Webcast 1 t14 ing

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Localiza - Webcast 1Q14

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Webcast 1 t14 ing

  1. 1. Localiza Rent a Car S.A. 1Q14 Results R$ million April 16, 2014
  2. 2. 70.8% 66.8% 66.6% 72.2% 2012 2013 1Q13 1Q14 2 Highlights Strong cash generation in the quarter. 283.2 311.3 1Q13 1Q14 Net revenues – Car Rental Division R$million 217.2 249.1 1Q13 1Q14 Consolidated EBITDA R$million 429.5 459.3 363.8 485.8 1Q13 1Q14 Car Rental Used car sales Consolidated net revenues R$million 945.1 793.3 88.8 105.8 1Q13 1Q14 Consolidated net income R$million ROIC Cost of deb after taxes Spread ROIC minus cost of debt after taxes 6.0% 7.6% 16.5% 18.9% 2013 1Q14 11.3p.p. 10.5p.p. Utilization rate– Car Rental Division
  3. 3. 3 Net Revenues (R$ million) # Daily Rentals (thousands) Car Rental division Car rental daily volumes grew 10.1% in 1Q14. 5,793 7,940 8,062 10,734 12,794 13,749 14,242 3,426 3,773 2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14 428.0 565.2 585.2 802.2 980.7 1,093.7 1,163.5 283.2 311.3 2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14
  4. 4. 178 199 214 234 247 272 286 301 134 147 167 181 202 202 193 176 69 76 71 61 47 50 63 63 2007 2008 2009 2010 2011 2012 2013 1Q14 4 Car Rental network evolution 15 new owned rental locations were added in 1Q14. # of car rental locations (Brazil and abroad) Localiza´s branches - Brazil Franchisees´ branches - Brazil Franchisses´ branches - abroad 381 422 452 476 496 524 542 540 +15
  5. 5. 219.8 268.4 303.2 361.1 455.0 535.7 575.9 141.8 143.2 2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14 5,144 6,437 7,099 8,044 9,603 10,601 10,844 2,742 2,623 2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14 5 Net Revenues (R$ million) # Daily Rentals (thousands) Fleet Rental division The increase of 5.7% in the average rental rate offset the decrease of 4.3% in daily rental volumes. -4.3%
  6. 6. 1,060.9 1,335.3 1,204.2 1,910.4 1,776.5 1,618.8 2,026.2 341.5 317.1 850.5 980.8 922.4 1,321.9 1,468.1 1,520.0 1,747.3 363.8 485.8 2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14 6 Net investment Fleet Expansion* (quantity) Fleet reduction by 6,569 cars in 1Q14 allowed fleet optimization after summer vacations. Net Investment (R$ million) 38,050 44,211 43,161 65,934 59,950 58,655 69,744 12,349 10,880 30,093 34,281 34,519 47,285 50,772 56,644 62,641 12,934 17,449 2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14 7,957 9,930 8,642 9,178 2,011 7,10318,649 (585) (6,569) 210.4 308.4 98.8 354.5 281.8 588.5 278.9 (22.3) (168.7) Cars purchased Cars sold Purchases (includes accessories) Used car sales net revenues * It does not include theft / crashed cars.
