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0 1Q07 Results presentation (R$ million - USGAAP) Localiza Rent a Car S.A.

1 Q07 Analystand Investors Meeting

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Page 1: 1 Q07 Analystand Investors Meeting

0

1Q07 Results presentation(R$ million - USGAAP)

Localiza Rent a Car S.A.

Page 2: 1 Q07 Analystand Investors Meeting

Integrated business platform

As of December 31, 2006

This integrated business platform gives us superior performance

Synergies:

cost reduction

cross selling

bargaining power

171 agenciesin 9 countries6,319 cars

30 points of sale8, 870 cars sold79% sold to final consumer

145 agencies23,825 cars1,086,794 individuals and14,000 corporations

14,938 cars(489 managed)350 clients

1.828 employees 157 employees

17 employees 381 employees

Overhead = 124 employees

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Revenue per car sold** 102,20SG&A (7%) (7,15)Safety Margin (3%) (3,06) Book value after 12 months 91,99

Car rental financial cycle

115Financial payment

Financing

100

Car Sales Revenue

102

** Depreciation over list price: 100-(102.2/125)x100 = 18,2%

100Car acquisition

(List price net of dealers discount = 125)

Holding cost of cars after tax with 3% margin = depreciation + financial cost.Either the leverage is through third party financing or shareholder’s capital.

Principal 100,00Interest (CDI + 1 p.p.) 15,00Financial payment 115,00

Depreciation = estimated price of selling after one year, net of SG&A and safety margin minus price of purchase. Depreciation rate: 100-(102.2*0.9) = 8.02%

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Car rental financial cycle

115Financial payment

Financing

100

Car Sales Revenue

102

Revenues = 114,58

Expenses = 62,84

100Car acquisition

(List price net of dealers discount = 125)

*

Consolidated net margin is 19,3% of car rental revenues (if 100% leveraged).

R$ % R$ % R$ %

Car rental revenue 114,58 100,0% 102,20 100,0% 216,78 100,0%Costs (46,00) -40,1% (46,00)SG&A (16,84) -14,7% (7,15) (23,99)Book value of car resale (91,99) -90,0% (91,99) -3,8%

EBITDA 51,75 45,2% 3,06 3,0% 54,81 25,3%Depreciation (8,20) -8,0% (8,20) -3,8%Interest (15,00) -14,7% (15,00) -6,9%Tax (30%) (15,52) -13,5% 6,04 5,9% (9,48) -4,4%

NET INCOME 36,22 31,6% (14,10) -13,8% 22,12 10,2%% over car rental revenue

Car Rental Car Resale (Seminovos) Consolidated

31,6% -12,3% 19,3%

Revenue per car sold** 102,20SG&A (7%) (7,15)Safety Margin (3%) (3,06) Book value after 12 months 91,99

** Depreciation over list price: 100-(102.2/125)x100 = 18,2%

Principal 100,00Interest (CDI + 1 p.p.) 15,00Financial payment 115,00

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R$ % R$ % R$ %

Fleet rental Revenue 53,64 100,0% 102,20 100,0% 155,84 100,0%Costs (14,24) -26,5% (14,24) -9,1%SG&A (3,97) -7,4% (7,15) (11,12) -7,1%Book value of car resale (91,99) -90,0% (91,99) -59,0%

EBITDA 35,43 66,0% 3,06 3,0% 38,49 24,7%Depreciation (8,20) -8,0% (8,20) -5,3%Interest (15,00) -14,7% (15,00) -9,6%Tax (30%) (10,63) -19,8% 6,04 5,9% (4,59) -2,9%

NET INCOME 24,80 46,2% (14,10) -13,8% 10,70 6,9%% over fleet rental revenue

Fleet Rental Car Resale (Seminovos) Consolidated

46,2% -26,3% 20,0%

Fleet rental financial cycle

Financing

100

115Financial payment

100Car acquisition

(List price net of dealers discount = 125)

Revenues = 53,64

Car Sales Revenue

102

Expenses = 18,21

Consolidated net margin is 20% of fleet rental revenues (if 100% leveraged).

