Localiza institucional inglês 2018

1

January 2018

AGENDACOMPANY OVERVIEW1

MAIN BUSINESS DIVISIONS2

FINANCIALS4

APPENDIX: EARNINGS RELEASE 3Q175

CAR RENTAL

FLEET RENTAL

SEMINOVOS

1

2

3

2

COMPETITIVE ADVANTAGES3

3

1973

Founded in Belo Horizonte with 6 VW Beetles

1979

Expasion to 11 capital cities becoming market

leader in 1981

1984

Expansion strategy byadjacencies: Franchising

1991

Expansion strategy byadjacencies: Seminovos

1992

Internationalizationthrough Franchising

1997

PE firm DL&J enters ata market cap ofUS$150 mm

1999

Expansion strategy byadjacencies: Fleet

Rental

2005

IPO with a Market Cap ofUS$295 mm

2014

Beginning ofDigital Transformation

2017

Strategic partnershipwith Hertz ‐

Market Cap US$4.4 Billion(12/31/17)

Phase I: Rise to #1 Phase II: Expansion Phase III: Reaching Scale

Phase IV: Digital Transformation

COMPANY:MILESTONES

INTEGRATED BUSINESS PLATFORM

THIS INTEGRATED PLATFORM GIVES LOCALIZA

FLEXIBILITY AND SUPERIOR PERFORMANCE

4

• 127,221 CARS• 6,8 MILLION CLIENTS• 371 LOCATIONS• 4,294 EMPLOYEES

CAR RENTAL FLEET RENTAL•44,655 CARS• 1,173 CLIENTS• 259 EMPLOYEES

USED CAR SALES• 45.7% SOLD TO FINAL CONSUMER• 93 STORES• 60 CITIES• 1.080 EMPLOYEES

FRANCHISING• 13,514 CARS• 136 LOCATIONS IN BRASIL • 70 LOCATIONS IN SOUTH AMERICA• 36 EMPLOYEES

SYNERGIES:BARGAINING POWERCOST REDUCTIONCROSS SELLING

• OPERATIONS: 514 EMPLOYEES• OVERHEAD: 463 EMPLOYEES

COMPANY:BUSINESS PLATFORM DIVISIONS

CAR RENTAL FRANCHISING FLEET RENTAL USED CAR SALES

5

• HIGH FIXED COST STRUCTURE• STANDARDIZED FLEET • 1 YEAR CYCLE• HIGHER ENTRY BARRIERS • GAINS OF SCALE• CAPITAL INTENSIVE • CONCENTRATED AIRPORT MARKET• FRAGMENTED OFF AIRPORT MARKET

RENTS TO INDIVIDUALS AND COMPANIES AT AIRPORTS AND OFF AIRPORT LOCATIONS.

CONTRIBUTES TO EXPAND LOCALIZA’S NETWORK.

• HIGH PROFITABILITY • LOW CONTRIBUTION TO EARNINGS• RESPONSIBLE TO DEVELOP NEW

MARKETS

• LOW FIXED COST STRUCTURE• CUSTOMIZED FLEET• 2‐3 YEARS CYCLE• LOWER ENTRY BARRIERS• CAPITAL INTENSIVE

OUTSOURCES FLEET FOR 2‐3 YEARS’ TERM CONTRACTS.

SELLS THE USED CARS MAINLY TO FINAL CONSUMERS AFTER THE RENTAL AND ESTIMATES THE RESIDUAL VALUES.

• EFFICIENCY AREA RESPONSIBLE TO SELL CARS FROM RAC AND FLEET DIVISIONS

• KNOW HOW OF USED CARS MARKET• LOW DEPENDENCE OF INTERMEDIATES• ALLOWING FOR LOWER DEPRECIATION

R$35.2Average car price(past 2 years)

Car sale revenue net of SG&A

R$31.61 year cycle

1 2 3 4 5 6 7 8 9 10 11 12Expenses, interest and tax

Revenue

Financial Cycle RAC 2016Per car

6

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

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

Revenue

Car sale revenue net of SG&A

R$29,2

R$42,9Average car price(past 2 years)

3 year cycle

Financial Cycle Fleet Rental 2016Per car

7

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

R$ 151 16%

R$ 338 37% R$ 439

47%R$ 283 39%

R$ 446 61%

Net RevenuesR$4.249

EBITDAR$928**

R$ 2,425 57%

R$ 538 13% R$ 1,286

30%

EBIT*R$729**

Consolidated breakdown – 9M17R$ million

8

*Seminovos results recorded in the Car Rental and Fleet Rental Divisions**9M17 adjusted financials

