2. Agenda
1. The Company
2. Drivers and opportunities
3. Competitive advantages
4. Financials
5. Macroeconomic scenario
2
3. Company: highlights
Performance
Largest car rental company in South America with more than 480 branches in 8 countries
Proved growth and profitability track record
Market share of 37.5% in car rental and 12.5% in fleet rental
~100,000 cars fleet
Flexible business model
Top of mind
Corporate governance
High levels of corporate governance
Stable management
RENT3
ADTV: > BRL 20 million
3
4. Integrated business platform
57,077cars 30,732 cars
2.7million clients 693 clients
240 locations 293 employees
3,810 employees
Synergies:
bargaining power
cost reduction
cross selling
12,285 cars 75.4% sold to final consumer
195 locations in Brazil 61 stores
46 locations in South America 822 employees
32 employees
This integrated business platform gives Localiza flexibility and superior performance.
4
Based on the 3Q11
5. Strategy by division
Increase market leadership maintaining high return
Core business
Create value taking advantage of the fleet rental market,
leveraging the synergies from the integrated business platform
Support
Add value to the businesses, optimizing fleet renewal and
reducing depreciation as a competitive advantage
5
6. Company: stable management
BOARD OF DIRECTORS
Salim Mattar – 38y
CEO
Car
Acquisition
Legal
COO Eugênio Mattar – 38y
Human Administration
Financial Resources IT
Gina Rafael – 30y
Bruno Roberto Mendes – 26y
Andrade – 19y
João Andrade – 7y
Localiza has a lean and efficient structure.
Marco Antônio The succession process is already planned.
Guimarães – 21y
6
7. Company: managing assets
Targeted spread
Equity
Pricing strategy
Assets (cars)
Funding
Assets (cash)
Debt Profitability comes from Cash to renew the fleet
rental divisions
Flexible and liquid assets.
7
8. Financial cycle – car rental
1-year cycle
Car sale revenue
$27.9
Revenue
1 2 3 4 5 Expenses, interest and tax 8 9 10 11 12
$2.3
$26.6 SG&A
Car acquisition
Car Rental Seminovos Total
per operating car per operating car 1 year
R$ % R$ % R$
Revenues 19.5 100.0% 27.9 100.0% 47.4
Cost (8.2) -42.2% (8.2)
SG&A (2.8) -14.5% (2.3) -8.4% (5.2)
Net car sale revenue 25.5 91.6% 25.5
Book value of car sale (24.7) -90.0% (24.7)
EBITDA 8.5 43.4% 0.8 2.9% 9.3
Depreciation (vehicle) (1.5) -5.5% (1.5)
Depreciation (non-vehicle) (0.4) -1.8% (0.1) (0.5)
Interest on debt (2.0) -7.2% (2.0)
Tax (2.4) -12.1% 0.7 2.5% (1.6)
NET INCOME 5.8 29.5% (2.2) -7.7% 3.6
NOPAT 5.1
ROIC * 17.7% Spread
Cost of debt after tax 7.9% 9.8p.p.
* Investment in cars and PP&E (8%) 8
9. Financial cycle – fleet rental
2-year cycle Net car sale revenue
29.0
Revenue
1 2 3 4 5 Expenses, interest and tax 20 21 22 23 24
$2.2
33.8 SG&A
Car acquisition
Fleet Rental Seminovos Total
per operating car per operating car 2 anos
R$ % R$ % R$
Revenues 32.7 100.0% 29.0 100.0% 61.7
Cost (9.4) -28.9% (9.4)
SG&A (1.8) -5.6% (2.2) -7.7% (4.1)
Net car sale revenue 26.8 92.3% 26.8
Book value of car sale (26.5) -90.0% (26.5)
EBITDA 21.4 65.6% 0.3 1.0% 21.7
Depreciation (vehicle) (7.0) -24.2% (7.0)
Depreciation (non-vehicle) (0.1) -0.2% (0.1)
Interest on debt (3.8) -12.9% (3.8)
Tax (6.2) -19.0% 3.1 10.8% (3.1)
NET INCOME 15.2 46.4% (7.3) -25.3% 7.8
NET INCOME per year 7.6 46.4% (3.7) -25.3% 3.9
NOPAT (annualized) 5.1
ROIC 15.2% Spread
Cost of debt after tax 7.9% 7.3p.p.
