Management Presentation 3Q12

Management Presentation
3Q12
1
A brief history of Unidas
 In 1985, five car rental Companies and two Investors joined together in the stablishment of Unidas, which
began operations with seven sites and approximately 500 vehicles
 SAG acquired Unidas’ control in 2001
 In July 2011, Unidas concluded a R$300 mm capital increase. Brazilian Private Equity funds Gávea, Kinea
and Vinci now hold 47.3% of Unidas – equally split, while SAG remains with 52.7%
 Today, Unidas is one of the leading Companies in car rental and fleet management, with a market share of
approximately 6.6% and 7.1% respectively
15.831
Vehicles
Stablished
1985
31.769
1
Vehicles
2001
2005
2011
2012
2013
1 – Quantity of vehicles in Sep/12
2
July 2011: R$300 mm capital injection
R$100 mm
R$100 mm
15.76%
15.76%
15.76%
Corporate Governance
SAG and the Funds share the
control of Unidas: Management,
Compensation, Budget, Capex,
Leverage and other strategic decisions
are jointly taken
R$100 mm
Successful Track-record
Gávea, Kinea and Vinci have a long
track-record of successful
investments in multiple sectors and
will actively contribute to Unidas
growth together with SAG
Capital Structure
Gávea, Kinea and Vinci now hold
47.3% of Unidas – equally split,
while SAG remains with 52.7%
Capital increase decreased leverage
from 3.5x Net Debt / EBITDA to 1.9x
Source: Unidas
3
Corporate Structure
Shareholders known for the quality of management and governance in their investments
SAG
1
Vinci
52.72%
15.76%
Gávea
15.76%
15.76%
99.99%
99.99%
Unidas Comercial
de Veículos LTDA
Unidas Locadora
de Veículos LTDA
99.99%
Unidas Franquias
do Brasil S.A.
Source: Unidas
Note
1. SAG owns a 52.72% stake in Unidas, being 49.83% directly and 2.89% trhrough Novinela, one of its subsidiaries. Nevertheless, the shareholders agreement provides shared control.
4
SECTION 1
Company Overview
Flexible and Integrated Business Model
Value Chain for Unidas
Franchises
2.1
Cars Rental
Stores
Auctions
1
3
Cars Sale
Stores
2.2
1.
2.
3.
Fleet Management
Purchase of cars directly from automakers (about 15,400 cars purchased in 2011)
Making the necessary procedures (license, inspection) and availability of vehicles for rent. Two business segments:
1.
Rent a car (franchises and stores)
2.
Fleet Management
Sale of the vehicle at the end of the cycle
Integrated business model allows gains in all stages of Unidas’ value chain
Source: Unidas
6
Scale Gains of Unidas’ Operations
The network size
increases brand
recognition
Car Sales network
creates better
conditions for resale
Rental Revenues
Purchase of Cars
Scale Gain
Scale allows bigger
discounts with automakers
Scale Gain
Maintenance
Scale Gain
Scale reduces
maintenance costs of cars
Credit Score
Car Sales
Scale Gain
Scale influences the
rating, reducing the
cost of financing
Scalability of operations increases earnings during the Unidas vehicles’ lifetime
Source: Unidas
7
New Unidas – A turnaround story

People and Structure – Function based organizational structure changed to Business Unit focused
structure

Portfolio management –search for profitability

Car rental: business expansion

Underwriting – More conservative approach to Residual Value risk led to stricter underwriting
policies

Improved controls and procedures
8
Talented and aligned management
Background
Pedro Almeida
 24 years in auto sales and rental at Ford, Honda and SAG
CEO
High performance culture
Gisomar Marinho
CFO
Carlos Sarquis
RAC
Paulo Fraga
Fleet Operations
Levi Avila da Fonseca
Used Car Sales
Fani Feitosa
People & Mngmt
 22 years in finance at CEMAR, Lojas Americanas, Baker and
Hughes and others
 18 years in consumer finance at Grupo Itaú Unibanco, McKinsey
and Chase Manhattan Bank
 15 years in commercial, operational and administrative areas at
ALL, Vale, Usiminas and Rocha Terminais Portuários
 15 years in retail banking, leading some restructuring processes
and new ventures at Grupo Itaú Unibanco and Grupo BBM
 High performance culture to be
fostered, leveraging Funds
experience in other industries
 Relevant variable compensation to
be paid according to ROIC, Cash
generation, Growth and Quality
targets
 Retention of top talent is key
performance indicator for leadership
 10 years in HR at Ambev, Vivax and Danone
Source: Unidas
9
Reestructure: Capital Return and Procedures Improvement
FM Portfolio Reduction

Reduction from 23 thousand to 17 thousand cars in Fleet
Management division, not renewing non-profitable contracts.
Increase in average profitability

