INVESTOR RELATIONS PRESENTATION 1.COMPANY OVERVIEW 2.COMPETITIVE ADVANTAGES 3.MAIN BUSINESS DIVISIONS 4.FINANCIALS 5.APPENDIX BECOMING THE LARGEST CAR RENTAL COMPANY IN LATAM
PHASE IV: DIGITAL PHASE I: PATH TO LEADERSHIP PHASE II: EXPANSION PHASE III: REACHING SCALE TRANSFORMATION
2019 1973 1984 1992 1999 Follow-on of R$1,8B Founded in Belo Expansion strategy Internationalization Expansion strategy 2014 Horizonte with by adjacencies: through by adjacencies: Beginning of digital Market Cap 6 VW beetles Franchising Franchising Fleet Rental transformation US$10B (12/2019)
2020 1979 2017 Launch of car subscription, Expansion to 11 1991 1997 2005 Market Cap Localiza Meoo Expansion strategy capital cities DLPE firm DL&J enters IPO with a Market US$ 4,4 bi Merger announcement: by adjacencies: becoming market at a market cap of millionsCap Unidas leader in 1981 Seminovos US$150 mm of US$295 mm Market Cap US$ 10.1 bi as of Dec/20
6 1,970 5,080 24,700 118,000 289,000 (1973) (1983) (1993) (2003) (2013) (1Q21)
3 FLEET RENTAL •65,622 CARS • 529EMPLOYEES INTEGRATED BUSINESS PLATFORM C A R R E N T A L FLEET RENTAL SUPPORTING SYNERGIES: BARGAINING GROWTH POWER C A R R E N T A L COST REDUCTION 1Q21 CROSS SELLING • 223,571 CARS OVERHEAD AND SUPPORT: 2,174 EMPLOYEES • 11.8 MILLION CLIENTS • 541 LOCATIONS IN BRAZIL Localiza has Unmatched • 71 LOCATIONS ABROAD USED CAR SALES Advantages from a Highly • 7,408 EMPLOYEES Scalable Model and • 50.6% SOLD TO FINAL CONSUMER(*) Unparalleled Business • 131 STORES Expertise • 90 CITIES SEMINOVOS • 1,644 EMPLOYEES
Source: Company filings. (*) Accumulated until 03/31/2021 4 COMPANY 1 BUSINESS
PLATAFORM CAR RENTAL FLEET RENTAL USED CAR SALES
SELLS THE USED CARS AFTER THE RENTS TO INDIVIDUALS AND OUTSOURCES FLEET FOR END OF CARS’ SERVICES AS RENTAL COMPANIES AT AIRPORTS AND 2-3 YEARS CONTRACTS CARS AND ESTIMATES THE RESIDUAL OTHER LOCATIONS VALUES
• HIGH FIXED COST STRUCTURE • LOW FIXED COST STRUCTURE • EFFICIENCY AREA RESPONSIBLE TO SELL • STANDARDIZED FLEET • CUSTOMIZED FLEET CARS FROM RAC AND FLEET DIVISIONS • 1 YEAR CYCLE • 2-3 YEARS CYCLE • KNOW HOW OF USED CARS MARKET • GAINS OF SCALE • CAPITAL INTENSIVE • REDUCE DEPENDENCE OF INTERMEDIATES • CAPITAL INTENSIVE • ALLOWING FOR LOWER DEPRECIATION • CONCENTRATED AIRPORT MARKET • FRAGMENTED OFF AIRPORT MARKET
5 1.COMPANY OVERVIEW 2.COMPETITIVE ADVANTAGES 3.MAIN BUSINESS DIVISIONS 4.FINANCIALS 5.APPENDIX LOCALIZA IS Buying Cars Renting Cars Largest buyer, with distinguished Top of mind brand, market leader READY TO relationship with automakers with prop technology TAKE THE WHEEL OF AN Raising Money Selling Cars Best credit rating and funding Expertise and nationwide EVOLVING conditions in the industry capillarity MOBILITY Leading Mobility Player with Clear MARKET Competitive Advantages at Scale…
…Generating Unparalleled Financial and Operational Performance Financial Highlights 23.4% 24.9% 26.5% 10.2% 19.5% 7.4% ROIC
Source: Company filings. Sales EBITDA Earnings ROIC EoP 2020 spread vs. (1) Market share considering fleet size and including primary ’16-20a CAGR ’16-20a CAGR ’16-20a CAGR In 2020 ’16-20a CAGR post-tax cost of and secondary CNAE, according to ABLA. Does not include franchisees. debt 7 Raising Money Buying Cars Renting Cars Selling Cars ◼ Best credit rating and funding ◼ Large buyer with ◼ Top of mind company ◼ Surpassing capillarity KEY PILLARS conditions in the industry distinguished relationship and market leader ensuring sales at better with automakers terms OF THE LEADING INDUSTRY ✓ Solid balance sheet ✓ Leverage on data ✓ Tech, costumer centric, ✓ Accelerated digital analytics strategy improving end- transformation PLAYER ✓ Broad acess to capital (debt to-end experience ✓ Strategically opening new and equity) ✓ Unique relationship with ✓ Innovative solutions and stores automakers ✓ Best credit ratings in the ramp-up of recent industry products ✓ Unique expertise and market reading
Localiza’s Integrated Model and Size Made the Company the best in class Lowest spread in the Industry Leader Top of Mind Operational expertise coupled industry: 2.2% cost of debt 2x larger than player with leading with nationwide capillarity of the Industry after taxes – 1Q21 the 2nd player technology
Source: Company filings.