COMPANY’S PROFITABILITY COMES FROM CAR RENTAL AND FLEET RENTAL DIVISIONS



FINANCIALS4


CAR RENTAL

FLEET RENTAL

SEMINOVOS

1

2

3

9


CAR RENTAL: OVERVIEW

10

Compact cars 53,0%

Others47.0%

9M17 FLEET COMPOSITION127,221 CARS

CORPORATE FLEET SIZECAR RENTAL DISTRIBUTION (BRAZIL)

474 479 476 494 491507

2012 2013 2014 2015 2016 9M17

65,086 70,717 77,573 76,75594,156

127,221

2012 2013 2014 2015 2016 9M17

84 millionAdult population(age> 20 years)Class A+B+C

64 millionCredit card owners*

6.8 million

180200 240

260

300 350 380415

465510

545

622678

724

788880

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

CAR RENTAL AFFORDABILITY

Source: BCB and Localiza rates

Sources: IPEADATA, Localiza’s loyalty program and BCB (2016)

INCREASING AFFORDABILITY AND LOW PENETRATION BRINGS GROWTH OPPORTUNITIES.

*Was considered that each credit card owner owns 1,3 credit card, BCB estimated that were 84 million active credit cards in Brazil in 2016.

DRIVERS

11

EVOLUTION IN AIRLINE MARKET BRINGS GROWTH OPPORTUNITIES

DRIVERS

12

*

40.645.7 49.7

56.9

70.381.5

87.0 88.2 93.3 94.4 89.0 90.8

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

AIRLINE MARKET EVOLUTIONRPK (REVENUE SEAT KILOMETER) IN MILLION

* Annualized with the available data until November/17

Sources: ANAC

201.3267.8

401

201.3 241.4

700.5

2017 2027 2037

DEMAND FORECASTING PASSANGERS ESTIMATE (IN MILLION)

Sources: Ministério dos Transportes / Transportation Ministry (september/2017)

OPTIMISTIC

CONSERVATIVE

CAR RENTAL LOCATIONS IN BRAZIL

OFF – AIRPORT MARKET IS STILL FRAGMENTED

AIRPORT LOCATIONS OFF – AIRPORT LOCATIONS

Localiza98

Hertz32 Unidas

50

Avis32

Others42

Movida51

Localiza409

Hertz47

Unidas156

Avis21

Others7,825

Movida101

13Source: ABLA, each company’s website on 11/30/2017 and Localiza’s 3Q17 Earnings Release.

