ApresentaçãO 3 Q09 Completa Eng (Pp Tminimizer)

1

Localiza Rent a Car S.A.

October, 2009

3Q09 and YTD results (R$ millions - USGAAP)

2

Agenda

• Company

• Drivers of growth

• Competitive advantages

• Growth with profitability

• 3Q09 and 9M09 Financials

3

Localiza started its business from scratch in 1973…

…with 6 beetles, 100% financed.

4

19991973 1984 1990 1992

Private Equity

DLJ

Private Equity

DLJ

1997

R$ 200MM Debenture

2nd Localiza

R$ 200MM Debenture

2nd Localiza

2007

Follow on

Follow on

2006

US$ 100MM Bonds

US$ 100MM Bonds

2005

IPOIPO R$ 350MM Debenture

1st Localiza

R$ 350MM Debenture

1st Localiza

Growth by adjacencies: timeline

2008

71,500 cars9 countries

431 locations

71,500 cars9 countries

431 locations

2009

R$ 300MM Debenture

3st Localiza

R$ 300MM Debenture

3st Localiza

R$ 400MM Debentures

1stTotafleet

R$ 400MM Debentures

1stTotafleet

5

Integrated business platform

This integrated business platform gives Localiza flexibility and superior performance

Synergies:cost reductioncross sellingbargaining power

8,358 cars225 locations in 9 countries 160 locations in Brazil 65 locations in South America16 employees

23,184 cars sold79% sold to final consumer42 stores446 employees

41,091 cars1.8 million clients206 locations2,709 employees

22,047 cars593 clients225 employees

As of 09/30/2009

6

Cor

e B

usin

esse

sSu

ppor

tIncrease market leadership maintaining high return

Create value taking advantage of the integrated business platform synergies

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

Strategy by division

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

7

Breakdown

Revenues EBITDA Net income

Car rental 34% 51% 55%

Fleet rental 17% 45% 41%

Used car sales 48% 3% *

Franchising 1% 1% 4%

Total 100% 100% 100%

Date: 09/30/2009

Rentals revenues

Consolidated

* Used cars losses are allocated in the rental divisions

Revenues

66%

34%

EBITDA

54%

46%

Net Income

51%

49%

Car rental Fleet rental

8

100%100%100% 100%100%

EugenioMattar

AntonioClaudio Resende

FlavioResende Free-Float

13.1% 8.6% 12.8% 8.6% 56.9%

SalimMattar

Founders

Localiza Car Rental

RentalInternational

Ownership breakdown

9

Company’s structureBOARD OF DIRECTORS

CEO

COO

Car Acquisition

Legal

Financial ITHuman Resources Administration

Localiza has a very lean and efficient structure

The supporting areas assist all four businesses’ divisions.

10

Agenda

• Company





11

Growth opportunities

Air traffic8.7% CAGR (2004/2008)

Growth forecast between 2% - 5%

GDP elasticityRental divisions 5.9x GDP

Sector: 2.6x GDP

ConsolidationUS market: 4 players 95% BR market: 4 players 40%

1,893 players 60%

Credit cards23.7% CAGR (2004/2008)

44 mm holders (estimated)ReplacementAround 10 million cars insuredAccident frequency of 15% p.a.

Fleet outsourcingCorporate target fleet of 500,000 cars

Approximately 25% rented

Source: Localiza, ABLA and Central Bank

Source: Infraero, Gol and Tam

Source: Abecs and estimates

Source: Susep, Denatran and estimates

Source: Company estimates

Source: Auto Rental News and estimates

12

Localiza’s revenues have been growing 5.9x GDP.

