2. 1. Company overview
2. Main business divisions
Car Rental
Fleet Rental
Seminovos
3. Financials
Appendix: Earnings release 2Q16
Agenda
2
3. Company: milestones
Phase I – Rise to #1
1973 – Founded in Belo
Horizonte/MG
Late 70’s - Acquisitions in the
Northeast of Brazil
1981 – Brazilian car rental leader in
# of branches
Phase II – Expansion
1984 – Expansion strategy by
adjacencies: Franchising
1991 – Expansion strategy by
adjacencies: Seminovos
1997 – Expansion strategy by
adjacencies: Fleet Rental
1997 – PE firm DL&J enters at a
market cap of US$ 150 mm
Phase III – Reaching Scale
2005 – IPO: market cap of US$ 295
mm
2011 – Rated as investment grade by
Moody’s, Fitch and S&P in 2012
2012 – ADR level I
06/30/2016 – Market cap of about
US$2.3 bi with ADTV of US$10.4
million
1973 1982 1983 2004 2005 2015
3
4. Company: integrated business platform
Synergies:
bargaining power
cost reduction
cross selling
13,695 cars
166 locations in Brazil
71 locations in South America
32 employees
46.7% sold to final consumer
78 stores
48 cities
984 employees
78,352 cars
6.0 million clients
328 locations
4,761 employees
32,726cars
880 clients
391 employees
Based on the 2Q16 4
Car Rental Fleet Rental
SeminovosFranchising
This integrated business platform gives Localiza flexibility and superior performance.
5. 5
High fixed cost
Standard fleet
1 year cycle
High entry barriers
Gains of scale
Intensive capital
Consolidated in airport
market
Fragmented off airport
market
Support area
Reduces depreciation
Know How of used cars
market
Low dependence on
intermediates
Supplementary
business
Important for
distribution
High profitability
Low contribution in
results
Company: Business platform divisions
Car Rental
Rents to individuals and
companies at airports
and off airport locations.
Franchising
Contributes to expand
the Localiza’s network.
Fleet Rental
Outsources fleet for 2-3
years term contracts.
Used Car Sales
Sells the used cars mainly
to final consumers after
the rental and estimates
the residual values.
Low fixed cost
Customized fleet
3 years cycle
Low entry barriers
Intensive capital
6. 6
Net car sale
revenue
R$28.51 year cycle
Car Rental Division - 2015 Financial Cycle
Per car
R$31.6
Average car price
(past 2 years)
1 2 3 4 5 6 7 8 9 10 11 12Expenses, interest and tax
Revenue
Total
1 year
R$ % R$ % R$
Net revenues 20.1 100.0% 31.9 100.0% 52.1
Costs - fixed and variable (9.9) -49.1% (9.9)
SG&A (3.8) -19.1% (3.4) -10.7% (7.2)
Net revenues of car sold 28.5 89.3% 28.5
Book value of car sold (26.6) -83.3% (26.6)
EBITDA 6.4 31.8% 1.9 6.1% 8.3
Cars Depreciation (0.6) -1.9% (0.6)
Others depreciation (0.4) -1.8% (0.1) -0.4% (0.5)
Financial expenses (2.2) -6.9% (2.2)
Taxes (1.8) -9.0% 0.3 1.0% (1.5)
Net Income (Loss) 4.2 21.0% (0.7) -2.3% 3.5
NOPAT 5.0
ROIC 16.0%
Cost of debt after taxes 9.5%
Car Rental Seminovos
Per car soldPer operating car
7. 7
Net car sale
revenue
R$28.4
3 year cycle
Fleet Rental Division - 2015 Financial Cycle
Per car
1 2 3 4 5 6 31 32 33 34 35 36Expenses, interest and tax
Revenue
R$39.0
Average car price
(past 3 years)
Total
3 years
R$ % Seminovos % R$
Net revenues 57.6 100.0% 31.2 100.0% 88.8
Costs - fixed and variable (17.9) -31.1% (17.9)
SG&A (3.9) -6.7% (2.8) -9.1% (6.7)
Net revenues of car sold 28.4 90.9% 28.4
Book value of car sold (24.3) -77.9% (24.3)
EBITDA 35.8 62.2% 4.1 13.0% 39.9
Cars Depreciation (11.8) -37.8% (11.8)
Others depreciation (0.2) -0.4% (0.2) -0.6% (0.4)
Financial expenses (6.0) -19.4% (6.0)
Taxes (10.7) -18.6% 4.2 13.4% (6.5)
Net Income (Loss) 24.9 43.3% (9.8) -31.4% 15.2
Net Income (Loss) - per year 8.3 43.3% (3.3) -31.4% 5.1
NOPAT 6.5
ROIC (it considers the effect of the average book value of the car in its useful life) 16.6%
Cost of debt after taxes 9.5%
Per operating car
Fleet Rental Seminovos
Per car sold
8. 8
2015 Consolidated breakdown
R$ million
R$ 150
16%
R$ 378
40%
R$ 407
44% R$ 297
40%
R$ 438
60%
Net Revenues
R$3,928
EBITDA
R$935
R$ 2,045
52%
R$ 608
16% R$ 1,275
32%
EBIT*
R$735
*Seminovos results recorded in the Car Rental and Fleet Rental Divisions
Company’s profitability comes from
Car Rental and Fleet Rental Divisions.
