localiza 2q12
TRANSCRIPT
1August / 2012
2
1.The Company
2.Drivers and opportunities
3.Competitive advantages
4.Financials
Agenda
3
Company: integrated business platform
This integrated business platform gives Localiza flexibility and superior performance.
Synergies:
bargaining power
cost reduction
cross selling
13,389 cars 201 locations in Brazil 48 locations in South America 34 employees
66.6% sold to final consumer 71 stores 951 employees
58,436 cars 3.1 million clients 253 locations 4,057 employees
31,412 cars 699 clients 343 employees
Based on the 2Q12
4
Total1 year
R$ % R$ % R$Revenues 19.9 100.0% 29.1 100.0% 48.9 Cost (8.2) -41.3% (8.2) SG&A (2.7) -13.5% (2.9) -9.9% (5.5)
Net car sale revenue 26.2 90.1% 26.2
Book value of car sale (25.5) -90.0% (25.5) EBITDA 9.0 45.2% 0.7 2.4% 9.7
Depreciation (vehicle) (1.7) -5.8% (1.7) Depreciation (non-vehicle) (0.3) -1.7% (0.1) (0.5) Interest on debt (2.4) -8.2% (2.4) Tax (2.6) -13.0% 1.0 3.6% (1.5)
NET INCOME 6.1 30.4% (2.4) -8.4% 3.6
NOPAT 5.3 ROIC 17.5%Cost of debt after tax 8.6%
Car Rental Seminovosper operating car per car sold
2011 Car rental financial cycle
Car sale revenue$26.2
$27.9Car acquisition
1 2 3 4 5 8 9 10 11 12Expenses, interest and tax
1-year cycle
Revenue
Spread8.9p.p.
*
* Investment in cars and PP&E (8%)
5
$33.8Car acquisition
Net car sale revenue
$26.4
1 2 3 4 5 20 21 22 23 24
2-year cycle
Expenses, interest and tax
Revenue
2011 Fleet rental financial cycle
Spread7.5p.p.
Total2 years
R$ % R$ % R$Revenues 34.0 100.0% 28.7 100.0% 62.7
Cost (9.7) -28.7% (9.7)
SG&A (1.8) -5.3% (2.3) -7.9% (4.1) Net car sale revenue 26.4 92.1% 26.4 Book value of car sale (25.0) -90.0% (25.0)
EBITDA 22.4 66.0% 1.4 5.0% 23.8 Depreciation (vehicle) (8.3) -28.8% (8.3) Depreciation (non-vehicle) (0.1) -0.1% (0.1) Interest on debt (4.0) -14.1% (4.0) Tax (6.7) -19.8% 3.3 11.4% (3.5)
NET INCOME 15.6 46.0% (7.6) -26.5% 8.0
NET INCOME per year 7.8 46.0% (3.8) -26.5% 4.0
NOPAT (annualized) 5.4 ROIC 16.1%Cost of debt after tax 8.6%
Fleet Rental Seminovosper operating car per car sold
6
Pricing strategy
Company: managing assets
Targeted spread
Funding
Equity
Cash to renew the fleet
Assets (cash)
Profitability comes fromrental divisions
Ass
ets
(car
s)
Debt
Flexible and liquid assets.
7
Company: stable management
Salim Mattar – 39y
Eugênio Mattar – 39y
Gina Rafael – 31y
João Andrade – 8y
Marco Antônio Guimarães – 22y
Bruno Andrade – 20y
BOARD OF DIRECTORS
CEO
COO
Car Acquisition
Legal
Localiza has a lean and efficient structure.
The succession process is already planned.
Roberto Mendes – 27y
Financial ITHuman
Resources Administration
Daltro Leite – 27y Alberto Campos– 4y
8
Average growth of roughly 25% p.a. in the last years.