Revenue per car sold** 102,20SG&A (7%) (7,15)Safety Margin (3%) (3,06) Book value after 12 months 91,99

** Depreciation over list price: 100-(102.2/125)x100 = 18,2%

Principal 100,00Interest (CDI + 1 p.p.) 15,00Financial payment 115,00

*

Page 6: 1 Q07 Analystand Investors Meeting

Revenues Ebitda Profit

Car rental 31% 48% 54%

Fleet rental 17% 42% 45%

Seminovos 52% 9% *

Franchising 1% 1% 2%

Total 100% 100% 100%

2006

*Profit (loss) alocated in the rental divisions

Breakdown per segment

Revenue

Car rental31%

Fleet rental17%

Seminovos52%

Franchising1%

Profit

Car rental54%

Fleet rental45%

Franchising2%

EBITDA

C ar rental48%

F leet rental42%

F ranchising1%

Semino vo s9%

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Cor

e B

usin

esse

sSu

ppor

t

Increase market leadership maintaining high return

Create value taking advantage of the synergies of the integrated business platform

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

Strategy by segment

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

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Growth opportunities

Air traffic

GDP elasticity

Consolidation

Credit cards

Replacement

Fleet outsorcing

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Source: Bacen, Localiza

Accumulated growth rate – car rental

Growth opportunities: GDP

Source: Bacen, Localiza

Localiza – Daily volume GDP

7.7x

The average car rental division volume growth was 7.7 x GDP over the last 3 years

2003 2004 2005 2006

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Number of travellers has increased 13% on the last 3 years

Localiza is the absolute leader in airport branches in Brazil

In 2006 Localiza Car Rental Division grew 2 times faster than the number of passengers

Air traffic evolution(Millions of passengers per year)

CAGR: +13%

Growth opportunities: Air traffic

7183

96 102

2003 2004 2005 2006

Source: infraero

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Source: www.abecs.

CAGR: +18%

# of credit cards (million)

Growth opportunities: Credit cards

48 5368

78

2003 2004 2005 2006

78 million credit cards in Brazil

35.5 million potential Localiza customers

37% of car rental revenues camethrough credit cards in 2006

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

Growth opportunities: Replacement market

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 (2.5 x the car rental division in 2006)

Source: FENASEG -

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Growth opportunities: Fleet outsourcing

Focus of corporations on their core businesses Focus of corporations on their core businesses

Fixed asset reduction by companies (increase their asset turnover)Fixed asset reduction by companies (increase their asset turnover)

Renting a fleet is more economic than owning itRenting a fleet is more economic than owning it

Large potential market with low penetration due to lack of habit Large potential market with low penetration due to lack of habit

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DTG11%

Vanguard20%

Hertz28%

Avis Budget32%

Other2%

Enterprise7%

All others19%

Avis Budget7%

Hertz9%

Enterprise65%

US airport segment* US$10BN

US off-airport segment* - US$10BN

Source:*Avis presentation nov/06 - local segment share amounts are company estimates** National/Alamo prospectus, NYSE/SEC, September 20, 2006

USA: 5 companies hold 92% of market shareEurope: 6 companies hold 74% of market share**

US Market share 2005

Growth opportunities: Consolidation

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Hertz33

Avis31

Unidas31

Localiza 74

Others48

Growth opportunities: Off-airport market

In the airports the market is concentrated in the hands of the networksOff-airport market is fragmented mainly among 1.952 small car rental companies

Source: 1948 companies as of ABLA’s report* Localiza as of 03/31/07**Each company website, 04/16/07*** Assuming that each local player has one agency

BR on airport segment* agencies

BR off-airport segment*agencies

*

******

Airport and off airport market - Brazil

Others1948

Localiza204

Hertz56

Unidas42

Avis51

*

** **

**

***

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53,6% 59,4% 59,5%

46,4% 40,6% 40,5%

2005 2006 1Q07

Growth opportunities: On airport and off-airport growth

Consolidation is happening mainly on the off-airport agencies

Volume growth Revenue growth

Airport 17.2% 16.0%

Off-airport 49.6% 46.7%

2006 / 2005 Growth (Car rental division)

Elasticity on airport in 2006 was 2 times the growth of domestic deplanements

Domestic deplanements increase x Localiza (rentals on airports)