9. Raising
money Buying
cars
Renting Cars Selling
Cars
Cash to renew the fleet or pay debt
$
Profitability comes from rental divisions
Competitive advantages
$
9
42 years of experience in managing assets and generating value.
10. Competitive advantages: raising money
Global Scale
National Scale
As of July, 2016.
BB+ Fitch
Ba2 Moody’s
BB+ S&P
Baa1 Moody´s B+ S&P
Ba3 Moody´s
BB- S&P
brAA+ S&P
Aa1.br Moody’s
AAA(bra) Fitch
brAA- S&P
AA- (bra) Fitch
A- (bra) Fitch AA- (bra) Fitch A(bra) Fitch
10
Investment grade: lower spreads and longer tenors
Source: Bloomberg .
Raising
money Buying
cars
Renting Cars Selling
Cars
$
Localiza raises money with better conditions then its competitors.
11. 11
Competitive advantages: buying cars
Number of cars purchased – 2015
* Includes Franchising.
68,319 37,444
19,357 13,068
Localiza Movida Unidas Locamerica
*
Source: each company website and ANFAVEA
Localiza’s share in the internal sales of the
major OEMs - 2015
4.2%
Raising
money Buying
cars
Renting Cars Selling
Cars
$
Localiza buys cars with better conditions due to the volume of purchases.
7,600
75,919
Purchase antecipation of Dec/14
12. Raising
money Buying
cars
Renting Cars Selling
Cars
361
134
67
94
Localiza Unidas Hertz Movida
12
Competitive advantages: renting cars
Brand Brazilian distribution
#ofbranches#ofcities
Source: Each company website on 04/28/2016, 2Q16 Earnings Release for Localiza and 1Q16 Earnings Release for Movida, Unidas and Hertz .
467
100
204
163
Localiza Competitors
494
$
The Company is present in 180 cities where the other largest networks do not operate.
13. Raising
money Buying
cars
Renting Cars Selling
Cars
13
Localiza Express®
Self-service that provides fast
service, reducing queues and
scalability to service.
Localiza Way®
New platform to offer
value-added services
Mobile Checklist
More quality, control and agility
in providing cars for rental
Fast Checkout
More operational productivity
and agility in returning the cars
after rental
Connected Shuttle
Optimization of
customer shuttle service
at airports
Anti fraud
Taylor-made solution for
fraud prevention in car
rentals
Competitive advantages: Innovation
$
Constant innovations allow maintenance of the premium service.
14. 14
Integrated technology solution that
increases competitive intelligence
and leverages productivity gains.
CONNECTED FLEET
Integrated mobile solution to
fleet rental services for drivers
and contract manager.
MOBILE SOLUTION
Rapid diagnosis and friendly
vision of the fleet by the
customer.
ONLINE FLEET RENTAL
Competitive advantages: Innovation
Raising
money Buying
cars
Renting Cars Selling
Cars
$
Differentiated offer with higher added value to the customer.
15. Raising
money Buying
cars
Renting Cars Selling
Cars
15
Sales to final consumer
Competitive advantages: selling cars
Buffer: additional fleet during
peaks of demand
Information/mobility:
Ipad for Salesmen
• Support sale
• Access to the database
• Customer registration
• Agility in car sales
$
Sales center: 20k incoming calls per month with 55% visits to stores scheduled.
Distribution channel: 200 cities and 1,900 customers.
16. 16
ROIC versus cost of debt after taxes
The Company presented a positive spread of 5.2p.p.
