Localiza completa 1 q10 eng_abla

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Localiza completa 1 q10 eng_abla

  1. 1. Localiza Rent a Car S.A. 1Q10 Results - R$ millions, USGAAP Goldman Sachs: “The BRICs Nifty 50: The EM and DM winners”, November, 2009 May, 2010 1
  2. 2. Localiza started its business in 1973… …with 6 used beetles, 100% financed. 2
  3. 3. Timeline: growth by adjacencies 79.858 cars 79.858 cars 9 countries 9 countries 449 locations 449 locations 1973 1984 1990 1997 1999 2005 2006 2007 2008 2009 1Q10 Private US$ R$ 350MM R$ 200MM R$ 300MM R$ 400MM R$ 370MM Equity 100MM IPO Debenture Follow on Debenture Debenture Debenture Debenture DLJ Bonds 1st Localiza 2nd Localiza 3rd Localiza 1st Total Fleet 4th Localiza 3
  4. 4. Ownership breakdown Founders 13.1% 8.6% 12.0% 8.6% 57.7% Salim Eugenio Antonio Flavio Claudio Resende Resende Free-Float * Mattar Mattar 100% 100% 100% * Includes 4.226.300 shares in Treasury 4
  5. 5. Company’s structure BOARD OF DIRECTORS CEO Salim Mattar Car Acquisition Legal COO Eugenio Mattar Human Administration Financial Resources IT Localiza has a very lean and efficient structure The supporting areas assist all four businesses’ divisions. The succession process is already planned. 5
  6. 6. Integrated business platform 48,323 cars 22,285 cars 2.0 million clients 599 clients 213 locations 232 employees 2.844 employees Revenue: 16.9% Revenue: 32.7% EBITDA: 44.4% EBITDA: 52.2% Synergies: Net income.: 38.8% Net income: 57.8% bargaining power cost reduction cross selling 9,250 cars Capacity to sell 50,000 cars/year 166 locations in Brazil Around 80% sold to final consumer 70 locations in South America 48 stores 26 employees 617 employees Revenue: 0.6% Revenue: 49.8% EBITDA: 1.2% EBITDA: 2.3% Net income: 3.4% Net income: - This integrated business platform gives Localiza flexibility and superior performance 6
  7. 7. Strategy by division Increase market leadership maintaining high return Core Businesses Create value taking advantage of the fleet rental market, leveraging the synergies from the integrated business platform Add value to the brand by expanding the network in Brazil and South America, with profitability Support Add value to the businesses optimizing fleet renewal and reducing depreciation 7
  8. 8. Financial cycle – Car rental 1-year cycle Funding (PV) Net car sale revenue $26.6 $25.6 Revenue: 19.0 1 2 3 4 5 Expenses: (10.8) 8 9 10 11 12 $26.6 $29.7 Car acquisition Funding (FV) Car rental Used car sales Total Per operational car Per operational car 1 year R$ % R$ % R$ Revenues 19.0 100.0% 27.6 100.0% 46.6 Cost (8.0) -42.1% (8.0) SG&A (2.8) -14.7% (2.0) -7.3% (4.8) Net car sale revenue 25.6 92.7% 25.6 Book value of car sale (25.1) -91.0% (25.1) EBITDA 8.2 43.2% 0.5 1.7% 8.7 Depreciation (vehicle) (1.6) -5.8% (1.6) Depreciation (non-vehicle) (0.3) -1.6% (0.3) Interest on debt (1.9) -6.7% (1.9) Tax (2.4) -12.5% 0.9 3.3% (1.5) NET INCOME 5.5 29.1% (2.1) -7.6% 3.4 ROIC 17.8% 8
  9. 9. Financial cycle - Fleet rental Funding (PV) 2-year cycle Net car sale revenue 33.8 28.5 Revenue: 32.4 1 2 3 4 5 Expenses: (10.5) 20 21 22 23 24 33.8 42.0 Car acquisition Funding (FV) Fleet rental Used car sales Total Per operational car Per operational car 2 years R$ % R$ % R$ Revenues 32.4 100.0% 30.7 100.0% 63.1 Cost (8.7) -26.7% (8.7) SG&A (1.8) -5.6% (2.1) -7.0% (4.0) Net car sale revenue 28.5 93.0% 28.5 Book value of car sale (28.0) -91.3% (28.0) EBITDA 21.9 67.6% 0.5 1.7% 22.4 Depreciation (vehicle) (6.5) -21.2% (6.5) Depreciation (non-vehicle) (0.4) -1.2% (0.4) Interest on debt (4.9) -16.0% (4.9) Tax (6.5) -19.9% 3.3 10.6% (3.2) NET INCOME 15.1 46.5% (7.6) -24.8% 7.4 NET INCOME per year 7.5 46.5% (3.8) -24.8% 3.7 ROIC 16.1% 9
