5TH ANNUAL ANDEAN CONFERENCE Larraín Vial --- March, 2011

Transcription

1 5TH ANNUAL ANDEAN CONFERENCE 2011 Larraín Vial --- March, 2011

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3 AGENDA Company Review Housing and Construction Industry Business Strategy Financial Highlights

4 HISTORY 1965 Real Estate & Construction Company founded by Eduardo Gras Díaz First housing development 16 houses in Temuco 1967 New partners join the business Socovesa is born 1979 First project outside Temuco in the city of Valdivia 1983 The Company starts activities in Santiago New projects for higher segment customers 1996 Internationalization of the Company Socovesa purchased participation in a project in Buenos Aires 2003 Enters the Engineering and Construction business to third parties Socoicsa 2007 Takeover of Almagro S.A. (Apartments construction company) Socovesa is listed on the Chilean Stock Market 2008 Inmobiliaria Pilares is born 2009 Socoicsa Capital Raise 2010 Corporate Restructure => New Chairman of the Board, new CEOs Socoicsa Subsidiaries => Civil Projects and Industrial Assembly Launch of some real estate projects (Laguna de Cóndores)

5 SOCOVESA: LARGEST REAL ESTATE DEVELOPER IN CHILE LARGEST REAL ESTATE GROUP IN THE COUNTRY 45 years of continuous growth and company development. Over houses built. Successful business model and financial strength: Positive results even in poor economic cycles. Over workers. 88 developments in 16 cities Economies of scale, greater efficiency and flexibility. Housing sales US$ 468 million and total sales US$ 551 million (2010), with a 12.2% compound growth in the last 8 years. EXPERIENCED MANAGEMENT TEAM WITH GREAT BUSINESS KNOWLEDGE 24 years of experience in the industry Clear vision and execution of the business model. Ability to handle multiple projects simultaneously. SIZE, PRESTIGE AND BRAND RECOGNITION AS COMPETITIVE ADVANTAGES Good brand positioning: trustworthy, quality and exceptional post-sale services. GREAT GROWTH POTENTIAL. Land stock is unique, base of future growth for the real estate business. Growth potential through new products, segments, and markets.

6 ORGANIZATIONAL STRUCTURE Real Estate Business Engineering & Construction Business Socovesa Santiago Socoicsa Montajes Socovesa Sur Socoicsa Obras Civiles Almagro Pilares Socovesa Desarrollos Comerciales

7 SALES DISTRIBUTION PER BUSINESS AREA 100% 90% 80% 23% 15% 20% 11% 15% 21% 70% 60% 50% 40% 30% 77% 85% 80% 89% 85% 79% 20% 10% 0% p Engineering & Construction Business Real Estate Business Note: FECU data

8 600, , ,000 40,000 35,000 30,000 25,000 Sales ( Th US$) Profit (Th US$) SALES & PROFIT EVOLUTION 300, , ,000 0 CAGR: 13,9% 20,000 15,000 10,000 5, (PCGA) 2010 (IFRS) CAGR: 86,2% CAGR: 8,0% Sales Prof it

9 PROPERTY STRUCTURE The Company is controlled by Mr. Eduardo Gras, founder of Socovesa, and his family through 13 corporations. Until December 31st, 2010, the executives and employees of the Company maintained 6.4% of the participation Market Cap up to March 15th* = US $ 776,88 millions 11% 12% 3% 2% 1% 6% Gras Family Negrón Family Investment Funds Stock Broker Executives and Employees 52% Pension Funds Mutual Funds Others Retail Insurance Company 13% Total Shares: * Price = $305

10 AGENDA Company Review Housing and Construction Industry Business Strategy Financial Highlights

11 POSITIVE FIGURES ON THE MACROECONOMIC SCENE IMACEC Better figures towards the end of the year 2010 Labor Market Important recovery 10 8 a/a, % 10 8 Octubre Sep Agosto Julio Junio Source: Zahler & Co. 5.7 Empleo a/a, % Abril Mayo 6 Marzo Source: Zahler & Co. IMACEC a/a, % IMACON Construction Business with more activity Interest Rates still low IMACON a/a, % Dic 2010: feb-07 may-07 ago-07 nov-07 feb-08 may-08 ago-08 nov-08 feb-09 may-09 ago-09 nov-09 feb-10 may-10 ago-10 nov-10 feb Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Source: Zahler & Co. Source: ABIF BCU 5 años BCU 10 años

12 IPEC*-SUPPLY AND SALES EVOLUTION (Quarterly Average) * Economic Perception Index Fuente: Collect

13 IPEC EVOLUTION : Would you say that now is a good moment or a bad one to buy an appartment or a house? Fuente: Collect