Despite the adverse scenario and the significant increase in the interest rate
7.3%
8.6%
6.3% 6.0%
8.0%
9.5% 10.2%
16.9% 17.1%
16.1% 16.5%
17.5% 17.0%
15.4%
2010 2011 2012 2013 2014 2015 1H16
ROIC
Cost of debt
after taxes
9.6p.p. 8.5p.p. 9.5p.p.
9.8p.p. 10.5p.p.
7.5p.p. 5.2p.p.
2010 to 2014 ROIC considered income tax rate of 30.0%
2015 and 1Q16 ROIC considered income tax rate of 24.5%
Annualized
17. Localiza vs. players
Profitability
Source: Companies’ Financial Statements
17
ROIC 2015
ROE 2015
Fleet
RAC+Fleet Rental RAC+Fleet Fleet Rental Fleet Rental RAC+Fleet Rental
124,695 43,342 31,184 28,813 53,439
Reference
ROIC = NOPAT (considering the effective tax rate) / (Average net debt + average equity)
ROE = Net income / Equity at the beginning of the year
17.0%
9.3% 10.5%
6.5%
8.4%
Localiza Unidas Locamerica Ouro Verde JSL Consolidada
24.3%
6.2% 6.0% 5.0% 4.5%
Localiza Unidas Locamerica Ouro Verde JSL Consolidada
18. 18
Net Debt / EBITDA - 2015
Net Debt / Equity - 2015
Source: Companies’ Financial Statements.
For Unidas and JSL Confirming is included in net debt.
Localiza vs. players
Debt ratios
1.7x
2.5x 2.9x
3.8x 4.3x
Localiza Unidas Locamerica Ouro Verde JSL
Consolidated
0.8x 1.1x
2.0x
9.7x
4.6x
Localiza Unidas Locamerica Ouro Verde JSL
Consolidated
19. 19
1. Company overview
2. Main business divisions
Car Rental
Fleet Rental
Seminovos
3. Financials
Appendix: Earnings release 2Q16
Agenda
21. 21
Drivers
Source: BCB and Localiza rates
151
180 200
240
260300
350 380
415
465
510
545
622
678
724
788
51%
38%
37% 35%
31%
27%
22% 20% 18% 16% 15% 15% 13% 13%12% 11%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Monthly minimum salary (R$) Daily rental price over minimum salary (%)
Car rental affordability
Source: IPEADATA and Localiza’s loyalty program.
6 million
84 million
Adult population
(age > 20 years)
Class A+B+C
15 million
Adult population
(age > 20 years)
Class A+B
Increasing affordability and low penetration in leisure trips brings growth opportunities.
22. 22
Drivers
# domestic air traffic passengers
In million
Expected investment 2016-2019
(in R$ billion)
Source: Sectorial Analysis Committee / BNDES: 2016-2019 , as of February,
2016.
Source: ANAC up to 2015 and IATA-Air Passenger Forecast
Global Report, as of April, 2015.
The pipeline of investments tend to benefit
the corporate segment.
Expected annual traffic growth of 4.4% from 2014 to 2034
traffic.
70
82 89 90 96 96
2010 2011 2012 2013 2014 2015
214.1
142.6
87.1
35.8
32.9
32.5
17.0
15.5
5.8
Energia
Telecomunicações
Rodovias
Saneamento
Ferrovias
Mobilidade Urbana
Aeroportos
Portos
Resíduos Sólidos
23. 23
Source: RAIS, each company’s website on 04/28/2016 and Localiza´s 2Q16 Earnings Release
Airport locations Off-airport locations
Car Rental Locations in Brazil
Off-airport market is still fragmented.
24. 24
Market Share – Car Rental 2015
Source: ABLA and Companies’ Financial Statements and estimates.
Localiza’s market share is higher than the 2nd and 3rd players together.
# of companies: 7,455
Fleet: 375.4k
Reference: ABLA increased data collection basis for mapping car rental market in 2015, the number of Car Rental Locations
reached 7.455 from 5.624 in 2014 and fleet went to 375,4k from 332,5k in 2014.
