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1December / 2011
2
1.The Company
2.Drivers and opportunities
3.Competitive advantages
4.Financials
5.2012 Brazilian Macroeconomic scenario
Agenda
3
Company: integrated business platform
This integrated business platform gives Localiza flexibility and superior performance.
Synergies:bargaining powercost reduction cross selling
12,285 cars195 locations in Brazil 46 locations in South America32 employees
75.4% sold to final consumer61 stores822 employees
57,077cars2.7million clients240 locations3,810 employees
30,732 cars693 clients293 employees
Based on the 3Q11
4
Company: stable management
Salim Mattar – 38y
Eugênio Mattar – 38y
Gina Rafael – 30y
João Andrade – 7y
Marco Antônio Guimarães – 21y
Bruno Andrade – 19y
BOARD OF DIRECTORS
CEO
COO
Car Acquisition
Legal
Localiza has a lean and efficient structure.
The succession process is already planned.
Roberto Mendes – 26y
Financial ITHumanResources Administration
Daltro Leite – 26y
5
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.
6
Company: financial cycle – car rental
Net car sale revenue$25.5
$26.6Car acquisition
1 2 3 4 5 8 9 10 11 12Expenses, interest and tax
1-year cycle
Revenue
Spread9.8p.p.
Total1 year
R$ % R$ % R$Revenues 19.5 100.0% 27.9 100.0% 47.4 Cost (8.2) -42.2% (8.2) SG&A (2.8) -14.5% (2.3) -8.4% (5.2) Net car sale revenue 25.5 91.6% 25.5 Book value of car sale (24.7) -90.0% (24.7)
EBITDA 8.5 43.4% 0.8 2.9% 9.3 Depreciation (vehicle) (1.5) -5.5% (1.5) Depreciation (non-vehicle) (0.4) -1.8% (0.1) (0.5) Interest on debt (2.0) -7.2% (2.0) Tax (2.4) -12.1% 0.7 2.5% (1.6)
NET INCOME 5.8 29.5% (2.2) -7.7% 3.6 NOPAT 5.1 ROIC 17.7%Cost of debt after tax 7.9%
Car Rental Seminovosper operating car per operating car
*
* Investment in cars and PP&E (8%)
7
Company: financial cycle – fleet rental
Total2 anos
R$ % R$ % R$Revenues 32.7 100.0% 29.0 100.0% 61.7 Cost (9.4) -28.9% (9.4) SG&A (1.8) -5.6% (2.2) -7.7% (4.1) Net car sale revenue 26.8 92.3% 26.8 Book value of car sale (26.5) -90.0% (26.5)
EBITDA 21.4 65.6% 0.3 1.0% 21.7 Depreciation (vehicle) (7.0) -24.2% (7.0) Depreciation (non-vehicle) (0.1) -0.2% (0.1) Interest on debt (3.8) -12.9% (3.8) Tax (6.2) -19.0% 3.1 10.8% (3.1)
NET INCOME 15.2 46.4% (7.3) -25.3% 7.8
NET INCOME per year 7.6 46.4% (3.7) -25.3% 3.9 NOPAT (annualized) 5.1 ROIC 15.2%Cost of debt after tax 7.9%
Fleet Rental Seminovosper operating car per operating car
33.8Car acquisition
Net car sale revenue 26.8
1 2 3 4 5 20 21 22 23 24
2-year cycle
Expenses, interest and tax
Revenue
Spread7.3p.p.
8
Average growth of roughly 25% p.a. in the last years.
Company: growth and profitability track record Revenues consolidated
EBITDA consolidated
331.4 408.4 537.4 655.0 842.9 898.5 1,175.3 1,409.9303.0 446.5
588.8850.5
980.8 922.4
1,321.91,450.7
515.7457.4402.7296.1234.1225.9212.9
1997 1999 2001 2003 2005 2007 2009 2011annualized
CAGR: 24.0%
CAGR: 16.5%
634.4854.9
1,126.21,505.5
1,823.7 1,820.9
2,497.22,860.6
Consolidated Rentals Used car sales
CAGR: 23.2%
4.3
42 62 85.2 134.3 154 149.9 152.1 197.8278.1 311.4
403.5504.1 469.7
649.5804.0
1997 1999 2001 2003 2005 2007 2009 2011annualized
CAGR: 23.9%CAGR: 23.1%
-0.6 7.55.7 3.2 4.0 6.1 5.2
1.9Average
1.12.71.34.30.30.03.4GDP 3.3
9
Rental revenues growth elasticity x GDP
2005 2006 2007 2008 2009 2010
5.5x
Localiza
GDP
Sector
2.8x
Company: GDP elasticity
The drivers combined with Localiza’s competitive advantages resulted in a growth above the industry level.