Source: Central Bank, Localiza and ABLA

Growth opportunities: GDP

5.9x

Localiza

GDP

Sector 2.6x

2005 2006 2007 2008

GDP (real) Localiza (real) Sector (real)

Rental revenues accumulated growth rate – rentals

13

Others1889

Localiza277 Unidas

72 Avis63

Hertz54

Growth opportunities: consolidation

Airport locations Off-airport locations

Brazilian car rental agencies

Off-airport market is fragmented among almost 2,000 small local car rental companies

Source: Each company website as of September 30th , 2009

Unidas30

Avis29

Hertz29

Others36

Localiza89

14

22.4% 25.8%29.4%

33.0%38.0%

2004 2005 2006 2007 2008

Consistent market share evolution

38.0%

Strategy: increase market leadership maintaining high return

Source: ABLA, based on revenues

15

Consistent market share evolution

14.0%

Strategy: create value taking advantage of the integrated business platform synergies

Source: ABLA, based on revenues

10.2% 11.4%13.0% 13.2% 14.0%

2004 2005 2006 2007 2008

16

Agenda

• Company





17

Highercompetitiveness

Market shareincrease

Gains of scale

ScaleKnow-how

Strong brandStrong values

Integrated platformGeographical footprint

High corporate governance standardsUsed car sales network

Management model Lower depreciation Stable Management

Owners involvedFacilities

Rating

Competitive advantages

Localiza reached the virtuous cycle

18

Competitive advantages: strong values

Principles:Ethical behavior

Zeal for the imageSearch for excellenceCustomer valorization

Add value to the companyRecognition of employee performance

MissionTo contribute to the success

of our customers’ business and leisure, renting cars with efficiency and friendliness.

MissionTo contribute to the successof our customers’ business

through an efficient solution in fleet rental.

MissionTo contribute to the success of our franchisees,

transferring know-how with efficiency and promoting solid relationship.

MissionTo contribute for the success of our customers,Selling quality pre-owned cars with transparency

and friendliness.

19

Salim Mattar

Eugênio Mattar

BOARD OF DIRECTORS

CEO

COO

Car Acquisition

Legal


Competitive advantages: owners involved in the business

The succession process is already planned.

20

Salim Mattar - 36y

Eugênio Mattar – 36y

Roberto Mendes – 24y

Gina Rafael – 28y

Daltro Leite – 24y

Marco Antônio Guimarães – 19y

AristidesNewton – 26y

BOARD OF DIRECTORS

CEO

COO

Car Acquisition

Legal


Helvia Barcelos – 22y

Competitive advantages: stable management

21

Competitive advantages: know-how

36 years

Raising money

Buyingcars

Renting cars

Selling cars

Since its beginning, Localiza always had strong focus in the business

22

Execution

Management by results: execution with meritocracy

Competitive advantages: management model

Mgt.contract

Action plan Evaluation Reward

Profitsharing

StockOptions

Variable

Actions

Objectives

Mission

Business

Values

Vision

Planning

23

Competitive advantages: strong brand

34th

Most valuable brand in Brazil

(Brand Analytics, May 2009)

Bestof transport sector

(Exame, Biggest & Best, July 2009)28thBrazilian international

company.(Ranking FDC, August 2009)*

*by the Fundação Dom Cabral – FDC Index based on foreign sales, assets and employees over total sales, assets and employees

24

International footprint

International footprint

Strategic locationsStrategic locations

Nationwidepresence

Nationwidepresence

Competitive advantages: geographical footprint

431 locations in 9 countries in South America

As of 09/30/2009

25

Competitive advantages: facilities

Localiza is present in all Brazilian airports

26

Competitive advantages: facilities

Localiza has the best located downtown locations

27

Competitive advantages: used car sales network

42 stores in Brazil

Strategy: To add value to the businesses, reducing depreciation as a competitive advantage

Logistic of distribution

Know-how of used car market

Selling to final consumers in order to have higher revenue per sold car

28


Localiza has special network to sell its cars to final consumers

29


Car sales inventory is used as a buffer for car rental division during peaks of demand

30

Localiza’s used car sale division share

34,281Cars sold by Localiza in 2008

(Seminovos)

0.3% of total car sale market 9,860,000 cars

0.5% of used car sale market 7,260,000 cars

1.3% of new car sale market 2,600,000 cars

5.3% of up to 3-year old car market 644,000 cars

2008 Brazilian car sales market

Localiza’s share Total market

23,184 Cars sold by Localiza in 9M09

(Seminovos)

