localiza institucional inglês

Institutional PresentationFebruary, 2017

1. Company overview

2. Main business divisions

Car Rental

Fleet Rental

Seminovos

3. Financials

Appendix: Earnings release 4Q16

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

12/31/2016 – Market cap of about US$2.2 bi with ADTV of US$11.3 million

1973 1982 1983 2004 2005 2016

3

Company: integrated business platform

Synergies:bargaining powercost reductioncross selling

14,015 cars 158 locations in Brazil 70 locations in South America 33 employees

49.8% sold to final consumer 84 stores 53 cities 1.029 employees

94,156 cars 6.4 million clients 333 locations 4,865 employees

34,948 cars 925 clients 397 employees

Based on the 4Q16 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$31.61 year cycle

Car Rental Division - 2016 Financial CyclePer car

R$35.2Average 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 20.3 100.0% 34.6 100.0% 55.0Costs - fixed and variable (10.1) -49.5% (10.1)SG&A (3.7) -18.1% (3.1) -8.9% (6.8)Net revenues of car sold 31.6 91.1% 31.6Book value of car sold (30.0) -86.6% (30.0)EBITDA 6.6 32.3% 1.6 4.6% 8.2Cars Depreciation (1.3) -3.6% (1.3)Others depreciation (0.3) -1.7% (0.1) -0.4% (0.5)Financial expenses (2.5) -7.2% (2.5)Taxes (1.9) -9.2% 0.7 2.0% (1.2)Net Income (Loss) 4.4 21.5% (1.6) -4.6% 2.8

NOPAT 5.0ROIC 14.2%Cost of debt after taxes 10.2%

Car Rental SeminovosPer car soldPer operating car

7

Net car salerevenue R$29.2

3 year cycle

Fleet Rental Division - 2016 Financial Cycle Per car

1 2 3 4 5 6 31 32 33 34 35 36Expenses, interest and tax

Revenue

R$42.9Average car price(past 2 years)

Total3 years

R$ % Seminovos % R$Net revenues 61.3 100.0% 32.0 100.0% 93.3Costs - fixed and variable (18.2) -29.7% (18.2)SG&A (3.6) -5.8% (2.9) -8.9% (6.4)Net revenues of car sold 29.2 91.1% 29.2Book value of car sold (25.7) -80.4% (25.7)EBITDA 39.5 64.5% 3.4 10.7% 42.9Cars Depreciation (11.1) -34.8% (11.1)Others depreciation (0.3) -0.4% (0.2) -0.5% (0.4)Financial expenses (6.5) -20.2% (6.5)Taxes (11.8) -19.2% 4.3 13.5% (7.5)Net Income (Loss) 27.5 44.8% (10.1) -31.4% 17.4

Net Income (Loss) - per year 9.2 44.8% (3.4) -31.4% 5.8

NOPAT 8.1ROIC 18.9%Cost of debt after taxes 10.2%

Per operating carFleet Rental Seminovos

Per car sold

8

2016 Consolidated breakdownR$ million

R$ 128 13%

R$ 420 41% R$ 468

46% R$ 334 43%

R$ 437 57%

Net RevenuesR$4,439

EBITDAR$1,016

R$ 2,343 53%

R$ 652 15% R$ 1,445

32%

EBIT*R$771

*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

43 years of experience in managing assets and generating value.

Competitive advantages: raising money

Global Scale

National Scale

As of February, 2017.

BB+ FitchBa2 Moody’sBB+ S&P

Baa1 Moody´s B+ S&P Ba3 Moody´sBB- S&P

brAA+ S&P Aa1.br Moody’sAAA(bra) Fitch

brAA- S&PAA- (bra) Fitch

A- (bra) FitchbrA+ S&P

AA- (bra) FitchbrA S&P A(bra) Fitch

10

Investment grade: lower spreads and longer tenors

Source: Bloomberg .

Raisingmoney Buying

cars


$

Localiza raises money with better conditions then its competitors.

Raisingmoney Buying

cars


11

Competitive advantages: buying cars

Number of cars purchased - 2016

* Includes Franchising.Source: each company website and ANFAVEA

Localiza’s share in the internal salesof the OEMs - 2016

4.7%

$

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

92,671

45,114 26,709

9,122

Localiza Movida Unidas Locamerica

*

Raisingmoney Buying

cars


12

Competitive advantages: renting cars

BrandBrazilian distribution

# of

bra

nche

s#

of c

ities

Source: Each company website on 01/23/2017, 4Q16 Earnings Release..

