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Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
Localiza completa 4 q11 eng
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Localiza completa 4 q11 eng

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  • 1. 1February / 2012
  • 2. Agenda1. The Company2. Drivers and opportunities3. Competitive advantages4. Financials5. 2012 Brazilian Macroeconomic scenario 2
  • 3. Company: integrated business platform 64,688cars 31,629 cars 2.8 million clients 687 clients 247 locations 312 employees 4,090 employees Synergies: bargaining power cost reduction cross selling Sales capacity: more than 50,000 12,958 cars cars/year 202 locations in Brazil 74.6% sold to final consumer 47 locations in South America 66 stores 32 employees 37 cities 1,251 employees in franchisee 870 employees locations Deactivated fixed asset saleThis integrated business platform gives Localiza flexibility and superior performance. 3 Based on the 4Q11
  • 4. Car rental financial cycle 1-year cycle Car sale revenue $26.2 Revenue 1 2 3 4 5 Expenses, interest and tax 8 9 10 11 12 $27.9Car acquisition Car Rental Seminovos Total per operating car per operating car 1 year R$ % R$ % R$ Revenues 19.9 100.0% 29.1 100.0% 48.9 Cost (8.2) -41.3% (8.2) SG&A (2.7) -13.5% (2.9) -9.9% (5.5) Net car sale revenue 26.2 90.1% 26.2 Book value of car sale (25.5) -90.0% (25.5) EBITDA 9.0 45.2% 0.7 2.4% 9.7 Depreciation (vehicle) (1.7) -5.8% (1.7) Depreciation (non-vehicle) (0.3) -1.7% (0.1) (0.5) Interest on debt (2.4) -8.2% (2.4) Tax (2.6) -13.3% 1.4 4.7% (1.3) NET INCOME 6.0 30.2% (2.1) -7.3% 3.9 NOPAT 5.3 ROIC * 17.5% Spread Cost of debt after tax 8.6% 8.9p.p. * Investment in cars and PP&E (8%) 4
  • 5. Fleet rental financial cycle 2-year cycle Net car sale revenue 26.4 Revenue 1 2 3 4 5 Expenses, interest and tax 20 21 22 23 24 33.8Car acquisition Fleet Rental Seminovos Total per operating car per operating car 2 anos R$ % R$ % R$ Revenues 34.0 100.0% 28.7 100.0% 62.7 Cost (9.7) -28.7% (9.7) SG&A (1.8) -5.3% (2.3) -7.9% (4.1) Net car sale revenue 26.4 92.1% 26.4 Book value of car sale (25.0) -90.0% (25.0) EBITDA 22.4 66.0% 1.4 5.0% 23.8 Depreciation (vehicle) (8.3) -28.8% (8.3) Depreciation (non-vehicle) (0.1) -0.1% (0.1) Interest on debt (4.0) -14.1% (4.0) Tax (6.9) -20.3% 3.3 11.4% (3.6) NET INCOME 15.5 45.6% (7.6) -26.5% 7.9 NET INCOME per year 7.7 45.6% (3.8) -26.5% 3.9 NOPAT (annualized) 5.4 ROIC 16.1% Spread Cost of debt after tax 8.6% 7.5p.p. 5
  • 6. Company: managing assets Targeted spread Equity Pricing strategy Assets (cars)Funding Assets (cash) Debt Profitability comes from Cash to renew the fleet rental divisions Flexible and liquid assets. 6
  • 7. Company: stable management BOARD OF DIRECTORS CEO Salim Mattar – 38y Car Acquisition Legal COO Eugênio Mattar – 38y Human Administration Financial Resources ITGina Rafael – 30yBruno Roberto Mendes – 26y Daltro Leite – 26yAndrade – 19yJoão Andrade – 7y Localiza has a lean and efficient structure.Marco Antônio The succession process is already planned.Guimarães – 21y 7
  • 8. Company: growth and profitability track record Revenues consolidated % R: 24.4 2,918.1 CAG 2,497.2 1,823.7 1,820.9 1,4 6 8 .1 1,505.5 1,3 2 1.9 CAGR: 15.9% 1,126.2 9 8 0 .8 9 2 2 .4 854.9 8 5 0 .5 634.4 CAGR: 5 15 .7 5 8 8 .8 23.4% 4 5 7 .4 4 4 6 .5 1,4 5 0 .0 2 3 4 .1 2 9 6 .1 4 0 2 .7 3 0 3 .0 1,17 5 .3 2 12 .9 2 2 5 .9 8 4 2 .9 8 9 8 .5 5 3 7 .4 6 5 5 .0 3 3 1.4 4 0 8 .4 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Consolidated Rentals Used car sales EBITDA consolidated % : 22.6 CAGR 23.9% 821.3 CAGR: 649.5 504.1 469.7 403.5 278.1 311.4 154 152.1 197.8 134.3 149.9 42 62 85.2 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011GDP 3.4 0.0 0.3 4.3 1.3 2.7 1.1 5.7 3.2 4.0 6.1 5.2 -0.6 7.5 2.9Average 1.9 4.3 Average growth of roughly 25% p.a. in the last years. 8
