Localiza Rent a Car S.A.
                                                                  May 2008




Confins airport br...
Agenda




1. Integrated business platform   page 3

2. Growth opportunities           page 7

3. Competitive advantages  ...
Integrated business platform


                       35,686 cars                          17,790 cars
                   ...
Strategy by division




                  Increase market leadership maintaining high return
Core Businesses




        ...
Breakdown per division


           Revenues                                                EBITDA                        ...
Agenda




1. Integrated business platform   page 3

2. Growth opportunities           page 7

3. Competitive advantages  ...
Growth opportunities


                    GDP elasticity


Consolidation                              Air traffic




   ...
Growth opportunities: GDP


               Revenues accumulated growth rate – rentals



                                 ...
Growth opportunities: Air traffic




                                                    Number of travelers has
        ...
Growth opportunities: Credit cards




     # of credit cards (million)
                                                  ...
Growth opportunities: Replacement market




    Replacement is a growing market in Brazil

        Brazil has 9.2 million...
Growth opportunities: Fleet outsourcing




     Large potential market with low penetration due to lack of culture
     L...
Growth opportunities: Consolidation


                                      US Market share 2007
                         ...
Growth opportunities: Consolidation


                                                        Brazil Market 2007
         ...
Growth opportunities: airport x off-airport markets



                                        Car rental division


     ...
Localiza is increasing its market share

                    2005                   2006
2004                             ...
Agenda




1. Integrated business platform   page 3

2. Growth opportunities           page 7

3. Competitive advantages  ...
Competitive advantages




                                        Pricing
 Gains of
                                     ...
Competitive Advantages: Largest distribution



 Nationwide
 Nationwide
  presence
  presence




 Strategic
 Strategic
 l...
Competitive Advantages: Largest distribution



         Agencies in Brazil                                  Cities in Bra...
Curitiba - PR




                21
Natal - RN




             22
Belo Horizonte - MG




                      23
Competitive advantages: Rating

                 Moody’s debt rating as of August, 2007 (Global scale)
                Baa...
Competitive advantages: Car resale inventory as a buffer




32 stores in Brazil



                                      ...
Campinas - SP




                26
Goiânia - GO




               27
Rio de Janeiro / Barra - RJ




                              28
Competitive Advantages: Strong ties with the automakers


                               Purchased cars
                  ...
Agenda




1. Integrated business platform   page 3

2. Growth opportunities           page 7

3. Competitive advantages  ...
Growth with profitability

                                                 Revenue evolution

                           ...
Rental volume evolution




        Car rental – daily rentals                                       Fleet rental – averag...
1Q08 highlights

                 Average rented fleet                                                          Net revenu...
EBITDA margin per division

                                                                   1Q08 EBITDA breakdown


   ...
Investment in fleet

                                                                                                     ...
Net debt x fleet value


                                                                          1,492.9       1,465.1
 ...
Free cash flow - FCF
                                                             Free cash flow before growth
           ...
EVA
                                                                                                114.3
                ...
RENT3: Performance

       Average daily trade volume (R$ million)                                                        ...
Disclaimer


             The material presented is a presentation of general background information about LOCALIZA as of ...
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ConferêNciase Non Deal Roadshow Maio2008(InglêS)

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ConferêNciase Non Deal Roadshow Maio2008(InglêS)