$

The Company is present in 180 cities where the other largest networks do not operate.

502

92

227

183

Localiza Competitors

491

360

153

63 96

Localiza Unidas Hertz Movida

Raisingmoney Buying

cars


13

Localiza Fast®Mobile‐based counter bypass:Provides agility and controlover the car rental experience.Customers can pick‐up carbypassing our counter

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 fraudTaylor‐made solution for fraud prevention in car rentals

Competitive advantages: Innovation

$

Constant innovations allow maintenance of the premium service.

14

Integrated technology solution that increases competitive intelligence and leverages productivity gains.

CONNECTED FLEETIntegrated mobile solution tofleet 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


$

Differentiated offer with higher added value to the customer.

Raisingmoney Buying

cars


15

Sales to final consumer

Competitive advantages: selling cars

Buffer: additional fleet during peaks of demand Large database

$

Deep know how of used car market: consumer preference, pricing and residual value

NPS of 70 (survey made 90 days after the purchase)

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 2016

16

ROIC versus cost of debt after taxes

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% and effective income tax rate from 2015 on

Spread of 5.2p.p. in line with the Company's short-term strategyand expectation of a sharp drop in interest in 2017

17

1. Company overview


Car Rental

Fleet Rental

Seminovos

3. Financials


Agenda

18

Car Rental overview

Compact cars 55.9%

Others 44.1%

2016 Fleet composition94,156 cars

Corporate fleet size

65,08670,717 77,573 76,755

94,156

2012 2013 2014 2015 2016

Car rental distribution (Brazil)

474 479 476 494 491

2012 2013 2014 2015 2016

19

Drivers

Source: BCB and Localiza rates

Car rental affordability

Source: IPEADATA , Localiza’s loyalty program and SPC Brasil research * jun/2013

6.4 million

84 millionAdult population(age > 20 years)

Class A+B+C

65 millionCredit Card

Owners

Increasing affordability and low penetration in leisure trips brings growth opportunities.

180 200 240 260300350 380 415

465 510 545622

678 724788

880

38% 37%35% 31%

27%22% 20% 18% 16% 15% 15% 13% 13% 12%

11% 9%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

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

* The research indicated that 77% of the population owns at least one credit card. The population was 80% class A,B and C members and 20% class D and E members.

20

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 2016 and IATA-Air Passenger Forecast Global Report, as of February, 2016.

The pipeline of investments tend to benefit the corporate segment.

Expected annual traffic growth of 2.5% from 2017 to 2034 traffic.

70 82 89 90 96 96 89

2010 2011 2012 2013 2014 2015 2016

214.1

142.6

87.1

35.8

32.9

32.5

17.0

15.5

5.8

Energy

Telecoms

Highways

Sanitation

Railways

Urban mobility

Airports

Ports

Solid Residues

21Source: ABLA, each company’s website on 01/23/2017 and Localiza´s 4Q16 Earnings Release

Airport locations Off-airport locations

Car Rental Locations in Brazil

Off‐airport market is still fragmented.

22

Market ShareGross Revenue - Car Rental 2016

Source: ABLA and Companies’ Financial Statements.

Localiza’s market share is higher than the 2nd and 3rd players together.

33.7%

13.5%7.6%

45.2%

Localiza(includes franchising)

Movida

Unidas

Others

Market size:R$5.1 billion

23

1. Company overview


Car Rental

Fleet Rental

Seminovos

3. Financials


Agenda

24

Number of clients

Fleet Rental overview

Compact cars 33.8%

Others 66.2%

2016 Fleet composition34,960 cars

729 760 798 849 925

2012 2013 2014 2015 2016

End of period fleet

32,104 32,809 34,312 33,948 34,960

2012 2013 2014 2015 2016

25Source: ABLA, Datamonitor and Localiza

Rented fleet penetration

Corporate fleet:4,000,000*

Rented fleet:440,737

34,960

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 ShareGross Revenue - Fleet Rental 2016

26Source: ABLA, Companies’ Financial Statements.

Fragmented market with low entry barriers.

12.2%

3.8%

6.5%

8.1%

69.3%

Localiza

Movida

UnidasOthers

Locamerica

Market size:R$5.4 billion

27

1. Company overview


Car Rental

Fleet Rental

Seminovos

3. Financials


Agenda

28

# of points of sale

Car sales – operating data

5566 73 74 75 77 84

2010 2011 2012 2013 2014 2015 2016

47,285 50,77256,664

62,64170,621

64,305 68,449

2010 2011 2012 2013 2014 2015 2016

# Number of cars sold (quantity)

Efficiency gain on car sales.

