Download - Webcast 4 T08 Eng
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Localiza Rent a Car S.A.
February, 2009
4Q08 Results (R$ millions - USGAAP)
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442.7357.2
197.1271.3
585.7
2004 2005 2006 2007 2008
Net revenues (R$ millions)
21,849
15,93712,842
9,4026,654
2004 2005 2006 2007 2008
Average rented fleet (quantity)
Car rental division
CAGR: 34.6%
CAGR: 31.3%
14,697 14,347 15,65318,98020,097 21,550 22,700 22,772
1Q 2Q 3Q 4Q
20.0%
2007 2008
104.4 98.7 108.0131.6137.6 141.0 151.9 155.2
1Q 2Q 3Q 4Q
2007 2008
17.9%
37.1%
32.3%
3
7,796 9,30811,635
14,29517,880
2004 2005 2006 2007 2008
276.9
228.2
127.8149.2
190.2
2004 2005 2006 2007 2008
Fleet rental division
CAGR: 23.1%
CAGR: 21.3%
53.3 56.3 58.4 60.261.6 66.073.2 76.1
1Q 2Q 3Q 4Q
13,325 13,941 14,652 15,24615,720 16,98718,532
20,291
1Q 2Q 3Q 4Q
2007 2008
2007 2008
Net revenues (R$ millions)
Average rented fleet (quantity)
33.1%
26.4%
25.1%
21.3%
4
8,870
6,006
7,709 7,508
9,292
7,716
10,627
6,646
1Q 2Q 3Q 4Q
244.2
174.1214.5 220.3
268.9222.8
302.9
188.6
1Q 2Q 3Q 4Q
Sold cars (quantity)
Net revenue (R$ millions)
Used car sales per quarter
2007 2008
-11.5%
-14.4%
5
331.4 428.7 555.1 678.5872.4303.0
448.2590.3
853.2
983.2
2004 2005 2006 2007 2008
Consolidated net revenue
CAGR: 30.8% 1,855.7
634.4
876.9
1,145.4
1,531.7
403.7331.1
382.8 414.1470.5
432.3
530.4
422.5
1Q 2Q 3Q 4Q
2007 2008
Net revenues per quarter (R$ millions)
Net revenues (R$ millions)
28.6%
2.0%
Rentals Used car sales
6
98.285.5
104.6115.2120.8 123.6
133.9125.8
1Q 2Q 3Q 4Q
EBITDA consolidated
31.1
51.6 20.8
41.3
49.1
259.3196.8
150.2122.879.0
2004 2005 2006 2007 2008
Car rental (R$ millions)
CAGR: 29.4%
29.5%
110.1
174.4 171.0
238.1
308.4
Car rental Used car sales
5.47.5
6.15.1
5.4
185.4156.8
131.493.081.0
2004 2005 2006 2007 2008
Fleet rental (R$ millions)
CAGR: 21.9%17.9%
86.4 100.5
137.5161.9
190.8
Fleet rental Used car sales
2007 2008
EBITDA consolidated per quarter (R$ millions)
9.2%
103.5
122.718,6%
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EBITDA margin
Divisions 2004 2005 2006 2007 2008 4Q07 4Q08
Car Rental 40.1% 45.3% 42.0% 44.5% 44.3% 46.5% 44.4%
Fleet Rental 63.4% 62.3% 69.1% 68.7% 67.0% 68.8% 68.9%
Used car sales Seminovos 12.0% 13.2% 4.6% 5.4% 5.5% 5,3% 1.6%
EBITDA consolidated (R$ millions)
Car rental Used car sales
161.0218.8
284.4357.1
449.636.5
59.126.9
46.4
54.5
2004 2005 2006 2007 2008
403.5
277.9
197.5
504.1
311.3
CAGR: 26.4%
25.9%
24.9%
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Depreciation per quarter
3.43.2 5.49.7
63.6
2.8 2.5
(1.2)1Q 2Q 3Q 4Q
2007 2008
4.0
54.2
5.4
