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Localiza completa 3 q11 eng

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Localiza completa 3 q11 eng

  1. 1. 1October / 2011
  2. 2. Agenda1. The Company2. Drivers and opportunities3. Competitive advantages4. Financials5. Macroeconomic scenario 2
  3. 3. Company: highlightsPerformance Largest car rental company in South America with more than 480 branches in 8 countries Proved growth and profitability track record Market share of 37.5% in car rental and 12.5% in fleet rental ~100,000 cars fleet Flexible business model Top of mindCorporate governance High levels of corporate governance Stable managementRENT3 ADTV: > BRL 20 million 3
  4. 4. Integrated business platform 57,077cars 30,732 cars 2.7million clients 693 clients 240 locations 293 employees 3,810 employees Synergies: bargaining power cost reduction cross selling 12,285 cars 75.4% sold to final consumer 195 locations in Brazil 61 stores 46 locations in South America 822 employees 32 employeesThis integrated business platform gives Localiza flexibility and superior performance. 4 Based on the 3Q11
  5. 5. Strategy by division Increase market leadership maintaining high returnCore business Create value taking advantage of the fleet rental market, leveraging the synergies from the integrated business platformSupport Add value to the businesses, optimizing fleet renewal and reducing depreciation as a competitive advantage 5
  6. 6. Company: stable management BOARD OF DIRECTORS Salim Mattar – 38y CEO Car Acquisition Legal COO Eugênio Mattar – 38y Human Administration Financial Resources ITGina Rafael – 30yBruno Roberto Mendes – 26yAndrade – 19yJoão Andrade – 7y Localiza has a lean and efficient structure.Marco Antônio The succession process is already planned.Guimarães – 21y 6
  7. 7. Company: managing assets Targeted spread Equity Pricing strategy Assets (cars)Funding Assets (cash) Debt Profitability comes from Cash to renew the fleet rental divisions Flexible and liquid assets. 7
  8. 8. Financial cycle – car rental 1-year cycle Car sale revenue $27.9 Revenue 1 2 3 4 5 Expenses, interest and tax 8 9 10 11 12 $2.3 $26.6 SG&ACar acquisition Car Rental Seminovos Total per operating car per operating car 1 year R$ % R$ % R$ Revenues 19.5 100.0% 27.9 100.0% 47.4 Cost (8.2) -42.2% (8.2) SG&A (2.8) -14.5% (2.3) -8.4% (5.2) Net car sale revenue 25.5 91.6% 25.5 Book value of car sale (24.7) -90.0% (24.7) EBITDA 8.5 43.4% 0.8 2.9% 9.3 Depreciation (vehicle) (1.5) -5.5% (1.5) Depreciation (non-vehicle) (0.4) -1.8% (0.1) (0.5) Interest on debt (2.0) -7.2% (2.0) Tax (2.4) -12.1% 0.7 2.5% (1.6) NET INCOME 5.8 29.5% (2.2) -7.7% 3.6 NOPAT 5.1 ROIC * 17.7% Spread Cost of debt after tax 7.9% 9.8p.p. * Investment in cars and PP&E (8%) 8
  9. 9. Financial cycle – fleet rental 2-year cycle Net car sale revenue 29.0 Revenue 1 2 3 4 5 Expenses, interest and tax 20 21 22 23 24 $2.2 33.8 SG&ACar acquisition Fleet Rental Seminovos Total per operating car per operating car 2 anos R$ % R$ % R$ Revenues 32.7 100.0% 29.0 100.0% 61.7 Cost (9.4) -28.9% (9.4) SG&A (1.8) -5.6% (2.2) -7.7% (4.1) Net car sale revenue 26.8 92.3% 26.8 Book value of car sale (26.5) -90.0% (26.5) EBITDA 21.4 65.6% 0.3 1.0% 21.7 Depreciation (vehicle) (7.0) -24.2% (7.0) Depreciation (non-vehicle) (0.1) -0.2% (0.1) Interest on debt (3.8) -12.9% (3.8) Tax (6.2) -19.0% 3.1 10.8% (3.1) NET INCOME 15.2 46.4% (7.3) -25.3% 7.8 NET INCOME per year 7.6 46.4% (3.7) -25.3% 3.9 NOPAT (annualized) 5.1 ROIC 15.2% Spread Cost of debt after tax 7.9% 7.3p.p. 9