20.4%
2.0%
6.0%
9.9%
50.3%
11.4%
Movida
37.1k
Unidas
22.6k
Others
188.9k
22.4%New data
basis
42.8k
76.8k
7.2k
25. 25
1. Company overview
2. Main business divisions
Car Rental
Fleet Rental
Seminovos
3. Financials
Appendix: Earnings release 2Q16
Agenda
26. 26
Number of clients
Fleet Rental overview
Compact cars
34.9%
Others 65.1%
2015 Fleet composition
33,948 cars
729 760 798 849 880
2012 2013 2014 2015 1H16
End of period fleet
32,104 32,809
34,312 33,948 32,726
2012 2013 2014 2015 1H16
27. 27
Source: ABLA, Datamonitor and Localiza
Rented fleet penetration
Corporate fleet:
4,000,000*
Rented fleet:
440,737
33,948
Brazilian Market World
11.0% 8.9%
13.3%
16.5%
24.5%
37.4%
46.9%
58.3%
Drivers
*Localiza estimates
Low penetration of rented fleet in Brazil.
28. Market Share – Fleet Rental 2015
28
Source: ABLA, Companies’ Financial Statements and estimates
Fragmented market with low entry barriers.
Reference: ABLA increased data collection basis for mapping car rental market in 2015, the number of Car Rental Locations
reached 7,455 from 5,624 in 2014 and fleet went to 477.8k from 440.7k in 2014.
# of companies: 7,455
Fleet: 477.8k
33.9k
7.1% 1.7k
0.4% 20.8k
4.3%
16.3k
3.4%
23.8k
5.0%
31.2K
6.5%
313.0k
65.5%
37.1k
7.8%
Movida
Unidas
Others
Ouro
Verde
Locamerica
New data
basis
7.5%
29. 29
1. Company overview
2. Main business divisions
Car Rental
Fleet Rental
Seminovos
3. Financials
Appendix: Earnings release 2Q16
Agenda
30. 30
# of points of sale
Car sales – operating data
55
66
73 74 75
77 78
2010 2011 2012 2013 2014 2015 1H16
47,285
50,772
56,664
62,641
70,621
64,305
30,187
2010 2011 2012 2013 2014 2015 1H16
# Number of cars sold (quantity)
Efficiency gain on car sales.
31. 31
Used car sales drivers:
affordability and penetration
Affordability to buy cars – Public Price of the most
basic Gol
300 350
380 415
465
510
545
622
678
724
78884
71 69
61
55
51 49
43 43 43 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
Minimum wage (R$) Minimum wages to buy a new car
7.9
7.7
7.3
6.9
6.5
6.0
5.7
5.3
5.0 4.9 4.8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
# of inhabitants per car – Brazil 2005 - 2015
Source: Sindipeças - Current Fleet Report 2016, as of April 2016.
Developed countries maintain a ratio between 1 - 2
cars per inhabitant.
Source: BCB and Localiza
Reference: to calculate the minimum wages to buy a new car we used
the public price of the Vehicle type Gol.
32. 8.4 8.9
9.0 9.4
10.1 9.9
3.3 3.5 3.6 3.6 3.3
2.5
32
2.5x
2.5x
2010 2011 2012 2013 2014 2015
2.6x
Brazilian car market:
new x used car market and affordability
New cars
Used cars
Source: FENABRAVE (light and commercial cars)
2.6x 3.1x 4.0x
In million of cars
Total market of 12.4 million cars.
33. 33
2015 Up to 2 years
381,531
2015 Brand new
2,476,9042015 Used cars
9,987,711
0.6% 2.6% 16.9%
Car sales – operating data
Source: Anfavea and Fenabrave
Unidas, Locamerrica and Movida websites
Examples • Retailers • Dealers • Rental operators • “Auto malls”
Points of sale • 48,000 (Fenauto) • 4,364 (Anfavea)
• +78 (Unidas, Movida,
Locamerica)
• 71 (Fenauto)
Main players
34. 34
1. Company overview
2. Main business divisions
Car Rental
Fleet Rental
Seminovos
3. Financials
Appendix: Earnings release 2Q16
Agenda
35. 35
Highlights
Net Revenues - Car Rental Division (R$ million) Net Revenues - Fleet Rental Division (R$ million)
296.4 327.8
2Q15 2Q16
149.9 159.5
2Q15 2Q16
223.0 234.3
2Q15 2Q16
93.4 98.0
2Q15 2Q16
Consolidated EBITDA (R$ million) Consolidated Net Income (R$ million)
Utilization rate evolution – Car RentalRental days evolution (thousand)– Car Rental
66.3%
69.0%
70.7% 71.1%
73.4% 73.7%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
3,812 3,780
3,871
4,111
4,242 4,308
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
36. 36
Number of Daily Rentals (thousands)
The Company continued to perform strong volume growth in 2Q16 in an adverse
macro and highly competitive environment.
