Institucional Presentation - February/15

49
February, 2015. Localiza Rent a Car S.A. 1

Transcript of Institucional Presentation - February/15

Page 1: Institucional Presentation - February/15

February, 2015.

Localiza Rent a Car S.A.

1

Page 2: Institucional Presentation - February/15

1. Company overview

2. Main business divisions

Car Rental

Fleet Rental

Seminovos

3. Financials

Appendix: Earnings release 4Q14

Agenda

2

Page 3: Institucional Presentation - February/15

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 – PE firm DL&J enters at a

market cap of US$ 150 mm

1997 – Expansion strategy by

adjacencies: Fleet Rental

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

Page 4: Institucional Presentation - February/15

Company: integrated business platform

Synergies:

bargaining power

cost reduction

cross selling

13,339 cars

172 locations in Brazil

64 locations in South America

37 employees

58.7% sold to final consumer

75 stores

998 employees

77,573 cars

4.3 million clients

304 locations

4,491 employees

34,312 cars

798 clients

387 employees

This integrated business platform gives Localiza flexibility and superior performance.

Based on the 4Q14 4

Car Rental Fleet Rental

Seminovos Franchising

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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

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High fixed cost

Standard fleet

1 year cycle

High entry barriers

Gains of scale

Intensive capital

Consolidated market in

airports

Fragmented market off

airports

Support area

Reduction of

depreciation

Know How of used cars

market

Sales to the final

consumer

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 after

the rental and estimates

the residual values.

Low fixed cost

Customized fleet

3 years cycle

Low entry barriers

Intensive capital

Page 7: Institucional Presentation - February/15

1,462.8 1,699.2 1,802.5 1,821.8

2010 2011 2012 2013

Rental revenues evolution

4,637.6 4,692.1 4,791.3 4,698.2

2010 2011 2012 2013

Localiza’s rental revenues at constant prices

Sector’s revenue at constant prices (ex- Localiza)

GDP 7.5% 2.7% 1.0% 2.5%

Average GDP growth: 2.7%

Source: ABLA (Brazilian Car Rental Association) and Localiza. 7

The Company grew at an average of 2.8x GDP and 19.0x the sector.

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Net car sale

revenue

R$26.2 1 year 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 12 Expenses, 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

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Net car sale

revenue

R$24.4 3 year cycle

Fleet Rental Division - Financial Cycle

Per car

Spread

9.5p.p.

1 2 3 4 5 6 19 20 21 22 23 24 Expenses, 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

Page 10: Institucional Presentation - February/15

Raising money Buying

cars

Renting Cars Selling Cars

Cash to renew the fleet or pay debt

$

Profitability comes from rental divisions

Competitive advantages

$

10

41 years of experience in managing assets and generating value.

Page 11: Institucional Presentation - February/15

Competitive advantages: raising money

Global Scale

National Scale

Localiza raises money with better conditions when compared to competitors.

As of December, 2014.

BBB Fitch

Baa3 Moody’s

BBB- S&P

BBB+ S&P B1 Moody´s

B+ 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

11

Investment grade: lower spreads and longer tenors

Source: Bloomberg and companies website

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Competitive advantages: buying cars

Localiza buys cars with better conditions due to the volume of purchases.

Number of cars purchased - 2014

* Includes Franchising

** 2013 data

86,426

18,8669,950

Localiza Unidas 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

** **

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108

157

8255

13

The Company is present in 243 cities where the other largest networks do not operate.

Competitive advantages: renting cars

Know How Brand Brazilian distribution

# o

f b

ran

ch

es

# o

f cit

ies

Source: 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

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Sales to final consumer

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

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7.3%8.6%

6.3% 6.0%8.0%

16.9% 17.1% 16.1% 16.5% 17.5%

2010 2011 2012 2013 2014

15

Spread

ROIC versus cost of debt after taxes

9.6p.p. 8.5p.p. 9.5p.p. 9.8p.p.

ROIC Cost of debt after taxes

10.5p.p.

NOPAT of 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.

