localiza institucional inglês
TRANSCRIPT
July 22, 2016Institutional Presentation
1. Company overview
2. Main business divisions
� Car Rental
� Fleet Rental
� Seminovos
3. Financials
Appendix: Earnings release 2Q16
Agenda
2
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 – Expansion strategy by adjacencies: Fleet Rental
1997 – PE firm DL&J enters at a market cap of US$ 150 mm
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
06/30/2016 – Market cap of about US$2.3 bi with ADTV of US$10.4 million
1973 1982 1983 2004 2005 2015
3
Company: integrated business platform
Synergies:
bargaining power
cost reduction
cross selling
� 13,695 cars� 166 locations in Brazil� 71 locations in South America� 32 employees
� 46.7% sold to final consumer� 78 stores� 48 cities� 984 employees
� 78,352 cars� 6.0 million clients� 328 locations� 4,761 employees
� 32,726cars� 880 clients� 391 employees
Based on the 2Q16 4
Car Rental Fleet Rental
SeminovosFranchising
This integrated business platform gives Localiza flexibility and superior performance.
5
� High fixed cost� Standard fleet� 1 year cycle� High entry barriers� Gains of scale� Intensive capital� Consolidated in airport
market� Fragmented off airport
market
� Support area� Reduces depreciation� Know How of used cars
market� 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 mainly to final consumers after the rental and estimates the residual values.
� Low fixed cost� Customized fleet� 3 years cycle� Low entry barriers� Intensive capital
6
Net car salerevenue R$28.51 year cycle
Car Rental Division - 2015 Financial CyclePer car
R$31.6Average car price(past 2 years)
1 2 3 4 5 6 7 8 9 10 11 12Expenses, interest and tax
Revenue
Total1 year
R$ % R$ % R$Net revenues 20.1 100.0% 31.9 100.0% 52.1Costs - fixed and variable (9.9) -49.1% (9.9)SG&A (3.8) -19.1% (3.4) -10.7% (7.2)Net revenues of car sold 28.5 89.3% 28.5Book value of car sold (26.6) -83.3% (26.6)EBITDA 6.4 31.8% 1.9 6.1% 8.3Cars Depreciation (0.6) -1.9% (0.6)Others depreciation (0.4) -1.8% (0.1) -0.4% (0.5)Financial expenses (2.2) -6.9% (2.2)Taxes (1.8) -9.0% 0.3 1.0% (1.5)Net Income (Loss) 4.2 21.0% (0.7) -2.3% 3.5
NOPAT 5.0ROIC 16.0%Cost of debt after taxes 9.5%
Car Rental SeminovosPer car soldPer operating car
7
Net car salerevenue R$28.4
3 year cycle
Fleet Rental Division - 2015 Financial Cycle Per car
1 2 3 4 5 6 31 32 33 34 35 36Expenses, interest and tax
Revenue
R$39.0Average car price(past 3 years)
Total3 years
R$ % Seminovos % R$Net revenues 57.6 100.0% 31.2 100.0% 88.8Costs - fixed and variable (17.9) -31.1% (17.9)SG&A (3.9) -6.7% (2.8) -9.1% (6.7)Net revenues of car sold 28.4 90.9% 28.4Book value of car sold (24.3) -77.9% (24.3)EBITDA 35.8 62.2% 4.1 13.0% 39.9Cars Depreciation (11.8) -37.8% (11.8)Others depreciation (0.2) -0.4% (0.2) -0.6% (0.4)Financial expenses (6.0) -19.4% (6.0)Taxes (10.7) -18.6% 4.2 13.4% (6.5)Net Income (Loss) 24.9 43.3% (9.8) -31.4% 15.2
Net Income (Loss) - per year 8.3 43.3% (3.3) -31.4% 5.1
NOPAT 6.5ROIC (it considers the effect of the average book v alue of the car in its useful life) 16.6%Cost of debt after taxes 9.5%
Per operating carFleet Rental Seminovos
Per car sold
8
2015 Consolidated breakdownR$ million
R$ 150 16%
R$ 378 40%
R$ 407 44% R$ 297
40%
R$ 438 60%
Net RevenuesR$3,928
EBITDAR$935
R$ 2,045 52%
R$ 608 16% R$ 1,275
32%
EBIT*R$735
*Seminovos results recorded in the Car Rental and Fleet Rental Divisions
Company’s profitability comes from
Car Rental and Fleet Rental Divisions.
