1. Localiza Rent a Car S.A.
Presentation of 3Q06 Results
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2. Localiza
High quality management
Corporate Governance
Clear and consistent
and respect to minority
strategy
shareholders
Localiza
Discipline on
Consistency on investments
and conservative
quarterly results
financial management
High potential
of profitable growth
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3. Integrated Business Platform
133 agencies
14,250 cars
25,138 cars
Synergies:
cost reduction,
cross selling,
bargaining power
179 agencies 23 points of sales
in 8 countries 79% directly sold
to consumers
6,816 cars
In the 9M06 : 16 new proprietary agencies and 10 new points
In the 9M06 : 16 new proprietary agencies and 10 new points
of used cars sales
of used cars sales
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4. Competitive advantages
Bargaining
Scale gains
power
Integrated platform
Geographical distribution
Yield management
Bargaining power
Know-how
Credit access
Depreciation
Strong brand
IT
Higher
Market share
competitiveness
expansion
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5. Growth opportunities
PIB elasticity
Consolidation Air traffic
Credit cards
Fleet outsorcing*
Replacement
* including mini-lease
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6. Strategies
Short-term:
To add value: EVA
To maintain profitability
(ROE, net margin and EBITDA margin)
Cash generation
Long-term:
To expand business volume through organic growth and new
agencies, leveraging on growth opportunities and market
consolidation, and to achieve scale gains
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7. 3Q06 Highlights
62.8% net income growth
71.8% car rental utilization rate
40.5 % increase in car rental business volume
23.2 % increase in fleet rental business volume
31.2 % increase in car rental EBITDA (excluding used cars sales results)
37.9 % increase in fleet rental EBITDA (excluding used cars sales results)
64th stock in the IBrX – Brazilian index
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8. Localiza Rent a Car S.A.
Presentation of 3Q06 results
(R$ million - USGAAP)
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9. Car Rental Performance
(R$ million. USGAAP)
Daily Rentals (thousand) Net Revenue
641
3,411 410 370
347
2,413
213
1,839
192 166 191
1,231
41%
876
99
271 97 34%
197
155
93
69
2003 2004 2005 3Q05 3Q06 2003 2004 2005 3Q05 3Q06
EBITDA Net Income
179
78
53
117 53
1.1
33
72 31
80 18
44
19 126 43 17
52
31% 55%
84 3
12 34 30
53 41 19
31
(2.0)
(2.9) (11.3)
(2.3)
2003 2004 2005 3Q05 3Q06 2003 2004 2005 3Q05 3Q06
Car Rental
Used Cars Sales
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10. Fleet Rental Performance
(R$ million. USGAAP)
Daily Rentals (thousand) Net Revenues
227
218
179
3,351
3,119 78
2,806 90
59
94
23% 1,071
60
869 149 45
128
120 21 26%
49
39
2003 2004 2005 3Q05 3Q06 2003 2004 2005 3Q05 3Q06
EBITDA Net Income
103 27
90 37
36
78 8
7
4
18
63
35 57
95 51
27
83 5
74 1 60%
2 38% 26
34 16
25
(15) (20) (8)
(36) (11)
2003 2004 2005 3Q05 3Q06 2003 2004 2005 3Q05 3Q06
Fleet Rental
Used Cars Sales
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11. EBITDA Margin per Segment
(R$ million, USGAAP)
3Q06
2003 2004 2005 3Q05
Margin
Margin Margin Margin Margin
44.5%
Rentals 34.3% 42.6% 46.3% 45.3%
Car Rental
2.7%
Used Cars Sales 9.7% 15.3% 14.4% 12.5%
22.9%
TOTAL 20.7% 28.4% 27.9% 26.2%
Rentals
70.1%
61.2% 65.2% 63.6% 64.2%
Fleet Rental
2.9%
Used car sales 7.3% 8.2% 10.5% 7.9%
37.9%
TOTAL 43.4% 41.7% 45.3% 44.2%
53.4%
Rentals 46% 51.5% 52.5% 52.1%
Consolidated
2.8%
Used car sales 9.2% 13.2% 13.7% 11.7%
47.4%
Franchising 43.6% 41.5% 47.6% 47.4%
28.0%
TOTAL 28.6% 33.1% 32.6% 31.1%
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12. Consolidated Performance
(R$ million, USGAAP)
Net Revenues
Daily Rentals (thousand) 869
6,762
628
5,219
4,959
527 448
303
32% 26%
251
2,301 285
1,745 226
144
421 118
325
276
141
108
2003 2004 2005 3Q05 3Q06 2003 2004 2005 3Q05 3Q06
Net Income
EBITDA 286
210 61 107
91
152 40
69
23 63%
13% 79
221 36
70
167 22
4
127 14
75
56
2003 2004 2005 3Q05 3Q06
2003 2004 2005 3Q05 3Q06
Margin 12.7%
12.9% * 14.3% 12.2% 9.8%
* Pro forma result disregarding mark-to-market (MTM) of derivatives contracts
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13. Reconciliation of Net Income
(R$ million, USGAAP)
EBITDA change = + 9.4 million
Rental = +19.2 million
Change in other items = + 4.6 million
Used cars sales = - 9.8 million
Revenues Costs
+58.7 -44.4
25.3 -33.2
Interest
SG&A
+33.4 -11.2 +9.0 Stock
-3.2
Depreciation Options
-1.0
-1.4 -4.9 Taxes
+1.8 1.7
-1.2
+62.8%
22.3 36.3
Net Income Net Income
3Q05 3Q06
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14. Cash Flow
(R$ million, USGAAP)
Cash and cash Cah and cash
equivalents at the 281.7 equivalents on
beginning of 2006: 09/30/06
193.6
70.8 -158.9
Financing and
Operating
Investment
Activities
Activities
Investment activities include fleet (renewal: 14,861 cars and growth: 2,853)
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15. Indebtedness Profile
(R$ million, USGAAP)
Net Debt (R$ million) USGAAP
539
351.3
349.3
281
87
2003 2004 2005 9M05 9M06
2003 2004 2005 9M05 9M06
Net debt / fleet 22% 46% 60% 49% 34%
Net debt / equity 0.36 0.96 1.37 0.95 0.57
S&P Rating - BrA / Positive outlook
The Company is prepared for a new growth cycle.