14 MARKET TRENDS We have seen the recovery of the real estate business after the decrease in sales suffered by the industry due to the financial crisis. The more sensitive segment affected by the crisis, is that of houses and apartments with prices ranging from US$ to US$ This segment is still hit, but we expect its recovery during Housing Sales in Gran Santiago (Units) Months to deplete Stock (Semi anual mobile average ) 3,500 3,000 2,500 2,000 1,500 1, ene/04 abr/04 jul/04 oct/04 ene/05 abr/05 jul/05 oct/05 ene/06 abr/06 jul/06 oct/06 ene/07 abr/07 jul/07 oct/07 ene/08 abr/08 jul/08 oct/08 ene/09 abr/09 jul/09 oct/09 ene/10 abr/10 jul/10 oct/10 ene/11 Houses Apartments Total Source: Cámara Chilena de la Construcción Source: Cámara Chilena de la Construcción Units (semi anual mobile average ) ene/04 abr/04 jul/04 oct/04 ene/05 abr/05 jul/05 oct/05 ene/06 abr/06 jul/06 oct/06 ene/07 abr/07 jul/07 oct/07 ene/08 abr/08 jul/08 oct/08 ene/09 abr/09 jul/09 oct/09 ene/10 abr/10 Months to deplete stock ( semi anual mobile avergae) jul/10 oct/10 ene/11 Houses Apartments Total

15 AGENDA Company Review Housing and Construction Industry Business Strategy Financial Highlights

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17 MULTIFACETED RESIDENTIAL PRODUCTS IN ALL INCOME SEGMENTS MULTIPRODUCT AND MULTIBRAND STRATEGY ABC1 C2 C3 D E HOUSES RTMENTS APAR Santiago South

18 STRONG BRAND RECOGNITION AND SOLID REPUTATION Nationwide, Socovesa is the strongest brand in the Real Estate and Construction Industry

19 BOTH BRANDS, SOCOVESA AND ALMAGRO, HAD A GOOD PERFORMANCE DURING 2010

20 PRO FORMA REAL ESTATE SALES EVOLUTION 600,000 CAGR: 10% 8% 500,000 Sales (Th US$) 400, , , , p Socovesa Almagro Pilares * Includes income from sales of new and used homes, land and others.

21 PRE-SALES EVOLUTION Pre-Sales Evolution January- December of each year 600,000 8% 500,000 17% 400,000 Th US$ 300, , , p Socovesa Almagro Pilares

22 FINISHED HOUSES INVENTORY EVOLUTION Inventory of Finished Houses January 2008 to December , , , , ,000 50, , , , ,000 50,000 0 Th US$ Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Th US$ Socovesa Almagro Pilares

23 PROJECTS UNDER DEVELOPMENT DECEMBER SOCOVESA BUSINESS UNIT NUMBER OF PROJECTS UNITS ON SALE AVERAGE PRICE US$ ON SALE (Th) Santiago US$ Th US$ Temuco US$ Th US$ Valdivia US$ Th US$ TOTAL US$ Th US$ Parque Lauquén Larapinta Ciudad Satélite Alcalá Los Monjes US$ US$ US$ US$ US$ US$ US$

24 PROJECTS UNDER DEVELOPMENT DECEMBER ALMAGRO BUSINESS UNIT NUMBER OF PROJECTS UNITS ON SALE AVERAGE PRICE US$ ON SALE (Th) Almagro US$ Th US$ Blanco Encalada US$ Los Tres Antonios US$ El Comendador US$ Kennedy US$ US$ US$

25 PROJECTS UNDER DEVELOPMENT DECEMBER PILARES BUSINESS UNIT NUMBER OF PROJECTS UNITS ON SALE AVERAGE PRICE US$ ON SALE (Th) Pilares US$ Th US$ Plaza Los Castaños US$ Parque Balmaceda US$ Mirador de Goycolea US$ US$ US$

26 REAL ESTATE SALES DISTRIBUTION DECEMBER 2010 GEOGRAPHIC ZONE PRODUCT TYPE PRICE RANGE North 12% Between ThUS$ 275 to ThUS$ 460 5% More than ThUS$ % Less than ThUS$ 92 20% Center 59% South 29% Apartments 51% Houses 49% Between ThUS$ 183 to ThUS$275 17% Between ThUS$ 92 and ThUS$ % Note: Distribution presented considers the income of the sale of units from the projects currently on execution.

