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Institucional Presentation - Julho/15
Localiza is a Brazilian car rental company with over 40 years of experience in managing vehicle fleets. It operates in three main divisions: car rental, fleet rental, and used car sales. Localiza has a large scale of operations in Brazil, with competitive advantages in raising capital, purchasing vehicles, and renting cars. It has a profitable business model in each division and maintains healthy profitability levels and debt ratios compared to competitors. Localiza's integrated business platform allows it flexibility and superior financial performance.
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Institucional Presentation - Julho/15
- 1. 1 Localiza Rent aCar S.A. July , 2015
- 2. 1. Company overview 2.Main business divisions Car Rental Fleet Rental Seminovos 3. Financials Appendix: Earnings release 2Q15 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 12/31/2014 – Market cap of about US$3.0 bi with ADTV of US$14.0 million 1973 1982 1983 2004 2005 2014 3
- 4. Company: integrated businessplatform Synergies: bargaining power cost reduction cross selling 12,934 cars 175 locations in Brazil 67 locations in South America 38 employees 58,2% sold to final consumer 75 stores 993 employees 71,525 cars 4.6 million clients 310 locations 4,522 employees 33,217 cars 793 clients 399 employees This integrated business platform gives Localiza flexibility and superior performance. Based on the 1H15 4 Car Rental Fleet Rental SeminovosFranchising
- 5. 5 2014 Consolidated breakdown R$million Company’s profitability comes from Car Rental and Fleet Rental Divisions. 12% 35% 52% 35% 65% Net Revenues R$3,892 EBITDA R$970 52% 15% 33% EBIT* R$726 R$2,018 R$1,302 R$572 R$120 R$507 R$343 R$253 R$473 *Seminovos results recorded in the Car Rental and Fleet Rental Divisions
- 6. 6 High fixed cost Standardfleet 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
- 7. 7 Net car sale revenue R$26.21year cycle Car Rental Division - Financial Cycle Per car R$27.8 Average car price 1 2 3 4 5 6 7 8 9 10 11 12Expenses, interest and tax Revenue Spread 9.5p.p. Total 1 year R$ % R$ % R$ Net revenues 20.9 100.0% 29.0 100.0% 49.8 Costs - fixed and variable (9.4) -44.9% (9.4) SG&A (3.4) -16.3% (2.8) -9.6% (6.2) Net revenues of car sold 26.2 90.4% 26.2 Book value of car sold (24.8) -85.6% (24.8) EBITDA 8.1 38.7% 1.4 4.7% 9.5 Cars Depreciation (1.3) -4.4% (1.3) Others depreciation (0.4) -1.7% (0.2) -0.6% (0.5) Financial expenses (1.7) -6.0% (1.7) Taxes (2.3) -11.1% 0.5 1.9% (1.8) Net Income (Loss) 5.4 25.9% (1.3) -4.4% 4.1 NOPAT 5.3 ROIC (it considers the effect of the average book value of the car in its useful life) 17.5% Cost of debt after taxes 8.0% Car Rental Seminovos Per car soldPer operating car
- 8. 8 Net car sale revenue R$24.4 3year cycle Fleet Rental Division - Financial Cycle Per car Spread 9.5p.p. 1 2 3 4 5 6 31 32 33 34 35 36Expenses, interest and tax Revenue R$33.3 Average car price Total 3 years R$ % Seminovos % R$ Net revenues 55.7 100.0% 26.9 100.0% 82.6 Costs - fixed and variable (18.6) -33.4% (18.6) SG&A (3.7) -6.7% (2.5) -9.3% (6.2) Net revenues of car sold 24.4 90.7% 24.4 Book value of car sold (21.2) -78.9% (21.2) EBITDA 33.4 60.0% 3.2 11.8% 36.6 Cars Depreciation (12.6) -46.9% (12.6) Others depreciation (0.1) -0.2% (0.1) -0.2% (0.2) Financial expenses (4.4) -16.3% (4.4) Taxes (10.0) -17.9% 4.2 15.5% (5.8) Net Income (Loss) 23.3 41.8% (9.7) -36.1% 13.6 Net Income (Loss) - per year 7.8 41.8% (3.2) -36.1% 4.5 NOPAT 5.6 ROIC (it considers the effect of the average book value of the car in its useful life) 17.5% Cost of debt after taxes 8.0% Per operating car Fleet Rental Seminovos Per car sold