Company: growth and profitability track record
Revenues consolidated
EBITDA consolidated
331.4 408.4 537.4 655.0 842.9 898.51,175.3
1,450.0303.0
446.5588.8
850.5980.8 922.4
1,321.9
1,468.1
515.7457.4402.7296.1234.1225.9212.9
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
CAGR: 24.4%
CAGR: 15.9%
634.4854.9
1,126.2
1,505.51,823.7 1,820.9
2,497.2
2,918.1
Consolidated Rentals Used car sales
CAGR: 23.4%
4.3
42 62 85.2 134.3 154 149.9 152.1 197.8278.1 311.4
403.5504.1 469.7
649.5821.3
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
CAGR: 23.9%
CAGR: 22.6%
-0.6 7.55.7 3.2 4.0 6.1 5.2
1.9Average
1.12.71.34.30.30.03.4GDP 2.9
9
2005 2006 2007 2008 2009 2010 2011
Rental revenues growth elasticity x GDP
5.7x
Localiza
GDP
Sector
2.9x
Company: GDP elasticity
The drivers combined with Localiza’s competitive advantages resulted in a growth above the industry level.
10
17.9%20.5% 22.1%
24.8% 24.2%27.4%
30.4%
2005 2006 2007 2008 2009 2010 2011
18.9% 20.6% 20.8% 21.8% 21.4% 23.5% 24.1%
2005 2006 2007 2008 2009 2010 2011
Revenues - consolidated Fleet - consolidated
Fleet
Company: market share
Source: ABLA 2012 yearbook
36.5% 13.9%
Car Rental division Fleet Rental division
11
2011 - Would you recommend Localiza? YES!
Company: recognitions and rewards
Customers recognize premium service and recommend it!
94.6% 94.8% 96.0% 95.5% 95.3% 96.3% 95.9%
2005 2006 2007 2008 2009 2010 2011
Source: based on “Fale Fácil” satisfaction survey answered by more than 350,000 customers in 2011
95.9%
12
Company: recognitions and rewards
93.0%99.0%98.0%
Users VIP Users Contract managers
Customers recognize good service and recommend it!
Source: Users and VIP users based on phone interviews made by the Company with customers. Contract managers made by an independent research: Vox Populi
2011 - Would you recommend Total Fleet? YES!
98.0%
13
Company: recognitions and rewards
Customers recognize premium service and recommend it!
94.0%92.3%94.0%
2009 2010 2011
Source: based on phone interviews made by the Company with customers started in 2009
2011 - Would you recommend Seminovos? YES!
94.0%
14
Company: recognitions and rewards
2011 Valor 200 8th Company in growth and profitability
Maiores e Melhores do Transporte 2011 (Biggest & Best of Transportation) The best Company of the vehicle rental sector
Institutional Investor’s ranking:
BRIC Breakout One of the 5 top picks Brazil for 2012
Exame Magazine
Among the 5 best Companies of the consumer sector, in the article “Where to invest in 2012”
Best CEO, CFO and IR executive and Best IR department
Best IR executiveBest IR department
IR Magazine 2012
9th company in ROIC7th in current liquidity10th in wealth generated by employee
The Company was recognized by Exame Magazine - Best and Biggest (service sector):
15
1.The Company
2.Drivers and opportunities
3.Competitive advantages
4.Financials
Agenda
16
Drivers and growth opportunities
17
R$1.5 trillion to be invested until 2016.
Car rental drivers: investments
Source: Valor Setorial Magazine, as of May 2012
679
343
182
85 8351
14 101517
Oil/gas Transportation Energy Water/sewage Industry Hotel/Resort Housing Others Infrastructure ShoppingCenter
Investments by sector
18
Income increase and stable daily rental rates increased car rental affordability.
Car rental drivers: income and affordability
GDP per capita
(R$ thousands)
151
260
465510
545
645
240180 200
350
415380
300
18% 16% 15% 13%
31%
35%
15%
37%38%
51%
22% 20%
27%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e
Monthly minimum salary (R$) Daily rental price over minimum salary (%)
Car rental affordability
Source: IPEADATA, IBGE and Valor website, Bradesco (2012: estimated)
6.9 7.5 8.4 9.5 10.7 11.7 12.814.2
16.0 16.619.0 21.3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
19
Strong domestic drivers leads to higher volumes.
Source: FGV, BCB, Infraero, Gol, Abecs and Exame (Dec/2011)
Car rental drivers: consumption
1320
31
2003 2009 2014e
53.8% 55.0%
A and B classes - million
71128
154 179
2003 2009 2010 2011
80.3%20.3% 16.2%
Air traffic passengers - million
15
45 5169
2003 2009 2010 2011
200.0% 13.3% 35.3%
Credit card holders - million
20Source: Company as of May 2012, ABLA (Brazilian Car Rental Association) and each company website (May, 2012)
Car rental opportunities: consolidation
Off-airport market is still fragmented.
