Apimecmg - 1Q06 Results presentation

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Localiza Rent a Car S.A.1T06 – Public meeting

1

Integrated business platform

Competitiveadvantages

Growthopportunities

Businessesstrategies

Objectives

Integratedbusinessplatform

123 agencies 20,096 cars

13,116 cars

13 points of sale 78.4% sold to final consumer

195 agencies in 9 countries 7,076 cars

Synergies:

cost reduction,

cross selling,

bargaining power

Data-base: 03/31/2006

2

Businesses strategies

Cor

e B

usin

esse

sSu

ppor

tIncrease market leadership maintaining high return on investment

Create value through fleet management market opportunities, taking advantage of the synergies generated by the integrated business platform

Add value to the brand by expanding the network in Brazil and Latin America

Add value to the businesses of the platform as a competitive advantage, reducing depreciation costs


Growthopportunities


Objectives


3

Objectives

Short-term:

Maintain profitability (Net margin, ROE and EBITDA margin)

Long-term:

Increase business volume through organic growth and horizontal expansion, taking advantage of growth and consolidation opportunities to expand market share and gains of scale


Growthopportunities


Objectives


4

Bargainingpower

CompetitivenessMarket shareincrease

Gains ofscale

Strong brandGeographic footprintIntegrated platformYield management

Know-how

Competitive advantages


Growthopportunities


Objectives


5

Growth opportunities

Airtraffic

GDP elasticity

Consolidation

Creditcards

Replacement

Fleet rentalmarket


Growthopportunities


Objectives


6

1Q06 Results presentation(R$ million - USGAAP)

Localiza Rent a Car S.A.

7

1Q06 Highlights

42,6% increase in car rental business volume

31,8% increase in fleet rental business volume

23,2% increase in car rental EBITDA (excluding used car sales)

37,3% increase in fleet rental EBITDA (excluding used car sales)

2.2 p.p utilization rate increase in car rental business

68,6% increase in the trading volume of RENT3 (R$ 7,1 million in the 1Q06)

8

Car rental performance(R$ millon, USGAAP)

Daily rentals (thousands)

Used car sales Car rental

343 410

641162

190+17.8%

155 197 271 64 87188 213

37098 103

2003 2004 2005 1Q05 1Q06

Net revenue

1,8392,413

3,411

7611.085

2003 2004 2005 1Q05 1Q06

+42.6%

+36.4%

EBITDA

74117

17948 47

-1.4%

59 91139

344213

26

40

14 5

2003 2004 2005 1Q05 1Q06

+23.2%39

5789 21 29

(4) (12) (2) (11)

12

2003 2004 2005 1Q05 1Q06

Net income

+36.5%

-9.2%

1820

51 53

77

+5.6%

9

120 128 14934

45

64 90 7824 22

2003 2004 2005 1Q05 1Q06

Net revenue

(R$ millon, USGAAP)

Fleet rental performance

Daily rentals (thousands)

Used car sales Fleed rental

184218 227

5867

+31.8% +15.7%3,119 2,806

3,351

7631.006

2003 2004 2005 1Q05 1Q06

+31.1%

EBITDA

91103 +28.4%

83 92 10325

35

(5) (1) (0)

1

(1)

2003 2004 2005 1Q05 1Q06

+37.3%

7834

26

Net income

58 63 6917

25

(4)(26) (42)

(11) (13)

2003 2004 2005 1Q05 1Q06

+50.6%

53 37 276

12+105.3%

-6.7%

10

(R$ milhões, USGAAP)

EBITDA margin per segment

2003 2004 2005 1Q05 1Q06

Margin Margin Margin Margin Margin

Rentals 38.1% 45.9% 51.2% 53.7% 48.5%

Used car sales 6.6% 12.3% 10.8% 14.2% 5.0%

TOTAL 20.7% 28.4% 27.9% 29.8% 25.0%

Rentals 69.4% 71.9% 69.2% 73.5% 76.9%

Used car sales -9.2% -1.4% -0.2% 3.8% -5.0%

TOTAL 43.5% 41.6% 45.3% 44.9% 49.9%

Rentals 51.8% 56.2% 57.6% 60.6% 58.2%

Used car sales 2.9% 9.9% 8.9% 12.2% 3.3%

Franchising 43.6% 48.6% 47.2% 47.1% 29.4%

TOTAL 28.6% 33.1% 32.6% 33.9% 31.4%Con

solid

ated

Flee

tren

tal

Car

rent

al

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Net revenue

Consolidated performance(R$ million, USGAAP)