Page 16: Institucional Presentation - February/15

Localiza Unidas* Locamerica* Ouro Verde JSL Movida

Localiza Unidas* Locamerica* Ouro Verde JSL Movida

Profitability Localiza vs. players

Source: Companies’ Financial Statements.

*9M14 data

** Total of light vehicles. 16,000 cars will be transfer to Movida 16

ROIC 2014

ROE 2014

Frota 125,224 40,296 30,291 25,326 47,000** 19,208

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%

8.0% 9.2% 8.5% 7.6%

4.4%

30.6%

7.2% 7.6% 10.9%

7.1% 7.5%

Page 17: Institucional Presentation - February/15

0.8x 0.9x 2.0x

8.5x

3.5x

1.6x

Localiza Unidas* Locamerica* Ouro Verde JSL Movida

1.4x 2.0x 3.2x 3.7x 4.2x

9.8x

Localiza Unidas* Locamerica* Ouro Verde JSL Movida

17

Net Debt / EBITDA - 2014

Net Debt / Equity - 2014

Source: Companies’ Financial Statements.

*9M14 data

** The accounts payable to automakers is included in the debt

Debt ratios Localiza vs. players

Consolidated

Consolidated

**

**

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1. Company overview

2. Main business divisions

Car Rental

Fleet Rental

Seminovos

3. Financials

Appendix: Earnings release 4Q14

Agenda

Page 19: Institucional Presentation - February/15

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Car Rental overview

63.9% Compact cars

2014 Fleet composition

77,573 cars

36.1% Others

Corporate fleet size

65.086 70.717 77.573

2012 2013 2014

Car rental distribution (Brazil)

415

449

474 479 476

2010 2011 2012 2013 2014

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Drivers

# domestic air traffic passengers

In million

Source: BCB and Localiza rates

151180 200

240260 300

350380

415465

510545

622678

51%

38%37% 35%

31%27%

22% 20% 18% 16% 15% 15% 13% 12%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Monthly minimum salary (R$) Daily rental price over minimum salary (%)

Car rental affordability

Investments per industry

(In billions of Reais)

Source: IPEADATA and Localiza’s loyalty program.

Source: Exame Magazine, December 2014.

4 million

84 million

Adult population

(age > 20 years)

Class A+B+C

15 million

Adult population

(age > 20 years)

Class A+B

Opportunity: Low penetration in leisure trips

Penetration: 4.8% on A, B and C classes.

394

339

155

73

52

Transportation

Fuels

Electric Energy

Sanitation

Others

70 82 89 90 96

122

2010 2011 2012 2013 2014 2017E

Source: ANAC

2017 estimates: BOEING

Page 21: Institucional Presentation - February/15

21 Source: RAIS 2012 and each company’s website

As of December 31, 2014

Off-airport market is still fragmented.

Airport locations Off-airport locations

Car Rental Locations in Brazil

Localiza372

Hertz61

Unidas111

Avis20

Movida52

Localiza104

Hertz43

Unidas46

Avis27

Movida30

Others24

Others

5,111

Page 22: Institucional Presentation - February/15

39.5% 7.5%

8.2%

6.5%

2.9%

1,9%

33.5%

22

31.8% 4.1%

7.4%

4.5%

3.1%

1.5% 47.5%

47.0% 35.9%

Others

Movida

Avis

Hertz

Unidas

Others Movida

Avis

Hertz

Unidas

Market Share – Car Rental

2013

Rental Revenues R$3,055.8 million

Fleet 222,554 cars

Source: ABLA and Companies’ Financial Statements and estimates.

