1. Localiza Rent a Car S.A.
4Q09 and 2009 Results - R$ millions, USGAAP
Localiza’s flexible
business model
proved to be effective
during the crisis period.
March, 2010 1
2. Managing assets
Pricing Strategy
• Operating costs
Equity • Depreciation
• Financial expenses
• Taxes
• Spread
Assets (cars)
Funding
Debt Profitability comes from Cash to renew the fleet
rental divisions
Flexible and liquid assets.
2
3. Integrated business platform
47,517 cars 22,778 cars
1.9 million clients 584 clients
214 locations 225 employees
2,768 employees
Synergies:
cost reduction
cross selling
bargaining power
8,791 cars 34,519 cars sold
238 locations in 9 countries 78% sold to final consumer
167 locations in Brazil 49 stores
71 locations in South America 588 employees
23 employees
This integrated business platform gives Localiza flexibility and superior performance
As of 12/31/2009 3
4. Consolidated results
2008 2009 Var.
Net revenue 1,855.7 1,856.3 0.0%
EBITDA 504.1 469.7 -6.8%
Net income 127.4 116.3 (R$11.1)
Net margin 6.9% 6.3% -
4Q08 4Q09 Var.
Net revenue 422.5 551.1 +30.4%
EBITDA 125.8 128.9 +2.5%
Net income (loss) (29.8) 38.4 R$68.2
Net margin -7.1% 7.0% -
Resumption growth in net revenues and net income in 4Q09.
4
6. Car rental division
# daily rentals
- 3.3% 3% .5%
9.1% 16. 17
815 835
726 702 658 719 701
711
oct nov dec jan
2009 2010
2008 2009
Localiza is back to high growth.
jan feb mar apr may jun jul aug sep oct nov dec
2005 2006 2007 2008 2009
6
7. Car rental division
Net revenue breakdown – car rental
100% 100% 100% 100% 100%
46% 41% 38% 34% 32%
54% 59% 62% 66% 68%
2005 2006 2007 2008 2009
Off airport Airport
Localiza is already present in all airports
and therefore it has been concentrating its geographical expansion in new markets.
7
8. Car rental division
# of locations
199 214
178 + 15
145 + 21
117
+ 33
+ 28
2005 2006 2007 2008 2009
It doesn’t include franchisees
Even during the crisis period Localiza has expanded its network distribution.
8
9. Car rental division
Locations in Brazil Cities in Brazil
381 269
270
74 79
60 50
94
102
Localiza Unidas Hertz Avis Localiza Unidas Hertz Avis
Localiza network is larger than the second, third and fourth competitors combined.
The main networks are not present in 190 out of the 269 cities in which Localiza operates.
Source: each company website as of 12/31/2009
9
11. Fleet rental division
Net revenue (R$ millions)
%
: 22.9 1 3 .2
%
CAGR 313.4
276.9
228.2
190.2
149.2
76.1 8.4% 82.5
2005 2006 2007 2008 2009 4Q08 4Q09
# of daily rentals (thousand)
10.3%
24.3%
CAGR: 7,099
6,437
5,144
4,188
3,351
1.3%
1,826 1,850
2005 2006 2007 2008 2009 4Q08 4Q09
Fleet rental division has kept a consistent growth even in a crisis scenario.
11
12. Used car sales division
# of sold cars
%
: 22.3 0 .7 %
CAGR
34,281 34,519
30,093
23,174
18,763
%
70.6 11,335
6,646
2005 2006 2007 2008 2009 4Q08 4Q09
% 9%
.0% .9 41.
70 .0% 81
58 4,419 3,577
3,574 3,342 2,521
2,102 2,115 2,429
oct nov dec jan
2008 2009 2009 2010
The used car sales division has presented strong growth since 4Q09.
12
13. Used car sales division
# of stores
%
40.0 49
32 35
26
+3 + 14
13
+6
+ 13
2005 2006 2007 2008 2009
In 2009, the used car sales division expanded its network.
13
14. Used car sales division market share
2009 Brazilian car sales market
Localiza’s share Total market
34,519 0.3% of total car sale market 10,080,267 cars
Cars sold by Localiza in 2009
0.5% of used car sale market 7,071,525 cars
(Seminovos)
1.1% of new car sale market 3,008,742 cars
5.0% of up to 3-year old car market 688,059 cars
Localiza’s used car has a low market share.