- 9. Raising money Buying cars Renting CarsSelling 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: raisingmoney Global Scale National Scale Localiza raises money with better conditions when compared to competitors. As of May, 2015. BBB Fitch Baa3 Moody’s BBB- S&P Baa1 Moody´s BBB+ S&P B1 Moody´s B+ S&P Ba3 Moody´s BB- S&P BB- Fitch brAAA S&P Aa1.br Moody’s AAA(bra) Fitch brAA- S&P A+ (bra) Fitch brA S&P A- (bra) Fitch A+ (bra) Fitch A(bra) Fitch Raising money Buying cars Renting Cars Selling Cars 10 Investment grade: lower spreads and longer tenors Source: Bloomberg and companies website
- 11. 11 Competitive advantages: buyingcars Localiza buys cars with better conditions due to the volume of purchases. Number of cars purchased - 2014 * Includes Franchising 86,426 22,920 17,246 14,177 Localiza Unidas Movida Locamerica * Source: each company website and ANFAVEA Localiza’s share in the internal sales of the major OEMs - 2014 3.6% Raising money Buying cars Renting Cars Selling Cars
- 12. 108 157 82 82 12 The Company ispresent in 243 cities where the other largest networks do not operate. Competitive advantages: renting cars Know HowBrand Brazilian distribution 2014 #ofbranches#ofcitiesSource: Each company website As of December, 2014 476 402 Raising money Buying cars Renting Cars Selling Cars Localiza Unidas Hertz Movida Avis 348 105 78 60 42 Localiza Competitors
- 13. 13 Sales to finalconsumer Competitive advantages: selling cars Selling directly to final consumer reduces depreciation. Cars available for sale are used during peaks of demand. Raising money Buying cars Renting Cars Selling Cars Buffer: additional fleet
- 14. 7.3% 8.6% 6.3% 6.0% 8.0% 9.0% 16.9%17.1% 16.1% 16.5% 17.5% 16.2% 2010 2011 2012 2013 2014 1H15* 14 ROIC versus cost of debt after taxes 9.6p.p. 8.5p.p. 9.5p.p. 9.8p.p. ROIC and spread remained at a healthy level. ROIC Cost of debt after taxes 10.5p.p. 7.2p.p. *Annualized
- 15. Localiza Unidas LocamericaOuro Verde JSL Localiza Unidas Locamerica Ouro Verde JSL Localiza vs. players Profitability Source: Companies’ Financial Statements. * Includes 19,208 cars from Movida - RAC 15 ROIC 2014 ROE 2014 Frota 125,224 40,296 30,291 25,326 49,429* 13.7% WACC Reference ROIC = NOPAT / (Average net debt + average equity) ROE = Net income / Equity at the beginning of the year Consolidated Consolidated 17.5% 8.1% 9.1% 8.5% 7.6% 30.6% 8.2%7.1% 10.9% 7.1%
- 16. 0.8x 1.0x 2.2x 8.5x 3.5x Localiza UnidasLocamerica Ouro Verde JSL 1.4x 2.2x 3.3x 3.7x 4.2x Localiza Unidas Locamerica Ouro Verde JSL 16 Net Debt / EBITDA - 2014 Net Debt / Equity - 2014 Source: Companies’ Financial Statements. Localiza vs. players Debt ratios Consolidated Consolidated
- 17. 17 1. Company overview 2.Main business divisions Car Rental Fleet Rental Seminovos 3. Financials Appendix: Earnings release 2Q15 Agenda
- 18. 18 Car Rental overview 63.9% Compactcars 2014 Fleet composition 77,573 cars 36.1% Others Corporate fleet size 65,086 70,717 77,573 71,525 2012 2013 2014 1H15 Car rental distribution (Brazil) 474 479 476 485 2012 2013 2014 1H15
- 19. 19 Drivers Source: BCB andLocaliza rates 151 180 200 240 260 300 350 380 415 465 510 545 622 678 724 51% 38% 37% 35% 31% 27% 22% 20% 18% 16% 15% 15% 13% 13% 12% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Monthly minimum salary (R$) Daily rental price over minimum salary (%) Car rental affordability Source: IPEADATA and Localiza’s loyalty program. 4 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.