  • 9. Company: GDP elasticity Rental revenues growth elasticity x GDP Localiza 5.5x Sector GDP 2.8x 2005 2006 2007 2008 2009 2010The drivers combined with Localiza’s competitive advantages resulted in a growth above the industry level. 9
  • 10. Company: market share - fleetCar Rental division Fleet Rental division 37.5% 12.5% Consolidated 23.5% 20.6% 20.8% 21.8% 21.4% 18.9% 2005 2006 2007 2008 2009 2010 10 Source: ABLA 2011 yearbook
  • 11. Company: recognitions and rewards2011 Valor 200 8th Company in growth and profitabilityMaiores e Melhores do Transporte 2011 (Biggest & Best of Transportation) The best Company of the vehicle rental sectorBRIC Breakout One of the 5 top picks Brazil for 2012Exame Magazine Among the 5 best Companies of the consumer sector, in the article “Where to invest in 2012”Institutional Investor’s ranking: 11
  • 12. Agenda1. The Company2. Drivers and opportunities3. Competitive advantages4. Financials5. 2012 Brazilian Macroeconomic scenario 12
  • 13. Drivers and growth opportunities 13
  • 14. Car rental drivers: investments Investments in Brazil Investments by sector 12.3% 20.8% 154 137R$85.8 bn R$150.4 bn 106 18.7% 38 R$16.8 bn 7 6 5 3 19.5% n as i ty ng as e n s io ag er ti o en g ic si at th il/ ew rta tr ou ic Ar O O ec R$174.6 bn un /s o H sp El er m at an m W co Tr le 18.4% Te R$28.7 bn Invested To be invested R$456 bn to be invested. 14 Source: EXAME yearbook, 2011-2012
  • 15. Car rental drivers: income and affordability GDP per capita (R$ thousands) 19.0 16.0 16.6 14.2 12.8 10.7 11.7 8.4 9.5 6.9 7.5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Car rental affordability 545 51% 510 465 415 38% 380 37% 35% 350 300 260 240 180 200 151 31% 27% 22% 20% 18% 16% 15% 15% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Monthly m inim um salary (R$) Daily rental price over m inim um salary (%)Income increase and stable daily rental rates increased car rental affordability. 15 Source: Exame magazine (Dec/2010)
  • 16. Car rental drivers: consumption A and B classes - million Potential consumption of Brazilians in 2011 - billion 31 Total population % % 55.0 R$ 2,500 13 53.8 20 A and B classes2003 2009 2014e R$ 930 Air traffic passengers - million Credit card holders - million % 20.3 % 16.2 179 % 35.3 % % 154 .0 % 13.3 69 80.3 128 200 45 51 71 152003 2009 2010 2011 2003 2009 2010 2011 Strong domestic drivers leads to higher volumes. 16 Source: FGV, BCB, Infraero, Gol, Abecs and Exame (Dec/2011)
  • 17. Car rental opportunities: consolidation Car rental locations in Brazil Airport locations Off-airport locations Localiza Avis Outras 336 Hertz 35 22 Localiza 83 Unidas 99 70 Avis 32 OthersUnidas 2004 27 Hertz 36 Off-airport market is still fragmented. 17 Source: ABLA and each company website (October, 2011)
  • 18. Car rental strategy: organic growth Brazilian distribution Network expansion in Brazil 415 449 381 312 346254 279 2011 Branches2005 2006 2007 2008 2009 2010 2011 Owned 13 Franchised 21 Total 34 Localiza’s network is still being expanded. 18
  • 19. Fleet rental drivers: outsourcing trend Outsourced fleet penetrationBrazilian Market World (%) 58.3Corporate fleet: 46.9 4,200,000 37.4 Targeted fleet: 24.5 16.5 500,000 13.3 8.9 5.4 Rented fleet: nd l 232,000 d in k ce y zi lic U n an a ra la an la b Sp m ol B pu Po Fr er H Re G ch ze C 31,629 Less than 50% of targeted fleet is rented. 19 Source: ABLA and Datamonitor