0.3% of total car sale market 7,300,916 cars

0.5% of used car sale market 5,089,495 cars

1.0% of new car sale market 2,211,421 cars

4,5% of up to 3-year old car market 520,655 cars

9M09 Brazilian car sales market

Localiza’s share Total market

31

322.9 492.3939.1

332.9

2,546.0 2,729.7

(1,390.0)

(3,990.0)

1,600.0 1,300.0

180.0

(190.0)

(3 ,8 0 0 .0 )

(2 ,8 0 0 .0 )

(1 ,8 0 0 .0 )

(8 0 0 .0 )

2 0 0 .0

1 ,2 0 0 .0

2 ,2 0 0 .0

3 ,2 0 0 .0

(4 ,0 0 0 .0 )

(2 ,0 0 0 .0 )

-

2 ,0 0 0 .0

4 ,0 0 0 .0

Average depreciation Used car gain (loss) + SG&A

Competitive advantages: lower depreciation

The depreciation is calculated using the estimated sale price in the future (mark to market), net of the sales expenses.

In 2010 depreciation shall drop as we are renewing the fleet.

Average depreciation per car - Car rental division*

2008 and 2009 depreciation were impacted by declining market conditions and IPI reduction.

777.0

1,769.0

Average per car 2004 2005 2006 2007 2008 9M09

(-)Purchase price in previous year 16,140 19,960 24,350 25,840 25,650 27,740

Selling price in the year 19,490 23,060 24,770 27,460 27,770 26,010

(-)Used car sales SG&A (7-9%) 1,750 1,800 1,810 1,810 1,940 2,260

(=)Gain (loss) 1,600 1,300 (1,390) (190) 180 (3,990)

Impairment (IPI reduction)

2004 2005 2006 2007 2008 9M09

2,546.0

32

Competitive advantages: rating

Enterprise Localiza Avis Budget Hertz Europcar Dollar Thrifty

Baa2Ba1

Ba2B1

B2

Caa3

Moody’s debt rating as of Jan/09 (Global scale)

S&P and Moody’s reassured Localiza’s rating in 2009.

Moody’s corporate rating as of Sep/09 (Local Currency)

Localiza Rent a Car S.A Aa2.brBraskem S.A. Aa2.brMagnesita Refratários S.A. Ba2.br

Gafisa S.A. A1.br

CEMIG Aa1.brDuke Energy Aa2.br

LupatechGol

A3.brB1

Enterprise Localiza Europcar Hertz Avis Budget Dollar Thrifty

brA-brA

LupatechTam

brAA-Duke EnergybrAAA+Brasil Telecom S.A

brA-Gafisa S.A.

brA-Magnesita Refratários S.A.brAA+Braskem S.AbrAA-Localiza Rent a Car S.A

S&P corporate credit rating as of Jan/09 (Global scale)

Standard & Poors as of Sep/09 (Local Currency)

BBBBB

B+B

CCC+CCC

Localiza has one of the best ratings among its international peers

33

79

59

50

Localiza Unidas Hertz Avis

Competitive advantages: scale

102

92

74

Localiza* Unidas Hertz Avis

Localiza network is larger than the second, the third and the fourth competitors combined

Source: Each company website as of September 30th , 2009

Locations in Brazil Cities in Brazil

366

268189

261

34

Competitive advantages: high standards of governance

Listed at “Novo Mercado” of Bovespa

Elected Excellence in Corporate Finance Company (IBEF – Brazilian Institute of Finance Executives of Minas Gerais)

Elected twice “the most shareholder-friendly” company (Institutional Investor Magazine)

Elected the best company in corporate governance (Capital Aberto Magazine)

Elected the best CEO of a small-cap twice (Institutional Investor Magazine)