  10. 10. Growth opportunities Consolidation US market: 4 players 95% BR market: 4 players 45% 1.893 players 55% Source: Auto Rental News and Company’s estimates Infrastructure Outsourcing Pre salt – R$30bn/year until 2015 Corporate fleet : 2MM of cars Automakers R$23bn until 2013 Targeted market 500.000 cars World Cup 2014 – R$ 71bn 30% rented Olympic Games in RJ – R$ 31bn Source: Company’s estimates Source: Petrobras, Santander Equity Market Income / Consumption Air traffic 2010: 12 to 18% Credit cards: 45 mm of holders Income growth: Middle class in Brazil 2009 – 98MM Source: Gol, Tam, Abecs and Company’s estimates Strong drivers of growth 10
  11. 11. Growth opportunities: GDP Rental revenues accumulated growth rate – rentals Localiza 6.5x Sector 3.3x GDP 2005 2006 2007 2008 2009 PIB Loc a l i z a S e c t or GDP annual growth estimated for the next 5 years between 4 and 5% (Brazilian Central Bank) Source: Central Bank, Localiza and ABLA 11
  12. 12. Growth opportunities: consolidation Brazilian car rental agencies Airport locations Off-airport locations Others Localiza 49 290 Unidas Hertz 74 Hertz 28 73 Avis 53 Unidas 28 Localiza Avis 89 Others* 30 1951 Off-airport market is an opportunity to Localiza since it is still fragmented *Source: ABLA, 2009 Source: Each company website as of March 31th , 2010 12
  13. 13. Competitive advantages Gains of Scale Higher Know-how scale Strong brand competitiveness Strong values Integrated platform Geographical footprint High corporate governance standards Used car sales network Management model Lower depreciation Stable Management Owners involved Facilities Rating Market share increase Localiza reached the virtuous circle 13
  14. 14. Competitive advantages 37 years of experience… Raising Buying Renting Selling money cars cars cars …gives Localiza know-how and superior performance in all chains of the business process 14
  15. 15. Competitive advantages in funding Raising Buying Renting Selling money cars cars cars Rating Moody’s corporate rating as of Mar/10 (Local Currency) Standard & Poors as of Mar/10 (Local Currency) Localiza Rent a Car S.A Aa2.br Localiza Rent a Car S.A brAA- Braskem S.A. Aa2.br Braskem S.A brAA+ Cyrela Brazil Realty brA+ Cyrela Brazil Realty Aa2.br CEMIG brAA CEMIG Aa2.br Duke Energy brAA- Duke Energy Aa2.br Tam brA Localiza raises money with lower spreads 15
  16. 16. Competitive advantages in buying cars Raising Buying Renting Selling money cars cars cars Localiza’ share in national sales of Purchases by brand Fiat, GM, VW and Renault* Localiza 2.3% GM FIAT 44% 33% Others VW RENAULT 1% 16% 6% Localiza purchases cars with better prices and conditions * Includes Localiza, Total Fleet and Franchisees purchases. 16
  17. 17. Competitive advantages in renting cars Raising Buying Renting Selling money cars cars cars Geographical Strong brand Scale footprint Locations in Brazil 379 274 71 101 102 Localiza Unidas Hertz Avis *Source: Each company website as of March 31th , 2010 17
  18. 18. Competitive advantages: network footprint Airport and off airport branches located in easy-access and intense traffic places 18