8 Ratings: National and Global
COMPETITIVE Player A Player B AAA AAA AA BB+ - B+ CCC+ ADVANTAGES Aa1 - - Ba2 - - Caa2 AAA AA+ AA- BB - - -
Market Emissions
R$mm and % of CDI
%CDI Cost of debt in the secondary market from 2019 on
134.00% Player B 131.23% 132.00% R$ 197.31 Player B Locadora B 127.49% Locadora B 127.77% 130.00% R$ 363.86 Locadora B 125.55% Locadora B R$ 281.77 125.97% R$ 256.22 125.51% Raising money in better 128.00% R$ 216.62 R$ 166.07 Player B Player B 126.58% conditions 126.61% 126.00% Locadora B R$ 356.81 R$ 94.41 126.02% 124.00% R$ 140.12 Locadora B Player B Localiza 125.93% 125.26% 123.66% R$ 251.03 R$ 514.48 R$ 960.44 122.00% Source: Bloomberg April, 2021 and 0 1 2 3 4 5 6 7 Companies’ public information Years 9 Purchased Vehicles: Competitive Total Purchased Vehicles Landscape Share in Brazilian Automakers’ Sales COMPETITIVE Thousand Thousand, 2020 % of total sales, 2020 ADVANTAGES 112 112 1.4x 1.6x - BUYING 80 CARS 70 64
5.9%
Localiza buys cars with better terms due to the 2015 2020 Car Rental Car Rental volume of purchases company A company B
Source: website of each company and ANFAVEA 10 # of Locations(1)
541 451
195 COMPETITIVE 256
ADVANTAGES Car Rental Competitors # of Cities(1)
- RENTING 371
CARS 152 102
Player A Player B
Highly awarded and top of mind in the sector, Localiza 11.8 million clients (1Q21) has a solid presence th 1st throughout Brazil with its 15 Most Valuable Superior quality Sixth-time Best RAC division… Brand in Brazil Culture of delighting Consecutive Car Rental Modern and diversified fleet Winner Company - Jornal do Carro - Estadão Top of Mind Largest NPS among the 25 companies in the Source: Companies, ABLA in the Sector Interbrand Ranking Note: (1) As of 1Q21 for Localiza and and data released from Rental Companies A and B 11 • Connected Fleet Improving traffic safety • Consultancy, customized • Transparency in management panels, results monitoring • ✓ Whole fleet rental information Content offer through lectures • Definition of indexes related to available at any time and courses costs productivity and safety • Cost reduction ✓ Fleet monitoring reports with information to support decision-making process Security and COMPETITIVE ✓ Ability to customize reports according to customers’ needs, with citizenship Good data such as vehicle age, accidents, mileage, maintenance history Practices ADVANTAGES ✓ The acquisition of Mobi7 made this technology proprietary, creating a lab for telematics solutions development. - FLEET Strategic information adding value to customers RENTAL Mobile Solutions ✓ User-friendly mobile applications connecting users to fleet manager, enabling clients to rapidly anticipate and address potential issues ✓ Integration of different platforms through an omni-channel approach
Strong focus on improving Integrated applications to deliver a seamless experience client experience
Transparent throughout the entire Subscription car Practical Restfull Economic Choose your style and You go out of the car Follow everything about Maintenance on our own leave the worry with without the purchase your subscription in an app journey as the one-stop and 24-hour service to documentation, costs - there is money left that makes your life easier, ✓ Localiza Meoo is a resolve any emergency. registration and over to invest in whatever exclusive for those who solution for fleet rental subscription car with maintenance with us! you want. have Localiza Meoo exclusive benefits.
✓ Solution aimed at individuals and small and medium-sized companies.
All the best in having a car, even better. 12 Presence in all regions Wide capillarity through its own stores and wholesale
AM PA MA CE RN COMPETITIVE PB PI PE ADVANTAGES AL BA MT SE - SELLING 90 cities DF in Brazil GO MG MS Online CARS ES SP Channel RJ Digital sales with customer PR journey 131 SC understanding used car stores (Big Data) Strong investment in the RS network
131 points of sale (1Q21) Efficiency area to reduce depreciation Distribution Sales final consumer Big data Buffer 90 cities in Brazil Lower depreciation Best understanding of costumer Additional fleet during Loyalty of costumers, generating Digital sale preference peaks of demand good repurchase rates and indication Pricing estimate - Depreciation /+ Residual Value 13 Input for car purchase RAISING BUYING RENTING SELLING COMPETITIVE MONEY CARS CARS CARS ADVANTAGE WITH OPERATIONAL EXCELLENCE