9
10. Company: growth and profitability track record
Revenues consolidated
% 2,551.30
25.1
CAGR:
1,855.70 1,856.30
1,531.70
CAGR: 16.5% 1,145.40
876.90
532.00 634.40
420.40 476.90
212.90 234.30 244.70 310.10
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
EBITDA consolidated
%
: 23.1
CAGR
649.5
23.9% 504.1
CAGR: 403.5
469.7
278.1 311.4
197.8
134.3 154 149.9 152.1
62 85.2
42
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
GDP 3.4 0.0 0.3 4.3 1.3 2.7 1.1 5.7 3.2 4.0 6.1 5.2 -0.6 7.5
Average 1.9 4.4
Average growth of 25.0% p.a. in the last six years
10
11. Company: GDP elasticity
Rental revenues growth elasticity x GDP
Consolidated Localiza
5.5x
Sector
GDP 2.8x
2005 2006 2007 2008 2009 2010
The drivers combined with Localiza’s competitive advantages resulted in a growth above the industry level.
11
15. Car rental drivers: income and affordability
GDP per capita
(R$ thousands)
19.0
16.0 16.6
14.2
12.8
10.7 11.7
8.4 9.5
6.9 7.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Rent a Car Affordability
51% 510
465
415
38% 380
37% 35% 350
300
260
240
180 200
151 31%
27%
22% 20%
18% 16% 15%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Monthly m inim um salary (R$) Daily rental price over m inim um salary (%)
Income increase and stable daily rental rates granted access of car rental to the middle class.
15
Source: Infraero, Gol, Abecs and Exame magazine (Dec/2010)
16. Car rental drivers: consumption
Middle class (million)
113
98
66
%
15.3
.5 %
48
2003 2009 2014e
Air traffic passengerss
Credit card holders
154 51
128 45
% %
71 20.3 00
. 0% 13.3
.3 % 15 2
80
2003 2009 2010 2003 2009 2010
Middle class and credit card holders growth resulted in the increase of demand.
16
Source: Infraero, Gol, Abecs and Exame (Dec/2010)
17. Car rental drivers: investments
Investments 2011-2014
886
+ 66%
339
533
R$ billion
206 210
131
337
196
2006-2009 2011-2014
Construction Infrastructure Industry
Infrastructure investments have a positive impact in rental volumes.
17
Source: BNDES 2011-2014, Ernani Torres (Deputy Director)
18. Car rental opportunities: consolidation
Brazilian distribution Market
# of branches Airport
424 Other
Avis 30
Localiza
33
252 98
64
91
97 Unidas
18 Hertz
Localiza Hertz Unidas Avis 30
# of cities Off-airport
289
326 Hertz
Unidas
67
73
Avis
64 72 31
46
Other
Localiza Hertz Unidas Avis 2004
217 cities where the competitors are not present. Off-airport market is still fragmented.
18
Source: Each company website (June, 2011)
19. Strategy: organic growth
Brazilian distribution Network expansion
# of branches in Brazil
415 435
346 381
279 312
254
Last 12 months* Branches
2005 2006 2007 2008 2009 2010 9M11
Own 17
Franchised 22
Total 39
*as of June, 2011
The network still being expanded.
19
20. Fleet rental drivers: outsourcing trend
Corporate fleet:
2.000.000
Targeted fleet:
500.000
Rented fleet:
232.000
30.732
Only 50% of targeted fleet is rented.
