Brazil Day Newyork 14 11 2005
Transcript of Brazil Day Newyork 14 11 2005
Localiza Rent a Car
is the most competitive
regional car rental company
in the world
Company overviewC
ore
Bu
sin
ess
Su
pp
ort
#1 operator in Brazil with 96 corporate owned branches Segments: Individuals, Corporate, Travel Industry, Replacement,
Mini Lease Largest fleet in Brazil: 17,961 cars
#1 operator in Brazil with a fleet of 12,119 cars State of the art technology in fleet management
Presence in 6 countries: Brazil, Argentina, Ecuador, Mexico, Paraguay and Uruguay
187 Franchised agencies, with a fleet of 7,200 cars
13 points of sale located in the country’s largest cities 14,846 sold cars up to 3Q05 78.5% cars sold to final customers
Rent a Car Fleet
Franchising Used Car Sales
Synergy: Cost Reduction; Cross Selling; Bargaining Power
Competitive Advantages
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Competitive Advantages
283 branches
6 countries
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Competitive Advantages
Localiza network is larger than the second, the third, the fourth and the fifth competitors combined
(number of agencies in Brazil)
0%
20%
40%
60%
80%
100%
Localiza 229 Avis 80 Unidas 77 Hertz 57 Europcar 14
228229Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Competitive Advantages
Localiza network in airports is larger than the second and the third competitors combined.
(number of agencies in Airports)
68
3228
24
10
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Competitive Advantages
The largest fleet in South America
37.280 cars
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Competitive Advantages
Yield Management Practices
Price fluctuates with supply & demand on:
Day of the week
Month of the year
City
Events
Volume per customer
Competitors’ monitoring
Localiza has been able to maintain list prices fixed since 1999
increasing its profitability through gains of scale, cost reduction
and productivity.
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Competitive Advantages
Localiza has been recognized as Top of Mind for it’s
Customer satisfaction
Quality of services
Strong presence nationwide
High standards of ethical behaviour
Strong financial performance
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Competitive Advantages
Facilities
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Competitive Advantages
Loyalty Program
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Competitive Advantages
Shuttle Service
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Competitive Advantages
Hand held
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Curitiba - PR
Maceió - AL
Natal - RN
Araguaína - TO
Araraquara - SP
Araxá - MG
Atibaia - SP
Blumenau - SC
Brasília - DF
Caçapava - SP
Caxias do Sul - RS
Chapecó - SC
Colatina - ES
Cuiabá - MS
Dourados - MS
Florianópolis - SC
Franca - SP
Governador Valadares - MG
Ilhéus - BA
Itu - SP
Itumbiara - GO
Manaus - AM
Marília - SP
Maringá - PR
Mogi das Cruzes - SP
Montes Claros - MG
Ouro Preto - MG
Passo Fundo - RS
Piracicaba - SP
Ponta Grossa - PR
Recife - PE
Rio Verde - GO
São Carlos - SP
Sertãozinho - SP
Sinop - MT
Taubaté - SP
Teresina - PI
Timóteo - MG
Toledo - PR
Vitória da Conquista - BA
Bariloche - Argentina
Palermo - Buenos Aires
Las Condes - Buenos Aires
Providência - Argentina
Guayaquil - Equador
Competitive Advantages
Stable management
Fast decisions
Deep knowledge
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Competitive Advantages
Released (1)
Unidas
Dallas
(Avis) Locaralpha Master Hertz
Localiza
Consolidated
Net revenue 97,780 46,133 33,584 36,976 nd 616,398Cost 68,480 42,671 41,203 30,192 nd 381,858Gross income 29,300 3,462 (7,619) 6,784 nd 234,540
Sales expense (6,577) --- --- (126) nd (46,771)Adm. exp./ revenue/ oper. exp. (19,223) 3,204 --- (5,671) nd (19,288)Operating income 3,500 6,666 (7,619) 987 nd 168,481
Net financial expense (25,516) (7,367) (3,613) (870) nd (25,798)Equity result --- --- --- --- nd ---Non oper. Income 24,974 1,149 10,159 --- nd 70Taxes/ SC (1,165) (183) (65) (26) nd (40,410)
Net income 1,793 265 (1,138) 91 nd 102,343
Serasa
* It includes R$ 303MM in car resale revenues
Source: Serasa
(1) Released in 02-25-05 (Gazeta Mercantil, Estado de Minas and Valor Econômico)
BR GAAP (R$ thousand)
2004
Integrated Business Platform
Largest Distribution
Largest Fleet
Yield Management
Brand Recognition
Leadership
Management
Financials
Revenues
EBITDA
Net Income
Ratios
Ratings
0
100
200
300
400
500
600
700
2002 2003 2004 YTD Sept04 YTD Sept05
477532
634
443
653
CAGR: +15%
+47%
Net Revenue
Financials
Revenues
EBITDA
Net Income
Ratios
Ratings
0
50
100
150
200
250
2002 2003 2004 YTD Sept04 YTD Sept05
150 152
210
151
205CAGR: +18%
+36%
EBITDA
Financials
Revenues
EBITDA
Net Income
Ratios
Ratings
EBITDA and margin of EBITDA
0
50
100
150
200
250
300
2002 2003 2004 2005
149,8 152,5
210
274
31,4% 28,7%33,1%
32,0%
* Annualized.
