institucional presentation - march/16
TRANSCRIPT
1. Company overview
2. Main business divisions
� Car Rental
� Fleet Rental
� Seminovos
3. Financials
Appendix: Earnings release 4Q15
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
12/31/2015 – Market cap of about US$1.3 bi with ADTV of US$7,5 million
1973 1982 1983 2004 2005 2014
3
Company: integrated business platform
Synergies:
bargaining power
cost reduction
cross selling
� 13,992 cars� 174 locations in Brazil� 70 locations in South America� 35 employees
� 56.7% sold to final consumer� 77 stores� 47 cities� 1,000 employees
� 76,755 cars� 5.7 million clients� 320 locations� 4,766 employees
� 33,948 cars� 849 clients� 384 employees
Based on the 4Q15 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$31.6Average car price
1 2 3 4 5 6 7 8 9 10 11 12Expenses, interest and tax
Revenue
Total1 year
R$ % 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$39.0Average car price
Total3 years
R$ % 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 March, 2016.
BBB- FitchBa2 Moody’sBB+ S&P
Baa1 Moody ´sBBB+ S&P
B1 Moody ´sB+ S&P
Ba3 Moody ´sBB- S&PBB- Fitch
brAA+ S&P Aa2.br Moody’sAAA(bra) Fitch
brAA- S&PA+ (bra) Fitch
brA S&P A- (bra) Fitch
brAA- S&P AA- (bra) Fitch
A(bra) Fitch
10
Investment grade: lower spreads and longer tenors
Source: Bloomberg and companies website
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
37,44419,357 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.
Raisingmoney Buying
cars
Renting Cars SellingCars
442
15595 107
43
Localiza Unidas Hertz Movida Avis
12
Competitive advantages: renting cars
Brand Brazilian distribution
# of
bra
nche
s*#
of c
ities
**
Source: Each company website and Earnings Release*As of December, 2015 **As of November, 2015
497
100
196
15645
Localiza Competitors
494
$
The Company is present in 243 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.
“In a scale from 0 (zero) to 10, how much would you recommend Localiza to a friend orcolleague?”
Competitive advantages: Client satisfaction
80.7%
*Range of Net Promoter Scores (NPS) Across Industries in USA
*Source:Temkin Group Q3 2015 Consumer benchmark Survey
% of Promoters % de Detractors
Score between 9 and 10 = 85.6% Score between 0 and 6 = 4.6%
YTD December/2015
Satisfaction Index: NPS – Net Promoter Score
Localiza: 1st place in the category Car rental.
14
Raisingmoney Buying
cars
Renting Cars SellingCars
$
Low High
NPS Avg. NPS
As of December, 2015.
15
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
16
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.
17
ROIC versus cost of debt after taxes
7.3%8.6%
6.3% 6.0%8.0%
9.5%
15.8%
16.9% 17.1%16.1% 16.5%
17.5%17.0%
2010 2011 2012 2013 2014 2015
ROIC
Cost of debt
after taxes
9.6p.p. 8.5p.p. 9.5p.p.9.8p.p. 10.5p.p.
6.3p.p.
Calculated based on the tax effective rate of 2015
7.5p.p.
Considering the effective income tax and social con tribution rate in 2015, ROIC would have been 17.0% and the spread, 7.5p.p..
Localiza vs. playersProfitability
Source: Companies’ Financial Statements18
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%
9.4% 10.6%
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
19
Net Debt / EBITDA - 2015
Net Debt / Equity - 2015
Source: Companies’ Financial Statements.
Localiza vs. playersDebt ratios
0.8x 2.4x 2.8x
3.8x 4.3x
Localiza Unidas Locamerica Ouro Verde JSL
Consolidated
0.8x 1.1x 1.9x
9.7x
4.6x
Localiza Unidas Locamerica Ouro Verde JSL
Consolidated
20
1. Company overview
2. Main business divisions
� Car Rental
� Fleet Rental
� Seminovos
3. Financials
Appendix: Earnings release 4Q15
Agenda
21
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
2012 2013 2014 2015
Car rental distribution (Brazil)
474 479 476 494
2012 2013 2014 2015
22
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$) Daily rental price over minimum salary (%)
Car rental affordability
Source: IPEADATA and Localiza’s loyalty program.
6 million
84 millionAdult population(age > 20 years)
Class A+B+C
15 millionAdult population(age > 20 years)
Class A+B
Increasing affordability and low penetration in lei sure trips brings growth opportunities.