Raisingmoney Buying
cars
Renting Cars SellingCars
Cash to renew the fleet or pay debt
$
Profitability comes from rental divisions
Competitive advantages
$
9
42 years of experience in managing assets and gener ating value.
Competitive advantages: raising money
Global Scale
National Scale
As of July, 2016.
BB+ FitchBa2 Moody’sBB+ S&P
Baa1 Moody ´s B+ S&PBa3 Moody ´s
BB- S&P
brAA+ S&P Aa1.br Moody’sAAA(bra) Fitch
brAA- S&PAA- (bra) Fitch
A- (bra) Fitch AA- (bra) Fitch A(bra) Fitch
10
Investment grade: lower spreads and longer tenors
Source: Bloomberg .
Raisingmoney Buying
cars
Renting Cars SellingCars
$
Localiza raises money with better conditions then i ts competitors.
11
Competitive advantages: buying cars
Number of cars purchased – 2015
* Includes Franchising.
68,319 37,444
19,357 13,068
Localiza Movida Unidas Locamerica
*
Source: each company website and ANFAVEA
Localiza’s share in the internal sales of themajor OEMs - 2015
4.2%
Raisingmoney Buying
cars
Renting Cars SellingCars
$
Localiza buys cars with better conditions due to th e volume of purchases.
7,600
75,919
Purchase antecipation of Dec/14
Raisingmoney Buying
cars
Renting Cars SellingCars
361
13467 94
Localiza Unidas Hertz Movida
12
Competitive advantages: renting cars
Brand Brazilian distribution
# of
bra
nche
s#
of c
ities
Source: Each company website on 04/28/2016, 2Q16 Ea rnings Release for Localiza and 1Q16 Earnings Relea se for Movida, Unidas and Hertz .
467
100
204
163
Localiza Competitors
494
$
The Company is present in 180 cities where the othe r largest networks do not operate.
Raisingmoney Buying
cars
Renting Cars SellingCars
13
Localiza Express®
Self-service that provides fast
service, reducing queues and
scalability to service.
Localiza Way®New platform to offer
value-added services
Mobile ChecklistMore quality, control and agility
in providing cars for rental
Fast CheckoutMore operational productivity
and agility in returning the cars
after rental
Connected ShuttleOptimization of
customer shuttle service
at airports
Anti fraud
Taylor-made solution for
fraud prevention in car
rentals
Competitive advantages: Innovation
$
Constant innovations allow maintenance of the premi um service.
14
Integrated technology solution that
increases competitive intelligence
and leverages productivity gains.
CONNECTED FLEETIntegrated mobile solution to
fleet rental services for drivers
and contract manager.
MOBILE SOLUTIONRapid diagnosis and friendly
vision of the fleet by the
customer.
ONLINE FLEET RENTAL
Competitive advantages: Innovation
Raisingmoney Buying
cars
Renting Cars SellingCars
$
Differentiated offer with higher added value to the customer.
Raisingmoney Buying
cars
Renting Cars SellingCars
15
Sales to final consumer
Competitive advantages: selling cars
Buffer: additional fleet during peaks of demand
Information/mobility: Ipad for Salesmen
• Support sale
• Access to the database
• Customer registration
• Agility in car sales
$
Sales center: 20k incoming calls per month with 55% visits to stores scheduled.
Distribution channel: 200 cities and 1,900 customer s.