Residual Value Approach

Introduction of new tools and methodologies for
delinquency control
Result of Mark-to-Market (R$ millions)
RAC: Rate per day increased by 14%, from R$73 in June
2009 to R$83 in September 2012
Collection

Introduction of new tools and methodologies for delinquency
control
Delinquency (after 3 months)
10
Stores Expansion
Expansion of the store network
+32 stores
+4 stores
+18 stores
+4 spots
+6 stores
Opening of 18 Rent-a-Car stores, 4 Rent-a-Car Franchises, 6 Car Sales showrooms and 4 Corporate
Services spots until December/12
11
Where we are
Rent-a-Car (53)
Rent-a-Car Franchises (66)
Car Sales (14)
12
Enterprise Partnership
In April 2012, Unidas became the exclusive Master Franchise with the U.S. company Enterprise Holdings to operate the
Alamo Rent a Car and National Car Rental brands in Brazil for 15 years, with possibility of renewal for another five years.
Illustration from the Stores in Airports
The Stores will be adapted with the inclusion of
Alamo and National brands.
13
Best Fleet Acquisition
In January 2013, Unidas announced the acquisition of Best Fleet operations, a company dedicated to executive fleet
management with a focus on the high-end segment.
Business highlights:
•
Acquisition value: R$185 million;
•
The transaction does not include the assumption of financial liabilities of Best Fleet;
•
Fleet size: 2.500 vehicles;
•
Estimated revenue for 2012: R$72 million;
•
Acquisition authorized by CADE unrestricted at 2013/01/31.
14
Partnership Unidas and TAM
•
In January 2013, Unidas has entered into a commercial agreement with the airline TAM, which is valid for all TAM’s
destinations around Brazil in which are also served by Unidas;
•
TAM’s passengers can acquire combined air and ground travel packages, with exclusive offers and benefits;
•
TAM’s customers can take benefit from cheaper Unidas daily rates and advantages to renting accessories or
contracting additional services;
•
The partnership ensures to TAM’s customers convenience by combining car rental with business and leisure trips.
15
SECTION 2
Car Rental Market
in Brazil
Overwiew of the Car Rental Market
Growing Market for Car Rental
Participation of Fleet Management (% of total fleet)
High Growth
Potential
Sources: Denatran, Fenabrave, ABLA and Data Monitor
17
SECTION 3
Results
3Q12 and 9M12
Financial Highlights - Consolidated
2
Consolidated Net Revenue (R$ million)
EBITDA (R$ million) and EBITDA Margin
8.9%
(2.1)%
26.2%
3.4%
Adjusted EBIT (R$ million) e Adjusted EBIT Margin
1 2
Adjusted Net Income (R$ million)
1
96.6%
210.7%
142.4%
137.3%
1 - EBIT and Net Income excluding the effect of extraordinary depreciation of BRL31.1 million recorded in 2Q12, due to the reduction of the IPI for new cars announced by the government on May 21, 2012.
2 – Margin calculated over the Rental Revenue
19
Highlights per business – RAC and Fleet
Net Revenue (R$ million) per business
EBITDA (R$ million) per business
23.3%
9.5%
9.8%
Adjusted EBIT (R$ million) per business
28.1%
1
Total Fleet per business (# vehicles) in 09.30.2012
121.5%
208.6%
1 - EBIT and Net Income excluding the effect of extraordinary depreciation of BRL31.1 million recorded in 2Q12, due to the reduction of the IPI for new cars announced by the government on May 21, 2012.
20
Fleet
Fleet Trend (thousand of vehicles)
Net CAPEX – Fleet (R$ million)
104
89
+1,587 carros (5.3%)
55
Average Fleet Age (months)
40
Nº of Alienated Vehicles
4.9%
7.6%
21
Debt
In 09.21.2012, Standard & Poor‘s has attributed a Brazilian National Scale ‘brA’ rating, with a Stable Outlook
Net Debt (R$ million) and Net Debt / EBITDA
% of Debt Collateralized by Fleet
In 06.30.2011
Debt Profile in 09.30.2012 - Principal (%)
In 09.30.2012
Annual Average Cost of Debt (Spread CDI +)
(295) bps
22
Rating
Date: 20/09/2012
Rating: Brazilian National Scale ‘brA’ rating, with a Stable Outlook
Rating Motivators:





Strong brand;
Partnership with Enterprise Holdings Inc.;
Strong market position;
Conservative capital structure;
Comfortable liquidity.
Date: 16/07/2012
Rating: Long Term National Scale ‘A-(bra)’ rating, with a Stable Outlook
Rating Motivators:
 Significant market position;
 Sturdy capital structure;
 Strong commitment to liquidity.
23
Contacts
PEDRO de ALMEIDA
CEO
GISOMAR MARINHO
CFO
Phones: +55 (11) 3155-4818
E-mail: [email protected]
Website: www.unidas.com.br
Fonte: Unidas
24
The End
25