23
Drivers
# domestic air traffic passengersIn million
Infrastructure investment prospects 2015-2018(in US$ billion)
Source: BNDES June, 2015.
7082 89 90 96
122
2010 2011 2012 2013 2014 2017E
Source: ANAC 2017 estimates: BOEING
89.4
57.9
27.2
21.3
17.0
16.6
12.3
6.8
Energy
Telecoms
Highways
Urban Mobility
Ports
Sanitation
Railways
Airports
The strong pipeline of investments tend to benefit the corporate segment. Air traffic growth supporting demand at the airport s.
24Source: RAIS and each company’s website
As of September 2015.* As of December, 2015.
Airport locations Off-airport locations
Car Rental Locations in Brazil
*
*
Off-airport market is still fragmented.
Localiza
23.3%
Franchising
2.4%
Unidas
6.9%Movida
5.8%Avis
2.1%
Others
59.5%
Franchising
25
Market Share – Car Rental 2014
Fleet332,485 cars
Source: ABLA and Companies’ Financial Statements an d estimates.
25.7%
Localiza’s market share is higher than the 2nd and 3rd players together.
26
1. Company overview
2. Main business divisions
� Car Rental
� Fleet Rental
� Seminovos
3. Financials
Appendix: Earnings release 4Q15
Agenda
27
Number of clients
Fleet Rental overview
Compact cars 34.9%
Others 65.1%
2015 Fleet composition
33,948 cars
729 760 798 849
2012 2013 2014 2015
End of period fleet
32,104 32,809 34,312 33,948
2012 2013 2014 2015
28Source: 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.
Localiza Fleet
7.7%
Franchising
0.4%
Locamerica
6.9%
JSL
6.9%
Ouro Verde
5.7%Unidas
4.9%
ALD
3.6%
Others
63.9%
Market Share – Fleet Rental 2014
29
Fleet440,737 cars
Source: ABLA, Companies’ Financial Statements and e stimates
8.1%
Fragmented market with low entry barriers.
30
1. Company overview
2. Main business divisions
� Car Rental
� Fleet Rental
� Seminovos
3. Financials
Appendix: Earnings release 4Q15
Agenda
31
# of points of sale
Car sales – operating data
5566 73 74 75 77
2010 2011 2012 2013 2014 2015
47,285 50,77256,664
62,64170,621
64,305
2010 2011 2012 2013 2014 2015
# Number of cars sold (quantity)
Efficiency gain on car sales.
32Source: O Estado de São Paulo newspaper, as of 08/1 6/13 (based on researches of Sindipeças) and Globo w ebsite, as of 03/10/2014.
Used car sales drivers: affordability and penetration
# of inhabitants per car 2012 – (Brazil 2014)
4.2
4.0
4.0
3.6
2.1
2.0
1.9
1.8
1.2
Argentina
Brazil
Russia
South Korea
Japan
France
Germany
United Kingdon
USA
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$) Minimum wages to buy a new car
8.4 8.9 9.0 9.410.1 9.9
3.3 3.5 3.6 3.6 3.32.5
33
2.5x2.5x
2010 2011 2012 2013 2014 2015
2.6x
Brazilian car market: new x used car market and affordability
New cars
Used cars
Source: FENABRAVE (light and commercial cars)
2.6x 3.1x 4.0x
In million of cars
Total market of 12.4 million cars.
34
2014 Up to 2 years442,257
2015 Brand new2,476,9042015 Used cars
9,987,711
0.6% 2.6% 16.0%
Car sales – operating data
Source: Anfavea and Fenabrave
Unidas, Locamerrica and Movida websites
Examples • Retailers • Dealers • Rental operators • “Auto malls”
Points of sale • 48,000 (Fenauto) • 4,364 (Anfavea)• +71 (Unidas, Movida,
Locamerica and others).