- 20. 20 Drivers # domestic airtraffic passengers In million Investments per industry (In billions of Reais) Source: Exame Magazine, December 2014. 70 82 89 90 96 122 2010 2011 2012 2013 2014 2017E Source: ANAC 2017 estimates: BOEING The strong pipeline of investments tend to benefit the corporate segment. Air traffic growth supporting demand at the airports.
- 21. 21Source: RAIS andeach company’s website As of December 31, 2014 Off-airport market is still fragmented. Airport locations Off-airport locations Car Rental Locations in Brazil Others 5,111
- 22. 22 Market Share –Car Rental 2014 Fleet 332,485 cars Source: ABLA and Companies’ Financial Statements and estimates. 23.3% 2.4% 6.9% 5.8% 2.1% 61.6% Localiza’s market share is about 2x higher than the 2nd and 3rd players together. Movida Unidas Franchising 25.7% Others Avis
- 23. 23 1. Company overview 2.Main business divisions Car Rental Fleet Rental Seminovos 3. Financials Appendix: Earnings release 2Q15 Agenda
- 24. 24 Number of clients FleetRental overview 35.0% Compact cars 2014 Fleet composition 34,312 cars 65.0% Others 729 760 798 793 2012 2013 2014 1H15 End of period fleet 32,104 32,809 34,312 33,217 2012 2013 2014 1H15
- 25. 25 Source: ABLA, Datamonitorand Localiza Low penetration of rented fleet in Brazil. Rented fleet penetration Corporate fleet: 4,000,000* Rented fleet: 440,737 34,312 Brazilian Market World 11.0% 8.9% 13.3% 16.5% 24.5% 37.4% 46.9% 58.3% Drivers *Localiza estimates
- 26. Market Share –Fleet Rental 2014 26 Fleet 440,737 cars Source: ABLA, Companies’ Financial Statements and estimates 7.8% 0.4% 6.9% 6.9% 5.7% 4.9% 3.6% 63.9% Fragmented market with low entry barriers. 8.1% Franchising Locamerica JSL Ouro Verde Unidas Others ALD
- 27. 27 1. Company overview 2.Main business divisions Car Rental Fleet Rental Seminovos 3. Financials Appendix: Earnings release 2Q15 Agenda
- 28. 28 Efficiency gain oncar sales # of points of sale Car sales – operating data 55 66 73 74 75 75 2010 2011 2012 2013 2014 1H15 47,285 50,772 56,664 62,641 70,621 33,520 2010 2011 2012 2013 2014 1H15 # Number of cars sold (quantity)
- 29. 29 Source: O Estadode São Paulo newspaper, as of 08/16/13 (based on researches of Sindipeças) and Globo website, as of 03/10/2014. Used car sales drivers: affordability and penetration # of inhabitants per car 2012 – (Brazil 2014) 4.2 4.0 4.0 3.6 2.1 2.0 1.9 1.8 1.2 Argentina Brazil Russia South Korea Japan France Germany United Kingdon USA Affordability to buy cars – Public Price of the most basic Gol 300 350 380 415 465 510 545 622 678 724 84 71 69 61 55 51 49 43 43 43 - 10 20 30 40 50 60 70 80 90 - 100 200 300 400 500 600 700 800 900 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Minimum wage (R$) Minimum wages to buy a new car
- 30. 8.4 8.9 9.09.4 10.1 3.3 3.5 3.6 3.6 3.3 30 2.5x 2.5x 2010 2011 2012 2013 2014 2.6x Brazilian car market: new x used car market and affordability New cars Used cars Source: FENABRAVE (light and commercial cars) 2.6x Total market of 13.4 million cars. 3.1x
- 31. 31 2014 Up to2 years 442,257 2014 Brand new 3,328,716 2014 Used cars 10,051,296 0.7% 1.8% 16.0% Car sales – operating data Source: Anfavea and Fenabrave Examples • Retailers • “Loja do carro” • Dealers • Fiat, VW, Ford, GM most successful • Auto Brasil • Rental operators • Locamerica, Hertz • “Auto malls” and “Cidade do automóvel” Points of sale • 48,000 (Fenauto) • 4,364 (Anfavea) • +57 (Unidas, Movida, Locamerica and others). • 71 (Fenauto) Main players