oct/08 nov/08 dec/08
3.5
52.2
6.0
oct/08 nov/08 dec/08
Car rental (R$ millions)
7.7
61.7
10.27.6 10.1 13.213.18.6
1Q 2Q 3Q 4Q
2007 2008
Fleet rental (R$ millions)
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Net income
90.6106.5
138.2
190.2
127.4
2004 2005 2006 2007 2008
(R$ millions)
- 33.0%
4Q07 OCT NOV DEC 4Q08 Var. Revenues - car rental and fleet rental 191.8 75.2 72.9 83.2 231.3 20.6%
EBITDA - car rental and fleet rental 103.5 35.4 40.8 46.5 122.7 18.6%
EBITDA - Used car sales 11.7 0.2 2.1 0.8 3.1 -73.5% Depreciation of revenue-earning vehicles (10.2) (7.5) (106.4) (11.4) (125.3) 1,128.4%
Other depreciation and amortization (3.9) (1.6) (1.7) (1.7) (5.0) 28.2% Financial expenses, net (20.9) (15.8) (14.0) (14.7) (44.5) 112.9% Earnings before taxes 80.2 10.7 (79.2) 19.5 (49.0) -161.1%
Income tax and social contribution (24.3) (4.2) 26.9 (3.5) 19.2 -179.0%
Net income (loss) 55.9 6.5 (52.3) 16.0 (29.8) -153.3%
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493.1690.0
930.3 1,060.91,335.3
303.0448.2
590.3853.2 983.2
2004 2005 2006 2007 2008
190.1241.8
340.0207.7
Fleet investment
Net investment * (R$ millions)352.1
Purchases Sales
22,18226,105
33,52038,050
44,211
15,715 18,76323,174
30,09334,281
2004 2005 2006 2007 2008
Quantity
7,34210,346
6,467
7,9579,930
Purchases (includes accessories) Used car sales revenue
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-107.7-55.0-43.6
-299.9-188.9
205.7
-765.1 -1,254.5
FCF before growth
InterestDividendsCapex growth
Stockrepurchase
Net debt reconciliation
Net debt 12/31/2007
Net debt 12/31/2008
Change in vehicle
suppliers caption (CAPEX)
- 343.5 - 162.7
Discretionary Investment
Dividends andInterests on equity
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Net debt x fleet value
440.4
1,254.61,247.71,492.9
1,752.6
765.1535.8
281.3 612.2
900.2
2004 2005 2006 2007 2008
Net debt Fleet value
End of period balances 2004 2005 2006 2007 2008
Net debt /Fleet value (USGAAP) 46% 60% 36% 51% 72%
Net debt / EBITDA (USGAAP) 1.4x 1.9x 1.4x 1.9x 2.5x
Net debt / EBITDA (BRGAAP) 1.1x 1.5x 1.0x 1.3x 1.8x
Net debt / Equity (USGAAP) 1.0x 1.4x 0.7x 1.3x 2.0x
(R$ millions)
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Debt profile - principal(R$ millions)
335.0
112.7 109.666.8
195.6
500.0
2009 2010 2011 2012 2013 2014
Sep/08 Feb/09* Var.
Net debt – R$ millions 1,201.0 1,172.4 (28.6)
Car suppliers – R$ millions 201.7 2.4 (199.3)
Net debt + car suppliers – R$ millions 1,402.7 1,174.8 (227.9)
R$176.1 millions - paid
R$ 19.5 millions – extended to sep/10
R$195.6 millions – debt from 2009
It has not been contracted new debts
* up to 2/12/2009.