  19. 19. Competitive advantages in used car sales Raising Buying Renting Selling money cars cars cars Unique product Selling directly to final consumer Footprint Pre owned cars Low mileage 48 stores Pre-owned cars Automaker warranty Cars financed through third-party financial institutions Cash generated in used car sales is used to renew the fleet Selling directly to final consumer reduces depreciation 19
  20. 20. Competitive advantages: used car sales network Around 80% of used cars are sold directly to final consumers 20
  21. 21. Competitive advantages: additional fleet Cars available for sale are used by car rental division in peaks of demand 21
  22. 22. Competitive advantages: stable management BOARD OF DIRECTORS Salim Mattar - 37y CEO Car Acquisition Legal COO Eugênio Mattar – 37y Human Administration Financial Resources IT Gina Rafael – 29y Bruno Roberto Mendes – 25y Andrade – 18y Helvia Barcelos – 23y Daltro Leite – 25y Marco Antônio Guimarães – 20y 22
  23. 23. Competitive advantages: management model Business Values Planning Execution Vision Stock Options Mission Yearly bonus Objectives Variable Mgt. Action Actions Evaluation Reward contract plan Management by results: execution with meritocracy 23
  24. 24. Results 24
  25. 25. Results: growth with profitability Net revenues consolidated .8% R : 30 1,855.7 1,856.3 CA G 1,531.7 CAGR: 16.5% 1,145.4 876.9 532.0 634.4 420.4 476.9 234.3 244.7 310.1 212.9 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 EBITDA consolidated % R: 26.3 CAG 504.1 469.7 23.9% 403.5 CAGR: 311.4 278.1 197.8 134.3 154.0 149.9 152.1 62.0 85.2 42.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 GDP 3.4 0.0 0.3 4.3 1.3 2.7 1.1 5.7 2.9 3.7 4.6 5.1 -0.2 Average 1.9 4.4 -0.2 25
  26. 26. Results: market share Fleet - consolidated Revenues - consolidated 24.8% 24.2% 21.8% 21.4% 20.6% 20.8% 22.1% 18.9% 20.5% 17.9% 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Fleet 30.4% 13.2% Source: ABLA, 2009 26
  27. 27. Results: consolidated market share Revenues 2008 2009 Localiza Localiza 24.8% 24.2% Unidas Unidas Others 7.1% Others 7.7% 68.1% 68.1% Localiza Unidas 2008 2009 1Q10 2008 2009 1Q10 Consolidated fleet 69,460 77,880 78,664 37,982 36,000 33,029 Rental and franchised revenues 988.6 1,057.6 308.3 325.3 376.3 84.9 Net income 127.4 116.3 48.8 (17.4) (31.6) (32.2) 27
  28. 28. Corporate governance Elected twice the best company in corporate governance (Capital Aberto Magazine) Elected “the most shareholder-friendly” company (Institutional Investor Magazine - 2008) Recognitions & Rewards 47th most valuable brand in Brazil among listed companies (Brand Analytics, May 2010) The best in the transportation sector (Exame Magazine, July 2009) Elected twice the best CEO of a small-cap (Institutional Investor Magazine) 28
  29. 29. Financials 1Q10 29
  30. 30. 1Q10 Highlights R$ millions 1Q09 1Q10 Variation Net revenue 446.1 563.9 26.4% Rental net revenues 229.4 268.5 17.0% EBITDA 115.4 132.1 14.5% Net income 30.2 48.8 61.6% Net income / Rental net revenues 13.2% 18.2% 5.0p.p. Quantity 1Q09 1Q10 Variation Purchased cars 387 11,486 11,099 Sold cars 7,828 10,948 3,120 End of period fleet 54,817 70,608 15,791 Localiza is back to high levels of growth 30
  31. 31. Car Rental Division Net revenue (R$ million) 3.8% 29.2% CAGR: 585.7 607.8 442.7 357.2 271.3 20.1% 181.4 151.1 2005 2006 2007 2008 2009 1Q09 1Q10 # daily rentals (thousand) % 1.5% : 32.5 CAGR 7,940 8,062 5,793 4,668 3,411 21.4 % 1,952 2,369 2005 2006 2007 2008 2009 1Q09 1Q10 31
  32. 32. Car Rental Division # daily rentals (thousand) % 17.5 1% 25. 0% 22. 711.2 835.4 722.1 649.2 811.3 591.6 Jan Feb Mar 2009 2010 # daily rentals jan feb m ar apr m ay jun jul aug sep oct nov dec 2005 2006 2007 2008 2009 2010 Growth resumption 32