CAR PREPARATION DELIVERY IN THE BRANCHES OPERATING CAR CAR DECOMISSIONING
• Quality control of the • Transport tracking • Maintanance and • Car checking cars delivered by • Logistic management repair • Preparation for sales OEM’S optimization • Traffic fines • Transportation to • Car licensing processing Seminovos stores • Licensing renewal
14 AGILE INNOVATION TO ENABLE SUPERIOR CUSTOMER EXPERIENCE (EXAMPLES)
Long-term rental for 100% digital counter bypass End-to-end digital rental for consumers (100% digital) Uber drivers
LOCALIZA FAST CAR SUBSCRIPTION RIDESHARING APP
Facial recognition
Driver’s license Fraud score
FRAUD PREVENTION TELEMATICS DIGITAL CAR SALES
15 ESG INITIATIVES ENVIRONMENTAL Recent Developments Strong progress in the solar energy generation project with an increase of more than 88% in clean energy generation (1Q21 / 1Q20) Enhanced reporting of scope 3 emissions Enters ICO2¹ index of B3, in partnership with BNDES2 2021 Improved dry cleaning indicator (1Q21 / 1Q20) 2019 emissions from operations (scopes 1 and 2) neutralized SOCIAL
Signatories of LGBTI+ Business and Rights Forum Diversity and inclusion moving forward 8p.p. with 95% favorability in the climate survey (P90) published ISO 37001 Certification 2020 in 1Q21 Start of the plan of more than 40 actions in the Diversity and Inclusion Program with the Committee Goal setting for issues defined as priority and groups of employees We become signatories to the UN Women’s Greenhouse Gas Inventory Reporting Principles of Women's Empowerment As of March 31, women represented 44.6% of the 2nd Greenhouse Gas Inventory 2019 Company's employees, with 49.7% of leadership positions 2nd Sustainability Report GOVERNANCE
Start of the CEO and Board engagement agenda with Sustainability becomes a our investors on ESG topics strategic intention 2018 Sustainability Committee Creation ESG goals incorporated in management contracts Signature of Global (including executive board and CEO) Compact Policy and Materiality Matix Development Continuous improvement of performance indicators using UN and SASB references 1st Greenhouse Gas Inventory
2017 Source: Company filings 1st Sustainability Report Note: (1) Carbon Efficient Index; (2) Brazilian national development bank; (3) Economatica Award, (4) Associação Nacional dos Executivos de Finanças, Administração e Contabilidade 16 16 1.COMPANY OVERVIEW 2.COMPETITIVE ADVANTAGES 3.MAIN BUSINESS DIVISIONS 4.FINANCIALS 5.APPENDIX Customer Journey and Experience
Journey Onboarding ➢ Infotainment ➢ On-demand pickup ➢ E-commerce ➢ Hassle free process ➢ Concierge LARGE AND ➢ Convenience and safety Before Journey ➢ Navigation services GROWING ➢ Advertising ➢ Entertainment ADDRESSABLE
MARKET Purchase Planning ➢ Payment ➢ Operator review ➢ Insurance ➢ Data-sharing ➢ Other ➢ Analytics financial ➢ Services Localiza’s Scale, Technology and Brand Mobility Models Technology Enablers
Recognition Allows it to Traditional Models Car Integrate Customers’ Sharing CONNECTED ON DEMAND Ownership Ride Journey with Best User’s Hailing Experience Taxi
Daily Rentals & Replacement Train ELETRIC AUTONOMOUS Source: Oliver Wyman Mass Subscription Transport 18 LOCALIZA IS WELL POSITIONED TO CAPTURE GROWTH IN ALL SEGMENTS
Unique Sector Tailwinds where Localiza Underpenetrated Outsourcing Market in Unique Expertise and Capillarity to Sell 1 2 3 is Already the Undisputed Leader Brazil Cars
Increase in Car Rental Affordability Fleet Rental Market Share(2) Localiza’s Used Car Sales Capillarity
1130 1,045 Presence in 12% 998 58.3% all regions 1030 954 11% 937 46.9% 930 880 37.4% 9% 830 788 724 8% 8% 24.5% 7% 730 7% 13.3% 16.5% 8.9% 10.4% 630 Localiza’s Relevance in the Brazilian 2014 2015 2016 2017 2018 2019 2020 Market for Used Car Sales (2020)
Minimum wage (R$) Daily rental/minimum wage (%) 1.4%
(1) Localiza’s RaC Clients(# millions) Outsourcing Fleet in Brazil (# thousand) CAGR 15-20: 14,9% CAGR 16-20: 98.6% 11.4 11.8 8,8% 9.6 519 514 New vs Used Car Market in Brazil(# millions)(3) 8.6 411 430 7.6 367 9.9 10.0 10.7 10.7 11.0 10.6 6.4 9.5 5.7
