ENGLISH 7_Q4_LESSON 2_ Employing a Variety of Strategies for Effective Interp...
2Q10 final
1. Localiza Rent a Car S.A.
2Q10 Results - R$ million, USGAAP
Guarulhos International Airport Brach - Sao Paulo - Brazil
Opened: 06/11/2010
July 14th, 2010 1
2. 2Q10 Highlights
R$ millions 2Q09 2Q10 Variation
Consolidated ret revenue 416.5 575.6 Record 38.2%
Net rental revenues 220.2 284.1 Record 29.0%
EBITDA 109.1 150.5 Record 37.9%
Net income 27.1 57.5 Record 112.2%
Net income / Net rental revenues 12.3% 20.2% 7.9p.p
Quantity 2Q09 2Q10 Variation
Purchased cars 4,946 11,323 128.9%
Sold cars 7,279 10,679 46.7%
End of period fleet 52,223 71,055 36.1%
Localiza is back to high levels of growth.
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3. Car Rental Division
Net revenue (R$ million)
3.8%
.2 %
R: 29 585.7 607.8
CAG
442.7 27.7%
372.9 %
357.2 291.9 36.1
271.3
191.6
140.8
2005 2006 2007 2008 2009 1H09 1H10 2Q09 2Q10
# daily rentals (thousand)
1.5%
%
: 32.5
CAGR 7,940 8,062 26.4 %
5,793
4,668 4,857 3 1 .7 %
3,411 3,841
2,488
1,889
2005 2006 2007 2008 2009 1H09 1H10 2Q09 2Q10
In the 2Q10 revenue grew above volume due to an increase of 3.3% in the average daily rate.
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4. Fleet Rental Division
Net revenue (R$ million)
13.2%
22.9%
CAGR: 276.9
313.4
%
228.2
14.1
%
190.2
152.1
173.5 16.9
149.2
76.2 89.1
2005 2006 2007 2008 2009 1H09 1H10 2Q09 2Q10
# daily rentals (thousand)
10.3%
24.3%
CAGR: 6,437 7,099
5,144 9.3%
4,188 3,816
3,351 3,490 12.6%
1,710 1,926
2005 2006 2007 2008 2009 1H09 1H10 2Q09 2Q10
In the 2Q10 revenue grew above volume due to an increase of 4.1% in the average daily rate.
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5. Used car sales
# of sold cars
0.7%
22.3%
CAGR: 34,281 34,519
30,093
%
23,174 43.2 21,627
18,763 %
15,107 46.7
10,679
7,279
2005 2006 2007 2008 2009 1H09 1H10 2Q09 2Q10
Sale’s volumes are still presenting strong growth.
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6. Car Rental Division – Average age
Sold cars
(month)
16.6 15.3
12.3
2008 2009 2Q10
Operating fleet
(month)
9.5
6.3 6.6
2008 2009 2Q10
The average age of the operating fleet returned to pre-crisis levels.
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7. Consolidated net revenues
R$ million
8.4%
R: 2
CAG 1,855.7 1,856.3
1,531.7
32.1%
1,145.4 1,139.4
876.9 862.7 38.2%
575.6 Record
416.5
2005 2006 2007 2008 2009 1H09 1H10 2Q09 2Q10
Consolidated net revenues grew 38.2% in the 2Q10.
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9. Average depreciation per car
R$
Car Rental
- 43
.8%
2,546.0 2,577.0
1,448.5
939.1
492.3 332.9
2005 2006 2007 2008 2009 1H10
annualized
Fleet Rental
- 20.5
5,083.1 %
4,371.7
3,475.8
2,981.3
2,383.3 2,395.8
2005 2006 2007 2008 2009 1H10
annualized
Average depreciation per car showed a strong drop when compared to the one in 2009.
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10. Net income
R$ million
190.2
138.2 127.4 3%
116.3 85. 106.2
106.5
.2 %
1 12 57.5 Record
57.3
27.1
2005 2006 2007 2008 2009 1H09 1H10 2Q09 2Q10
Reconciliation of EBITDA x Net Income 2008 2009 Var. R$ 1H09 1H10 Var. R$ 2Q09 2Q10 Var. R$
EBITDA - Car rental and fleet rental 449.6 459.1 9.5 219.8 273.3 53.5 107.5 144.0 36.5
EBITDA - Used car sales 54.5 10.6 (43.9) 4.7 9.3 4.6 1.6 6.5 4.9
EBITDA Consolidated 504.1 469.7 (34.4) 224.5 282.6 58.1 109.1 150.5 41.4
Depreciation of revenue-earning vehicles (178.5) (172.3) 6.2 (70.0) (66.5) 3.5 (40.1) (35.8) 4.3
Other depreciation (18.3) (21.0) (2.7) (10.7) (10.2) 0.5 (5.4) (5.1) 0.3
Financial expenses, net (133.3) (112.9) 20.4 (65.5) (57.4) 8.1 (26.8) (29.2) (2.4)
Income tax and social contribution (46.6) (47.2) (0.6) (21.0) (42.3) (21.3) (9.7) (22.9) (13.2)
Net income 127.4 116.3 (11.1) 57.3 106.2 48.9 27.1 57.5 30.4
Record net income since IPO in 2005.