Airport locations Off-airport locations
Car rental locations in Brazil
Others36Avis
35
Unidas34
Localiza101
Hertz42
Avis27
Unidas73
Localiza351 Hertz
78
Others2079
21
Localiza’s network is still being expanded.
Brazilian distribution
Car rental strategy: organic growth
279 312 346 381 415 449
254
2005 2006 2007 2008 2009 2010 2011
22Source: ABLA and Datamonitor
Fleet rental drivers: outsourcing trend
Less than 50% of targeted fleet is rented.
Outsourced fleet penetration
Corporate fleet:4,200,000
Targeted fleet:500,000
Rented fleet:245,000
31,629
Brazilian Market World
5.4%8.9%
13.3%16.5%
24.5%
37.4%
46.9%
58.3%
23
Income increase and credit availability are the major drivers for car sales.
Source: Bradesco (2012: estimated), ANFAVEA, Exame (Dec/2011).
Used car sales drivers: affordability and penetration
Car purchase affordability
66
94.9113
2003 2009 2014e
43.8%19.1%
Middle class - million
148 128115
97 10493
80
445256586875
151 180 200240 260
300350
645545
510465
380415
0
2 0
4 0
6 0
8 0
1 0 0
1 2 0
1 4 0
1 6 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
0
1 0 0
2 0 0
3 0 0
4 0 0
5 0 0
6 0 0
7 0 0
Number of minimum w ages to buy a new car Monthly minimum salary (R$)
*
24
8.0 7.9
7.4
6.9
6.5
5.9
5.5
2005 2006 2007 2008 2009 2010 2011
Income increase and credit availability are the major drivers for car sales.
Source: O Estado de São Paulo, as of 04/15/12 (based on researches of Sindipeças, Roland Berger and PWC).
Used car sales drivers: affordability and penetration
# of inhabitants per car (2011) # of inhabitants per car - Brazil
5.5
4.2
4.0
3.6
2.1
2.0
1.9
1.8
1.3
Brazil
Argentina
Russia
South Korea
Japan
France
Germany
United Kingdon
USA
25
7.9
8.9
11.9
15.8
17.4
1.82.3
2.7 3.0 3.3 3.5
6.8
5.6
7.0
8.98.4
7.17.37.1
6.7
1.6
Brazilian car market: new x used car market and affordability
Source: FENABRAVE (Autos + light commercial) and Bradesco
New cars4.4x
Individuals with affordability to buy a new car*
Used cars
3.7x 3.1x2.7x
2.4x2.5x 2.6x
2005 2006 2007 2008 2009 2010 2011
Used car market is currently 2.6x the new car market.
* Population with affordability to buy a new compact car (R$25,000) with 20% downpayment
26
0km SeminovosUsed Seminovos 2 years old Seminovos
1.5% 10.6%
Up to 2 yearsUp to 2 years476,827476,827
Brazilian car market : 2011 market share
Source: Fenabrave 2011
Brand new carsBrand new cars3,425,4993,425,499
0.6%
Used carsUsed cars8,862,9518,862,951
Localiza used cars x Car market
Used cars sold: 50,772
27
74 73
82 82 82
2008 2009 2010 2011 2011
Brazilian car market: monthly sale per store
Localiza Seminovos monthly sale per store is in line with Brazilian new car dealership average.
Monthly sale per store
Source: Anfavea 2012 yearbook (National OEM’s Association)
Brazilian new carDealership
Seminovos: average sales per lots (excluding auto malls – 10 stores)Brazilian new car dealership: total sales (3,633,248) divided by the number of dealers (3,714)
28
The network is being expanded to support rentals’ growth.
Brazilian distribution
Used car sales strategy: network expansion
26 32 3549 55
6680
13
2005 2006 2007 2008 2009 2010 2011 2012e
29
Used car sales: sold cars evolution
The increase on sales was supported by the opening of new stores.
Sales profile
Financed In cash
Monthly average of sold cars
The macro prudential measures impacted the sales profile in 2011 and 2012.
