webcast 4 q12 eng
TRANSCRIPT
1 February 5, 2013
Localiza Rent a Car S.A. 4Q12 and 2012 Earnings
R$ million, IFRS
4Q11 4Q12
2
Net Revenues – Car Rental Division
R$ m
illio
n
Net Revenues – Fleet Rental Division
R$ m
illio
n
Net Income – Consolidated
4Q12 Highlights R
$ m
illio
n
Free cash flow before growth and interest
4Q11 4Q12
266.5 290.3
122.0 137.9
4Q11 4Q12
78.7
86.1
2011 2012
R$ m
illio
n 415.5
528.5
3
Net Revenues (R$ million)
Daily Rentals (thousands)
Car Rental Division
More moderate growth in business volumes due to the slower pace of economic growth.
4,668 5,793
7,940 8,062
10,734
12,794 13,749
3,324 3,560
2006 2007 2008 2009 2010 2011 2012 4Q11 4Q12
346.1428.0
565.2 585.2
802.2980.7
1,093.7
266.5 290.3
2006 2007 2008 2009 2010 2011 2012 4Q11 4Q12
4
Fly and Drive agreement with GOL
5
Car Rental Locations
25 rental locations were added to the Brazilian footprint.
Number of car rental locations (Brazil)
279312
346381
415449
474
2006 2007 2008 2009 2010 2011 2012
+25
6
Utilization Rate
The division’s utilization rate of 70.8% was 1.9 p.p. higher than in 2011.
Car Rental Division
65.5% 70.7% 67.9% 68.8% 69.1% 68.9% 70.8%
0.0%
5.0%
10. 0%
15. 0%
20. 0%
25. 0%
30. 0%
35. 0%
40. 0%
45. 0%
50. 0%
55. 0%
60. 0%
65. 0%
70. 0%
75. 0%
80. 0%
85. 0%
90. 0%
95. 0%
100. 0%
2006 2007 2008 2009 2010 2011 2012
7
Net Revenues (R$ million)
Daily Rentals (thousands)
Fleet Rental Division
Revenue growth outpaced volume growth supported by the higher average rental rate.
4,188 5,144
6,437 7,099
8,044
9,603 10,601
2,517 2,690
2006 2007 2008 2009 2010 2011 2012 4Q11 4Q12
184.0 219.8
268.4 303.2 361.1
455.0 535.7
122.0 137.9
2006 2007 2008 2009 2010 2011 2012 4Q11 4Q12
8
Net Investment
In 4Q12, the Company resumed its fleet expansion by adding 4,132 cars.
Fleet Expansion * (quantity)
33,520 38,050 44,211 43,161
65,934 59,950 58,655
21,790 17,896 23,174
30,093 34,281 34,519
47,285 50,772 56,644
13,078 13,764
2006 2007 2008 2009 2010 2011 2012 4Q11 4Q12
10,346 7,957
9,930 8,642
Cars purchased Cars sold
9,178 2,011
8,712 4,132
18,649
* It does not include theft / crashed cars.
Net Investment (R$ million)
930.3 1,060.9
1,335.3 1,204.2
1,910.4 1,776.5
1,618.8
656.7 494.4 588.8
850.5 980.8 922.4
1,321.9 1,468.1 1,520.0
380.2 362.6
2006 2007 2008 2009 2010 2011 2012 4Q11 4Q12
Purchases (includes accessories) Net used car sales revenues
341.5 210.4
308.4 98.8
354.5 281.8
588.5
276.5 131.8
9
Fleet Size cars at end of period
The lower growth in fleet size reflects the productivity gains.
31,373 35,686 39,112 47,517 61,445 64,688 65,086
14,630 17,790
23,403 22,778
26,615 31,629 32,104
2006 2007 2008 2009 2010 2011 2012
46,003 53,476
Car Rental Fleet Rental
62,515 70,295
97,190 96,317 88,060
10
Seminovos Dealerships
7 new Seminovos used-car dealerships were opened to sustain fleet renewal.
Number of dealerships (Brazil)
2632 35
4955
6673
2006 2007 2008 2009 2010 2011 2012
+7
11
Consolidated Net Revenues R$ million
Rental revenues grew 10.3% in 4Q12, while Seminovos revenues were impacted by the lower IPI tax rate.