1/3 OF CAR RENTAL’S REVENUES COMES FROM AIRPORT LOCATIONS

6,4%

OFF ‐AIRPORT LOCATIONS

AIRPORT LOCATIONS

MARKET SHAREGROSS REVENUE ‐ CAR RENTAL 2016

LOCALIZA’S MARKET SHARE IS HIGHER THANTHE 2ND AND 3RD PLAYERS TOGETHER

33.7%

13.5%7.6%

45.2%

MARKET SIZE:R$5.1 BILLION

OTHERS

UNIDASMOVIDA

14



FINANCIALS4


CAR RENTAL

FLEET RENTAL

SEMINOVOS

1

2

3

15


FLEET RENTAL: OVERVIEW

NUMBER OF CLIENTS

32,104 32,809 34,312 33,948 34,96044,655

2012 2013 2014 2015 2016 9M17

729 760 798 849 9251,173

2012 2013 2014 2015 2016 9M17

9M17 Fleet composition44,655 cars

Compact cars36.9%Others

63.1%

16

END OF PERIOD FLEET

DRIVERS

17

Corporate fleet:5,000,000*

Rented fleet:440,737**

44,655

BRAZILIAN MARKET

*Frost&Sullivan research **Localiza estimates

WORLD

8.8% 8.9%13.3% 16.5%

24.5%

37.4%46.9%

58.3%

Source: Datamonitor for European countries and Localiza’s estimate for Brazil

LOW PENETRATION OF RENTED FLEET IN BRAZIL

MARKET SHAREGROSS REVENUE ‐ FLEET RENTAL 2016

FRAGMENTED MARKET WITH LOW ENTRY BARRIERS

MARKET SIZE:R$5.4 BILLION

OTHERS UNIDAS

LOCAMERICA

18

12.2%

3.8%6.5%

8.1%

69.3%

MOVIDA



FINANCIALS4


CAR RENTAL

FLEET RENTAL

SEMINOVOS

1

2

3

19


CAR SALES OPERATING DATA

20

# OF POINTS OF SALE

73 74 75 77 84 93

2012 2013 2014 2015 2016 9M17

# CARS SOLD (QUANTITY)

56.644 62.64170.621 64.305 68.449 64.451

2012 2013 2014 2015 2016 9M17

EFFICIENCY GAIN ON CAR SALES

DRIVERS SEMINOVOS

# OF INHABITANTS PER CAR – BRAZIL 2005 ‐ 2016AFFORDABILITY TO BUY CARS – PUBLIC PRICE OF THE

MODEL GOL IN THE MOST BASIC VERSION

AFFORDABILITY AND PENETRATION

7.97.7

7.36.9

6.56.0

5.75.3

5.0 4.9 4.8 4.8

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

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

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

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

DEVELOPED COUNTRIES MAINTAIN A RATIO BETWEEN 1‐2 CARS PER INHABITANT

Source: Sindipeças – Current Fleet Report 2016, as of April 2016. Source: BCB and Localiza

21

8.4 8.9 9.0 9.4 10.1 9.9 10.010.6

3.3 3.5 3.6 3.6 3.3 2.5 2.0 2.1

2010 2011 2012 2013 2014 2015 2016 2017*

BRAZILIAN CAR MARKET: new vs used car market

Source: Fenabrrave (light and commercial cars)

*9M17 anualizado 22

New cars

Used cars

2.5x 2.5x2.6x 2.6x 3.1x 4.0x5.0x 5.0x

TOTAL MARKET OF 12.7 MILLION CARS.

10.7

2.2

21.8%

Up to 2 years ‐ 2016313,274

CARS SALESOPERATING DATA

0.7%

Used cars – 201610,008,769

3.4%

Brand new‐ 20161,986,362

Main players

Examples • Retailers • Dealers • Rental Operators • “Auto malls”

Points of sale • 48,000 (Fenauto) • 4.,93 (Anfavea) • +120 (Unidas, Movida, Locamerica) • 71 (Fenauto)

Source: Anfavea 2017 e Fenabrave / Unidas, Locamerica e Movida.23



FINANCIALS4


CAR RENTAL

FLEET RENTAL

SEMINOVOS

1

2

3

24


COMPETITIVE ADVANTAGES

PROFITABILITY COMES FROM RENTAL DIVISIONS

CASH TO RENEW THE FLEET OR PAY DEBT

44 YEARS OF EXPERIENCE IN MANAGING ASSETS AND GENERATING VALUE.

RAISING MONEY

BUYINGCARS

ALUGUELDE CARS

SELLINGCARS

25

RENTINGCARS

COMPETITIVE ADVANTAGESRAISING MONEY

RAISING MONEY

BUYINGCARS

SELLINGCARS

INVESTMENT GRADE: LOWER SPREADS AND LONGER TENORS

LOCALIZA RAISES MONEY WITH BETTER CONDITIONS THEN ITS COMPETITORS.Source: Bloomberg November, 2017.

BB+ FitchBa2 Moody’sBB+ S&P

Baa1 Moody´s B+ S&P Ba3 Moody´sBB S&P

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

A+(bra) Fitch AA‐ (bra) FitchbrA+ S&P

AA‐ (bra) FitchbrA S&P A(bra) FitchNational scale

Global scale

26

RENTINGCARS

COMPETITIVE ADVANTAGESRAISING MONEY

RAISING MONEY

BUYINGCARS

SELLINGCARS

27

R$869,0 109,35%12/2017

R$700 107,25%05/2017

R$650 104,66%09/2017

R$500 107,00%05/2017

Unidas R$500113,97% ‐ 10/2017

R$ 350 103,49%10/2017

Unidas R$300128,68% ‐ 04/17

Locamerica R$300130,00% ‐ 08/2017

Movida R$250131,42% ‐ 07/2017

R$216 111,30%12/2017

Movida R$150119,00% ‐ 07/2017

Locamerica R$100113,15% ‐ 11/2017

100%

105%

110%

115%

120%

125%

130%

135%

140%

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

RENTINGCARS

2017 Bonds ‐ R$ million

COMPETITIVE ADVANTAGESBUYING DE CARS

Number of cars purchased – 9M17 Localiza’s share in the internal sales of the OEMs ‐ 9M17

LOCALIZA BUYS CARS WITH BETTER CONDITIONS DUE TO THE VOLUME OF PURCHASES.Source: website of each company and ANFAVEA..