  33. 33. Car Rental Division Average age of operational fleet (month) 9.5 6.3 6.9 2008 2009 1Q10 The average age of the operating fleet is returning to pre-crisis levels… Average age of sold cars (month) 18.7 16.6 12.3 2008 2009 1Q10 33
  34. 34. Depreciation per car Car Rental Division -51.1 % 2,546.0 2,577.0 1,318.0 939.1 492.3 332.9 2005 2006 2007 2008 2009 1Q10 …resulting in lower depreciation 34
  35. 35. Fleet Rental Division Net revenue (R$ million) % : 22.9 CAGR 1 3 .2 % 313.4 276.9 228.2 190.2 149.2 % 11.2 75.9 84.4 2005 2006 2007 2008 2009 1Q09 1Q10 # daily rentals (thousand) : 24.3% 10.3% CAGR 7,099 6,437 5,144 4,188 3,351 6.2% 1,780 1,890 2005 2006 2007 2008 2009 1Q09 1Q10 Revenues grew above volume, due to an increase of 4.9% in the average rental rate 35
  36. 36. Depreciation per car Fleet Rental Division -25.6 % 5,083.1 4,371.7 3,254.4 2,981.3 2,383.3 2,395.8 2005 2006 2007 2008 2009 1Q10 Average depreciation per car decreased again in the 1Q10 36
  37. 37. Used car sales # of sold cars % : 22.3 CAGR 34,281 0 .7 % 34,519 30,093 23,174 18,763 % 39.9 10,948 7,828 2005 2006 2007 2008 2009 1Q09 1Q10 # of sold cars % .6 % % 48 4,213 41 .9 3,577 27.8 3,158 2,836 2,521 2,471 Jan Feb Mar 2009 2010 Sale’s volumes are back to pre-crisis levels 37
  38. 38. Consolidated net revenues R$ million : 28.4% CAGR 1,855.7 1,856.3 1,531.7 1,145.4 876.9 26.4% 563.9 446.1 2005 2006 2007 2008 2009 1Q09 1Q10 Consolidated net revenues grew 26.4% in the 1Q10 38
  39. 39. Consolidated EBITDA margins R$ million : 22.0% - 6.8 CAGR % 504.1 469.7 403.5 277.9 311.3 % 115.4 14.5 132.1 2005 2006 2007 2008 2009 1Q09 1Q10 Divisions 2005 2006 2007 2008 2009 1Q09 1Q10 Car rental 45.3% 42.0% 44.5% 44.3% 40.3% 40.8% 40.6% Fleet rental 62.3% 69.1% 68.7% 67.0% 66.5% 65.2% 64.5% Rental consolidated 51.0% 51.2% 52.6% 51.5% 49.3% 49.0% 48.3% Used car sales 13.2% 4.6% 5.4% 5.5% 1.1% 1.4% 0.8% Consistent EBITDA margins 39
  40. 40. Net income R$ million 190.2 138.2 127.4 116.3 106.5 61.6% 48.8 30.2 2005 2006 2007 2008 2009 1Q09 1Q10 Reconciliation of EBITDA x Net Income 2008 2009 Var. R$ 1Q09 1Q10 Var. R$ EBITDA - Car rental and fleet rental 449.6 459.1 9.5 112.3 129.6 17.3 EBITDA - Used car sales 54.5 10.6 (43.9) 3.1 2.5 (0.6) EBITDA Consolidated 504.1 469.7 (34.4) 115.4 132.1 16.7 Depreciation of revenue-earning vehicles (178.5) (172.3) 6.2 (29.9) (30.7) (0.8) Other depreciation (18.3) (21.0) (2.7) (5.3) (5.1) 0.2 Financial expenses, net (133.3) (112.9) 20.4 (38.8) (28.2) 10.6 Income tax and social contribution (46.6) (47.2) (0.6) (11.2) (19.3) (8.1) Net income 127.4 116.3 (11.1) 30.2 48.8 18.6 Net income grew 61.6% in the 1Q10 40
  41. 41. Spread: ROIC x CDI 3 0. % 0 3 0. % 0 24.9% 21.3% 19.1% 18.8% 17.0% 15.3% 14.3% 12.0% 11.5% 11.6% 10.1% 10.0% 9.3 5.8 3.5 5.4 1.5 4.3 0. % 0 0. % 0 2005 2006 2007 2008 2009 1Q10 annualized Spread (p.p.) ROIC Average CDI 2005 2006 2007 2008 2009 1Q10a Rental revenues 428,703 555,115 678,507 872,486 931,832 1,073,840 NOPAT 151,059 185,189 241,724 279,674 196,461 269,640 NOPAT margin 35.2% 33.4% 35.6% 32.1% 21.1% 25.1% Invested capital turnover 0.71 x 0.56 x 0.60 x 0.53 x 0.55 x 0.57 x ROIC 24.9% 18.8% 21.3% 17.0% 11.5% 14.3% Average CDI 19.1% 15.3% 12.0% 11.6% 10.0% 10.1% Spread (ROIC – CDI) p.p. 5.8 3.5 9.3 5.4 1.5 4.3 5 p.p. average spread 41