  1. 1. Localiza Rent a Car S.A. May 2008 Confins airport branch – Belo Horizonte 24h reservation 0800 979 2000 www.localiza.com 1
  2. 2. Agenda 1. Integrated business platform page 3 2. Growth opportunities page 7 3. Competitive advantages page 18 4. Financials page 31 2
  3. 3. Integrated business platform 35,686 cars 17,790 cars 1.3 million clients 456 clients 178 agencies 2,186 employees 177 employees Synergies: cost reduction cross selling bargaining power 30,093 cars sold 7,602 cars 84% sold to final 134 agencies in Brazil consumer 203 agencies in 9 countries 32 points of sale 25 employees 416 employees This integrated business platform gives Localiza superior performance Data-base: 12/31/2007 3
  4. 4. Strategy by division Increase market leadership maintaining high return Core Businesses Add value to the brand by expanding the network in Brazil and South America Create value taking advantage of the integrated business platform synergies Support Add value to the businesses, reducing depreciation as a competitive advantage 4
  5. 5. Breakdown per division Revenues EBITDA Profit Franchising Franchising Franchising 1% Car rental 1% 1% 11% Fleet rental 29% 36% 49% Used car Car rental sales 63% 39% Fleet rental 55% 15% Revenues EBITDA Profit Car rental 29% 49% 54% Fleet rental 15% 39% 45% Used car sales 55% 11% * Franchising 1% 1% 1% Total 100% 100% 100% *Profit (loss) alocated in the rental divisions 5
  6. 6. Agenda 1. Integrated business platform page 3 2. Growth opportunities page 7 3. Competitive advantages page 18 4. Financials page 31 6
  7. 7. Growth opportunities GDP elasticity Consolidation Air traffic Credit cards Fleet outsourcing Replacement 7
  8. 8. Growth opportunities: GDP Revenues accumulated growth rate – rentals Localiza 5.9x Sector 2.4x GDP 2004 2005 2006 2007 Localiza’s average annual revenue growth was 5.9x the average annual GDP. The Brazilian car rental market grew 2.4x the GDP in the same period. Source: Bacen, Abla and Localiza 8
  9. 9. Growth opportunities: Air traffic Number of travelers has Air traffic evolution increased 10.2% CAGR (Millions of passengers per year) Localiza has strong leadership 111 102 96 in airports 83 % 10.2 CAGR: + Localiza’s airport agencies has been grown in average 2 times faster than the number of 2004 2005 2006 2007 passengers deplaned Air traffic is an important driver for car rental industry Source: Infraero 9
  10. 10. Growth opportunities: Credit cards # of credit cards (million) 93 million credit cards 93 31 million credit cards holders 79 68 53 % 20.6 36.2% of car rental revenues were CAGR: + paid through credit card in 2007 2004 2005 2006 2007 Having a credit card is a requirement to rent a car in Brazil and in USA Source: Abecs 10
  11. 11. Growth opportunities: Replacement market Replacement is a growing market in Brazil Brazil has 9.2 million insured cars The accident rate is 16.5% / year The potential market is 10.6 million of daily rentals (2.5 x the car rental division in 2006) Localiza is very well positioned to capture this growth due to its geographic footprint Source: Fenaseg and Denatran 11
  12. 12. Growth opportunities: Fleet outsourcing Large potential market with low penetration due to lack of culture Large potential market with low penetration due to lack of culture Focus of corporations on their core businesses Focus of corporations on their core businesses Fixed asset reduction by companies (increase their asset turnover) Fixed asset reduction by companies (increase their asset turnover) Renting a fleet can be more economic than owning it Renting a fleet can be more economic than owning it Approximately 25% of the corporate fleet (500,000e cars) is rented 12
