2. 1
109,1
199,6
142,4
-63,3-18,6 -38,0
1,9
0,1
2,5
2004 2005 2006
30%
18%
2006 highlights: growth with profitability
6.654
9.402
12.842
7.796
11.635
9.308
2004 2005 2006
14.450
24.477
18.710
65,5%
58,8%60,6%
2004 2005 2006
(R$ millions. USGAAP)
44,5
57,4
75,6
2004 2005 2006
Average rented fleet Car rental utilization rate
Net income EVA
30%
19%
41%
31%
25%
37%
7 P.P.
31%
40%
90.6
106.9
138.2
29%
32%
Car rentalFleet rental
Used car salesRental Franchising
3. 2
2006 highlights: Recognition
Standard & Poor’s rating upgraded to ‘brAA-’ in national scale and ‘BB’
in global scale. same as sovereign risk. with stable outlook
Included in IBrX (between the 100 most traded shares)
Included in ISE – Corporate Sustainability Index (34 companies)
“Best Company for Shareholders” by Capital Aberto magazine. between
Companies of up to R$ 5 BI market share
4. 3
2006 highlights: Footprint expansion
145
117
83
12/31/04 12/31/05 12/31/06
24% increase in the number of owned car rental agencies
100% increase in the number of used car points of sales
26
1313
31/12/2004 12/31/05 12/31/06
Owned car rental agencies Used car points of sales
41%
24%
100%
32*
* Until the end of 1H07
5. 4
2006 highlights: On airport and off-airport growth
Consolidation is happening mainly on off-airport agencies
46.7%49.6%Off-airport agencies
16.0%17.2%Airport agencies
Revenue growthVolume growth
2006/2005 (%)
Elasticity on airport in 2006 was 2 times the growth of domestic deplanement
14,3% 14,0%
1,5% 0,2%
27,2%
20,4%
12,3%
9,8%
1T06 2T06 3T06 4T06
Domestic deplanement increase x Localiza – daily rentals on airports
Daily rental volume on airportsDomestic deplanement
8. 7
(R$ million. USGAAP)
Net income reconciliation
-1.0
2005
Net income
2006
Net income
106.5
+268.5
Revenues
-215.5
Costs
-25.7
SG&A
Depreciation
-14,0
+19.1
+126.4 -49.5
Interest
Taxes
138.2
-6.8
+29.8%
+142.1 -166.1
Rental = +61.3 milhões
Used cars = - 34.0milhões
-15,7
EBITDA variation = + 27.3 milhões
Other items variation = + 4.4 milhões
+6.1
Stock
Options
-10,0
9. 8
(R$ million. USGAAP)
2006 cash generation
70.8 162.2
Cash and cash
equivalents in the
beggining of the period:
Operating
activities
Investment
activities
The cash generation for operating activities (R$31 mi), excluding the
investment on fleet growth (R$287 mi), was R$ 318 million
431.2
60.1
530.4
+31.3
Acquisitions
(growth/
renew)
Depreciated cost of
sold vehicles
-930.3
Cash and cash
equivalents in the end
of the period:
11. 10
Net debt (R$ million) USGAAP
Rating S&P – BrAA- / Stable
(R$ million. USGAAP)
Indebtness
42% / 58%50% / 50%33% / 67%Net debt / equity
36%60%46%Net debt / fleet
200620052004
The Company will pursue a net debt/equity structure that adds
maximum value for shareholders
The Company will pursue a net debt/equity structure that adds
maximum value for shareholders
281
539
443
2004 2005 2006
12. 11
(R$ million. USGAAP)
EBITDA margin per segment
42.4%
4.6%
69.3%
21.2%
4.6%
42.3%
2006
45.3%41.7%TOTAL
10.5%8.2%Seminovos
63.6%65.2%Aluguel
27.9%28.4%TOTAL
14.4%15.3%Seminovos
46.3%42.6%Aluguel
20052004
AluguelfrotasAluguelcarros
The drop of 4 p.p. in the car rental margin was compensated by
the increase of 5.7 p.p. in the fleet rental margin
14. 13
Indexes: ROIC
19.8%24.1%29.3%24.5%ROIC
3.1%5.7%7.6%9.3%IPCA – inflation index
4,0%9,4%17,4%14,0%Average increase in the car price
2006200520042003
The 4 p.p. decrease in the ROIC in 2006 was mainly due to the slow down of the asset turnover:
1. Stable tariffs in the car rental
2. 5% increase in the new car prices in 2006
3. Impact of inflation in the fixed costs
The 4 p.p. decrease in the ROIC in 2006 was mainly due to the slow down of the asset turnover:
1. Stable tariffs in the car rental
2. 5% increase in the new car prices in 2006
3. Impact of inflation in the fixed costs
R$ / million
1,8
75,6
44,5
57,4
11,8%
24,1% 18,4%
15,8%
19,8%
24,1%
29,3%
24,6%
-
25,0
50,0
75,0
100,0
2003 2004 2005 2006
-5,0%
5,0%
15,0%
25,0%
35,0%
EVA WACC nominal ROIC
-4 p.p.