EBITDA

Daily rentals+17.1%

CAGR: + 28%

+13.9%CAGR: +25%*+8.5%

CAGR: + 37%

69*

CAGR: +17% +37.2%

Net income

532634

877 222 260

2003 2004 2005 1Q05 1Q06

100134+34%

+3.2%4,959 5,219

6,762

1,524

2,091

2003 2004 2005 1Q05 1Q06

152

210286

7581

2003 2004 2005 1Q05 1Q06

10691

107

26 30

2003 2004 2005 1Q05 1Q06

122126

154

60 77+29%

-72%

•Pro forma result disregarding mark-to-market (MTM)of derivatives contracts

Margin 13.0% 14.,3% 12.2% 11.8% 11.4%

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(R$ millon, USGAAP)

Net income evolution

Net income1Q05

Net income1Q06

26.0

+37.9Revenues

-23.4Costs

-8.1SG&A

Depreciations+1.4 -3.8

+34.0 -9.8

InterestsTaxes

29.6

+0.5

+13.9%

+3.9

-13.6

Rentals = + 17.1 milionUsed car sales = - 10.7 million

-1.0

-7.1

EBITDA variation = + 6.4 million

-0.9Stock option

Other itens variation = - 2.8 million

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(R$ millon, USGAAP)

Cash flow

Synthetic cash flow 1Q05 1Q06 Variation

Net income adjusted to reconcile net income to net cash 50.3 56.2 5.9

Increase in working capital (client, accounts payable, etc) (16.6) (9.4) 7.2

Car purchase (64.8) (51.1) 13.7

Cost of used cars sold 95.1 106.9 11.8

102.6

(104.1)

(1.5)

70.7

69.2

Net cash generated by operational activities 64.0 38.6

Net cash generated by investment and financing activities 385.3 (489.4)

Increase (reduction) of net cash 449.3 (450.7)

Availabilities at the beginning of the period 129.3 58.6

Availabilities at the end of the period 578.6 509.4

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Net debt (R$ millon) USGAAP

(R$ millon, USGAAP)

Indebtedness

Rating S&P - Positive BrA 2003 2004 2005 1T05 1T061Q06*

pro forma

Net debt / fleet 22% 46% 60% 44% 58% 39%

Net debt / equity 0.36 0.96 1.37 0.8 1.2 0,.6

322,8*

* Pro forma considering R$ 156.8 million of the primary offer

87

281

539

250.3

479.6

2003 2004 2005 1Q05 1Q06

322.8*

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RENT3 performance

Average daily volume traded in 1Q06 of R$ 7,1 MM

1Q06 RENT3 performance: +28.5%

1Q06 RENT 3 x IBOVESPA performance: +15.1%

R EN T 3 X IB OV ESPA

10

15

20

25

30

35

40

45

50

0

20

40

60

80

100

120

Volume RENT3 RENT3 IBOVESPA

31/12/0528,63

31/03/0636,8+ 28,5%

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Perspectives

Utilization rate above 65% in car rental business

25% increase in car rental business volume

15% increase in fleet rental business volume

EBITDA margin in car rental business of 45% (excluding used car sales)

EBITDA margin in fleet rental business of 70% (excluding used car sales)

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1Q06 Results Analysis

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Rental results analysis – % over revenue

(*) pro-form numbers (excluding stock options and bonus expenses).

