2. Important Notice
• We make forward-looking statements that are subject to risks and
uncertainties. These statements are based on the beliefs and assumptions of
our management, and on information currently available to us. Forward-looking
statements include statements regarding our intent, belief or current
expectations or that of our directors or executive officers.
• Forward-looking statements also include information concerning our possible
or assumed future results of operations, as well as statements preceded by,
followed by, or that include the words ''believes,'' ''may,'' ''will,'' ''continues,''
''expects,'‘ ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' or similar expressions.
• Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions because they relate to future events and
therefore depend on circumstances that may or may not occur. Our future
results and shareholder values may differ materially from those expressed in or
suggested by these forward-looking statements. Many of the factors that will
determine these results and values are beyond our ability to control or predict.
2
5. Management present
Wilson Amaral, CEO
Duilio Calciolari, CFO
João Audi, Managing Director, AlphaVille
Antonio Carlos Ferreira, Managing Director, Gafisa
Carlos Trostli, CEO
Paulo Mazzali, CFO
5
6. Our Company
Launches R$ million
2004-2008 CAGR: 87%
1954 Gafisa founded
4.195
2004 GP takes control of the Company
2.236
1.005
652
200
2005 Equity Int’l (Sam Zell) invests
2004 2005 2006 2007 2008
IPO
2006
AlphaVille Acquisition Sales R$ million
2004-2008 CAGR: 78%
Follow-on Equity Offering 2.578
2007
NYSE listing
1.627
995
60% control of Tenda
2008 450
Equity Int’l increases stake by 5% 254
2004 2005 2006 2007 2008
6
8. Brazil has a housing deficit of 7.2 million homes
HOUSING DEFICIT PER REGION IN 2007
In Thousands of Homes
North
997.2
Northeast
2,459.1
Brazil
446.6
Total Deficit: 7.2 million Homes
550.6
1,223.5 1,235.6
Inadequate
20.9% Housing
17.6%
8.8%
3.6 3.6
Central-West Southeast Cohabitation
360.0 10.3% 2,667.5
123.6 7.9%
1,265.2
1,402.3
Relative
236.4
South Deficit 12.8%
726.0
257.8
468.2
Brazil has a population of 190 million,
Source: IBGE, FGV 2007, Ernst & Young 83% urban, 43% below 24 years.
8
9. Increased purchasing power will generate greater
demand for new housing
New Housing Formation
Monthly Income (Million Families) New Families per year (in thousands)
2007 2030
Up to R$ 1,000 31.7 53% 29.1 31% (113)
From R$ 1,000 to R$ 2,000 15.5 26% 27.6 29% 526
From R$ 2,000 to R$ 4,000 8.4 14% 21.8 23% 582
From R$ 4,000 to R$ 8,000 3.3 5% 11 12% 334
From R$ 8,000 to R$ 16,000 1.1 2% 4.3 5% 139
From R$ 16,000 to R$ 32,000 0.3 0% 1.3 1% 44
More than R$ 32,000 0 0% 0.3 0% 13
TOTAL 60.3 100% 95.4 100% 1.526
Source: Brazilian Geography and Statistics Institute (IBGE), FGV, Ernst & Young.
9
10. Brazil’s housing industry provides ample
opportunity for growth and consolidation
• Real estate market highly fragmented, with no
dominant player
• Biggest markets in Brazil are São Paulo and
Rio de Janeiro. Gafisa is one of the largest
players, yet its estimated market share is only
~ 5% in São Paulo and ~ 6% in Rio de Janeiro
• Untapped potential, especially in markets
where the housing deficit is high
1
10
11. Despite strong mortgage market growth recently,
Brazil has low mortgage penetration
Mortgages to GDP Households (in thousands)
69%
58% New New Homes % Financed
Total
Households Financed by Over New
Households
Formed SBPE and FGTS Households
2002 48,035 1,530 83 5%
2003 49,710 1,675 104 6%
2004 51,752 2,042 112 5%
2005 53,114 1,362 101 7%
13%
11% 2006 54,610 1,496 151 10%
2% 2007 56,343 1,733 166 10%
US Spain Chile M exico Braz il
Source: JP Morgan, 2008 Sources: IBGE, BC. Does not include financing of existing homes.
