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. 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. 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
7. Growth opportunities
GDP elasticity
Consolidation Air traffic
Credit cards
Fleet outsourcing
Replacement
7
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. 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. 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. 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. 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. 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. 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. 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. 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
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. Competitive Advantages: Largest distribution
Nationwide
Nationwide
presence
presence
Strategic
Strategic
locations
locations
International
International
footprint
footprint
387 agencies in 9 countries
19
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
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$1.2 billion in cars
Localiza and its Franchisees represented in 2007
3.2% of GM internal car sales
1.8% of FIAT internal car sales
1.6% of the Brazilian internal car sales
Localiza has better conditions due to its large scale
29
33. 1Q08 highlights
Average rented fleet Net revenue
16.6%
27.8%
470.5
35,817 403.6
28,022
R$ 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. 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. 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. 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. 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. 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. 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
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ar
ar
ar
ct
ct
g
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Au
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-J
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-M
-N
-D
-D
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M
-M
-S
-S
-A
-A
-J
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-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. 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
