Post on 13-Jul-2015
1
Localiza’s flexible business model
proved to be effective during the crisis period.
Localiza Rent a Car S.A.4Q09 and 2009 Results - R$ millions, USGAAP
March, 2010
2
Funding
Equity
Debt
Ass
ets
(car
s)
Profitability comes fromrental divisions
Cash to renew the fleet
Pricing Strategy• Operating costs• Depreciation• Financial expenses• Taxes• Spread
Managing assets
Flexible and liquid assets.
3
Integrated business platform
This integrated business platform gives Localiza flexibility and superior performance
Synergies:cost reductioncross sellingbargaining power
8,791 cars238 locations in 9 countries 167 locations in Brazil 71 locations in South America23 employees
34,519 cars sold78% sold to final consumer49 stores588 employees
47,517 cars1.9 million clients214 locations2,768 employees
22,778 cars584 clients225 employees
As of 12/31/2009
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Consolidated results
Resumption growth in net revenues and net income in 4Q09.
2008 2009 Var.
Net revenue 1,855.7 1,856.3 0.0%
EBITDA 504.1 469.7 -6.8%
Net income 127.4 116.3 (R$11.1)
Net margin 6.9% 6.3% -
4Q08 4Q09 Var.
Net revenue 422.5 551.1 +30.4%
EBITDA 125.8 128.9 +2.5%
Net income (loss) (29.8) 38.4 R$68.2
Net margin -7.1% 7.0% -
5
Car rental division
167.0155.2
607.8585.7
442.7357.2
271.3
2005 2006 2007 2008 2009 4Q08 4Q09
Net revenues (R$ millions)
CAGR: 29.2% 3.8%
Revenues and daily rentals have grown in 4Q09.
7.6%
3,4114,668
5,793
7,940 8,062
2,085 2,236
2005 2006 2007 2008 2009 4Q08 4Q09
CAGR: 32.5% 1.5%
7.2%
# daily rentals (thousand)
6
Car rental division
jan feb mar apr may jun jul aug sep oct nov dec
2005 2006 2007 2008 2009
- 3.3% 9.1% 16.3%17.5%
# daily rentals
Localiza is back to high growth.
726 658 701702 719 815
oct nov dec
2008 2009
711
835
jan
2009 2010
7
Car rental division
Net revenue breakdown – car rental
54% 59% 62% 66% 68%
46% 41% 38% 34% 32%
2005 2006 2007 2008 2009
Off airport Airport
100% 100% 100% 100% 100%
Localiza is already present in all airports and therefore it has been concentrating its geographical expansion in new markets.
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117145
178 199 214
2005 2006 2007 2008 2009
# of locations
+ 28 + 33 + 21+15
It doesn’t include franchisees
Car rental division
Even during the crisis period Localiza has expanded its network distribution.
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Car rental division
102
9474
Localiza Unidas Hertz Avis
Localiza network is larger than the second, third and fourth competitors combined.
Source: each company website as of 12/31/2009
Locations in Brazil Cities in Brazil
381
270
269
79 60 50
Localiza Unidas Hertz Avis
The main networks are not present in 190 out of the 269 cities in which Localiza operates.
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Car rental division
67.9% 68.8% 68.6% 67.6%64.5%
76.2% 15.3
2.4
16.1
5 8 .0 %
6 0 .0 %
6 2 .0 %
6 4 .0 %
6 6 .0 %
6 8 .0 %
7 0 .0 %
7 2 .0 %
7 4 .0 %
7 6 .0 %
7 8 .0 %
2008 2009 1Q09 2Q09 3Q09 4Q09
-
2 .0
4 .0
6 .0
8 .0
1 0 .0
1 2 .0
1 4 .0
1 6 .0
1 8 .0
Utilization rate – car rental
Trade-off: lower depreciation despite its effect in a lower utilization rate.
Utilization rate # of purchased cars (thousand)
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Fleet rental division
# of daily rentals (thousand)
149.2190.2 228.2
276.9 313.4
76.1 82.5
2005 2006 2007 2008 2009 4Q08 4Q09
CAGR: 22.9%
Net revenue (R$ millions)
8.4%
13.2%
Fleet rental division has kept a consistent growth even in a crisis scenario.
3,3514,188
5,1446,437 7,099
1,826 1,850
2005 2006 2007 2008 2009 4Q08 4Q09
CAGR: 24.3% 10.3%
1.3%
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Used car sales division
The used car sales division has presented strong growth since 4Q09.
18,76323,174
30,09334,281 34,519
6,64611,335
2005 2006 2007 2008 2009 4Q08 4Q09
CAGR: 22.3%
70.6%
0.7%
# of sold cars
2,102 2,115 2,4293,574 3,342
4,419
oct nov dec2008 2009
70.0%58.0% 81.9
%
2,5213,577
jan
2009 2010
41.9%
13
1326 32 35
49
2005 2006 2007 2008 2009
# of stores
+ 13 + 6+ 3
In 2009, the used car sales division expanded its network.