29

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

880 84

71 69 61

55 51 49

43 43 43 41 41

‐

10

20

30

40

50

60

70

80

90

‐100

‐

100

200

300

400

500

600

700

800

900

200520062007200820092010201120122013201420152016

Minimum wage (R$) Minimum wages to buy a new car

7.97.7

7.36.9

6.56.0

5.75.3

5.0 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 9.4 10.1 9.9 10.0

3.3 3.5 3.6 3.6 3.3 2.52.0

2010 2011 2012 2013 2014 2015 2016

30

Brazilian car market: new x used car market and affordability

New cars

Used cars

Source: FENABRAVE (light and commercial cars)

In million of cars

Total market of 12.0 million cars.

2.5x 2.5x2.6x 2.6x 3.1x 4.0x 5.0x

31

2015 Up to 2 years419,085

2016 Brand new1,986,3622016 Used cars

10,008,769

0.7% 3.4% 15.3%

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) • +115 (Unidas, Movida, Locamerica) • 71 (Fenauto)

Main players

32

1. Company overview


Car Rental

Fleet Rental

Seminovos

3. Financials


Agenda

Message from the CEO – highlights Financial discipline and strong balance sheet

Cash position and debt profile to face the tough environmentHigh credit ratings

The only company in the sector to create value for shareholdersFocused on leadership, commercial and operational excellence and on active cost management

Long‐term global strategic alliance agreement with The Hertz CorporationExpand its market share in inbound/outbound reservationsUse the Localiza‐Hertz brand through a co‐brand agreementExchange knowhow, technology and expertise

Indisputable leadership in quality and serviceNet Promoter Score of over 80 in 2016

The most visited site in its category, with more than 7.6 million visitors in 2016195,000 downloads of its mobile appFacebook fan page with more than 515,000 followers and the highest engagement in the category

Protagonist on innovationLocaliza FAST na app that allows clients to open the car door without going through the counter

Brand25ª most valuable brand in Brazil , among other brands across different sectors

Highest standards of ethics and corporate governanceHonored as the best company in Transparency and Ethics at the Revista Exame 2016 ranking

Car rental division with the biggest and most diversified fleet that is renewed yearlyMore than 50 models of cars, from compact to premium brands such as Audi, BMW and Volvo

33Strong ambition towards growth and expanding its market leadership

3,812 3,780 3,871 4,111 4,242 4,308

4,846 5,266

1Q 2Q 3Q 4Q

76,755 94,156

33,948 34,960 13,992 14,015

124,695 143,131

2015 2016Car Rental Fleet Rental Franchising 34

4Q16 and 2016 Operational Highlights

15,047 16,348 13,839

17,379 20,883

4Q15 1Q16 2Q16 3Q16 4Q16

Cars sold– consolidated

Rental days evolution (thousand)– Car Rental Average revenues per operating car (R$ thousand)

Fleet at end of the year

20.1 20.3

2015 2016

2015 2016 2015 2016 2015 2016 2015 2016

Net Revenues - (R$ million) EBITDA - (R$ million)

Net Income (R$ million)

402.4 409.3

2015 2016

4Q16 and 2016 Financial Highlights

35

EBIT (R$ milhões)

338.7 402.2 155.6 170.5 499.2

733.3 993.5

1,306.0

4Q15 4Q16

Car Rental Fleet Rental Seminovos

228.0 270.9

4Q15 4Q16

175.0 202.0

4Q15 4Q16

36

Number of Daily Rentals (thousand)

28.1% increase in car rental volume and 19.0% growth in net revenue in 4Q16 versus 4Q15

10,734 12,794 13,749 14,242 15,416 15,566

18,662

4,111 5,266

2010 2011 2012 2013 2014 2015 2016 4Q15 4Q16

Car Rental

802.2 980.7 1,093.7 1,163.5 1,284.4 1,258.0

1,428.0

334.5 398.0

2010 2011 2012 2013 2014 2015 2016 4Q15 4Q16

Net Revenues (R$ million)

69.1% 68.9%70.8%

66.8%69.9% 69.3%

73.4%

2010 2011 2012 2013 2014 2015 2016

37

Utilization Rate Evolution – Car Rental

The increase in the utilization rate offset the drop in the average rate, keeping the average revenue per operating car stable