802.2
980.7 1,093.7 1,163.5 1,284.4 1,258.0
606.4 667.5
296.4 327.8
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
10,734
12,794 13,749 14,242 15,416 15,566
7,584 8,550
3,780 4,308
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
Net Revenues (R$ million)
Car Rental
37. Average daily rental evolution and utilization rate
Car Rental Division
37
In 2Q16, the average daily rental rate was adjusted to the post summer
vacation mix. Demand stimulation resulted in higher utilization rate
Average daily rental – In R$ Utilization rate
66.3%
69.0%
70.7% 71.1%
73.4% 73.7%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
85.26
81.85
85.93 85.11 83.61
79.41
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
-3.0%
38. 38
Car Rental network evolution
Number of car rental locations (Brazil and abroad)
8 new corporate locations were added to the network
Localiza´s branches - Brazil Franchisees´ branches - Brazil Franchisees´ branches - abroad
234 247 272 286 304 320 328
181 202 202 193 172 174 16661 47 50 63 64 70 71476 496 524 542 540 564 565
2010 2011 2012 2013 2014 2015 1H16
+8
39. 39
Fleet Rental Division
6.4% increase in net revenues due to higher average rental rate
361.1
455.0
535.7 575.9 571.9 608.5
298.8 317.9
149.9 159.5
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
8,044
9,603
10,601 10,844 10,363 10,901
5,484 5,507
2,739 2,761
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
Net Revenues (R$ million)
Number of Daily Rentals (thousands)
40. Purchases (includes accessories) Used car sales net revenues
Cars purchased Cars sold
40
Net investment
Fleet Expansion* (quantity)
Net Investment in Fleet (R$ million)
9,178 2,011 7,10318,649
* It does not include theft / crashed cars.
9,183
465.0
(273)
65,934
59,950 58,655
69,744
79,804
64,032
26,851 31,009
16,211
24,020
47,285 50,772 56,644
62,641
70,621 64,305
33,520 30,187
16,071 13,839
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
(6,669) 822
140
10,181
1,910.4 1,776.5 1,618.8
2,026.2
2,483.2 2,278.4
901.3
1,133.9
552.3
878.7
1,321.9
1,468.1 1,520.0
1,747.3
2,018.2 2,044.9
1,043.2 1,016.4
499.2 471.7
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
In 2Q16, 24,020 new cars were bought and 13,839 cars were sold, resulting in an
increase of 10,181 cars and net investment of R$407.0 million
308.4 98.8
588.5 278.9
233.5
(141.9) 117.5
53.1
407.0
41. 31.22 31.10
31.98
33.23 33.34
34.14
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
+ 9.8%
Average price of cars sold and purchased
Consolidated
9.8% increase in average prices of cars sold in 2Q16 x 2Q15, mainly due to
change in fleet composition
Average price of cars sold
In R$ thousand
4
1
Average price of cars purchased
In R$ thousand
32.76
34.03
34.67
38.63
36.40 36.55
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
+ 7.4%
Change in the fleet composition
Change in the fleet composition
44. Car sales
Car sales were impacted by the reduction of decommissioning cars for fleet
renewal due to the car rental growth and delays in new cars deliveries
17,449
16,071 15,738
15,047
16,348
13,839
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
Number of cars sold
44
5,296
7,428
8,534
7,253
5,355
3,662
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
Cars in Seminovos stores (Average)
45. 45
Consolidated EBITDA
R$ million
(*)From 2012 onwards, accessories and freight of new cars have been accounted directly in the cost line, impacting EBITDA but
reducing depreciation costs.
(**) It considers the new appropriation criteria of the overhead, which is also appropriated to Seminovos.
Divisions 2010* 2011* 2012 2013 2014** 2015 1H15 1H16 2Q15 2Q16
Car Rental 45.3% 46.9% 40.9% 36.8% 38.7% 31.8% 32.4% 33.1% 30.3% 31.6%
Fleet Rental 68.0% 68.6% 66.4% 65.5% 60.0% 62.2% 61.1% 64.8% 62.8% 65.0%
Rental Consolidated 52.3% 53.8% 49.3% 46.5% 45.3% 41.7% 41.9% 43.3% 41.3% 42.6%
Used Car Sales 2.6% 2.8% 4.2% 5.7% 6.0% 7.3% 8.2% 6.1% 7.5% 5.3%
EBITDA grew R$11.3 million in the 2Q16 x 2Q15
649.5
821.3 875.6 916.5 969.8 934.8
467.8 492.7
223.0 234.3
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
+ R$24.9 million
+ R$11.3 million
46. 46
Average depreciation per car (in R$)
Car Rental
Depreciation in 2Q16 reflects new car prices that are rising below inflation.