Rental Seminovos
537.4 655.0 842.9 898.5 1,175.3 1,450.0 1,646.7
392.5 432.9
588.8 850.5
980.8 922.4
1,321.9
1,468.1 1,520.0
380.2 362.6
2006 2007 2008 2009 2010 2011 2012 4Q11 4Q12
1,126.2
1,505.5 1,823.7
2,918.1
772.7 795.5
1,820.9
2,497.2
3,166.7
12
Consolidated EBITDA R$ million
EBITDA margin was impacted by higher expenses with property leasing and personnel.
Divisions 2006 2007 2008 2009 2010 2011 2012 4Q11 4Q12
Car Rental 42.7% 45.0% 43.5% 39.8% 43.5% 43.9%* 40.9% 44.3% 40.2%
Fleet Rental 70.7% 70.3% 67.5% 67.5% 66.7% 66.8%* 66.4% 66.7% 67.0%
Rental Consolidated 52.4% 53.6% 51.2% 49.3% 50.7% 51.2%* 49.3% 51.3% 49.0%
Used Car Sales 4.6% 5.5% 5.6% 1.1% 2.6% 2.8% 4.2% 2.1% 3.9%
311.3 403.5504.1 469.7
649.5821.3 875.6
218.3 226.3
2006 2007 2008 2009 2010 2011 2012 4Q11 4Q12
*Includes the adjustment of accessories and excludes the reversals of non-recurring provisions of R$10.6 million in 3Q11.
EBITDA margin from 2006 to 2011 was adjusted to reflect the accounting of accessories in the cost line:
13
Additional depreciation due to lower IPI tax rate R$ million
Division
Additional depreciation
Accounted Estimated
Total 9M12 4Q12 Subtotal From 2013 on
Car rental 105.0 6.2 111.2 4.8 116.0
90.6% 5.3% 95.9% 4.1% 100.0%
Fleet rental 25.7 7.6 33.3 31.2 64.5
39.8% 11.8% 51.6% 48.4% 100.0%
Consolidated 130.7 13.8 144.5 36.0 180.5
95.9% of the additional depreciation in the car rental division has already been recorded.
14
Average depreciation per car
in R$
939.1 332.9
2,546.0 2,577.0
1,536.0 1,683.9
3,972.4
2,044.7
2006 2007 2008 2009 2010 2011 2012 4Q12* Annualized
* Robust used-car market
Financial crisis effect
IPI reduction effect
2,383.3 2,395.8
5,083.1 4,371.7
3,509.7 4,133.0
5,408.2 4,996.7
2006 2007 2008 2009 2010 2011 2012 4Q12
* Annualized
*
Robust used-car market
Financial crisis effect IPI reduction effect
15
Car Rental depreciation breakdown in R$
Car Rental
* Annualized depreciation of cars purchased after the reduction in the IPI tax.
Average depreciation per car of vehicles purchased after the IPI reduction
is in line with the depreciation of previous years.
1,199.9 1,304.8 1,317.3
3,140.9
2010 2011 4Q12 4Q12*
1,536.0 1,683.9
Car average depreciation Accessory average depreciation
*
Cars purchased
after IPI reduction Cars purchased
before IPI reduction
16
Consolidated Net Income R$ million
Excluding the additional depreciation of R$144.5 million in the year, net of income tax effects,
Net income for 2012 was R$336.3 million.
