3. 3
1973
Founded in Belo
Horizonte with 6
VW Beetles
1979
Expasion to 11 capital
cities becoming market
leader in 1981
1984
Expansion strategy by
adjacencies:
Franchising
1991
Expansion strategy by
adjacencies:
Seminovos
1992
Internationalization
through Franchising
1997
PE firm DL&J enters at
a market cap of
US$150 mm
1999
Expansion strategy by
adjacencies: Fleet
Rental
2005
IPO with a Market Cap of
US$295 mm
2014
Beginning of
Digital Transformation
2017
Strategic partnership
with Hertz ‐
Market Cap US$4.4 Billion
(12/31/17)
Phase I: Rise to #1 Phase II: Expansion
Phase III:
Reaching Scale
Phase IV: Digital
Transformation
COMPANY:
MILESTONES
5. COMPANY:
BUSINESS PLATFORM DIVISIONS
CAR RENTAL FRANCHISING FLEET RENTAL USED CAR SALES
5
• HIGH FIXED COST STRUCTURE
• STANDARDIZED FLEET
• 1 YEAR CYCLE
• HIGHER ENTRY BARRIERS
• GAINS OF SCALE
• CAPITAL INTENSIVE
• CONCENTRATED AIRPORT MARKET
• FRAGMENTED OFF AIRPORT MARKET
RENTS TO INDIVIDUALS AND
COMPANIES AT AIRPORTS AND
OFF AIRPORT LOCATIONS.
CONTRIBUTES TO EXPAND
LOCALIZA’S NETWORK.
• HIGH PROFITABILITY
• LOW CONTRIBUTION TO EARNINGS
• RESPONSIBLE TO DEVELOP NEW
MARKETS
• LOW FIXED COST STRUCTURE
• CUSTOMIZED FLEET
• 2‐3 YEARS CYCLE
• LOWER ENTRY BARRIERS
• CAPITAL INTENSIVE
OUTSOURCES FLEET FOR 2‐3
YEARS’ TERM CONTRACTS.
SELLS THE USED CARS MAINLY TO
FINAL CONSUMERS AFTER THE
RENTAL AND ESTIMATES THE
RESIDUAL VALUES.
• EFFICIENCY AREA RESPONSIBLE TO SELL
CARS FROM RAC AND FLEET DIVISIONS
• KNOW HOW OF USED CARS MARKET
• LOW DEPENDENCE OF INTERMEDIATES
• ALLOWING FOR LOWER DEPRECIATION
6. R$35.2
Average car price
(past 2 years)
Car sale revenue
net of SG&A
R$31.6
1 year cycle
1 2 3 4 5 6 7 8 9 10 11 12Expenses, interest and tax
Revenue
Financial Cycle RAC 2016
Per car
6
Total
1 year
R$ % R$ % R$
Net revenues 20.3 100.0% 34.6 100.0% 55.0
Costs - fixed and variable (10.1) -49.5% (10.1)
SG&A (3.7) -18.1% (3.1) -8.9% (6.8)
Net revenues of car sold 31.6 91.1% 31.6
Book value of car sold (30.0) -86.6% (30.0)
EBITDA 6.6 32.3% 1.6 4.6% 8.2
Cars Depreciation (1.3) -3.6% (1.3)
Others depreciation (0.3) -1.7% (0.1) -0.4% (0.5)
Financial expenses (2.5) -7.2% (2.5)
Taxes (1.9) -9.2% 0.7 2.0% (1.2)
Net Income (Loss) 4.4 21.5% (1.6) -4.6% 2.8
NOPAT 5.0
ROIC 14.2%
Cost of debt after taxes 10.2%
Car Rental Seminovos
Per car soldPer operating car
7. 1 2 3 4 5 6 31 32 33 34 35 36Expenses, interest and tax
Revenue
Car sale revenue
net of SG&A
R$29,2
R$42,9
Average car price
(past 2 years)
3 year cycle
Financial Cycle Fleet Rental 2016
Per car
7
Total
3 years
R$ % Seminovos % R$
Net revenues 61.3 100.0% 32.0 100.0% 93.3
Costs - fixed and variable (18.2) -29.7% (18.2)
SG&A (3.6) -5.8% (2.9) -8.9% (6.4)
Net revenues of car sold 29.2 91.1% 29.2
Book value of car sold (25.7) -80.4% (25.7)
EBITDA 39.5 64.5% 3.4 10.7% 42.9
Cars Depreciation (11.1) -34.8% (11.1)
Others depreciation (0.3) -0.4% (0.2) -0.5% (0.4)
Financial expenses (6.5) -20.2% (6.5)