27 STRATEGICALLY LOCATED LAND BANK SUBSIDIARY NUMBER OF SITES AREA (m2) BOOK VALUE (Th US$) Socovesa 69 17,829, ,481 Almagro , ,072 TOTAL 88 18,090, ,553

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29 ENGINEERING AND CONSTRUCTION BUSINESS SALES EVOLUTION 160, ,000 65% 120, ,000 CAGR: 26% Th US$ 80,000 60,000 40,000 20, p

30 PROJECTS UNDER DEVELOPMENT DECEMBER SOCOICSA BUSINESS UNIT PROJECTS UNDER DEVELOPMENT CONTRACT AMOUNT (Th) Socoicsa 18 Th US$ Some of Socoicsa s projects: Líder Collao Termoeléctrica Lautaro Hospital Santa Cruz Hospital de Cañete ThUS$ ThUS$ ThUS$ ThUS$

31 BACKLOG UP TO JANUARY 2011 Th US$ PROJECT MANDATOR DUE DATE Hogar Israel Hogar Israelita de Ancianos ene-11 Cesfam San Felipe S.Salud Aconcagua ene-11 Estadio de Copiapo Instituto Nacional del Deporte ene-11 Santo Tomas de La Serena Corporacion Santo Tomas ene-11 Hospital Santa Cruz S. Salud O'Higgins feb-11 Santo Tomas Rancagua Corporacion Santo Tomas feb-11 Central Lautaro* Comasa S.A. may-11 Sisa Coronel Cencosud mar-11 Escuelas Para Chile Fundación Teleton abr-11 Casa de los Intendentes Gobierno Regional de Magallanes y Antartica Chilena abr-11 Obras Civiles Caldera CMPC Laja CMPC abr-11 Nueva Aldea Clorato Celulosa Arauco Celulosa Arauco may-11 Super bodega Acuenta Cauquenes Saitec may-11 Reemplazo Descortezador Planta Arauco Celulosa Arauco jun-11 Planta Dual SQM SQM Salar S.A jul-11 Hospital Cañete S. Salud Arauco sep-11 Edificio Ombu Inmobiliaria y Constructora OMBU S.A. sep-11 Santo Tomas de Los Angeles Corporacion Santo Tomas oct-11 Centro Distribución LIDER Saitec oct-11 Santiago College Fundación Educacional Santiago College ene-12 Mall Concepción Mall del Concepción S.A. may-12

32 GROWTH STRATEGY Recovery of the middle and low income segments: Consolidation of 3 big projects in Socovesa Santiago Recuperation of Socovesa Valdivia and consolidation of Pilares Portfolio balance towards housing of higher yield Improvement in the margins Real Estate Business Growth and consolidation of Empresas Socovesa in the north of Chile Important base in Antofagasta with the objective of starting new developments in Iquique-- in both cases with the brand Almagro (other subsidiaries may be added in the future) Commercial real estate business: Creation of a new subsidiary: Socovesa Desarrollos Comerciales S.A. The Ombu project is the first office building of this new subsidiary which is developed with a partnership with Inmobiliaria Camargo (50% each) Estimated sale: US$12 millions. Potential development of office building projects in some lots in Ciudad Empresarial m 2 remainder Development of a commercial building -- offices and a hotel in the land of Villa Esmeralda in Antofagasta m 2 saleable of housing and commercial equipment New projects under analysis in prime locations in Santiago

33 GROWTH STRATEGY Engineering and Construction Business Growth and Consolidation of Socoicsa s Sales by: Consolidation of the type of projects and clients: Hospitals Retail Stadiums and other sports infrastructure projects Energy Paper manufacturer Increase the portfolio of projects and clients in the segments where Sococisa does not participate today: Mining Industry Ports Infrastructure Incorporation of EPC Projects in which the engineering is developed inhouse Developing partnerships with strategic enterprises in different areas of the industry that allows Socoicsa to increase its portfolio To promote businesses with other subsidiaries within the Group in order to use and exploit the experience in the engineering and construction business (i.e.: Socoicsa will build the office buildings of the commercial real estate subsidiary).

34 2011 REAL ESTATE LAUNCHES SUBSIDIARY NUMBER OF PROJECTS NUMBER OF UNITS TO DEVELOP AVERAGE PRICE (US$) POTENCIAL SALES (Th US$) Socovesa 35 2,715 USD 104,770 USD 284,450 Almagro 16 1,277 USD 178,599 USD 228,071 Pilares USD 56,161 USD 31,899 TOTAL 55 4,560 USD 119,390 USD 544,420

35 AGENDA Company Review Housing and Construction Industry Business Strategy Financial Highlights

36 FINANCIAL HIGLIGHTS Total Leverage (x times) (IFRS)2010(IFRS) Financial Leverage (x times) (IFRS) 2010 (IFRS) Financial Debt/ EBITDA (x times) (IFRS) 2010 (IFRS) EBITDA / Financial Expenses (x times) (IFRS) 2010 (IFRS) Note: Year : PCGA Accounting; Year 2009 and 2010: IFRS Accounting

37 FINANCIAL HIGLIGHTS DEBT EVOLUTION 700, , , , , ,000 Th USD 640, , , ,000 Th USD 600, , , ,000

38 5TH ANNUAL ANDEAN CONFERENCE 2011 Larraín Vial --- March, 2011