1. Localiza Rent a Car S.A.
3Q08 results presentation
(R$ million - USGAAP)
1
2. Average rented fleet evolution
Average rented fleet
38,517
33.4%
CAGR: 27.9% 28,877
30,232
17,069
24,477
Quantity
22.2%
22.9%
18,710 14,295 13,973
25.0%
14,450 11,635
19.4%
43.9%
9,308 24.1%
21,448
7,796 36.6%
41.3% 15,937 14,904
12,842
9,402
6,654
2004 2005 2006 2007 Up to sep/07 Up to sep/08
Car rental Fleet rental
Car rental Fleet rental
22,700
18,532
%
Quantity
Quantity
45.0
15,653 14,652
26.5%
3Q07 3Q08 3Q07 3Q08
3Q08 growth still strong...
2
3. Revenues evolution
Net revenue
28.3%
4.2% 1,531.7
R: 3 1,433.3
CAG
1,145.4 1,117.5
R$ million
8 5 3 .2 7 9 4 .7
876.9
38.6%
6 3 2 .8
5 9 0 .3
634.4 530.4
4 4 8 .2
382.8
22.2% 31.8%
3 0 3 .0 3 0 2 .9
29.5% 6 7 8 .5 6 3 8 .6
29.4% 5 5 5 .1 2 14 .5
4 8 4 .7
4 2 8 .7 %
35.2
3 3 1.4 2 2 7 .5
16 8 .3
2004 2005 2006 2007 Up to Sep/07 Up to Sep/08 3Q07 3Q08
Rental Used car sales
Fleet rental
Car rental
151.9
R$ million
%
40.6
R$ million
73.2
108.0
58.4
25.3%
3Q07 3Q08
3Q07 3Q08
...reflecting in the revenue increase...
3
4. EBITDA evolution
EBITDA
: 26.9% 403.5
C A GR 378.3
%
31.2
46.4
311.3 51.3
288.3
277.9
R$ million
26.9
34.5
59.1
197.5
36.5 25.6% 357.1 28.8% 327.0
30.0% 284.4
35.9% 253.8
218.8
161.0
2004 2005 2006 2007 Up to Sep/07 Up to Sep/08
Rental Used car sales
EBITDA per quarter
8.3%
133.9
123.6
120.9
104.6
98.1
R$ million
85.5
28.0%
1Q 2Q 3Q
2007 2008
...maintaining strong profitability...
4
5. EBITDA margin per division
EBITDA Breakdown - 2007 EBITDA Breakdown – 2008 YTD
Car Rental
Car Rental
Fleet Rental
Fleet Rental 50%
49%
35%
39%
Franchising
Franchising
Used Car Sale Used Car Sale
1%
1%
11% 14%
Divisions 2004 2005 2006 2007 Up to sep/07 Up to sep/08 3Q07 3Q08
Car Rental 39.3% 45.0% 41.9% 44.5% 43.7% 44.3% 46.0% 41.9%
Fleet Rental 63.4% 62.3% 69.1% 68.7% 68.7% 66.3% 71.9% 69.7%
Rentals consolidated 48.6% 51.0% 51.2% 52.6% 52.4% 51.2% 55.0% 50.8%
Used car salesSeminovos 12.0% 13.2% 4.6% 5.4% 5.5% 6.5% 5.6% 6.0%
59.6% 64.8% 56.1% 59.5% 59.5% 59.2% 62.2% 58.9%
Total EBITDA / rental revenues
...and consistent margins.
5
6. Net income evolution
Net income
190.2
157.2
138.2 134.3
R$ million
106.5
17.1%
90.6
28.0%
CAGR:
2004 2005 2006 2007 Up to Sep/07 Up to Sep/08
Net income per quarter
53.6
53.5 50.4 50.1
45.4
38.4
R$ million
1Q 2Q 3Q
2007 2008
6
7. Fleet: purchases and sales
13,864
7,957
10,.346
(947)
7,342
6,467 41,499
38,050
33,520
Quantity
30,093
27,635
26,105
23,174 22,585
22,182 21,638
18,763
15,715
2004 2005 2006 2007 Up to Sep/07 Up to Sep/08
Purchases Sales
Purchases and sales per quarter
7,240
8,703
17,867
(2,079) 16,419
Quantity
10,627
9,292
7,716
7,213
1Q08 2Q08 3Q08
The growth of 7,240 cars in the 3Q08...
7
8. Fleet: net investment
Net investment *
207.7 443.6
340.0
241.8 (25.8) 1,238.3
190.1 1,060.9
930.3 853.2 794.7
690.0
R$ million
632,8
590.3 607,0
493.1 448.2
303.0
2004 2005 2006 2007 Up to Sep/07 Up to Sep/08
* Includes accessories
Purchases Sales
Net investment per quarter
235.1
252.9
538.0
(44.3) 475.7
302.9
268.9
224.6 222.8
1Q08 2Q08 3Q08
...demanded a net investment of R$ 235.1 million.
8
9. Fleet: utilization rate
End of period fleet *
: 23.1% 3% 66.696
CAGR 49.
53.476
22,481
46.003 44.680
Quantity
35.4%
21.6%
35.865 17,790
24.4%
28.699 14,630
28.3% 16,600
11,762 %
5 7 .5
13.7%
9,168 44,215
30.2% 35,686
31,373 28,080
23.4% 24,103
19,531
2004 2005 2006 2007 Up to Sep/07 Up to Sep/08
Car rental Fleet rental
Utilization rate evolution
Car Rental Division
70.5%
69.3% 68.3% 66.1%
Up to Sep/07 Up to Sep/08 3Q07 3Q08
The purchases will be reduced in the 4Q08 so the utilization rate returns to previous level.