  13. 13. Growth opportunities: Consolidation US Market share 2007 US$ 21.54 B Number of agencies Revenues Others DTG Others 3,7% 7,5% 26,6% Enterprise Avis Budget Enterprise 40,5% 22,4% 47,6% DTG 3,6% Avis Budget Hertz Hertz 12,2% 18,8% 17,0% USA: 4 companies hold 96% of market share (Auto Rental News) Source: Auto Rental News 13
  14. 14. Growth opportunities: Consolidation Brazil Market 2007 (# of agencies) Airport segment Off-airport segment agencies agencies Others*** Localiza* Hertz** 29 232 64 Unidas** Localiza* Avis** 53 83 33 Avis** 49 Unidas** Hertz** 30 31 1901 Source: *Localiza as of 03/31/2008; **Each company website, 05/15/2008; *** Assuming that each local player has one agency The main car rental networks are concentrated in airport market Off-airport market is fragmented among almost 2,000 small local car rental companies 14
  15. 15. Growth opportunities: airport x off-airport markets Car rental division Car rental revenues breakdown Car rental revenues growth 100% 100% 100% 100% 2006 2007 1Q08 38% 36% 41% 46% Airports 16.0% 13.8% 19.4% 64% 62% 59% 54% Off-airport 46.7% 27.8% 41.3% 2005 2006 2007 1Q08 Off-airports Airports The geographical expansion strategy has reduced the share of airport market in car rental revenues 15
  16. 16. Localiza is increasing its market share 2005 2006 2004 2007 Car rental market share 22.4% 25.8% 29.4% 33.0% Feet rental market share 10.2% 13.2% 11.4% 13.0% Consolidated Localiza’s market share 17.9% 15.5% 22.1% 20.5% Source: ABLA and Company, based on revenues 16
  17. 17. Agenda 1. Integrated business platform page 3 2. Growth opportunities page 7 3. Competitive advantages page 18 4. Financials page 31 17
  18. 18. Competitive advantages Pricing Gains of strategy scale Integrated platform Geographical distribution Lower interest rate Know-how Strong brand State of the art IT Lower depreciation Car resale inventory as a buffer Higher Market share competitiveness increase 18
  19. 19. Competitive Advantages: Largest distribution Nationwide Nationwide presence presence Strategic Strategic locations locations International International footprint footprint 387 agencies in 9 countries 19
  20. 20. Competitive Advantages: Largest distribution Agencies in Brazil Cities in Brazil 315 223 260 173 82 52 315 223 83 59 95 62 Localiza Hertz Unidas Avis Localiza Hertz Unidas Avis Localiza network is larger than the second, the third and the fourth competitors combined in number of agencies and cities. Source: Each company website as of May 15, 2008 20
  21. 21. Curitiba - PR 21
  22. 22. Natal - RN 22
  23. 23. Belo Horizonte - MG 23
  24. 24. Competitive advantages: Rating Moody’s debt rating as of August, 2007 (Global scale) Baa2 Ba1 Ba2 Ba3 Ba3 B1 B1 Enterprise Localiza Avis Budget Hertz Europcar Dollar Vanguard Thrifty Standard & Poors’ corporate rating as of May, 2007 (Local Currency) Localiza Rent a Car S.A. brAA-/ Stable /-- Gerdau S.A. brAAA/ Negative /-- CPFL Energia S.A brAA-/ Stable /-- Klabin S.A. brAA-/ Stable /-- Banco Citibank S.A. brAA+/ Positive /brA-1 Banco Votorantim S.A. brAA+/ Stable /brA-1 Unibanco Asset Management brAA+/ Positive /brA-1 Localiza has one the best rating among its international peers 24
  25. 25. Competitive advantages: Car resale inventory as a buffer 32 stores in Brazil Rented cars Buffer Buffer Buffer Buffer 1 6 1 1 1 6 2 1 2 6 3 1 5 1 0 1 5 2 0 2 5 2 7 1 2 1 7 2 2 2 7 1 6 1 1 1 6 2 1 2 6 1 6 1 1 1 6 2 1 2 6 3 1 5 1 0 1 5 2 0 2 5 3 0 5 1 0 1 5 2 0 2 5 3 0 4 9 1 4 1 9 2 4 2 9 3 8 1 3 1 8 2 3 2 8 3 8 1 3 1 8 2 3 2 8 2 7 1 2 1 7 2 2 2 7 2 7 1 2 1 7 2 2 2 7 Jan Feb Marc Apr Mai Jun Jul Aug Sep Oct Nov Dec Car resale inventory is used as a buffer during peaks of demand 25
  26. 26. Campinas - SP 26
  27. 27. Goiânia - GO 27
  28. 28. Rio de Janeiro / Barra - RJ 28