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11. Free cash flow - FCF
Free cash flow - R$ million 2005 2006 2007 2008 2009 1H10
EBITDA 277.9 311.3 403.5 504.1 469.7 282.6
Used car sales revenues (448.2) (590.3) (853.2) (983.2) (924.5) (586.9)
Cost of used car sales 361.2 530.4 760.0 874.5 855.1 539.6
EBITDA without used car sales revenues and costs 190.9 251.4 310.3 395.4 400.3 235.3
(-) Income tax and social contribution – current (32.7) (42.7) (63.4) (52.8) (49.0) (31.0)
Working capital variation (24.2) (4.8) 13.3 (44.8) (11.5) (12.8)
Cash provided before capex 134.0 203.9 260.2 297.8 339.8 191.5
Used car sales revenues 448.2 590.3 853.2 983.2 924.5 586.9
Capex of car – renewal (496.0) (643.3) (839.0) (1,035.4) (963.1) (637.7)
Change in amounts payable to car suppliers (capex) - - - - 15.2 -
Net capex for renewal (47.8) (53.0) 14.2 (52.2) (23.4) (50.8)
Capex - Property and equipment, net (28.0) (32.7) (23.7) (39.9) (21.0) (12.8)
Free cash flow before growth 58.2 118.2 250.7 205.7 295.4 127.9
Capex of car – growth (194.0) (287.0) (221.9) (299.9) (241.1) (34.9)
Change in amounts payable to car suppliers (capex) (25.5) 222.0 (51.0) (188.9) 241.1 (8.3)
Free cash flow (161.3) 53.2 (22.2) (283.1) 295.4 84.7
Fleet increase (quantity) 7,342 10,346 7,957 9,930 8,642 1,182
Even with the addition of 1,182 cars, the Company still generated R$84.7 million in free cash flow in the 1H10.
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12. Net debt reconciliation
R$ million
Free cash flow
84.7
Net debt Net debt
03/31/2010 06/30/2010
-1,078.6 -1,074.6
(15.0)
Interest on own
capital and (65.7)
dividends Interest
and
others
Net debt remained stable.
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13. Debt – profile and costs
Principal on 6/30/10 - R$ million
268.6 284.8
264.0
249.0 238.0
122.0
0.4 0.9
2010 2011 2012 2013 2014 2015 2016 2017
396.5
Cash and cash
equivalents
Gross debt – principal Average effective cost 2010 2011 2012 2013 2014 2015 2016 2017 Total
111.1% a 115.0% of CDI
Working capital - - 58.0 78.0 55.0 75.0 190.0 - 456.0
and CDI + 1.50%pa
Debenture 2nd Issuance CDI + 0.59%pa - - 66.6 66.6 66.8 - - - 200.0
Debenture 4th Issuance 114.2% of CDI - - 24.0 24.0 63.0 63.0 74.0 122.0 370.0
Debenture 1st Issuance:Total Fleet CDI + 2.02%pa - - 100.0 100.0 100.0 100.0 - - 400.0
BNDES TJLP + 3.80%pa 0.4 0.9 0.4 - - - - - 1.7
Total gross debt – principal - 0.4 0.9 249.0 268.6 284.8 238.0 264.0 122.0 1,427.7
Cash and equivalents (396.5) - - - - - - - (396.5)
Total net debt – principal - (396.1) 0.9 249.0 268.6 284.8 238.0 264.0 122.0 1,031.2
Debt profile was stretched and the Company has enough cash to support its growth.
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14. Debt – ratios
R$ million
1,907.8 1,963.8
1,752.6
1,492.9
1,247.7 1,254.5
1,078.6 1,074.6
900.2 765.1
535.8 440.4
2005 2006 2007 2008 2009 1H10
Net debt Fleet value
BALANCE AT THE END OF THE PERIOD 2005 2006 2007 2008 2009 1H10
Net debt / Fleet value (USGAAP) 60% 36% 51% 72% 57% 55%
Net debt / EBITDA (USGAAP)* 1.9x 1.4x 1.9x 2.5x 2.3x 1.9x
Net debt / EBITDA (BRGAAP)* 1.5x 1.0x 1.3x 1.8x 1.7x 1.3x
Net debt / Equity (USGAAP) 1.4x 0.7x 1.3x 2.0x 1.5x 1.3x
* annualized
Every indebtedness ratios improved and have remained comfortable.
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15. Thank you!
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.
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