Localiza institucional inglês

44
April, 2014 Localiza Rent a Car S.A. Institutional Presentation 1

Transcript of Localiza institucional inglês

Page 1: Localiza institucional inglês

April, 2014

Localiza Rent a Car S.A.Institutional Presentation

1

Page 2: Localiza institucional inglês

1. Company overview

2. Main business divisions

� Car Rental

� Fleet Rental

� Seminovos

3. Consolidated

4. Debt and cash

5. Appendix

� Earnings release 1Q14

Agenda

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Page 3: Localiza institucional inglês

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 – PE firm DL&J enters at a market cap of US$ 150 mm

1997 – Expansion strategy by adjacencies: Fleet Rental

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

03/31/2014 – Market cap of US$3.1 bi with ADTV of R$49.4 million

1973 1982 1983 2004 2005 2014

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Page 4: Localiza institucional inglês

Company: integrated business platform

Synergies:

bargaining power

cost reduction

cross selling

� 13.275 cars

� 176 locations in Brazil

� 63 locations in South America

� 37 employees

� 59.2% sold to final consumer

� 74 stores

� 1,003 employees

� 64,642 cars

� 4.0 million clients

� 301 locations

� 4,379 employees

� 32,009 cars

� 768 clients

� 353 employees

This integrated business platform gives Localiza flexibility and superior performance.

Based on the 1Q14 4

Page 5: Localiza institucional inglês

Company: Business platform divisions

Car Rental

Localiza car rental rents to individuals or businesses at airports and other locations.

The traditional backbone of Localiza. With its giant fleet that gets renewed annually, it lays the foundation for all scale effects captured by the group as a whole.

Fleet Rental

Offering customized fleet for 2-3 years terms.

Localiza Fleet is seen as an additional business that generates value by leveraging synergies created by the integrated platform approach.

Used car sales

Support area, with the objective to sell the Company’s used cars and add know-how in buying cars and estimating the residual value.

As a support business activity, Seminovosenables the sell roughly 65% of used cars directly to the final customer, thereby maximizing the residual value of used rental cars.

Franchising

Supplementary business, with the purpose to expand the brand’s network.

Franchising is seen as a primarily strategic business by management – the revenues generated are low, however brand and network expand at minimum capital expenditure.

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Net car salerevenue R$25.51 year cycle

Car Rental Financial CyclePer car

R$27.0Car acquisition

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

Revenue

Spread11.1p.p.

Total

1 ano

R$ % Seminovos % R$

Net revenues 19,7 100,0% 28,1 100,0% 47,8

Costs - fixed and variable (9,1) -46,1% (9,1)

SG&A (3,3) -17,0% (2,6) -9,4% (6,0)

Net revenues of car sold 25,5 90,6% 25,5

Book value of car sold (24,1) -85,8% (24,1)

EBITDA 7,3 36,8% 1,4 4,9% 8,6

Cars Depreciation (1,5) -5,2% (1,5)

Others depreciation (0,4) -1,9% (0,2) -0,8% (0,6)

Financial expenses (1,3) -4,6% (1,3)

Taxes (2,1) -10,5% 0,5 1,7% (1,6)

Net Income (Loss) 4,8 24,5% (1,1) -4,0% 3,7

NOPAT 4,6

ROIC 17,1%

Cost of debt after taxes 6,0%

Car Rental Seminovos

Per car soldPer operating car

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Net car salerevenue R$24.4

2 year cycle

Fleet Rental Financial Cycle

Per car

Spread11.1p.p.

R$33.3Car acquisiton

1 2 3 4 5 6 19 20 21 22 23 24Expenses, interest and tax

Revenue

Total

2 anos

R$ % Seminovos % R$

Net revenues 36,9 100,0% 26,7 100,0% 63,7

Costs - fixed and variable (10,3) -28,0% (10,3)

SG&A (2,4) -6,5% (2,4) -8,9% (4,8)

Net revenues of car sold 24,4 91,1% 24,4

Book value of car sold (23,1) -86,2% (23,1)

EBITDA 24,2 65,5% 1,3 4,9% 25,5

Cars Depreciation (9,2) -34,3% (9,2)

Others depreciation (0,1) -0,2% - 0,0% (0,1)