Car Rental

Average daily rental – In R$

19.5 19.120.4

19.7 20.9

20.1 20.3

2010 2011 2012 2013 2014 2015 2016

78.07 79.68 82.36 84.85 87.71 84.56

79.67

2010 2011 2012 2013 2014 2015 2016

Average annual revenues per operating car (R$ thousand)

Car Rental network evolution

Number of car rental locations (Brazil and abroad)

13 new corporate locations were added to the network

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

234 247 272 286 304 320 333

181 202 202 193 172 174 15861 47 50 63 64 70 70476 496 524 542 540 564 561

2010 2011 2012 2013 2014 2015 2016

+13

39

Fleet Rental

361.1 455.0

535.7 575.9 571.9 608.5 651.8

155.6 170.5

2010 2011 2012 2013 2014 2015 2016 4Q15 4Q16

8,044 9,603 10,601 10,844 10,363 10,901 11,240

2,702 2,922

2010 2011 2012 2013 2014 2015 2016 4Q15 4Q16

Net Revenues (R$ million)

Number of Daily Rentals (thousand)

8.1% growth in daily volume and 9.6% in net revenue in 4Q16 versus 4Q15

Purchases (includes accessories) Used car sales net revenues

Cars purchased Cars sold

40

Net investment Fleet Expansion* (quantity)

Net Investment in Fleet (R$ million)

9,178 2,011 7,10318,649

* It does not consider theft / crashed cars.

9,183

465

(273)

65,934 59,950 58,655 69,744 79,804

64,032

87,833

21,660 27,921

47,285 50,772 56,644 62,641 70,621 64,305 68,449

15,047 20,883

2010 2011 2012 2013 2014 2015 2016 4Q15 4Q16

1,910 1,777 1,6192,026

2,483 2,278

3,290

838 1,0781,322 1,468 1,520 1,7472,018 2,045

2,343

499733

2010 2011 2012 2013 2014 2015 2016 4Q15 4Q16

Strong growth in the fleet to support the Company's growth

309 99588 279 233

6,613

339

19,384

7,038

R$947

345

41

Number of points of sale

New stores will be added to the network to support the renewal of the fleet due to the strong growth of the Car Rental Division

5566 73 74 75 77 84

2010 2011 2012 2013 2014 2015 2016

+7

42

Period-end fleetQuantity

61,445 64,688 65,086 70,717 77,573 76,755 94,156 26,615 31,629 32,104 32,809 34,312 33,948

34,960 10,652 12,958 14,545 14,233 13,339 13,992

14,015 98,712 109,275 111,735 117,759 125,224 124,695

143,131

2010 2011 2012 2013 2014 2015 2016

Car Rental Fleet Rental Franchising

The car rental fleet increased 17,401 cars to meet strong demand, maintaining the utilization rate at a record level of 73.4%

+17,401

+1,012

1,175.3 1,450.0 1,646.7 1,758.9 1,874.0 1,883.1 2,096.8 494.3 572.7

1,321.9 1,468.1 1,520.0 1,747.3 2,018.2 2,044.9 2,342.5

499.2 733.3

2,497.2 2,918.1 3,166.7 3,506.2

3,892.2 3,928.0 4,439.3

993.5 1,306.0

2010 2011 2012 2013 2014 2015 2016 4Q15 4Q16

43

Consolidated net revenuesR$ million

Rental Used car sales

31.5% increase in consolidated revenue in 4Q16 versus 4Q15

The increase of 46.9% in 4Q16 in the revenue of the Seminovos is due to 5,836 cars sold more than in 4Q15, and to the increase of 5.9% in the car prices

44

Consolidated EBITDA R$ million

(*)From 2012 onwards, accessories and freight of new cars have been accounted directly in the cost line, impacting EBITDA but reducing depreciation costs.(**) It considers the new appropriation criteria of the overhead, which is also appropriated to Seminovos.

Divisions 2010* 2011* 2012 2013 2014** 2015 2016 4Q15 4Q16

Car Rental 45.3% 46.9% 40.9% 36.8% 38.7% 31.8% 32.3% 30.2% 31.5%

Fleet Rental 68.0% 68.6% 66.4% 65.5% 60.0% 62.2% 64.5% 64.0% 63.8%

Rental Consolidated 52.3% 53.8% 49.3% 46.5% 45.3% 41.7% 42.3% 40.8% 40.8%

Used Car Sales 2.6% 2.8% 4.2% 5.7% 6.0% 7.3% 5.5% 5.2% 5.0%

Increase of R$42.9 million in EBITDA in 4Q16

649.5821.3 875.6 916.5 969.8 934.8 1,015.6

228.0 270.9

2010 2011 2012 2013 2014 2015 2016 4Q15 4Q16

+ R$42.9

45

Average depreciation per car (in R$)

