Webcast 1 q13 eng
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Localiza Rent a Car reported financial results for the first quarter of 2013, with some key highlights: 1) Net revenue from car rentals increased slightly to R$283 million, while net revenue from fleet outsourcing grew 9% to R$142 million. 2) Consolidated net income increased 22% to R$89 million, with spreads remaining stable. 3) The car rental fleet was reduced by only 585 vehicles in the quarter, a much smaller reduction than the 4,562 vehicles sold in the first quarter of 2012, as economic growth was more moderate.
Webcast 1 q13 eng
- 1. Localiza Rent a Car S.A. 1Q13 Earnings R$ million, IFRS 1 April 17, 2013
- 2. 1Q13 Highlights Net Revenues – Car Rental Division Net Revenues – Fleet Outsourcing 267.9 283.2 141.8 129.5 R$ million R$ million 1Q12 1Q13 1Q12 1Q13 Net Income – Consolidated Spread 15.1% 15.1% 88.8 R$ million 72.7 8.0p.p. 9.8p.p. 7.1% 5.3% 1Q12 1Q13 1Q12 1Q13 Annualized Annualized ROIC Interest rates paid to third parties after taxes 2
- 3. Car Rental Division # Daily Rentals (thousands) 12,794 13,749 10,734 7,940 8,062 5,793 4,668 3,330 3,426 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 Net Revenues (R$ million) 980.7 1,093.7 802.2 565.2 585.2 428.0 346.1 267.9 283.2 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 Low economic activity growth reflected on more moderate results in 1Q13. 3
- 4. Car Rental locations evolution # of car rental locations (Brazil and abroad) 524 533 476 496 452 50 55 422 47 381 61 71 327 76 202 200 69 181 202 48 167 +4 134 147 134 272 278 199 214 234 247 145 178 2006 2007 2008 2009 2010 2011 2012 1Q13 Localiza´s branches - Brazil Franchisees´ branches - Brazil Franchisses´ branches - abroad 4 rental locations were added to the Brazilian footprint. 4
- 5. Fleet Outsourcing Division # Daily Rentals (thousands) 10,601 9,603 8,044 6,437 7,099 5,144 4,188 2,611 2,742 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 Net Revenues (R$ million) 535.7 455.0 361.1 268.4 303.2 184.0 219.8 129.5 141.8 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 Revenue growth outpaced volume growth due to a 3.8% increase in the average rental rate. 5
- 6. Net Investment Fleet Expansion* (quantity) 18,649 9,178 2,011 9,930 8,642 7,957 10,346 65,934 59,950 58,655 47,285 50,772 56,644 44,211 43,161 (585) 33,520 38,050 34,281 34,519 (4.562) 30,093 23,174 13,285 12,349 12,934 8,723 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 Cars purchased Cars sold * It does not include theft / crashed cars. Net Investment (R$ million) 588.5 98.8 308.4 354.5 281.8 1,910.4 210.4 1,776.5 341.5 1,618.8 1,520.0 1,335.3 1,468.1 1,204.2 1,321.9 1,060.9 (123.8) (22.3) 930.3 850.5 980.8 922.4 588.8 373.3 341.5 363.8 249.5 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 Purchases (includes accessories) Used car sales net revenues The reduction of the fleet in 1Q13 was of only 585 cars, compared to 4,562 cars reduced in 1Q12. 6
- 7. End of Period Fleet Quantity 96,317 97,190 96,255 88,060 91,444 70,295 31,629 32,104 32,212 62,515 26,615 31,186 46,003 53,476 22,778 23,403 14,630 17,790 61,445 64,688 65,086 60,258 64,043 39,112 47,517 31,373 35,686 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 Car Rental Fleet Outsourcing Fleet grew 5.3% compared to 1Q12 Total Fleet of 111,358 cars, including 15,103 cars from franchisees. 7
- 8. Seminovos Points of Sale Evolution # Points of sale (Brazil) +1 The continuous increase in points sales sustains the Company business model, allowing fleet renewal. 8