Financial expenses (2,2) -8,2% (2,2)

Taxes (7,2) -19,6% 3,0 11,3% (4,2)

Net Income (Loss) 16,9 45,7% (7,0) -26,3% 9,9

Net Income (Loss) - per year 8,4 45,7% (3,5) -26,3% 4,9

NOPAT 5,7

ROIC 17,1%

Cost of debt after taxes 6,0%

Per operating car

Fleet Rental Seminovos

Per car sold

Page 8: Localiza institucional inglês

Spread (ROIC minus cost of debt after taxes)

(*) 2008 and 2012 ROIC were calculated excluding additional fleet depreciation that was treated as equity loss since they were extraordinary non-recurring events caused by external factors (IPI reduction for new cars), following the concepts recommended by Stern Stewart.

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8.4% 8.8% 7.6% 7.3% 8.6%6.3% 6.0% 7.6%

21.3%17.0%

11.5%

16.9% 17.1% 16.1% 16.5%18.9%

2007 2008 2009 2010 2011 2012 2013 1Q14

12.9p.p.8.2p.p.

4.0p.p.9.6p.p. 8.5p.p. 11.3p.p.

9.8p.p.

ROIC Cost of debt after taxes

Financial crisis effect

10.5p.p.

Annualized

Page 9: Localiza institucional inglês

505.9 608.2 745.2

883.1 1,087.1 1,096.3

1,382.1 1,605.4 1,703.0

2004 2005 2006 2007 2008 2009 2010 2011 2012

Rental revenues evolution

3.585,6 3.520,6 3.510,5 3.659,4 3.884,6 4.045,4 4.381,8 4.433,3 4.527,0

2004 2005 2006 2007 2008 2009 2010 2011 2012

Localiza’s rental revenues at constant prices

Sector’s revenue at constant prices (ex- Localiza)

GDP 5.7% 3.2% 4.0% 6.1% 5.2% -0.3% 7.5% 2.7% 1.0%

Average GDP growth: 3.9%

Source: ABLA (Brazilian Car Rental Association) and Localiza. 9

The Company grew at an average of 4.2x GDP and 5.5x the sector.

Page 10: Localiza institucional inglês

Raisingmoney Buying

cars

Renting Cars SellingCars

Source: ABLA (Brazilian Car Rental Association) and Localiza.

Cash to renew the fleet or pay debt

$

Profitability comes from rental divisions

Competitive advantages: 40 years of experience in managing assets

$

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Competitive advantages: raising money

Global Scale

National Scale

Localiza raises money with lower spreads when compared to Brazilian competitors.

As of March, 2014.

BBB FitchBaa3 Moody’sBBB- S&P

BBB+ S&P B+ S&P B+ Fitch B1 Moody‘s

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

brAA- S&PA+ (bra) Fitch

brA S&P A (bra) Fitch

brA+ S&PA+ (bra) Fitch

A(bra) Fitch

Raisingmoney

Buyingcars

Renting CarsSellingCars

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Competitive advantages: buying cars

Localiza buys cars with better conditions due to the volume of purchases.

Number of cars purchased - 2013

• Includes Franchising

78,779

18,8669,950

*

Source: each company website

Localiza’s share in the internal sales of the major OEMs - 2013

2.6%

Raisingmoney

Buyingcars

Renting CarsSellingCars

Localiza Unidas Locamerica

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99 7842

108

153

55

13

The Company is present in 245 cities where the other largest networks do not operate.

Competitive advantages: renting cars

Know HowBrand Brazilian distribution

# o

f b

ran

ch

es

# o

f cit

ies

Source: Brand Analytics and each company website (Localiza and Peers, as of December, 2013)

479

316

Raisingmoney

Buyingcars

Renting CarsSellingCars

Localiza Unidas Hertz Avis

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Sales to final consumer

Competitive advantages: selling cars

Selling directly to final consumer reduces depreciation.

Cars available for sale are used by car rental division during peaks of demand.