40.0%
Used car sales division
+14
14
Used car sales division market share
Source: Anfavea e Fenabrave
Localiza’s used car has a low market share.
34,519 Cars sold by Localiza in 2009
(Seminovos)
0.3% of total car sale market 10,080,267 cars
0.5% of used car sale market 7,071,525 cars
1.1% of new car sale market 3,008,742 cars
5.0% of up to 3-year old car market 688,059 cars
2009 Brazilian car sales market
Localiza’s share Total market
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Depreciation per car – car rental division
332.9
2,546.0 2,577.0
939.1492.3
2005 2006 2007 2008 2009
Average depreciation per car (R$) - year
With 2/3 of fleet renewed, average depreciation per car has already presented a significant drop.
Average depreciation per car (R$) - quarter
418.8
7,379.3
1,798.62,599.7
3,763.32,209.2
1,133.4729.7
1Q 2Q 3Q 4Q
2008 2009
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Average operating fleet age – car rental(in months)
The average operating fleet age is coming back to pre-crisis level.
6.0 6.4 5.7 7.09.4
11.69.6
7.3
1Q 2Q 3Q 4Q
2008 2009
Average operating fleet age
12.6 12.6 11.6 12.715.4 16.7 16.3 17.5
1Q 2Q 3Q 4Q2008 2009
Average sold fleet age
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Depreciation per car – fleet rental division
2,981.3 2,383.3
4,371.75,083.1
2,395.8
2005 2006 2007 2008 2009
The average depreciation per car has also presented a significant reduction in the fleet rental division.
Average depreciation per car (R$) - quarter
Average depreciation per car (R$) - year
2,048.0
11,572.0
3,064.54,557.6
6,238.63,652.02,894.3 2,670.1
1Q 2Q 3Q 4Q
2008 2009
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Diversification and flexibility of fleet
GM44%
FIAT33%
VW16%
Others1%
RENAULT6%
# of purchased cars by brand
Fleet strategically diversified to obtain lower depreciation.
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Net revenues
1,856.31,855.71,531.7
1,145.4876.9
634.4532.0476.9234.3212.9 244.7 310.1 420.4
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Consolidated net revenues(R$ million)
CAGR: 16.5%
CAGR: 30.8%
GDP 3.4 0.0 0.3 4.3 1.3 2.7 1.1 5.7 2.9 3.7 4.6 5.1 -0.2*
Média 1.9 4.4 -0.2*
From 2004 to 2008 Localiza’s revenues have grown 7x GDP.
* Estimate: Focus Report, Brazilian Central Bank
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277.9 311.3403.5
504.1 469.7
125.8 128.9
2005 2006 2007 2008 2009 4Q08 4Q09
EBITDA margin
Divisions 2005 2006 2007 2008 2009 4Q08 4Q09
44.3%
67.0%
51.5%
5.5%
44.4% 43.0%
65.9%
Rentals consolidated 51.0% 51.2% 52.6% 49.3% 52.5% 50.6%
68.9%
0.4%1.6%
40.3%
66.5%
1.1%
42.0%
69.1%
4.6%
44.5%
68.7%
5.4%
Car rental 45.3%
Fleet rental 62.3%
Used car sales 13.2%
EBITDA consolidated (R$ millions)
CAGR: 22.0%
EBITDA margins are still consistent.
- 6.8%
2.5%
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Net income
38.4-29.8
106.5138.2
190.2
127.4 116.3
2005 2006 2007 2008 2009 4Q08 4Q09
- 228.9%
Net income (R$ millions)
Main impact in results: decrease of used car sales EBITDA.
- 8.7%
Reconciliation of EBITDA x Net Income 2008 2009 Var. R$
449.6
54.5
504.1
(178.5)
(18.3)
(133.3)
(46.6)
4Q08 4Q09 Var. R$
EBITDA - Car rental and fleet rental
127.4
5.09.5459.1
10.6
469.7
(172.3)
(21.0)
(112.9)
(1.9)
EBITDA Consolidated
(47.2)
(43.9)
(34.4)
6.2
(2.7)
20.4
116.3
125.8 128.9 3.1
(0.6)
85.1
(0.1)
20.0
(11.1)
(39.9)
68.2
122.7 127.7
EBITDA - Used car sales 3.1 1.2
Depreciation of revenue-earning vehicles (125.3) (40.2)
Other depreciation (5.0) (5.1)
Financial expenses, net (44.5) (24.5)
Income tax and social contribution 19.2 (20.7)
Net income (29.8) 38.4
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Free cash flow - FCF
205.7295.4
2008 2009
FCF before growth (R$ millions)
Free cash flow - R$ millions 2008 2009504.1 469.7
(924.5)855.1400.3(49.0)(11.5)339.8924.5
(963.1)Change in amounts payable to car suppliers (capex) - 15.2
(23.4)(21.0)295.4
(241.1)241.1295.4
(983.2)874.5 395.4 (52.8)(44.8)297.8 983.2
(1,035.4)
(52.2)(39.9)205.7
(299.9)(188.9)(283.1)
EBITDA
Used car sales revenues
Cost of used car sales
EBITDA without used car sales revenues and costs
(-) Income tax and social contribution – current
Working capital variation
Cash provided before capex
Used car sales revenues
Capex of car – renewal
Net capex for renewal
Capex - Property and equipment, net
Free cash flow before growth
Capex of car – growth
Change in amounts payable to car suppliers (capex)
Free cash flow
43.6% In 2009 Localiza presented strong cash generation.