  10. 10. Company: growth and profitability track record Revenues consolidated % 2,551.30 25.1 CAGR: 1,855.70 1,856.30 1,531.70 CAGR: 16.5% 1,145.40 876.90 532.00 634.40 420.40 476.90 212.90 234.30 244.70 310.10 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 EBITDA consolidated % : 23.1 CAGR 649.5 23.9% 504.1 CAGR: 403.5 469.7 278.1 311.4 197.8 134.3 154 149.9 152.1 62 85.2 42 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010GDP 3.4 0.0 0.3 4.3 1.3 2.7 1.1 5.7 3.2 4.0 6.1 5.2 -0.6 7.5Average 1.9 4.4 Average growth of 25.0% p.a. in the last six years 10
  11. 11. Company: GDP elasticity Rental revenues growth elasticity x GDP Consolidated Localiza 5.5x Sector GDP 2.8x 2005 2006 2007 2008 2009 2010The drivers combined with Localiza’s competitive advantages resulted in a growth above the industry level. 11
  12. 12. Company: market share FleetCar Rental division Fleet Rental division 37.5% 12.5% Consolidated 21.8% 23.5% 20.6% 20.8% 21.4% 18.9% 2005 2006 2007 2008 2009 2010 12 Source: ABLA 2011 yearbook
  13. 13. Agenda1. Company2. Drivers and opportunities3. Competitive advantages4. Financials5. Macroeconomic scenario 13
  14. 14. Drivers and growth opportunities 14
  15. 15. Car rental drivers: income and affordability GDP per capita (R$ thousands) 19.0 16.0 16.6 14.2 12.8 10.7 11.7 8.4 9.5 6.9 7.5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Rent a Car Affordability 51% 510 465 415 38% 380 37% 35% 350 300 260 240 180 200 151 31% 27% 22% 20% 18% 16% 15% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Monthly m inim um salary (R$) Daily rental price over m inim um salary (%)Income increase and stable daily rental rates granted access of car rental to the middle class. 15 Source: Infraero, Gol, Abecs and Exame magazine (Dec/2010)
  16. 16. Car rental drivers: consumption Middle class (million) 113 98 66 % 15.3 .5 % 48 2003 2009 2014e Air traffic passengerss Credit card holders 154 51 128 45 % %71 20.3 00 . 0% 13.3 .3 % 15 2 802003 2009 2010 2003 2009 2010 Middle class and credit card holders growth resulted in the increase of demand. 16 Source: Infraero, Gol, Abecs and Exame (Dec/2010)
  17. 17. Car rental drivers: investments Investments 2011-2014 886 + 66% 339 533 R$ billion 206 210 131 337 196 2006-2009 2011-2014 Construction Infrastructure IndustryInfrastructure investments have a positive impact in rental volumes. 17 Source: BNDES 2011-2014, Ernani Torres (Deputy Director)
  18. 18. Car rental opportunities: consolidation Brazilian distribution Market # of branches Airport 424 Other Avis 30 Localiza 33 252 98 64 91 97 Unidas 18 Hertz Localiza Hertz Unidas Avis 30 # of cities Off-airport 289 326 Hertz Unidas 67 73 Avis 64 72 31 46 OtherLocaliza Hertz Unidas Avis 2004217 cities where the competitors are not present. Off-airport market is still fragmented. 18 Source: Each company website (June, 2011)
  19. 19. Strategy: organic growth Brazilian distribution Network expansion # of branches in Brazil 415 435 346 381 279 312254 Last 12 months* Branches2005 2006 2007 2008 2009 2010 9M11 Own 17 Franchised 22 Total 39 *as of June, 2011 The network still being expanded. 19