Taxes (11.8) -19.2% 4.3 13.5% (7.5)
Net Income (Loss) 27.5 44.8% (10.1) -31.4% 17.4
Net Income (Loss) - per year 9.2 44.8% (3.4) -31.4% 5.8
NOPAT 8.1
ROIC 18.9%
Cost of debt after taxes 10.2%
Per operating car
Fleet Rental Seminovos
Per car sold
11. 84 million
Adult population
(age> 20 years)
Class A+B+C
64 million
Credit card owners*
6.8
million
180
200 240
260
300
350
380
415
465
510
545
622
678
724
788
880
38% 37%
35%
31%
27%
22%
20%
18% 16% 15% 15% 13% 13% 12%
11% 9%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Monthly minimun salary (R$) Daily rental price over minimum salary (%)
CAR RENTAL AFFORDABILITY
Source: BCB and Localiza rates
Sources: IPEADATA, Localiza’s loyalty program and BCB (2016)
INCREASING AFFORDABILITY AND LOW PENETRATION BRINGS GROWTH OPPORTUNITIES.
*Was considered that each credit card owner owns 1,3 credit card, BCB estimated that were 84 million active credit cards in Brazil in 2016.
DRIVERS
11
12. EVOLUTION IN AIRLINE MARKET BRINGS GROWTH OPPORTUNITIES
DRIVERS
12
*
40.6
45.7
49.7
56.9
70.3
81.5
87.0 88.2 93.3 94.4 89.0 90.8
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
AIRLINE MARKET EVOLUTION
RPK (REVENUE SEAT KILOMETER) IN MILLION
* Annualized with the available data until November/17
Sources: ANAC
201.3
267.8
401
201.3
241.4
700.5
2017 2027 2037
DEMAND FORECASTING
PASSANGERS ESTIMATE (IN MILLION)
Sources: Ministério dos Transportes / Transportation Ministry (september/2017)
OPTIMISTIC
CONSERVATIVE
13. CAR RENTAL LOCATIONS IN BRAZIL
OFF – AIRPORT MARKET IS STILL FRAGMENTED
AIRPORT LOCATIONS OFF – AIRPORT LOCATIONS
Localiza
98
Hertz
32 Unidas
50
Avis
32
Others
42
Movida
51
Localiza
409
Hertz
47
Unidas
156
Avis
21
Others
7,825
Movida
101
13Source: ABLA, each company’s website on 11/30/2017 and Localiza’s 3Q17 Earnings Release.
1/3 OF CAR RENTAL’S
REVENUES COMES
FROM AIRPORT
LOCATIONS
6,4%
OFF ‐AIRPORT
LOCATIONS
AIRPORT
LOCATIONS
21. DRIVERS SEMINOVOS
# OF INHABITANTS PER CAR – BRAZIL 2005 ‐ 2016
AFFORDABILITY TO BUY CARS – PUBLIC PRICE OF THE
MODEL GOL IN THE MOST BASIC VERSION
AFFORDABILITY AND PENETRATION
7.9
7.7
7.3
6.9
6.5
6.0
5.7
5.3
5.0 4.9 4.8 4.8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
300 350
380
415
465 510
545
622
678
724
788
880
84
71 69
61
55
51 49
43 43 43 41 41
‐
10
20
30
40
50
60
70
80
90
‐100
‐
100
200
300
400
500
600
700
800
900
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Minimum wage (R$) Minimum wages needed to buy a new car
DEVELOPED COUNTRIES MAINTAIN A RATIO BETWEEN
1‐2 CARS PER INHABITANT
Source: Sindipeças – Current Fleet Report 2016, as of April 2016. Source: BCB and Localiza
21
22. 8.4 8.9 9.0 9.4
10.1 9.9 10.0
10.6
3.3 3.5 3.6 3.6 3.3
2.5
2.0 2.1
2010 2011 2012 2013 2014 2015 2016 2017*
BRAZILIAN CAR MARKET: new vs used car market
Source: Fenabrrave (light and commercial cars)
*9M17 anualizado 22
New cars
Used cars
2.5x 2.5x2.6x 2.6x 3.1x 4.0x
5.0x 5.0x
TOTAL MARKET OF 12.7 MILLION CARS.