- 9. Consolidated Net Revenues R$ million 3,166.7 2,918.1 2,497.2 1,520.0 1,820.9 1,468.1 1,823.7 1,505.5 1,321.9 1,126.2 980.8 922.4 850.5 774.7 793.3 588.8 1,450.0 1,646.7 1,175.3 373.3 363.8 655.0 842.9 898.5 537.4 401.4 429.5 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 Rental Seminovos Car rental and outsourcing fleet net revenues increased 7.0%. 9
- 10. Consolidated EBITDA R$ million 821.3 875.6 649.5 504.1 469.7 311.3 403.5 210.0 217.2 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 EBITDA margin from 2006 to 2011 was adjusted to reflect the accounting of accessories in the cost line: Divisions 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 Car Rental 42.7% 45.0% 43.5% 39.8% 43.5% 43.9%* 40.9% 42.0% 35.6% Fleet Outsourcing 70.7% 70.3% 67.5% 67.5% 66.7% 66.8%* 66.4% 66.2% 65.9% Rental Consolidated 52.4% 53.6% 51.2% 49.3% 50.7% 51.2%* 49.3% 49.9% 45.8% Used Car Sales 4.6% 5.5% 5.6% 1.1% 2.6% 2.8% 4.2% 2.6% 5.6% *Includes the adjustment of accessories and excludes the reversals of non-recurring provisions of R$10.6 million in 3Q11. 10
- 11. Average depreciation per car in R$ IPI reduction effect Financial crisis effect 3,972.4 Robust used-car market 2,546.0 2,577.0 1,536.0 1,683.9 * 1,273.7 939.1 332.9 2006 2007 2008 2009 2010 2011 2012 1Q13 * Annualized IPI reduction effect Financial crisis effect * Robust used-car market 5,083.1 4,371.7 4,133.0 5,408.2 5,427.3 3,509.7 2,383.3 2,395.8 2006 2007 2008 2009 2010 2011 2012 1Q13 * Annualized 11
- 12. Additional Depreciation due to lower IPI tax rate R$ million Additional Depreciation Division Accounted Estimated Total 2012 1Q13 Subtotal From 2Q13 on 111.2 3.2 114.4 1.6 116.0 Car Rntal 95.9% 2.8% 98.6% 1.4% 100.0% 33.3 6.8 40.1 24.4 64.5 Fleet Outsourcing 51.6% 10.5% 62.2% 37.8% 100.0% Consolidated 144.5 10.0 154.5 26.0 180.5 98.6% additional depreciation of the Car Rental Division have already been recorded. 12
- 13. Consolidated Net Income R$ million 336.3 * 291.6 250.5 240.9 190.2 Record 138.2 127.4 116.3 72.7 88.8 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 * Pro forma net income excluding aditional depreciation of R$144.5 million in the year, net of income tax. Reconciliation EBITDA vs. Net income 2009 2010 2011 2012 1Q12 1Q13 Var. R$ Var. % Consolidated EBITDA 469.7 649.5 821.3 875.6 210.0 217.2 7.2 3.4% Car depreciation (172.3) (146.3) (201.5) (376.9) (58.0) (60.5) (2.5) 4.3% Other property depreciation and amortization (21.0) (21.1) (24.1) (32.9) (7.5) (8.6) (1.1) 14.7% Financial expenses, net (112.9) (130.1) (179.0) (138.7) (43.6) (23.0) 20.6 -47.2% Income tax and social contribution (47.2) (101.5) (125.1) (86.2) (28.2) (36.3) (8.1) 28.7% Net income 116.3 250.5 291.6 240.9 72.7 88.8 16,1 22.1% 22.1% net income growth, especially due to the reduction of net financial expenses and the conservative financial policy of the Company. 13
- 14. Free Cash Flow Free cash flow - R$ million 2006 2007 2008 2009 2010 2011 2012 1Q13 EBITDA 311.3 403.5 504.1 469.7 649.5 821.3 875.6 217.2 Used car sale revenue, net from taxes (588.8) (850.5) (980.8) (922.4) (1,321.9) (1,468.1) (1,520.0) (363.8) Depreciated cost of cars sold (*) 530.4 760.0 874.5 855.1 1,203.2 1,328.6 1,360.2 320.9 (-) Income tax and social contribution (42.7) (63.4) (52.8) (49.0) (57.8) (83.0) (100.9) (23.0) Change in working capital (4.8) 13.3 (44.8) (11.5) 54.5 (83.9) 37.1 (32.7) Cash provided before investment 205.4 262.9 300.2 341.9 527.5 514.9 652.0 118.6 Used car sale revenue, net from taxes 588.8 850.5 980.8 922.4 1,321.9 1,468.1 1,520.0 347.3 Car investment for renewal (643.3) (839.0) (1,035.4) (947.9) (1,370.1) (1,504.5) (1,563.3) (341.5) Net investment for fleet renewal (54.5) 11.5 (54.6) (25.5) (48.2) (36.4) (43.3) 5.8 Fleet renewal – quantity 23,174 30,093 34,281 34,519 47,285 50,772 56,644 12,349 Other property investment (32.7) (23.7) (39.9) (21.0) (51.1) (63.0) (80.2) (7.7) Free