  20. 20. Fleet rental drivers: outsourcing trend Corporate fleet: 2.000.000 Targeted fleet: 500.000 Rented fleet: 232.000 30.732Only 50% of targeted fleet is rented. 20 Source: ABLA and Company’s estimates
  21. 21. Used car sales drivers: affordability and penetration Car purchase affordability 1 6 0 6 0 0 148 128 510 1 4 0 115 465 5 0 0 104 415 1 2 0 97 93 380 80 4 0 0 1 0 0 8 0 3 0 0 350 6 0 300 75 260 2 0 0 4 0 240 68 180 200 58 56 1 0 0 2 0 151 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Number of minimum w ages to buy a new car Monthly minimum salary (R$) # of inhabitants per car Brazil 6.9 Mexico 4.0 Germany 1.9 England 1.7 France 1.7 Italy 1.5 USA 1.2Income increase and credit availability are the major drivers for car sales. Source: Bradesco, PIB per capita: IPEADATA. 21
  22. 22. Strategy: network expansion Brazilian distribution New lots # of points of sale 55 61 Points of 49 Status* 32 35 sale 2613 In construction 62005 2006 2007 2008 2009 2010 9M11 Construction to begin 6 Prospection 10 *as of June, 2011 The network is being expanded to support rentals’ growth. 22
  23. 23. Brazilian market: new cars x used cars New cars X used cars 8,429,3097,016,576 7,114,870 7,260,054 7,071,525 6,743,699 2.5x 2.3x 3.0x 2.7x 4.3x 3.7x 3,329,1701,620,657 2,342,059 3,009,482 1,830,402 2,671,338 2005 2006 2007 2008 2009 2010 New cars Used cars 23 Source: FENABRAVE (Autos + light commercial)
  24. 24. Used car sales: 2010 market share Share: Localiza used cars x Car market Used cars sold: 47,285 0.6% 1.4% 4.4% 0KM Used Up to 3 years 3,329,170 8,429,309 1,093,281Used Seminovos 0km Seminovos 3 years old Seminovos 24 Source: Fenabrave 2010
  25. 25. Used car sales: sold cars evolution Monthly average of sold cars 4,545 4,159 3,940 3,860 2010 1Q11 2Q11 3Q11 Financial sales profile 39% 43% 42% 51% 61% 57% 58% 49% 2010 1Q11 2Q11 3Q11 Financed In cashThe increase on sales was supported by the opening of new points of sale. The macro prudential measures impacted the financial sales profile. 25
  26. 26. Agenda1. Company2. Drivers and opportunities3. Competitive advantages4. Financials5. Macroeconomic scenario 26
  27. 27. Competitive advantagesRaising Buying Renting Sellingmoney cars cars cars Localiza presents competitive advantages in all links of the rental chain. 27
  28. 28. Competitive advantages: raising money Raising Buying Renting Selling money cars cars cars Investment grade: lower spreads and longer terms Global Scale BBB- Fitch BBB+ S&P B+ S&P B+ Fitch B2 Moodys Baa3 Moody’sNational Scale Aa1.br Moody’s A (bra) Fitch BBB+ (bra) Fitch BBB (bra) Fitch AA(bra) Fitch Localiza raises money with lower spreads when compared to Brazilian competitors. 28
  29. 29. Competitive advantages: buying cars Raising Buying Renting Selling money cars cars cars Better conditions due to higher volumesLocaliza’ share in national sales of the three Purchases by brand largest automakers: GM, FIAT, VW Ford Renault Others 4.3% 3.1% 2.8% Fiat 2.8% GM 25.6% 37.0% VW 27.2%Localiza buys cars fit to rent and that have the highest residual value reduces depreciation. 29
  30. 30. Competitive advantages: renting carsRaising Buying Renting Sellingmoney cars cars cars Know How The Company has a strong know-how of the rental process. 30