Raisingmoney

Buyingcars

Renting CarsSellingCars

Buffer: additional fleet

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1. Company overview

2. Main business divisions

� Car Rental

� Fleet Rental

� Seminovos

3. Consolidated

4. Debt and cash

5. Appendix

� Earnings release 1Q14

Agenda

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Car Rental overview

65.9%Compact cars

2013 Fleet composition

70,717 cars

34.1%Others

Net Revenues (R$ million)

Corporate fleet size

47,517

64,688 70,717

2009 2011 2013

428.0 565.2

585.2 802.2

980.71,093.7 1,163.5

283.2 311.3

2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14

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Drivers

Air traffic passengers - million

Source: BNDES, ANAC, IPEADATA and BCB

GDP per capita

(R$ thousands)

6.9 7.5 8.4 9.5 10.7 11.7 12.8 14.2 16.0 16.6

19.0 21.3 22.4

24.1

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

151180 200

240260 300

350380

415465

510545

622678

51%

38%37% 35%

31%27%

22% 20% 18% 16% 15% 15% 13% 12%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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

Car rental affordability

29

7082 89 90

2003 2010 2011 2012 2013

Investments in Brazil (2014-2017)(R$ 3.982 billion)

1.505

1.100 867

510

Services andAgriculture

Industry Housing Infraestructure

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Distribution

Car rental distribution (Brazil)

312 346 381 415 449 474 479 477

2007 2008 2009 2010 2011 2012 2013 1Q14

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19Source: Abla and each company’s website (December 2013)

Off-airport market is still fragmented.

Airport locations Off-airport locations

Car Rental Locations in Brazil

Page 20: Localiza institucional inglês

2012 Share – Car Rental

Source: Euromonitor for revenue , ABLA for fleet and Companies’ Financial Statements.20

Rental RevenuesR$2,781.2 million

Others53.8%

30.9%

4.6%

6.5%Unidas

Fleet210,506 cars

Characteristics of Car Rental network in Brazil:

� Complex chain management

� High fixed-cost structure

� Market consolidated in airports and fragmented in off-airport locations

� High barrier to entry

� Capital intensive

35.5%

41.8%

2.5%Hertz

Others46.8%

2.8%Avis

6.1%Unidas

2.1%Avis

2.1 Hertz

Page 21: Localiza institucional inglês

2013 Industry overview

Source: ABLA, Companies’ Financial Statements. **Ouro Verde: Net Fleet Rental Revenue; Ouro Verde: EBITDA excludes selling of Martini Meat. ***Investiment = Average shareholders’ Equity + Average Net Debt

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Gross RentalRevenues (R$ million)

1,821.8 567.0 356.9 N/A 216.8**

Fleet (End of period ) 117,759 38,292 28,265 29,247 18,616

ROIC(NOPAT/ Investment***):

2013 17.7% 6.8% 7.4% 7.2% 7.8%

2012 17.3% 3.9% 6.9% 7.0% 7.9%

Net Debt/ EBITDA 1.5x 2.2x 3.1x 3.9x 3.5x

Net Debt/ Equity 1.0x 0.9x 1.7x 2.7x 6.8x

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1. Company overview

2. Main business divisions

� Car Rental

� Fleet Rental

� Seminovos

3. Consolidated

4. Debt and cash

5. Appendix

� Earnings release 1Q14

Agenda

Page 23: Localiza institucional inglês

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Number of clients

Fleet Rental overview

38.0%Compact cars

2013 Fleet composition

32,809 cars

62.0%Others

584687 760

2009 2011 2013

Net Revenues (R$ million)

219.8 268.4 303.2 361.1

455.0 535.7

575.9

141.8 143.2

2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14

Page 24: Localiza institucional inglês

2012 Share – Fleet Rental

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Others65.5%

16.0%

1.6%

Unidas

Locamérica

Rental RevenuesR$3,448.8 million

Others70.1%

11.5% 0.9%

Unidas

Locamérica

Fleet279,042 cars

Characteristics of the Fleet Rental business in Brazil:

� Scale in purchasing cars of little relevance after initial scale (10,000 cars)

� Low fixed cost structure

� Risk of forecast of car residual value by the end of the contract (depreciation)

� Low entry barrier

17.6%

12.4%

Source: Euromonitor for revenue , ABLA for fleet and Companies’ Financial Statements.