2.5 2.0 2.2 2.5 2.7 2.0 2.0
2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 1Q21 2015 2016 2017 2018 2019 2020 1Q21 Used cars New cars
Source: Company fillings, ABLA, Datamonitor, ANFAVEA and Fenabrave. (1) Only natural person. (2) Ipeadata, Datamonitor, XP Investimentos 19 (3) Fenabrave, considering only cars and light commercials. TAM Overview Potential TAM Expansion
Number of People ( m m ) M o b i l i t y Ride Hailing Subscription CAR RENTAL Credit Card Holders 84mm 7.0x 30% of 21% of Drivers rent cars Brazilians own a vehicle(2) OVERVIEW Adult (1) 5.3x Population 64mm Lease Penetration Amongst Latam drivers Americans 32% RaC Users 12mm Current 21% ~1.0mm ~250k ~200k 2012 2019
Average Auto Loan & Interest Rate (3)
Market leader with a top 20.4% 18.9% notch brand in a segment with secular industry 11.5% 8.3% tailwinds 6.8% 7.8% 4.4% 4.0% 3.0% 3.0% 3.4% 2.2% 2.2% 0.0% 0.0% 0.1% 0.3% 0.3%
Source: Companies fillings, Companies websites and ABLA. France Germany United Kingdon U.S. Australia Panama India Brazil Turkey IPEADATA, Localiza’s loyalty program, and BCB as of 2016, Considering that each credit card owner owns 1,3 credit cards (1) Age>20 years, class A+B+C (2) Sindipeças 2020 yearbook , considering cars and light vehicles 20 (3) Financial Advisory, Federal Reserve and BCB websites Car plate
Documentation and IPVA
Preventive and corrective maintenance Localiza's subscription car Troubleshooting Third party damage insurance FLEET Designed for individuals or SMEs. Changing tires
Fines management Through a digital experience, supported by an expert MANAGEMENT 24H assistance team focused on the product. Digital channels
OVERVIEW New car with every renovation
Transparent Practical Restfull Economic Choose your style and You go out of the car Follow everything about Maintenance on our own leave the worry with without the purchase your subscription in an app and 24-hour service to documentation, costs - there is money left that makes your life easier, resolve any emergency. registration and over to invest in whatever exclusive for those who maintenance with us! you want. have Localiza Meoo Strong focus on improving client experience throughout the entire TAM Overview Fleet Rental journey as the one-stop 58.3% ( m m ) Corporate Fleet Penetration by Country (%) (1) 46.9% solution for fleet rental (2) Corporate fleet 5.0mm 76x 37.4% 24.5% 7.6x 16.5% Source: Company fillings. Total fleet 0.5mm 10.4% 13.3% Datamonitor for European countries and Localiza’s estimate 8.9% for Brazil. 2 million being from SMEs, with extremely low penetration. 66k Atual 21 Sells RAC and Fleet Rental cars after the end of their service as rental cars Presence in all regions Wide capillarity through its own stores and wholesale
AM PA MA USED CAR RN CE PB PI SALES PE AL BA MT SE OVERVIEW 90 cities DF in Brazil GO MG MS ES SP Online RJ PR Channel Digital sales SC with customer journey 131 RS understanding used car stores (Big Data) Strong investment in Unique Market Reading to the network Accurately Price the Cars, Sold Vehicles & Points of Sale Selling More and at Better (# units) Cars sold Points of sale Total SG&A as % of Used Car Sales Terms than any 150 123 130 131 200,000 180,000 130 107 99 160,000 12.0% Competitor 110 84 140,000 10.0% 90 77 120,000
8.0% 70 100,000
80,000 50 147,915 6.0% 135,490 60,000 10.4% 30 111,279 8.9% 4.0% 40,000 7.7% 68,449 90,554 7.3% 6.8% 6.3% 6.0% 10 64,305 2.0% 29,032 20,000
-10 - 220.0% 2015 2016 2017 2018 2019 2020 1Q21 2015 2016 2017 2018 2019 2020 1Q21 CAAS: PROVIDING A COMPLETE USER EXPERIENCE
Leveraging our Unique Platform Assets to Launch, Scale and Optimized Operations LEADING TECHNOLOGY BRAND RECOGNITION Prediction, safety, pricing and Constantly leveraging on brand and payments for drivers across the reach to launch new business at country scale
OPERATIONAL EXCELLENCE PRODUCT EXPERTISE Support users, enhance relationships Provide drivers with a safe, intuitive and accelerate new product and continuously improving launches experience
MASSIVE NETWORK SCALE EFFICIENCY Utilizing data to power every Significant operational cost contract on a daily basis Complete User Experience advantages