The Company is prepared for a new growth cycle.
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16. Fleet Investment
(R$ million. USGAAP)
Investments - (R$ million. USGAAP) Quantity - thousand
690
26.1
22.2
493 18.8
448
15.5 15.1 15.7
334
303
251 288 12.0
144 5.6
118 105 5.0 3.6
2003 2004 2005 3Q05 3Q06 2003 2004 2005 3Q05 3Q06
Bought Cars
Sold Cars
Net Investment Fleet Growth (thousand)
2003 2004 2005 3Q05 3Q06
2003 2004 2005 3Q05 3Q06
Renewal
37.4 46.3 47.7 -12.9 13.0 -0.4 +6.2 +7.3 -1.3 +6.4
Growth - 143.8 194.1 - 177.0
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17. Economic Value Added (EVA)
R$ / thousand
100,000 30.0%
29.3%
24.6% 82,736
24.1%
80,000
24.1%
20.0%
21.1%
57,384
18.4%
60,000
44.486 15.8%
40,000
12.0% 10.0%
20,000
1,781
- 0.0%
2003 2004 2005 2006
EVA Nominal WACC ROIC
2006A
2003 2004 2005 Change
16.4 19.5 24.6 *26.2 59.8%
Average price per car R$
9.3% 7.6% 5.7% *2.0% 26.9%
IPCA (consumer inflation index)
23.3% 16.2% 19.0% 15.7% -7.6p.p.
Average CDI (iunterbank CD)
8.4% 5.4% 4.0% 2.5% -5.9p.p.
Sovereign risk
14.3% 10.9% 10.5% 9.1% -5.2p.p.
Real WACC (excluding inflation)
Spread 0.6% 10.8% 8.3% 9.1% -
* 9M06
In the last 3 years the spread between ROIC and WACC has shown little volatility
In the last 3 years the spread between ROIC and WACC has shown little volatility
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18. ROE – Return on Equity
38.9%
38.6%
36.7%
30.4%
2003 2004 2005 2006
NB: The 2006 figure was annualized based on the results of the first nine months, already considering the proceeds from the shares offering.
ROE was arrived at by dividing net income by average shareholders’ equity for the year’, excluding net profit from the respective year.
In 2003, the mark-to-market of derivative contracts was excluded from net income.
Localiza is ranked 13th, among the 500 largest companies in Brazil, in terms of ROE.
Localiza is ranked 13th, among the 500 largest companies in Brazil, in terms of ROE.
(FGV ranking)
(FGV ranking)
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19. Performance - RENT3
359%
RENT3 X IBOV
120
50
100
45
40 80
35
60
30 61%
25 40
20
20
15
10 0
23-May 21-Jun 19-Jul 16-Aug 14-Sep 13-Oct 11-Nov 12-Dec 10-Jan 8-Feb 10-Mar 7-Apr 10-May 7-Jun 6-Jul 3-Aug 31-Aug 29-Sep
Volume RENT3 RENT3 IBOVESPA
From 05/23/05 (IPO) to 10/19/06.
Average daily trading volume in the 3Q06 R$ 8.4m
Performance: RENT3 2006 + 86% X IBOV 2006: + 16%
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20. Disclaimer – Information and Projections
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.
It is not allowed to offer or sell in the United States securities not registered or exempted from registration. in accordance with the Securites Act of
1933. Any securities offering to be conducted in United States must be made through an offering memorandum. which can be obtained with the
underwriters. The offering memo must contain or include reference to detailed information about LOCALIZA and its business and financial results.
in addition to its financial statements.
This presentation does not constitute an offering. invitation or offering request or acquisition of any type of
securities. Neither this presentation nor anything here included represent the terms of a contract or
commitment of any kind.
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21. Thank You!
Localiza IR:
www.localiza.com/ri
Phone: +55 (31) 3247-7039
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