20
Source: ABLA and Company’s estimates
21. Used car sales drivers: affordability and penetration
Car purchase affordability
1 6 0 6 0 0
148 128 510
1 4 0
115 465 5 0 0
104 415
1 2 0
97 93 380
80
4 0 0
1 0 0
8 0 3 0 0
350
6 0
300 75
260
2 0 0
4 0
240 68
180 200 58 56 1 0 0
2 0
151
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Number of minimum w ages to buy a new car Monthly minimum salary (R$)
# of inhabitants per car
Brazil 6.9
Mexico 4.0
Germany 1.9
England 1.7
France 1.7
Italy 1.5
USA 1.2
Income increase and credit availability are the major drivers for car sales.
Source: Bradesco, PIB per capita: IPEADATA. 21
22. Strategy: network expansion
Brazilian distribution New lots
# of points of sale
55 61 Points of
49 Status*
32 35 sale
26
13
In construction 6
2005 2006 2007 2008 2009 2010 9M11
Construction to begin 6
Prospection 10
*as of June, 2011
The network is being expanded to support rentals’ growth.
22
23. Brazilian market: new cars x used cars
New cars X used cars
8,429,309
7,016,576 7,114,870 7,260,054 7,071,525
6,743,699
2.5x
2.3x
3.0x 2.7x
4.3x 3.7x
3,329,170
1,620,657 2,342,059 3,009,482
1,830,402 2,671,338
2005 2006 2007 2008 2009 2010
New cars Used cars
23
Source: FENABRAVE (Autos + light commercial)
24. Used car sales: 2010 market share
Share: Localiza used cars x Car market
Used cars sold: 47,285
0.6% 1.4% 4.4%
0KM
Used Up to 3 years
3,329,170
8,429,309 1,093,281
Used Seminovos 0km Seminovos 3 years old Seminovos
24
Source: Fenabrave 2010
25. Used car sales: sold cars evolution
Monthly average of sold cars 4,545
4,159
3,940
3,860
2010 1Q11 2Q11 3Q11
Financial sales profile
39% 43% 42%
51%
61% 57% 58%
49%
2010 1Q11 2Q11 3Q11
Financed In cash
The increase on sales was supported by the opening of new points of sale.
The macro prudential measures impacted the financial sales profile.
25
26. Agenda
1. Company
2. Drivers and opportunities
3. Competitive advantages
4. Financials
5. Macroeconomic scenario
26
27. Competitive advantages
Raising Buying Renting Selling
money cars cars cars
Localiza presents competitive advantages in all links of the rental chain.
27
28. Competitive advantages: raising money
Raising Buying Renting Selling
money cars cars cars
Investment grade: lower spreads and longer terms
Global Scale BBB- Fitch
BBB+ S&P B+ S&P B+ Fitch B2 Moody's
Baa3 Moody’s
National Scale Aa1.br Moody’s
A (bra) Fitch BBB+ (bra) Fitch BBB (bra) Fitch
AA(bra) Fitch
Localiza raises money with lower spreads when compared to Brazilian competitors.
28
29. Competitive advantages: buying cars
Raising Buying Renting Selling
money cars cars cars
Better conditions due to higher volumes
Localiza’ share in national sales of the three Purchases by brand
largest automakers: GM, FIAT, VW
Ford Renault Others
4.3% 3.1% 2.8%
Fiat
2.8% GM 25.6%
37.0%
VW
27.2%
Localiza buys cars fit to rent and that have the highest residual value reduces depreciation.
29
30. Competitive advantages: renting cars
Raising Buying Renting Selling
money cars cars cars
Know How
The Company has a strong know-how of the rental process.
30
31. Competitive advantages: renting cars
Raising Buying Renting Selling
money cars cars cars
Brand
Localiza is TOP OF MIND in Brazil.