cash flow before growth and before interest 118.2 250.7 205.7 295.4 428.2 415.5 528.5 116.7 Investment on cars for fleet (growth) /reduction (287.0) (221.9) (299.9) (241.1) (540.3) (272.0) (55.5) 16.5 Change in accounts payable to car suppliers 222.0 (51.0) (188.9) 241.1 111.3 32.7 (116.9) (56.7) Fleet growth (65.0) (272.9) (488.8) 0.0 (429.0) (239.3) (172.4) (40.2) Fleet increase / (reduction) – quantity 10,346 7,957 9,930 8,642 18,649 9,178 2,011 (585) Free cash flow after growth and before interest 53.2 (22.2) (283.1) 295.4 (0.8) 176.2 356.1 76.5 (*) Technical discount deduction excluded until 2010 14
- 15. Changes in Net Debt R$ million FCF 76.5 Net debt Net debt 12/31/2012 03/31/2013 -1,231.2 - 1,193.5 (23.0) (15.8) Interest Interest on own capital Net debt was reduced by 3.1%, or R$37.7 million in this quarter. 15
- 16. Debt Profile (principal) R$ million 625.2 592.0 462.0 182.6 247.7 194.9 146.0 172.0 2013 2014 2015 2016 2017 2018 2019 Cash 897.5 The Company continues delivering a strong cash position and comfortable debt profile. Cash available at the Company is enough to pay 100% of debt from years 2013, 2014,2015 and 46% of 2016’s. . 16
- 17. Debt - ratios Net debt vs. Fleet value 2,446.7 2,681.7 2,547.6 2,503.1 1,907.8 1,752.6 1,492.9 1,363.4 1,247.7 1,254.5 1,281.1 1,231.2 1,193.5 1,078.6 765.1 440.4 2006 2007 2008 2009 2010 2011 2012 1Q13 Net debt Fleet value BALANCE AT THE END OF PERIOD 2006 2007 2008 2009 2010 2011 (*) 2012 (*) 1Q13(*) Net debt / Fleet value 36% 51% 72% 57% 52% 51% 48% 48% Net debt / EBITDA (**) 1.4x 1.9x 2.5x 2.3x 2.0x 1.7x 1.4x 1,4x Net debt / Equity 0.7x 1.3x 2.0x 1.5x 1.4x 1.2x 0.9x 0,8x EBITDA / Net financial expenses 4.8x 5.4x 3.8x 4.2x 5.0x 4.6x 6.3x 9,4x (*) As from January 1, 2011, based on the financial statements in IFRS (**) Annualized Comfortable debt ratios. 17
- 18. Spread (ROIC minus interest rates paid for third parties after tax) 21.25% 18.70% 17.03% 16.94% 17.12% 16.10% 15.13% 7.8p.p. 12.9p.p. 11.54% 8.2p.p. 9.6p.p. 8.5p.p. 4.0p.p. 9.8p.p. 9.8p.p. 10.90% 8.84% 7.59% 7.33% 6.34% 5.33% 8.40% 8.60% 2006 2007 2008 2009 2010 2011 2012 1Q13 Annualized ROIC Interest rates paid to third parties after taxes Stable spread despite the EBITDA margin decrease. 18
- 19. Succession: current structure BOARD OF DIRECTORS CEO Car acquisition Legal Communication COO Finance and IR HR IT 19
- 20. Succession: structure from May/2013 BOARD OF DIRECTORS CEO Legal Communication Supply and Finance and IR HR IT logistics 20
- 21. Attributions of the Chairman and CEO Chairman of the Board To represent the Value management CEO institution before society to shareholders Governance standards Institutional crisis Definition of goals, actions Long and mid term management and initiatives based on strategies and goals Strategic planning the strategies Business model and To guard Culture Continuous innovation portfolio and Values and improvement of the management model Executive role to the press, investors, market and employees Coaching and succession of the executive officers 21
- 22. Localiza Level I ADR Ticker Symbol: LZRFY CUSIP: 53956W300 ISIN: US53956W3007 Ratio: 1 Common Share : 1 ADR Exchange: OTC Depositary bank: Deutsche Bank Trust Company Americas ADR broker helpline: +1 212 250 9100 (New York) +44 207 547 6500 (London) E-mail: adr@db.com ADR website: www.adr.db.com Depositary bank’s local custodian: Banco Bradesco S/A, Brazil 22
- 23. Thank you! www.localiza.com/ir E-mail: ri@localiza.com Tel: +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 projections 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, invitation or solicitation of an offer to subscribe to or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. 23