  42. 42. Free cash flow - FCF Free cash flow - R$ million 2005 2006 2007 2008 2009 1Q10 EBITDA 277.9 311.3 403.5 504.1 469.7 132.1 Used car sales revenues (448.2) (590.3) (853.2) (983.2) (924.5) (295.4) Cost of used car sales 361.2 530.4 760.0 874.5 855.1 275.3 EBITDA without used car sales revenues and costs 190.9 251.4 310.3 395.4 400.3 112.0 (-) Income tax and social contribution – current (32.7) (42.7) (63.4) (52.8) (49.0) (15.6) Working capital variation (24.2) (4.8) 13.3 (44.8) (11.5) 1.7 Cash provided before capex 134.0 203.9 260.2 297.8 339.8 98.1 Used car sales revenues 448.2 590.3 853.2 983.2 924.5 295.4 Capex of car – renewal (496.0) (643.3) (839.0) (1,035.4) (963.1) (297.1) Change in amounts payable to car suppliers (capex) - - - - 15.2 (15.2) Net capex for renewal (47.8) (53.0) 14.2 (52.2) (23.4) (16.9) Capex - Property and equipment, net (28.0) (32.7) (23.7) (39.9) (21.0) (7.7) Free cash flow before growth 58.2 118.2 250.7 205.7 295.4 73.5 Capex of car – growth (194.0) (287.0) (221.9) (299.9) (241.1) (14.6) Change in amounts payable to car suppliers (capex) (25.5) 222.0 (51.0) (188.9) 241.1 (8.7) Free cash flow (161.3) 53.2 (22.2) (283.1) 295.4 50.2 Fleet increase (quantity) 7,342 10,346 7,957 9,930 8,642 538 The Company generated R$50.2 million of free cash flow in the 1Q10, even with a small increase in the fleet 42
  43. 43. Debt – profile and costs R$ million Debt profile (principal) on 03/31/10 225.0 239.6 200.7 205.4 211.8 160.0 2010 2011 2012 2013 2014 2015 250.8 Cash Stand by* *Stand by refers to R$100 MM limit with BNDES, with term of drawing until sept/2010 Gross debt - principal Average effective cost 2010 2011 2012 2013 2014 2015 Total Working Capital CDI + 1.25%pa - 204.5 58.0 73.0 45.0 60.0 440.5 Debentures - 2nd Issuance CDI + 0.59%pa - - 66.6 66.6 66.8 - 200.0 Commercial Papers 108.9% of CDI 200.0 - - - - - 200.0 Debentures - 1st Issuance, Total Fleet CDI +2.02%pa - - 100.0 100.0 100.0 100.0 400.0 BNDES TJLP + 3.80%pa 0.7 0.9 0.4 - - - 2.0 Total gross debt - principal - 200.7 205.4 225.0 239.6 211.8 160.0 1,242.5 Cash and cash equivalents (250.8) - - - - - (250.8) Total net debt - principal - (50.1) 205.4 225.0 239.6 211.8 160.0 991.7 Debt profile was extended 43
  44. 44. Debt – ratios R$ million 1,907.8 1,907.7 1,752.6 1,492.9 1,247.7 1,254.5 1,078.6 1,062.1 900.2 765.1 535.8 440.4 2005 2006 2007 2008 2009 1Q10 Net debt Fleet value BALANCE AT THE END OF THE PERIOD 2005 2006 2007 2008 2009 1Q10 Net debt / Fleet value (USGAAP) 60% 36% 51% 72% 57% 56% Net debt / EBITDA (USGAAP) 1.9x 1.4x 1.9x 2.5x 2.3x 2.0x* 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 1.4x * annualized Indebtedness ratios have improved and remain comfortable 44
  45. 45. Managing assets Pricing strategy • Operating costs Equity • Depreciation • Financial expenses • Taxes • Spread Assets (cars) Funding Debt Cash to renew the fleet Profitability comes from rental divisions Flexible and liquid assets 45
  46. 46. Price 23 -M 0 5 10 15 20 25 ay 5- Ju 16 l -A ug 28 -S ep 11 -N ov 2005 26 -D ec 8- Fe b 24 -M ar 10 -M ay 22 -J un 3- Au g 15 2006 -S ep 30 -O c 14 t -D ec 31 -J an 16 -M ar 30 -A pr 13 -J un 26 -J ul 6- 2007 Se p 22 RENT3 Volume -O ct 6- D ec 23 -J an 10 -M RENT3 ar 23 -A RENT3 X IBOVESPA pr 6- Ju n 21 -J ul 2008 1- Se p 13 -O IBOVESPA ct 25 -N ov 12 -J an 25 -F eb 8- Ap 25 r -M ay 7- Ju 19 l -A 2009 ug Average daily volume negotiated of R$11.9 million in 1Q10 1- O c 16 t -N ov 4- Ja n 18 -F eb 0 20 40 60 80 100 120 140 160 180 200 191% 390% Volume Up to March 31, 2010 RENT3 Performance 46
  47. 47. 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. 47

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