16
ROIC versus cost of debt after taxes
The Company presented a positive spread of 5.2p.p.Despite the adverse scenario and the significant in crease in the interest rate
7.3%8.6%
6.3% 6.0%8.0%
9.5% 10.2%
16.9% 17.1% 16.1% 16.5% 17.5% 17.0%15.4%
2010 2011 2012 2013 2014 2015 1H16
ROIC
Cost of debt
after taxes
9.6p.p. 8.5p.p. 9.5p.p.9.8p.p. 10.5p.p.
7.5p.p. 5.2p.p.
2010 to 2014 ROIC considered income tax rate of 30.0%2015 and 1Q16 ROIC considered income tax rate of 24.5%
Annualized
Localiza vs. playersProfitability
Source: Companies’ Financial Statements17
ROIC 2015
ROE 2015
FleetRAC+Fleet Rental RAC+Fleet Fleet Rental Fleet Rental RAC+F leet Rental
124,695 43,342 31,184 28,813 53,439
ReferenceROIC = NOPAT (considering the effective tax rate) / (Average net debt + average equity)ROE = Net income / Equity at the beginning of the y ear
17.0%
9.3% 10.5%
6.5%8.4%
Localiza Unidas Locamerica Ouro Verde JSL Consolidada
24.3%
6.2% 6.0% 5.0% 4.5%
Localiza Unidas Locamerica Ouro Verde JSL Consolidada
18
Net Debt / EBITDA - 2015
Net Debt / Equity - 2015
Source: Companies’ Financial Statements.For Unidas and JSL Confirming is included in net deb t.
Localiza vs. playersDebt ratios
1.7x 2.5x 2.9x
3.8x 4.3x
Localiza Unidas Locamerica Ouro Verde JSL
Consolidated
0.8x 1.1x 2.0x
9.7x
4.6x
Localiza Unidas Locamerica Ouro Verde JSL
Consolidated
19
1. Company overview
2. Main business divisions
� Car Rental
� Fleet Rental
� Seminovos
3. Financials
Appendix: Earnings release 2Q16
Agenda
20
Car Rental overview
Compact cars 46.1%Others 53.9%
2015 Fleet composition
76,755 cars
Corporate fleet size
65,08670,717 77,573 76,755 78,352
2012 2013 2014 2015 1H16
Car rental distribution (Brazil)
474 479 476 494 494
2012 2013 2014 2015 1H16
21
Drivers
Source: BCB and Localiza rates
151180 200
240260300
350 380 415465
510 545622
678724
788
51%
38% 37% 35%
31%27%
22% 20% 18% 16% 15% 15% 13% 13%12% 11%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Monthly minimum salary (R$) Daily rental price over minimum salary (%)
Car rental affordability
Source: IPEADATA and Localiza’s loyalty program.
6 million
84 millionAdult population(age > 20 years)
Class A+B+C
15 millionAdult population(age > 20 years)
Class A+B
Increasing affordability and low penetration in lei sure trips brings growth opportunities.
22
Drivers
# domestic air traffic passengersIn million
Expected investment 2016-2019(in R$ billion)
Source: Sectorial Analysis Committee / BNDES: 2016-2019 , as of February, 2016.
Source: ANAC up to 2015 and IATA-Air Passenger Forecast Global Report, as of April, 2015.
The pipeline of investments tend to benefit the corporate segment.
Expected annual traffic growth of 4.4% from 2014 to 2034 traffic.
7082 89 90 96 96
2010 2011 2012 2013 2014 2015
214.1
142.6
87.1
35.8
32.9
32.5
17.0
15.5
5.8
Energia
Telecomunicações
Rodovias
Saneamento
Ferrovias
Mobilidade Urbana
Aeroportos
Portos
Resíduos Sólidos
23Source: RAIS, each company’s website on 04/28/2016 and Localiza´s 2Q16 Earnings Release
Airport locations Off-airport locations
Car Rental Locations in Brazil
Off-airport market is still fragmented.
24
Market Share – Car Rental 2015
Source: ABLA and Companies’ Financial Statements an d estimates.
Localiza’s market share is higher than the 2nd and 3rd players together.
