Localiza Rent a Car S.A

Document Sample
Localiza Rent a Car S.A Powered By Docstoc
					                                                            Localiza Rent a Car S.A.
                                          2008 Transportation and Logistic Conference – Deutsche Bank




Confins airport branch – Belo Horizonte


                                                                                   24h reservation
                                                                                0800 979 2000
                                                                               www.localiza.com



                                                                                                        1
                                                      Integrated business platform


                      35,686 cars                           17,790 cars
                      1.3 million clients                   456 clients
                      178 agencies

    2,186 employees                                                           177 employees


                                            Synergies:
                                      cost reduction
                                      cross selling
                                      bargaining power



                                                         30,093 cars sold
                      7,602 cars
                                                         84% sold to final
                      134 agencies in Brazil
                                                         consumer
                      203 agencies in 9 countries
                                                         32 points of sale
   25 employees                                                              416 employees




This integrated business platform gives Localiza superior performance
                                                                                    Data-base: 12/31/2007
                                                                                                            2
                                            Strategy by division




                  Increase market leadership maintaining high return
Core Businesses




                  Add value to the brand by expanding the network in
                  Brazil and South America




                  Create value taking advantage of the integrated
                  business platform synergies
Support




                  Add value to the businesses, reducing depreciation as
                  a competitive advantage



                                                                          3
Localiza’s strategy



                      4
               USA: Car rental industry market share



           US Market share 2007




            DTG Others
   Avis     7,5% 3,7%
  Budget                          Enterprise
   22,4%                            47,6%


           Hertz
           18,8%




USA: 4 companies hold 96% of market share

                                               Source: Auto Rental News
                                                                          5
                                 Europe: Car rental industry market share

                            UK Market share 2006

                           Others                Enterprise
                           29,3%                   33,1%
                           Sixt
                           5,8%
                            Europcar    Avis   Hertz
                              7,8%     11,7%   12,3%




Germany Market share 2006                                     Italy Market share 2006

           Others                                                Others
                                                                                 Hertz
           21,0%        Sixt                                     18,4%
Enterprise                                                                       22,8%
                       28,4%
  4,5%

                                                          Maggiore
      Hertz                                                                          Avis
                      Europcar                             14,5%
      11,4%   Avis                                               Europcar           22,6%
              12,3%     22,4%                                      21,7%



  EUROPE: Car rental market in a number of countries is concentrated
                      among 4 or 5 top players
                                                                                 Source: Euromonitor
                                                                                                       6
                                                           Brazil: Car rental industry market share


                                                        Brazil Market 2007
                                                              (# of agencies)

            Airport segment
                                                                                                          Off-airport segment
                agencies
                                                                                                                agencies
            Others***
                                                                                                                        Localiza* Hertz**
               29
                                                 Localiza*                                                                232       64 Unidas**
   Avis**                                                                                                                                 53
                                                    83
    33
                                                                                                                                            Avis**
                                                                                                                                             49
     Unidas**
                               Hertz**
        30
                                 31                                                                   1901



               Source: *Localiza as of 03/31/2008; **Each company website, 05/15/2008; *** Assuming that each local player has one agency




                The airport market is dominated by the largest players
Off-airport market is fragmented among almost 2,000 small local car rental companies


                                                                                                                                                     7
                                              Pricing strategy: Flat rates




Flat rates since December 12, 1998



 Localiza has the same list price, in nominal terms, despite of an inflation
               of around 90% in the last 10 years (BACEN)


                                                                               8
                                        Pricing strategy: Flat rates



  Adds
1998     1999            2002



                                                    2007




            Localiza is making car rental affordable…


                                                                       9
                                                                                                           Pricing strategy



  ROIC and WACC

              1   2   0
                                                                         114.3
                                                                                                                   3     0 %




                           24.6%         24.8%
                  8   0
                                                          76.2
                                                                 18.7%           21.3%
                             16.9%       55.5                                                                      2     0 %




                                                15.7%            11.0%                                   35.4
                          39.2
                  4   0




                                                                                 11.2%    25.9                     1     0 %




                                                                                                 5.2%           5.6%
                                                                                                                2.7%
                                                                                                 2.8%              0 %