Franchising

Franchising

Page 23: Institucional Presentation - February/15

Sources: EUROMONITOR from 2008 to 2012 and ABLA for 2013

23

Market Share Evolution – Car Rental

33.2%

29.5%

37.8% 40.5% 41.8%

47.0%

5.2% 6.2% 6.9% 6.1% 6.1% 8.2%

2.9% 2.5% 2.9% 2.9% 2.8% 2.9% 2.6% 2.3% 2.6% 2.5% 2.5% 6.5%

56.1%

59.5%

49.8% 48.0% 46.8%

35.4%

2008 2009 2010 2011 2012 2013

Localiza

Hertz Avis

Unidas

Others

Based on Revenues

Page 24: Institucional Presentation - February/15

24

1. Company overview

2. Main business divisions

Car Rental

Fleet Rental

Seminovos

3. Financials

Appendix: Earnings release 4Q14

Agenda

Page 25: Institucional Presentation - February/15

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Number of clients

Fleet Rental overview

35.0% Compact cars

2014 Fleet composition

34,312 cars

65.0% Others

729 760 798

2012 2013 2014

End of period fleet

32,104 32,809 34,312

2012 2013 2014

Page 26: Institucional Presentation - February/15

26 Source: ABLA, Datamonitor and Localiza

Low penetration of rented fleet in Brazil.

Rented fleet penetration

Corporate fleet:

4,000,000*

Rented fleet:

307,336

32,809

Brazilian Market World

8.1% 8.9%13.3%

16.5%

24.5%

37.4%

46.9%

58.3%

Drivers

*Localiza estimates

Page 27: Institucional Presentation - February/15

Market Share – Fleet Rental

2013

27

Rental Revenues R$3,464.2 million

Fleet 307,336 cars

Source: ABLA, Companies’ Financial Statements and estimates

Locamerica 10.3%

Unidas 9.1%

Ouro Verde 4.9%

18.4%

Others

57.2%

11.3% Unidas 7.1%

Locamerica 10.3%

JSL 10.0%

Ouro Verde 6.0%

ALD 4.8%

Others

50.5%

Page 28: Institucional Presentation - February/15

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1. Company overview

2. Main business divisions

Car Rental

Fleet Rental

Seminovos

3. Financials

Appendix: Earnings release 4Q14

Agenda

Page 29: Institucional Presentation - February/15

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Efficiency gain on car sales

# of points of sale

Car sales – operating data

5566

73 74 75

2010 2011 2012 2013 2014

47,28550,772

56,66462,641

70,621

2010 2011 2012 2013 2014

# Number of cars sold (quantity)

Page 30: Institucional Presentation - February/15

30 Source: O Estado de 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 2013) # of inhabitants per car - Brazil

4.4

4.2

4.0

3.6

2.1

2.0

1.9

1.8

1.2

Brazil

Argentina

Russia

South Korea

Japan

France

Germany

United Kingdon

USA

5.9 5.5 5.2 4.4

2010 2011 2012 2013

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

Page 31: Institucional Presentation - February/15

8.4 8.9 9.0 9.410.1

3.3 3.5 3.6 3.6 3.3

31

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

Page 32: Institucional Presentation - February/15

32

2013 Up to 2 years

409,121

2014 Brand new

3,328,716 2014 Used cars

10,051,296

0.7% 1.8% 13.9%

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 • 45,600 (Fenauto) • 3,714 (Anfavea)

• 25 (Unidas,

Locamerica, Avis

and Hertz website).

• 71 (Fenauto)

Main players

Page 33: Institucional Presentation - February/15

33

1. Company overview

2. Main business divisions

Car Rental

Fleet Rental

Seminovos

3. Financials

Appendix: Earnings release 4Q14

Agenda

Page 34: Institucional Presentation - February/15

802.2980.7

1,093.7 1,163.5 1,284.4

310.4 331.2

2010 2011 2012 2013 2014 4Q13 4Q14

34

Net Revenues (R$ million)

# Daily Rentals (thousands)

Car Rental Division

The net revenues increased 10.4% in 2014

10,734 12,794 13,749 14,242 15,416

3,714 3,898

2010 2011 2012 2013 2014 4Q13 4Q14

Page 35: Institucional Presentation - February/15

234 247 272 286 304

181 202 202 193 17261 47 50 63 64

2010 2011 2012 2013 2014

35

Car Rental network evolution

18 new owned rental locations were added to the network in 2014.