7.1%

9.8%

7.0%

10.5%

Page 25: Localiza institucional inglês

25Source: ABLA 2012 Yearbook and Datamonitor

Low penetration of outsourced fleet in Brazil.

Outsourced fleet penetration

Corporate fleet:

5,000,000*

Rented (outsourced) fleet:

279,042

32,009

Brazilian Market World

5.4%8.9%

13.3%16.5%

24.5%

37.4%

46.9%

58.3%

Brazi

l

Poland

Cze

ch R

epublic

Ger

man

y

France

Spain Uk

Holla

nd

Drivers

*Estimated

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1. Company overview

2. Main business divisions

� Car Rental

� Fleet Rental

� Seminovos

3. Consolidated

4. Debt and cash

5. Appendix

� Earnings release 1Q14

Agenda

Page 27: Localiza institucional inglês

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Combining Localiza’s brand with a growing network of stores

enables the Company to continuously sell thousands of cars at market prices.

# of points of sale

Car sales – operating data

32 35

4955

6673 74 74

2007 2008 2009 2010 2011 2012 2013 1Q14

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Income increase and credit availability are the major drivers for car sales.

Source: O Estado de São Paulo, as of 08/16/13 (based on researches of Sindipeças) and Globo website, as of 03/10/2014.

Used car sales drivers: affordability and penetration

# of inhabitants per car 2012 –(Brazil 2013)

# of inhabitants per car - Brazil

4.4

4.2

4.0

3.6

2.1

2.0

1.9

1.8

1.2

Brazil

Argentina

Russia

South Korea

Japan

France

Germany

United Kingdon

USA

8.0 7.9 7.4

6.9 6.55.9 5.5 5.2

4.4

2005 2006 2007 2008 2009 2010 2011 2012 2013

Page 29: Localiza institucional inglês

7.06.7

7.1 7.3 7.1

8.48.9 9.0

9.4

1.6 1.82.3

2.73.0

3.3 3.5 3.6 3.6

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4.4x3.7x

3.1x2.7x 2.4x 2.5x 2.5x

2005 2006 2007 2008 2009 2010 2011 2012 2013

2.6x

Brazilian car market: new x used car market and affordability

New cars

Used cars

Source: FENABRAVE (Autos + light commercial) and Anfavea

2.6x

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2012 Up to 2 years409.121

2013 Brand new3,579,903

2013 Used cars9,434,225

0.7% 1.8% 13.9%

Car sales – operating data

Source: Anfavea and Fenabrave

30,093 34,281 34,519

47,285 50,772

56,644 62,641

12,934 17,449

2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14

# of cars sold (Quantity)

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Examples

• Dealers• Fiat, VW, Ford, GM most

successful• Auto Brasil

• Rental operators• Locamerica, Hertz

• Retailers• “Loja do carro”

• “Auto malls” and “Cidade do automóvel”

Strengths*

• Brand and perceived image/ experience

• Support often directly from the OEM’s

• Flexibility in trade-in cars

• Strong media presence

• Tailored to popular customer demand at purchase, hence likely to be an attractive value proposition when for sale

• Often appeal to lower income classes, with older cars

• Occasionally specialized in niches

• Comfort and convenience

• Variety of models and brands

• Flexibility in exchange

Weaknesses*

• Used cars not a core business

• Cars often older than 2 years

• Stigma about heavy usage during rental car years

• Weak retail network• Geographical

concentration (SP)• Lower media

presence

• No brand recognition (lower reputation market)

• Financing options with higher interest rates

• Lower media presence

• Cars often older than 2 years

• It hasn’t been successful

Points of sale • 3,714 (Anfavea)• 25 (Unidas,

Locamerica, Avis and Hertz website).

• 45,600 (Fenauto) • 71 (Fenauto)

Main players

*Source: Roland Berger

Page 32: Localiza institucional inglês

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1. Company overview

2. Main business divisions

� Car Rental

� Fleet Rental

� Seminovos

3. Consolidated

4. Debt and cash

5. Appendix

� Earnings release 1Q14

Agenda

Page 33: Localiza institucional inglês

40%

60%

33

2013 Consolidated breakdownR$ million

Net Revenues EBITDA

11%

41%

48%

50%

16% 34%

Company’s profitability comes from Car Rental and Fleet Rental Divisions.