# of companies: 7,455Fleet: 375.4k
Reference: ABLA increased data collection basis for mapping car rental market in 2015, the number of Car Rental Locations
reached 7.455 from 5.624 in 2014 and fleet went to 375,4k from 332,5k in 2014.
20.4%
2.0%
6.0%
9.9%
50.3%
11.4%
Movida37.1k
Unidas22.6k
Others188.9k
22.4%New data basis42.8k
76.8k
7.2k
25
1. Company overview
2. Main business divisions
� Car Rental
� Fleet Rental
� Seminovos
3. Financials
Appendix: Earnings release 2Q16
Agenda
26
Number of clients
Fleet Rental overview
Compact cars 34.9%
Others 65.1%
2015 Fleet composition
33,948 cars
729 760 798 849 880
2012 2013 2014 2015 1H16
End of period fleet
32,104 32,809 34,312 33,948 32,726
2012 2013 2014 2015 1H16
27Source: ABLA, Datamonitor and Localiza
Rented fleet penetration
Corporate fleet:4,000,000*
Rented fleet:440,737
33,948
Brazilian Market World
11.0% 8.9%13.3% 16.5%
24.5%
37.4%
46.9%
58.3%
Drivers
*Localiza estimates
Low penetration of rented fleet in Brazil.
Market Share – Fleet Rental 2015
28
Source: ABLA, Companies’ Financial Statements and e stimates
Fragmented market with low entry barriers.
Reference: ABLA increased data collection basis for mapping car rental market in 2015, the number of Car Rental Locations
reached 7,455 from 5,624 in 2014 and fleet went to 477.8k from 440.7k in 2014.
# of companies: 7,455Fleet: 477.8k
33.9k
7.1% 1.7k
0.4% 20.8k
4.3%
16.3k
3.4%
23.8k
5.0%
31.2K
6.5%
313.0k
65.5%
37.1k
7.8%
Movida
Unidas
Others
Ouro Verde
Locamerica
New data basis
7.5%
29
1. Company overview
2. Main business divisions
� Car Rental
� Fleet Rental
� Seminovos
3. Financials
Appendix: Earnings release 2Q16
Agenda
30
# of points of sale
Car sales – operating data
5566 73 74 75
77 78
2010 2011 2012 2013 2014 2015 1H16
47,285 50,77256,664
62,64170,621
64,305
30,187
2010 2011 2012 2013 2014 2015 1H16
# Number of cars sold (quantity)
Efficiency gain on car sales.
31
Used car sales drivers: affordability and penetration
Affordability to buy cars – Public Price of the most
basic Gol
300 350 380
415
465 510
545 622
678 724
788 84
71 69
61
55 51 49
43 43 43 41
-
10
20
30
40
50
60
70
80
90
-100
-
100
200
300
400
500
600
700
800
900
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Minimum wage (R$) Minimum wages to buy a new car
7.97.7
7.36.9
6.5
6.05.7
5.35.0 4.9 4.8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
# of inhabitants per car – Brazil 2005 - 2015
Source: Sindipeças - Current Fleet Report 2016, as of April 2016.
Developed countries maintain a ratio between 1 - 2
cars per inhabitant.
Source: BCB and Localiza
Reference: to calculate the minimum wages to buy a new car we used the public price of the Vehicle type Gol.
8.4 8.9 9.0 9.410.1 9.9
3.3 3.5 3.6 3.6 3.32.5
32
2.5x2.5x
2010 2011 2012 2013 2014 2015
2.6x
Brazilian car market: new x used car market and affordability
New cars
Used cars
Source: FENABRAVE (light and commercial cars)
2.6x 3.1x 4.0x
In million of cars
Total market of 12.4 million cars.