                          2004           2005             2006           2007             1Q07           1Q08


                                           EVA                   ROIC                Nominal WACC




                                                   2004          2005     2006           2007           1Q07           1Q08          Variation
Spread (ROIC‐WACC) – p.p.                           7.7          9.1       7.7           10.1           2.4                    2.9     0.5


                                     … while sustaining high margins of return

                                                                                                                                                 10
                 Results: Localiza is increasing its market share

2004                   2005                         2006                            2007

                              Car rental market share


         22.4%                  25.8%                         29.4%
                                                                                               33.0%




                              Feet rental market share


       10.2%                   11.4%                                                            13.2%
                                                              13.0%




                       Consolidated Localiza’s market share



         15.5%                  17.9%                      20.5%                                  22.1%



                                                              Source: ABLA and Company, based on revenues
                                                                                                            11
                                                Results: Airport x off-airport growth



                                        Car rental division


           Car rental revenues growth                           Car rental revenues breakdown


                                                         100%          100%              100%    100%

                   2006       2007       4Q07                           41%               38%    36%
                                                         46%
Airports           16.0%       13.8%      18.3%
                                                         54%            59%               62%    64%
Off-airport        46.7%       27.8%      37.0%
                                                         2005           2006              2007   1Q08

                                                                       Off-airports   Airports




              The geographical expansion strategy has reduced the share of
                         airport market in car rental revenues


                                                                                                        12
 Localiza’s way of
achieving its goals



                      13
                        Planning…




Business



Values



 Vision
             Planning
Mission



Objectives



 Actions
                                    14
                                    Execution...




Business



Values



 Vision



Mission

                 Execution
Objectives


             Performance   Action
 Actions      contracts     plan

                                                   15
                     Planning, execution and compensation




Business



Values



 Vision                                             Stock
                                                   Options


Mission                                              Profit
                                                    sharing


Objectives                                          Variable



             Performance   Action    Performance
 Actions                    plan                   Compensation
              contracts               evaluation
                                                                  16
                    Meritocracy
Business



Values



 Vision                                              Stock
             Planning                               Options


Mission                                               Profit
                                                     sharing
                   Execution
Objectives                                           Variable



               Performance   Action   Performance
 Actions                      plan                  Compensation
                contracts              evaluation
                                                                   17
                  Localiza is a company with vocation for growth …



2008 Consulting          Objectives                          Conclusion

Stern & Stewart          Compensation / EVA                  Concluded

Booz Allen Hamilton      Adequacy of the structure           May/08
                         for growth

Accenture                Adequacy of IT for growth           Jul/08

Hay Group                Job and compensation plan review    Jul/08

NDG – Managerial          Processes’ improvement            Dec/08
Development Institute



        … and it continues with focus on being the consolidator
                  of the fragmented car rental industry in Brazil.
                                                                          18
Thanks!



          19
                                                                                        Breakdown per division


           Revenues                                                EBITDA                                           Profit

                                                                    Franchising
            Franchising                                                                                            Franchising
                                                                        1%
                1%             Car rental                    11%                                                       1%
                                                                                                 Fleet rental
                                  29%
                                                                                                     36%
                                                                                  49%
Used car                                                                                                                         Car rental
 sales                                                 39%                                                                          63%
                              Fleet rental
  55%
                                  15%




                                                               Revenues                 EBITDA                  Profit
                          Car rental                                  29%                 49%                    54%
                          Fleet rental                                15%                 39%                    45%
                          Used car sales                              55%                 11%                        *
                          Franchising                                  1%                  1%                     1%
                          Total                                     100%                 100%                   100%




                                             *Profit (loss) alocated in the rental divisions
                                                                                                                                          20
                                     Growth opportunities


                    GDP elasticity


Consolidation                              Air traffic




Fleet outsourcing                          Credit cards

                    Replacement


                                                            21
                                             Growth opportunities: GDP


               Revenues accumulated growth rate – rentals



                                                 Localiza


                                                   Sector
                                                                       5.9x
                                                            2.4x
                                                    GDP



               2004       2005        2006         2007




Localiza’s average annual revenue growth was 5.9x the average annual GDP.
   The Brazilian car rental market grew 2.4x the GDP in the same period.