15. 14
Indexes: WACC
11.8%15.8%18.4%24.1%WACC
42% / 58%50% / 50%33% / 67%27% / 73%Third party’s capital x equity
12.6%18.1%21.8%26.9%Cost of own capital
10.7%13.5%11.5%16.6%Third party cost of capital
2.4%4.0%5.4%8.4%Sovereign risk
15.0%19.0%16.2%23.3%Average CDI
2006200520042003
The ROIC decrease was partially offset by the reduction of 4 p.p. in WACC from 15.8% to 11.8%The ROIC decrease was partially offset by the reduction of 4 p.p. in WACC from 15.8% to 11.8%
R$ / million
1,8
75,6
44,5
57,4
11,8%
24,1% 18,4%
15,8%
19,8%
24,1%
29,3%
24,6%
-
25,0
50,0
75,0
100,0
2003 2004 2005 2006
-5,0%
5,0%
15,0%
25,0%
35,0%
EVA WACC nominal ROIC
-4 p.p.
16. 15
1,8
75,6
44,5
57,4
11,8%
24,1% 18,4%
15,8%
19,8%
24,1%
29,3%
24,6%
-
25,0
50,0
75,0
100,0
2003 2004 2005 2006
-5,0%
5,0%
15,0%
25,0%
35,0%
EVA WACC nominal ROIC
Indexes: EVA
75.657.444.51.8EVA – R$ million
8.068.3210.830.55Spread (ROIC – WACC) percentage points
937.8689.4410.8323.5Average invested capital – R$ million
2006200520042003
Localiza continues to present low volatility in spread.
In 2006 EVA grew 29.9% in accordance with the average rented fleet growth
Localiza continues to present low volatility in spread.
In 2006 EVA grew 29.9% in accordance with the average rented fleet growth
R$ / million
32%
17. 16
ROE – return on equity
OBS: ROE was calculated dividing net income by average equity of the year. excluding the income of the year
Localiza was the 13th among the largest 500 companies in Brasil
with consistent ROE in the last 5 years, by 2006 FGV ranking
Localiza was the 13th among the largest 500 companies in Brasil
with consistent ROE in the last 5 years, by 2006 FGV ranking
29%
39%
37%
2004 2005 2006
19. 18
2007 perspectives:
Utilization rate and real increase in the car price
2007 perspectives: Utilization rate of 70% in the car rental
Real increase in the new car prices in line with inflation
Average depreciation
per car
Real decrease in the
used car price
Real increase in the
used car price
65.5%58.8%60.6%62.9%67.4%74.0%74.1%Utilization rate
5.2%2.9%1.8%9.2%9.3%11.9%13.8%% over rental revenue
939.1492.3322.91.752.31.656.22.142.53.617.7Average depreciation per car
Car Rental
0.88%3.71%9.82%4.65%-5.14%-0.95%.-4.07%
Real increase (decrease) in the new car
price
3.14%5.69%7.60%9.30%12.53%7.67%5.97%IPCA- inflation
4.02%9.40%17.42%13.95%7.39%6.72%1.90%Increase of new car price (Pálio)
2006200520042003200220012000
Real increase x depreciation
3.617,7
2.142,5
1.656,2
1.752,3
322,9 492,3
939,1
0,9p.p.
-4,1p.p.
-1,0p.p.
-5,1p.p.
4,7p.p.
9,8p.p.
3,7p.p.