1,536 1,684
1,896 1,452 1,270
622
917
2010 2011 2012 2013 2014 2015 1H16
2,076
IPI Effect
3,972
*
* Annualized
3,510
4,133
4,311
4,592
4,202 3,935 3,981
2010 2011 2012 2013 2014 2015 1H16
1,097
Efeito IPI
5,408
*
* Annualized
Fleet Rental
47. 47
*2012 EBIT was impacted by R$144.5 million due to the additional depreciation related to the reduction in IPI (sales tax).
Consolidated EBIT
R$ million
Divisions 2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
Car Rental 38.5% 38.8% 23.7% 32.8% 36.2% 34.3% 36.5% 32.5% 34.3% 29.3%
Fleet Rental 46.2% 45.6% 36.9% 45.1% 44.3% 48.9% 47.1% 50.6% 50.7% 50.7%
Consolidated 41.0% 41.1% 28.3% 37.1% 38.8% 39.1% 40.0% 38.4% 39.8% 36.4%
The EBITDA increase was offset by higher depreciation, resulting in stable EBIT in
2Q16
482.1
595.7
465.8
652.1
726.7 735.5
365.5 381.5
179.4 179.0
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
610.3*
48. 48
* Pro forma 2012 net income excluding additional depreciation related to the IPI tax reduction, net of income tax.
Consolidated net income
R$ million
4.9% increase in 2Q16 net income
250.5
291.6
240.9
384.3 410.6 402.4
193.6 201.0
93.4 98.0
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
336.3*
Reconciliation EBITDA x Net income 2010 2011 2012 2013 2014 2015 1H15 1H16 Var. R$ Var. % 2Q15 2Q16 Var. R$Var. %
Consolidated EBITDA 649.5 821.3 875.6 916.5 969.8 934.8 467.8 492.7 24.9 5.3% 223.0 234.3 11.3 5.1%
Cars depreciation (146.3) (201.5) (232.4) (229.0) (207.4) (163.6) (84.6) (92.1) (7.5) 8.9% (34.7) (45.8) (11.1) 32.0%
Cars additional depreciation – IPI effect - - (144.5) - - - - - - - - - - -
Other property depreciation and amortization (21.1) (24.1) (32.9) (35.4) (35.7) (35.7) (17.7) (19.1) (1.4) 7.9% (8.9) (9.5) (0.6) 6.7%
Financial expenses, net (130.1) (179.0) (138.7) (110.6) (151.1) (202.7) (99.4) (117.2) (17.8) 17.9% (51.5) (49.5) 2.0 -3.9%
Income tax and social contribution (101.5) (125.1) (135.3) (157.2) (165.0) (130.4) (72.5) (63.3) 9.2 -12.7% (34.5) (31.5) 3.0 -8.7%
Income tax and social contribution – IPI effect - - 49.1 - - - - - - - - - - -
Net income of the period 250.5 291.6 240.9 384.3 410.6 402.4 193.6 201.0 7.4 3.8% 93.4 98.0 4.6 4.9%
49. 49
Free cash flow - FCF
Free cash flow - R$ million 2010 2011 2012 2013 2014 2015 1H16
w
Operations EBITDA 649.5 821.3 875.6 916.5 969.8 934.8 492.7
Used car sale revenue, net from taxes (1,321.9) (1,468.1) (1,520.0) (1,747.3) (2,018.2) (2,044.9) (1,016.4)
Depreciated cost of cars sold (*) 1,203.2 1,328.6 1,360.2 1,543.8 1,777.0 1,769.1 901.4
(-) Income tax and social contribution (57.8) (83.0) (100.9) (108.5) (113.1) (110.7) (55.9)
Change in working capital 54.5 (83.9) 37.1 2.9 (27.1) (30.0) (31.7)
Cash generated by rental operations 527.5 514.9 652.0 607.4 588.4 518.3 290.1
Capex-
Renewals
Used car sale revenue, net from taxes 1,321.9 1,468.1 1,520.0 1,747.3 2,018.2 2,036.3 1,016.4
Fleet renewal investment (1,370.1) (1,504.5) (1,563.3) (1,819.7) (2,197.7) (2,278.4) (1,103.8)
Net investment for fleet renewal (48.2) (36.4) (43.3) (72.4) (179.5) (242.1) (87.4)