10
18.9% 20.6% 20.8% 21.8% 21.4% 23.5%
2005 2006 2007 2008 2009 2010
Company: market share - fleet
Consolidated
Source: ABLA 2011 yearbook
37.5% 12.5%
Car Rental division Fleet Rental division
11
2011 Valor 2008th Company in growth and profitability
2011 Maiores e Melhores do Transporte (Biggest & Best of Transportation)
The best Company of the vehicle rental sector
Institutional Investor’s ranking:
Company: recognitions and rewards
12
1.The Company
2.Drivers and opportunities
3.Competitive advantages
4.Financials
5.2012 Brazilian Macroeconomic scenario
Agenda
13
Drivers and growth opportunities
14
R$456 bn to be invested.
Car rental drivers: investments
Source: EXAME yearbook, 2011-2012
18.4%
InvestedTo be invested
19.5%
R$174.6 bn
12.3%
R$150.4 bn
20.8%
R$85.8 bn
R$28.7 bn
18.7%
R$16.8 bn
154137
106
38
7 6 35
Oil/gas
Transp
ortatio
nElec
tricit
yWate
r/sew
age
Teleco
mmunicatio
n
Arenas
OthersHousin
g
Investments by sectorInvestments in Brazil
15
Income increase and stable daily rental rates increased car rental affordability.
Car rental drivers: income and affordability
GDP per capita (R$ thousands)
151
260
465510
240180 200
350415
380300
18% 16%
31%
35%
15%
37%38%
51%
22% 20%27%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Monthly minimum salary (R$) Daily rental price over minimum salary (%)
Car rental affordability
Source: Exame magazine (Dec/2010)
6.9 7.5 8.4 9.5 10.7 11.7 12.8 14.216.0 16.6
19.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
16
Strong domestic drivers leads to higher volumes.
Source: FGV, BCB, Infraero, Gol, Abecs and Exame (Dec/2010)
Car rental drivers: consumption
71128
154
2003 2009 2010
80.3% 20.3%
Air traffic passengers - million
15
45 51
2003 2009 2010
200.0% 13.3%
Credit card holders - million
1421
27
2003 2009 2014e
50.0% 28.6%
A and B classes - million
6698
113
2003 2009 2014e
48.5%
15.3%
Middle class - million
17Source: Each company website (October, 2011)
Car rental opportunities: consolidation
Off-airport market is still fragmented.
Avis32
Unidas70
Localiza336 Hertz
83
Others2004
Outras22
Avis35
Unidas27
Localiza99
Hertz36
Airport locations Off-airport locations
Car rental locations in Brazil
18
Network expansion
Last 12 months* Branches
Total 39
Owned 16
Franchised 23
Localiza’s network is still being expanded.
Brazilian distribution
# of locations in Brazil
279 312 346 381 415 435
254
2005 2006 2007 2008 2009 2010 9M11
Car rental strategy: organic growth
*as of September, 2011
19Source: 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:232,000
30,732
Brazilian Market World (%)
5.48.9
13.316.5
24.5
37.4
46.9
58.3
Brazil
Poland
Czech
Repu
blic
German
y
France
Spain Uk
Holland
20
Income increase and credit availability are the major drivers for car sales.
Source: Bradesco, ANFAVEA, PIB per capita: IPEADATA.
Used car sales drivers: affordability and penetration
Car purchase affordability
6.5
3.6
1.8
1.8
1.7
1.5
1.2
Brazil
Mexico
Germany
UK
France
Italy
USA
# of inhabitants per car (2009)
148 128115
97 104 9380
56586875
151 180 200240 260 300
350
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
0
1 0 0
2 0 0
3 0 0
4 0 0
5 0 0
6 0 0
Number of minimum w ages to buy a new car Monthly minimum salary (R$)
8.0 7.9
7.4
6.96.5
2005 2006 2007 2008 2009
# of inhabitants per car - Brazil
21
3,329,1703,009,4822,671,3382,342,0591,830,4021,620,657
2005 2006 2007 2008 2009 2010
8,429,309
7,071,5257,016,5766,743,699
7,114,870 7,260,054
4.3x 3.7x 3.0x 2.7x2.3x
2.5x
Brazilian car market: new cars x used cars
New cars X used cars
Source: FENABRAVE (Autos + light commercial)
Used car market is currently 2.5x the new car market.