23
Net debt
Net debt was reduced by R$175.9 million.
1,254.5
1,078.6
12/31/2008 12/31/2009
-14.0%
Net debt (R$ millions)
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Debt – profile and costsDebt (principal) on 12/31/09 – R$ millions
2009
423.1
205.4 225.0 239.6 211.8160.0
459.6Cash
2010 2011 2012 2013 2014 2015
Stand by*
Debt profile was extended.
Gross debt - principal Average effective cost 2010 2011 2012 2013 2014 2015 Total
Working Capital CDI + 1.25%pa - 204.5 58.0 73.0 45.0 60.0 440.5
Debentures - 1st Issuance 110.8% of CDI 222.2 - - - - - 222.2
Debentures - 2nd Issuance CDI + 0.59%pa - - 66.6 66.6 66.8 - 200.0
Commercial Papers 108.9% of CDI 200.0 - - - - - 200.0
Debentures - 1st Issuance, Total Fleet CDI +2.02%pa - - 100.0 100.0 100.0 100.0 400.0
BNDES TJLP + 3.80%pa 0.9 0.9 0.4 - - - 2.2
Total gross debt - principal - 423.1 205.4 225.0 239.6 211.8 160.0 1,464.9
Cash and cash equivalents (459.6) - - - - - (459.6)
Total net debt - principal - (36.5) 205.4 225.0 239.6 211.8 160.0 1,005.3
*Stand by refers to R$100 MM limit with BNDES, with term of draw until sept/2010
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Debt - ratios
Significant improvement in debt ratios.
535.8 440.4765.1
1,254.5 1,078.6900.2
1,247.71,492.9
1,752.6 1,907.8
2005 2006 2007 2008 2009
(R$ millions)
Net debt Fleet value
BALANCE AT THE END OF THE PERIOD 2005 2006 2007 2008 2009
Net debt / Fleet value (USGAAP) 60% 36% 51% 72%
2.5x
1.8x
2.0x
57%
Net debt / EBITDA (USGAAP) 1.9x 1.4x 1.9x 2.3x
Net debt / EBITDA (BRGAAP) 1.5x 1.0x 1.3x 1.7x
Net debt / Equity (USGAAP) 1.4x 0.7x 1.3x 1.5x
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Rewards and recognitions
Corporate governance:Elected twice The Best Company In Corporate Governance (Capital Aberto Magazine)Elected “The Most Shareholder-friendly” company (Institutional Investor Magazine)
Corporate reputation:Elected twice The Best CEO of a small-cap (Institutional Investor Magazine)Best of Transportation Sector (Exame Magazine)One of The 100 Companies with Best Reputation in the Country (Consumidor Moderno Magazine)
Internationalization:28th Most Internationalized Brazilian Company (Ranking Fundação Dom Cabral)
Franchising:Franchisor of the Year (Brazilian Franchising Association)Best Franchising of Brazil (Pequenas Empresas, Grandes Negócios Magazine)
Human resources:One of The 50 Most Admired RHs (Gestão & RH Magazine)
RENT3:34th Most Valuable Brand in Brazil (IstoÉ Dinheiro Magazine)2nd Highest Profitability since the IPO (Ranking elaborated by Valor Newspaper)
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RENT3 performance
Average daily volume (R$ millions) Average daily volume (# shares)
Strong growth of traded volumes.
648.7
824.2
2008 2009
8.4
11.9
2008 2009
41.7%27.1%
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Referrals
TOP PICK from Itaú for March
Weekly portfolio from SLW broker
Citi – “Still Our Favorite Brazilian Transportation Name”
Goldman Sachs – BRIC’s EM Nifty 50
Santander – Shifting Into High Gear
BNP Paribas – Porfolio for March
Link Broker – Porfolio for March
Valor Econômico – Portfolio for March
RENT3 is well recommended.
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Indexes
MSCI Brazil Index
Van Eck ETF - Market Vectors Brazil Small-Cap Index
Goldman Sachs GSSTEM50 – BRIC’s EM Nifty 50
IBrX 100
ITAG
IGC
RENT3 is present in various indexes.
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Thank you!