11
12. Over the last few years, housing credit has
increased – with better rates and longer terms
Interest Rates vs. Housing Credit Evolution of Financing Terms
Dec, 2008 – Interest rate=12.75% Average term in running days – Housing Credit
30% 65,000
60,000
25% 3,000
55,000
2,500
20% 50,000
45,000 2,000
15%
40,000 1,500
10% 35,000
1,000
30,000
5%
25,000 500
0% 20,000 0
Apr-06
Aug-06
Apr-08
Dec-02
Sep-03
Feb-04
Jun-04
Nov-04
Dec-05
Sep-07
Oct-08
May-03
Mar-05
May-07
Jul-05
Jan-07
Jan-08
Jul-08
Jan-09
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Interest Rate (Selic) Real Estate Credit (R$MM)
Note: Housing credit available through December
Source: Banco Central do Brasil Source: Febraban
12
13. Consumer mortgage financing has grown
exponentially
Housing Credit Growth (R$ bn) Savings Accounts and FGTS Balances
CAGR (2003-2008): 43% Over R$400 billion available (R$ bn)
41.4
425
385
11.3
336
308
25.2 287 210
269
198
6.9 186
16.3 161 173
154
10.4 30.1
7
6 6.9 18.3 215
5.5 187
126 135 150
3.8 3.9 9.3 115
2.2 3 4.9
2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008
Housing Credit using resources from FGTS
Housing Credit using resources from Savings Accounts Saving Accounts Balance FGTS Balance
Sources: ABECIP, Banco Central do Brasil, CEF and FGV.
13
14. Recent government measures are
expected to stimulate growth
• Since September 2008, the Brazilian government has made nearly
$400 bn available to Brazilian businesses and consumers through the
following vehicles: Value
Treasury funds lent to BNDES for onlending 100.0
Reduction of reserve requirements 99.2
Relaxation of bank capital requirements/ reg. changes 81.2
Supply of dollar hedge via dollar-swaps 33.3
Incremental farm lending 19.0
Cash foreign exchange sales to market 14.3
BNDES capital increase from National Treasury 15.0
FX made available thru repurchase auctions 7.4
Auctions of dollars for trade finance 6.0
Permission for small banks to use FGC funds for lending 5.4
Banco do Brasil new lines for small and medium companies 5.0
Income-tax schedule changes 4.9
Banco do Brasil new credit lines to automaker banks 4.0
Reduction of tax on financial operations 2.5
Reduction of industrial production tax on cars 1.0
Total 398.2
Sources: Brazilian Central Bank, Gazeta Mercantil and Goldman Sachs
14
15. Specific measures for homebuilders have
already been announced
Oct Additional R$10 billion to finance up to 20% of each development, at
2008 rates of TR+10% to TR+11%, within the limits of the 65% of savings
balances which must be used for real estate financing.
Dec FGTS Oversight Board announced new financing conditions:
2008
• Builders: R$3 billion of FGTS to finance up to 80% of each
development at TR+7% per annum for properties up to
R$130,000, and TR+9%
Mar New Housing Package expected. Goal is to build 500,000 to 1
2009 million new houses by 2010, focusing on the low-income segment.
15
16. Government to announce additional
measures to support the sector
Government is expected to announce soon a plan to build up to 1 million new
houses through 2010; special attention given to low income segment.
• I
Improved mortgage t
d t terms t i
to increase attractiveness:
tt ti
– Lower costs related to insurance and origination
– Use of Price Table, abandoning Constant Amortization System
– 30-year maturity with loan to values close to 100%.