Daily rental volume on airportsDomestic deplanement

Of f- airport x On - airport share

On-airport agenciesOff-airport agencies

100% 100% 100%

2006

17,0% 17,0%

8,2% 5,8%

24,0%

39,0%

17,0%12,6%

2004 2005 2006 1Q07

Page 17: 1 Q07 Analystand Investors Meeting

16Source: ABLA

Growth opportunities: Consolidation

Localiza’s market share – Car and Fleet - Brazil

2004 2005

15,5% 17,9%

7% 4% 4%Local

players69%

Unidas Avis Hertz

2006

20,5%

Localiza corporation grew 30.2% in 2006. The market grew 8.9%%

Localiza grew more than 2x the market in 2006

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Bargainingpower

Highercompetitiveness

Market shareincrease

Gains of scale Integrated platform

Geographical distributionYield management

Credit with lower interest rateKnow-how

Strong brandState of the art ITBargaining power

Depreciation

Competitive advantages

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Competitive Advantages: Integrated business platform

Franchising

Car rental Fleet rental

Used Car Sales

This integrated business platform gives us superior performance

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International footprint

International footprint

Strategic locationsStrategic locations

Nationwidepresence

Nationwidepresence

Competitive Advantages: Largest distribution

316 agencies in 9 countries

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Competitive Advantages: Largest distribution

278

89

82

73

Localiza Hertz Avis Unidas

244**278*

Localiza network is larger than

the second, the third and the fourth competitors combined.

(number of agencies in Brazil)

* As of March 31, 2006 ** As of April 16,2007

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Yield management allows Localiza to be more competitive and profitable

Month of the yearMonth of the year

Day of the weekDay of the week

EventsEvents

CityCity

Volume per customerVolume per customer

Competitors’ monitoringCompetitors’ monitoring

Localiza adjusts its prices based on supply & demand

Competitive Advantages: Yield management

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Competitive Advantages: credit with lower interest rate

Global ScaleLocaliza Rent a Car S.A. BB / Stable /--Hertz Corp. BB-/ Stable /--

Vanguard (National / Alamo) B+/ Stable /--

Avis Budget Car Rental BB+/ Stable /--

Enterprise Rent-Car Co. A-/ Stable / A-2

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 2007

Localiza has the best rating among its international peers considering the debt currency

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Deep knowledge of the businessState-of-the-art systemsOperational excellenceAdoption of best practicesStable management

Competitive Advantages: Know-how

16SeminovosMarco Guimarães

33Vice-presidentAntonio Resende (Founder)

21CFO and IRRoberto Mendes

22Total FleetDaltro Barbosa

26Car rentalGina Rafael

33

33

Eugênio Mattar (Founder)

CEO and Chairman of the Board Salim Mattar (Founder)

Experience in Localiza

ResponsibilityName

Vice-president

15Investor relationsSilvio Guerra

24Aristides Newton Franchising

We believe this experienced team will run the business for the next ten years

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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

Most consumed car rental brand in the ranking of America Economia Magazine

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Speed in transaction timeBetter operational controlCustomer satisfactionOn-line networkCost reduction

Competitive Advantages: State of the art IT

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Localiza enjoys better conditions due to its large scale

Localiza purchased more than US$1,2 billion worth of cars from 2003-2006*

Localiza and its Franchisees represented in 2006

3.9% of FIAT internal car sales

2.7% of GM internal car sales

1.8% of the Brazilian internal car sales

*96.9 thousand cars between 2003-2006 calculated on average purchase price of 2006

Competitive Advantages: Bargaining power

15.062

22.182

26.105

33.520

2003 2004 2005 2006

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When car prices go up more than inflation, depreciaton decreases

% over rental revenue 2000 2001 2002 2003 2004 2005 2006

Localiza (car rental division) 13.8% 11.9% 9.3% 9.2% 1.8% 2.9% 5.2%

Hertz (USA) - - - - 22% 23% 23% *

National / Alamo (USA) - - - - 22% 23% 23% *

Competitive Advantages: Depreciation

Depreciation cost over the car rental revenue

* Until Set/06Source: National/Alamo prospectus, Sep 20, 2006, p.11 Hertz prospectus, Nov 21,2006, p.12 and 17, Avis 2006 10K