                                                                   Source: Bacen, Abla and Localiza
                                                                                                      22
                                         Growth opportunities: Air traffic




         Air traffic evolution                      Number of travelers has
  (Millions of passengers per year)                 increased 10.2% CAGR


                       102        111               Localiza has strong leadership
            96
83                                                  in airports

                                                    Localiza’s airport agencies has
                                                    been grown in average 2 times
2004       2005       2006        2007              faster than the number of
                                                    passengers deplaned




            Air traffic is an important driver for car rental industry

                                                                           Source: Infraero
                                                                                              23
                                          Growth opportunities: Credit cards




     # of credit cards (million)
                                                      93 million credit cards
                                   93
                       79                             31 million credit cards holders
             68
53
                                                      36.2% of car rental revenues were
                                                      paid through credit card in 2007

2004        2005      2006         2007




Having a credit card is a requirement to rent a car in Brazil and in USA


                                                                                Source: Abecs
                                                                                                24
                   Growth opportunities: Replacement market




    Replacement is a growing market in Brazil

        Brazil has 9.2 million insured cars

        The accident rate is 16.5% / year

        The potential market is 10.6 million of daily rentals (2.5 x the
        car rental division in 2006)




Localiza is very well positioned to capture this growth due to its
                       geographic footprint


                                                       Source: Fenaseg and Denatran
                                                                                      25
                        Growth opportunities: Fleet outsourcing




     Large potential market with low penetration due to lack of culture


     Focus of corporations on their core businesses


     Fixed asset reduction by companies (increase their asset turnover)


     Renting a fleet can be more economic than owning it




Approximately 25% of the corporate fleet (500,000e cars) is rented


                                                                          26
                                              Growth opportunities: Consolidation


                                      US Market share 2007
                                          US$ 21.54 B

                      Revenues                                        Number of agencies


              DTG     Others
                       3,7%                                  Others
              7,5%
                                                             26,6%
Avis Budget                                                                                    Enterprise
                                 Enterprise
   22,4%                                                                                         40,5%
                                   47,6%

                                                      DTG
                                                      3,6%

              Hertz                                    Avis Budget
              18,8%                                       12,2%              Hertz
                                                                             17,0%




               USA: 4 companies hold 96% of market share (Auto Rental News)



                                                                                 Source: Auto Rental News
                                                                                                            27
                                                                 Growth opportunities: Consolidation


                                                        Brazil Market 2007
                                                              (# of agencies)

            Airport segment
                                                                                                          Off-airport segment
                agencies
                                                                                                                agencies
            Others***
                                                                                                                        Localiza* Hertz**
               29
                                                 Localiza*                                                                232       64 Unidas**
   Avis**                                                                                                                                 53
                                                    83
    33
                                                                                                                                            Avis**
                                                                                                                                             49
     Unidas**
                               Hertz**
        30
                                 31                                                                   1901



               Source: *Localiza as of 03/31/2008; **Each company website, 05/15/2008; *** Assuming that each local player has one agency




            The main car rental networks are concentrated in airport market
Off-airport market is fragmented among almost 2,000 small local car rental companies


                                                                                                                                                     28
                             Growth opportunities: airport x off-airport markets



                                         Car rental division


       Car rental revenues breakdown                           Utilization rate evolution


                                                                                 64.9%      66.4%
100%          100%              100%    100%           57.3%      59.5%


46%            41%               38%    36%



54%            59%               62%    64%


2005           2006              2007   1Q08            1Q5        1Q06           1Q07      1Q08

              Off-airports   Airports




                                                                                                    29
                        Localiza is increasing its market share

2004             2005                          2006                           2007

                         Car rental market share


         22.4%             25.8%                        29.4%
                                                                                         33.0%




                         Feet rental market share


       10.2%              11.4%                                                           13.2%
                                                        13.0%




                 Consolidated Localiza’s market share



         15.5%             17.9%                      20.5%                                 22.1%



                                                        Source: ABLA and Company, based on revenues
                                                                                                      30
                                        Competitive advantages