New cars
Used cars
22
0km SeminovosUsed Seminovos 3 years old Seminovos
1.4% 4.4%
Up to 3 yearsUp to 3 years1,093,2811,093,281
0KM0KM3,329,1703,329,170
0.6%
UsedUsed8,429,3098,429,309
Brazilian car market : 2010 market share
Source: Fenabrave 2010
Localiza used cars x Car market
Used cars sold: 47,285
23
Brazilian car market: monthly sale per store
Localiza Seminovos monthly sale per store is in line with market average.
10996 91 90 84 84 81
48
FIAT VW FORD GM SEMINOVOS* SECTOR2010**
RENAULT PEUGEOT
Monthly sale / lots*
Source: Anfavea (National OEM’s Association); number of dealers from each OEM association website (nov/11 )
* Average sales per lots (excluding auto malls – 10 stores)** Total sales divided by the number of dealers
24
The network is being expanded to support rentals’ growth.
Brazilian distribution New lots
Status* Points of sale
Contract signed 3
In construction 6
Negotiation and prospection 11
# of points of sale
26 32 3549 55 61
13
2005 2006 2007 2008 2009 2010 9M11
Used car sales strategy: network expansion
*as of September, 2011
25
61% 49% 57% 58%
39% 51% 43% 42%
2010 1Q11 2Q11 3Q11
3,940 3,860
4,159
4,545
2010 1Q11 2Q11 3Q11
Used car sales: sold cars evolution
The increase on sales was supported by the opening of new points of sale.
Sales profile
Financed In cash
Monthly average of sold cars
The macro prudential measures impacted the sales profile in the 1Q11.
26
1.The Company
2.Drivers and opportunities
3.Competitive advantages
4.Financials
5.2012 Brazilian Macroeconomic scenario
Agenda
27
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
28
Competitive advantages: raising money
BBB- FitchBaa3 Moody’s BBB+ S&P B+ S&P B+ Fitch B2 Moody's
Global Scale
Aa1.br Moody’sAA+(bra) Fitch A (bra) Fitch BBB (bra) Fitch A- (bra) Fitch
National Scale
Investment grade: lower spreads and longer terms
Localiza raises money with lower spreads when compared to Brazilian competitors.
As of December, 2011.
Renting carsRaisingmoney
Sellingcars
Buyingcars
29
Fiat25.6%GM
37.0%
Renault3.1%
Ford4.3% Others
2.8%
VW27.2%
2.8%
Better conditions due to higher volumes
Competitive advantages: buying cars
Localiza announced the purchase of 100,000 cars for 2H11 and 2012.
Localiza’ share in national sales of the three largest automakers in 2010: GM, FIAT, VW
Purchases by brand in 2010
Renting carsRaisingmoney
Buyingcars
Sellingcars
30
The Company is present in 226 cities where the other largest networks do not operate.
Competitive advantages: renting cars
Know HowBrand Brazilian distribution
119
96
67
298
64 72 46
# of
bra
nche
s#
of c
ities
435
282
Localiza Hertz Unidas Avis
Source: Each company website (October, 2011)
Renting carsRaisingmoney
Buyingcars
Sellingcars
31
Sales to final consumer
Competitive advantages: selling cars
Buffer: additional fleet
Selling directly to final consumer reduces depreciation.
Cars available for sale are used by the car rental division during peaks of demand.
Renting carsRaisingmoney
Buyingcars
Sellingcars
32
1.The Company
2.Drivers and opportunities
3.Competitive advantages
4.Financials
5.2012 Brazilian Macroeconomic scenario
Agenda
33
Financials: Car Rental Division
Average rental rate increased due to a change in the business mix and better negociations.
# daily rentals (thousand)
Net revenues (R$ million)
3,4114,668
5,7937,940 8,062
10,734
7,7209,470
2,863 3,227
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
CAGR: 25.8%22.7%
12.7%
241.8208.7
714.2566.6
802.2585.2565.2
428.0346.1
258.6
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
CAGR: 25.4%26.1%
15.9%
34
Financials: Fleet Rental Division
Growth in rental rate derived from the increase in basic interest rate.