• Creation of Guarantee Fund to allow for a bridge of mortgage payments
in case of unemployment
• Extend the Housing Financing System (SFH) eligibility requirements to
allow unit values to R$500,000 from R$350,000
• Direct use of monthly worker’s compensation fund (FGTS) contribution
to pay part of home buyer’s total installment
• Subsidies will be provided in inverse proportion to income level
16
18. Key competitive advantages
Large land
National bank to Well-
reach & sustain developed
strong local future and
partnerships growth recognized
Professional
brands
management
Reputation
with a significant
pipeline of talent for financial
discipline
The strongest
100% focused on platform to sustain
the residential leadership in the
market in all 18
rapidly growing lower
income income segments
segments
18
19. Gafisa is present in all income segments
Families by Income Level* Gafisa Brands
15,2%
High and Mid-High 9.1 million
Income Level families 15.1%
Above R$4,807
Middle Income Level 31.5 million
Between R$1,115 and R$4,807 families 52.3%
Low Income Level
Up to R$1,115
19.7 million 32.6%
families
Total: 60.3 million families
Source: FGV/CPS, Feb. 2009
* Income percentage in six Brazilian metropolitan areas
19
20. Comprehensive portfolio of products
• Gafisa & Tenda’s Offerings:
Affordable Entry
High-income Mid-high Middle Income Level
Nice Terraças Alto Lapa Parque Barueri Tenda Clube Vivaldi
Manaus – AM São Paulo – SP Barueri – SP São Paulo - SP
Average unit price: R$ Average unit price: R$ Average unit price: Average unit price: R$
800,000 399,000 R$ 224,000 70,000+
20
21. Professional management and established
organizational structure
• Management with extensive experience in the sector
• Senior management with knowledge of diverse industries
• Reputation for on-time and on-budget execution
• Dedicated teams for each business line / market
• Standardized procedures with modern management system and tools
21
22. Our Product Lines:
Focused Management for Each Market
60% owned by Gafisa 60% owned by Gafisa
Mid, Mid High and High
Mid High and High Low Affordable Entry Level
Vertical Horizontal / Vertical
Horizontal (lots)
Metropolitan areas Metropolitan Areas and
Outside Metropolitan
Outskirts
Financing: Banks Areas
Financing: CEF and Banks
Unique Projects Financing: Direct
Standardized Projects
Unique Projects
Unit Prices: > R$200K Unit Prices: R$50K –
Unit prices: R$70K – R$200K
Sales through own sales R$500K
force and brokers Sales in stores through
Sales through own sales own sales force - and
force and brokers brokers
22
23. National reach and strong local
partnerships
• The partnership strategy has many benefits:
Access to local
Local market Local culture government, Access to business Reduce barriers Local operational
knowledge knowledge reducing time of opportunities to entry support
approvals
23
24. A diversified, high quality landbank, with
53% acquired through swaps
• 199 different sites throughout the country
Potential Units Potential Units Future Sales Swap
Company
(100%) (% Gafisa) R$ billion %
GAFISA 22,412 19,050 7.68 40
ALPHAVILLE 32,122 16,432 3.03 97
TENDA 70,116 67,578 6.34 20
Total 124,650 103,060 17.05 53
The size of the land bank gives us the ability to develop it selectively,
according to market demand
24
25. The Gafisa brand is a household name
• Gafisa Is a Top of Mind, leading brand in our largest markets
Spontaneous Stimulated recall
1st GAFISA 22% 1st GAFISA 55%
2nd
d - 13% 2nd - 32%
3rd - 10% 3rd - 29%
• Our campaigns aim to reinforce Gafisa’s key brand attributes (honest,
reliable, traditional, innovative and creative).
Countdown to 1,000
Institutional Campaign Completed Buildings Safe Purchase Guide
25
26. A reputation for financial discipline
• Strong relationship with the most important banks
• Sarbanes-Oxley Article 404 compliance as of December 2008
• SAP management information systems
• Credit Ratings:
– Moody’s: international Ba2 and local A1.br
– Fitch: A-(bra) local
– Standard & Poors: BrA local
26
27. Tenda is an anchor of the company’s
future growth strategy
• Tenda is a platform for leadership in the affordable entry level
segment:
– One of the largest land banks
– A business model with regional offices that enable strong local relationships with
CEF’s (Caixa)
– Unique sales model based on retail stores that provides a range of products
within a region
– Well trained own sales force focused exclusively on our products
• Gafisa owns 60% of Tenda shares and began consolidating 100% of
this Company’s results as of October 21, 2008.