2.508 2.857 2.877
3.940 4.2314.835
2007 2008 2009 2010 2011 2Q12
55% 57% 58% 61% 52% 49%
45% 44% 42% 39% 48% 51%
2007 2008 2009 2010 2011 2Q12
30
1.The Company
2.Drivers and opportunities
3.Competitive advantages
4.Financials
Agenda
31
Raising money
Renting cars Selling carsBuying
cars
Cash to renew the fleet or pay debt
$
$
Profitability comes from rental divisions
Competitive advantages: 38 years of experience in managing assets
32
Competitive advantages: raising money
Global Scale
National Scale
Localiza raises money with lower spreads when compared to Brazilian competitors.
As of June, 2012.
Renting carsRaisingmoney
Sellingcars
Buyingcars
BBB- FitchBaa3 Moody’s
BBB- S&PBBB+ S&P B+ S&P B+ Fitch B2 Moody's
brAAA S&P Aa1.br Moody’sAA+(bra) Fitch
A (bra) FitchbrA- S&P
A- (bra) FitchA- (bra) Fitch
33
2.3%
Fiat39.3%
GM21.0%
Renault9.9%Ford
11.0%
Others1.3%
VW17.5%
Competitive advantages: buying cars
Better conditions due to higher volumes
Localiza announced the purchase of 100,000 cars for 2H11 and 2012.
Localiza’ share in national sales of the main automakers in 2011: GM, FIAT, VW, Ford
and Renault
Purchases by brand in 2011
Renting carsRaisingmoney
Buyingcars
Sellingcars
34
The Company is present in 213 cities where the other largest networks do not operate.
Competitive advantages: renting cars
Know HowBrand Brazilian distribution
120
107
62
# o
f b
ran
ches
# o
f ci
ties
452
289
Localiza Hertz Unidas Avis
Source: Brand Analytics and each company website (May, 2012)
Renting carsRaisingmoney
Buyingcars
Sellingcars
318
71 6032
49th most valued brand
in Brazil
35
Sales to final consumer
Competitive advantages: selling cars
Buffer: additional fleet
Selling directly to final consumer cutting the intermediaries reduces our depreciation.
Cars available for sale are used by the car rental division during peaks of demand.
Renting carsRaisingmoney
Buyingcars
Sellingcars
36
1.The Company
2.Drivers and opportunities
3.Competitive advantages
4.Financials
Agenda
37
Reflexes of the tax reduction (IPI) for new cars from May 21, 2012 to August 31, 2012 that might be extended:
Drop in the residual value expected for cars after their useful life. In the 2Q12 an amount of R$100.1 million was recognized as additional depreciation Increase of pre-owned car sales sold for fleet renewal:
April: 3,876; May: 4,917 and June: 5,711 cars (all time high)
The Company expects that the reduction in sale prices will be offset by the reduction of purchase prices with the IPI reduction (with no impact on the CAPEX for fleet renewal)
Utilization rate of 74.2% in the Car Rental division
Free cash flow of R$242.3 million in the 1H12
Highlights
38
Net revenues (R$ million)
# daily rentals (thousand)
3,4114,668
5,793
7,940 8,062
10,734
12,794
6,243 6,664
3,179 3,334
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
CAGR: 24.6%
4.9%6.8%
258.6346.1
428.0565.2 585.2
802.2
980.7
472.4 532.3
239.4 264.3
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
CAGR: 24.9%
10.4%12.7%
Car Rental Division
Revenue grew above volume due to the increase in the average rental rate per car.
39
Net revenues (R$ million)
# daily rentals (thousand)
3,3514,188
5,1446,437 7,099
8,0449,603
4,625 5,248
2,372 2,637
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
CAGR: 19.2%
11.2%13.5%
142.0184.0
219.8268.4
303.2361.1
455.0
215.7261.3
111.0 131.8
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
CAGR: 21.4%
18.7%21.1%
Fleet Rental Division
Revenues reflect the interest and depreciation assumptions at the time of the agreement.