10.7
2.2
23. 21.8%
Up to 2 years ‐ 2016
313,274
CARS SALES
OPERATING DATA
0.7%
Used cars – 2016
10,008,769
3.4%
Brand new‐ 2016
1,986,362
Main players
Examples • Retailers • Dealers • Rental Operators • “Auto malls”
Points of sale • 48,000 (Fenauto) • 4.,93 (Anfavea)
• +120 (Unidas, Movida,
Locamerica)
• 71 (Fenauto)
Source: Anfavea 2017 e Fenabrave / Unidas, Locamerica e Movida.
23
28. COMPETITIVE ADVANTAGES
BUYING DE CARS
Number of cars purchased – 9M17 Localiza’s share in the internal sales of
the OEMs ‐ 9M17
LOCALIZA BUYS CARS WITH BETTER CONDITIONS DUE TO THE VOLUME OF PURCHASES.
Source: website of each company and ANFAVEA..
100,109
44,096
26,029
12,557
Localiza Movida Unidas Locamerica
6.4%
RAISING
MONEY
BUYING
CARS
SELLING
CARS
28
RENTING
CARS
35. 9.8p.p.
10.6p.p. 10.7p.p. 7.5p.p. 5.2p.p. 7.7p.p.
16.9% 16.7% 17.8% 17.0%
15.4% 15.9%
6.3% 6.0%
8.0%
9.5% 10.2%
8.2%
2012 2013 2014 2015 2016 9M17
ROIC Cost of debt after taxes
ROIC versus COST OF DEBT AFTER TAXES
ROIC considered effective income tax rate
LOCALIZA IS COMMITED TO VALUE CREATION FOR ITS SHAREHOLDERS
annualized
35
39. HERTZ BRASIL – SUCESS OF THE INTEGRATION
40
Rebranding with the new brand Localiza Hertz
Fleet contracts transferred to Localiza Fleet
Integration of Hertz Brasil´s and Localiza´s locations
8.386 cars integrated to the Localiza´s fleet
Inbound/outbound reservation system already integrated
Localiza´s clients have acess to over 10,000 Hertz locations around the globe
Data and client base consolidation
Closing on 09/01/2017
NEXT STEPS: INCREASE OF THE COMMERCIAL OPPORTUNITIES, INBOUND OUTBOUND AND KNOW‐HOW EXCHANGE
40. ONE TIME COSTS 3Q17
41
ONE-TIME COSTS
3Q17
Incurred
4Q17
Estimated
Total
Estimated
RAC Costs:
Hertz: rebrand, structure and networking reduction (2.1) (40.0) (42.1)
Franchise integration (12.7) (12.7)
RAC - Total costs (14.8) (40.0) (54.8)
SG&A
Hertz: structure and networking reduction (6.7) (20.0) (26.7)
Total SG&A (6.7) (20.0) (26.7)
Total One-time Costs (21.5) (60.0) (81.5)
CONSOLIDATED RESULTS
3Q17
actual
One-off
3Q17
Adjusted
Net revenues 1,563.4 1,563.4
Total costs and expenses (1,252.6) 21.5 (1,231.1)
EBITDA 310.8 21.5 332.3
Depreciation (68.4) (68.4)
EBIT 242.4 21.5 263.9
Financial expenses, net (79.4) (79.4)
Income tax and social contribution (39.8) (5.2) (45.0)
Net income 123.2 16.3 139.5
3Q17 financial results were adjusted to
exclude the impact of one‐time costs
resulting from the acquisition of Hertz´s
operations in Brazil (R$8.8 million) and
the integration of 17 franchised locations
(R$12.7 million):
Note: non‐incurred one‐time costs were not provisioned in 3Q17 because, on 09/30/2017, such expenses were not bound to be regarded as
provision according to the rules imposed by Technical Pronouncement CPC # 25 – Provisions, Contingent Liabilities and Contingent Assets.