27
29. Gafisa’s Products
• Gafisa’s products are priced at more than R$ 200,000 and targeted to families
with monthly income above R$ 4,800 (High and Mid-High Income Levels)
Condominiums Residential Buildings Planned Neighborhoods
Breakdown of families by income level
(millions of families)
2007 2030
R$ 4,000 to R$ 8,000 3.3 11
Within 23 years, R$ 8,000 to R$ 16,000 1.1 4.3
12 million new R$ 16,000 to R$ 32,000 0.3 1.3
families > R$ 32,000 0 0.3
TOTAL 4.7 16.9
Source: Brazilian
Source: Brazilia Geographic and
Source: Brazilian Geographic and Statistics Institute (“
h d (“IBGE”) and FGV
”) and
d
29
30. Gafisa s Strategy
Products targeted to Mid, Mid-High
National presence and High segments and adapted to Standardized processes
regional needs
Strength of Gafisa brand Focus on sales
30
31. National Presence
• Developments in progress / Gafisa Landbank (Potential Sales Value)
La
Land Bank by Region
22 / R$1.770MM So ut h
12 / R$380MM Cent er-
West 3%
No rt h 3%
5%
São
P a ulo 44%
No rt heast
59 / R$5,080MM R io de
03 / R$220MM
23% J a ne iro 16%
So ut heast M ina s
4%
66% G e ra is
E s pirit o
S a nt o 2%
06 / R$230MM
Land Bank by Segment
• Up to R$ 200 thousand: 5%
• R$ 200 to R$ 350 thousand: 28%
• R$ 350 to 700 thousand: 50%
• R$ 700 to 1,200 thousand: 12%
• R$ > 1,200 thousand: 5%
31
32. Geographic Expansion
Importance of Local Partnerships
• Expertise in local culture and market
• Lowers barriers to entry
• Business prospecting enhanced
• Speeds approval processes
Assignments in a typical development
GAFISA PARTNER
• Due diligence analysis on • Business prospection
Number of Cities where Gafisa Launched • Licenses and permits
land acquisitions
31 • Product and project • Customized customer
development services
• Marketing campaign
23 • Sales management
• Administrative and
financial management
16
9
• Centralization of activities
5
• Cost reduction (offices only in SP and RJ)
• Business model easy to replicate
2004 2005 2006 2007 2008
32
33. Sales Force
• Gafisa Vendas (Gafisas’s own sales Team):
– Operating in SP, RJ and BA
– 123 brokers
– Dedicated teams for inventory, launches and online sales
– Gafisa Sales participation in 2008: Gafisa Vendas
SP RJ sells only
35.0%
43.0%
Gafisa’s
products,
resulting in
42% Inventory 45% Inventory
Efficient Sale
29% Launches 41% Launches of Inventory
• External Sales Force:
– Partnerships with Brokerage Companies
Sales force of
• 7 in SP approximately
• 6 in RJ 8,000 brokers
• 26 in New Markets
33
34. Standardized Products
• Average unit price between R$ 200,000 and R$ 350,000
• Standardized projects for apartments with 2 and 3 bedrooms
• Cost optimization
• Reduction of construction cycle
• Faster approval and launching
34
35. Unique projects
• Units price above R$ 350,000
• Customer-driven feasibility studies
E l i
Exclusive support/follow-up during
/f ll d i regarding different income levels
the construction works, allowing for
customized blueprints and finishings • Projects designed according to features
considered important by customers
(research)
35
36. Current Scenario
Customers visiting sales stand several times
Consumer / Buyer Decision-making period has increased from 20 to 70
More Conservative days
Customers concerned about reliable delivery:
- customer research of real estate companies has increased
•Tradition: 54 years history.
•Reliability: 961 developments delivered.
•Credibility: 10 million m² built.