(2.000,0)
(1.000,0)
-
1.000,0
2.000,0
3.000,0
4.000,0
2000 2001 2002 2003 2004 2005 2006
-6,0%
-2,0%
2,0%
6,0%
10,0%
20. 19
2007 Perspectives: Consolidation
CAGR: + 11%
Car rental market revenues Localiza revenues
(excluding car sales)
Localiza corporation grew 30.2% in 2006. ABLA estimated the market growth in 12%
Perspective: Localiza’s growth of at lease 20% in business volume in 2007
Others
84%
Localiza
16%
Others
82%
Localiza
18%
Others
80%
Localiza
20%
Market share of Localiza Group
2004 2005 2006E
281
331
429
2003 2004 2005
CAGR: + 24%
2,350
2,680
2,910
2003 2004 2005
R$ / million
21. 20
2007 perspectives:
Management proposals for RENT3
New dividend policy in line with the high cash generation and the low
indebted
Split of the shares (each one will be converted into 3) for the increase of
the negotiability index
22. 21
Strategies
Short-term:
To reinvest cash in our growth
To maintain profitability (ROE, net margin, EBITDA margin)
To add value to the company (EVA)
Long-term:
To expand business scale through organic growth and new
agencies
To distribute excess cash
Localiza’s remuneration is aligned with the short-term strategies (variable
remuneration) and long-term strategies (stock option)
23. 22
RENT3 performance
Localiza was the Best Company for Shareholders
Research by Economática. Stern & Stewart, IBGC and FEA/USP – companies up to R$ 5 bi market cap
Localiza was the Best Company for Shareholders
Research by Economática. Stern & Stewart, IBGC and FEA/USP – companies up to R$ 5 bi market cap
Average daily traded volume (RS million)
4,570
10,581
6,124
11,804
2005 2006 4T05 4T06
+132%
+93%
Source: Capital Aberto magazine
24. 23
Disclaimer - Forward looking statements
The material that follows 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.
28. 27
Source: Bacen, Localiza
The average car rental division volume growth was
8.4 x GDP over the last five years
0%
20%
40%
60%
80%
100%
120%
140%
Localiza – daily rentals volume GDP
2001 2002 2003 2004 2005
CAGR: 18.3%
CAGR: 2.2%
8.4x
Accumulated growth rate – car rental
Growth opportunities: GDP
-20%
29. 28
High leverage of car rental on
air travel
Air traffic has increased 11%
p.a. over the last 2 years due
to the success of low cost -
low fare airlines
Localiza is the absolute leader
in airport branches in Brazil
Air traffic evolution
(Millions of passengers per year)
CAGR: +11%
Growth opportunities: Air traffic
83
96 102
2004 2005 2006
30. 29
Source: ABECS
CAGR: +21%
# of credit card (million)
Growth opportunities: Credit cards
Number of credit cards increased 21%
per year over the last 2 years
78 million credit cards in Brazil
Every credit card user is a Localiza
potential customer
53
68
78
2004 2005 2006
31. 30
Replacement is a growing market in Brazil
Brazil has 34 million cars but only 9.2 million
insured
The accident rate is 16.5% / year
The potential market is 10.6 million of daily
rentals
Localiza is very well positioned to capture this growth
due to its geographic footprint
Growth opportunities: Replacement market
32. 31
Focus of corporations on their core businessesFocus of corporations on their core businesses
Fixed asset reduction by companiesFixed asset reduction by companies
Economic growthEconomic growth
Large potential market with low penetrationLarge potential market with low penetration
Growth opportunities: Fleet outsourcing
33. 32
Growth opportunities: Consolidation
DTG
11%
Vanguard
20%
Hertz
28%
Avis Budget
32%
Other
2%
Enterprise
7%
All others
19%
Avis Budget
7%
Hertz
9%
Enterprise
65%
Source:*Avis presentation nov/06 - local segment share amounts are company estimates
** National/Alamo prospectus, NYSE/SEC, September 20, 2006
US airport segment* - US$10BN US off-airport segment* - US$10BN
USA: 5 companies hold 92% of market share
Europe: 6 companies hold 74% of market share**
US Market share 2005
34. 33
Source: ABLA
Localiza is the consolidator in a fragmented industry
Growth opportunities: Consolidation
Localiza’s Market share - Brazil
2004 Market share 2005 Market share
16%
18%
7% 4% 4%
Local
players
69%
Unidas
Avis Hertz
2006E Market share
20%
35. 34
Off-airport agencies
Growth opportunities: Consolidation
Airport agencies
41
55
45
88
9/30/2005 9/30/2006
9.8%
60.0%
96
133
Owned agencies
The share in off-airport agencies is growing faster in volume and revenue
46.7%49.6%Off-airport agencies
16.0%17.2%Airport agencies
Revenue growthVolume growth
2006/2005 (%)
39. 38
278
86
83
74
Localiza Hertz Avis Unidas
Localiza network is larger than the second, the third and the fourth
competitors combined.