33
2015 Up to 2 years381,531
2015 Brand new2,476,9042015 Used cars
9,987,711
0.6% 2.6% 16.9%
Car sales – operating data
Source: Anfavea and Fenabrave
Unidas, Locamerrica and Movida websites
Examples • Retailers • Dealers • Rental operators • “Auto malls”
Points of sale • 48,000 (Fenauto) • 4,364 (Anfavea)• +78 (Unidas, Movida,
Locamerica)• 71 (Fenauto)
Main players
34
1. Company overview
2. Main business divisions
� Car Rental
� Fleet Rental
� Seminovos
3. Financials
Appendix: Earnings release 2Q16
Agenda
35
Highlights
Net Revenues - Car Rental Division (R$ million) Net Revenues - Fleet Rental Division (R$ million)
296.4 327.8
2Q15 2Q16
149.9 159.5
2Q15 2Q16
223.0 234.3
2Q15 2Q16
93.4 98.0
2Q15 2Q16
Consolidated EBITDA (R$ million) Consolidated Net Income (R$ million)
Utilization rate evolution – Car RentalRental days evolution (thousand)– Car Rental
66.3%
69.0%70.7% 71.1%
73.4% 73.7%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
3,812 3,780 3,871
4,111 4,242 4,308
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
36
Number of Daily Rentals (thousands)
The Company continued to perform strong volume grow th in 2Q16 in an adverse macro and highly competitive environment.
802.2 980.7 1,093.7 1,163.5 1,284.4 1,258.0
606.4 667.5
296.4 327.8
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
10,734 12,794 13,749 14,242 15,416 15,566
7,584 8,550
3,780 4,308
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
Net Revenues (R$ million)Car Rental
Average daily rental evolution and utilization rateCar Rental Division
37
In 2Q16, the average daily rental rate was adjusted to the post summer vacation mix. Demand stimulation resulted in higher utilization rate
Average daily rental – In R$ Utilization rate
66.3%
69.0%
70.7% 71.1%
73.4% 73.7%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
85.2681.85
85.93 85.11 83.6179.41
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
-3.0%
38
Car Rental network evolution
Number of car rental locations (Brazil and abroad)
8 new corporate locations were added to the network
Localiza´s branches - Brazil Franchisees´ branches - Brazil Fr anchisees´ branches - abroad
234 247 272 286 304 320 328
181 202 202 193 172 174 16661 47 50 63 64 70 71476 496 524 542 540 564 565
2010 2011 2012 2013 2014 2015 1H16
+8
39
Fleet Rental Division
6.4% increase in net revenues due to higher average renta l rate
361.1 455.0
535.7 575.9 571.9 608.5
298.8 317.9
149.9 159.5
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
8,044 9,603 10,601 10,844 10,363 10,901
5,484 5,507
2,739 2,761
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
Net Revenues (R$ million)
Number of Daily Rentals (thousands)
Purchases (includes accessories) Used c ar sales net revenues
Cars purchased Cars sold
40
Net investmentFleet Expansion* (quantity)
Net Investment in Fleet (R$ million)
9,178 2,011 7,10318,649
* It does not include theft / crashed cars.