36
37. New Launches
• Assumptions for new launches:
– Construction financing secured
– Pre-launch period up to 90 days to confirm demand
– Launch only if 40% of units are likely to be sold during first month
Examples:
Chácara Santana Brink Alphaville Barra da Tijuca
Launching Date: Launching Date: Launching Date:
11/15/2008 11/30/2008 12/06/2008
Pre-marketing: Pre-marketing: Pre-marketing:
75 days 70 days 20 days
68% 75% 90%
Sold in the Sold in the Sold in the
1st month 1st month 1st month
37
38. Case Study
Porto Velho
Population: 300,000 inhabitants
Local economy stimulated due to the
construction of 2 hydroelectric power plants
PSV: R$100 million
Gafisa s Share: 80%
Units: 280 in 4 towers
Local market research:
September ’07
Local partner definition:
November ’07
Land Acquisition:
April ’08
Launch:
September ’08
Sales:
76%
38
41. Strategic and Geographic
Positioning
Master Developer
National Presence • Residential Lots in Gated Communities coupled
with local Commercial Facilities
Leadership Position
• No national competitor in the segment
Track Record
• The concept is well established throughout the
country, with a visible presence in 38 Alphavilles in
26 different cities and 16 states
Brand Recognition
• AlphaVille is one of the best known brands in
the country and the most desired in the markets
where it is established
AlphaVille – Brand Recognition Prizes
Master Top de
Superbrands FIABCI Pop List
Imobiliário Marketing
2007 2005 2005 2005 2005
41
42. Project Approval Process
Long-term perspective and complex approval process are
significant entry barriers to the segment
DUE DILIGENCE / PARTNER/ LAND PROJECT MARKETING
CONSTRUCTION OCCUPATION
STRATEGIC ANALYSIS SWAP CONTRACT APPROVAL & SALES
3 years 2 years
PROJECT Analysis of legal and environmental aspects, location, market and
ANALYSIS feasibility studies
LAND SWAP Contract with land owner
CONTRACT
APPROVAL Development of master plan to be submitted to local authorities for
PROCESS analysis, registration and approval. This process takes an average of
three years and deals with federal and local authorities
MKT & SALES On average, 80% of the units are sold in the launching week
CONSTRUCTION AlphaVille manages the construction, contracting third parties through a
centralized procurement. Average development takes 2 years
OCCUPATION Customers are invited to begin construction of their houses under specific
regulations developed for an organized occupation
42
43. Recent Growth
Steady launch growth at a CAGR of 46% since 2006
Launches (R$ Millions) Sales (R$ Millions)
32% 312 26% 300
11
237 238
114% 70%
6
140
111
3
2006 2007 2008 2006 2007 2008
43
44. Sales Velocity Q4/08
(R$ Millions)
December´ s Launches Barra-RJ Mossoró-RN Nova Esplanada-SP
Launching dat e Dec. 13t h Dec. 5t h Dec. 17t h
Launched PSV 59,6 12,1 29,4
So ld PSV 53,6 12,0 21,0
Sales / PSV - unt il December 31st 90% 99% 71%
Launched Unit s 249 119 472
Average Tick et (R$) 713.721 101.454 207.931
Average R$/ m² 1.002 260 300
The average sales of these 3 launches reached 86% above the
PSV, in spite of adverse market conditions.
Note: Total PSV amounts to R$172 million, part belonging to Alphaville and part to Gafisa Segment
44
45. Land Bank reaches R$3 billion
Targeting cities that have unique commercial potential
PSV potential (R$ millions) Total Dec 08
January 1st 2008 2,929 Areas VGV
Launches 2008 PSV (313) São Paulo State 978
Additions 2008 314 Brasília 668
Revision/Change in PSV 102 Porto Alegre - (2 projects) 207
Land Bank position in december 2008 3,032 Florianópolis - (2 projects) 177
Land Bank AUSA sustains 9.7* years
* Based on 2008 launching figures Among Other 18 areas 1.001
Prospective Pipe Line of 4.4 billion Total 3.032
Land Bank of almost 10 years based on 2008 launch level; 98% of
them based in land swaps
45
46. Project Design
A typical Alphaville project
LEISURE
RESIDENTIAL AREAS
AREAS
RESIDENTIAL
AREAS
Highly sustainable business model
Land swaps: no cash outlay
ALPHAVILLE
COMMERCIAL
CLUB
COMMERCIAL
AREAS
AREAS RESIDENTIAL Infrastructure development after the launch
GOLF AREAS
BUILDING
AREAS
COURSE Outstanding Sales Velocity
AlphaVille Graciosa (Curitiba, Paraná) Use of Alphaville Foundation to help the social
integration of neighborhood
46
47. Case Study
AlphaVille Jacuhy – Vitória - ES
CONTRACT DATE: 2002
LAUNCH DATE: December 2007
LOCATION: Vitória - ES
PSV R$: 102.9 Million
PRICE R$/m²: 275 (launch price)
UNITS: 775
SALEABLE AREA: 475,000 m²
SALES SPEED: 90% upon launch
SALES MIX: 40% Short Term
47
48. Case Study
Jacuhy – Vitória - ES
Construction started on Jan/08
48
49. Case Study
Jacuhy – Vitória - ES
R$ Millions
90% sold on launching week Receivables securitization after completion
Minimum Cash Exposure
Construction – 24 months
49
52. Gafisa’s Solid Financial Position
• R$606 million cash in addition to R$300 million in securitizable receivables.