Source: Anfavea e Fenabrave 14
15. Depreciation per car – car rental division
Average depreciation per car (R$) - year
2,546.0 2,577.0
939.1
492.3 332.9
2005 2006 2007 2008 2009
Average depreciation per car (R$) - quarter
7,379.3
3,763.3
2,599.7 2,209.2
1,798.6 1,133.4
729.7
418.8
1Q 2Q 3Q 4Q
2008 2009
With 2/3 of fleet renewed, average depreciation per car has already presented a significant drop.
15
16. Average operating fleet age – car rental
(in months)
Average operating fleet age
11.6
9.4 9.6
6.4 7.0 7.3
6.0 5.7
1Q 2Q 3Q 4Q
2008 2009
Average sold fleet age
15.4 16.7 16.3 17.5
12.6 12.6 11.6 12.7
1Q 2Q 3Q 4Q
2008 2009
The average operating fleet age is coming back to pre-crisis level.
16
17. Depreciation per car – fleet rental division
Average depreciation per car (R$) - year
5,083.1
4,371.7
2,981.3
2,383.3 2,395.8
2005 2006 2007 2008 2009
Average depreciation per car (R$) - quarter
11,572.0
6,238.6
4,557.6 3,652.0
3,064.5 2,894.3 2,670.1
2,048.0
1Q 2Q 3Q 4Q
2008 2009
The average depreciation per car has also presented a significant reduction in the fleet rental division.
17
18. Diversification and flexibility of fleet
# of purchased cars by brand
GM FIAT
44% 33%
Others VW
RENAULT
1% 16%
6%
Fleet strategically diversified to obtain lower depreciation.
18
19. Net revenues
Consolidated net revenues
(R$ million)
%
30.8
CAGR: 1,855.7 1,856.3
1,531.7
CAGR: 16.5% 1,145.4
876.9
532.0 634.4
420.4 476.9
234.3 244.7 310.1
212.9
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
GDP 3.4 0.0 0.3 4.3 1.3 2.7 1.1 5.7 2.9 3.7 4.6 5.1 -0.2*
Média 1.9 4.4 -0.2*
From 2004 to 2008 Localiza’s revenues have grown 7x GDP.
* Estimate: Focus Report, Brazilian Central Bank 19
21. Net income
Net income (R$ millions)
190.2 - 8.7%
138.2 127.4 116.3
106.5
.9 %
- 228 38.4
-29.8
2005 2006 2007 2008 2009 4Q08 4Q09
Reconciliation of EBITDA x Net Income 2008 2009 Var. R$ 4Q08 4Q09 Var. R$
EBITDA - Car rental and fleet rental 449.6 459.1 9.5 122.7 127.7 5.0
EBITDA - Used car sales 54.5 10.6 (43.9) 3.1 1.2 (1.9)
EBITDA Consolidated 504.1 469.7 (34.4) 125.8 128.9 3.1
Depreciation of revenue-earning vehicles (178.5) (172.3) 6.2 (125.3) (40.2) 85.1
Other depreciation (18.3) (21.0) (2.7) (5.0) (5.1) (0.1)
Financial expenses, net (133.3) (112.9) 20.4 (44.5) (24.5) 20.0
Income tax and social contribution (46.6) (47.2) (0.6) 19.2 (20.7) (39.9)
Net income 127.4 116.3 (11.1) (29.8) 38.4 68.2
Main impact in results: decrease of used car sales EBITDA.
21
22. Free cash flow - FCF
FCF before growth (R$ millions)
43.6% 295.4 In 2009 Localiza
205.7
presented strong
cash generation.
2008 2009
Free cash flow - R$ millions 2008 2009
EBITDA 504.1 469.7
Used car sales revenues (983.2) (924.5)
Cost of used car sales 874.5 855.1
EBITDA without used car sales revenues and costs 395.4 400.3
(-) Income tax and social contribution – current (52.8) (49.0)
Working capital variation (44.8) (11.5)
Cash provided before capex 297.8 339.8
Used car sales revenues 983.2 924.5
Capex of car – renewal (1,035.4) (963.1)
Change in amounts payable to car suppliers (capex) - 15.2
Net capex for renewal (52.2) (23.4)
Capex - Property and equipment, net (39.9) (21.0)
Free cash flow before growth 205.7 295.4
Capex of car – growth (299.9) (241.1)
Change in amounts payable to car suppliers (capex) (188.9) 241.1
Free cash flow (283.1) 295.4
22
23. Net debt
Net debt (R$ millions)
-14.0
%
1,254.5
1,078.6
12/31/2008 12/31/2009
Net debt was reduced by R$175.9 million.