Percentages

Car Rental2003 2004 2005 1Q05 1Q06

1Q06 pro form* Difference (*)

Rental net revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% -Rental costs -43.9% -40.0% -36.4% -35.9% -37.3% -36.8% -0,9p,p,Gross profit 56.1% 60.0% 63.6% 64.1% 62.7% 63.2% -0,9p,p,Operating expenses (SG&A) -20.0% -18.5% -15.3% -12.2% -16.4% -13.2% -1,0p,p,Net financial expenses -0.6% -0.7% -1.3% -2.8% -0.3% -0.3% 2.5p.p.Operating profit after financial result 35.5% 40.8% 46.9% 49.1% 46.0% 49.7% 0,6p,p,Non-operating result 0.0% 0.1% 0.1% 0.0% 0.0% 0.0% -Income tax -10.8% -12.0% -14.2% -16.2% -13.0% -14.1% 2,1p,p,Net income of the period 24.8% 29.0% 32.8% 32.9% 33.0% 35.6% 2,7p,p,EBITDA margin 38.1% 46.0% 51.2% 53.7% 48.5% 49.7% -4,0p,p,

ALUGUEL2003 2004 2005 1Q05 1Q06


Rental net revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% -Rental costs -24.2% -21.9% -23.1% -19.8% -16.9% -16.9% 2,9p,p,Gross profit 75.8% 78.1% 76.9% 80.2% 83.1% 83.1% 2,9p,p,Operating expenses (SG&A) -6.7% -8.1% -9.2% -7.0% -7.1% -6.2% 0,8p,p,Net financial expenses -0.5% -0.5% -0.4% -0.3% -0.7% -0.7% -0,4p,p,Operating profit after financial result 68.7% 69.5% 67.4% 72.9% 75.3% 76.2% 3,3p,p,Non-operating result 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -Income tax -20.8% -20.3% -21.2% -24.5% -19.8% -20.0% 4,5p,p,Lucro líquido do período 47.9% 49.2% 46.1% 48.4% 55.6% 56.2% 7,8p,p,Margem EBITDA 69.4% 71.9% 69.2% 73.5% 76.9% 77.8% 4,3p,p,

Car Rental2003 2004 2005 1Q05 1Q06


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Rental results analysis – daily rental

(*) pro-form numbers (excluding stock options and bonus expenses).

R$ / Daily rentals

ALUGUEL2003 2004 2005 1Q05 1Q06


Rental net revenue 84.4 81.7 79.5 84.2 80.5 80.5 -4.4%Rental costs (37.1) (32.7) (29.0) (30.2) (30.0) (29.7) -1.8%Gross profit 47.4 49.0 50.6 54.0 50.5 50.9 -5.8%Operating expenses (SG&A) (16.9) (15.1) (12.2) (10.2) (13.2) (10.6) 3.4%Net financial expenses (0.5) (0.5) (1.1) (2.4) (0.3) (0.3) -88.3%Operating profit after financial result 30.0 33.4 37.3 41.4 37.0 40.0 -3.4%Non-operating result - 0.1 0.1 - - - -Income tax (9.1) (9.8) (11.3) (13.7) (10.5) (11.3) -17.1%Net income of the period 20.9 23.7 26.1 27.7 26.5 28.7 3.4%Net margin 24.8% 29.0% 32.8% 32.9% 33.0% 35.6% 2,7p,p,EBITDA 32.1 37.5 40.7 45.2 39.1 42.0 -7.0%EBITDA margin 38.1% 46.0% 51.2% 53.7% 48.5% 52.2% -1,5p,p,

ALUGUEL2003 2004 2005 1Q05 1Q06


Rental net revenue 38.6 45.5 44.5 45.0 44.7 44.7 -0.5%Rental costs (9.3) (10.0) (10.3) (8.9) (7.6) (7.6) -15.2%Gross profit 29.2 35.6 34.3 36.0 37.2 37.2 3.2%Operating expenses (SG&A) (2.6) (3.7) (4.1) (3.1) (3.2) (2.8) -11.5%Net financial expenses (0.2) (0.2) (0.2) (0.1) (0.3) (0.3) 127.6%Operating profit after financial result 26.5 31.6 30.0 32.8 33.7 34.1 4.1%Non-operating result 0.0 0.0 0.0 0.0 0.0 0.0 -Income tax (8.0) (9.2) (9.5) (11.0) (8.9) (8.9) -18.7%Net income of the period 18.5 22.4 20.5 21.8 24.9 25.2 15.6%Net margin 47.9% 49.2% 46.1% 48.4% 55.6% 56.2% 7,8p,p,EBITDA 26.8 32.7 30.8 33.0 34.4 34.8 5.4%Margem EBITDA 69.4% 71.9% 69.2% 73.5% 76.9% 77.8% 4,3p,p,