• 71 (Fenauto)
Main players
35
1. Company overview
2. Main business divisions
� Car Rental
� Fleet Rental
� Seminovos
3. Financials
Appendix: Earnings release 4Q15
Agenda
331.2 334.5
4Q14 4Q15
36
Highlights
146.7 155.6
4Q14 4Q15
102.2 105.9
4Q14 4Q15
173.8 175.0
4Q14 4Q15
Net Revenues - Car Rental Division (R$ million) Net Revenues - Fleet Rental Division (R$ million)
Consolidated EBIT (R$ million) Consolidated Net Income (R$ million)
802.2980.7
1,093.7 1,163.5 1,284.4 1,258.0
331.2 334.5
2010 2011 2012 2013 2014 2015 4Q14 4Q15
37
Net Revenues (R$ million)
# Daily Rentals (thousands)
Car Rental
10,734 12,794 13,749 14,242 15,416 15,566
3,898 4,111
2010 2011 2012 2013 2014 2015 4Q14 4Q15
Volumes increased 5.5% in 4Q15, even in a weak eco nomic activity environment
Number of Rental DaysCar Rental
38
3,60 0.0
3,70 0.0
3,80 0.0
3,90 0.0
4,00 0.0
4,10 0.0
4,20 0.0
3,60 0.0
3,70 0.0
3,80 0.0
3,90 0.0
4,00 0.0
4,10 0.0
4,20 0.0
1st quarter 2nd quarter 3rd quarter 4th quarter
+1.0%-2.2% -0.2%
+5.5%
2015
2014
Number of rental daysCar Rental
The investments in business intelligence contribute d to capture demand in specific segments, offsetting reduced volumes in those segments
sensitive to the adverse macro environment
Average daily rental evolution – Car RentalIn R$
39
78.0779.68
82.3684.85
87.7185.26
81.85
85.93 85.11
2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 4Q15
Average: 84.56
The average rental day is the result of pricing pol icy per segment and the portion of each segment in the mix
69.1%
68.9%
70.8%
66.8%
69.9%
66.3%
69.0%
70.7% 71.1%
2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 4Q15
40
Utilization rate evolution – Car Rental
4Q15 utilization rate in Car Rental Division was 71.1%, the highest of the past 7 quarters
234 247 272 286 304 320
181 202 202 193 172 17461 47 50 63 64 70476 496 524 542 540 564
2010 2011 2012 2013 2014 2015
41
Car Rental network evolution
# of car rental locations (Brazil and abroad)
Localiza´s branches - Brazil Franchisees´ branches - Brazil Fr anchisses´ branches - abroad
+16
+6
+2
+24
24 new corporate locations were added to the networ k in 2015
361.1455.0
535.7 575.9 571.9 608.5
146.7 155.6
2010 2011 2012 2013 2014 2015 4Q14 4Q15
8,0449,603 10,601 10,844 10,363 10,901
2,644 2,702
2010 2011 2012 2013 2014 2015 4Q14 4Q15
42
Net Revenues (R$ million)
# Daily Rentals (thousands)
Fleet Rental
The growth reflects the policy and commercial intel ligence in exploring market opportunities
647.3676.3
724.3
808.3870.6 868.8 885.8 912.0
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
Contracted revenue evolution – Fleet Rental(R$ million)
43
The contracted revenue increased 12.8% in 4Q15 vers us 4Q14
1,910.4 1,776.5 1,618.82,026.2
2,483.22,278.4
877.4 837.7
1,321.9 1,468.1 1,520.01,747.3
2,018.2 2,044.9
553.0 499.2
2010 2011 2012 2013 2014 2015 4Q14 4Q15
Purchases (includes accessories) Used c ar sales net revenues
Cars purchased Cars sold
44
Net investmentFleet Expansion* (quantity)
Net Investment in Fleet (R$ million)
65,934 59,950 58,65569,744
79,804
64,032
27,06621,660
47,28550,772 56,644
62,64170,621
64,305
18,468 15,047
2010 2011 2012 2013 2014 2015 4Q14 4Q15
9,178 2,0117,103
18,649
308.4 98.8588.5 278.9
* It does not include theft / crashed cars.
9,183
465.0
(273)
8,5986,613
324.4 338.5
233.5
For peak of demand season, 21,660 cars were bought in 4Q15, 6,613 more than cars sold
45
End of period fleetQuantity
61,445 64,688 65,086 70,717 77,573 76,755
26,615 31,629 32,104 32,80934,312 33,94810,652
12,958 14,545 14,233 13,339 13,99298,712 109,275 111,735 117,759 125,224 124,695
2010 2011 2012 2013 2014 2015
Car Rental Fleet Rental Franch ising
2014 fleet was impacted by the anticipation of 7,60 0 cars purchase to avoid the increase in IPI tax that occurred in January, 2 015
1,175.3 1,450.0 1,646.7 1,758.9 1,874.0 1,883.1 482.2 494.3
1,321.9 1,468.1 1,520.0 1,747.3 2,018.2 2,044.9
553.0 499.2
2,497.2 2,918.1 3,166.7
3,506.2 3,892.2 3,928.0
1,035.2 993.5
2010 2011 2012 2013 2014 2015 4Q14 4Q15
46
Consolidated net revenuesR$ million
Rental Used car sales
Consolidated net revenues grew 0.9% in 2015 when c ompared with 2014
47
Consolidated EBITDA R$ million
649.5821.3 875.6 916.5 969.8 934.8
237.6 228.0
2010 2011 2012 2013 2014 2015 4Q14 4Q15
(*)From 2012 on, accessories and freight of new car s have been accounted directly in the cost line, im pacting EBITDA but reducing depreciation costs.