23
24. Debt – profile and costs
Debt (principal) on 12/31/09 – R$ millions
423.1
225.0 239.6
205.4 211.8
160.0
2009
2010 2011 2012 2013 2014 2015
459.6
Cash
*Stand by refers to R$100 MM limit with BNDES, with term of draw until sept/2010
Stand by*
Average effective
Gross debt - principal 2010 2011 2012 2013 2014 2015 Total
cost
Working Capital CDI + 1.25%pa - 204.5 58.0 73.0 45.0 60.0 440.5
Debentures - 1st Issuance 110.8% of CDI 222.2 - - - - - 222.2
Debentures - 2nd Issuance CDI + 0.59%pa - - 66.6 66.6 66.8 - 200.0
Commercial Papers 108.9% of CDI 200.0 - - - - - 200.0
Debentures - 1st Issuance, Total
CDI +2.02%pa - - 100.0 100.0 100.0 100.0 400.0
Fleet
BNDES TJLP + 3.80%pa 0.9 0.9 0.4 - - - 2.2
Total gross debt - principal - 423.1 205.4 225.0 239.6 211.8 160.0 1,464.9
Cash and cash equivalents (459.6) - - - - - (459.6)
Total net debt - principal - (36.5) 205.4 225.0 239.6 211.8 160.0 1,005.3
Debt profile was extended.
24
25. Debt - ratios
(R$ millions)
1,907.8
1,752.6
1,492.9
1,247.7 1,254.5
1,078.6
900.2
765.1
535.8 440.4
2005 2006 2007 2008 2009
Net debt Fleet value
BALANCE AT THE END OF THE PERIOD 2005 2006 2007 2008 2009
Net debt / Fleet value (USGAAP) 60% 36% 51% 72% 57%
Net debt / EBITDA (USGAAP) 1.9x 1.4x 1.9x 2.5x 2.3x
Net debt / EBITDA (BRGAAP) 1.5x 1.0x 1.3x 1.8x 1.7x
Net debt / Equity (USGAAP) 1.4x 0.7x 1.3x 2.0x 1.5x
Significant improvement in debt ratios.
25
26. Rewards and recognitions
Corporate governance:
Elected twice The Best Company In Corporate Governance (Capital Aberto Magazine)
Elected “The Most Shareholder-friendly” company (Institutional Investor Magazine)
Corporate reputation:
Elected twice The Best CEO of a small-cap (Institutional Investor Magazine)
Best of Transportation Sector (Exame Magazine)
One of The 100 Companies with Best Reputation in the Country (Consumidor Moderno Magazine)
Internationalization:
28th Most Internationalized Brazilian Company (Ranking Fundação Dom Cabral)
Franchising:
Franchisor of the Year (Brazilian Franchising Association)
Best Franchising of Brazil (Pequenas Empresas, Grandes Negócios Magazine)
Human resources:
One of The 50 Most Admired RHs (Gestão & RH Magazine)
RENT3:
34th Most Valuable Brand in Brazil (IstoÉ Dinheiro Magazine)
2nd Highest Profitability since the IPO (Ranking elaborated by Valor Newspaper)
26
27. RENT3 performance
Average daily volume (R$ millions) Average daily volume (# shares)
11.9
7%
41. 27.1% 824.2
8.4 648.7
2008 2009 2008 2009
Strong growth of traded volumes.
27
28. Referrals
TOP PICK from Itaú for March
Weekly portfolio from SLW broker
Citi – “Still Our Favorite Brazilian Transportation Name”
Goldman Sachs – BRIC’s EM Nifty 50
Santander – Shifting Into High Gear
BNP Paribas – Porfolio for March
Link Broker – Porfolio for March
Valor Econômico – Portfolio for March
RENT3 is well recommended.
28
29. Indexes
MSCI Brazil Index
Goldman Sachs GSSTEM50 – BRIC’s EM Nifty 50
Van Eck ETF - Market Vectors Brazil Small-Cap Index
IBrX 100
ITAG
IGC
RENT3 is present in various indexes.
29