Renting is the new Buying Top Benefits of Car Subscription Large Ride Hailing Market
Having transportation is necessary, but owning a vehicle is Among those aware(% of answers) not (% agree) Over 1.0mm drivers 55% 45% Uber’s 2nd largest 34% 44% market globally 28% 36% 35% 35% Best/Newest Minimal Models Offers +22mm app users Technology Repairing Gen Z Millenials Gen X Boomers flexibility Flexibility Access Efforts 23 Source: Company filings, IBGE, Edmunds, Anfavea. BUILDING THE PLATFORM FOR THE FUTURE OF MOBILITY
OWNERSHIP INTERNET X EV AND OF THINGS PAY PER USE AUTONOMOUS (IOT) VEHICLES
SUBSCRIPTION CAR AS MODEL A SERVICE
DATA RIDE HAILING ANALYTICS AND PLATFORMS TELEMATICS
KEY PARTNERSHIPS CUSTOMER IN VEHICLES EXPERIENCE VALUE CHAIN
24 OUR COMPANY IS IN CONTINUOUS AND CONSISTENT EVOLUTION MOVEMENT BECAUSE WE NEVER STOP LOOKING AT THE ESSENTIAL: OUR CUSTOMERS , OUR EMPLOYEES , OUR RESULTS
AND THESE ARE THE PILLARS OF OUR CORPORATE CULTURE 1.COMPANY OVERVIEW 2.COMPETITIVE ADVANTAGES 3.MAIN BUSINESS DIVISIONS 4.FINANCIALS 5.APPENDIX RENTAL HIGHLIGHTS
Revenue – Car Rental Revenue – Fleet Rental R$ million, including royalties R$ million
9.7% 979.3 9.6% 892.9 280.9 256.2
1Q20 1Q21 1Q20 1Q21
Average rental rate (in R$) and Utilization rate (%) Average rental rate (in R$) and Utilization rate (%) Car Rental Fleet Rental
250 100.0% 100.0 120.0%
78.2% 80.4% 90.0% 96.7% 98.6%
90.0 100.0%
200 80.0%
70.0%
80.0 80.0%
150 60.0%
16.0% 50.0% 70.0 60.0% 4.7% 100 69.2 80.3 40.0% 55.7 60.0 40.0%
30.0% 53.1
50 20.0%
50.0 20.0%
10.0%
0 0.0% 40.0 0.0% 1Q20 1Q21 1Q20 1Q21
Rental rate Utilization Rental rate Utilization 27 FINANCIAL HIGHLIGHTS
Net revenues EBITDA R$ million R$ million
0.1% 2,794.6 2,797.1 27.4% 805.8 632.7
1Q20 1Q21 1Q20 1Q21 EBIT Net income R$ million R$ million
63.1% 708.4 Record 108.9% 434.4 482.3 230.9
1Q20 1Q21 1Q20 1Q21 QUARTELY RECORD RESULTS IN EBITDA, EBIT AND NET INCOME 28 CAR RENTAL Number of rental days in thousands 7.9% 50,447 46,746 35,285 -5.4% 25,264 18,662 14,168 13,396
2016 2017 2018 2019 2020 1Q20 1Q21 Net revenues R$ million, including royalties
3.2% 3,048.6 3,145.0 2,536.5 1,865.0 1,445.0 9.7% 892.9 979.3
2016 2017 2018 2019* 2020 1Q20 1Q21
(*) From 2019 the Company begun to record PIS and COFINS credits in SG&A. Before, those credits were recorded as a reduction of sales taxes. EFFICIENT PRICE MANAGEMENT IN THE CONTEXT OF LIMITED CAR SUPPLY RESULTED IN 9.7% REVENUE GROWTH AS COMPARED TO 1Q20 29 CAR RENTAL Average rental rate in R$ 16.0% 80.3 79.7 75.2 72.9 71.6 68.5 69.2
2016 2017 2018 2019 2020 1Q20 1Q21
Utilization rate (%) 2.2p.p.
78.6% 79.6% 79.1% 80.4% 78.0% 73.5% 78.2%
2016 2017 2018 2019 2020 1Q20 1Q21
THE MOBILITY RESTRICTION SCENARIO IN MARCH DOES NOT OFFSET THE STRONG DEMAND IN THE QUARTER, WHICH CONTRIBUTES TO HIGH UTILIZATION RATES. EFFICIENT MIX AND PRICES MANAGEMENT PER SEGMENT RESULTS IN 16% GROWTH IN THE AVERAGE RENTAL RATE WHEN COMPARED TO 1Q20 30 CAR RENTAL NETWORK EVOLUTION
Number of car rental locations - Brazil and abroad
602 610 608 612 561 588 591 65 74 70 80 71 70 71 98 99 133 125 101 101 158
401 427 442 427 442 333 384
2016 2017 2018 2019 2020 1Q20 1Q21
Localiza's branches - Brazil Franchisees' branches - Brazil Franchisees' branches - abroad
MAINTENANCE OF INVESTMENTS TO EXPAND THE NETWORK WITH 15 NEW AGENCIES IN THE LAST 12 MONTHS
31 FLEET RENTAL Number of rental days in thousands
25,000.0 11.7% 21,328 19,091 20,000.0 15,236 15,000.0 12,753 11,240 4.6%
10,000.0 5,270 5,510
5,000.0
- 2016 2017 2018 2019 2020 1Q20 1Q21 Net revenues R$ million
12.0% 1,053.5 940.3 848.8 742.1 651.8 9.6% 256.2 280.9
2016 2017 2018 2019* 2020 1Q20 1Q21
(*) From 2019 the Company begun to record PIS and COFINS credits in SG&A. Before, those credits were recorded as a reduction of sales taxes.
4.6% INCREASE IN VOLUMES AND 4.7% IN AVERAGE RENTED FLEET, RESULTING IN 9,6% INCREASE IN THE 1Q21 NET REVENUE 32 NET INVESTMENT Car purchase and sales Quantity* 75,619
54,142 223,534 52,860 (26,111) 165,421 147,915 19.384 143,414 135,490 8,162 111,279 109,379 135.252 2,518 87,833 90,554 (2,672) 68,449 40,879 38,361 26,360 29,032
2016 2017 2018 2019 2020 1Q20 1Q21
Cars purchased Cars sold Hertz Brasil *Does not consider theft / crashed cars written off.