Debt profile on December (Principal)
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Debt on 12/31/2008 (principal)
Start Type Currency R$ mm Due day Status
feb-08 Resolution 2770 Real* 2.2 jan-09 Paidfeb-08 Resolution 2770 Real* 15.0 feb-09 Paidjan-08 Resolution 2770 Real* 39.5 apr-09 Paidoct-08 Over draft / revolver Real* 30.0 apr-09 Paidapr-08 Compror Real 11.4 apr-09 Paidjan-08 Resolution 2770 Real* 35.0 may-09 Paidnov-08 Working capital Real 43.0 may-09 Paidsep-08 Working capital Real 19.5 dec-09 Extended to sep-2010
Subtotal short term debt 195.6
sep-08 Working capital Real 150.0 jan-10 Extended to sep-2010apr-05 1st Debenture Real 350.0 apr-10 -apr-08 Working capital Real 35.0 apr-11 -sep-08 3rd Debenture Real 300.0 sep-11 -apr-08 Working capital Real 43.0 apr-12 -jun-07 BNDES Real 3.1 may-12 -jul-07 2nd Debenture Real 66.6 jul-12 -apr-08 Working capital Real 43.0 apr-13 -jul-07 2nd Debenture Real 66.6 jul-13 -jul-07 2nd Debenture Real 66.8 jul-14 -
Subtotal long term debt 1,124.1
Gross debt 1,319.7
Cash and equivalents 129.9
Net debt 1,189.8
* Operations in foreign currency are swaped at the same issuance day to CDI (R$)
(R$ millions)
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Free cash flow - FCF
Free cash flow - R$ millions 2004 2005 2006 2007 2008
EBITDA 197.5 277.9 311.3 403.5 504.1
Used car sales revenues (303.0) (448.2) (590.3) (853.2) (983.2)
Cost of used car sales 248.7 361.2 530.4 760.0 874.5
EBITDA without used car sales revenues and costs 143.2 190.9 251.4 310.3 395.4
Income tax and social contribution – current (40.9) (32.7) (42.7) (63.4) (52.8)
Working capital variation 6.2 (24.2) (4.8) 13.3 (44.8)
Cash provided before capex 108.5 134.0 203.9 260.2 297.8
Used car sales revenues 303.0 448.2 590.3 853.2 983.2
Capex of car – renewal (349.3) (496.0) (643.3) (839.0) (1,035.4)
Net capex for renewal (46.3) (47.8) (53.0) 14.2 (52.2)
Capex - Property and equipment (10.2) (28.0) (32.7) (23.7) (39.9)
Free cash flow before growth 52.0 58.2 118.2 250.7 205.7
Capex of car – growth (143.8) (194.0) (287.0) (221.9) (299.9)
Change in amounts payable to car suppliers (capex) (21.9) (25.5) 222.0 (51.0) (188.9)
Free cash flow (113.7) (161.3) 53.2 (22.2) (283.1)
52.0 58.2
118.2
250.7
205.7
2004 2005 2006 2007 2008
(R$ millions)
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EVA
P.S.:Loss in fleet value was considered as a loss in equity, since it’s a non-recurring event.
114.3
55.5
76.2
39.2
100.0
11.2%
16.9% 15.7%11.0% 10.9%
21.3%18.7%
24.8%24.6%
17.0%
2 0 .0
6 0 .0
1 0 0 .0
1 4 0 .0
2004 2005 2006 2007 2008
1 .0 %
1 1 .0 %
2 1 .0 %
3 1 .0 %
EVA(*) (in R$ millions) Nominal WACC ROIC
41.6%37.3%
50.0%
2004 2005 2006 2007 2008
Average investment capital R$ millions 507.4 606.3 986.2 1,137.5 1,642.3
NOPAT margin (over rental revenue) 37.8% 35.2% 33.4% 35.6% 32.1%
Turnover of average investment capital (over rental revenue) 0.65x 0.71x 0.56x 0.60x 0.53x
ROIC 24.6% 24.8% 18.7% 21.3% 17.0%
Cost of debt 11.6% 13.6% 10.9% 8.4% 8.2%
Cost of Equity 20.0% 16.2% 11.0% 11.5% 11.3%
Nominal WACC 16.9% 15.7% 11.0% 11.2% 10.9%
Spread (ROIC - WACC) - p.p. 7.7 9.2 7.7 10.1 6.1
EVA R$ millions 39.2 55.5 76.2 114.3 100.0
EVA increase R$ millions 16.3 20.7 38.1 (14.3)
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Strategies adopted by the Company
Suspension of purchases of new cars to adjust the fleet
Increase in car rental and fleet rental rates to offset the higher revenue-earning vehicles depreciation costs
Recognition of loss in fleet value in the amount of R$87.6 million
Increase the monthly fleet depreciation from R$7.5 million in October to R$11.4 million in December Increase in promotions and advertising with the purpose of enhancing car sales
Scenario: drop in the sales volume and prices of used cars4Q08
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2009 Outlook
Macroeconomic scenario (Central Bank of Brazil website – market outlook): GDP of 1.5% Decrease of 300 bps in basic interest rate in the first half of 2009 Inflation close to the inner center of 4.5%
Fleet strategies: Keep 2009 end of period fleet at same levels of the end of 2008 Increase the utilization rate to at least 72% in car rental division
Debt strategies: Contract debt only for extending debt profile or reduce financial costs
January/2009: Number of cars sold : 2,521 cars Average rented fleet : 43,296 cars Revenue from car rental and fleet rental: + 19%
The forecasts below are interrelated and cannot be separately analyzed.
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Thank you!