  31. 31. Competitive advantages: renting carsRaising Buying Renting Sellingmoney cars cars cars Brand Localiza is TOP OF MIND in Brazil. 31
  32. 32. Competitive advantages: renting carsRaising Buying Renting Sellingmoney cars cars cars Brazilian distribution Airport Off-airport Other Localiza Avis 30 326 Hertz Localiza Unidas 33 67 98 73 Avis 31 Unidas Other 18 Hertz 2004 30 Localiza is present in 100% of the commercial airports. Localiza is present in the most important Brazilian cities. 32 Source: Each company website (June, 2011)
  33. 33. Competitive advantages: renting carsRaising Buying Renting Sellingmoney cars cars cars Scale # of branches # of cities 424 289 252 64 91 72 64 46 97Localiza Hertz Unidas Avis Localiza Hertz Unidas AvisLocaliza is bigger than the 2nd, 3rd and 4th competitors combined in number of rental locations. 33 Source: Each company website (June, 2011)
  34. 34. Competitive advantages: selling cars Raising Buying Renting Selling money cars cars cars Lower depreciationPoint of sale in Francisco Morato - SP - Brazil Point of sale in Belo Horizonte - MG - Brazil Point of sale in Sorocaba - SP - Brazil Around 75% of used cars are sold directly to final consumers. Selling directly to final consumer reduces depreciation. 34
  35. 35. Competitive advantages: selling carsRaising Buying Renting Sellingmoney cars cars cars Buffer Cars available for sale are used by the car rental division during peaks of demand. 35
  36. 36. Agenda1. Company2. Drivers and opportunities3. Competitive advantages4. Financials5. Macroeconomic scenario 36
  37. 37. Car Rental Division # daily rentals (thousand) :2 5.8 % CAGR 10,734 7% 9,470 22. 7,940 8,062 7,720 5,793 7% 4,668 12. 3,411 2,863 3,227 2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11 Net revenues (R$ million) : 25.4 % 802.2 1% 714.2 CAGR 565.2 585.2 26. 566.6 428.0 9% 346.1 15. 258.6 241.8 208.7 2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11Average rental rate increased due to a change in the business mix and better negociations. 37
  38. 38. Quarterly evolution of the number of rental days 2011 +23.4% +27.8% +29.3% 2010 Excluding effects of election 2009 1Q 2Q 3Q 4Q3Q comps are higher in the car rental due to the effects of 2010 elections. 38
  39. 39. Fleet Rental Division # daily rentals (thousand) 19.1% CAGR: % 7,099 8,044 20.9 7,086 6,437 5,862 3% 20. 5,144 4,1883,351 2,046 2,4612005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11 Net revenues (R$ million) : 20,5% CAGR 9% 303.2 361.1 27, 332.9 268.4 260.2 4% 26, 219.8 184.0 142.0 92.9 117.4 2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11 Growth in rental rate derived from the increase in basic interest rate. 39
  40. 40. Net Investment Fleet increase * (quantity) 18,649 7,957 9,930 8,642 10,346 65,934 6,121 466 7,342 44,211 47,285 43,161 40,607 38,160 4,939 (4,142) 38,050 34,519 34,486 37,694 33,520 30,093 34,28126,105 23,174 18,763 17,798 12,859 13,635 9,493 2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11 Purchased cars Sold cars Net investment (R$ million) 588.5 260.0 31.8 354.5 281.8 1,910.4 210.4 341.5 243.5 1,335.3 1,204.2 1,321.9 1,199.6 167.5 (100.4) 1,060.9 1,119.8 1,088.0 930.3 850.5 980.8 922.4 939.6 690.0 588.8 446.5 521.7 354.2 294.2 394.6 2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11 Purchases (accessories included) Used car sales revenues Flexibility in the car purchase to adjust fleet to demand. 40