 Gains of                               Pricing
  scale                                 strategy
               Integrated platform
            Geographical distribution
               Lower interest rate
                   Know-how
                  Strong brand
                State of the art IT
               Lower depreciation
         Car resale inventory as a buffer


Market share                       Higher
 increase                       competitiveness




                                                                 31
         Competitive Advantages: Largest distribution



 Nationwide
  presence




 Strategic
 locations




International
   footprint



                387 agencies in 9 countries
                                                        32
                           Competitive Advantages: Largest distribution



         Agencies in Brazil                                  Cities in Brazil

         315                                         223
                                 260
                                                                                    173

                                82
                                                                               52
      315                                          223
                                83
                                                                               59


                                95                                             62



    Localiza   Hertz   Unidas   Avis              Localiza    Hertz   Unidas     Avis




Localiza network is larger than the second, the third and the fourth competitors
                  combined in number of agencies and cities.
                                                    Source: Each company website as of May 15, 2008
                                                                                                      33
Curitiba - PR




                34
Natal - RN




             35
Belo Horizonte - MG




                      36
                                                        Competitive advantages: Rating

                 Moody’s debt rating as of August, 2007 (Global scale)
                Baa2
                             Ba1
                                          Ba2
                                                     Ba3       Ba3
                                                                            B1       B1




               Enterprise   Localiza   Avis Budget   Hertz   Europcar    Dollar   Vanguard
                                                                        Thrifty




       Standard & Poors’ corporate rating as of May, 2007 (Local Currency)
Localiza Rent a Car S.A.                                brAA-/ Stable /--
Gerdau S.A.                                             brAAA/ Negative /--
CPFL Energia S.A                                        brAA-/ Stable /--
Klabin S.A.                                             brAA-/ Stable /--
Banco Citibank S.A.                                     brAA+/ Positive /brA-1
Banco Votorantim S.A.                                   brAA+/ Stable /brA-1

Unibanco Asset Management                               brAA+/ Positive /brA-1



Localiza has one the best rating among its international peers
                                                                                             37
   Competitive advantages: Car resale inventory as a buffer




32 stores in Brazil



                                                                                                                                                                                                             Rented cars                                                                                                                                                                                                                                                                                                     Buffer


                                Buffer


                                                                                             Buffer                                                                                                                                                                                                                                                                          Buffer




                                 1   6   1   1   1   6   2   1   2   6   3   1   5   1   0   1   5   2   0   2   5   2   7   1   2   1   7   2   2   2   7   1   6   1   1   1   6   2   1   2   6   1   6   1   1   1   6   2   1   2   6   3   1   5   1   0   1   5   2   0   2   5   3   0   5   1   0   1   5   2   0   2   5   3   0   4   9   1   4   1   9   2   4   2   9   3   8   1   3   1   8   2   3   2   8   3   8   1   3   1   8   2   3   2   8   2   7   1   2   1   7   2   2   2   7   2   7   1   2   1   7   2   2   2   7




                                                 Jan                                         Feb                                     Marc                                            Apr                                     Mai                                     Jun                                         Jul                                 Aug                                     Sep                                     Oct                                     Nov                                     Dec




     Localiza has one the best rating among its international peers
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     38
Campinas - SP




                39
Goiânia - GO




               40
Rio de Janeiro / Barra - RJ




                              41
Competitive Advantages: Strong ties with the automakers


                               Purchased cars
                                                              38,050
                                             33,520
                              26,100
                22,180




                2004           2005           2006            2007




          In 2007 Localiza purchased more than R$1.2 billion in cars
           Localiza and its Franchisees represented in 2007

               3.2% of GM internal car sales
               1.8% of FIAT internal car sales
               1.6% of the Brazilian internal car sales


       Localiza has better conditions due to its large scale
                                                                       42
                                                                                                                           RENT3: Performance

       Average daily trade volume (R$ million)                                                                                     RENT3 X IBOVESPA
                                                                     25                                                                                                                          120

                                                                                                                                                                                                 448%
                                                                                                                                                                                                 100
                                                                     20
                               13.54                                                                                                                                                             80
                                                                     15
                10.58                            10.26                                                                                                                                           186%
                                                                                                                                                                                                 60

                                                                     10
                                                                                                                                                                                                 40