(number of agencies in Brazil)
243**
278*
* As of September 30, 2006 ** As of January 29,2007
Competitive Advantages:
Largest distribution
40. 39
Yield management allows Localiza to be more
competitive
Day of the weekDay of the week
Month of the yearMonth of the year
EventsEvents
CityCity
Volume per customerVolume per customer
Competitors’ monitoringCompetitors’ monitoring
Localiza adjusts its prices based on supply & demand
Competitive Advantages:
Yield management
41. 40
Localiza Group has the largest fleet in South America:
52,733 cars in 2006
Localiza purchased more than US$1,0 billion worth of cars from 2001-2005*
Localiza and its Franchisees represent
1,9% of the Brazilian internal car sales
3,9% of GM internal car sales
3,3% of FIAT internal car sales
Localiza enjoys better price conditions due to its large scale
*90.4 thousand cars between 2001-2005 calculated on average purchase price of 2005
Competitive Advantages:
Bargaining power
15.364
11.758
15.062
22.182
26.105
33.520
2001 2002 2003 2004 2005 2006
42. 41
Competitive Advantages:
Credit access
BB / Stable /--Localiza Rent a Car S.A.
A-/ Stable / A-2Enterprise Rent-Car Co.
BB+/ Stable /--Avis Budget Car Rental
B+/ Stable /--Vanguard (National / Alamo)
BB-/ Stable /--Hertz Corp.
Global Scale
brAA-/ Stable /--Localiza Rent a Car S.A.
brAA/ Positive /brA-1Banco Citibank S.A.
brAA+/ Positive /brA-1Banco Itaú S.A.
brAA+/ Positive /brA-1Banco Bradesco S.A
brA+/ Positive /--CPFL Energia S.A.
brAA+/ Positive /--Gerdau S.A.
brA+/ Stable /--TAM S.A.
Local Currency
Standard & Poor’s as of January 19, 2007
43. 42
Deep knowledge of the business
State-of-the-art systems
Operational excellence
Adoption of best practices
Stable management
15Used car operating officerMarco Guimarães
33Vice-presidentAntonio Resende
20CFORoberto Mendes
21Total fleet operating officerDaltro Barbosa
26Localiza operating officerGina Rafael
33
33
Eugênio Mattar
CEOSalim Mattar
Experience
at Localiza
TitleName
Vice-president
15Investor relationsSilvio Guerra
24Aristides Newton Franchising vice-president
Competitive Advantages:
Know-how
Integrated Business
Platform
Largest Distribution
Yield Management
Bargaining
power
Credit access
Depreciation
Experienced
management
Brand recognition
State-of-the-art
systems
44. 43
Car prices and accurate forecasts of depreciation (car rental)
26%*25%23%----National Alamo (USA)
23%23%22%----Hertz (USA)
4.1%2.9%1.8%9.2%9.3%11.9%13.8%Localiza (car rental division)
Until
Set/06200520042003200220012000% over rental revenue
Competitive Advantages:
Depreciation
Depreciation (car rental)
* Until Jun/06
Source: National/Alamo prospectus, Sep 20, 2006, p.11 and Hertz prospectus, Nov 21,2006, p.12 and 17
Average depreciation
per car
Real decrease in the
used car price
Real increase in the
used car price
Real increase x depreciation
3.617,7
2.142,5
1.656,2
1.752,3
322,9 492,3
939,1
0,9p.p.
-4,1p.p.
-1,0p.p.
-5,1p.p.
4,7p.p.
9,8p.p.
3,7p.p.
(2.000,0)
(1.000,0)
-
1.000,0
2.000,0
3.000,0
4.000,0
2000 2001 2002 2003 2004 2005 2006
-6,0%
-2,0%
2,0%
6,0%
10,0%
45. 44
Top of mindTop of mind
High quality of services
Customer satisfaction
Strong nationwide presence
International franchising program
High standards of ethical
behavior
Competitive Advantages:
Brand recognition
Integrated Business
Platform
Largest Distribution
Yield Management
Brand recognition
Bargaining
power
Credit access
Depreciation
State-of-the-art
systems
Experienced
management
46. 45
IT allows Localiza:
Speed in transaction time
Better operational control
Customer satisfaction
On-line network
Cost reduction
Competitive Advantages:
IT
Integrated Business
Platform
Largest Distribution
Yield Management
Brand recognition
Bargaining
power
Credit access
Depreciation
State-of-the-art
systems
Experienced
management