  29. 29. Competitive Advantages: Strong ties with the automakers Purchased cars 38,050 33,520 26,100 22,180 2004 2005 2006 2007 In 2007 Localiza purchased more than R$1.2 billion in cars Localiza and its Franchisees represented in 2007 3.2% of GM internal car sales 1.8% of FIAT internal car sales 1.6% of the Brazilian internal car sales Localiza has better conditions due to its large scale 29
  30. 30. Agenda 1. Integrated business platform page 3 2. Growth opportunities page 7 3. Competitive advantages page 18 4. Financials page 31 30
  31. 31. Growth with profitability Revenue evolution .3% : 30 R AG C 853 .5% CAGR: 16 590 448 303 251 191 679 151 555 89 429 90 85 331 86 286 281 270 221 145 160 127 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 EBITDA evolution 6% 27. 403 : GR CA 311 278 23.9% CAGR: 198 154 150 152 134 85 62 42 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 GDP % 3.4 0.0 0.3 4.3 1.3 2.7 1.1 5.7 2.9 3.7 5.4 1.9 Average 4.4 31
  32. 32. Rental volume evolution Car rental – daily rentals Fleet rental – average rented fleet (quantity thousands) (quantity) 1,820.9 % 15,720 1 8. 0 % 8 .2 13,325 3 1,317.4 11,174 1,085.2 8,477 8,345 761.0 2% % 35.7 +17. 537.7 R: + R: CAG CAG 1Q04 1Q05 1Q06 1Q07 1Q08 1Q04 1Q05 1Q06 1Q07 1Q08 32
  33. 33. 1Q08 highlights Average rented fleet Net revenue 16.6% 27.8% 470.5 35,817 403.6 28,022 R$ million 15 ,7 2 0 Quantty 18.0% 2 6 8 .9 10.1% 2 4 4 .2 13 ,3 2 5 2 0 ,0 9 7 36.7% 26.5% 14 ,6 9 7 2 0 1.6 15 9 .4 1Q07 1Q08 1Q07 1Q08 Car rental Rental and Franchising Fleet rental Used car sales EBITDA Net income R$ million R$ million 23.2% 17.8% 120.9 53.5 98.1 45.4 1Q07 1Q08 1Q07 1Q08 33
  34. 34. EBITDA margin per division 1Q08 EBITDA breakdown Seminovos 16.5% Car rental e Franchising Fleet rental 51.9% 31.6% Divisions 2004 2005 2006 2007 1Q07 1Q08 Car Rental and Franchising 39.3% 45.0% 41.9% 44.5% 46.6% 44.8% Fleet Rental 63.4% 62.3% 69.1% 68.7% 65.4% 62.0% Used car sales – Seminovos 12.0% 13.2% 4.6% 5.4% 5.7% 7.4% Rental divisions, including Used car sales 2004 2005 2006 2007 1Q07 1Q08 Car Rental and Franchising + Seminovos/ car rental revenue 54.6% 63.5% 47.6% 53.7% 58.5% 57.3% Fleet Rental + Seminovos/ fleet rental revenue 67.6% 67.4% 72.3% 70.9% 67.7% 66.1% 34
  35. 35. Investment in fleet Net investment * Quantity (R$ million) 7,957 207.7 10,346 340.0 241.8 7,342 38,050 6,467 1,060.9 190.1 33,520 930.3 (44.3) 30,093 853.2 (2,079) 26,105 (180.2) 23,174 690.0 22,182 (7,123) 590.3 18,763 493.1 15,715 448.2 303.0 9,292 8,870 224.6268.9 244.2 7,213 64.0 1,747 2004 2005 2006 2007 1Q07 1Q08 2004 2005 2006 2007 1Q07 1Q08 * Includes accessories Purchased Sold End of period fleet ** % 32.2 1% : +23. 53,476 CAGR 51,239 46,003 1.6% 17,790 38,763 35,965 % 18,604 14,630 2 2 4. 5 % 2 4. 4 28,699 14,938 % 11,762 2 8. 3 9,168 % % 3 7. 0 31,373 13.7 35,686 % 3 0. 2 32,635 % 24,103 2 3. 4 23,825 19,531 2004 2005 2006 2007 1Q07 1Q08 Car rental Fleet rental 35 ** Deductions for losses from theft and accidents are deducted from the fleet at end of period.
  36. 36. Net debt x fleet value 1,492.9 1,465.1 1,247.7 900.2 838.6 767.9 612.2 539.3 443.1 281.3 2004 2005 2006 2007 1Q08 Net debt Fleet value END OF PERIOD BALANCE 2004 2005 2006 2007 1Q08 Net debt / fleet 46% 60% 36% 51% 57% Net debt / EBITDA (USGAAP) 1.4x 1.9x 1.4x 1.9x 1.7x* Net debt / EBITDA (BRGAAP) 1.1x 1.5x 1.0x 1.4x 1.2x* Net debt / market cap 35% 30% 10% 20% 25% * Annualized 36
