state business, such as tourism projects, commercial and industrial property as well as residential individual lots. Units % Units % Residential, Edo. D
Slide 15: IV. Diversified Product Offerings
IV. 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 Banks & $400,000 Sofoles Middle $400,001 Income to 71 to 160 96 to 200 Banks & $1,000,000 S
Slide 16: 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 more than 25,500 homes.
Slide 17: Openings 2008
Openings 2008 Master Plan First Stage Housing Development Region State Units Units 17
Slide 18: RIALTA: New Brand Name for the Residential Segment
RIALTA: New Brand Name for the Residential Segment 18
Slide 19: 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 20: Shopping Malls
Shopping Malls Centro San Centro San Centro las Américas Plaza Oasis Plaza Carey Miguel Buenaventura Fashion Mall Power Center Cuautitlán City Ixtapaluca Ecatepec Ecatepec Tijuana Veracruz Izcalli State Edo. México Edo. México Edo. México Edo. México Baja California Veracruz Centro Centro Centro Reg
Slide 21: V. Integrated Business Model: ARA's Value Chain
Market Research Land Acquisition Architecture & Urban Design ARA’ s Value Chain Permits Supplying Marketing Construction Sales Titleing Post Sales Services 21 V. Integrated Business Model
Slide 22: Management Information Systems
Management Information Systems • BUSINESS DEVELOPMENT – Processes, strategic projects and IT integration, oriented to drive the business strategy and achieve its core corporate Procesos objectives Alineación • BUSINESS ARCHITECTURE (IT) – Definition of the best technological Organización Tecnología
Slide 23: VI. Strong Balance Sheet
VI. Strong Balance Sheet Cost Bearing Liabilities /EBITDA Cost Bearing Liabilities /Total Assets 0.16 1.32 0.13 0.10 0.83 0.57 2006 2007 2008 2006 2007 2008 Cost Bearing Liabilities / Equity 0.26 0.21 0.16 2006 2007 2008 23
Slide 24: VII. 2005-2009E Units & Revenues Mix
VII. 2005-2009E Units & Revenues Mix UNITS REVENUES Million pesos as of December 2007 1.3% 1.2% 0.6% 2.0% 2.5% 0.4% 0.3% 100% 100% Residential 5.4% 5.2% 7.1% 7.7% 4.2% Others 11.1% 14.6% 2.6% 5.8% Residential 7.7% 29.9% 26.7% 25.8% Middle Income 19.2% 80% 25.4% 80% 39.2% 35.9% Middle Income 35.1% 60
Slide 25: VIII. Dividends
VIII. Dividends ARA is the only publicly traded Mexican homebuilding company to pay dividends. 2005 2006 2007 2008 Dividend amount 1/ 156.1 1338.9 207.0 204.5 Dividend per Share 2/ 3/ 0.1189 1.0198 0.1576 0.1558 Yield 1.42% 9.06% 0.86% 1.30% 1/ Million pesos 2/ Pesos 3/ Shares: 1,312,847,497 25
Slide 26: IX. New Accounting Policy
IX. New Accounting Policy Based on INIF 14 (equivalent to IFRIC Interpretation 15 Agreements for the Construction of Real Estate issued by the International Accounting Standards Board IASB), ARA moves ahead to recognize revenue only when the completed home is titled to the buyer and NOT using the pe
Slide 27: Consolidated Statements of Income
Consolidated Statements of Income 27
Slide 28: Consolidated Balance Sheet 2008 and 2007
Consolidated Balance Sheet As of December 31, 2008 and 2007 Consolidated balance sheets As of December 31, 2008 and 2007 (reestructured) (In thousands of Mexican pesos of purchasing power of December 31, 2008) 2008 2007 (Reestructured) CURRENT ASSETS Cash and financial investments 1,162,307 1,923,53
Slide 29: Consolidated Balance Sheet 2008 and 2007 (liabilities)
Consolidated Balance Sheet As of December 31, 2008 and 2007 2007 CURRENT LIABILITIES 2008 (Reestructured) Trade accounts payable 276,215 339,848 Notes payable to financial institutions 976,429 336,429 Current portion of capital lease obligations 105,239 109,842 Income tax payable - 8,976 Accrued exp
Slide 30: X. Experienced Management Team
X. Experienced Management Team • Significant depth experience in the Mexican housing industry • “Socially Responsible Company” 2006, 2007, 2008. “Environmentally Responsible Company” and “Premio ADI” Award in 2006 • The ARA Foundation was established in 2005 as a philanthropic community-building org
Slide 31: 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 32: XI. P&L Statement 1Q 2009
XI. P&L Statement 1Q 2009 Million Pesos Variation 1Q09 % 1Q08 % $ % Revenues 1,467.5 100 1,785.7 100 (318.2) (17.8) COGS 1,098.7 74.9 1,330.5 74.5 (231.8) (17.4) Gross Income 368.9 25.1 455.2 25.5 (86.3) (19.0) SG&A 133.2 9.1 172.6 9.7 (39.4) (22.8) Operating Income 235.6 16.1 282.6 15.8 (46.9) (16.
Slide 33: Balance Sheet 1Q 2009
Balance Sheet 1Q 2008 Million Pesos Variation 2009 2008 $ % Total Assets 14,057.7 12,981.6 1,076.1 8.3 Asset 13,222.1 11,942.5 1,279.6 10.7 Accounts receivable Cash and Temporary Investment 1,084.5 1,359.6 (275.2) (20.2) represent 0.3 months Acounts Receivable 148.3 255.3 (107.1) (41.9) Land 5,073.3
Slide 34: Product Mix 1Q 2009 Results
1Q 2009 Results Product Mix Average Price Revenues Gross Units % % (Thousand) (millions) Margin Progresiva 249.9 1,564 45.6 390.8 26.6 22.8% Affordable Entry Level 351.1 832 24.2 292.1 19.9 25.7% Middle Income 586.6 903 26.3 529.7 36.1 25.8% Residential 1,393.10 134 3.9 186.2 12.7 26.7% Land Sales a
Slide 35: P & L Statement (LTM) April08-March09
P & L Statement (LTM) April08-March09 Million Pesos Variation Apr08-Mar09 % Apr07-Mar08 % $ % Revenues 6,640.5 100 7,975.1 100 (1,334.6) (16.7) COGS 4,989.5 75.1 5,846.0 73.3 (856.6) (14.7) Gross Income 1,651.1 24.9 2,129.1 26.7 (478.0) (22.5) SG&A 684.5 10.3 683.9 8.6 0.6 0.1 Operating Income 966.6
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 Arcos Bosques Marco II. Paseo de Tamarindos 90, Torre I. 24th floor, B