Average depreciationper car

Real decrease in thenew car price

Real increase in thenew car price

Avis / Budget (USA) - - - - 26% 29% 31%

Sixt (Europa) - - - - - 18.6% 20.5%

510,1

3.617,7

2.142,51.656,2

1.752,3322,9 492,3 939,10,9%

-0,4%

-4,1%

-1,0%

-5,1%

4,7%

9,8%

3,7%

(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 1T07

-6,0%-4,0%-2,0%0,0%2,0%4,0%6,0%8,0%10,0%12,0%

Rea

is

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Recognition

Standard & Poor’s rating upgraded to ‘brAA-’ in national scale and ‘BB’in global scale. same as sovereign risk. with stable outlook

IBrX (between the 100 most traded shares)

ISE – Corporate Sustainability Index (34 companies)

“Best Company for Shareholders” by Capital Aberto magazine. between Companies of up to R$ 5 BI market cap

The best subsequent public offer among the listed companies by Infomoney, in a survey among the brokers registered in BOVESPA

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Financials1Q07

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1T07 highlights: Net income

6991

107138

3045

2003 2004 2005 2006 1T06 1T07

Net income

53.4%

CAGR: 23.5%

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(R$ million, USGAAP)

1Q07 highlights: EBITDA per segment

Margin per segment 2004 2005 2006 1T06

42.6%

69.4%

51.7%

10.0%

29.4%

31.4%

42.3%

69.3%

51.7%

4.6%

39.0%

27.3%

1T07

Car rental 42.6% 46.3% 46.6%Fleet rental 65.2% 63.6% 65.2%

Consolidated - Rental 51.5% 52.5% 52.9%

Car Resale 13.2% 13.7% 5.6%

Franchising 41.5% 47.6% 70.6%

TOTAL 33.1% 32.6% 24.3%

Ebitda - ConsolidatedEbitda - Rental

84,0 125,7 151,0

37,2 48,7

83,394,9

131,8

31,3 34,7

2004 2005 2006 1T06 1T07

Car rental Fleet rental

210.1285.8 313.1

81.698.2

167.3

220.6282.8

68.5 83.421.8% 20.3%

CAGR: +30.0%CAGR: +22.1%

167,3 220,6 282,868,5 83,4

40,161,3

12,6

27,3

13,6

2,73,03,9

1,20,5

2004 2005 2006 1T06 1T07

Rentalsl Car Resale Franchising

+ 14.9 million + 16.6 million

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Highlights: Consolidation

Market share - 2004 Market share - 2005 Market share - 2006

Soucre: ABLA

Localiza Brazil has grown in revenues an average of 2,9x the market between 2004-2006Localiza CAGR: + 25,2%

Market CAGR: + 8,8%

Others84,5%

Localiza15,5%

Others82,1%

Localiza17,9%

Others79,5%

Localiza20,5%

+2.4 p,p, +2.6 p,p,

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Highlights: RENT3

Extraordinary dividends of R$ 196.7 millions (refers to 2005 and 2006)

Interest on own capital of R$ 5.9 million (2007 anticipation)

Proposal of share split (each 1 share will be converted into 3)

Average daily traded volume of R$ 13.4 million 1Q07 (R$ 10.6 million in 2006)

RENT3 had the best performance among the main public offerings of the last3 years (Economática, 04/09/2007)

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Highlights: Corporate governance

Board of Directors with 4 independent members (total of 9) Oscar BernardesPaulo GuedesStefano BonfiglioWilson Brumer

Internal committees of:Auditing (3 members being 2 independent )Disclosure (the main executives of each area of Localiza)Personal (3 members being 2 independent )

Definition of a succession plan for contingency

Page 36: 1 Q07 Analystand Investors Meeting

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(R$ million, USGAAP)

Net income reconciliation

-1,0

1Q06Net income

1Q07Net income

29.6

+143.9Revenues

-123.4Costs

-3.9Depreciation

-1.9

+8.1SG&A

+25.2

-10.8Interests

Taxes

45.4

-7.9

+53.4%

+118.7-112.6

Rental Ebitda + 15.6 millionCar Resale Ebitda + 1.0 million

+1.2

Total Ebitda +16.6 millions - 0.8 million

+0.9

StockOptions

-5.1

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Cash generation

(R$ milllion. USGAAP)

R$ 228.5 million was the cash generated by operational activities in 1Q07, adjusted by the reduction of the automakers’ debt in the amount of R$ 223.2 millions

Cash and cash equivalents

12/31/06:

30.1 39.4

Operationalactivities

Interest on owncapital and

others

Fleet acquisition

Financialapplication

Includes a reduction in theAutomakers’ account

of R$ 223.2 million

65.3

-64.0

11.9

-3.9 Cash and cash equivalents

03/31/07:

Page 38: 1 Q07 Analystand Investors Meeting

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(R$ million, USGAAP)

Indebtness

Net debt X Market cap Rating S&P – BrAA- / Stable

EOP BALANCE 2004 2005 2006 1Q07

Net debt / fleet 46% 60% 36% 43%

Net debt / equity 49% / 51% 58% / 52% 41% / 59%

1.42x

1.0X

10.3%

41% / 59%

Net debt / EBITDA (USGAAP) 1.34x 1.89x 1.19x*

Net debt / EBITDA (BRGAAP) 1.1x 1.5x 0.8x*

Net debt / Market cap 35.3% 29.7% 11.0%

281 539 443 4687961812

4320 4239

2004 2005 2006 1T07

Market cap Net debt

* Annualized based on 1Q07

Page 39: 1 Q07 Analystand Investors Meeting

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493690

930

64

303448

590

244

2004 2005 2006 1T07

26,1

33,5

1,8

18,823,2

8,9

22,215,7

2004 2005 2006 1T07

Investment in fleet

Quantity - Thousand Net investment – R$ million

Purchased Sold

+6.5+7.3 +10.3

-7.1

+190.0 +242.0+340.0

-183.0

In the 1Q07 the fleet was reduced in 7,458 cars to adjust off-peak demand after the high season

Investment per car – R$ thousand 2004 2005 2006

Average purchase price 21.9 26.0 27.6

Average selling price 18.8 23.4 25.0

Net 3.1 2.6 2.6

% over average purchase price 14.2% 10.0% 9.4%

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Investment in cars x utilization rate

In order to maximize the utilization rate in 2007 we will distribute the cars purchases through out the 2nd, 3rd and 4th quarters

Car rental division

2006

1582,861

9,513

12,862

4,112 3,273 3,978 6,599

1Q06 2Q06 3Q06 4Q06

Purchased Sold

2007 E

25

6,4618,783

12,098

7,462 7,178 7,423 6,879

1Q07 2Q07 3Q07 4Q07

Purchased Sold

2006

59,5% 68,4% 71,8% 63,3%

0

200.000

400.000

600.000

Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov Dez

Dai

ly

0%

40%

80%

120%

160%

Util

izat

ion

Daily rentals Utilization rate

2007 E

70,0%75,0%75,0%64,9%

0

200.000

400.000

600.000

Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov Dez

Dai

ly

0%

40%

80%

120%

160%U

tiliz

atio

n

Daily rentals Utilization rate

Daily rentals x utilization Buying and selling cars

Page 41: 1 Q07 Analystand Investors Meeting

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10

15

20

25

30

35

40

45

50

55

60

65

70

23-M

ay7-J

un21

-Jun

5-Jul

19-Ju

l2-A

ug16

-Aug

30-A

ug14

-Sep

28-S

ep13

-Oct

27-O

ct11

-Nov

28-N

ov12

-Dec

26-D

ec10

-Jan

24-Ja

n8-F

eb22

-Feb

10-M

ar24

-Mar

7-Apr

25-A

pr10

-May

24-M

ay7-J

un22

-Jun

6-Jul

20-Ju

l3-A

ug17

-Aug

31-A

ug15

-Sep

29-S

ep16

-Oct

30-O

ct14

-Nov

30-N

ov14

-Dec

2-Jan

16-Ja

n31

-Jan

14-F

eb2-M

ar16

-Mar

30-M

ar

Pric

e

0

20

40

60

80

100

120

Vol

ume-

R$

thou

sand

Volume RENT3 RENT3 IBOVESPA

RENT3 Performance

RENT3 X IBOV 448%

86%

From 05/23/05 (IPO) to 03/30/07.

RENT3 IBOVPerformance: 2005 + 149% +38%

2006 + 124% +33%since IPO + 448% + 89%

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RENT3 Liquidity

Average daily traded volume(R$ thousand)

4.570

10.581

7.047

13.395

2005 2006 1T06 1T07

132% 90%

RENT3 was the 59th most traded share in Bovespa in the last 12 months1Q07 x 2006 = +26.6%

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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.

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Thank you!

Localiza’s IR:www.localiza.com/riPhone: 55 (31) 3247-7039