Divisions 2010* 2011* 2012 2013 2014 2015 4Q14 4Q15
Car Rental 45.3% 46.9% 40.9% 36.8% 38.7% 31.8% 37.1% 30.2%
Fleet Rental 68.0% 68.6% 66.4% 65.5% 60.0% 62.2% 55.5% 64.0%
Rental Consolidated 52.3% 53.8% 49.3% 46.5% 45.3% 41.7% 42. 6% 40.8%
Used Car Sales 2.6% 2.8% 4.2% 5.7% 6.0% 7.3% 5.8% 5.2%
The R$35.0 million drop in EBITDA was more than offeset by the reduction ofR$43.7 million in depreciation
48
Average depreciation per carin R$
Car Rental
492 939
333 1,169
2,577
1,536 1,684
1,896
1,452 1,270
622
24,345 25,837 25,648
27,740 26,572 27,174
27,942
25,769
27,785 29,412
33,874
15,0 00
17,0 00
19,0 00
21,0 00
23,0 00
25,0 00
27,0 00
29,0 00
31,0 00
33,0 00
35,0 00
-
1,00 0
2,00 0
3,00 0
4,00 0
5,00 0
6,00 0
7,00 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annualized average depreciation per car (R$) Average price of cars purchased - Car Rental
1,377
IPI Effect
2,546 2,076
IPI Effect
3,972
Stable car priceRising car price Rising car price
The reduction of depreciation expenses is a result of the increase in new cars prices that reflects the used cars prices
49
Average depreciation per carin R$
Fleet Rental
2,981 2,383 2,396
4,372
3,510 4,133
4,592 4,202 3,935
32,106 33,190 33,754 34,192
30,741
35,414 33,315
35,025 35,693
38,346
42,949
15,0 00
20,0 00
25,0 00
30,0 00
35,0 00
40,0 00
45,0 00
-
2,00 0
4,00 0
6,00 0
8,00 0
10,0 00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annualized average depreciation per car (R$) Average price of cars purchased - Fleet Rental
2,280
IPI Effect
5,0831,097
IPI Effect
5,408
Stable car priceRising car price Rising car price
2,803
4,311
The reduction of depreciation expenses is a result of the increase in new cars prices that reflects in the used cars prices
50
482.1 595.7
465.8
652.1 726.7 735.5
173.8 175.0
2010 2011 2012 2013 3T15 2015 4Q14 4Q15
*2012 EBIT was impacted by R$144.5 million of additional dep reciation related to IPI (sales tax) reduction.
Consolidated EBIT R$ million
Divisions 2010 2011 2012 2013 2014 2015 4Q14 4Q15
Car Rental 38.5% 38.8% 23.7% 32.8% 36.2% 34.3% 34.9% 28.7%
Fleet Rental 46.2% 45.6% 36.9% 45.1% 44.3% 48.9% 38.9% 49.9%
Consolidated 41.0% 41.1% 28.3% 37.1% 38.8% 39.1% 36.0% 35.4%
610.3 *
Even in a adverse scenario, EBIT grew R$8.7 million in 2015
250.5291.6
240.9
384.3 410.6 402.4
102.2 105.9
2010 2011 2012 2013 2014 2015 4Q14 4Q15
51
Consolidated net incomeR$ million
* Pro forma 2012 net income excluding additional depreciation related to the IPI tax reduction, net of income tax.
336.3 *
3.6% increase in net income when compared to 4Q14.