31
32. Competitive advantages: renting cars
Raising Buying Renting Selling
money cars cars cars
Brazilian distribution
Airport Off-airport
Other Localiza
Avis 30 326 Hertz
Localiza Unidas
33 67
98 73
Avis
31
Unidas Other
18 Hertz 2004
30
Localiza is present in 100% of the commercial airports.
Localiza is present in the most important Brazilian cities.
32
Source: Each company website (June, 2011)
33. Competitive advantages: renting cars
Raising Buying Renting Selling
money cars cars cars
Scale
# of branches # of cities
424
289
252
64
91 72
64 46
97
Localiza Hertz Unidas Avis Localiza Hertz Unidas Avis
Localiza is bigger than the 2nd, 3rd and 4th competitors combined in number of rental locations.
33
Source: Each company website (June, 2011)
34. Competitive advantages: selling cars
Raising Buying Renting Selling
money cars cars cars
Lower depreciation
Point of sale in Francisco Morato - SP - Brazil Point of sale in Belo Horizonte - MG - Brazil Point of sale in Sorocaba - SP - Brazil
Around 75% of used cars are sold directly to final consumers.
Selling directly to final consumer reduces depreciation.
34
35. Competitive advantages: selling cars
Raising Buying Renting Selling
money cars cars cars
Buffer
Cars available for sale are used by the car rental division during peaks of demand.
35
36. Agenda
1. Company
2. Drivers and opportunities
3. Competitive advantages
4. Financials
5. Macroeconomic scenario
36
37. Car Rental Division
# daily rentals (thousand)
:2 5.8 %
CAGR
10,734 7% 9,470
22.
7,940 8,062 7,720
5,793 7%
4,668 12.
3,411 2,863 3,227
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
Net revenues (R$ million)
: 25.4 % 802.2
1% 714.2
CAGR
565.2 585.2 26.
566.6
428.0
9%
346.1 15.
258.6 241.8
208.7
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
Average rental rate increased due to a change in the business mix and better negociations.
37
38. Quarterly evolution of the number of rental days
2011 +23.4%
+27.8%
+29.3%
2010 Excluding effects of election
2009
1Q 2Q 3Q 4Q
3Q comps are higher in the car rental due to the effects of 2010 elections.
38
41. Utilization rate and average operating fleet age
Utilization rate and average operating fleet age
Elections effect 9 0 . %
0
74.1%
69.9% 69.7%
8 0 . %
0
66.2% 66.3% 68.2% 68.9%
7 0 . %
0
6 0 . %
0
5 0 . %
0
4 0 . %
0
6.9 6.6 7.3
6.3 6.3 6.5 3 0 . %
0
5.5 2 0 . %
0
1 0 . %
0
0 . %
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
Utilization rate Average operating fleet age
Fleet is adjusted according to demand.
41
42. Distribution
# of rental locations in Brazil
415 440
381
312 346
254 279
2005 2006 2007 2008 2009 2010 9M11
# of used car sales stores
61
55
49
32 35
26
13
2005 2006 2007 2008 2009 2010 9M11
Localiza and Seminovos networks are being expanded to increase sales volumes.
42
43. End of period fleet
End of period fleet (quantity)
9%
CAGR:
19.7% 15. 87,809
88,060
70,295 75,755
62,515 26,615 30,732
46,003 53,476 25,305
22,778
35,865 23,403
14,630 17,790
11,762 61,445 50,450 57,077
39,112 47,517
31,373 35,686
24,103
2005 2006 2007 2008 2009 2010 9/30/2010 9/30/2011
Car rental Fleet rental
The 15.9% growth in the fleet is in line with the rental volume increase.
43
44. Consolidated net revenues
R$ million
9%
GR: 2
3.9% 2,497.2 20. 2,145.4
C A
1,823.7 1,820.9 1,775.1
1,505.5 1,321.9 1,088.0
1,126.2 980.8 922.4 0%
15.
