2. Agenda
1. Company overview
2. Main business divisions
Car rental
Fleet rental
Seminovos
3. Consolidated
4. Debt and cash
5. Key value drivers
2
3. Company: milestones
Phase I – Rise to #1 Phase II – Expansion Phase III – Reaching Scale
1973 – Founded in Belo Horizonte/MG 1984 – Expansion strategy by 2005 – IPO: market cap of US$ 295 mm
adjacencies: Franchising
Late 70’s - Acquisitions in the 2011 – Rated as investment grade by
Northeast of Brazil 1991 – Expansion strategy by Moody’s, Fitch and more recently S&P
adjacencies: Seminovos
1981 – Brazilian car rental leader in # 2012 – ADR level I
of branches 1997 – PE firm DL&J enters at a market
cap of US$ 150 mm 06/30/2012 – Market cap pf US$3.1 bi
with ADTV of 37.1 million
1997 – Expansion strategy by
adjacencies: Fleet rental
1973 1982 1983 1990 2004 2005 2011
3
5. Company: integrated business platform
58,436 cars 31,412 cars
3.1 million clients 699 clients
253 locations 343 employees
4,057 employees
Synergies:
bargaining power
cost reduction
cross selling
13,389 cars 66.6% sold to final consumer
201 locations in Brazil 71 stores
48 locations in South America 951 employees
34 employees
This integrated business platform gives Localiza flexibility and superior performance.
5
Based on the 2Q12
6. Company: Business platform divisions
Car rental Franchising Fleet management Used car sales
Localiza car rental rents to Supplementary business, Total Fleet, offering Support area, with the
individuals or businesses with the purpose to expand customized fleet for terms objective to sell the
at airports and other the brand’s network. of 2-3 years. Company’s used cars and
locations. add know-how in buying
cars and to estimate the
residual value.
The traditional backbone of Franchising is seen as a Total Fleet is seen as an As a support business
Localiza. With its giant fleet primarily strategic business additional business that activity, Seminovos enables
that gets renewed annually, by management – the generates value by the sell 70% of used cars
it lays the foundation for all revenues generated are leveraging synergies directly to the final
scale effects captured by low, however brand and created by the integrated customer, thereby
the group as a whole. network expand at platform approach. maximizing the residual
minimum capital value of used rental cars.
expenditure.
6
7. Agenda
1. Company overview
2. Main business divisions
Car rental
Fleet rental
Seminovos
3. Consolidated
4. Debt and cash
5. Key value drivers
7
9. Overview
Car rental distribution (Brazil)
415 449 452
346 381
279 312
254
2005 2006 2007 2008 2009 2010 2011 1H12
# of branches # of cities
452
318
289
62
107
71 60
32
120
Localiza Hertz Unidas Avis
Localiza holds an extraordinarily strong position in the Brazilian market, as over decades it has
been successfully competing against major global players through local scale.
9
Source: Each company’s website as of May, 2012.
10. Overview
Car Rental market share - Brazil
(# of cars)
36.5%
Car rental locations in Brazil
Airport locations Off-airport locations
Others Localiza
Avis 36 Localiza Hertz
351
35 101 Unidas
78
73
Avis
27
Others
Unidas Hertz
2079
34 42
Off-airport market is still fragmented.
10
Source: ABLA (Brazilian Car Rental Association) and each company’s website (May, 2012)
11. Main competitors
Market share* 6.7% 3.1% 2.8%
Airport locations 34 35 42
Off-airport locations 73 27 78
• Capitalized by three
• International brand • International brand
Strengths Private Equity funds
• Local expertise • Local expertise
• Local expertise
• Weak footprint
• Relatively weak brand • Weak footprint in Brazil
• Weak footprint in Brazil
• Unclear priorities between • Master franchisee in Brazil in
Weaknesses • Used car sales retail network
rental and fleet business “Chapter 11”
• Used car sales retail • Used car sales retail network
network
11
*Source: Roland Berger report, as of June 21, 2012, based on 2010 figures
12. Drivers
Investments in Brazil Air traffic passengers - million
679
%
% 16.2
20.3 179
% 154
343 80.3 128
182 71
85 83 107
2003 2009 2010 2011
s
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tio
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us
th
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ew
ta
En
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In
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sp
er
at
an
W
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Car rental affordability GDP per capita
645
(R$ thousands)
545
51% 510
465 21.3
415 19.0
38% 380 16.0 16.6
37% 35% 350 14.2
300
11.7 12.8
260 10.7
240
8.4 9.5
180 200 6.9 7.5
151 31%
27%
22% 20%
18% 16% 15% 15% 13%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e 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 (%)
12
13. Satisfaction survey
2011 - Would you recommend Localiza? YES!