41. CAR RENTAL
1,093.7 1,163.5 1,284.4 1,258.0
1,428.0
1,030.0
1,273.6
362.5 472.6
2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17
NUMBER OF DAILY RENTALS (THOUSAND)
35.9% RAC DAILY RENTALS GROWTH AND 30.4% GROWTH IN NET REVENUES IN 3Q17
13,749 14,242 15,416 15,566
18,662
13,397
17,461
4,846
6,587
2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17
NET REVENUES (R$ MILLION)
42
42. 43
UTILIZATION RATE – CAR RENTALAVERAGE DAILY RENTAL RATE – IN R$
73.4% 73.7%
75.3%
71.5% 73.5% 74.7% 74.3%
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
83.6
79.4 77.7 78.6 79.3
74.1 74.1
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
CAR RENTAL
THE AVERAGE DAILY RENTAL RATE AND UTILIZATION RATE REMAINED
FLATTISH IN 3Q17 WHEN COMPARED WITH 2Q17
.
45. NET INVESTMENT
FLEET EXPANSION (REDUCTION)* (QUANTITY)
108,271 CARS PURCHASED IN 9M17, 57,213 OF WHICH WERE PURCHASED IN 3Q17, INCLUDING HERTZ BRASIL46
NET INVESTMENT IN FLEET (R$ MILLION)
Cars purchased Cars sold
2,011 7,103
* It does not consider theft / crashed cars.
9,183
465.0
(273)
1,618.8
2,026.2
2,483.2
2,278.4
3,289.6
2,211.9
4,316.6
1,078.0
2,208.9
1,520.0 1,747.3
2,018.2 2,044.9
2,342.6
1,609.3
2,424.7
592.9
898.4
2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17
58,655
69,744
79,804
64,032
87,833
59,912
108,271
28,903
57,213 56,644 62,641 70,621
64,305 68,449
47,566
64,451
17,379
23,941
2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17
98.8
278.9 233.5
19,384
947.0
12,346
602.6
485,1
43,820
33,272
1,891.9
1,310.5
11,524
267
100,109
8,162
8,162
49,051 267
64,184
23,674
9.04,030.1
286.5
286.5
1,922.4 9.02,415.7
889.4
Hertz Brasil
Purchases (includes accessories) Used car sales net revenues Hertz Brasil
46. 47
NUMBER OF POINTS OF SALE
73 74 75 77
84 79
93
56,644
62,641
70,621
64,305 68,449
47,566
64,451
‐50,000
‐30,000
‐10,000
10,000
30,000
50,000
70,000
‐10
10
30
50
70
90
110
130
150
2012 2013 2014 2015 2016 9M16 9M17
Points of sale Cars sold
NEW POINTS OF SALE WILL BE ADDED TO SUPPORT THE FLEET RENEWAL.
50. 51
AVERAGE ANNUAL DEPRECIATION PER CAR
In R$
1,896
1,452 1,270
622
1,251 1,351
2012 2013 2014 2015 2016 9M17 annualized
3,972
5,408
4,311
4,592 4,202 3,935 3,714
3,105
2012 2013 2014 2015 2016 9M17 annualized
2,076
IPI effect
1,097
IPI Effect
FLEET RENTAL
CAR RENTAL
DEPRECIATION IS IMPACTED BY THE NEW AND USED CAR MARKET, AS WELL BY THE COST TO SELL
56. 57
DEBT MATURITY PROFILE (PRINCIPAL)
R$ million
1,939.4
111.3
435.6 685.6
1,420.0
672.5 500.0 500.0
700.0
350.0
350.0
Cash 2017 2018 2019 2020 2021 2022 2023 2024
1,232.5
2,289.4
Pro‐Forma with 4th debentures issuance of Localiza Fleet, completed in October. 2017
1,050.0
As of September 30, 2017
Includes 4th issuance of Localiza Fleet completed in October 2017
STRONG CASH POSITION AND COMFORTABLE DEBT PROFILE
58. 59
Website: www.localiza.com/ir E‐mail: ri@localiza.com Phone: 55 31 3247‐7024
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. 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 projections 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.
This presentation does not constitute an offer, invitation or solicitation of an offer to subscribe to or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of
any contract or commitment whatsoever.
DISCLAIMER