Net investment in fleet 4,076.6 R$ million 10,283.3 2,471.4 2,302.4 (585.0) 6,981.8 6,206.7 5,753.6 6,109.1 947.1 5,524.1 285.7 4,510.4 192.6 (4.9) 3,289.6 3,451.2 2,342.5 5,467.9 1,838.1 1,645.5 1,532.0 1,536.9
2016 2017 2018 2019 2020 1Q20 1Q21 Purchases (includes accessories) Used car sales net revenues Hertz Brasil IN A CONTEXT LIMITED CAR SUPPLY, THE COMPANY PURCHASED 26,360 CARS AND REDUCED THE DECOMISSIONING PACE, RESULTING IN A REDUCTION OF 2,672 CARS IN THE FLEET IN 1Q21 33 SEMINOVOS
Number of points of sale and used cars
140 130 131 123 124 120 107 99 147,915 100 135,490 84 111,279 80 90,554
60 68,449
40 38,361 29,032
20
0 2016 2017 2018 2019 2020 1Q20 1Q21
Points of sale Cars sold
2016 2017 2018 2019 2020 Var. % YoY 1Q20 1Q21 Var.% QoQ Average price of cars sold (R$ thousand) 34.3 38.2 40.6 42.1 45.2 7.4% 43,0 53,0 23.3%
CAR DECOMISSIONING PACE WAS REDUCED TO ATTEND THE SUMMER SEASON DEMAND IN CAR RENTAL. THE VOLUME DECREASE WAS COMPENSATED BY HIGHER PRICES, RESULTED FROM HIGHER PRICES OF NEW CARS AND STRONG DEMAND 34 END OF PERIOD FLEET Quantity
-9.6% 323,361 -1.0% 16,230 292,159 292,159 289,193 14,168 14,168 248,024 68,957 -10.6% 14,780 15,922 61,657 61,657 6.4% 65,622 194,279 54,430 13,824 143,131 44,877 14,015 -9.2% -3.5% 238,174 34,960 216,334 216,334 208,791 177,672 135,578 94,156
2016 2017 2018 2019 2020 4Q20 1Q21
Car Rental Fleet Rental Franchising
SCENARIO FOR NEW CARS RECEIVING STILL COMPLEX, BUT WITH GROWTH RECOVERY IN FLEET MANAGEMENT
35 CONSOLIDATED NET REVENUES R$ million
1.1% 10,195.6 10,307.6
7,895.7
6,206.7 6,109.1 6,058.3 4,510.4 4,439.3 3,451.2 0.1% 2,794.6 2,797.1 2,342.5 -6.6% 5.3% 4,198.5 3,385.3 3,988.9 1,645.5 1,536.9 2,096.8 2,607.1 9.7% 1,149.1 1,260.2
2016 2017 2018 2019* 2020 1Q20 1Q21 (*) From 2019 the Company begun to record PIS and COFINS credits in SG&A. Before, those credits were recorded as a reduction of sales taxes.
Rental Used car sales
RENTAL REVENUE INCREASES 9.7% WHILE THE REVENUE OF USED CAR SALES DECREASES 6.6% DUE TO THE REDUCTION OF THE CAR DECOMISSIONING PACE 36 CONSOLIDATED EBITDA R$ million
11.5% 2,468.1 2,212.8 1,590.1 1,314.2 1,015.6 27.4% 805.8 632.7
2016 2017 2018 2019 2020 1Q20 1Q21 OTC Hertz
EBITDA margin: 2016 2017* 2018 2019** 2020 1Q20 1Q21 Car Rental and Franshising 32.4% 34.9% 35.9% 45.7% 45.3% 47.9% 42.9% Fleet Rental 64.5% 61.9% 64.0% 67.7% 72.4% 70.4% 63.6% Rental Consolidated 42.3% 42.6% 43.0% 50.9% 52.1% 52.7% 47.5% Used Car Sales 5.5% 5.9% 3.0% 3.0% 4.6% 1.5% 13.5%
Consolidated (on rental revenue) 48.4% 50.4% 47.0% 55.5% 58.8% 55.1% 63.9% (*) 2017 adjusted by the one-time costs incurred (OTC) - Hertz Brasil acquisition and franchisees incorporation (**) From 2019, EBITDA margin calculated based on the GAAP number including the reclassification of PIS and COFINS credits for the period, in the Car Rental and Fleet Rental divisions
CONSOLIDATED EBITDA GROWS 27.4% IN COMPARISON 37 AVERAGE ANNUALIZED DEPRECIATION PER CAR
Car Rental In R$ 1,918 1,707 1,251 1,250 1,012 612 526
2016 2017 2018 2019 2020 4Q20 1Q21
Fleet Rental In R$
3,714 3,601 3,923 3,104 2,179 1,907 1,393
2016 2017 2018 2019 2020* 4Q20 1Q21 (*) Since 2020, the Company began depreciating the Fleet Rental cars using the linear method opposed to the SOYD (Sum-of-the-years’ digits)
THE INCREASE IN THE PRICES OF CARS RESULTED IN A LOWER DEPRECIATION IN THE QUARTER
38 CONSOLIDATED EBIT R$ million
21.0% 1,801.8 1,489.6 1,254.6 1,043.1 771.1 63.1% 708.4 434.4
2016 2017 2018 2019 2020 1Q20 1Q21 OTC Hertz
EBIT margins include Seminovos and is calculated over the rental revenues:
2016 2017* 2018 2019** 2020 1Q20 1Q21 Car Rental and Franshising 30.2% 35.2% 33.2% 33.7% 35.1% 31.2% 53.3%
Fleet Rental 51.2% 51.4% 48.6% 49.1% 66.4% 60.7% 66.5%
Consolidated 36.8% 40.0% 37.1% 37.3% 42.9% 37.8% 56.2%
(*) 2017 adjusted by the one-time costs (OTC) incurred - Hertz Brasil acquisition and franchisees incorporation (**) From 2019, EBIT margin calculated based on the GAAP number including the reclassification of PIS and COFINS credits for the period
RECORD EBIT OF R$708.4 MILLION IN THE QUARTER, 63.1% HIGHER THAN 1Q20 39 CONSOLIDATED NET INCOME R$ million