9,183
465.0
(273)
65,934 59,950 58,655
69,744 79,804
64,032
26,851 31,009 16,211
24,020
47,285 50,772 56,644 62,641
70,621 64,305
33,520 30,187
16,071 13,839
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
(6,669) 822
14010,181
1,910.4 1,776.5 1,618.8 2,026.2
2,483.2 2,278.4
901.3 1,133.9
552.3 878.7
1,321.9 1,468.1 1,520.0
1,747.3 2,018.2 2,044.9
1,043.2 1,016.4
499.2 471.7
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
In 2Q16, 24,020 new cars were bought and 13,839 cars wer e sold, resulting in anincrease of 10,181 cars and net investment of R$407.0 mil lion
308.4 98.8588.5 278.9
233.5
(141.9) 117.5
53.1407.0
31.22 31.1031.98
33.23 33.3434.14
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
+ 9.8%
Average price of cars sold and purchasedConsolidated
Average price of cars sold - In R$ thousand
41
Average price of cars purchased - In R$ thousand
32.7634.03
34.67
38.63
36.40 36.55
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
+ 7.4%
Change in the fleet compositionChange in the fleet composition
Period-end fleetQuantity
61,445 64,688 65,086 70,717 77,573 76,755 71,525 78,352
26,615 31,629 32,104 32,809 34,312 33,948 33,217 32,726 10.652 12,958 14,545 14,233 13,339 13,992 12,934 13,695 98,712 109,275 111,735 117,759 125,224 124,695 117,676 124,773
2010 2011 2012 2013 2014 2015 1H15 1H16
Car Rental Fleet Rental Franchising
+7,097
1,175.3 1,450.0 1,646.7 1,758.9 1,874.0 1,883.1 913.3 993.7 450.3 491.4
1,321.9 1,468.1 1,520.0 1,747.3 2,018.2 2,044.9
1,043.2 1,016.4
499.2 471.7
2,497.2 2,918.1 3,166.7
3,506.2 3,892.2 3,928.0
1,956.5 2,010.1
949.5 963.1
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
42
Consolidated net revenuesR$ million
Rental Used car sales
Rental revenues grew 9.1% in 2Q16
Car sales
Car sales were impacted by the reduction of decommi ssioning cars for fleet renewal due to the car rental growth and delays in new cars deliveries
17,449 16,071 15,738
15,047
16,348
13,839
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
Number of cars sold
43
5,296
7,428 8,534
7,253
5,355
3,662
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
Cars in Seminovos stores (Average)
44
Consolidated EBITDA R$ million
(*)From 2012 onwards, accessories and freight of ne w cars have been accounted directly in the cost lin e, impacting EBITDA but reducing depreciation costs.(**) It considers the new appropriation criteria of the overhead, which is also appropriated to Semino vos.
Divisions 2010* 2011* 2012 2013 2014** 2015 1H15 1H16 2Q15 2Q 16
Car Rental 45.3% 46.9% 40.9% 36.8% 38.7% 31.8% 32.4% 33.1% 30.3% 31.6%
Fleet Rental 68.0% 68.6% 66.4% 65.5% 60.0% 62.2% 61.1% 64.8% 62.8% 65.0%
Rental Consolidated 52.3% 53.8% 49.3% 46.5% 45.3% 41.7% 41. 9% 43.3% 41.3% 42.6%
Used Car Sales 2.6% 2.8% 4.2% 5.7% 6.0% 7.3% 8.2% 6.1% 7.5% 5. 3%
EBITDA grew R$11.3 million in the 2Q16 x 2Q15
649.5821.3 875.6 916.5 969.8 934.8
467.8 492.7223.0 234.3
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
+ R$24.9 million
+ R$11.3 million
45
Average depreciation per car (in R$)
Car Rental
Depreciation in 2Q16 reflects new car prices that a re rising below inflation.
1,536 1,684 1,896 1,452
1,270
622 917
2010 2011 2012 2013 2014 2015 1H16
2,076
IPI Effect
3,972
*
* Annualized
3,510 4,133
4,311
4,592 4,202 3,935 3,981
2010 2011 2012 2013 2014 2015 1H16
1,097
Efeito IPI
5,408
*
* Annualized
Fleet Rental
46
*2012 EBIT was impacted by R$144.5 million due to the additio nal depreciation related to the reduction in IPI (sales tax) .
Consolidated EBIT R$ million
Divisions 2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
Car Rental 38.5% 38.8% 23.7% 32.8% 36.2% 34.3% 36.5% 32.5% 34.3% 29.3%
Fleet Rental 46.2% 45.6% 36.9% 45.1% 44.3% 48.9% 47.1% 50.6% 50.7% 50.7%
Consolidated 41.0% 41.1% 28.3% 37.1% 38.8% 39.1% 40.0% 38.4% 39.8% 36.4%
The EBITDA increase was offset by higher depreciati on, resulting in stable EBIT in 2Q16
482.1595.7
465.8
652.1726.7 735.5
365.5 381.5
179.4 179.0
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
610.3*
47
* Pro forma 2012 net income excluding additional depreciation related to the IPI tax reduction, net of income tax.