- 32. 32 1. Company overview 2.Main business divisions Car Rental Fleet Rental Seminovos 3. Financials Appendix: Earnings release 2Q15 Agenda
- 33. 802.2 980.7 1,093.7 1,163.5 1,284.4 628.1606.4 316.7 296.4 2010 2011 2012 2013 2014 1H14 1H15 2Q14 2Q15 33 Net Revenues (R$ million) # Daily Rentals (thousands) Car Rental Division The marketing initiatives helped to offset the reduction in rental demand as a result of lower volume of business trips and aggressive competitive landscape. 10,734 12,794 13,749 14,242 15,416 7,638 7,584 3,865 3,780 2010 2011 2012 2013 2014 1H14 1H15 2Q14 2Q15
- 34. 234 247 272286 304 310 181 202 202 193 172 175 61 47 50 63 64 67 2010 2011 2012 2013 2014 1H15 34 Car Rental network evolution 6 new corporate locations were added to the network in 1H15. # of car rental locations (Brazil and abroad) Localiza´s branches - Brazil Franchisees´ branches - Brazil Franchisses´ branches - abroad 476 496 524 542 540 +6 +3 552 +3
- 35. 35 Utilization rate evolution– Car Rental Division 2Q15 utilization rate was 69.0%, 2.7p.p. above the rate of 1Q15. 69.1% 68.9% 70.8% 66.8% 69.9% 66.3% 69.0% 2010 2011 2012 2013 2014 1Q15 2Q15
- 36. 361.1 455.0 535.7 575.9 571.9 283.1298.8 140.0 149.9 2010 2011 2012 2013 2014 1H14 1H15 2Q14 2Q15 8,044 9,603 10,601 10,844 10,363 5,153 5,484 2,530 2,739 2010 2011 2012 2013 2014 1H14 1H15 2Q14 2Q15 36 Net Revenues (R$ million) # Daily Rentals (thousands) Fleet Rental Division The growth reflects the Company´s commercial intelligence in exploring market opportunities as well as the synergy of our business platform.
- 37. 1,910.4 1,776.5 1,618.8 2,026.2 2,483.2 1,021.5 901.3 704.4 552.3 1,321.9 1,468.1 1,520.0 1,747.3 2,018.2 929.3 1,043.2 443.6499.2 2010 2011 2012 2013 2014 1H14 1H15 2Q14 2Q15 Purchases (includes accessories) Used car sales net revenues Cars purchased Cars sold 37 Net investment Fleet Expansion* (quantity) The 12.3% Seminovos net revenue growth in 1H15 was mainly due to the increase in the average price of cars sold. Net Investment in Fleet (R$ million) 65,934 59,950 58,655 69,744 79,804 35,064 26,851 24,184 16,211 47,285 50,772 56,644 62,641 70,621 33,338 33,520 15,889 16,071 2010 2011 2012 2013 2014 1H14 1H15 2Q14 2Q15 9,178 2,011 7,10318,649 309.4 98.8 588.6 278.9 * It does not include theft / crashed cars. 9,183 465.0 1,726 (6,669) 8,295 140 92.2 (141.9) 260.8 53.1 +12.3%
- 38. 38 End of periodfleet Quantity The 2.4% reduction in the fleet of Car Rental Division reflects the adjustments in fleet size according to demand. 61,445 64,688 65,086 70,717 77,573 73,281 71,525 26,615 31,629 32,104 32,809 34,312 31,814 33,217 10,652 12,958 14,545 14,233 13,339 12,991 12,934 2010 2011 2012 2013 2014 1H14 1H15 98,712 109,275 111,735 117,759 125,224 Car Rental Fleet Rental Franchising 118,086 117,676
- 39. 1,175.3 1,450.0 1,646.71,758.9 1,874.0 920.3 913.3 461.0 450.3 1,321.9 1,468.1 1,520.0 1,747.3 2,018.2 929.3 1,043.2 443.6 499.2 2010 2011 2012 2013 2014 1H14 1H15 2Q14 2Q15 39 Consolidated net revenues R$ million Consolidated net revenues grew 5.8% in 1H15 when compared with 1H14. Rental Used car sales 2,918.1 3,506.2 3,892.2 2,497.2 3,166.7 1,849.6 1,956.5 904.6 949.5