# of car rental locations (Brazil and abroad)

Localiza´s branches - Brazil Franchisees´ branches - Brazil Franchisses´ branches - abroad

476 496 524 542 540

+18

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36

Utilization rate evolution – Car Rental Division

Higher utilization rate reduced the invested capital in fleet.

69.1%

68.9%

70.8%

66.8%

69.9%

2010 2011 2012 2013 2014

Page 37: Institucional Presentation - February/15

361.1 455.0

535.7 575.9 571.9

142.9 146.7

2010 2011 2012 2013 2014 4Q13 4Q14

8,0449,603

10,601 10,844 10,363

2,669 2,644

2010 2011 2012 2013 2014 4Q13 4Q14

37

Net Revenues (R$ million)

# Daily Rentals (thousands)

Fleet Rental Division

The contracted revenue increased 25% in 2014 and reached R$808.3 million.

Page 38: Institucional Presentation - February/15

1,910.4 1,776.5 1,618.8

2,026.2

2,483.2

553.8 877.4

1,321.9 1,468.1 1,520.0

1,747.3 2,018.2

505.6 553.0

2010 2011 2012 2013 2014 4Q13 4Q14

Purchases (includes accessories) Used car sales net revenues

Cars purchased Cars sold

38

Net investment Fleet Expansion* (quantity)

Around 7,600 cars were acquired in advance in 4Q14 due the IPI tax reinstatement in 2015.

Net Investment in Fleet (R$ million)

65,934 59,950 58,655

69,744 79,804

18,588 27,066

47,285 50,772

56,644 62,641

70,621

17,999 18,468

2010 2011 2012 2013 2014 4Q13 4Q14

9,178 2,011 7,103 18,649

589

308.4 98.8

588.5 278.9

* It does not include theft / crashed cars.

48.2

8,598

324.4

9,183

465.0

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39

End of period fleet Quantity

In the Car Rental division, around 7,600 cars were acquired in advance in 4Q14, due the IPI

tax reinstatement in 2015.

By the end of 2014, 1,942 cars in the Fleet Rental division were being prepared to be

delivered to the clients.

61,445 64,688 65,086 70,717 77,573

26,61531,629 32,104

32,80934,31210.652

12,958 14,54514,233

13,339

2010 2011 2012 2013 2014

98,712 109,275 111,735

117,759 125,224

Car Rental Fleet Rental Franchising

Page 40: Institucional Presentation - February/15

1,175.3 1,450.0 1,646.7 1,758.9 1,874.0

458.3 482.2

1,321.9 1,468.1 1,520.0 1,747.3

2,018.2

505.6 553.0

2010 2011 2012 2013 2014 4Q13 4Q14

40

Consolidated net revenues R$ million

11.0% increase of consolidated net revenues in 2014.

Rental Used car sales

2,918.1

3,506.2 3,892.2

2,497.2

3,166.7

963.9 1,035.2

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41

Consolidated EBITDA R$ million

EBITDA grew 5.8% in the 2014.

649.5821.3 875.6 916.5 969.8

236.0 237.6

2010 2011 2012 2013 2014 4Q13 4Q14

(*)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 4Q13 4Q14

Car Rental 45.3% 46.9% 40.9% 36.8% 38.7% 37.3% 37.1%

Fleet Rental 68.0% 68.6% 66.4% 65.5% 60.0% 64.7% 55.5%

Rental Consolidated 52.3% 53.8% 49.3% 46.5% 45.3% 46.0% 42.6%

Used Car Sales 2.6% 2.8% 4.2% 5.7% 6.0% 4.9% 5.8%

Page 42: Institucional Presentation - February/15

**IPI Effect

3,509.7 4,133.0

4,311.3

4,592.3 4,202.1 4,626.0 1,096.9**

2010 2011 2012 2013 2014 4Q14

1,536.0 1,683.9

1,895.8

1,452.4 1,270.0 1,136.5

2,076.6**

2010 2011 2012 2013 2014 4Q14

42

Average depreciation per car in R$

3,972.4

5,408.2

Car Rental

Fleet Rental

*Annualized

*

* *Annualized

Page 43: Institucional Presentation - February/15

250.5291.6

240.9

384.3 410.6

90.0 102.2

2010 2011 2012 2013 2014 4Q13 4Q14

43

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 *

Net income increased 6.8% in 2014.