  41. 41. Utilization rate and average operating fleet age Utilization rate and average operating fleet age Elections effect 9 0 . % 0 74.1% 69.9% 69.7% 8 0 . % 066.2% 66.3% 68.2% 68.9% 7 0 . % 0 6 0 . % 0 5 0 . % 0 4 0 . % 0 6.9 6.6 7.3 6.3 6.3 6.5 3 0 . % 0 5.5 2 0 . % 0 1 0 . % 0 0 . % 01Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Utilization rate Average operating fleet age Fleet is adjusted according to demand. 41
  42. 42. Distribution # of rental locations in Brazil 415 440 381 312 346 254 279 2005 2006 2007 2008 2009 2010 9M11 # of used car sales stores 61 55 49 32 35 26132005 2006 2007 2008 2009 2010 9M11 Localiza and Seminovos networks are being expanded to increase sales volumes. 42
  43. 43. End of period fleet End of period fleet (quantity) 9% CAGR: 19.7% 15. 87,809 88,060 70,295 75,755 62,515 26,615 30,732 46,003 53,476 25,305 22,778 35,865 23,403 14,630 17,79011,762 61,445 50,450 57,077 39,112 47,517 31,373 35,68624,1032005 2006 2007 2008 2009 2010 9/30/2010 9/30/2011 Car rental Fleet rental The 15.9% growth in the fleet is in line with the rental volume increase. 43
  44. 44. Consolidated net revenues R$ million 9% GR: 2 3.9% 2,497.2 20. 2,145.4 C A 1,823.7 1,820.9 1,775.1 1,505.5 1,321.9 1,088.0 1,126.2 980.8 922.4 0% 15. 939.6854.9 850.5 757.5 588.8 658.8446.5 6% 898.5 1,175.3 26. 1,057.4 354.2 394.6 655.0 842.9 835.5408.4 537.4 304.6 19.1% 362.92005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11 Rentals Seminovos Rental and Seminovos’ increase in volumes and prices resulted in higher revenues. 44
  45. 45. EBITDA R$ million 8.5% C A GR : 1 649.5 30.7% 603.0 504.1 469.7 461.3 % 311.3 403.5 21.0 277.9 178.7 216.2 2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11Divisions 2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11Car rental 47.5% 43.4% 46.0% 45.9% 41.9% 45.3% 45.9% 46.9% 48.7% 50.4%Fleet Rental 65.5% 71.4% 71.3% 69.1% 68.7% 68.0% 67.4% 68.9% 68.9% 72.1%Rentals consolidated 53.6% 52.9% 54.5% 53.3% 51.1% 52.3% 52.7% 53.8% 54.8% 57.5%Used car sales 13.2% 4.6% 5.5% 5.6% 1.1% 2.6% 2.3% 3.1% 3.4% 1.9% The 30.7% growth in the EBITDA in the 9M11 was above the rental revenues increase. 45
  46. 46. Average depreciation per car R$ Depreciation evolution - per year Financial crisis effect Normal market conditions Hot used car market 2,577.0 2,546.0 1,536.0 1,619.8 1,578.5 939.1492.3 332.92005 2006 2007 2008 2009 2010 9M10 * 9M11 * * Annualized Average depreciation per car remained stable in the year. Depreciation evolution - per quarter 1,942.5 1,993.2 1,492.3 1,580.5 1,318.0 1,251.9 1Q10* 1Q11* 2Q10* 2Q11* 3Q10* 3Q11* * Annualized The launching of new models increases 3Qs depreciation. 46
  47. 47. Average depreciation per car R$ Depreciation evolution - per year Financial crisis effect Hot used car market 5,083.1 4,371.7 4,080.9 3,509.7 3,306.02,981.3 2,383.3 2,395.8 2005 2006 2007 2008 2009 2010 9M10 * 9M11* * Annualized Depreciation evolution - per quarter 4,241.8 4,020.8 3,990.6 3,693.9 3,254.4 2,989.4 1Q10* 1Q11* 2Q10* 2Q11* 3Q10* 3Q11* * Annualized The fleet renewal after the end of the tax exemption resulted in higher depreciation. 47