EBIT*

Net revenues EBITDA EBIT Net income

1,183.0 440.0 392.3 225.3

575.9 377.3 259.8 159.0

1,747.3 99.2 * *

Consolidated 3,506.2 916.5 652.1 384.3

*Seminovos results recorded in the Car Rental and Fleet Rental Division.

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Consolidated Net RevenuesR$ million

655.0 842.9 898.5 1,175.3 1,450.0 1,646.7 1,758.9

429.5 459.3

850.5 980.8 922.4

1,321.9 1,468.1

1,520.0 1,747.3

363.8 485.8

2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14

Car Rental Used car sales

1,505.51,823.7

2,918.1 3,506.2

793.3

1,820.9

2,497.2

3,166.7

945.1

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Consolidated EBITDA R$ million

In the Car Rental Division, EBITDA margin was 40.2% in 1Q14, 4.6 p.p. above the same quarter of 2013.

403.5 504.1 469.7649.5

821.3 875.6 916.5

217.2 249.1

2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14

Divisions 2007* 2008* 2009* 2010* 2011* 2012 2013 1Q13 1Q14

Car Rental 46.0% 45.9% 41.9% 45.3% 46.9% 40.9% 36.8% 35.6% 40.2%

Fleet Rental 71.3% 69.1% 68.7% 68.0% 68.6% 66.4% 65.5% 65.9% 62.0%

Rental Consolidated 54.5% 53.3% 51.1% 52.3% 53.8% 49.3% 46.5% 45.8% 47.2%

Used Car Sales 5.5% 5.6% 1.1% 2.6% 2.8% 4.2% 5.7% 5.6% 6.6%

(*)Up to 2011, accessories and freight of new cars were recorded as permanent assets and depreciated over the cars’ useful life.From 2012 on, such values have been accounted directly in the cost line, impacting EBITDA but reducing depreciation costs.

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2,395.8

5,083.14,371.7

3,509.7 4,133.0

4,311.3

4,592.3 4,508.01,096.9

2007 2008 2009 2010 2011 2012 2013 1Q14

332.9

2,546.0 2,577.0

1,536.0 1,683.9

1,895.8

1,452.4 1,396.0

2007 2008 2009 2010 2011 2012 2013 1Q14

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Average depreciation per carin R$

Robust used-carmarket

Financial crisis and IPI reduction effect

Robust used-car market

Financial crisis and IPI reduction effect

Depreciation Non recurring additional depreciation - IPI Effect

Depreciation Non recurring additional depreciation - IPI Effect

3,972.4

5,408.2

2,076.6

Average depreciation per car (R$) – Car Rental

Average depreciation per car (R$) – Fleet Rental

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Consolidated net incomeR$ million

190.2127.4 116.3

250.5291.6

240.9

384.3

88.8 105.8

2007 2008 2009 2010 2011 2012 2013 1Q13 1Q14

* Pro forma 2012 net income excluding additional depreciation, net of income tax.

336.3 *

Record

Strong net income growth even in a high interest scenario.

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1. Company overview

2. Main business divisions

� Car Rental

� Fleet Rental

� Seminovos

3. Consolidated

4. Debt and cash

5. Appendix

� Earnings release 1Q14

Agenda

Page 39: Localiza institucional inglês

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Free cash flow - FCF

(*) Without the technical discount up to 2010

Free cash flow - R$ million 2007 2008 2009 2010 2011 2012 2013 1Q14

Op

era

tio

ns

EBITDA 403.5 504.1 469.7 649.5 821.3 875.6 916.5 249.1

Used car sale revenue, net from taxes (850.5) (980.8) (922.4) (1,321.9) (1,468.1) (1,520.0) (1,747.3) (485.8)

Depreciated cost of cars sold (*) 760.0 874.5 855.1 1,203.2 1,328.6 1,360.2 1,543.8 432.0

(-) Income tax and social contribution (63.4) (52.8) (49.0) (57.8) (83.0) (100.9) (108.5) (31.7)

Change in working capital 13.3 (44.8) (11.5) 54.5 (83.9) 37.1 2.9 (44.4)