Consolidated net incomeR$ million
4.9% increase in 2Q16 net income
250.5291.6
240.9
384.3 410.6 402.4
193.6 201.093.4 98.0
2010 2011 2012 2013 2014 2015 1H15 1H16 2Q15 2Q16
336.3*
Reconciliation EBITDA x Net income 2010 2011 2012 2013 2014 2015 1H15 1H16 Var. R$ Var. % 2Q15 2Q16 Var. R$Var. %
Consolidated EBITDA 649.5 821.3 875.6 916.5 969.8 934.8 467.8 492.7 24.9 5.3% 223.0 234.3 11.3 5.1%
Cars depreciation (146.3) (201.5) (232.4) (229.0) (207.4) (163.6) (84.6) (92.1) (7.5) 8.9% (34.7) (45.8) (11.1) 32.0%
Cars additional depreciation – IPI effect - - (144.5) - - - - - - - - - - -
Other property depreciation and amortization (21.1) (24.1) (32.9) (35.4) (35.7) (35.7) (17.7) (19.1) (1.4) 7.9% (8.9) (9.5) (0.6) 6.7%
Financial expenses, net (130.1) (179.0) (138.7) (110.6) (151.1) (202.7) (99.4) (117.2) (17.8) 17.9% (51.5) (49.5) 2.0 -3.9%
Income tax and social contribution (101.5) (125.1) (135.3) (157.2) (165.0) (130.4) (72.5) (63.3) 9.2 -12.7% (34.5) (31.5) 3.0 -8.7%
Income tax and social contribution – IPI effect - - 49.1 - - - - - - - - - - -
Net income of the period 250.5 291.6 240.9 384.3 410.6 402.4 193.6 201.0 7.4 3.8% 93.4 98.0 4.6 4.9%
48
Free cash flow - FCFFree cash flow - R$ million 2010 2011 2012 2013 2014 2015 1H16
w
Ope
ratio
nsEBITDA 649.5 821.3 875.6 916.5 969.8 934.8 492.7
Used car sale revenue, net from taxes (1,321.9) (1,468.1) (1,520.0) (1,747.3) (2,018.2) (2,044.9) (1,016.4)
Depreciated cost of cars sold (*) 1,203.2 1,328.6 1,360.2 1,543.8 1,777.0 1,769.1 901.4
(-) Income tax and social contribution (57.8) (83.0) (100.9) (108.5) (113.1) (110.7) (55.9)
Change in working capital 54.5 (83.9) 37.1 2.9 (27.1) (30.0) (31.7)
Cash generated by rental operations 527.5 514.9 652.0 607.4 588.4 518.3 290.1
Cap
ex -
Ren
ewal
s
Used car sale revenue, net from taxes 1,321.9 1,468.1 1,520.0 1,747.3 2,018.2 2,036.3 1,016.4
Fleet renewal investment (1,370.1) (1,504.5) (1,563.3) (1,819.7) (2,197.7) (2,278.4) (1,103.8)
Net investment for fleet renewal (48.2) (36.4) (43.3) (72.4) (179.5) (242.1) (87.4)
Fleet renewal – quantity 47,285 50,772 56,644 62,641 70,621 64,032 30,187
Investment, other property and intangibles investm ents (50.6) (59.9) (77.8) (47.5) (46.3) (29.7) (19.9)
Free cash flow from operations, net of fleet renewa l capex 428.7 418.6 530.9 487.5 362.6 246.5 182.8
Cap
ex -
Gro
wth Fleet growth (investment) (540.3) (272.0) (55.5) (209.4) (286.8) 8.6 (30.1)
Change in accounts payable to car suppliers 111.3 32.7 (116.9) 89.7 334.4 (121.2) 19.7
Fleet growth (429.0) (239.3) (172.4) (119.7) 47.6 (112.6) (10.4)
Fleet increase / (reduction) – quantity 18,649 9,178 2,011 7,103 9,183 (273) 822
Free cash flow after growth, and before interest an d new HQ (0.3) 179.3 358.5 367.8 410.2 133.9 172.4
Cap
ex –
HQ
Investment in the construction of the new HQ (0.5) (3.1) (2.4) (6.5) (55.7) (123.3) (21.4)
Marketable securities – new HQ - - - - (92.6) 92.6 -
New headquarters construction (0.5) (3.1) (2.4) (6.5) (148.3) (30.7) (21.4)
Free cash flow before interest (0.8) 176.2 356.1 361.3 261.9 103.2 151.0
Free cash flow
(*) without the technical discounts reduction up to 2010
49
Changes in net debt R$ million
The increase of R$35.8 million in net debt was main ly due higher dividends distribution