Reconciliation EBITDA vs. Net income 2009 2010 2011 2012 Var. R$ Var. % 4Q11 4Q12 Var. R$ Var. %
Consolidated EBITDA 469.7 649.5 821.3 875.6 54.3 6.6% 218.3 226.3 8.0 3.7%
Car depreciation (172.3) (146.3) (201.5) (376.9) (175.4) 87.0% (57.9) (67.1) (9.2) 15.9%
Other property and equipment depreciation and
amortization (21.0) (21.1) (24.1) (32.9) (8.8) 36.5% (6.8) (8.9) (2.1) 30.9%
Financial expenses, net (112.9) (130.1) (179.0) (138.7) 40.3 -22.5% (41.2) (30.6) 10.6 -25.7%
Income tax and social contribution (47.2) (101.5) (125.1) (86.2) 38.9 -31.1% (33.7) (33.6) 0.1 -0.3%
Net income 116.3 250.5 291.6 240.9 (50.7) -17.4% 78.7 86.1 7.4 9.4%
138.2190.2
127.4 116.3
250.5
291.6
240.9
78.7 86.1
2006 2007 2008 2009 2010 2011 2012 4Q11 4Q12
336,3
17 17
Free Cash Flow
(*) Technical discount deduction excluded until 2010
Free cash flow - R$ million 2006 2007 2008 2009 2010 2011 2012
EBITDA 311.3 403.5 504.1 469.7 649.5 821.3 875.6
Net revenues from used car sales (588.8) (850.5) (980.8) (922.4) (1,321.9) (1,468.1) (1,520.0)
Depreciated cost of used car sales (*) 530.4 760.0 874.5 855.1 1,203.2 1,328.6 1,360.2
(-) Income tax and social contribution (42.7) (63.4) (52.8) (49.0) (57.8) (83.0) (100.9)
Working capital variation (4.8) 13.3 (44.8) (11.5) 54.5 (83.9) 37.1
Cash provided before capex 205.4 262.9 300.2 341.9 527.5 514.9 652.0
Net revenues from used car sales 588.8 850.5 980.8 922.4 1,321.9 1,468.1 1,520.0
Capex of car s for renewal (643.3) (839.0) (1,035.4) (947.9) (1,370.1) (1,504.5) (1,563.3)
Net capex for renewal (54.5) 11.5 (54.6) (25.5) (48.2) (36.4) (43.3)
Fleet renewal – quantity 23,174 30,093 34,281 34,519 47,285 50,772 56,644
Capex – other property and equipment (32.7) (23.7) (39.9) (21.0) (51.1) (63.0) (80.2)
Free cash flow before growth and before interest 118.2 250.7 205.7 295.4 428.2 415.5 528.5
Capex of car s for fleet (expansion) reduction (287.0) (221.9) (299.9) (241.1) (540.3) (272.0) (55.5)
Change in accounts payable to car suppliers (capex) 222.0 (51.0) (188.9) 241.1 111.3 32.7 (116.9)
Net capex for fleet expansion (65.0) (272.9) (488.8) 0.0 (429.0) (239.3) (172.4)
Fleet expansion – quantity 10,346 7,957 9,930 8,642 18,649 9,178 2,011
Free cash flow after growth and before interest 53.2 (22.2) (283.1) 295.4 (0.8) 176.2 356.1
18
Changes in Net Debt R$ million
The strong cash generation supported a reduction of R$132.2 million (9.7%) in net debt.
- 1,231.2
(138.6)
Interest
(85.3)
Dividends
Net debt
12/31/2012
FCF 356.1
-1,363.4
Net debt
12/31/2011
19
Debt Profile - Principal R$ million
The Company continues to maintain a strong cash position and comfortable debt profile.
191.4 234.8 192.3
592.0 462.0
146.0 172.0
2012 2013 2014 2015 2016 2017 2018 2019
Cash
823.9
618.5
20
Debt Ratios
Net debt vs. Fleet value
BALANCE END OF PERIOD 2006 2007 2008 2009 2010 2011 (*) 2012 (*)
Net debt / Fleet value 36% 51% 72% 57% 52% 51% 48%
Net debt / EBITDA (*) 1.4x 1.9x 2.5x 2.3x 2.0x 1.7x 1.4x
Net debt / Equity 0.7x 1.3x 2.0x 1.5x 1.4x 1.2x 0.9x
EBITDA / Net financial expenses 4.8x 5.4x 3.8x 4.2x 5.0x 4.6x 6.3x
(*) As from January 1, 2011, based on the financial statements in IFRS
440.4 765.1
1,254.5 1,078.6
1,281.1 1,363.4 1,231.2 1,247.7 1,492.9
1,752.6 1,907.8
2,446.7 2,681.7 2,547.6
2006 2007 2008 2009 2010 2011 2012
Net debt Fleet value
Comfortable debt ratios.
21
Spread
10.90%8.40% 8.84% 7.59% 7.33% 8.60% 6.34%
18.70%21.25%
17.03%
11.54%
16.94% 17.12% 16.10%
2006 2007 2008 2009 2010 2011 2012
Cost of debt after tax ROIC
7.8p.p. 12.9p.p. 8.2p.p.
4.0p.p. 9.6p.p. 8.5p.p. 9.8p.p.
(*) ROIC in 2008 and 2012 was calculated excluding additional fleet depreciation, which was treated as an asset loss since it
was a nonrecurring event caused by external factors (reduction in IPI tax on new cars), in accordance with the concepts
recommended by Stern Stewart.
22
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: [email protected]
ADR website: www.adr.db.com
Depositary bank’s local custodian: Banco Bradesco S/A, Brazil
23
Disclaimer
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/ir
E-mail: [email protected]
Tel: +55 31 3247-7024