Car Rental2003 2004 2005 1Q05 1Q06


Car Rental2003 2004 2005 1Q05 1Q06


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Why did Seminovos EBITDA margins fall from 8.8% in

2005 to 3.3% in the 1Q06?

21

2000 2001 2002 2003 2004 2005 1Q06

New car priceincrease (Palio)

1.90% 6.72% 7.39% 13.95% 17.42% 9.40% 1.50%

IPCA inflation 5.97% 7.,67% 12.53% 9.30% 7.60% 5.69% 1.44%

Real increase(decrease)

- 4.07% - 0.95% - 5.14% + 4.65% + 9.82% + 3.71% + 0.06%

Evolution of car prices increase

-4.1% -5.1%

-1,0%

4.7%

9.8%

3.7%

0.1%

-6.0%

-2.0%

2.0%

6.0%

10.0%

2000 2001 2002 2003 2004 2005 1Q06

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2000 2001 2002 2003 2004 2005 1Q06

Depreciation per car 3,617.70 2.142.50 1,656.20 1,752.30 322.90 492.30 720.60

% over rental revenue 13.8% 11.9% 9.3% 9.2% 1.8% 2.9% 4.2%

Evolution of depreciation in the Car Rental segment

3,618

2,1431,656

1,752

323 492 721

4%

14%

12%

9% 9%

2%3%

-

1,000

2,000

3,000

4,000

2000 2001 2002 2003 2004 2005 1Q060%

4%

8%

12%

16%

Average depreciation per car % over rental revenue

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Exemple 1 Exemple 2 Exemple 3 Exemple 4 Exemple 5 Exemple 6 Exemple 7

Car purchase price 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Sale price 95.00 100.00 105.00 110.00 115.00 120.00 125.00

Depreciation rate 14.5% 10.0% 5.5% 1.0% 0% 0% 0%

Book Value 85.50 90.00 94.50 99.00 100.00 100.00 100.00

SG&A (7%) 6.65 7.00 7.35 7.70 8.05 8.40 8.75

EBITDA 2.85 3.00 3.15 3.30 6.95 11.60 16.25

EBITDA margin 3% 3% 3% 3% 6% 10% 13%

Average 3.0% 9.6%

Depreciation rate = {(sale price – 10% of sale price) / Car purchase price}-1where 10% = selling expenses (7%) + safety margin (3%)

Depreciation rate X Seminovos EBITDA margin

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Conclusion

From 2003 to 2005 many Localiza cars presented zero depreciationrate, that resulted in an average EBITDA margin of 10%.

In ordinary conditions, by the sum of the years’ digit depreciation rate calculation method, the EBITDA margin will be around 3%.

We expect that the car prices in Brazil in 2006 increasejust a little above the inflation.

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The material that follows is a presentation of general background information about LOCALIZA

as of the date of the presentation. It is information in summary form and does not purport to be complete. It is not intended to be relied upon as advice to potential investors. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of the information presented herein.

This presentation contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are only 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’s management, LOCALIZA cannot guarantee future results or events. LOCALIZA expressly disclaims a duty to update any of the forward-looking statement.

The material that follows is a presentation of general background information about LOCALIZA

as of the date of the presentation. It is information in summary form and does not purport to be complete. It is not intended to be relied upon as advice to potential investors. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of the information presented herein.

This presentation contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are only 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’s management, LOCALIZA cannot guarantee future results or events. LOCALIZA expressly disclaims a duty to update any of the forward-looking statement.

Disclaimer - Forward Looking Statements

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Localiza Rent a Car S.A.1T06 – Public meeting

Apimecmg - 1Q06 Results presentation

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