9
* Losses from theft and accidents are deducted from the fleet at the end of period
10. Net debt reconciliation
+ 136.5
FCF before growth
Capex Capex Working Taxes Capex Stock Dividends Interest
EBITDA renewal other capital growth repurchase
378.3
-767.9 -1.201.0
-34.7 -35.5 -46.7
Net debt -30.1
-51.8 Net debt
-86.9
12/31/2007 -119.8 09/30/2008
-405.9
- 436.0 - 133.6
Discretionary Dividends and
investments Interests on equity
The increase of the debt was due to the strong growth in fleet.
10
11. Net debt x fleet valu
1,956.9
1,492.9
R$ million
1,247.7 1.201,0
900.2
767.9
612.2 539.3 443.1
281.3
2004 2005 2006 2007 Up to Sep/08
Net debt Fleet value
SALDOS EM FINAL DE PERÍODO 2004 2005 2006 2007 Up to Sep/08
Net debt /Fleet value 46% 60% 36% 51% 61%
Net debt / EBITDA (USGAAP) 1.4x 1.9x 1.4x 1.9x 2.4x*
Net debt / EBITDA (BRGAAP) 1.1x 1.5x 1.0x 1.4x 1.7x*
* Annualized
The fleet reduction on 4,000 cars will be destined to the payment of the debts with maturity in 2008 and 2009.
11
12. Free cash flow - FCF
3 0 0 1 2 0
. %
250.7
9,8p.p.
%
2. 1
R$ milliion
9 0
. %
11
2 0 0
136,5
118.2 6 0
. %
3,7p.p. .1%
3
10
11. 9 %
1 0 0
58.2
52.0 3 0
. %
0,9p.p. 0,6p.p.
0,6p.p.
0 0 .
0 %
2004 2005 2006 2007 Up to Sep/08
Free cash flow before growth Real increase in new car prices
Free cash flow – FCF (R$ million) 2004 2005 2006 2007 Up to Sep/08
EBITDA after taxes 156.6 245.2 268.6 340.1 326.5
Working capital variation (1) 6.2 (24.2) (4.8) 13.3 (35.5)
(100.6) (134.8) (112.9) (79.0) (119.8)
Net car capex ‐ renewal
(10.2) (28.0) (32.7) (23.7) (34.7)
Capex ‐ other
52.0 58.2 118.2 250.7 136.5
Free cash flow before growth
(143.8) (194.0) (287.0) (221.9) (413.7)
Net capex for vehicles ‐ growth
Change in amount payable to cars suppliers (capex) (1) (21.9) (25.5) 222.0 (51.0) 7.8
(113.7) (161.3) 53.2 (22.2) (269.4)
Free cash flow
Capex for growth in 2008 will be reduced by the decrease of 4,000 cars in the fleet.
12
(1) O saldo a pagar aos fornecedores de carros (capex) foi transferido de capital de giro para ajuste do investimento em Capex de carros (crescimento).
13. EVA
1 4 0.
0
3 1 .%
0
24.8%
24.6%
21.3% 93,5
18.7% 50.0% 18.9%
1 00.
0
78.5 2 1 .%
0
114.3
37.3%
16.9% 76.2
15.7% 15.4%
41.6% 14.2%
6 0.
0
1 1 .%
0
11.0% 11.2%
8.4%
55.5 8,2%
39.2
2 0.
0 1 0%
.
2004 2005 2006 2007 Up to Sep/07 Up to Sep/08
EVA(*) (R$ million) Nominal WACC ROIC
Up to Sep/07 Up to Sep/08
2004 2005 2006 2007
Average investment capital– R$ million 507.4 606.3 986.2 1.137.5 1.123.0 1.547.9
NOPAT margin (1) 37.8% 35.2% 33.4% 35.6% 35.7% 34.5%
Turnover of average investment capital (1) 0.65x 0.70x 0.56x 0.60x 0.43x 0.41x
ROIC 24.6% 24.8% 18.7% 21.3% 15.4% 14.2%
11.6% 13.6% 10.9% 8.4% 8.4% 8.2%
Cost of debt (2)(3)
20.0% 16.2% 11.0% 11.5% 11.5% 11.3%
Cost of equity(3)
Nominal WACC(3) 16.9% 15.7% 11.0% 11.2% 8.4% 8.2%
Spread (ROIC ‐ WACC) ‐ p.p. 7.7 9.1 7.7 10.1 7.0 6.0
EVA ‐ R$ million 39.2 55.5 76.2 114.3 78.5 93.5
‐ 16.3 20.7 38.1 ‐ 15.0
EVA increase – R$ million
(1) Margin and turnover calculated over rental revenue. (2) Cost of debt after taxes. (3) Calculated using long term premises
The adjustment of the rates and the reduction of the fleet will contribute
to the increase of the ROIC.
13
14. RENT3: Performance
RENT3 x IBOV Performance
25 120
159% 100
20
80
Volume
15
Price
105% 60
10
40
5
20
0 0
From IPO to 09/30/2008
Volume RENT3 RENT3 IBOVESPA
Average daily traded volume (R$ million)
13.54
10.58
8.86
4.57
2005 2006 2007 Up to Sep/08
Localiza was elected the best public-held company in the governance ranking
on a survey conducted by FEA-USP (Capital Aberto Magazine)
14
15. Strategies for the current scenario
1. To maintain a lean Company;
2. To reduce the non-car capex, postponing investments;
3. To raise fleet utilization in the car rental division to a minimum of 72%;
4. To increase car and fleet rental rates to compensate the increase on
the interests rate and inflation;
5. To adjust the Company growth in line with cash generation.
Concluding:
To maximize the use of the resources searching the best results
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