35

Agenda

• Company





36

Growth with strong results

504

134 154 150 152198

278 311

403

856242

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

331 429 555 679873191 251 303

448590

853

983

2812862702211601451279086 85 89 151

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

CAGR: 26.3%

CAGR: 23.9%

EBITDA evolution

Revenue evolution

CAGR: 16.5%

CAGR: 30.8%

Car sold / EOP fleet 77% 74% 50% 31% 42% 57% 69% 55% 52% 50% 56% 45%

GDP 3.4 0.0 0.3 4.3 1.3 2.7 1.1 5.7 2.9 3.7 4.6 5.1

Average 1.9 4.4

Rental Used car sales

37

Agenda

• Company





38

21,68322,70021,45721,44821,848

15,93712,842

9,4026,654

2004 2005 2006 2007 2008 9M08 9M09 3Q09 3Q09

148.9151.9

440.8430.5

585.7

442.7357.2

271.3197.1

2004 2005 2006 2007 2008 9M08 9M09 3Q08 3Q09

Car rental division

CAGR: 34.6%-4.5%

Average rented fleet (Quantity)

Net revenue (R$ millions)

CAGR: 31.3%2.4%

0.0%

Revenues grew 2.4% in the 9M09 due to an increase in the daily rates.

-2.0%

39

19,53818,53219,43517,06917,880

14,29511,635

9,3087,796

2004 2005 2006 2007 2008 9M08 9M09 3Q08 3Q09

127.8 149.2190.2

228.2276.9

200.9230.9

73.2 78.7

2004 2005 2006 2007 2008 908 9M09 3Q08 3Q09

CAGR: 23.1%5.4%

CAGR: 21.3%

7.5%

14.9%

13.9%

The revenue’s growth is a consequence of the increase in volumes and prices.

Average rented fleet (Quantity)

Fleet rental division

Net revenue (R$ millions)

40

690.0930.3

1,060.91,335.3

661.7509.4

303.0448.2

590.3853.2

983.2794.7

625.6

212.5538.0

1,238.3

493.1302.9

2004 2005 2006 2007 2008 9M08 9M09 3Q08 3Q09

22,18226,105

33,52038,050

44,211 41,499

17,86715,715 18,76323,174

30,09334,281

27,635

10,627

24,51819,18523,184

8,077

2004 2005 2006 2007 2008 9M08 9M09 3Q08 3Q09

Fleet investment

45% of the car rental division’s fleet has been already renewed.

Purchases (accessories included) Used car sales revenue

Net investment (R$ millions)

Purchased cars Sold cars

Fleet increase (quantity)

7,34210,346

6,467

7,9579,930

13,8641,334

7,240 11,108

241.8340.0

190.1

207.7352.1 443.6

36.1

235.1 296.9

41

24,103 31,373 35,686 39,112 44,215 41,0919,16811,762

14,63017,790

23,403 22,481 22,047

19,531

2004 2005 2006 2007 2008 9M08 9M09

End of period fleet and utilization rate

Utilization rate – Car rental division

End of period fleet (quantity)

CAGR: 21.5%


The current fleet returned to December 2008 level.

-5.3%

28,69935,865

46,003 53,47662,515 66,696 63,138

68.6%

76.2%

67.6%70.5%68.3%

9M08 9M09 1Q09 2Q09 3Q09

42

Net revenues - consolidated

872.5 638.6 679.6227.5 230.0

303.0448.2

590.3853.2

983.2794.7 625.6

302.9 212.5331.4 428.7 555.1 678.5

2004 2005 2006 2007 2008 9M08 9M09 3Q08 3Q09

-16.6%


CAGR: 30.8%

634.4876.9

1,145.41,531.7

1,855.7

Net revenues (R$ millions)

530.4 442.5

-8.9%

1,433.3 1,305.2

1.1%6.4%

9,402 12,842 15,937 21,848 21,448 21,457 22,700 21,6837,796 9,30811,635 14,295

17,880 17,069 19,435 18,532 19,538

6,654

2004 2005 2006 2007 2008 9M08 9M09 3Q08 3Q09

0,0%CAGR: 28.8%

14,450 18,71024,477

30,23239,728

Average rented fleet (quantity)


6.2%

41,232 41,22138,51740,892

43

+20%

83117

145178 199 206

2004 2005 2006 2007 2008 9M09

+ 34

Number of locations – car rental division

13 1326 32 35 42

2004 2005 2006 2007 2008 9M09

Number of used cars sales stores

+ 28 + 33 + 21 + 7

+ 13 + 6+ 3

+ 7

Network expansion

In 2009 the Company continues to increase its network.