100,109

44,096 26,029

12,557

Localiza Movida Unidas Locamerica6.4%

RAISING MONEY

BUYINGCARS

SELLINGCARS

28

RENTINGCARS

RENTING CARS

THE COMPANY IS PRESENT IN 251 CITIES WHERE THE OTHER LARGEST NETWORKS DO NOT OPERATE

Source: website of each company on 07/31/2017

BRAZILIAN DISTRIBUTION

# OF LOCATIONS # OF CITIES

507

219

183402

Localiza Competitors

400

149 96

Localiza Unidas Movida


RAISING MONEY

BUYINGCARS

SELLINGCARS

29

RENTINGCARS

Most recognized and desired brand in the category


RAISING MONEY

BUYINGCARS

SELLINGCARS

30

RENTINGCARS

• Co‐branding with Hertz, the most well‐known brand, with presence in +150 countries

• 24th most valuable brand in Brazil in 2017 (Interbrand ranking) • Brand with the largest awareness and preference in the sector• Presence online and offline

• Winner of Época ReclameAqui award for the 3rd consecutive year • Customer superior satisfaction (NPS) • Culture of delighting• Modern and diversified fleet

Leader in loyalty and superior quality

RENTING CARS

CAR RENTAL INOVATIONS

CONSTANT INNOVATIONS ALLOW MAINTENANCE OF THE PREMIUM SERVICE

Anti fraud


RAISING MONEY

BUYINGCARS

SELLINGCARS

31

RENTINGCARS

Localiza FastChatbot® Digital register and self check‐in

Taylor‐made solution for fraud prevention in car

rentals

Mobile‐based counter bypass:Provides agility and control over the car rental experience. Customers can pick‐up car bypassing our counter

Facebook / messengerbooking assistant

Automatic capture of the driver’s license for new costumers registration.

Expedite check‐in.

FLEET RENTAL INOVATIONS

Connected Fleet Mobile SolutionIntegrated mobile

solution to fleet rental services for drivers and

contract manager.

Online Fleet Rental

Fast diagnosis and friendly dashboard for

fleet manager.


RAISING MONEY

BUYINGCARS

SELLINGCARS

32

DIFFERENTIATED OFFER WITH HIGHER ADDED VALUE TO THE CUSTOMER

FLEETRENTAL

Integrated technology solution that increases

competitive intelligence and leverages productivity gains.

SELLING CARSCOMPETITIVE ADVANTAGES

RAISING MONEY

BUYINGCARS

SELLINGCARS

33

RENTINGCARS

Sale to final consumer

Digital Sale

93 points of sale

60 cities in Brazil

Buffer: additional fleet during peaks of demand

Deep know how of used car market

Costumer preference (make and models)

Pricing estimate and capture

+ Residual Value

EFFICIENCY AREA TO REDUCE DEPRECIATION


RAISING MONEY

BUYINGCARS

SELLINGCARS

34

RENTINGCARS

CAR PREPARATION

• Quality control of the cars delivered by OEM’S

• Car licensing

DELIVERY IN THE BRANCHES

• Transport tracking• Logistic management

optimization

OPERATING CAR

• Maintanance and rapair• Traffic fines processing• Licensing renewal

CAR DECOMISSIONING

• Car checking • Preparation for sales• Transportation to

Seminovos stores

OPERATIONAL EXCELLENCE AND LOGISTICS

9.8p.p.10.6p.p. 10.7p.p. 7.5p.p. 5.2p.p. 7.7p.p.