182.8
(117.2)
(30.1)
19.7
(21.4)
(69.6)
(1,624.4)
Net Debt06/30/2016
(1,588.6)
Net Debt12/31/2015
Free cash flow before growth, interest and
headquarters
Interest
Fleet increase
Increase in accounts
payable to cars
suppliers
New headquarters construction Dividends
+65.6 (10.4) (91.0)
50
Debt maturity profile (principal)R$ million
The Company is still presenting strong cash positio n and adequate debt profile for the current macro and growth landscape
As of June 30, 2016
202.6 487.7
264.6 619.5
770.0 672.5
2016 2017 2018 2019 2020 2021Cash
1,467.1
2016
954.9
51
Debt - ratiosNet debt vs. Fleet value
BALANCE AT THE END OF PERIOD 2010(*) 2011 2012 2013 2014 2015 1H16
Net debt / Fleet value 52% 51% 48% 48% 40% 44% 43%
Net debt / EBITDA(**) 2.0x 1.7x 1.4x 1.5x 1.4x 1.7x 1.6x
Net debt / Equity 1.4x 1.2x 0.9x 1.0x 0.8x 0.8x 0.8x
EBITDA / Net financial expenses 5.0x 4.6x 6.3x 8.3x 6.4x 4.6x 4.2x
(*) 2010 ratios based on USGAAP financial statemen ts(**) Annualized
Net debt Fleet value
Comfortable debt ratios
1,281.1 1,363.4 1,231.2 1,332.8 1,322.3 1,588.6 1,624.4
2,446.7 2,681.7 2,547.6 2,797.9 3,296.3
3,642.7 3,784.1
2010 2011 2012 2013 2014 2015 1H16
52
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 Americ as
�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
53
Disclaimer
Website: www.localiza.com/ir E-mail: [email protected] m Phone: 55 31 3247-7024
Roberto MendesCFO and IR
Nora LanariHead of IR
Eugênio MattarCEO
The material presented is a presentation of general backgro und information about LOCALIZA as of the date of the presenta tion. It is information in summaryform and does not purport to be complete. It is not intended to be relied upon as advice to potential investors. No represen tation or warranty, express orimplied, is made concerning, and no reliance should be place d on, the accuracy, fairness, or completeness of the informa tion presented herein.
This presentation contains statements that are forward-lo oking within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of theSecurities Exchange Act of 1934. Such forward-looking stat ements are only projections and are not guarantees of future performance. Investors are cautionedthat any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and fac tors relating to the operations andbusiness environments of LOCALIZA and its subsidiaries tha t may cause the actual results of the companies to be material ly different from any future resultsexpressed or implied in such forward-looking statements.
Although LOCALIZA believes that the expectations and assum ptions reflected in the forward-looking statements are rea sonable based on informationcurrently available to LOCALIZA’s management, LOCALIZA ca nnot guarantee future results or events. LOCALIZA expressl y disclaims a duty to update any ofthe forward-looking statement.
Securities may not be offered or sold in the United States unl ess they are registered or exempt from registration under th e 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 anythingcontained herein shall form the basis of any contract or commitment whatsoever.
Maria Carolina CostaIR Manager
Mariana CampolinaIR Manager