  7. 7. 7 Sales by quarter Quantity The Company continues to present a strong sales pace of decommissioned cars. # Number of cars sold Result of the OEM’s delays in delivering cars 13,285 14,504 15,091 13,764 12,934 13,669 18,039 17,999 17,449 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14
  8. 8. 8 Utilization rate evolution Fleet optimization resulted in an increase of utilization rate from 66.6% in 1Q13 to 72.2% in 1Q14. 70.7% 67.9% 68.8% 69.1% 68.9% 70.8% 66.8% 66.6% 72.2% 2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14
  9. 9. 9 End of period fleet Quantity Productivity gains resulted in 10.1% volume growth in the Car Rental Division, with only 0.9% increase in the end of period fleet. 35,686 39,112 47,517 61,445 64,688 65,086 70,717 64,043 64,642 17,790 23,403 22,778 26,615 31,629 32,104 32,809 32,212 32,009 2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14 53,476 Car Rental Fleet Rental 62,515 70,295 103,526 96,317 88,060 97,190 96,255 96,651
  10. 10. 655.0 842.9 898.5 1,175.3 1,450.0 1,646.7 1,758.9 429.5 459.3 850.5 980.8 922.4 1,321.9 1,468.1 1,520.0 1,747.3 363.8 485.8 2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14 10 Consolidated net revenues R$ million Consolidated net revenues increased 19.1% in 1Q14. Car Rental Used car sales 1,505.5 1,823.7 2,918.1 3,506.2 793.3 1,820.9 2,497.2 3,166.7 945.1
  11. 11. 11 Consolidated EBITDA R$ million In the Car Rental Division, EBITDA margin was 40.2% in 1Q14, 4.6 p.p. above the same quarter of 2013. 403.5 504.1 469.7 649.5 821.3 875.6 916.5 217.2 249.1 2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14 Divisions 2007* 2008* 2009* 2010* 2011* 2012 2013 1Q13 1Q14 Car Rental 46.0% 45.9% 41.9% 45.3% 46.9% 40.9% 36.8% 35.6% 40.2% Fleet Rental 71.3% 69.1% 68.7% 68.0% 68.6% 66.4% 65.5% 65.9% 62.0% Rental Consolidated 54.5% 53.3% 51.1% 52.3% 53.8% 49.3% 46.5% 45.8% 47.2% Used Car Sales 5.5% 5.6% 1.1% 2.6% 2.8% 4.2% 5.7% 5.6% 6.6% (*)Up to 2011, accessories and freight of new cars were recorded as permanent assets and depreciated over the cars’ useful life. From 2012 on, such values have been accounted directly in the cost line, impacting EBITDA but reducing depreciation costs.
  12. 12. 2,395.8 5,083.1 4,371.7 3,509.7 4,133.0 4,311.3 4,592.3 4,508.01,096.9 2007 2008 2009 2010 2011 2012 2013 1Q14 332.9 2,546.0 2,577.0 1,536.0 1,683.9 1,895.8 1,452.4 1,396.0 2007 2008 2009 2010 2011 2012 2013 1Q14 12 Average depreciation per car in R$ Robust used-car market Financial crisis and IPI reduction effect Robust used-car market Financial crisis and IPI reduction effect Depreciation Non recurring additional depreciation - IPI Effect Depreciation Non recurring additional depreciation - IPI Effect 3,972.4 5,408.2 2,076.6 Average depreciation per car (R$) – Car Rental Average depreciation per car (R$) – Fleet Rental
  13. 13. 13 Consolidated net income R$ million 190.2 127.4 116.3 250.5 291.6 240.9 384.3 88.8 105.8 2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14 * Pro forma 2012 net income excluding additional depreciation related to the IPI tax reduction, net of income tax. 336.3 * Record Productivity and efficiency gains contributed to reduce the impact of interest rates increases. The Company reported record net income this quarter.