40
26,10533,520 38,050
44,211 43,161
20,60218,763 23,17430,093 34,281 34,519
27,789
13,198
28,667
59,950
21,921
65,934
12,47814,50424,059
47,285 50,772
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
7,34210,346 7,957
18,649
9,930 8,6424,608 (5,868)
9,178
8,124 (1,306)
690.0930.3
1,060.91,335.3 1,204.2
1,910.4 1,776.5
628.5 593.8379.0446.5
588.8850.5 980.8 922.4
1,321.91,468.1
693.3 762.7
352.7 389.3
825.6
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
243.5341.5
210.4
308.4
354.5281.8
588.5
132.3 (134.2)241.1 (10.3)
Net Investment
Purchased cars Sold cars* It does not include theft / crashed cars.
Fleet increase * (quantity)
Net investment (R$ million)
Purchases (accessories included) Net used car sales revenues
Car purchases were adjusted to improve fleet productivity…
41
68.2% 68.9% 69.7% 68.9% 68.2%74.2%
2 0 .0 %
2 5 .0 %
3 0 .0 %
3 5 .0 %
4 0 .0 %
4 5 .0 %
5 0 .0 %
5 5 .0 %
6 0 .0 %
6 5 .0 %
7 0 .0 %
7 5 .0 %
8 0 .0 %
8 5 .0 %
9 0 .0 %
9 5 .0 %
1 0 0 .0 %
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
Utilization rate – car rental division
...resulting in higher utilization rate.
42
31,373 35,686 39,112 47,51761,445 64,688 63,500 58,43611,762
14,630 17,790 23,40322,778
26,615 31,629 28,654 31,412
24,103
2005 2006 2007 2008 2009 2010 2011 1H11 1H12
CAGR: 17.9%
35,86546,003
53,47662,515
70,29588,060 89,84892,15496,317
-2.5%
End of period fleetQuantity
Car rental Fleet rental
Fleet is adjusted to demand.
43
Seminovos network increase
Used car sales network has increased by 5 stores.
# of points of sale
2632 35
4955
6671
13
2005 2006 2007 2008 2009 2010 2011 1H12
+5
44
Car sales per street storeMonthly average
82 82 82
59
74 73 70 74
2008 2009 2010 2011 1Q12 Apr-12 May-12 Jun-12
Number of sold cars is weighed by number of opened stores in the period
Productivity has improved, contributing to the reduction of fixed cost per car sold.
45
408.4 537.4 655.0 842.9 898.5 1,175.3 1,450.0694.6 801.6
353.7 400.3446.5
588.8850.5
980.8 922.4
1,468.1
693.3 762.7
352.7 389.3
1,321.9
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
CAGR: 22.7%
854.91,126.2
1,505.51,823.7
2,918.1
1,820.9
2,497.2
706.4 789.6
1,387.9 1,564.3
15.4%
12.7%
13.2%
11.8%
Consolidated net revenuesR$ million
Rentals Seminovos
In the 2Q12, net revenues grew due to the increase of 13.2% in rental revenues and 10.4% in Seminovos revenues
46
215.7200.6425.7386.8
821.3649.5
469.7504.1403.5311.3277.9
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
7.5%
CAGR: 19.8%
10.1%
Divisions 2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
Car rental 47.5% 43.4% 46.0% 45.9% 41.9% 45.3% 46.9% 45.1% 41.3% 46.1% 40.6%
Fleet rental 65.5% 71.4% 71.3% 69.1% 68.7% 68.0% 68.6% 67.1% 66.0% 68.5% 65.8%
Rental consolidated 53.6% 52.9% 54.5% 53.3% 51.1% 52.3% 53.8% 52.0% 49.4% 53.1% 48.9%
Seminovos 13.2% 4.6% 5.5% 5.6% 1.1% 2.6% 2.8% 3.7% 3.9% 3.6% 5.1%
EBITDA R$ million
EBITDA margin in the 2Q12 was impacted by non-recurring expenses.
47
Financial crisis effectHot used car market
5,406.34,289.34,133.03,509.7
2,395.8
5,083.14,371.7
2,383.32,981.3
2005 2006 2007 2008 2009 2010 2011 Jan-Apr/12* 1H12*
5,468.2
2,062.31,683.91,536.0332.9
2,546.0 2,577.0939.1492.3
2005 2006 2007 2008 2009 2010 2011 Jan-Apr/12* 1H12** Annualized
* Annualized
Reflex of the
IPI reduction
Reflex of the
IPI reduction
Average depreciation per car
Financial crisis effectHot used car market
5,468.2
2,062.31,683.91,536.0332.9
2,546.0 2,577.0939.1492.3
2005 2006 2007 2008 2009 2010 2011 Jan-Apr/12* 1H12** Annualized
Reflex of the
IPI reduction
Depreciation was impacted by the decrease in car prices due to the IPI reduction...