Car Rental

1,536.0 1,683.91,895.8 1,452.4 1,270.0

622.1

1,251.2

2010 2011 2012 2013 2014 2015 2016

2,076.6IPI Effect

3,972.4

Average Price of cars purchasedIn R$ Thousand

29.41 33.87 36.57 4.46 2.70

Price 2014 Increase Price 2015 Increase Price 2016

2015 2016

The increase in the average depreciation per car of the RAC is a reflection of the slowdown of the increase of the new cars price that reflects in the seminovos cars

46

Average depreciation per car (in R$)

The drop in depreciation is due to a longer cycleThe depreciation of the cars in this division benefits from the price increase of

new cars that occurs over the life of the car

3,509.74,133.0

4,311.3

4,592.34,202.1 3,935.2 3,714.0

2010 2011 2012 2013 2014 2015 2016

1,096.9IPI Effect

5,408.2

Fleet Rental

47

Consolidated EBIT R$ million

Divisions 2010 2011 2012 2013 2014 2015 2016 4Q15 4Q16

Car Rental 38.5% 38.8% 23.7% 32.8% 36.2% 34.3% 30.2% 28.7% 28.4%

Fleet Rental 46.2% 45.6% 36.9% 45.1% 44.3% 48.9% 51.2% 49.9% 52.4%

Consolidated 41.0% 41.1% 28.3% 37.1% 38.8% 39.1% 36.8% 35.4% 35.3%

Even with increased car depreciation of the Car Rental Division, EBIT Margin remained stable in 4Q16

482.1 595.7

465.8

652.1 726.7 735.5 771.1

175.0 202.0

2010 2011 2012 2013 2014 2015 2016 4Q15 4Q16

144.5IPI Effect

610.3+ R$27.0

48

Consolidated net incomeR$ million

Increase of 1.7% in 2016 profit even with the increase of interest and depreciation

250.5 291.6

240.9

384.3 410.6 402.4 409.3

105.9 104.4

2010 2011 2012 2013 2014 2015 2016 4Q15 4Q16

336.395.4

IPI Effect

Reconciliation EBITDA x Net income 2010 2011 2012 2013 2014 2015 2016 Var. R$ Var. % 4Q15 4Q16 Var. R$ Var. %

Consolidated EBITDA 649.5 821.3 875.6 916.5 969.8 934.8 1,015.6 80.8 8.6% 228.0 270.9 42.9 18.8%

Cars depreciation (146.3) (201.5) (232.4) (229.0) (207.4) (163.6) (206.3) (42.7) 26.1% (44.0) (59.5) (15.5) 35.2%

Cars additional depreciation – IPI effect - - (144.5) - - - - - - - - - -

Other property depreciation and amortization (21.1) (24.1) (32.9) (35.4) (35.7) (35.7) (38.2) (2.5) 7.0% (9.0) (9.4) (0.4) 4.4%

EBIT 482.1 595.7 465.8 652.1 726.7 735.5 771.1 35.6 4.8% 175.0 202.0 27.0 15.4%

Financial expenses, net (130.1) (179.0) (138.7) (110.6) (151.1) (202.7) (243.5) (40.8) 20.1% (43.5) (72.7) (29.2) 67.1%

Income tax and social contribution (101.5) (125.1) (135.3) (157.2) (165.0) (130.4) (118.3) 12.1 -9.3% (25.6) (24.9) 0.7 -2.7%

Income tax and social contribution – IPI effect - - 49.1 - - - - - - - - - -

Net income of the period 250.5 291.6 240.9 384.3 410.6 402.4 409.3 6.9 1.7% 105.9 104.4 (1.5) -1.4%

49

Free cash flow - FCFFree cash flow

Free cash flow - R$ million 2010 2011 2012 2013 2014 2015 2016w

Ope

ratio

ns

EBITDA 649.5 821.3 875.6 916.5 969.8 934.8 1,015.6

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) (2,342.5)

Depreciated cost of cars sold 1,203.2 1,328.6 1,360.2 1,543.8 1,777.0 1,769.1 2,102.5

(-) Income tax and social contribution (57.8) (83.0) (100.9) (108.5) (113.1) (110.7) (93.3)