  14. 14. 14 Free cash flow - FCF (*) Without the technical discount up to 2010 Free cash flow - R$ million 2007 2008 2009 2010 2011 2012 2013 1Q14 Operations EBITDA 403.5 504.1 469.7 649.5 821.3 875.6 916.5 249.1 Used car sale revenue, net from taxes (850.5) (980.8) (922.4) (1,321.9) (1,468.1) (1,520.0) (1,747.3) (485.8) Depreciated cost of cars sold (*) 760.0 874.5 855.1 1,203.2 1,328.6 1,360.2 1,543.8 432.0 (-) Income tax and social contribution (63.4) (52.8) (49.0) (57.8) (83.0) (100.9) (108.5) (31.7) Change in working capital 13.3 (44.8) (11.5) 54.5 (83.9) 37.1 2.9 (44.4) Cash provided before investment 262.9 300.2 341.9 527.5 514.9 652.0 607.4 119.2 Capex-Renewals Used car sale revenue, net from taxes 850.5 980.8 922.4 1,321.9 1,468.1 1,520.0 1,747.3 302.9 Car investment for renewal (839.0) (1,035.4) (947.9) (1,370.1) (1,504.5) (1,563.3) (1,819.7) (317.1) Net investment for fleet renewal 11.5 (54.6) (25.5) (48.2) (36.4) (43.3) (72.4) (14.2) Fleet renewal – quantity 30,093 34,281 34,519 47,285 50,772 56,644 62,641 10,880 Investment, other property and intangibles investments (23.7) (39.9) (21.0) (51.1) (63.0) (80.2) (54.0) (9.8) Free cash flow before growth and before interest 250.7 205.7 295.4 428.2 415.5 528.5 481.0 95.2 Capex-Growth Investment on cars for fleet (growth) (221.9) (299.9) (241.1) (540.3) (272.0) (55.5) (209.4) - Cash provided by fleet decrease - - - - - - - 182.9 Change in accounts payable to car suppliers (51.0) (188.9) 241.1 111.3 32.7 (116.9) 89.7 (102.1) Fleet growth (272.9) (488.8) 0.0 (429.0) (239.3) (172.4) (119.7) 80.8 Fleet increase / (reduction) – quantity 7,957 9,930 8,642 18,649 9,178 2,011 7,103 (6,569) Free cash flow after growth and before interest (22.2) (283.1) 295.4 (0.8) 176.2 356.1 361.3 176.0
  15. 15. 15 Changes in net debt R$ million - 1,207.9(34.3) Financial expenses (16.8) IOC Net debt 03/31/2014 FCF 176.0 -1,332.8 Net debt 12/31/2013 FCF after financial expenses 141.7 Net debt was reduced by R$124.9 million due to strong cash generation in the period.
  16. 16. 16 Debt maturity profile (principal) R$ million The Company maintains a strong cash position and comfortable debt profile. 238.4 214.5 647.3 511.0 221.0 247.0 100.0 100.0 2014 2015 2016 2017 2018 2019 2020 2021 Cash 1,193.7 1,100.2
  17. 17. 765.1 1,254.5 1,078.6 1,281.1 1,363.4 1,231.2 1,332.8 1,207.9 1,492.9 1,752.6 1,907.8 2,446.7 2,681.7 2,547.6 2,797.9 2,623.6 2007 2008 2009 2010 2011 2012 2013 1Q14 17 Debt - ratios Net debt vs. Fleet value BALANCE AT THE END OF PERIOD 2007(*) 2008(*) 2009(*) 2010(*) 2011 2012 2013 1Q14 Net debt / Fleet value 51% 72% 57% 52% 51% 48% 48% 46% Net debt / EBITDA** 1.9x 2.5x 2.3x 2.0x 1.7x 1.4x 1.5x 1.2x Net debt / Equity 1.3x 2.0x 1.5x 1.4x 1.2x 0.9x 1.0x 0.8x EBITDA / Net financial expenses 5.4x 3.8x 4.2x 5.0x 4.6x 6.3x 8.3x 7.3x (*) From 2007 to 2010, ratios based on USGAAP financial statements. **Annualized Net debt Fleet value Comfortable debt ratios for the current scenario.
  18. 18. 18 ROIC versus cost of debt after taxes 8.4% 8.8% 7.6% 7.3% 8.6% 6.3% 6.0% 7.6% 21.3% 17.0% 11.5% 16.9% 17.1% 16.1% 16.5% 18.9% 2007 2008 2009 2010 2011 2012 2013 1Q14 12.9p.p. 8.2p.p. 4.0p.p. 9.6p.p. 8.5p.p. 11.3p.p. 9.8p.p. The Company focuses in adding value to shareholders. ROIC Cost of debt after taxes Financial crisis effect 10.5p.p. Annualized
  19. 19. Thank You! 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 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. 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, 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. www.localiza.com/ri Email: ri@localiza.com Tel: 55 31 3247-7024 Disclaimer

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