48
10.7
74.083.4137.6
291.6250.5
116.3127.4190.2
138.2106.5
2005 2006 2007 2008 2009 2010 2011 1H11 1H12 2Q11 2Q12
16.4%
-39.4%-85.5%
Consolidated net incomeR$ million
…reducing the net income of the period.
EBITDA x net income Reconciliation 2009 2010 2011 Var. R$ Var. % 1H11 1H12 Var. R$ Var. % 2Q11 2Q12 Var. R$ Var. %
Consolidated EBITDA 469.7 649.5 821.3 171.8 26.5% 386.8 425.7 38.9 10.1% 200.6 215.7 15.1 7.5%
Car depreciation (172.3) (146.3) (201.5) (55.2) 37.7% (89.7) (223.3) (133.6) 148.9% (43.3) (165.3) (122.0) 281.8%
Other property and equipment dep. (21.0) (21.1) (24.1) (3.0) 14.2% (12.3) (15.6) (3.3) 26.8% (6.3) (8.1) (1.8) 28.6%
Financial expenses, net (112.9) (130.1) (179.0) (48.9) 37.6% (88.0) (77.7) 10.3 -11.7% (45.2) (34.1) 11.1 -24.6%
Income tax and social contribution (47.2) (101.5) (125.1) (23.6) 23.3% (59.2) (25.7) 33.5 -56.6% (31.8) 2.5 34.3 -107.9%
Net income 116.3 250.5 291.6 41.1 16.4% 137.6 83.4 (54.2) -39.4% 74.0 10.7 (63.3) -85.5%
Excluding the additional depreciation, 1H12 net income would have reached R$149.5 million.
4949
Free cash flow - FCF
Free cash flow - R$ million 2005 2006 2007 2008 2009 2010 2011 1H12
EBITDA 277.9 311.3 403.5 504.1 469.7 649.5 821.3 425.7
Used car sales net revenues (446.5) (588.8) (850.5) (980.8) (922.4) (1,321.9) (1,468.1) (762.7)
Depreciated cost of used car sales (*) 361.2 530.4 760.0 874.5 855.1 1,203.2 1,328.6 687.7
(-) Income tax and social contribution (32.7) (42.7) (63.4) (52.8) (49.0) (57.8) (83.0) (54.9)
Working capital variation (24.2) (4.8) 13.3 (44.8) (11.5) 54.5 (83.9) (18.9)
Cash provided before capex 135.7 205.4 262.9 300.2 341.9 527.5 514.9 276.9
Used car sales net revenues 446.5 588.8 850.5 980.8 922.4 1,321.9 1,468.1 762.7
Capex of car - renewal (496.0) (643.3) (839.0) (1,035.4) (947.9) (1,370.1) (1,504.5) (628.5)
Net capex for renewal (49.5) (54.5) 11.5 (54.6) (25.5) (48.2) (36.4) 134.2
Capex – other property and equipment, net (28.0) (32.7) (23.7) (39.9) (21.0) (51.1) (63.0) (36.0)
Free cash flow before growth 58.2 118.2 250.7 205.7 295.4 428.2 415.5 375.1
Capex of car - growth (194.0) (287.0) (221.9) (299.9) (241.1) (540.3) (272.0) -
Change in accounts payable to car suppliers (capex) (25.5) 222.0 (51.0) (188.9) 241.1 111.3 32.7 (132.8)
Net capex for fleet growth (219.5) (65.0) (272.9) (488.8) 0.0 (429.0) (239.3) (132.8)
Fleet increase – quantity 7,342 10,346 7,957 9,930 8,642 18,649 9,178 (5,868)
Free cash flow after growth (161.3) 53.2 (22.2) (283.1) 295.4 (0.8) 176.2 242.3
(*) Without tecnical discount deduction up to 2010 (see item 18 – Glossary)
Company is still presenting strong cash generation.
50
Changes in net debt in 1H12 (R$ million)
Net debt was reduced by R$108.5 million (-8.0%).