# daily rentals (thousand)
Net revenues (R$ million)
117.4142.0184.0 219.8
268.4 303.2361.1
260.2332.9
92.9
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
CAGR: 20,5%
27,9%
26,4%
3,3514,188
5,1446,437 7,099
8,044
5,8627,086
2,046 2,461
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
CAGR: 19.1%
20.9%
20.3%
35
690.0930.3 1,060.9
1,335.3 1,204.2
1,910.4
1,199.6
446.5 588.8850.5 980.8 922.4
1,321.9939.6 1,119.81,088.0
2005 2006 2007 2008 2009 2010 9M10 9M11
690.0930.3 1,060.9
1,335.3 1,204.2
1,910.4
1,199.6
446.5 588.8850.5 980.8 922.4
1,321.9939.6 1,119.81,088.0
2005 2006 2007 2008 2009 2010 9M10 9M11
Financials: net Investment
The largest portion of the CAPEX is funded by used car sales.
Fleet increase * (quantity)
7,342 10,346 7,957
18,649
9,930 8,642
Purchased cars Sold cars
243.5 341.5210.4
354.5 281.8
588.5
Purchases (accessories included) Used car sales revenues
Net investment (R$ million)
26,10533,520 38,050
44,211 43,161
18,763 23,17430,093 34,281 34,519
38,16040,607
65,934
37,69447,285
34,486
2005 2006 2007 2008 2009 2010 9M10 9M11
6,121 466
260.0 31.8
36
Financials: utilization rate and average operating fleet age
Fleet is adjusted according to demand.
66.2% 69.9% 68.2% 68.9% 69.7%66.3%74.1%
6.9 6.6 6.3 5.5 6.3 6.5 7.3
0 .0 %
1 0 .0 %
2 0 .0 %
3 0 .0 %
4 0 .0 %
5 0 .0 %
6 0 .0 %
7 0 .0 %
8 0 .0 %
9 0 .0 %
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
Utilization rate Average operating fleet age
Elections effect
Utilization rate and average operating fleet age
37
31,373 35,686 39,112 47,517 61,445 50,450 57,07711,76214,630 17,790 23,403
22,77826,615
25,30530,732
24,103
2005 2006 2007 2008 2009 2010 9/30/2010 9/30/2011
Financials: end of period fleet
The 15.9% growth in the fleet is in line with the rental volume increase.
End of period fleet (quantity)
CAGR: 19.7%
35,86546,003 53,476
62,51570,295
88,060
Car rental Fleet rental
87,80975,755
15.9%
38
Financials: consolidated net revenuesR$ million
Rental and Seminovos’ increase in volumes and prices resulted in higher revenues.
408.4 537.4 655.0 842.9 898.5 1,175.3835.5 1,057.4
304.6 362.9
446.5588.8
850.5980.8 922.4 939.6
1,088.0
354.2 394.6
1,321.9
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
Rentals Seminovos
CAGR: 23.9%
854.91,126.2
1,505.51,823.7 1,775.11,820.9
2,145.42,497.2
658.8 757.5
20.9%
15.0%
19.1%26.6%
39
277.9 311.3403.5
504.1 469.7
649.5
461.3603.0
178.7 216.2
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
Financials: EBITDA R$ million
The 30.7% growth in the EBITDA in the 9M11 was above the rental revenues increase.
CAGR: 18.5%
Divisions 2005 2006 2007 2008 2009 2010 9M10 9M11
45.9%
67.4%
52.7%
2.3%
46.9%
68.9%
53.8%
3.1%
45.3%
68.0%
52.3%
2.6%
45.9%
69.1%
53.3%
5.6%
3Q10 3Q11
50.4%
72.1%
Rentals consolidated 53.6% 52.9% 54.5% 51.1% 54.8% 57.5%
1.9%
48.7%
68.9%
3.4%
41.9%
68.7%
1.1%
43.4%
71.4%
4.6%
46.0%
71.3%
5.5%
Car rental 47.5%
Fleet Rental 65.5%
Used car sales 13.2%
30.7%
21.0%
40
... it should increase to 3Q11 level due to higher costs to sell our used cars.
Financials: average depreciation per carR$
Hot used car market
Financial crisis effectCurrent market conditions
1,536.0 1,619.8 1,578.5
332.9
2,546.0 2,577.0
939.1492.3
2005 2006 2007 2008 2009 2010 9M10 9M11
* Annualized
* *
1,318.01,580.51,492.3
1,251.9
1,942.5 1,993.2
1Q10* 1Q11* 2Q10* 2Q11* 3Q10* 3Q11*
Depreciation evolution - per year
YTD, average depreciation per car remained stable, but...