Change in working capital 54.5 (83.9) 37.1 2.9 (27.1) (30.0) 113.2

Cash generated by rental operations 527.5 514.9 652.0 607.4 588.4 518.3 795.5

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 2,342.5

Fleet renewal investment (1,370.1) (1,504.5) (1,563.3) (1,819.7) (2,197.7) (2,278.4) (2,563.6)

Net investment for fleet renewal (48.2) (36.4) (43.3) (72.4) (179.5) (242.1) (221.1)

Fleet renewal – quantity 47,285 50,772 56,644 62,641 70,621 64,032 68,449

Investment, other property and intangibles (50.6) (59.9) (77.8) (47.5) (46.3) (29.7) (42.2)

Free cash flow from operations, net of fleet renewal capex 428.7 418.6 530.9 487.5 362.6 246.5 532.2

Cap

ex -

Gro

wth Fleet growth (investment) (540.3) (272.0) (55.5) (209.4) (286.8) 8.6 (726.0)

Change in accounts payable to car suppliers 111.3 32.7 (116.9) 89.7 334.4 (121.2) 190.7

Net investment for fleet growth (429.0) (239.3) (172.4) (119.7) 47.6 (112.6) (535.3)

Fleet increase / (reduction) – quantity 18,649 9,178 2,011 7,103 9,183 (273) 19,384

Free cash flow after growth, and before interest and new HQ (0.3) 179.3 358.5 367.8 410.2 133.9 (3.1)

New headquarters construction (0.5) (3.1) (2.4) (6.5) (148.3) (30.7) (84.4)

Free cash flow before interest (0.8) 176.2 356.1 361.3 261.9 103.2 (87.5)

50

Changes in net debt R$ million

R$288.7 million of cash generation after interest was invested to increase the fleet

532.2

(243.5)

(726.0)

190.7

(84.4)(139.4)

(25.0)(2,084.0)

Net Debt12/31/2016

(1,588.6)

Net Debt12/31/2015

Free cash flow after fleet renewal and

before headquarters

Interest

Fleet Increase of 19,384 cars

Increase in accounts payable to

cars suppliers

New headquarters construction

Dividends

+288.7 (535.3) (248.8)

Treasury Shares

51

Debt maturity profile (principal)R$ million

Strong cash position and comfortable debt profile to take advantage of growth opportunities

As of December 31, 2016

‐

558.4 335.7

620.8 770.0 672.5 750.0

2016 2017 2018 2019 2020 2021 2022

Cash1,692.3

2016

1,514.9

52

Debt - ratiosNet debt vs. Fleet value

BALANCE AT THE END OF PERIOD 2010(*) 2011 2012 2013 2014 2015 2016Net debt / Fleet value 52% 51% 48% 48% 40% 44% 45%Net debt / EBITDA 2.0x 1.7x 1.4x 1.5x 1.4x 1.7x 2.1xNet debt / Equity 1.4x 1.2x 0.9x 1.0x 0.8x 0.8x 0.9xEBITDA / Net financial expenses 5.0x 4.6x 6.3x 8.3x 6.4x 4.6x 4.2x

(*) 2010 ratios based on USGAAP financial statements

Net debt Fleet value

Low leverage supports growth targets

1,281.1 1,363.4 1,231.2 1,332.8 1,322.3 1,588.6 2,084.0 2,446.7 2,681.7 2,547.6 2,797.9

3,296.3 3,642.7

4,623.6

2010 2011 2012 2013 2014 2015 2016

53

ROIC versus cost of debt after taxes

ROIC Cost of debt after taxes

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 2016

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% and effective income tax rate from 2015 on

Spread of 5.2p.p. in line with the Company's short-term strategyand expectation of a sharp drop in interest in 2017

54

Disclaimer

Website: www.localiza.com/ir E-mail: [email protected] Phone: 55 31 3247-7024

Roberto MendesCFO and IR

Nora LanariHead of IR

Eugênio MattarCEO

The material presented is a presentation of general background information about LOCALIZA as of the date of the presentation. 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 representation or warranty, express orimplied, 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 theSecurities Exchange Act of 1934. Such forward-looking statements 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 factors relating to the operations andbusiness environments of LOCALIZA and its subsidiaries that may cause the actual results of the companies to be materially different from any future resultsexpressed 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 informationcurrently available to LOCALIZA’s management, LOCALIZA cannot guarantee future results or events. LOCALIZA expressly disclaims a duty to update any ofthe 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 anythingcontained herein shall form the basis of any contract or commitment whatsoever.

Maria Carolina CostaIR Manager

Mariana CampolinaIR Manager

localiza institucional inglês

Economy & Finance