- 1,254.9
(78.9)
Interest
(54.9)
Dividends
Net debt 06/30/2012
FCF242.3
- 1,363.4
Net debt 12/31/2011
51
52.026.0
432.0562.0
303.5323.5161.8
16.5
2012 2013 2014 2015 2016 2017 2018 2019
Cash673,9
Debt profile R$ million
Debt profile in 06/30/2012- principal (R$ million)
Strong cash position and comfortable debt profile.
In the 1H12, all in spread was of 1.3p.p. above the Selic rate.
5252
END OF PERIOD BALANCE 2005 2006 2007 2008 2009 20102011(**
) 1H12 (**)
Net debt / Fleet value 60% 36% 51% 72% 57% 52% 51% 52%
Net debt / EBITDA (*) 1.9x 1.4x 1.9x 2.5x 2.3x 2.0x 1.7x 1.5x
Net debt / Equity 1.4x 0.7x 1.3x 2.0x 1.5x 1.4x 1.2x 1.1x
EBITDA / Financial expenses, net 3.3x 4.8x 5.4x 3.8x 4.2x 5.0x 4.6x 5.5x
535.8 440.4765.1
1,254.51,078.6
1,281.1 1,363.4 1,254.9900.2
1,247.71,492.9
1,752.6 1,907.8
2,446.7 2,681.72,391.2
2005 2006 2007 2008 2009 2010 2011 1H12
(*) annualized(**) From January 1st 2011, adress financial statements in IFRS
Debt – ratios R$ million
Net debt Fleet value
The Company presents conservative indebtedness ratios.
53
Spread
2005 2006 2007 2008 2009 2010 2011 1H12 a
Average capital investment - R$ million 606.3 986.2 1,137.5 1,642.3 1,702.3 1,984.6 2,445.3 2,645.6
NOPAT margin (over rental net revenues) 37.0% 34.5% 36.9% 32.1%* 21.9% 28.6% 28.9% 24.9%*
Turnover of average capital investment (over rental net revenues) 0.67x 0.55x 0.58x 0.53x 0.53x 0.59x 0.59x 0.61x
ROIC 24.8% 18.7% 21.3% 17.0% 11.5% 16.9% 17.1% 15.1%
Interest on debt after tax 13.60% 10.90% 8.40% 8.84% 7.59% 7.33% 8.60% 7.05%
Spread (ROIC – Interest after tax) - p.p. 11.2 7.8 12.9 8.2 4.0 9.6 8.5 8.1
Spread
13.60%10.90%
8.40% 8.84% 7.59% 7.33% 8.60% 7.05%
24.80%
18.70%21.25%
17.03%
11.54%
16.94% 17.12%15.10%
2005 2006 2007 2008 2009 2010 2011 1H12annualized
Cost of debt after tax ROIC
11.2p.p.7.8p.p. 12.9p.p.
8.2p.p.4.0p.p.
9.6p.p. 8.5p.p. 8.1p.p.
ROIC and spread reflect the Company’s competitive pricing strategy.
* Excludes additional fleet depreciation, following the concept recommended by Stern Stewart
54
Localiza ADR level I
Ticker Symbol: LZRFY
CUSIP: 53956W300
ISIN: US53956W3007
Ratio: 1 Ordinary 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: [email protected]
ADR website: www.adr.db.com
Depositary bank’s local custodian: Banco Bradesco S/A, Brazil
55
2,70%
1,90%
1,30%1,50%
2,10%
4,25%
2011 1Q 12 2Q 12e 3Q 12e 4Q 12e 2013
11,00%
8,50%7,50% 7,50% 7,50%
9,75%
4Q 11 1Q 12 2Q 12 3Q 12e 4Q 12e 1Q 13e
2012 Macroeconomic scenario
Source: BR Central Bank – Market forecast system as of 06/15/2012- Focus Bulletin
GDP evolutionAccumulated in 4 quarters
Interest rate evolution End of period
Source: Department of Economics of Bradesco, as of 06/18/2012
56
IR Team
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 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 predictions 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, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever.
Nora LanariRoberto Mendes Silvio Guerra
CFO - RI RI RI
Website: www.localiza.com/ir E-mail: [email protected] Phone: 55 31 3247-7024