44

161.0 218.8 284.4 357.1449.6

327.0 331.2115.6 111.3

36.559.1

26.946.4

54.5

51.3 9.7

18.3 5.0

2004 2005 2006 2007 2008 9M08 9M09 3Q08 3Q09

EBITDA Margin

Divisions 2004 2005 2006 2007 2008 9M08 9M09

Rentals ‐ consolidated 48.6% 51.0% 51.2% 52.6% 51.5% 51.2% 48.7% 50.8% 48.4%

39.3%

66.7%

1.6%

44.3%

66.3%

6.5%

44.3%

67.0%

5.5%

42.0%

69.1%

4.6%

3Q08

44.5% 41.8%

69.7%

6.0%

68.7%

5.4%

3Q09

Car rental 40.1% 45.3% 39.2%

Fleet rental 63.4% 62.3% 65.9%

Used car sales 12.0% 13.2% 2.4%

EBITDA consolidated (R$ million)


CAGR: 26.4%

277.9197.5

403.5504.1

311.3-13.1%

133.9 116.3

EBITDA margins still consistent.

-9.9%378.3 340.9

-3.7%

1.3%

45

2,552.1

4,622.9

2,670.1

6,238.6

1,845.52,981.3

5,083.1

2,395.82,383.3

2004 2005 2006 2007 2008 9M08 9M09 3Q08 3Q09

777.0

2,729.7

1,133.4

3,763.3

939.1332.9

2,546.0

492.3322.9

2004 2005 2006 2007 2008 9M08 9M09 3Q08 3Q09

Car rental division (R$)

Depreciation per car

Fleet rental division (R$)

annualized

The launching of 2010 models impacted the 3Q09 depreciation.

annualized

46

20.650.178.0

157.2

90.6 106.5138.2

190.2

127.4

2004 2005 2006 2007 2008 9M08 9M09 3Q08 3Q09

Net income

Reconciliation of EBITDA x Net Income 9M08 9M09 Var. R$

327.0

51.3

378.3

(53.2)

(13.3)

(88.8)

(65.8)

3Q08 3Q09 Var. R$

EBITDA - Car rental and fleet rental

157.2

(4.3)4.2331.2

9.7

340.9

(132.2)

(15.9)

(88.3)

(13.3)

EBITDA Consolidated

(26.5)

(41.6)

(37.4)

(79.0)

(2.6)

0.5

78.0

133.9 116.3 (17.6)

39.3

(39.2)

(0.6)

13.3

(79.2)

14.6

(29.5)

115.6 111.3

EBITDA - Used car sales 18.3 5.0

Depreciation of revenue-earning vehicles (22.9) (62.1)

Other depreciation (4.7) (5.3)

Financial expenses, net (36.1) (22.8)

Income tax and social contribution (20.1) (5.5)

Net income 50.1 20.6

Net income (R$ millions)

Main impacts on results: drop of Seminovos’ EBITDA and increase of fleet depreciation.

- 58.9%

- 50.4%

47

52.0 58.2 118.2250.7 205.7

395.2

2004 2005 2006 2007 2008 9M09

Free cash flow - FCF

Free cash flow - R$ millions 2004 2005 2006 2007 2008 9M09

504.1 340.9

(625.6)

576.9

292.2

(37.5)

(32.7)

222.0

625.6

(625.7)

Change in amounts payable to car suppliers (capex) - - - - - 186.3

186.2

(13.0)

395.2

(36.0)

36.0

395.2

(983.2)

874.5

395.4

(52.8)

(44.8)

297.8

983.2

(1.035.4)

(52.2)

(39.9)

205.7

(299.9)

(188.9)

(283.1)

EBITDA 197.5 277.9 311.3 403.5

Used car sales revenues (303.0) (448.2) (590.3) (853.2)

Cost of used car sales 248.7 361.2 530.4 760.0

EBITDA without used car sales revenues and costs 143.2 190.9 251.4 310.3

(-) Income tax and social contribution – current (40.9) (32.7) (42.7) (63.4)