16.9% 16.7% 17.8% 17.0%15.4% 15.9%

6.3% 6.0%8.0%

9.5% 10.2%8.2%

2012 2013 2014 2015 2016 9M17

ROIC Cost of debt after taxes

ROIC versus COST OF DEBT AFTER TAXES

ROIC considered effective income tax rate

LOCALIZA IS COMMITED TO VALUE CREATION FOR ITS SHAREHOLDERS

annualized

35



FINANCIALS4


CAR RENTAL

FLEET RENTAL

SEMINOVOS

1

2

3

37


3Q17 OPERATIONAL HIGHLIGHTS

4,846 6,587

3Q16 3Q17

2,812 3,241

3Q16 3Q17

17,379

23,941

3Q16 3Q17

87,897 127,221

34,437

44,655 13,868

13,514 136,202

185,390

3Q16 3Q17Franchising Fleet Rental Car Rental 38

# OF CARS SOLD

RENTAL DAYS (THOUSAND)– CAR RENTAL RENTAL DAYS (THOUSAND) – FLEET RENTAL

FLEET AT END OF THE PERIOD

3Q17 FINANCIAL HIGHLIGHTS

39

NET REVENUES (R$ MILLION)

NET INCOME (R$ MILLION)

103.9139.5

3Q16 3Q17 Adjusted

EBIT (R$ MILHÕES)

592.9 898.4

366.8

476.5 163.5

188.5 1,123.2

1,563.4

3Q16 3Q17Seminovos RAC and frachising Fleet Rental

252.1 332.3

3Q16 3Q17 Adjusted

187.8 263.9

3Q16 3Q17 Adjusted

21.5

16.321.5

One‐time costs incurred ‐ Hertz Brasil acquisitionand Franchisees incorporation

One‐time costs incurred ‐ Hertz Brasil acquisitionand Franchisees incorporation, after taxes

One‐time costs incurred ‐ Hertz Brasil acquisitionand Franchisees incorporation

EBITDA (R$ MILLION)

HERTZ BRASIL – SUCESS OF THE INTEGRATION

40

Rebranding with the new brand Localiza Hertz

Fleet contracts transferred to Localiza Fleet

Integration of Hertz Brasil´s and Localiza´s locations

8.386 cars integrated to the Localiza´s fleet

Inbound/outbound reservation system already integrated

Localiza´s clients have acess to over 10,000 Hertz locations around the globe

Data and client base consolidation

Closing on 09/01/2017

NEXT STEPS: INCREASE OF THE COMMERCIAL OPPORTUNITIES, INBOUND OUTBOUND AND KNOW‐HOW EXCHANGE

ONE TIME COSTS 3Q17

41

ONE-TIME COSTS 3Q17 Incurred

4Q17 Estimated

Total Estimated

RAC Costs:Hertz: rebrand, structure and networking reduction (2.1) (40.0) (42.1)

Franchise integration (12.7) (12.7)

RAC - Total costs (14.8) (40.0) (54.8)SG&AHertz: structure and networking reduction (6.7) (20.0) (26.7)

Total SG&A (6.7) (20.0) (26.7)Total One-time Costs (21.5) (60.0) (81.5)

CONSOLIDATED RESULTS 3Q17 actual One-off 3Q17

Adjusted

Net revenues 1,563.4 1,563.4Total costs and expenses (1,252.6) 21.5 (1,231.1)

EBITDA 310.8 21.5 332.3Depreciation (68.4) (68.4)

EBIT 242.4 21.5 263.9Financial expenses, net (79.4) (79.4)

Income tax and social contribution (39.8) (5.2) (45.0)

Net income 123.2 16.3 139.5

3Q17 financial results were adjusted toexclude the impact of one‐time costsresulting from the acquisition of Hertz´soperations in Brazil (R$8.8 million) andthe integration of 17 franchised locations(R$12.7 million):

Note: non‐incurred one‐time costs were not provisioned in 3Q17 because, on 09/30/2017, such expenses were not bound to be regarded asprovision according to the rules imposed by Technical Pronouncement CPC # 25 – Provisions, Contingent Liabilities and Contingent Assets.

CAR RENTAL

1,093.7 1,163.5 1,284.4 1,258.0 1,428.0

1,030.0 1,273.6

362.5 472.6

2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17

NUMBER OF DAILY RENTALS (THOUSAND)

35.9% RAC DAILY RENTALS GROWTH AND 30.4% GROWTH IN NET REVENUES IN 3Q17

13,749 14,242 15,416 15,566 18,662

13,397 17,461

4,846 6,587

2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17


42

43

UTILIZATION RATE – CAR RENTALAVERAGE DAILY RENTAL RATE – IN R$

73.4% 73.7%75.3%

71.5% 73.5% 74.7% 74.3%

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

83.6 79.4 77.7 78.6 79.3

74.1 74.1

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

CAR RENTAL

THE AVERAGE DAILY RENTAL RATE AND UTILIZATION RATE REMAINED FLATTISH IN 3Q17 WHEN COMPARED WITH 2Q17

.