95.9%
94.6% 94.8% 96.0% 95.5% 95.3% 96.3% 95.9%
2005 2006 2007 2008 2009 2010 2011
Customers recognize premium service and recommend it!
13
Source: based on “Fale Fácil” satisfaction survey answered by more than 350,000 customers in 2011
14. Financial cycle
Net car sale revenue
1 - year cycle
$26.4
Revenue
1 2 3 4 5 Expenses, interest and tax 20 21 22 23 24
$27.5
Car acquisition
Fleet Rental Seminovos Total
2011 per operating car per operating car per year
R$ % R$ % R$
Net Revenues 19,1 100,0% 29,2 100,0% 48,3
Cost s (7,4) - 0,0% (7,4)
SG&A (2,7) -14,1% (2,8) -9,6% (5,5)
Net car sale revenue 26,4 90,4% 26,4
Book value of car sale (25,7) -90,0% (25,7)
EBITDA 9,0 47,2% 0,7 2,4% 9,7
Depreciation (vehicle) (2,0) -6,8% (2,0)
Depreciation (non-vehicle) (0,3) -1,6% (0,3)
Interest on debt (2,4) -8,2% (2,4)
Tax (2,7) -14,2% 1,1 3,8% (1,6)
NET INCOME 6,0 31,5% (2,6) -8,9% 3,4
NOPAT 5,2
ROIC 18,9% Spread
Cost of debt after tax (CDI+1,5%) 8,6% 10,3p.p.
14
15. Figures
Per operating car
Renting cars 2010 2011 2010 2011
Net revenues 802.2 980.7 18.7 19.1
EBITDA 363.3 460.3 8.5 9.0
Depreciation (81.1) (103.4) (1.9) (2.0)
EBIT 282.2 356.9 9.5 10.1
Financial expenses (87.1) (123.8) (2.0) (2.4)
EBT 195.1 233.1 4.5 4.5
Per car sold
Selling cars 2010 2011 2010 2011
Net revenues 1,101.1 1,241.1 27.8 29.2
EBITDA 32.1 30.0 0.8 0.7
Depreciation (5.1) (6.1) (0.1) (0.1)
EBIT 27.0 23.9 0.7 0.6
EBT 27.0 23.9 0.7 0.6
End of period fleet 61,445 64,688 - -
Average operating fleet 42,903 51,285 - -
Average rented fleet 29,646 35,348 - -
Number of cars sold 39,658 42,483 - -
15
16. Volumes and revenues
# daily rentals (thousand)
24.6% 12,794
CAGR: 10,734
7,940 8,062 6.8%
5,793 6,243 6,664
4.9%
4,668
3,411 3,179 3,334
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
Net revenues (R$ million)
24.9% 980.7
CAGR:
802.2
585.2
12. 7 %
565.2
10. 4 %
532.3
428.0 472.4
346.1
258.6 239.4 264.3
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
Revenue grew above volume due to the increase in the average rental rate per car.
16
18. Average depreciation per car
Hot used car market Financial crisis effect 5.468,2
2.546,0 2.577,0 1.683,9 2.062,3 Reflex of the
1.536,0
492,3 939,1 IPI reduction
332,9
2005 2006 2007 2008 2009 2010 2011 Jan-Apr/12* 1H12*
* Annualized
Additional depreciation related to the IPI reduction on May, 2012
R$ million Fleet as of May, 2012
Additional estimated depreciation Quantity of cars by year of maturity of estimated useful life
Division
2Q12 After 2Q12 Total 2012 2013 2014 2015 Total
85 (*) 31 116 45,486 12,187 143 5 57,821
Car rental
73% 27% 100% 79% 21% 0% 0% 100%
(*) Additional estimated depreciation of R$31 million will be accounted prospectively in the next 12 months
Depreciation was impacted by the decrease in car prices due to the IPI reduction.
18
19. Agenda
1. Company overview
2. Main business divisions
Car rental
Fleet rental
Seminovos
3. Consolidated
4. Debt and cash
5. Key value drivers
19
21. Overview
Fleet Rental division - Brazil
(# of cars)
13.9%
The business greatly profits from synergies with its car rental affiliate, and as the Brazilian economy
matures, one can expect a higher percentage of companies to take advantage of fleet rental.