Working capital variation 6.2 (24.2) (4.8) 13.3

Cash provided before capex 108.5 134.0 203.9 260.2

Used car sales revenues 303.0 448.2 590.3 853.2

Capex of car – renewal (349.3) (496.0) (643.3) (839.0)

Net capex for renewal (46.3) (47.8) (53.0) 14.2

Capex - Property and equipment, net (10.2) (28.0) (32.7) (23.7)

Free cash flow before growth 52.0 58.2 118.2 250.7

Capex of car – growth (143.8) (194.0) (287.0) (221.9)

Change in amounts payable to car suppliers (capex) (21.9) (25.5) 222.0 (51.0)

Free cash flow (113.7) (161.3) 53.2 (22.2)

FCF before growth (R$ million)

48

-58.5-30.9

395.2

-1,254.5 -948.7

InterestDividends

Net debt12/31/2008

Net debt 09/30/2009

Net debt reconciliation

Free cash flow

R$305.8 million net debt reduction YTD.

49

440.4765.1

948.71,247.7

1,492.91,752.6 1,687.6

1.254,5

535,8281,3

612,2900,2

2004 2005 2006 2007 2008 9M09

Debt ratios

BALANCE AT THE END OF THE PERIOD 2004 2005 2006 2007 2008 9M09

Net debt / Fleet value (USGAAP) 46% 60% 36% 51% 72%

2.5x

1.8x

2.0x

56%

Net debt / EBITDA (USGAAP) 1.4x 1.9x 1.4x 1.9x 2.1x(*)

Net debt / EBITDA (BRGAAP) 1.1x 1.5x 1.0x 1.3x 1.5x(*)

Net debt / Equity (USGAAP) 1.0x 1.4x 0.7x 1.3x 1.4x

(R$ million)

Net debt Fleet value

Indebtedness ratios have improved significantly on the 9M09 over 2008.

(*) annualized

50

Debt profile(Principal)

On 09/30/09 – R$ million

Pro forma considers the debentures’ early redemption and the fund raising of R$ 100 millions100.0*

209.8

0.2 9.2

255.4 251.7209.6

166.8100.0

109.8cash 2010 2011 2012 2013 2014 2015

0.2

359.8cash

350.9205.4 210.0 209.6 166.8

100.0

2010 2011 2012 2013 2014 2015

200,0*

559.8

Proforma – R$ million

* Limited amount approved by BNDES / PEC

51

4,6

10,6

13,5

8,4

3,1

10,7

14,7

2005 2006 2007 2008 1Q09 2Q09 3Q09

RENT3 Performance

Average daily volume (R$ millions) Average daily volume (# shares)

829,7729,5 687,5 648,7

385,4

956,4 961,7

2005 2006 2007 2008 1Q09 2Q09 3Q09

Record daily amount and number of shares traded in the 3Q09

9M09: RENT3 +149% x +64% IBOV

374%150%

R EN T 3 X IB OVESP A P erfo rmance

0

5

10

15

20

25

0

20

40

60

80

100

120

140

160

180

200

Volume RENT3 RENT3 IBOVESPA

362%

154%

2005 2006 2007 2008 2009

75.0%48.3%

52

Macroeconomic scenario

4.8% GDP growth in 2010 (Bacen/Focus, in 10/09/09)

5.6% real interest rate in 2010 (Bacen/Focus, in 10/09/09)

Strong infrastructure investments

Pre-salt oil exploration in the seashore

2014 Soccer World Cup in Brazil

2016 Olympic Games at Rio de Janeiro

53

Car market scenario

The used car market is following the recovery trend of the new car market.

Source: Anfavea e Fenabrave

Car Market

1.624 1.6751.818

1.997

1.707 1.8081.991

1.7541.494

1.671

469 559 624 689 617 721 758575 668 781 852

1.925

-

400

800

1.200

1.600

2.000

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09

Used car market New car market

54

Managing the Company as an asset management business

Funding

Equity

Debt

Ass

et (c

ars)

Profitability comes from rental divisions

Cash to renew fleet

55

Thank you!

ApresentaçãO 3 Q09 Completa Eng (Pp Tminimizer)

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