CAR RENTAL NETWORK EVOLUTION

Number of car rental locations Brazil and abroad (does not include Hertz Brasil)

272 286 304 320 333 371

202 193 172 174 158 13650 63 64 70 70 70524 542 540 564 561 577

2012 2013 2014 2015 2016 9M17*

Localiza's branches ‐ Brazil Franchisees' branches ‐ Brazil Franchisees' branches ‐ abroad

+38

38 CORPORATE BRANCHES WERE ADDED TO THE NETWORK IN 9M17

44

* Does not include Hertz Brasil branches

FLEET RENTAL NUMBER OF DAILY RENTALS (THOUSAND)

15.3% GROWTH IN DAILY RENTALS AND NET REVENUES IN 3Q17 45

535.7 575.9 571.9 608.5 651.8 481.3 538.2

163.5 188.5

2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17

10,601 10,844 10,363 10,901 11,240 8,318 9,184

2,812 3,241

2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17


NET INVESTMENT FLEET EXPANSION (REDUCTION)* (QUANTITY)

108,271 CARS PURCHASED IN 9M17, 57,213 OF WHICH WERE PURCHASED IN 3Q17, INCLUDING HERTZ BRASIL46

NET INVESTMENT IN FLEET (R$ MILLION)

Cars purchased Cars sold

2,011 7,103

* It does not consider theft / crashed cars.

9,183

465.0

(273)

1,618.82,026.2

2,483.2 2,278.4

3,289.62,211.9

4,316.6

1,078.0

2,208.91,520.0 1,747.3 2,018.2 2,044.9 2,342.6

1,609.32,424.7

592.9898.4

2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17

58,655 69,744 79,804

64,032 87,833

59,912

108,271

28,903

57,213 56,644 62,641 70,621 64,305 68,449

47,566 64,451

17,379 23,941

2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17

98.8 278.9 233.5

19,384

947.0

12,346

602.6

485,1

43,82033,272

1,891.9

1,310.5

11,524267

100,109

8,162

8,162

49,051 26764,18423,674

9.04,030.1

286.5

286.5

1,922.4 9.02,415.7

889.4

Hertz Brasil

Purchases (includes accessories) Used car sales net revenues Hertz Brasil

47

NUMBER OF POINTS OF SALE

73 74 75 77 84 7993

56,644 62,641 70,621

64,305 68,449

47,566

64,451

‐50,000

‐30,000

‐10,000

10,000

30,000

50,000

70,000

‐10

10

30

50

70

90

110

130

150

2012 2013 2014 2015 2016 9M16 9M17

Points of sale Cars sold

NEW POINTS OF SALE WILL BE ADDED TO SUPPORT THE FLEET RENEWAL.

48

END OF PERIOD FLEET

185,390 CARS AS OF 09/30/2017

INCREASE OF 39,324 CARS IN THE RENT A CAR DIVISION WITHOU IMPACTING UTILIZATION RATE

Car Rental Fleet Rental Franchising

+10,218

+39,324

Quantity

1,646.7 1,758.9 1,874.0 1,883.1 2,096.8 1,523.9 1,824.1 530.3 665.0

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

1,609.4 2,424.7

592.9 898.4

3,166.7 3,506.2 3,892.2 3,928.0 4,439.3 3,133.3

4,248.8

1,123.2 1,563.4

2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17

49

CONSOLIDATED NET REVENUESR$ million

Rental Used car sales

39.2% INCREASE IN CONSOLIDATED REVENUES IN 3Q17

50

CONSOLIDATED EBITDAR$ million

(*) It considers the new appropriation criteria of the overhead, which is also appropriated to Seminovos.(**)3Q17 and 9M17 adjusted financials

Divisions 2012 2013 2014* 2015 2016 9M16 9M17 3Q16 3Q17

Car Rental 40.9% 36.8% 38.7% 31.8% 32.3% 32.7% 34.2%** 31.9% 32.2%**

Fleet Rental 66.4% 65.5% 60.0% 62.2% 64.5% 64.7% 62.7% 64.5% 63.4%

Rental Consolidated 49.3% 46.5% 45.3% 41.7% 42.3% 42.9% 42.6%** 42.1% 41.0%**

Used Car Sales 4.2% 5.7% 6.0% 7.3% 5.5% 5.6% 6.2% 4.9% 6.6%

EBITDA margin:

875.6 916.5 969.8 934.8 1,015.6

744.6927.9

252.1332.3

2012 2013 2014 2015 2016 9M16 9M17Adjusted

3Q16 3Q17AdjustedIncurred One‐time costs acquisition Hertz Brasil and Franchisees

21.5

21.5

31.8% EBITDA INCREASE IN 3Q17

51

AVERAGE ANNUAL DEPRECIATION PER CARIn R$

1,896 1,452 1,270 622

1,251 1,351

2012 2013 2014 2015 2016 9M17 annualized

3,972

5,408

4,311

4,592 4,202 3,935 3,714 3,105

2012 2013 2014 2015 2016 9M17 annualized

2,076IPI effect

1,097IPI Effect

FLEET RENTAL

CAR RENTAL

DEPRECIATION IS IMPACTED BY THE NEW AND USED CAR MARKET, AS WELL BY THE COST TO SELL

52

CONSOLIDATED EBITR$ million

465.8

652.1 726.7 735.5 771.1569.1

729.4

187.8 263.9

2012 2013 2014 2015 2016 9M16 9M17Adjusted

3Q16 3Q17 Adjusted

610.3

Divisions 2012 2013 2014 2015 2016 9M16 9M17 3Q16 3Q17

Car Rental 23.7% 32.8% 36.2% 34.3% 30.2% 31.0% 34.8%* 28.1% 34.4%*

Fleet Rental 36.9% 45.1% 44.3% 48.9% 51.2% 50.8% 52.7% 51.4% 53.1%

Consolidated 28.3% 37.1% 38.8% 39.1% 36.8% 37.3% 40.0%* 35.4% 39.7%*

21.5

21.5

Incurred One‐time costs acquisition Hertz Brasil and Franchisees

144.5IPI Effect

(*)3Q17 and 9M17 adjusted financials

40.5% EBIT GROWTH, WITH INCREASING MARGINS ON RAC AND FLEET RENTAL

53

CONSOLIDATED NET INCOMER$ million

240.9

384.3 410.6 402.4 409.3304.9

389.0

103.9 139.5

2012 2013 2014 2015 2016 9M16 9M17Adjusted

3Q16 3Q17Adjusted

336.3

Reconciliation EBITDA x Net income 2012 2013 2014 2015 2016 9M16 9M17* Var. R$ Var. % 3Q16 3Q17* Var. R$ Var. %

Consolidated EBITDA 875.6 916.5 969.8 934.8 1,015.6 744.6 927.9 183.3 24.6% 252.1 332.3 80.2 31.8%

Cars depreciation (232.4) (229.0) (207.4) (163.6) (206.3) (146.8) (170.2) (23.4) 15.9% (54.7) (58.2) (3.5) 6.4%

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

Other property depreciation and amortization (32.9) (35.4) (35.7) (35.7) (38.2) (28.7) (28.3) 0.4 ‐1.4% (9.6) (10.2) (0.6) 6.3%

EBIT 465.8 652.1 726.7 735.5 771.1 569.1 729.4 160.3 28.2% 187.8 263.9 76.1 40.5%

Financial expenses, net (138.7) (110.6) (151.1) (202.7) (243.5) (170.8) (221.3) (50.5) 29.6% (53.7) (79.4) (25.7) 47.9%

Income tax and social contribution (135.3) (157.2) (165.0) (130.4) (118.3) (93.4) (119.1) (25.7) 27.5% (30.2) (45.0) (14.8) 49.0%

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

Net income of the period 240.9 384.3 410.6 402.4 409.3 304.9 389.0 84.1 27.6.% 103.9 139.5 35.6 34.3%

16.3

16.3

Incurred one‐time costs acquisition Hertz Brasil and Franchisees, after taxes

95.4IPI Effect

(*)3Q17 and 9M17 adjusted financials

34.3%NET INCOME INCREASE IN 3Q17

54

FREE CASH FLOW

R$1 billion investment

(64,451 cars)(35,658 cars) (includes 8,162

cars)

R$ 1 BILLION INVESTED IN GROWTH

FREE CASH FLOW

55

Free cash flow ‐ R$ million 2012 2013 2014 2015 2016 9M17 Adjusted

Ope

ratio

ns

EBITDA 875.6 916.5 969.8 934.8 1,015.6 927.9

Used car sale revenue, net from taxes (1,520.0) (1,747.3) (2,018.2) (2,044.9) (2,342.5) (2,424.7)