939.6
854.9 850.5 757.5
588.8 658.8
446.5 6%
898.5
1,175.3 26. 1,057.4 354.2 394.6
655.0 842.9 835.5
408.4 537.4 304.6 19.1% 362.9
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
Rentals Seminovos
Rental and Seminovos’ increase in volumes and prices resulted in higher revenues.
44
45. EBITDA
R$ million
8.5%
C A GR : 1
649.5 30.7% 603.0
504.1 469.7 461.3 %
311.3
403.5 21.0
277.9
178.7 216.2
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
Divisions 2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
Car rental 47.5% 43.4% 46.0% 45.9% 41.9% 45.3% 45.9% 46.9% 48.7% 50.4%
Fleet Rental 65.5% 71.4% 71.3% 69.1% 68.7% 68.0% 67.4% 68.9% 68.9% 72.1%
Rentals consolidated 53.6% 52.9% 54.5% 53.3% 51.1% 52.3% 52.7% 53.8% 54.8% 57.5%
Used car sales 13.2% 4.6% 5.5% 5.6% 1.1% 2.6% 2.3% 3.1% 3.4% 1.9%
The 30.7% growth in the EBITDA in the 9M11 was above the rental revenues increase.
45
46. Average depreciation per car
R$
Depreciation evolution - per year
Financial crisis effect
Normal market conditions
Hot used car market 2,577.0
2,546.0
1,536.0 1,619.8 1,578.5
939.1
492.3 332.9
2005 2006 2007 2008 2009 2010 9M10 * 9M11 *
* Annualized
Average depreciation per car remained stable in the year.
Depreciation evolution - per quarter
1,942.5 1,993.2
1,492.3 1,580.5
1,318.0 1,251.9
1Q10* 1Q11* 2Q10* 2Q11* 3Q10* 3Q11*
* Annualized
The launching of new models increases 3Qs depreciation.
46
47. Average depreciation per car
R$
Depreciation evolution - per year
Financial crisis effect
Hot used car market
5,083.1
4,371.7 4,080.9
3,509.7 3,306.0
2,981.3
2,383.3 2,395.8
2005 2006 2007 2008 2009 2010 9M10 * 9M11*
* Annualized
Depreciation evolution - per quarter
4,241.8 4,020.8
3,990.6
3,693.9
3,254.4
2,989.4
1Q10* 1Q11* 2Q10* 2Q11* 3Q10* 3Q11*
* Annualized
The fleet renewal after the end of the tax exemption resulted in higher depreciation.
47
48. Consolidated net income
R$ million
%
250.5 17.6
190.2 212.9
181.1
106.5
138.2 127.4 116.3 0.5%
74.9 75.3
2005 2006 2007 2008 2009 2010 9M10 9M11 3Q10 3Q11
Reconciliation EBITDA x net income 2009 2010 Var. R$ 9M10 9M11 Var. R$ 3T10 3T11 Var. R$
EBITDA – Rentals and franchising 459.1 615.1 156.0 440.0 569.3 129.3 166.8 208.6 41.8
EBITDA – Used car sales 10.6 34.4 23.8 21.3 33.7 12.4 11.9 7.6 (4.3)
EBITDA Consolidated 469.7 649.5 179.8 461.3 603.0 141.7 178.7 216.2 37.5
Cars depreciation (172.3) (146.3) 26.0 (104.3) (143.5) (39.2) (37.9) (53.9) (16.0)
Other property and equipment depreciation (21.0) (21.1) (0.1) (15.4) (17.4) (2.0) (5.1) (5.0) 0.1
Financial expenses, net (112.9) (130.1) (17.2) (88.8) (137.8) (49.0) (31.4) (49.8) (18.4)
Income tax and social contribution (47.2) (101.5) (54.3) (71.7) (91.4) (19.7) (29.4) (32.2) (2.8)
Net income 116.3 250.5 134.2 181.1 212.9 31.8 74.9 75.3 0.4
2011 results were impacted mainly due to interest rate increase.