21
Source: based on ABLA 2012 yearbook
22. Main competitors
Market share* 9.5% 7.1%
Revenues (R$ million) 272.5 204.7
Fleet size 27,262 16,418
• Capitalized
• Brazil’s second player
Strengths • Synergies with its rental car
• Successful IPO 04/2012
business area
• Low profitability (competing • Loss making in the last six
on price in the pursuit of years (competing on price in
Weaknesses market share) the pursuit of market share)
• Depreciation calculus • Used car sales retail network
• Used car sales retail network
22
*Source: Roland Berger report, as of June 21, 2012, based on 2011 figures.
23. Drivers
Outsourced fleet penetration
Brazilian Market World
58.3%
Corporate fleet: 46.9%
4,200,000 37.4%
24.5%
Targeted fleet: 16.5%
13.3%
500,000 5.4%
8.9%
Rented fleet:
nd
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n
k
nd
ce
lic
y
zi
U
ai
an
ra
la
an
la
b
Sp
pu
m
ol
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Fr
245,000
er
H
Re
G
ch
ze
C
31,629
Less than 50% of targeted fleet is rented.
23
Source: ABLA and Datamonitor
24. Financial cycle
Net car sale revenue
2 - year cycle
$26.3
Revenue
1 2 3 4 5 Expenses, interest and tax 20 21 22 23 24
$36.1
Car acquisition
Fleet Rental Seminovos Total
2011 per operating car per operating car per year
R$ % R$ % R$
Net Revenues 16,3 100,0% 28,6 100,0% 44,9
Costs (4,2) - 0,0% (4,2)
SG&A (0,9) -5,5% (2,3) -8,0% (3,2)
Net car sale revenue 26,3 92,0% 26,3
Book value of car sale (24,9) -90,0% (24,9)
EBITDA 11,2 68,7% 1,4 4,9% 12,6
Depreciation (vehicle) (4,2) -14,7% (4,2)
Depreciation (non-vehicle) (0,1) -0,3% (0,1)
Interest on debt (2,0) -7,0% (2,0)
Tax (3,4) -20,6% 1,4 5,0% (1,9)
NET INCOME 7,8 47,8% (3,4) -11,7% 4,4
NOPAT 5,8 Spread
ROIC 16,2% 7,6p.p.
Cost of debt after tax (CDI+1,5%) 8,6%
24
25. Figures
Per operating car
Renting cars 2010 2011 2010 2011
Net revenues 361.1 455.0 15.8 16.3
EBITDA 245.6 312.1 10.7 11.2
Depreciation (81.1) (115.8) (3.5) (4.2)
EBIT 164.5 196.3 7.2 7.0
Financial expenses (43.4) (57.0) (1.9) (2.0)
EBT 121.1 139.3 5.3 5.0
Per car sold
Selling cars 2010 2011 2010 2011
Net revenues 220.8 227.0 28.9 28.6
EBITDA 2.3 11.4 0.3 1.4
Depreciation (0.1) - (0.0) -
EBIT 2.2 11.4 0.3 1.4
EBT 2.2 11.4 0.3 1.4
End of period fleet 26,615 31,629 - -
Average operating fleet 22,916 27,858 - -
Average rented fleet 22,343 26,676 - -
Number of cars sold 7,627 7,929 - -
25
26. Satisfaction survey
2011 - Would you recommend Total Fleet? YES!
98.0%
98.0% 99.0% 93.0%
Users VIP Users Contract managers
Customers recognize good service and recommend it!
26
Source: Users and VIP users based on phone interviews made by the Company with customers. Contract managers made by an independent research: Vox Populi
27. Volumes and revenues
# daily rentals (thousand)
19.2%
CAGR: 9,603
8,044
6,437 7,099 13. 5 %
5,144 4,625 5,248 11. 2 %
4,188
3,351
2,372 2,637
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
Net revenues (R$ million)
21.4%
CAGR:
455.0
361.1
268.4
303.2 21.1% 261.3
18. 7 %
219.8 215.7
184.0
142.0 131.8
111.0
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
Revenues reflect the interest and depreciation assumptions at the time of the agreement.