- 40. 40 Consolidated EBITDA R$ million Partof the decrease in Car Rental EBITDA margin of the Car Rental was compensated by the reduction in depreciation expenses. 649.5 821.3 875.6 916.5 969.8 490.6 467.8 241.6 223.0 2010 2011 2012 2013 2014 1H14 1H15 2Q14 2Q15 (*)From 2012 on, accessories and freight of new cars have been accounted directly in the cost line, impacting EBITDA but reducing depreciation costs. Divisions 2010* 2011* 2012 2013 2014 1H14 1H15 2Q14 2Q15 Car Rental 45.3% 46.9% 40.9% 36.8% 38.7% 39.1% 32.4% 38.1% 30.3% Fleet Rental 68.0% 68.6% 66.4% 65.5% 60.0% 61.7% 61.1% 61.5% 62.8% Rental Consolidated 52.3% 53.8% 49.3% 46.5% 45.3% 46.3% 41.9% 45.4% 41.3% Used Car Sales 2.6% 2.8% 4.2% 5.7% 6.0% 7.0% 8.2% 7.3% 7.5%
- 41. 41 Average depreciation percar in R$ Car Rental The reduction of depreciation reflects new car prices’ increase at the dealers. 492 939 333 1,169 2,577 1,536 1,684 1,896 1,452 1,270 599 24,345 25,837 25,648 27,740 26,572 27,174 27,942 25,769 27,785 29,412 30,778 15,000 17,000 19,000 21,000 23,000 25,000 27,000 29,000 31,000 33,000 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15 Annualized average depreciation per car (R$) Average price of cars purchased - Car Rental 1,377 IPI Effect 2,546 2,076 IPI Effect 3,972 Stable car priceRising car price Rising car price
- 42. 42 Average depreciation percar in R$ Fleet Rental 2,981 2,383 2,396 2,803 4,372 3,510 4,133 4,311 4,592 4,202 4,118 32,106 33,190 33,754 34,192 30,741 35,414 33,315 35,025 35,693 38,346 45,686 15,000 20,000 25,000 30,000 35,000 40,000 45,000 - 2,000 4,000 6,000 8,000 10,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H15 Annualized average depreciation per car (R$) Average price of cars purchased - Fleet Rental 2,280 IPI Effect 5,083 1,097 IPI Effect 5,408 Stable car priceRising car price Rising car price The reduction in depreciation reflects new car prices’ increase at the dealers. The increase in the price of purchased cars also reflects a change in the fleet mix.
- 43. 43 EBIT Divisions 20102011 2012 2013 2014 1H14 1H15 2Q14 2Q15 Car Rental 309.2 380.8 259.0 381.4 464.6 232.2 221.6 113.4 101.7 Franchising 6.2 7.2 8.9 10.9 8.7 5.1 3.3 2.1 1.7 Fleet Rental 166.7 207.7 197.9 259.8 253.4 131.9 140.6 68.9 76.0 Consolidated 482.1 595.7 465.8 652.1 726.7 369.2 365.5 184.4 179.4 Consolidated Margin 41.0% 41.1% 28.3% 37.1% 38.8% 40.1% 40.0% 40.0% 39.8% 38.5% 38.8% 23.7% 32.8% 36.2% 36.5% 46.2% 45.6% 36.9% 45.1% 44.3% 47.1% 2010 2011 2012 2013 2014 1H15 Car Rental Fleet Rental EBIT of Car Rental and Fleet Rental contemplates Seminovos results. *2012 EBIT was impacted by R$144.5 million of additional depreciation related to IPI (sales tax) reduction. EBIT Margin calculated over rental revenues In this industry, EBIT margin is the indicator that best reflects the operating results. IPI Effect
- 44. 250.5 291.6 240.9 384.3 410.6 206.4 193.6 100.693.4 2010 2011 2012 2013 2014 1H14 1H15 2Q14 2Q15 44 Consolidated net income R$ million * Pro forma 2012 net income excluding additional depreciation related to the IPI tax reduction, net of income tax. 336.3 * In 2Q15, the increase of the interest rates impacted financial expenses in R$ 8.9 million (R$ 6.0 million after tax).