52
Free cash flow - FCFFree cash flow - R$ million 2010 2011 2012 2013 2014 2015
Ope
ratio
nsEBITDA 649.5 821.3 875.6 916.5 969.8 934.8
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)
Depreciated cost of cars sold (*) 1,203.2 1,328.6 1,360.2 1,543.8 1,777.0 1,769.1
(-) Income tax and social contribution (57.8) (83.0) (100.9) (108.5) (113.1) (110.7)
Change in working capital 54.5 (83.9) 37.1 2.9 (27.1) (30.0)
Cash generated by rental operations 527.5 514.9 652.0 607.4 588.4 518.3
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
Fleet renewal investment (1,370.1) (1,504.5) (1,563.3) (1,819.7) (2,197.7) (2,278.4)
Net investment for fleet renewal (48.2) (36.4) (43.3) (72.4) (179.5) (242.1)
Fleet renewal – quantity 47,285 50,772 56,644 62,641 70,621 64,032
Investment, other property and intangibles investm ents (50.6) (59.9) (77.8) (47.5) (46.3) (29.7)
Free cash flow before growth, new headquarters and interest 428.7 418.6 530.9 487.5 362.6 246.5
Cap
ex -
Gro
wth
Fleet growth (investment) (540.3) (272.0) (55.5) (209.4) (286.8) 8.6
Change in accounts payable to car suppliers 111.3 32.7 (116.9) 89.7 334.4 (121.2)
Fleet growth (429.0) (239.3) (172.4) (119.7) 47.6 (112.6)
Fleet increase / (reduction) – quantity 18,649 9,178 2,011 7,103 9,183 (273)
Free cash flow after growth, and before interest an d new HQ (0.3) 179.3 358.5 367.8 410.2 133.9
Cap
ex –
HQ
Investment in the construction of the new HQ (0.5) (3.1) (2.4) (6.5) (55.7) (123.3)
Marketable securities – new HQ - - - - (92.6) 92.6
New headquarters construction (0.5) (3.1) (2.4) (6.5) (148.3) (30.7)
Free cash flow before interest (0.8) 176.2 356.1 361.3 261.9 103.2
Free cash flow
(*) without the technical discounts reduction up to 2010
53
Free cash flow - FCF
Fleet Profile# Number of cars in the fleet
57.3%42.7%47.1%52.9%
Compact
Cars
Other
models Compact
Cars Other
models
20152014
Cash Flow variation
Accounts payable to automakersR$ thousands
378.1 276.0
478.0 499.9
712.5
446.2 444.3 454.9
591.3
4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
The share of compact cars was reduced by 10.2p.p. i n 2015
The anticipation of cars purchase in 4Q14 was paid in 2015
54
(1,588.6)(1,322.3)
Changes in net debt R$ million
Net debt12/31/2015
Net debt12/31/2014
(30.7)New
headquarters construction
Free cash flowbefore growth, interest
and headquarters
246.5
(139.3)Dividends
(27.5)Treasuryshares
purchased(112.6)
Change in accounts
payable to carssuppliersand fleetreduction
(202.7)Interest
The increase in net debt is due to dividends paymen t, share repurchases and new headquarters construction
-355.3 432.9
246.2
619.5 670.0 572.5
2015 2016 2017 2018 2019 2020 2021
55
Debt maturity profile (principal)R$ million
Cash
1,034.4
As of December 31, 2015
1,385.1
2015
-355.3 432.9 246.2
619.5
670.0 572.5
2015 2016 2017 2018 2019 2020 2021
As of December 31, 2015 – after debentures 10th issua nce
2015
1,034.4
1,385.1
770.0 672.5
New debentures issuance1,585.1*
Cash
*In 01/31/2016 Localiza’s cash position was R$1,337.0 after the payment to OEMs.
Cash strenghth after the 10 th debentures issuance
1,281.1 1,363.4 1,231.2 1,332.8 1,322.3 1,588.6
2,446.7 2,681.7 2,547.6
2,797.9 3,296.3
3,642.7
2010 2011 2012 2013 2014 2015
56
Debt - ratiosNet debt vs. Fleet value
BALANCE AT THE END OF PERIOD 2010(*) 2011 2012 2013 2014 2015
Net debt / Fleet value 52% 51% 48% 48% 40% 44%
Net debt / EBITDA 2.0x 1.7x 1.4x 1.5x 1.4x 1.7x
Net debt / Equity 1.4x 1.2x 0.9x 1.0x 0.8x 0.8x
EBITDA / Net financial expenses 5.0x 4.6x 6.3x 8.3x 6.4x 4.6x
(*) 2010 ratios based on USGAAP financial statemen ts
Net debt Fleet value
Comfortable debt ratios
57
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
58
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