  • 20. Used car sales drivers: affordability and penetration Middle class - million Car purchase affordability 1 6 0 6 0 0 148 128 510 545 465 115 1 4 0 113 104 415 5 0 0 94.9 1 2 0 97 93 380 % 19.1 80 4 0 0 1 0 0 66 . 8% 350 8 0 3 0 0 43 6 0 300 240 260 75 68 2 0 0 58 4 0 180 200 56 52 1 0 0 2 0 151 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2003 2009 2014e Number of minimum w ages to buy a new car Monthly minimum salary (R$) # of inhabitants per car (2009) # of inhabitants per car - Brazil USA 1.2 8.0 7.9 Italy 1.5 7.4 France 1.7 6.9 UK 1.8 6.5Germany 1.8 Mexico 3.6 Brazil 6.5 2005 2006 2007 2008 2009 Income increase and credit availability are the major drivers for car sales. Source: Bradesco, ANFAVEA, Exame (Dec/2011), PIB per capita: IPEADATA. 20
  • 21. Brazilian car market: new cars x used cars New cars X used cars 8,862,951 8,429,309 7,260,054 Used cars7,016,576 7,114,870 7,071,525 6,743,699 2.5x 2.6x 2.3x 3.0x 2.7x 4.3x 3.7x New cars 3,329,170 3,425,499 3,009,482 2,671,338 2,342,0591,620,657 1,830,4022005 2006 2007 2008 2009 2010 2011 Used car market is currently 2.5x the new car market. 21 Source: FENABRAVE (Autos + light commercial)
  • 22. Brazilian car market : 2010 market share Localiza used cars x Car market Used cars sold: 50,772 0.6% 1.5% 5.4% 0KM Used Up to 2 years 3,425,499 8,862,951 476,827Used Seminovos 0km Seminovos 2 years old Seminovos 22 Source: Fenabrave 2010
  • 23. Brazilian car market: monthly sale per store Monthly sale / lots*109 96 91 90 82 84 81 48FIAT VW FORD GM SEMINOVOS* SECTOR RENAULT PEUGEOT 2010** * Average sales per lots (excluding auto malls – 10 stores) ** Total sales divided by the number of dealers Localiza Seminovos monthly sale per store is in line with market average. 23Source: Anfavea (National OEM’s Association); number of dealers from each OEM association website (nov/11 )
  • 24. Used car sales strategy: network expansion Brazilian distribution New lots 66 49 55 Points of 32 35 Status 26 sale13 In construction and 14 prospection2005 2006 2007 2008 2009 2010 2011 The network is being expanded to support rentals’ growth. 24
  • 25. Used car sales: sold cars evolution Monthly average of sold cars 4,545 4,359 4,159 3,940 3,860 2010 1Q11 2Q11 3Q11 4Q11 Sales profile 39% 51% 43% 42% 41% 61% 49% 57% 58% 59% 2010 1Q11 2Q11 3Q11 4Q11 Financed In cashThe increase on sales was supported by the opening of new points of sale. The macro prudential measures impacted the sales profile in the 1Q11. 25
  • 26. Agenda1. The Company2. Drivers and opportunities3. Competitive advantages4. Financials5. 2012 Brazilian Macroeconomic scenario 26
  • 27. Competitive advantages: 38 years of experience in managing assets Profitability comes from rental divisions Renting cars SellingRaising Buying carsmoney cars $ $ Cash to renew the fleet or pay debt 27
  • 28. Competitive advantages: raising money Raising Buying Selling Renting cars money cars cars Investment grade: lower spreads and longer terms Global Scale BBB- Fitch BBB+ S&P B+ S&P B+ Fitch B2 Moodys Baa3 Moody’sNational Scale Aa1.br Moody’s A (bra) Fitch BBB+ (bra) Fitch A- (bra) Fitch AA+(bra) Fitch Localiza raises money with lower spreads when compared to Brazilian competitors. As of December, 2011. 28
  • 29. Competitive advantages: buying cars Raising Buying Selling Renting cars money cars cars Better conditions due to higher volumesLocaliza’ share in national sales of the three Purchases by brand in 2010 largest automakers in 2010: GM, FIAT, VW Ford Renault Others 4.3% 3.1% 2.8% Fiat 2.8% GM 25.6% 37.0% VW 27.2% Localiza announced the purchase of 100,000 cars for 2H11 and 2012. 29
  • 30. Competitive advantages: renting cars Know HowThe Company is present in 226 cities where the other largest networks do not operate. 30
  • 31. ERROR: stackunderflowOFFENDING COMMAND: ~STACK:

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