- 45. Net income variation– 2Q14 to 2Q15 (In R$ million) 2Q14 net income 100.6 EBITDA -18.6 Depreciation 13.6 Subtotal 95.6 Interest -8.9 Income tax 6.7 2Q15 net income 93.4 The drop of R$18.6 million in EBITDA was largely compensated by lower depreciation expenses of R$13.6 million. + +
- 46. 46 Free cash flow- FCF Free cash flow - R$ million 2010 2011 2012 2013 2014 1H15 Operations EBITDA 649.5 821.3 875.6 916.5 969.8 467.8 Used car sale revenue, net from taxes (1,321.9) (1,468.1) (1,520.0) (1,747.3) (2,018.2) (1,043.2) Depreciated cost of cars sold 1,203.2 1,328.6 1,360.2 1,543.8 1,777.0 889.3 (-) Income tax and social contribution (57.8) (83.0) (100.9) (108.5) (113.1) (56.1) Change in working capital 54.5 (83.9) 37.1 2.9 (27.1) (29.5) Cash provided by rental operations 527.5 514.9 652.0 607.4 588.4 228.3 Capex- Renewals Used car sale revenue, net from taxes 1,321.9 1,468.1 1,520.0 1,747.3 2,018.2 835.6 Fleet renewal investment (1,370.1) (1,504.5) (1,563.3) (1,819.7) (2,197.7) (901.3) Net investment for fleet renewal (48.2) (36.4) (43.3) (72.4) (179.5) (65.7) Fleet renewal – quantity 47,285 50,772 56,644 62,641 70,621 33,520 Investment, other property and intangibles investments (50.6) (59.9) (77.8) (47.5) (46.3) (10.5) Free cash flow before growth, new headquarters and interest 428.7 418.6 530.9 487.5 362.6 152.1 Capex-Growth Fleet growth investment (540.3) (272.0) (55.5) (209.4) (286.8) - Cash generated by fleet reduction - - - - - 207.6 Change in accounts payable to car suppliers 111.3 32.7 (116.9) 89.7 334.4 (268.2) Fleet growth (429.0) (239.3) (172.4) (119.7) 47.6 (60.6) Fleet increase / (reduction) – quantity 18,649 9,178 2,011 7,103 9,183 (6,669) Free cash flow after growth, and before interest and new HQ (0.3) 179.3 358.5 367.8 410.2 91.5 Capex– HQ Investment in the construction of the new HQ (0.5) (3.1) (2.4) (6.5) (55.7) (46.3) Marketable securities – new HQ - - - - (92.6) - New headquarters construction (0.5) (3.1) (2.4) (6.5) (148.3) (46.3) Free cash flow before interest (0.8) 176.2 356.1 361.3 261.9 45.2 359.7
- 47. 47 - 1,469.5 (99.4) Interest Net debt 06/30/2015 Cashgeneration before OEMs and new HQ 359.7 -1,322.3 Net debt 12/31/2014 (84.0) Dividends (46.3) New headquarters Changes in net debt R$ million The reduction in the balance payable to OEMs is largely due to the payment of 4Q14’s car purchases anticipation. (268.2) OEMs 9.0 Treasury shares purchasedAnticipation of cars purchase in 4Q14.
- 48. 2,446.7 2,681.7 2,547.6 2,797.9 3,296.3 3,217.1 2010 20112012 2013 2014 1H15 48 Debt - ratios Net debt + OEMs vs. Fleet value BALANCE AT THE END OF PERIOD 2010(*) 2011 2012 2013 2014 1H15 Net debt + OEMs / Fleet value 68% 66% 60% 61% 62% 59% Net debt / Fleet value 52% 51% 48% 48% 40% 46% Net debt / EBITDA** 2.0x 1.7x 1.4x 1.5x 1.4x 1.6x Net debt / Equity 1.4x 1.2x 0.9x 1.0x 0.8x 0.8x EBITDA / Net financial expenses 5.0x 4.6x 6.3x 8.3x 6.4x 4.7x (*) 2010 ratios based on USGAAP financial statements **Annualized OEMs Net debt Fleet value Comfortable debt ratios. 1,281.1 1,363.4 1,231.2 1,332.8 1,322.3 1,469.5 372.6 405.3 288.4 378.1 712.5 444.3 1,653.7 1,768.7 1,519.6 1,710.9 2,034.8 1,913.8
- 49. 120.4 288.7 370.8 221.1 594.5 595.0 447.5 20152016 2017 2018 2019 2020 2021 49 Debt maturity profile (principal) R$ million Strong cash position and comfortable debt profile. Cash* 1,001.0 As of June 30, 2015 1,321.8 * R$ 1,223.6 refers to cash and R$ 98.2 refers to Marketable Securities.
- 50. 50 Localiza Level IADR 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
- 51. 51 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