                                                                                                                                                                                                       Volume
4.57




                                                          Price
                                                                         5
                                                                                                                                                                                                 20


                                                                         0                                                                                                                       0




                                                                                                                       b




                                                                                                                                                                                 ul
                                                                                                   ov


                                                                                                           ec




                                                                                                                                                           ec
                                                                                                                                   n




                                                                                                                                                                     an




                                                                                                                                                                     un




                                                                                                                                                                                           an
                                                                                           ep




                                                                                                                                           ep
                                                                     ay




                                                                                                                      ay




                                                                                                                                                                                 ec
                                                                                   l




                                                                                                                                                                                  p
                                                                                                                      ar




                                                                                                                                                                      ar




                                                                                                                                                                                            ar
                                                                                                                                                   ct




                                                                                                                                                                                 ct
                                                                                            g




                                                                                                                                   g




                                                                                                                                                                      pr




                                                                                                                                                                                            pr
                                                                                Ju




                                                                                                                    Fe




                                                                                                                                                                               Se
                                                                                                                                Ju
                                                                                          Au




                                                                                                                                Au




                                                                                                                                                                               -J
                                                                                                                                                  O




                                                                                                                                                                              -O
                                                                                                                   -M




                                                                                                                                                                  -M




                                                                                                                                                                                        -M
                                                                                                  -N


                                                                                                          -D




                                                                                                                                                          -D
                                                                    M




                                                                                                                   -M




                                                                                                                                                                               D
                                                                                         -S




                                                                                                                                         -S




                                                                                                                                                                  -A




                                                                                                                                                                                        -A
                                                                                                                                                                   -J




                                                                                                                                                                   -J




                                                                                                                                                                                         -J
                                                                             5-




                                                                                                                                                                            26
                                                                                                                              -




                                                                                                                                                   -
                                                                                                                 8-




                                                                                                                                                                            6-




                                                                                                                                                                            6-
                                                                     -




                                                                                      -




                                                                                                                             3-
                                                                                                                           22




                                                                                                                                                30




                                                                                                                                                                31




                                                                                                                                                                13




                                                                                                                                                                           22




                                                                                                                                                                                      23
                                                                                       28


                                                                                                11


                                                                                                        26




                                                                                                                24




                                                                                                                                       15




                                                                                                                                                        14




                                                                                                                                                                16


                                                                                                                                                                30




                                                                                                                                                                                      10


                                                                                                                                                                                      23
                                                                  23




                                                                                   16




                                                                                                                10
                                                                                                                                         Volume RENT3             RENT3   IBOVESPA
2005            2006            2007             1Q08
                                                                                                                                                                             From IPO until 05/02/2008




                          Performance                    RENT3                                                                          IBOV
                               2005                      +149%                                                                          +38%
                               2006                      +124%                                                                          +33%
                               2007                      -12%                                                                           +44%
                               2008                      11%                                                                               9%
                            Since IPO                    +448%                                                                     +186%



                  Localiza was included in the MSCI Brazil Index beginning on March, 2008.
                                                                                                                                                                                                                43
Financials


             44
                                                         Growth with profitability

                            Revenue evolution



                                                                         853
                                                                  590
                                                          448
                                    191    251     303
                     89      151                                  555    679
86     90     85             270    286    281     331    429
127    145    160    221

1997   1998   1999   2000    2001   2002   2003   2004    2005   2006   2007




                            EBITDA evolution
                                                                        403

                                                                 311
                                                          278

                                                  198
                     134     154    150    152
               85
 42     62


1997   1998   1999   2000   2001    2002   2003   2004    2005   2006   2007




                                                                                     45
                                                            Rental volume evolution




        Car rental – daily rentals                          Fleet rental – average rented fleet
            (quantity thousands)                                         (quantity)
                                          1,820.9
                                                                                                  15,720
                                                                                      13,325
                               1,317.4
                                                                          11,174
                   1,085.2
                                                    8,345      8,477
        761.0
537.7




1Q04    1Q05        1Q06           1Q07    1Q08     1Q04       1Q05       1Q06        1Q07        1Q08




                                                                                                           46
                                                                                                  1Q08 highlights

                 Average rented fleet                                                        Net revenue