  48. 48. Consolidated net income R$ million % 250.5 17.6 190.2 212.9 181.1106.5 138.2 127.4 116.3 0.5% 74.9 75.3 2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11Reconciliation EBITDA x net income 2009 2010 Var. R$ 9M10 9M11 Var. R$ 3T10 3T11 Var. R$EBITDA – Rentals and franchising 459.1 615.1 156.0 440.0 569.3 129.3 166.8 208.6 41.8EBITDA – Used car sales 10.6 34.4 23.8 21.3 33.7 12.4 11.9 7.6 (4.3)EBITDA Consolidated 469.7 649.5 179.8 461.3 603.0 141.7 178.7 216.2 37.5Cars depreciation (172.3) (146.3) 26.0 (104.3) (143.5) (39.2) (37.9) (53.9) (16.0)Other property and equipment depreciation (21.0) (21.1) (0.1) (15.4) (17.4) (2.0) (5.1) (5.0) 0.1Financial expenses, net (112.9) (130.1) (17.2) (88.8) (137.8) (49.0) (31.4) (49.8) (18.4)Income tax and social contribution (47.2) (101.5) (54.3) (71.7) (91.4) (19.7) (29.4) (32.2) (2.8)Net income 116.3 250.5 134.2 181.1 212.9 31.8 74.9 75.3 0.4 2011 results were impacted mainly due to interest rate increase. 48
  49. 49. Free cash flow - FCFFree cash flow - R$ million 2005 2006 2007 2008 2009 2010 9M11EBITDA 277.9 311.3 403.5 504.1 469.7 649.5 603.0 Used car sales net revenues (446.5) (588.8) (850.5) (980.8) (922.4) (1,321.9) (1,088.0) Depreciated cost of used car sales (*) 361.2 530.4 760.0 874.5 855.1 1,203.2 974.5 (-) Income tax and social contribution (32.7) (42.7) (63.4) (52.8) (49.0) (57.8) (57.3) working capital variation (24.2) (4.8) 13.3 (44.8) (11.5) 54.5 (59.4)Cash provided before capex 135.7 205.4 262.9 300.2 341.9 527.5 372.8 Used car sales net revenues 446.5 588.8 850.5 980.8 922.4 1,321.9 1,088.0Capex of car - renewal (496.0) (643.3) (839.0) (1,035.4) (947.9) (1,370.1) (1,106.1) Net capex for renewal (49.5) (54.5) 11.5 (54.6) (25.5) (48.2) (18.1)Capex – other property and equipment, net (28.0) (32.7) (23.7) (39.9) (21.0) (51.1) (37.4)Free cash flow before growth and interest 58.2 118.2 250.7 205.7 295.4 428.2 317.3Capex of car - growth (194.0) (287.0) (221.9) (299.9) (241.1) (540.3) (13.7) Change in accounts payable to car suppliers (capex) (25.5) 222.0 (51.0) (188.9) 241.1 111.3 (195.8)Free cash flow after growth and before interest (161.3) 53.2 (22.2) (283.1) 295.4 (0.8) 107.8Fleet increase - quantity 7,342 10,346 7,957 9,930 8,642 18,649 466 Strong cash flow generation before growth and interest expenses. (*) without technical discount deduction 49
  50. 50. Debt profile and costs R$ million 514.0 372.0 299.8 249.3 207.7 230.3 0.7 2011 2012 2013 2014 2015 2016 2017 Cash 564.6 Contract rate Effective cost 2011 2012 2013 2014 2015 2016 2017 Total 108.7% to 114.7% 111.1% - 114.7%Working capital of CDI and of CDI and - 15.0 38.7 70.0 86.3 190.0 - 400.0 CDI+1.44%a.a. CDI+1.79%a.a.Debenture 2nd Issuance CDI + 0.44%pa CDI + 0.6%pa - 66.6 66.6 66.8 - - - 200.0 112.0% to 114.0%Debenture 4th Issuance 114.2% of CDI - 24.0 24.0 63.0 63.0 74.0 122.0 370.0 of CDIDebenture 5th Issuance 112.8% of CDI 114.5% of CDI - - - - - 250.0 250.0 500.0 stDebenture 1 Issuance: CDI +1.95%pa CDI + 2.0%pa - 100.0 100.0 100.0 100.0 - - 400.0Total Fleet TJLP + 3.8%pa / TJLP + 3.8%pa /Other 0.7 2.1 1.0 - - - - 3.8 CDI + 2.3%pa CDI + 2.3%paInterests accrued until - - 76.0 - - - - - - 76.009/30/11, net of interest paidCash and cash equivalents - - (564.6) - - - - - - (564.6)on 09/30/11Net debt - - (487.9) 207.7 230.3 299.8 249.3 514.0 372.0 1,385.2 6 years term for debt payment. 50