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44

Free cash flow - FCF (*) Without the technical discount up to 2010

Free cash flow - R$ million 2010 2011 2012 2013 2014

Op

era

tio

ns

EBITDA 649.5 821.3 875.6 916.5 969.8

Used car sale revenue, net from taxes (1,321.9) (1,468.1) (1,520.0) (1,747.3) (2,018.2)

Depreciated cost of cars sold (*) 1,203.2 1,328.6 1,360.2 1,543.8 1,777.0

(-) Income tax and social contribution (57.8) (83.0) (100.9) (108.5) (113.1)

Change in working capital 54.5 (83.9) 37.1 2.9 (27.1)

Cash provided by rental operations 527.5 514.9 652.0 607.4 588.4

Ca

pe

x -

Re

new

als

Used car sale revenue, net from taxes 1,321.9 1,468.1 1,520.0 1,747.3 2,018.2

Fleet renewal investment (1,370.1) (1,504.5) (1,563.3) (1,819.7) (2,197.7)

Net investment for fleet renewal (48.2) (36.4) (43.3) (72.4) (179.5)

Fleet renewal – quantity 47,285 50,772 56,644 62,641 70,621

Investment, other property and intangibles investments (50.6) (59.9) (77.8) (47.5) (46.3)

Free cash flow before growth, new HQ and interest 428.7 418.6 530.9 487.5 362.6

Ca

pe

x -

Gro

wth

Fleet growth investment (540.3) (272.0) (55.5) (209.4) (286.8)

Change in accounts payable to car suppliers 111.3 32.7 (116.9) 89.7 334.4

Fleet growth (429.0) (239.3) (172.4) (119.7) 47.6

Fleet increase / (reduction) – quantity 18,649 9,178 2,011 7,103 9,183

Free cash flow after growth, and before interest and before new headquarters (0.3) 179.3 358.5 367.8 410.2

Ca

pe

x –

HQ

Investment in the construction of the new headquarters (0.5) (3.1) (2.4) (6.5) (55.7)

Marketable securities – new headquarters - - - - (92.6)

New headquarters construction (0.5) (3.1) (2.4) (6.5) (148.3)

Free cash flow before interest (0.8) 176.2 356.1 361.3 261.9

Page 45: Institucional Presentation - February/15

45

The strong cash generation allowed net debt to remain stable,

even after investments in the new headquarters.

(*) Before new headquarters capex

Changes in net debt R$ million

Page 46: Institucional Presentation - February/15

1,281.1 1,363.4 1,231.2 1,332.8 1,322.3

2,446.7 2,681.7

2,547.6 2,797.9

3,296.3

2010 2011 2012 2013 2014

46

Debt - ratios

Net debt vs. Fleet value

BALANCE AT THE END OF PERIOD 2010(*) 2011 2012 2013 2014

Net debt / Fleet value 52% 51% 48% 48% 40%

Net debt / EBITDA 2.0x 1.7x 1.4x 1.5x 1.4x

Net debt / Equity 1.4x 1.2x 0.9x 1.0x 0.8x

EBITDA / Net financial expenses 5.0x 4.6x 6.3x 8.3x 6.4x

(*) 2010 ratios based on USGAAP financial statements

Net debt Fleet value

Comfortable debt ratios.

Page 47: Institucional Presentation - February/15

-248.6

555.9 511.7

221.0

544.5 445.0

147.5

2014 2015 2016 2017 2018 2019 2020 2021

47

Debt maturity profile (principal) R$ million

Total cash of R$1,482.8 million if we consider the R$92.6 million in marketable securities

investment for the new headquarters.

Cash

1,390.2

1,316.2

As of December 31, 2014

Page 48: Institucional Presentation - February/15

48

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

Page 49: Institucional Presentation - February/15

49

Disclaimer

Website: www.localiza.com/ir E-mail: [email protected] 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.