                                                                                                           470.5
                                         35,817                                   403.6
                28,022




                                                      R$ million
                                         15 ,7 2 0
Quantty




                                                                                                           2 6 8 .9
                13 ,3 2 5                                                         2 4 4 .2

                                         2 0 ,0 9 7
                14 ,6 9 7                                                         15 9 .4                  2 0 1.6


                 1Q07                     1Q08                                    1Q07                     1Q08

                 Car rental          Fleet rental                               Rental and Franchising          Used car sales




                            EBITDA                                                           Net income
  R$ million




                                      120.9                        R$ million                                  53.5
               98.1                                                                   45.4




               1Q07                   1Q08                                           1Q07                     1Q08


                                                                                                                                 47
                                                                               EBITDA margin per division

                                                                   1Q08 EBITDA breakdown


                                                             Seminovos
                                                               16.5%


                                                                                       Car rental e
                                                                                       Franchising
                                                    Fleet rental                          51.9%
                                                       31.6%




Divisions                                                            2004      2005        2006       2007    1Q07    1Q08

Car Rental and Franchising                                           39.3%     45.0%       41.9%      44.5%   46.6%   44.8%

Fleet Rental                                                         63.4%     62.3%       69.1%      68.7%   65.4%   62.0%

Used car sales – Seminovos                                           12.0%     13.2%       4.6%       5.4%    5.7%    7.4%


Rental divisions, including Used car sales                           2004      2005        2006       2007    1Q07    1Q08


Car Rental and Franchising + Seminovos/ car rental revenue           54.6%     63.5%       47.6%      53.7%   58.5%   57.3%

Fleet Rental + Seminovos/ fleet rental revenue                       67.6%     67.4%       72.3%      70.9%   67.7%   66.1%


                                                                                                                              48
                                                                                                                               Investment in fleet

                            Quantity                                                                                       Net investment *
                                                                                                                               (R$ million)


                                             7,957
                             10,346                                                                                                            207.7
                                                                                                                              340.0
                  7,342                   38,050
                                                                                                                 241.8
   6,467                                                                                                                                   1,060.9
                            33,520                                                               190.1                      930.3
                                               30,093                                                                                            853.2                       (44.3)
              26,105                                                       (2,079)
22,182                           23,174                                                                        690.0                                        (180.2)
                   18,763                                 (7,123)                                                               590.3
     15,715                                                                                     493.1              448.2
                                                                8,870           9,292                  303.0
                                                                        7,213                                                                                    244.2   224.6268.9
                                                        1,747                                                                                             64.0


   2004          2005          2006          2007          1Q07            1Q08                    2004          2005         2006            2007          1Q07           1Q08


                                                                                                                                                         * Includes accessories
                                                                            Purchased          Sold



                                                                            End of period fleet **



                                                                                              53,476                           51,239
                                                                                 46,003
                                                            35,965                            17,790           38,763           18,604
                                                                                  14,630
                                            28,699                                                              14,938
                                                             11,762
                                             9,168
                                                                                  31,373      35,686                            32,635
                                            19,531           24,103                                             23,825


                                             2004               2005               2006        2007              1Q07               1Q08

                                                                    Car rental                  Fleet rental
                                                                                                                                                                                      49
                                          ** Deductions for losses from theft and accidents are deducted from the fleet at end of period.
                                                                                       Net debt x fleet value


                                                                          1,492.9       1,465.1
                                                          1,247.7
                                           900.2                                    838.6
                                                                    767.9
                           612.2   539.3
                                                   443.1
                   281.3



                        2004         2005             2006            2007             1Q08

                                               Net debt     Fleet value




END OF PERIOD BALANCE                          2004            2005            2006           2007       1Q08
Net debt / fleet                               46%             60%              36%           51%         57%
Net debt / EBITDA (USGAAP)                     1.4x            1.9x             1.4x          1.9x       1.7x*
Net debt / EBITDA (BRGAAP)                     1.1x            1.5x             1.0x          1.4x       1.2x*
Net debt / market cap                          35%             30%              10%           20%         25%

                                                                                                     * Annualized




                                                                                                                    50
                                                                                                                         Free cash flow - FCF
                                                             Free cash flow before growth
                    4   5   0




                                                                                      340.2                                                                1   3   %




                    3   5   0




                                   9.8p.p.
                    2   5   0




                                                                                      222.0                      199.7                                     8   %




                                                                                       (1)
                                                             3.7p.p.
                    1   5   0




                                30.1                      32.7                                                                                             3   %




                        5   0
                                                                                    118.2       0.9p.p.                      0.6p.p.             1.2p.p.