Depreciated cost of cars sold 1,360.2 1,543.8 1,777.0 1,769.1 2,102.5 2,178.8

(‐) Income tax and social contribution (100.9) (108.5) (113.1) (110.7) (93.3) (81.7)

Change in working capital 37.1 2.9 (27.1) (30.0) 113.2 (28.9)

Cash generated by rental operations 652.0 607.4 588.4 518.3 795.5 571.4

Cape

x ‐ren

ewal Used car sale revenue, net from taxes 1,520.0 1,747.3 2,018.2 2,036.3 2,342.5 2,424.7

Fleet renewal investment (1,563.3) (1,819.7) (2,197.7) (2,278.4) (2,563.6) (2,594.6)

Net investment for fleet renewal (43.3) (72.4) (179.5) (242.1) (221.1) (169.9)

Fleet renewal – quantity 56,644 62,641 70,621 64,032 68,449 64,451

Investment, other property and intangible investments (77.8) (47.5) (46.3) (29.7) (42.2) (35.1)

Free cash flow from operations, before growth 530.9 487.5 362.6 246.5 532.2 366.4

Cape

x ‐Growth Fleet growth (investment) (55.5) (209.4) (286.8) 8.6 (726.0) (1,435.5)

Change in accounts payable to car suppliers (116.9) 89.7 334.4 (121.2) 190.7 738.7

Fleet growth capex (172.4) (119.7) 47.6 (112.6) (535.3) (696.8)

Fleet increase / (reduction) – quantity 2,011 7,103 9,183 (273) 19,384 35,658

Free cash flow after growth, and before interest and new HQ 358.5 367.8 410.2 133.9 (3.1) (330.4)

Cape

x‐n

on‐

recurring

Hertz acquisition net of the acquired cash (R$360.1 million ‐ R$22.4 cash)

‐ ‐ ‐ ‐ ‐ (337.7)

Incurred one‐time costs effect ‐ ‐ ‐ ‐ ‐ (21.5)

New headquarters construction and furniture (2.4) (6.5) (148.3) (30.7) (84.4) (119.7)

Free cash flow before interest 356.1 361.3 261.9 103.2 (87.5) (809.3)

56

CHANGE IN NET DEBTR$ million

R$1.1 BILLION NET DEBT INCREASE DUE TO FLEET EXPANSION AND HERTZ BRASIL ACQUISITION

R$1 billion investment

57

DEBT MATURITY PROFILE (PRINCIPAL)R$ million

1,939.4

111.3435.6 685.6

1,420.0

672.5 500.0 500.0700.0

350.0

350.0

Cash 2017 2018 2019 2020 2021 2022 2023 2024

1,232.52,289.4

Pro‐Forma with 4th debentures issuance of Localiza Fleet, completed in October. 2017

1,050.0

As of September 30, 2017Includes 4th issuance of Localiza Fleet completed in October 2017

STRONG CASH POSITION AND COMFORTABLE DEBT PROFILE

58

DEBT RATIOS

THE COMPANY CONTINUES TO PRESENT SOLID DEBT RATIOS

NET DEBT VERSUS FLEET VALUE

BALANCE AT THE END OF PERIOD 2012 2013 2014 2015 2016 9M17

Net debt / Fleet value 48% 48% 40% 44% 45% 49%

Net debt / EBITDA(*) 1.4x 1.5x 1.4x 1.7x 2.1x 2.6x

Net debt / Equity 0.9x 1.0x 0.8x 0.8x 0.9x 1.3x

EBITDA / Net financial expenses 6.3x 8.3x 6.4x 4.6x 4.2x 4.2x

NET DEBT FLEET VALUE

(*)Annualized

1,231.2 1,332.8 1,322.3 1,588.6 2,084.0 3,238.3 2,547.6 2,797.9 3,296.3 3,642.7

4,623.6

6,588.6

2012 2013 2014 2015 2016 9M17

59

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

The material presented 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 becomplete. 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, theaccuracy, 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 projections 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, subjectto 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 materiallydifferent 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.

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 anything contained herein shall form the basis ofany contract or commitment whatsoever.

DISCLAIMER

Localiza institucional inglês 2018

Economy & Finance

Transcript of Localiza institucional inglês 2018