  51. 51. Debt – ratios R$ million 2,446.7 2,430.7 1,752.6 1,907.8 1,492.9 1,385.2 1,247.7 1,254.5 1,281.1 900.2 1,078.6 765.1535.8 440.4 2005 2006 2007 2008 2009 2010 9M11 Net debt Fleet valueSALDOS EM FINAL DE PERÍODO 2005 2006 2007 2008 2009 2010 9M11Net debt / Fleet value 60% 36% 51% 72% 57% 52% 57%Net debt / EBITDA (*) 1.9x 1.4x 1.9x 2.5x 2.3x 2.0x 1.7xNet debt / Equity 1.4x 0.7x 1.3x 2.0x 1.5x 1.4x 1.3xEBITDA / Net financial expenses 3.3x 4.8x 5.4x 3.8x 4.2x 5.0x 4.4x (*) annualized Comfortable debt ratios. 51
  52. 52. Spread 24.8% 21.3% 18.7% 17.0% 16.9% 16.9% 11.2p.p. 11.5% 7.8p.p. 12.9p.p. 8.0p.p. 8.8p.p. 9.1p.p. 3.7p.p. 13.6% 10.9% 8.9% 8.4% 8.2% 7.8% 7.8% 2005 2006 2007 2008 2009 2010 9M11 * Interest on debt after tax ROIC * Annualized 2005 2006 2007 2008 2009 2010 9M11Average capital investment - R$ million 606.3 986.2 1,137.5 1,642.3 1,702.3 1,984.6 2,428.8NOPAT margin (over rental net revenues) 37.0% 34.5% 36.9% 32.1% 21.9% 28.6% 29.2%Turnover of average capital investment(over rental net revenues) 0.67x 0.55x 0.58x 0.53x 0.53x 0.59x 0.58xROIC 24.8% 18.7% 21.3% 17.0% 11.5% 16.9% 16.9%Interest on debt after tax 13.6% 10.9% 8.4% 8.2% 7.8% 7.8% 8.9%Spread (ROIC – Interest after tax) - p.p. 11.2 7.8 12.9 8.8 3.7 9.1 8.0 Spread of 8.0p.p. despite the growth on basic interest rate. 52
  53. 53. Agenda1. Company2. Drivers and opportunities3. Competitive advantages4. Financials5. Macroeconomic scenario 53
  54. 54. GDP: growth moderation Accumulated in 4 quarters 7,5 7,5 6,2 5,3 4,7% of GDP 3,5 2,2 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11* Q/Q -1 9,3 9,2 6,7 5,0% of GDP 4,2 3,1 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Source: BCB presentation as of September 11: Desafios e Perspectivas da Economia Brasileira 54
  55. 55. Inflation and selic rate: expecting decrease Real Market expectation -14.0 Central Bank12.0 Selic10.0 8.0 6.0 4.0 12-month CPI 2.0 Apr-08 Jul-08 Apr-09 Jul-09 Apr-10 Jul-10 Apr-11 Jul-11 Apr-12 Jul-12 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 2008 2009 2010 2011 E 2012 E Selic rate 12.5 10.4 10.0 11.7 10.5Average 12-month CPI 5.7 4.9 5.0 6.6 5.7 Real interest rate 6.4 5.2 4.7 4.8 4.5 Source: BCB/ IBGE as of 10/07/11. 55
  56. 56. Macro prudential measures adoptedBanks: Increase bank reserve requirements on demand and time deposits Increased capital requirement for consumer loan involving longer maturitiesConsumption: Minimum payment for credit card bill IOF tax over credit to consumptionExchange: Established unremunerated reserve requirement on short spot FX positions above a limit IOF over some types of capital entrance 56
  57. 57. IR Team Roberto Mendes Silvio Guerra Nora Lanari CFO - RI RI RI Email: ri@localiza.com Phone: 55 31 3247-7024 DisclaimerThe 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 tobe 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 representationor 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, asthe 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 resultsof 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’smanagement, 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 inthe 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 hereinshall form the basis of any contract or commitment whatsoever. 57

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