• R$3.4 billion in construction finance lines of credit provided by all of the major banks:
– R$1,699 million signed contracts
– R$751 million contracts in process
– R$951 million additional availability
• 73% of our debt is long term
4Q08 3Q08 4Q07
Total Debt 1,552 1,377 695
Cash and Cash Equivalents 606 790 517
Obligation to Investors 300 300 0
Net Debt & Obligation to Investors 1,246 887 178
Shareholder’s Equity 1,612 1,689 1,485
Total Capitalization 3,164 3,066 2,180
Net Debt & Obligation to Investors / Equity 77.3% 52.5% 12.0%
52
53. 20
40
60
80
0
100
200
300
400
500
600
0
Gafisa Feb-06
Cyrela Mar-06
Apr-06
Rossi Jun-06
MRV Jul-06
Aug-06
PDG
Sep-06
Agra Oct-06
Tenda Nov-06
Dec-06
Inpar
Sector
Feb-07
Tecnisa Mar-07
Apr-07
Lopes
May-07
CCDI Jun-07
Volume (R$ MM)
Abyara Jul-07
Aug-07
Klabin
Oct-07
Even Nov-07
Dec-07
Brascan
Avg. daily volume from Feb 01 of 2008 - Feb 28 of 2009 (R$ MM)
Price
Jan-08
Invest Tur Feb-08
Rodobens Mar-08
May-08
EZ Tec
Jun-08
Trisul Jul-08
Aug-08
Highest Trading Volume in Real Estate
São Carlos
Sep-08
JHSF Oct-08
Market Cap (R$ MM )
NYSE Listing: Gafisa is the only Brazilian real estate company listed in the United States.
CR2 Nov-08
Jan-09
0
750
0
10
20
30
40
1,500
2,250
3,000
53
55. Key competitive advantages
• A presence in all income segments
• Professional management and a pipeline of talent
• National reach & strong local relationships
• Large land bank to sustain future growth
• Well-developed and recognized brands
• Reputation for financial discipline
• The strongest platform to sustain leadership in the rapidly growing lower
income market segments
55
56. Strategy
• Continue diversification (Product & Geography)
• Maintain financial discipline and ‘preferred borrower’
status Superior Revenue
Growth
• Benefit from expertise, positioning and key relationships in
the fast-growing affordable housing segment
• Leverage reputation for quality and brand strength in new
and existing markets
High ROE & Capital
• Maximize sales of broad product portfolio through
complimentary sales channels Appreciation
• Focus on high-return opportunities
• Maintain land bank of 2-3 years
56
57. Navigating the current market environment
• Ongoing Measures:
– Fortified product and geographic portfolio with acquisition of Tenda
– Implemented conservative approach to launch strategy
– Renewed focus on cash flow and returns
– Strengthening of financial relationships
– Launched consumer educational campaign “Safe Purchases”
Poised to respond quickly to new potential
financing opportunities aimed at spurring
continued growth in the sector
57
58. Outlook
– Given the current economic situation and the continued disruption in the credit markets,
visibility on overall growth in the industry is limited.
– Despite these factors, we are optimistic that government actions including the additional R$3
billion in FGTS funds designated for financing within the construction industry, the stimulus
program aimed at building one million houses by 2010, and the lowering of the Selic interest
rate by the Central Bank will result in the increased availability of funds to support the growth of
homebuilding.
– However, without all of the elements currently in place, we are not providing guidance in the
short term.
– In 2009, we will continue to be very selective with our launches, conserve cash and increase
our sales efforts towards our inventory.
58