48
49. Free cash flow - FCF
Free cash flow - R$ million 2005 2006 2007 2008 2009 2010 9M11
EBITDA 277.9 311.3 403.5 504.1 469.7 649.5 603.0
Used car sales net revenues (446.5) (588.8) (850.5) (980.8) (922.4) (1,321.9) (1,088.0)
Depreciated cost of used car sales (*) 361.2 530.4 760.0 874.5 855.1 1,203.2 974.5
(-) Income tax and social contribution (32.7) (42.7) (63.4) (52.8) (49.0) (57.8) (57.3)
working capital variation (24.2) (4.8) 13.3 (44.8) (11.5) 54.5 (59.4)
Cash provided before capex 135.7 205.4 262.9 300.2 341.9 527.5 372.8
Used car sales net revenues 446.5 588.8 850.5 980.8 922.4 1,321.9 1,088.0
Capex of car - renewal (496.0) (643.3) (839.0) (1,035.4) (947.9) (1,370.1) (1,106.1)
Net capex for renewal (49.5) (54.5) 11.5 (54.6) (25.5) (48.2) (18.1)
Capex – other property and equipment, net (28.0) (32.7) (23.7) (39.9) (21.0) (51.1) (37.4)
Free cash flow before growth and interest 58.2 118.2 250.7 205.7 295.4 428.2 317.3
Capex of car - growth (194.0) (287.0) (221.9) (299.9) (241.1) (540.3) (13.7)
Change in accounts payable to car suppliers (capex) (25.5) 222.0 (51.0) (188.9) 241.1 111.3 (195.8)
Free cash flow after growth and before interest (161.3) 53.2 (22.2) (283.1) 295.4 (0.8) 107.8
Fleet increase - quantity 7,342 10,346 7,957 9,930 8,642 18,649 466
Strong cash flow generation before growth and interest expenses.
(*) without technical discount deduction 49
50. Debt profile and costs
R$ million
514.0
372.0
299.8 249.3
207.7 230.3
0.7
2011 2012 2013 2014 2015 2016 2017
Cash
564.6
Contract rate Effective cost 2011 2012 2013 2014 2015 2016 2017 Total
108.7% to 114.7% 111.1% - 114.7%
Working capital of CDI and of CDI and - 15.0 38.7 70.0 86.3 190.0 - 400.0
CDI+1.44%a.a. CDI+1.79%a.a.
Debenture 2nd Issuance CDI + 0.44%pa CDI + 0.6%pa - 66.6 66.6 66.8 - - - 200.0
112.0% to 114.0%
Debenture 4th Issuance 114.2% of CDI - 24.0 24.0 63.0 63.0 74.0 122.0 370.0
of CDI
Debenture 5th Issuance 112.8% of CDI 114.5% of CDI - - - - - 250.0 250.0 500.0
st
Debenture 1 Issuance:
CDI +1.95%pa CDI + 2.0%pa - 100.0 100.0 100.0 100.0 - - 400.0
Total Fleet
TJLP + 3.8%pa / TJLP + 3.8%pa /
Other 0.7 2.1 1.0 - - - - 3.8
CDI + 2.3%pa CDI + 2.3%pa
Interests accrued until
- - 76.0 - - - - - - 76.0
09/30/11, net of interest paid
Cash and cash equivalents
- - (564.6) - - - - - - (564.6)
on 09/30/11
Net debt - - (487.9) 207.7 230.3 299.8 249.3 514.0 372.0 1,385.2
6 years term for debt payment.