27
29. Average depreciation per car
5.083,1 5.406,3
4.371,7 4.133,0 4.289,3 Reflex of the
2.981,3 3.509,7
IPI reduction
2.383,3 2.395,8
2005 2006 2007 2008 2009 2010 2011 Jan-Apr/12* 1H12*
* Annualized
Additional depreciation related to the IPI reduction on May, 2012
R$ million Fleet as of May, 2012
Additional estimated depreciation Quantity of cars by year of maturity of estimated useful life
Division
2Q12 After 2Q12 Total 2012 2013 2014 2015 Total
15 (*) 49 64 5,340 10,303 11,590 4,055 31,288
Fleet rental
23% 77% 100% 17% 33% 37% 13% 100%
(*) Additional estimated depreciation of R$49 million will be accounted prospectively throughout the prospective life of the cars
Depreciation was impacted by the decrease in car prices due to the IPI reduction.
29
30. Agenda
1. Company overview
2. Main business divisions
Car rental
Fleet rental
Seminovos
3. Consolidated
4. Debt and cash
5. Key value drivers
30
31. Overview
Localiza launched Seminovos in 1993, a brand new concept featuring younger cars.
Combining the Localiza brand with a growing network of stores
enables the firm to continuously sell thousands of cars at market prices.
31
Source: Fenabrave 2011
33. Main competitors
• Dealers • “Auto malls” and
• Rental operators • Retailers
Examples • Fiat, VW, Ford, GM most “Cidade do
• Locamerica, Hertz • “Loja do carro”
successful automóvel”
• Brand and perceived • Tailored to popular • Comfort and
• Often appeal to lower
image/ experience customer demand at convenience
income classes, with
• Support often directly purchase, hence likely • Variety of models
Strengths older cars
from the OEM’s to be an attractive value and brands
• Occasionally
• Flexibility in trade-in cars proposition when for • Flexibility in
specialized in niches
• Strong media presence sale exchange
• Stigma about heavy
• Lower media
usage during rental car • No brand recognition
• Used cars not a core presence
years (lower reputation
business • Cars often older than
Weaknesses • Weak retail network market)
• Cars often older than 2 2 years
• Geographical • Financing options with
years • It hasn’t been
concentration (SP) higher interest rates
successful
• Lower media presence
Points of sale • 3,714 (Anfavea) • 95* • 45,600 (Fenauto) • 71 (Fenauto)
*Seminovos Localiza and main rentals, estimates 33
34. Drivers
# of inhabitants per car (2011) # of inhabitants per car - Brazil
8.0 7.9
USA 1.3
7.4
United Kingdon 1.8
Germany 1.9 6.9
France 2.0 6.5
Japan 2.1 5.9
South Korea 3.6 5.5
Russia 4.0
Argentina 4.2
Brazil 5.5 2005 2006 2007 2008 2009 2010 2011
Brazilian car market: new x used car market and affordability
17.4 Individuals with
15.8
affordability to
11.9
buy a new car*
8.9
7.9 8.9
7.0 8.4 Used cars
6.8 7.1 7.3 7.1
5.6 6.7 2.6x
2.7x 2.4x 2.5x
4.4x 3.7x 3.1x
3.5 New cars
3.0 3.3
1.6 1.8 2.3 2.7
2005 2006 2007 2008 2009 2010 2011
34
* Population with affordability to buy a new compact car (R$25,000) with 20% downpayment
35. Satisfaction survey
2011 - Would you recommend Seminovos? YES!
94.0%
94.0% 92.3% 94.0%
2009 2010 2011
Customers recognize our quality and recommend it!
35
Source: based on phone interviews made by the Company with customers started in 2009
36. Network increase
# of points of sale
+5
71
66
55
49
32 35
26
13
2005 2006 2007 2008 2009 2010 2011 1H12
Used car sales network has increased by 5 stores.
36
37. Car sales per street store
Monthly average
Car sold per store/month
82 82 82
74 73 74
70
59
2008 2009 2010 2011 1Q12 Apr-12 May-12 Jun-12
Number of sold cars is weighed by number of opened stores in the period
Productivity has improved, contributing to the reduction of fixed cost per car sold.