Depreciation evolution - per quarter
* Annualized
41
Financials: average depreciation per carR$
3,509.7 3,306.04,080.9
2,395.8
5,083.14,371.7
2,383.32,981.3
2005 2006 2007 2008 2009 2010 9M10 9M11
* Annualized
* *
3,254.43,693.9
4,241.8 3,990.6
2,989.4
4,020.8
1Q10* 1Q11* 2Q10* 2Q11* 3Q10* 3Q11*
Hot used car market
Financial crisis effect
Depreciation evolution - per year
Depreciation evolution - per quarter
* Annualized
The fleet renewal after the end of the tax exemption resulted in higher depreciation in 2011.
42
Financials: consolidated net incomeR$ million
Reconciliation EBITDA x net income 2009 2010 Var. R$ 9M10 9M11 Var. R$
156.0 440.0
21.3
461.3
(104.3)
(15.4)
(88.8)
(71.7)
181.1
23.8
129.3569.3
33.7
603.0
(143.5)
(17.4)
179.8
(137.8)
(91.4)
12.4
141.7
(39.2)
(2.0)
26.0
(49.0)
(19.7)
212.9
(0.1)
(17.2)
31.8
(54.3)
134.2
459.1
10.6
469.7
(172.3)
(21.0)
(112.9)
(47.2)
116.3
615.1
34.4
649.5
(146.3)
(21.1)
(130.1)
(101.5)
250.5
3T10 3T11 Var. R$
EBITDA – Rentals and franchising 166.8 208.6 41.8
(4.3)
EBITDA Consolidated 178.7 216.2 37.5
(16.0)
0.1
(18.4)
(2.8)
0.4
EBITDA – Used car sales 11.9 7.6
Cars depreciation (37.9) (53.9)
Other property and equipment depreciation (5.1) (5.0)
Financial expenses, net (31.4) (49.8)
Income tax and social contribution (29.4) (32.2)
Net income 74.9 75.3
75.374.9
212.9181.1
250.5
116.3127.4190.2
138.2106.5
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
0.5%
17.6%
2011 results were impacted mainly due to higher interest rate.
43
Financials: free cash flow - FCF
(*) without technical discount deduction
Free cash flow - R$ million 2005 2006 2007 2008 2009 2010 9M11
469.7 649.5
(1,321.9)
1,203.2
(57.8)
54.5
527.5
1,321.9
(1,370.1)
(48.2)
(51.1)
428.2(540.3)
111.3
(0.8)
18,649
(922.4)
603.0
(1,088.0)
974.5
(57.3)
(59.4)
372.8
1,088.0
(1,106.1)
(18.1)
(37.4)
317.3(13.7)
(195.8)
107.8
Fleet increase - quantity 7,342 10,346 7,957 9,930 8,642
855.1
(49.0)
(11.5)
341.9
922.4
(947.9)
(25.5)
(21.0)
295.4(241.1)
241.1
295.4
466
504.1
(980.8)
874.5
(52.8)
(44.8)
300.2
980.8
(1,035.4)
(54.6)
(39.9)
205.7 (299.9)
(188.9)
(283.1)
EBITDA 277.9 311.3 403.5
Used car sales net revenues (446.5) (588.8) (850.5)
Depreciated cost of used car sales (*) 361.2 530.4 760.0
(-) Income tax and social contribution (32.7) (42.7) (63.4)
working capital variation (24.2) (4.8) 13.3
Cash provided before capex 135.7 205.4 262.9
Used car sales net revenues 446.5 588.8 850.5
Capex of car - renewal (496.0) (643.3) (839.0)
Net capex for renewal (49.5) (54.5) 11.5
Capex – other property and equipment, net (28.0) (32.7) (23.7)
Free cash flow before growth and interest 58.2 118.2 250.7 Capex of car - growth (194.0) (287.0) (221.9)
Change in accounts payable to car suppliers (capex) (25.5) 222.0 (51.0)
Free cash flow after growth and before interest (161.3) 53.2 (22.2)
Strong cash flow generation before growth and interest expenses.
44
Financials: debt – ratiosR$ million
Comfortable debt ratios.