                                                                                                                                           1Q08 -8.8
                        5
                        -   0                                                                                                                              2
                                                                                                                                                           -   %




                                2004                      2005                         2006                      2007

                                                 Free cash flow before growth                 Real increase in new car prices

                                (1) Impact on cash flow due to the extraordinary increase in the vehicle supplier caption.


   Free cash flow                                                             2004               2005               2006               2007                1Q08
   EBITDA after taxes                                                         156.6              245.2              268.6               340.1               100.6
     Working capital variation ‐ (increase) decrease                          (15.7)             (49.7)             217.2               (37.7)             (117.7)
   Cash provided before capex                                                 140.9              195.5              485.8               302.4               (17.1)
     Capex of vehicle ‐ renovation                                           (349.3)            (496.0)            (643.3)             (839.0)             (224.6)
     Cost of used car sales                                                   248.7              361.2              530.4               760.0               236.3
       Net capex – for renovation                                            (100.6)            (134.8)            (112.9)              (79.0)               11.7
     Capex – Property and equipment, net                                      (10.2)             (28.0)             (32.7)              (23.7)               (3.4)
   Free cash flow before growth                                                30.1               32.7              340.2               199.7                (8.8)
     Capex of vehicle – growth                                               (143.8)            (194.0)            (287.0)             (221.9)                 ‐
   Free cash flow                                                            (113.7)            (161.3)              53.2               (22.2)               (8.8)

   Variation on vehicle supplier account                                     (21.9)             (25.5)              222.0              (51.0)              (89.3)


The negative FCF of R$ 8.8 million was impacted by the reduction of R$ 89.3 million in vehicle supplier account,
  compensated by the reduction of R$ 44.3 million in car-capex, what would result in a FCF of R$ 36.2 million
                                                                                                                                                                       51
                                                                                                                                                                             EVA
                            1   2   0
                                                                                                114.3
                                                                                                                                                       3    0%




                                         24.6%          24.8%
                                8   0
                                                                          76.2
                                                                                     18.7%                 21.3%
                                           16.9%        55.5                                                                                           2    0%




                                                               15.7%                 11.0%                                                35.4
                                        39.2
                                4   0




                                                                                                           11.2%       25.9                            1    0%




                                                                                                                               5.2%               5.6%
                                                                                                                                                  2.7%
                                                                                                                               2.8%                    0%




                                        2004           2005               2006                      2007               1Q07               1Q08


                                                          EVA                        ROIC                      Nominal WACC




                                                               2004        2005              2006            2007              1Q07          1Q08                Variation
ROIC                                                           24.6%      24.8%              18.7%           21.3%              5.2%         5.6%                 0.4p.p.
Nominal WACC                                                   16.9%      15.7%              11.0%           11.2%             2.8%.         2.7%                 ‐0.1p.p.
Cost of debt (2)                                               11.6%       13.6%             10.9%           8.4%               8.8%         8.2%                 ‐0.6p.p.
Cost of equity                                                 20.0%       16.2%             11.0%           11.5%             11.6%         11.2%                ‐0.4p.p.
Spread (ROIC‐WACC) – p.p.                                       7.7            9.1            7.7            10.1                2.4             2.9                0.5
Capital investment –    R$ thousand (1)                     507,362      606,327            986,232        1,137,460          1,095,637    1,246,730             151,093      13.8%
EVA – R$ thousand                                             39,198      55,530            76,201          114,334            25,862        35,362                9,500
EVA increase calculation – R$ thousand                                    16,332            20,671          38,133

       (1) For EVA® calculus, it was used the average capital of the period.
       (2) Cost of debt after taxes




                                                                                                                                                                                      52
                                                                                                                  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.

                                                                                                                                           53
Thank you!



             54