*
Financials
Revenues
EBITDA
Net Income
Ratios
Ratings
0
20
40
60
80
100
120
2002 2003 2004 YTD Sept04 YTD Sept05
27
106
91
77 80
CAGR: +19%
+4%
Net Income
64*69*
* Pro forma result disregarding mark-to-market (MTM) of derivative contracts.** Annualized.
Net income / Equity 33,5%* 29,7%* 37,1%* 36,1%**
Financials
Revenues
EBITDA
Net Income
Ratios
Ratings
3,726,414,705,57EBITDA* / NET FINANCIAL EXPENSES**
0,950,960,361,01NET DEBT / EQUITY
0,490,460,220,56NET DEBT / FLEET
1,281,340,571,32NET DEBT / EBITDA
30/09/0531/12/0431/12/0331/12/02
* annualized** except fair value adjustment
Financials
Revenues
EBITDA
Net Income
Ratios
Ratings
Standard & Poors
brA positive outlook
As the Brazilian economy
is performing well
we have some opportunities
Opportunities
Consolidation
GDP
Airport Traffic
Credit Expansion
Replacement
34%
20%10%
18%
10%8%
Consolidated market in USA: five players = 92%
Source: Fleet Central. 2004 data
Local players
Opportunities
Consolidation
GDP
Airport Traffic
Credit Expansion
Replacement
1999 = 59% 2001 = 72%
Consolidation in Europe: six players
41%
15%13%
5%
5%
10%
11%28%
18%16%
8%
6%
11%
13%
Local players
Local playersLocal players
Opportunities
Consolidation
GDP
Airport Traffic
Credit Expansion
Replacement
69%
16%
7%4% 4%
Local players
Localiza
UnidasAvis Hertz
Consolidation in Brazil 2004: four players = 31%
Opportunities
Consolidation
GDP
Airport Traffic
Credit Expansion
Replacement
69%
16%
7%4% 4%
Local players
Localiza
UnidasAvis
Hertz
Number of car rental companies
Consolidation in Brazil 2004: four players = 31%
0
0,5
1
1,5
2
2,5
3
2002 2003 2004
CAGR = -11%
2,511 2,340 1,985
Opportunities
Consolidation
GDP
Airport Traffic
Credit Expansion
Replacement
Vertical expansion
Horizontal expansion
Franchisees’ acquisition
Consolidation
Opportunities
Consolidation
GDP
Airport Traffic
Credit Expansion
Replacement
Horizontal expansion
Consolidation
Opportunities
Consolidation
GDP
Airport Traffic
Credit Expansion
Replacement
Car rental division
average growth of 4 x GDP
in the last five years
GDP
Opportunities
Consolidation
GDP
Airport Traffic
Credit Expansion
Replacement
Airport traffic
Low cost – low fare airlines
have increased 19% y/y growth
(2005/2004)
Opportunities
Consolidation
GDP
Airport Traffic
Credit Expansion
Replacement
Credit expansion
55,4 million major credit cards
23 million credit card holders
Up to 10 installments just in Localiza
Opportunities
Consolidation
GDP
Airport Traffic
Credit Expansion
Replacement
Replacement It is a growing market
- Brazil has 32 million cars but only 8 million insured
- The hit frequency rate is 15% / year
- The potential market is 1,2 million of transactions = 10 million of daily rentals
Localiza has 35% of this market
Localiza is very well positioned to grab this market due to it’s geographic foot print
Rent 3
36.9% Free Float and foreign investors participation of roughly 84,8%
Performance RENT3 since IPO: +98% (1)
Relative Performance RENT 3 x IBOV: almost +60,0% (1)
Average Volume of R$3.3 million
Target price of R$26.00*
(1) From May 23 (IPO date until November11, 2005 * Credit Suisse Report as of November 8, 2005
Localiza.
The opportunity
you were
waiting for.