  37. 37. Free cash flow - FCF Free cash flow before growth 4 5 0 340.2 1 3 % 3 5 0 9.8p.p. 199.7 222.0 2 5 0 8 % (1) 3.7p.p. 1 5 0 32.7 30.1 3 % 0.9p.p. 118.2 0.6p.p. 1.2p.p. 5 0 1Q08 -8.8 5 - 0 2 - % 2004 2005 2006 2007 Free cash flow before growth Real increase in new car prices (1) Impact on cash flow due to the extraordinary increase in the vehicle supplier caption. 1Q08 Free cash flow 2004 2005 2006 2007 EBITDA after taxes 156.6 245.2 268.6 340.1 100.6 Working capital variation ‐ (increase) decrease (15.7) (49.7) 217.2 (37.7) (117.7) Cash provided before capex 140.9 195.5 485.8 302.4 (17.1) Capex of vehicle ‐ renovation (349.3) (496.0) (643.3) (839.0) (224.6) Cost of used car sales 248.7 361.2 530.4 760.0 236.3 (100.6) (134.8) (112.9) (79.0) 11.7 Net capex – for renovation (10.2) (28.0) (32.7) (23.7) (3.4) Capex – Property and equipment, net 30.1 32.7 340.2 199.7 (8.8) Free cash flow before growth (143.8) (194.0) (287.0) (221.9) ‐ Capex of vehicle – growth (113.7) (161.3) 53.2 (22.2) (8.8) Free cash flow (21.9) (25.5) 222.0 (51.0) (89.3) Variation on vehicle supplier account The negative FCF of R$ 8.8 million was impacted by the reduction of R$ 89.3 million in vehicle supplier account, compensated by the reduction of R$ 44.3 million in car-capex, what would result in a FCF of R$ 36.2 million 37
  38. 38. EVA 114.3 1 2 0 3 0% 24.6% 24.8% 76.2 8 0 18.7% 21.3% 55.5 16.9% 2 0% 15.7% 35.4 11.0% 39.2 25.9 11.2% 4 0 1 0% 5.6% 5.2% 2.7% 2.8% 0% 2004 2005 2006 2007 1Q07 1Q08 EVA ROIC Nominal WACC 2004 2005 2006 2007 1Q07 1Q08 Variation ROIC 24.6% 24.8% 18.7% 21.3% 5.2% 5.6% 0.4p.p. Nominal WACC 16.9% 15.7% 11.0% 11.2% 2.8%. 2.7% ‐0.1p.p. Cost of debt (2) 11.6% 13.6% 10.9% 8.4% 8.8% 8.2% ‐0.6p.p. Cost of equity 20.0% 16.2% 11.0% 11.5% 11.6% 11.2% ‐0.4p.p. Spread (ROIC‐WACC) – p.p. 7.7 9.1 7.7 10.1 2.4 2.9 0.5 R$ thousand (1) 507,362 606,327 986,232 1,137,460 Capital investment – 1,095,637 1,246,730 151,093 13.8% 39,198 55,530 76,201 114,334 EVA – R$ thousand 25,862 35,362 9,500 16,332 20,671 38,133 EVA increase calculation – R$ thousand (1) For EVA® calculus, it was used the average capital of the period. (2) Cost of debt after taxes 38
  39. 39. RENT3: Performance Average daily trade volume (R$ million) RENT3 X IBOVESPA 25 120 448% 100 20 13.54 80 15 10.58 10.26 186% 60 10 40 Volume 4.57 % Price 5 +196 20 0 0 b ul ov ec ec n an un an ep ep ay ay ec l p ar ar ar ct ct g g pr pr Ju Fe Se Ju Au Au -J O -O -M -M -M -N -D -D D M -M -S -S -A -A -J -J -J 5- 26 - - 8- 6- 6- - - 3- 22 30 31 13 22 23 28 11 26 24 15 14 16 30 10 23 23 16 10 Volume RENT3 RENT3 IBOVESPA 2005 2006 2007 1Q08 From IPO until 05/02/2008 Performance RENT3 IBOV 2005 +149% +38% 2006 +124% +33% 2007 -12% +44% 2008 11% 9% Since IPO +448% +186% Localiza was included in the MSCI Brazil Index beginning on March, 2008. 39
  40. 40. Disclaimer The material presented is a presentation of general background information about LOCALIZA as of the date of the presentation. It is information in summary form and does not purport to be complete. It is not intended to be relied upon as advice to potential investors. This presentation is strictly confidential and may not be disclosed to any other person. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of the information presented herein. This presentation contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of LOCALIZA and its subsidiaries that may cause the actual results of the companies to be materially different from any future results expressed or implied in such forward-looking statements. Although LOCALIZA believes that the expectations and assumptions reflected in the forward-looking statements are reasonable based on information currently available to LOCALIZA’s management, LOCALIZA cannot guarantee future results or events. LOCALIZA expressly disclaims a duty to update any of the forward-looking statement. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the Securities Act of 1933. Any offering of securities to be made in the United States will be made by means of an offering memorandum that may be obtained from the underwriters. Such offering memorandum will contain, or incorporate by reference, detailed information about LOCALIZA and its business and financial results, as well as its financial statements. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. 40
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