Localiza Rent a Car is the most competitive regional car rental company in the world
Company overview Core Business Support #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) Integrated 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) Integrated Business Platform Largest Distribution Largest Fleet Yield Management Brand Recognition Leadership Management
Competitive Advantages The largest fleet in South America 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 * It includes R$ 303MM in car resale revenues Source: Serasa (1) Released in (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 CAGR: +15% +47% Net Revenue
Financials Revenues EBITDA Net Income Ratios Ratings CAGR: +18% +36% EBITDA
Financials Revenues EBITDA Net Income Ratios Ratings EBITDA and margin of EBITDA 149,8 152, ,4% 28,7% 33,1% 32,0% * Annualized. *
Financials Revenues EBITDA Net Income Ratios Ratings 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 31/12/0231/12/0331/12/0430/09/05 NET DEBT / EBITDA1,320,571,341,28 NET DEBT / FLEET0,560,220,460,49 NET DEBT / EQUITY1,010,360,960,95 EBITDA* / NET FINANCIAL EXPENSES**5,574,706,413,72 * 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 data Local players
Opportunities Consolidation GDP Airport Traffic Credit Expansion Replacement 1999 = 59% 2001 = 72% Consolidation in Europe: six players 41% 15% 13% 5% 10% 11% 28% 18% 16% 8% 6% 11% 13% Local players
Opportunities Consolidation GDP Airport Traffic Credit Expansion Replacement 69% 16% 7% 4% Local players Localiza Unidas Avis Hertz Consolidation in Brazil 2004: four players = 31%
Opportunities Consolidation GDP Airport Traffic Credit Expansion Replacement 69% 16% 7% 4% Local players Localiza Unidas Avis Hertz Number of car rental companies Consolidation in Brazil 2004: four players = 31% 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 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 % 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.