37
38. Agenda
1. Company overview
2. Main business divisions
Car rental
Fleet rental
Seminovos
3. Consolidated
4. Debt and cash
5. Key value drivers
38
44. Consolidated net income
R$ million
%
16.4
291.6
250.5 -39.4
%
190.2
138.2 137.6
-85.5
106.5 127.4 116.3
%
83.4 74.0
10.7
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
EBITDA x net income Reconciliation 2009 2010 2011 Var. R$ Var. % 1H11 1H12 Var. R$ Var. % 2Q11 2Q12 Var. R$ Var. %
Consolidated EBITDA 469.7 649.5 821.3 171.8 26.5% 386.8 425.7 38.9 10.1% 200.6 215.7 15.1 7.5%
(172.3) (146.3) (201.5) (55.2) 37.7% (89.7) (223.3) (133.6) 148.9% (43.3) (165.3) (122.0) 281.8%
Car depreciation
Other property and equipment dep. (21.0) (21.1) (24.1) (3.0) 14.2% (12.3) (15.6) (3.3) 26.8% (6.3) (8.1) (1.8) 28.6%
Financial expenses, net (112.9) (130.1) (179.0) (48.9) 37.6% (88.0) (77.7) 10.3 -11.7% (45.2) (34.1) 11.1 -24.6%
Income tax and social contribution (47.2) (101.5) (125.1) (23.6) 23.3% (59.2) (25.7) 33.5 -56.6% (31.8) 2.5 34.3 -107.9%
Net income 116.3 250.5 291.6 41.1 16.4% 137.6 83.4 (54.2) -39.4% 74.0 10.7 (63.3) -85.5%
Excluding the additional depreciation, 1H12 net income would have reached R$149.5 million.
44
45. SWOT Analysis: Localiza business platform
According to Roland Berger report as of June 21, 2012
Strengths Weaknesses
• Unrivaled local scale • Strong focus on airport locations
• Vertical integration, creating synergies for all four • Renewal of airport concessions costly
businesses
• Dependence on passengers travelling by air (growth
• Strong business operating performance and limited by Brazilian infrastructure)
experienced leadership
• Weak footprint outside of Brazil, resulting in
• Strong footprint in Brazil’s extreme traffic locations exposure to national economic development
• Dependence on long-term capital to finance renewal
of fleet
Opportunities Threats
• Increase in market share through further •Any measures of the Brazilian government which
consolidation of Brazilian rental car market impact car sales prices, potentially lowering asset
value (e.g. new car sales tax)
• Underdeveloped fleet outsorcing in Brazil
• New competitors entering the market (rental car or
• Upcoming mega events in Brazil
fleet management)
• Positive outlook for Brazilian business and tourism
• Increasing fuel price
Localiza’s brand is top of mind in Brazil.
Localiza doesn’t see it as a weakness or a threat
45
46. Agenda
1. Company overview
2. Main business divisions
Car rental
Fleet rental
Seminovos
3. Consolidated
4. Debt and cash
5. Key value drivers
46
47. Free cash flow - FCF
Free cash flow - R$ million 2005 2006 2007 2008 2009 2010 2011 1H12
EBITDA 277.9 311.3 403.5 504.1 469.7 649.5 821.3 425.7
Used car sales net revenues (446.5) (588.8) (850.5) (980.8) (922.4) (1,321.9) (1,468.1) (762.7)
Depreciated cost of used car sales (*) 361.2 530.4 760.0 874.5 855.1 1,203.2 1,328.6 687.7
(-) Income tax and social contribution (32.7) (42.7) (63.4) (52.8) (49.0) (57.8) (83.0) (54.9)
Working capital variation (24.2) (4.8) 13.3 (44.8) (11.5) 54.5 (83.9) (18.9)
Cash provided before capex 135.7 205.4 262.9 300.2 341.9 527.5 514.9 276.9
Used car sales net revenues 446.5 588.8 850.5 980.8 922.4 1,321.9 1,468.1 762.7
Capex of car - renewal (496.0) (643.3) (839.0) (1,035.4) (947.9) (1,370.1) (1,504.5) (628.5)
Net capex for renewal (49.5) (54.5) 11.5 (54.6) (25.5) (48.2) (36.4) 134.2
Capex – other property and equipment, net (28.0) (32.7) (23.7) (39.9) (21.0) (51.1) (63.0) (36.0)
Free cash flow before growth 58.2 118.2 250.7 205.7 295.4 428.2 415.5 375.1
Capex of car - growth (194.0) (287.0) (221.9) (299.9) (241.1) (540.3) (272.0) -
Change in accounts payable to car suppliers (capex) (25.5) 222.0 (51.0) (188.9) 241.1 111.3 32.7 (132.8)
Net capex for fleet growth (219.5) (65.0) (272.9) (488.8) 0.0 (429.0) (239.3) (132.8)
Fleet increase – quantity 7,342 10,346 7,957 9,930 8,642 18,649 9,178 (5,868)
Free cash flow after growth (161.3) 53.2 (22.2) (283.1) 295.4 (0.8) 176.2 242.3
47
(*) Without tecnical discount deduction up to 2010 (see item 18 – Glossary)
48. Changes in net debt in 1H12 (R$ million)
FCF
242.3
Net debt Net debt
12/31/2011 06/30/2012
- 1,363.4 - 1,254.9
(78.9) (54.9)
Interest Dividends
Net debt was reduced by R$108.5 million (-8.0%).