Fleet renewal – quantity 47,285 50,772 56,644 62,641 70,621 64,032 30,187
Investment, other property and intangibles investments (50.6) (59.9) (77.8) (47.5) (46.3) (29.7) (19.9)
Free cash flow from operations, net of fleet renewal capex 428.7 418.6 530.9 487.5 362.6 246.5 182.8
Capex-Growth
Fleet growth (investment) (540.3) (272.0) (55.5) (209.4) (286.8) 8.6 (30.1)
Change in accounts payable to car suppliers 111.3 32.7 (116.9) 89.7 334.4 (121.2) 19.7
Fleet growth (429.0) (239.3) (172.4) (119.7) 47.6 (112.6) (10.4)
Fleet increase / (reduction) – quantity 18,649 9,178 2,011 7,103 9,183 (273) 822
Free cash flow after growth, and before interest and new HQ (0.3) 179.3 358.5 367.8 410.2 133.9 172.4
Capex–
HQ
Investment in the construction of the new HQ (0.5) (3.1) (2.4) (6.5) (55.7) (123.3) (21.4)
Marketable securities – new HQ - - - - (92.6) 92.6 -
New headquarters construction (0.5) (3.1) (2.4) (6.5) (148.3) (30.7) (21.4)
Free cash flow before interest (0.8) 176.2 356.1 361.3 261.9 103.2 151.0
Free cash flow
(*) without the technical discounts reduction up to 2010
50. 50
Changes in net debt
R$ million
The increase of R$35.8 million in net debt was mainly due higher dividends distribution
182.8
(117.2)
(30.1)
19.7
(21.4)
(69.6)
(1,624.4)
Net Debt
06/30/2016
(1,588.6)
Net Debt
12/31/2015
Free cash flow before
growth, interest and
headquarters
Interest
Fleet
increase
Increase in
accounts
payable to
cars
suppliers
New
headquarters
construction Dividends
+65.6 (10.4) (91.0)
51. 51
Debt maturity profile (principal)
R$ million
The Company is still presenting strong cash position and adequate debt profile for
the current macro and growth landscape
As of June 30, 2016
202.6
487.7
264.6
619.5
770.0
672.5
2016 2017 2018 2019 2020 2021
Cash
1,467.1
2016
954.9
52. 52
Debt - ratios
Net debt vs. Fleet value
BALANCE AT THE END OF PERIOD 2010(*) 2011 2012 2013 2014 2015 1H16
Net debt / Fleet value 52% 51% 48% 48% 40% 44% 43%
Net debt / EBITDA(**) 2.0x 1.7x 1.4x 1.5x 1.4x 1.7x 1.6x
Net debt / Equity 1.4x 1.2x 0.9x 1.0x 0.8x 0.8x 0.8x
EBITDA / Net financial expenses 5.0x 4.6x 6.3x 8.3x 6.4x 4.6x 4.2x
(*) 2010 ratios based on USGAAP financial statements
(**) Annualized
Net debt Fleet value
Comfortable debt ratios
1,281.1 1,363.4 1,231.2 1,332.8 1,322.3 1,588.6 1,624.4
2,446.7
2,681.7 2,547.6
2,797.9
3,296.3
3,642.7 3,784.1
2010 2011 2012 2013 2014 2015 1H16
53. 53
Localiza Level I ADR
Ticker Symbol: LZRFY
CUSIP: 53956W300
ISIN: US53956W3007
Ratio: 1 Common Share : 1 ADR
Exchange: OTC
Depositary bank: Deutsche Bank Trust Company Americas
ADR broker helpline: +1 212 250 9100 (New York)
+44 207 547 6500 (London)
E-mail: adr@db.com
ADR website: www.adr.db.com
Depositary bank’s local custodian: Banco Bradesco S/A, Brazil
54. 54
Disclaimer
Website: www.localiza.com/ir E-mail: ri@localiza.com Phone: 55 31 3247-7024
Roberto Mendes
CFO and IR
Nora Lanari
Head of IR
Eugênio Mattar
CEO
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.
Maria Carolina Costa
IR Manager
Mariana Campolina
IR Manager