50
51. Debt – ratios
R$ million
2,446.7 2,430.7
1,752.6 1,907.8
1,492.9 1,385.2
1,247.7 1,254.5 1,281.1
900.2 1,078.6
765.1
535.8 440.4
2005 2006 2007 2008 2009 2010 9M11
Net debt Fleet value
SALDOS EM FINAL DE PERÍODO 2005 2006 2007 2008 2009 2010 9M11
Net debt / Fleet value 60% 36% 51% 72% 57% 52% 57%
Net debt / EBITDA (*) 1.9x 1.4x 1.9x 2.5x 2.3x 2.0x 1.7x
Net debt / Equity 1.4x 0.7x 1.3x 2.0x 1.5x 1.4x 1.3x
EBITDA / Net financial expenses 3.3x 4.8x 5.4x 3.8x 4.2x 5.0x 4.4x
(*) annualized
Comfortable debt ratios.
51
52. Spread
24.8%
21.3%
18.7% 17.0% 16.9%
16.9%
11.2p.p.
11.5%
7.8p.p. 12.9p.p. 8.0p.p.
8.8p.p. 9.1p.p.
3.7p.p.
13.6%
10.9% 8.9%
8.4% 8.2% 7.8% 7.8%
2005 2006 2007 2008 2009 2010 9M11 *
Interest on debt after tax ROIC * Annualized
2005 2006 2007 2008 2009 2010 9M11
Average capital investment - R$ million 606.3 986.2 1,137.5 1,642.3 1,702.3 1,984.6 2,428.8
NOPAT margin (over rental net revenues) 37.0% 34.5% 36.9% 32.1% 21.9% 28.6% 29.2%
Turnover of average capital investment
(over rental net revenues) 0.67x 0.55x 0.58x 0.53x 0.53x 0.59x 0.58x
ROIC 24.8% 18.7% 21.3% 17.0% 11.5% 16.9% 16.9%
Interest on debt after tax 13.6% 10.9% 8.4% 8.2% 7.8% 7.8% 8.9%
Spread (ROIC – Interest after tax) - p.p. 11.2 7.8 12.9 8.8 3.7 9.1 8.0
Spread of 8.0p.p. despite the growth on basic interest rate.
52
53. Agenda
1. Company
2. Drivers and opportunities
3. Competitive advantages
4. Financials
5. Macroeconomic scenario
53
54. GDP: growth moderation
Accumulated in 4 quarters
7,5 7,5
6,2
5,3
4,7
% of GDP
3,5
2,2
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11*
Q/Q -1
9,3 9,2
6,7
5,0
% of GDP
4,2
3,1
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
Source: BCB presentation as of September 11: Desafios e Perspectivas da Economia Brasileira 54
55. Inflation and selic rate: expecting decrease
Real Market expectation -
14.0
Central Bank
12.0 Selic
10.0
8.0
6.0
4.0
12-month CPI
2.0
Apr-08
Jul-08
Apr-09
Jul-09
Apr-10
Jul-10
Apr-11
Jul-11
Apr-12
Jul-12
Oct-08
Oct-09
Oct-10
Oct-11
Oct-12
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
2008 2009 2010 2011 E 2012 E
Selic rate 12.5 10.4 10.0 11.7 10.5
Average
12-month CPI 5.7 4.9 5.0 6.6 5.7
Real interest rate 6.4 5.2 4.7 4.8 4.5
Source: BCB/ IBGE as of 10/07/11. 55
56. Macro prudential measures adopted
Banks:
Increase bank reserve requirements on demand and
time deposits
Increased capital requirement for consumer loan
involving longer maturities
Consumption:
Minimum payment for credit card bill
IOF tax over credit to consumption
Exchange:
Established unremunerated reserve requirement on short
spot FX positions above a limit
IOF over some types of capital entrance
56
57. IR Team
Roberto Mendes Silvio Guerra Nora Lanari
CFO - RI RI RI
Email: ri@localiza.com
Phone: 55 31 3247-7024
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 does not 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 any other person. 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.
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 securities to be made in
the United States will be made by means of an offering memorandum that may be obtained from the underwriters. Such offering memorandum will contain, or incorporate by reference,
detailed information about LOCALIZA and its business and financial results, 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.
57