48
49. Debt profile
R$ million
Debt profile in 06/30/2012- principal
(R$ million)
562.0
432.0
323.5 303.5
161.8
16.5 26.0 52.0
2012 2013 2014 2015 2016 2017 2018 2019
Cash
673,9
Strong cash position and comfortable debt profile.
In the 1H12, all in spread was of 1.3p.p. above the Selic rate.
49
50. Debt – ratios
R$ million
2,446.7 2,681.7
2,391.2
1,752.6 1,907.8
1,492.9 1,363.4
1,247.7 1,254.5 1,281.1 1,254.9
1,078.6
900.2
765.1
535.8 440.4
2005 2006 2007 2008 2009 2010 2011 1H12
Net debt Fleet value
END OF PERIOD BALANCE 2005 2006 2007 2008 2009 2010 2011(**) 1H12 (**)
Net debt / Fleet value 60% 36% 51% 72% 57% 52% 51% 52%
Net debt / EBITDA (*) 1.9x 1.4x 1.9x 2.5x 2.3x 2.0x 1.7x 1.5x
Net debt / Equity 1.4x 0.7x 1.3x 2.0x 1.5x 1.4x 1.2x 1.1x
EBITDA / Financial expenses, net 3.3x 4.8x 5.4x 3.8x 4.2x 5.0x 4.6x 5.5x
(*) annualized
(**) From January 1st 2011, adress financial statements in IFRS
The Company presents conservative indebtedness ratios.
50
51. Agenda
1. Company overview
2. Main business divisions
Car rental
Fleet rental
Seminovos
3. Consolidated
4. Debt and cash
5. Key value drivers
51
52. Key value drivers
Adding value
to shareholders
Spread Ability to sustain
ROIC > DEBT COST Growth (competitive advantages)
(1) (2) (3)
1- Spread around 8p.p. on the invested capital above the cost of debt after taxes.
2- Growth: GDP elasticity has been 5.7x over the last 6 years.
3- Localiza’s competitive strengths: the competitive strengths in each step of the
process allow the Company to grow profitably on a sustainable manner.
52
53. Spread
24,80%
21,25%
18,70%
17,03% 16,94% 17,12%
15,10%
11.2p.p.
7.8p.p. 12.9p.p. 11,54%
8.2p.p. 9.6p.p. 8.5p.p. 8.1p.p.
13,60% 4.0p.p.
10,90%
8,40% 8,84% 7,59% 8,60%
7,33% 7,05%
2005 2006 2007 2008 2009 2010 2011 1H12
annualized
Cost of debt after tax ROIC
2005 2006 2007 2008 2009 2010 2011 1H12 a
Average capital investment - R$ million 606.3 986.2 1,137.5 1,642.3 1,702.3 1,984.6 2,445.3 2,645.6
NOPAT margin (over rental net revenues) 37.0% 34.5% 36.9% 32.1%* 21.9% 28.6% 28.9% 24.9%*
Turnover of average capital investment
(over rental net revenues) 0.67x 0.55x 0.58x 0.53x 0.53x 0.59x 0.59x 0.61x
ROIC 24.8% 18.7% 21.3% 17.0% 11.5% 16.9% 17.1% 15.1%
Interest on debt after tax 13.60% 10.90% 8.40% 8.84% 7.59% 7.33% 8.60% 7.05%
Spread (ROIC – Interest after tax) - p.p. 11.2 7.8 12.9 8.2 4.0 9.6 8.5 8.1
ROIC and spread reflect the Company’s competitive pricing strategy.
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* Excludes additional fleet depreciation, following the concept recommended by Stern Stewart
54. GDP elasticity
Rental revenues real growth elasticity x GDP
Localiza
5.7x
Sector
GDP 2.9x
2005 2006 2007 2008 2009 2010 2011
Localiza’s competitive advantages resulted in a growth above the industry level.
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56. Ability to sustain: competitive advantages
brAAA
Aa1.br
AA+ (bra)
Raising money Buying cars
Localiza’s bought 2.3% of the
main automakers sales in 2011
Selling cars Renting cars
Sales to final consumer 452 locations
71 points of sale Top of Mind brand
Additional fleet during peaks of demand Strong know-how
Stable management
Localiza managed to close the cycle of the rental business through
integration, capturing competitive advantages at every step.
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