25.7% 1,048.2 833.9 659.2 563.4 482.3 409.3 108.9% 230.9
2016 2017 2018 2019 2020 1Q20 1Q21 OTC Hertz
EBITDA x Net income reconciliation 2016 2017* 2018 2019 2020 Var. R$ Var. % 1Q20 1T21 Var. R$ Var. % Consolidated EBITDA 1,015.6 1,314.2 1,590.1 2,212.8 2,468.1 255.3 11.5% 632.7 805.8 173.1 27.4% Cars depreciation (206.3) (232.0) (291.6) (551.5) (473.0) 78.5 -14.2% (153.2) (46.6) 106.6 -69.6% Other property depreciation and amortization (38.2) (39.1) (43.9) (171.7) (193.4) (21.7) 12.6% (45.1) (50.8) (5.7) 12.6% EBIT 771.1 1,043.1 1,254.6 1,489.6 1,801.7 312.1 21.0% 434.4 708.4 274.0 63.1% Financial expenses, net (243.5) (315.0) (368.9) (409.8) (374.4) 35.4 -8.6% (127.6) (22.3) 105.3 -82.5%
Income tax and social contribution (118.3) (164.7) (226.5) (245.9) (379.1) (133.2) 54.2% (75.9) (203.8) (127.9) 168.5% Net income of the period 409.3 563.4 659.2 833.9 1,048.2 214.3 25.7% 230.9 482.3 251.4 108.9% (*) 2017 adjusted by the one-time costs (OTC) - incurred Hertz Brasil acquisition and franchisees incorporation
DESPITE THE LIMITED CAR SUPPLY AND THE EFFECTS OF SOCIAL DISTANCING MEASURES IN MARCH, WITH STRONG SEMINOVOS RESULTS AND LOW DEPRECIATION, THE COMPANY PRESENTED A RECORD NET INCOME, 108.9% HIGHER THAN 1Q20 40 FREE CASH FLOW
Free cash flow (R$ million) 2016 2017 2018 2019 2020 1T21 EBITDA 1,015.7 1,314.2 * 1,590.1 2,212.8 2,468.1 805.8 Used car sale revenue, net of taxes (2,342.6) (3,451.2) (4,510.4) (6,206.7) (6,109.1) (1,536.9) Net book value of vehicles written-off 2,102.5 3,106.6 4,198.5 5,863.6 5,599.9 1,259.9 (-) Income tax and social contribution (93.3) (108.3) (131.2) (146.1) (250.1) (120.2)
Operations Change in working capital (40.8) (47.9) (117.4) (268.9) 103.5 (78.4) Cash generated by rental operations 641.5 813.4 1,029.6 1,454.7 1,812.3 330.2 Used car sale revenue, net from taxes – fleet renewal 2,342.6 3,451.2 4,510.4 6,206.7 4,886.9 1,389.1 Fleet renewal investment (2,563.6) (3,660.9) (4,696.7) (6,804.6) (5,524.1) (1,532.0)
Change in accounts payable to car suppliers for fleet renewal 219.8 227.6 250.1 468.7 235.1 (673.5) Capex - renewal Net investment for fleet renewal (1.2) 17.9 63.8 (129.2) (402.1) (816.4) Fleet renewal – quantity 68,449 90,554 111,279 147,915 109,379 26,360 Investment, property and intangible (40.9) (28.8) (42.8) (70.0) (108.0) (36.4) Free cash flow from operations, before fleet increase or reduction 599.4 802.5 1,050.6 1,255.5 1,302.2 (522.6) (Investment) / Divestment in cars for fleet growth (726.0) (1,807.0) (2,285.1) (3,478.7) 1,222.2 147.8 Change in accounts payable to car suppliers for fleet growth 26.8 168.7 509.4 23.6 (943.4) -
Acquisition of Hertz and franchisees (fleet value) - (285.7) - (105.5) 0.0 - Growth Capex - Net investment for fleet growth (699.2) (1,924.0) (1,775.7) (3,560.6) 278.8 147.8 Fleet increase / (reduction) – quantity 19,384 52,860 54,142 75,619 (26,111) (2,672) Free cash flow after growth (99.8) (1,121.5) (725.1) (2,305.0) 1,581.0 (374.8) Acquisitions and francisees acquision- except fleet value - (121.5) - (18.2) (7.9) (3.6)
non- New headquarters construction and furniture (85.7) (146.2) - - -
Capex - - recurring Free cash generated before the cash effects of discounts and anticipation of payables to (185.5) (1,389.2) (725.1) (2,323.2) 1,573.1 (378.4) Cash effects of receivables and anticipation of payables to suppliers (**) 98.0 88.3 (113.2) (131.8) (293.1) 155.6 Free cash flow before interest (87.5) (1,300.9) (838.3) (2,455.0) 1,280.0 (222.8)
In the free cash flow, short-term financial assets were considered as cash (*) 2017 adjusted by the one-time costs (OTC) - incurred Hertz Brasil acquisition and franchisees incorporation (**) Discount of credit card receivables and anticipation of accounts payable were demonstrated in a different line so that the Free Cash Flow From Operations considered only the contractual terms, reflecting the Company's operation 41 CHANGE IN NET DEBT R$ million
816.4