Cash provided before investment 262.9 300.2 341.9 527.5 514.9 652.0 607.4 119.2

Cap

ex -

Ren

ew

als

Used car sale revenue, net from taxes 850.5 980.8 922.4 1,321.9 1,468.1 1,520.0 1,747.3 302.9

Car investment for renewal (839.0) (1,035.4) (947.9) (1,370.1) (1,504.5) (1,563.3) (1,818.7) (317.1)

Net investment for fleet renewal 11.5 (54.6) (25.5) (48.2) (36.4) (43.3) (72.4) (14.2)

Fleet renewal – quantity 30,093 34,281 34,519 47,285 50,772 56,644 62,641 10,880

Investment, other property and intangibles investments

(23.7) (39.9) (21.0) (51.1) (63.0) (80.2) (54.0) (9.8)

Free cash flow before growth and before interest 250.7 205.7 295.4 428.2 415.5 528.5 481.0 95.2

Cap

ex -

Gro

wth

Investment on cars for fleet (growth) (221.9) (299.9) (241.1) (540.3) (272.0) (55.5) (209.4) -

Cash provided by fleet decrease - - - - - - - 182.9

Change in accounts payable to car suppliers (51.0) (188.9) 241.1 111.3 32.7 (116.9) 89.7 (102.1)

Fleet growth(272.9

)(488.8) 0.0 (429.0) (239.3) (172.4) (119.7) 80.8

Fleet increase / (reduction) – quantity 7,957 9,930 8,642 18,649 9,178 2,011 7,103 (6,569)

Free cash flow after growth and before interest (22.2) (283.1) 295.4 (0.8) 176.2 356.1 361.3 176.0

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Changes in net debt R$ million

- 1,207.9(34.3)

Financial expenses

(16.8)

IOC

Net debt 03/31/2014

FCF176,0

-1,332.8

Net debt12/31/2013

FCF after financial expenses

141.7

Net debt was reduced in R$124.9 million due to strong cash generation in the period.

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Debt maturity profile (principal)R$ million

The Company maintains a strong cash position and comfortable debt maturity profile.

238.4 214.5

647.3 511.0

221.0 247.0 100.0 100.0

2014 2015 2016 2017 2018 2019 2020 2021

Cash

1,193.7

1,100.2

Page 42: Localiza institucional inglês

765.1

1,254.5 1,078.6

1,281.1 1,363.4 1,231.2 1,332.8 1,207.9 1,492.9

1,752.6 1,907.8

2,446.7 2,681.7 2,547.6 2,797.9 2,623.6

2007 2008 2009 2010 2011 2012 2013 1Q14

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Debt - ratiosNet debt vs. Fleet value

BALANCE AT THE END OF PERIOD

2007(*) 2008(*) 2009(*) 2010(*) 2011 2012 2013 1Q14

Net debt / Fleet value 51% 72% 57% 52% 51% 48% 48% 46%

Net debt / EBITDA** 1.9x 2.5x 2.3x 2.0x 1.7x 1.4x 1.5x 1.2x

Net debt / Equity 1.3x 2.0x 1.5x 1.4x 1.2x 0.9x 1.0x 0.8x

EBITDA / Net financial expenses 5.4x 3.8x 4.2x 5.0x 4.6x 6.3x 8.3x 7.3x

(*) From 2007 to 2010, ratios based on USGAAP financial statements.**Annualized

Net debt Fleet value

Comfortable debt ratios.

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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 Americas

�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

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Disclaimer

Disclaimer

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 doesnot purport to be complete. It is not intended to be relied upon as advice to potential investors. This presentation is strictly confidential and may not be disclosed to anyother person. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of theinformation 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 ExchangeAct of 1934. Such forward-looking statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-lookingstatements 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 itssubsidiaries 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 toLOCALIZA’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. Any offering of securitiesto be made in the United States will be made by means of an offering memorandum that may be obtained from any underwriters we may appoint in connection with anoffering of securities in future. Such offering memorandum will contain, or incorporate by reference, detailed information about LOCALIZA and its business and financialresults, as well as its financial statements.This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything

contained herein shall form the basis of any contract or commitment whatsoever.

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

Roberto MendesCFO and IR

Nora LanariHead of IR

Eugênio MattarCEO