End of period balance 2005 2006 2007 2008 2009 2010
177% 191%
2.0x
1.4x
EBITDA / Net financial expenses 3.3x 4.8x 5.4x 3.8x 4.2x 5.0x 4.4x
2.3x
1.5x
140%
2.5x
2.0x
9M11
Fleet value / Net debt 168% 283% 195% 175%
Net debt / EBITDA (*) 1.9x 1.4x 1.9x 1.7x
Net debt / Equity 1.4x 0.7x 1.3x 1.3x
(*) annualized
Fleet; 2,410.5
Cash; 564.6
Debt; 1,846.0
Balance sheet, as of 09/30/11
Net debt; 1,281.4
Other assets; 572.0
Other liabilities; 620.6
Equity; 1,080.5
Assets Liability and equity
45
Financials: debt profile and costs R$ million
6 years term for debt payment.
207.7 230.3 299.8 249.3
514.0372.0
0.7
2011 2012 2013 2014 2015 2016 2017Cash564.6
Contract rate Effective cost 2011 2012 2013 2014 2015 2016 2017 Total
Working capital108.7% to 114.7%
of CDI and CDI+1.44%a.a.
CDI + 0.44%pa
112.0% to 114.0% of CDI
112.8% of CDI
CDI +1.95%pa
TJLP + 3.8%pa / CDI + 2.3%pa
-
-
-
111.1% - 114.7% of CDI and
CDI+1.79%a.a. - 15.0 38.7 70.0 86.3 190.0 - 400.0
Debenture 2nd Issuance CDI + 0.6%pa - 66.6 66.6 66.8 - - - 200.0
Debenture 4th Issuance 114.2% of CDI - 24.0 24.0 63.0 63.0 74.0 122.0 370.0
Debenture 5th Issuance 114.5% of CDI - - - - - 250.0 250.0 500.0
Debenture 1st Issuance: Total Fleet CDI + 2.0%pa - 100.0 100.0 100.0 100.0 - - 400.0
Other TJLP + 3.8%pa / CDI + 2.3%pa 0.7 2.1 1.0 - - - - 3.8
Interests accrued until 09/30/11, net of interest paid - 76.0 - - - - - - 76.0
Cash and cash equivalents on 09/30/11 - (564.6) - - - - - - (564.6)
Net debt - (487.9) 207.7 230.3 299.8 249.3 514.0 372.0 1,385.2
46
16.9%
8.9%13.6% 10.9% 8.4% 8.2% 7.8% 7.8%
16.9%11.5%
24.8%18.7% 21.3%
17.0%
2005 2006 2007 2008 2009 2010 9M11
Interest on debt after tax ROIC
Financials: spread
2005 2006 2007 2008 2009 2010 9M11
1,984.6 2,428.8
29.2%
0.58x
16.9%
8.9%
8.0
28.6%
0.59x
16.9%
7.8%
9.1
1,642.3
32.1%
0.53x
17.0%
8.2%
Average capital investment - R$ million 606.3 986.2 1,137.5
8.8
1,702.3
21.9%
0.53x
11.5%
7.8%
3.7
NOPAT margin (over rental net revenues) 37.0% 34.5% 36.9%
Turnover of average capital investment (over rental net revenues) 0.67x 0.55x 0.58x
ROIC 24.8% 18.7% 21.3%
Interest on debt after tax 13.6% 10.9% 8.4%
Spread (ROIC – Interest after tax) - p.p. 11.2 7.8 12.9
11.2p.p.7.8p.p. 12.9p.p. 8.8p.p.
3.7p.p.9.1p.p. 8.0p.p.
*
* Annualized
Spread of 8.0p.p. despite the growth in the interest rate.
47
1.The Company
2.Drivers and opportunities
3.Competitive advantages
4.Financials
5.2012 Brazilian Macroeconomic scenario
Agenda
48
Macroeconomic scenario
Strengthssolid financial systemhigh compulsory deposit low standards of unemploymentrobust international reserveprimary surplus
Weaknessesdeficient infrastructurehigh tax burdenbureaucracy
Threatsincrease in inflation household indebtnessincrease in default
Opportunitiescrisis opened space for reduction in Selic ratemonetary policy: deposit requirement and macro prudential measuresinfrastructure investments with private partnership2014 World Cup / 2016 Olympic Games
Source: IMF / BCB / Bradesco / Itaú / Citi / Valor Econômico
7.5%
2.9% 3.4%
2010 2011E 2012E
GDP
5.9%6.5%
5.4%
2010 2011E 2012E
CPI - IPCA
9.7%11.8%
9.7%
2010 2011E 2012E
Selic rate
49
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’smanagement, 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 hereinshall form the basis of any contract or commitment whatsoever.
Nora LanariRoberto Mendes Silvio GuerraCFO - RI RI RI
Website: www.localiza.com/ir E-mail: [email protected] Phone: 55 31 3247-7024