Net debt Cash Purchase and Variation of Capex Fleet MOBI7 Cash effects of Interest Dividends and Net debt 12/31/2020 generated by sale for fleet suppliers for Others reduction Acquisition the discounts IOC paid 03/31/2021 rental renewal renewal and operations anticipation
REDUCTION OF ABOUT R$492 MILLION IN NET DEBT AS A RESULT OF RENTAL CASH GENERATION AND FLEET REDUCTION, PARTLY COMPENSATED BY THE REDUCTION OF THE ACCOUNTS PAYABLE TO OEMS 42 DEBT MATURITY PROFILE (PRINCIPAL) R$ million As of March 31, 2021 3,440.1
3,892.8 2,794.5
1,831.3 1,678.6 1,385.6 828.6 975.0 258.3
Cash and financial 2021 2022 2023 2024 2025 2026 2027 to 2032 assets Proforma after 17th issue of debentures after 03/31/2021
4.640,1 3,892.8 1,200.0 2,794.5 1,678.6 1,831.3 1.458,3 3,440.1 1,385.6 975.0 828.6 1,200.0 258.3 Caixa e aplicações 2021 2022 2023 2024 2025 2026 20272027 ato 20322032 financeiras
STRONG LIQUIDITY POSITION AND EXTENDED DEBT PROFILE
43 DEBT RATIOS R$ million Net debt versus fleet value 13,515.9 12,963.8 13,187.4
9,533.4 7,038.1 6,619.5 6,127.3 6,421.5 4,623.6 5,241.0 3,864.7 2,084.0
2016 2017 2018 2019 2020 1Q21 Net debt Fleet value
BALANCE AT THE END OF PERIOD 2016 2017 2018 2019 2020 1Q21 LTM Net debt/Fleet value (book value) 45% 55% 55% 49% 47% 49% Net debt/annualized EBITDA 2.1x 2.9x 3.3x 3.0x 2.5x 2.4x Net debt/Equity 0.9x 1.5x 1.7x 1.2x 1.0x 1.0x EBITDA/Net financial expenses 4.2x 4.2x 4.3x 5.4x 6.6x 9.8x
QUARTER ENDED WITH A NET DEBT / LTM EBITDA RATIO OF 2.4x
44 ROIC VERSUS COST OF DEBT AFTER TAXES
15.4% 15.6% 15.5%
12.9% 5.2p.p. 11.6% 11.6% 8.0p.p. 10.2% 13.3p.p. 10.2% 7.9p.p. 7.0p.p. 7.4p.p. 9.2p.p. 7.6%
5.0% 4.6%
2.8% 2.4% 2.2%
2016 2017* 2018 2019 2020 1Q21 LTM 1Q21 annualized ROIC Cost of debt after taxes ROIC considered each year´s effective income tax and social contribution rate ROE considered quarterly net income divided by the average Equity of the period * 2017 adjusted by the one-time costs (OTC) incurred Hertz Brasil acquisition and franchisees incorporation STRONG VALUE GENERATION, EVEN THOUGH IN AN EXTREMELY ADVERSE SCENARIO, WITH LTM ROE OF 22.0% (30.8% 1Q21 ANNUALIZED) 45 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 DISCLAIMER investors. 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.
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. Website: ri.localiza.com E-mail: [email protected] Phone: +55 31 3247-7024 1.COMPANY OVERVIEW 2.COMPETITIVE ADVANTAGES 3.MAIN BUSINESS DIVISIONS 4.FINANCIALS 5.APPENDIX Per car
1 year cycle Car sale revenue net of SG&A CAR RENTAL: R$42.7 FINANCIAL Revenue
CYCLE 2020 1 2 3 4 5 6 Expenses , interest and tax 7 8 9 10 11 12 R$47.4 Average car price (2 years)
Car Rental Seminovos Total Per operating car Per car sold 1 year R$ % R$ % R$ Net revenues 15.7 100.0% 45.4 100.0% 61.1 Costs - fixed and variable (5.6) -35.7% (5.6) SG&A (3.0) -18.9% (2.8) -6.1% (5.8) Net revenues of car sold 42.6 93.9% 42.6 Book value of car sold (40.8) -90.1% (40.8) EBITDA 7.1 45.3% 1.7 3.8% 8.8 Cars Depreciation (1.7) -3.8% (1.7) Others depreciation (0.6) -3.8% (0.3) -0.6% (0.9) Financial expenses (0.2) -1.4% (1.3) -2.9% (1.5) Taxes (1.5) -9.6% 0.4 0.8% (1.1) Net Income (Loss) 4.8 30.5% (1.2) -2.6% 3.6 NOPAT 4.8 ROIC (it consideres only cars in capital invested) 10.1% Cost of debt after taxes 4.6% Per car
3 year cycle Car sale revenue net of SG&A FLEET RENTAL: R$41.5 Revenue FINANCIAL 1 2 3 4 5 6 Expenses , interest and tax 31 32 33 34 35 36 CYCLE 2020 R$50.5 Average car price (3 years) Fleet Rental Seminovos Total Per operating car Per car sold 3 years R$ % Seminovos % R$ Net revenues 52.9 100.0% 43.7 100.0% 96.6 Costs - fixed and variable (11.1) -21.0% (11.1) SG&A (3.5) -6.6% (2.3) -5.2% (5.8) Net revenues of car sold 41.4 94.8% 41.4 Book value of car sold (37.6) -85.9% (37.6) EBITDA 38.2 72.4% 3.9 8.8% 42.1 Cars Depreciation (6.5) -15.0% (6.5) Others depreciation (0.4) -0.8% (0.5) -1.1% (0.9) Financial expenses (0.0) 0.0% (3.4) -7.9% (3.5) Taxes (11.3) -21.5% 2.0 4.5% (9.4) Net Income (Loss) 26.4 50.0% (4.6) -10.6% 21.8 Net Income (Loss) - per year 8.8 50.0% (1.5) -10.6% 7.3 NOPAT 8.1 ROIC (it consideres only cars in capital invested) 16.0% Cost of debt after taxes 4.6% THANK YOU