Localiza Rent A Car S/Adr

Good morning. Before we begin, for those who need translation, the tool is available on the platform. Please click Interpretation button using the globe icon on the bottom of the screen and choose your language of preference. You may also choose to mute or unmute the original audio by clicking the Unmute Original Audio button. Good morning, and welcome to Localiza and Co. webinar on the results for the fourth quarter and full year 2025. Joining us today are Bruno Lazansky, our CEO, Rodrigo Tavares, CFO, and Nora Lanari, Head of Investor Relations. Please note that this webinar is being recorded and will be available at ri.localiza.com. where the full warnings materials are also available. The presentation itself is available for download on the IRR website. For the Q&A session for analysts and investors, please signal your interest in participating via the Q&A icon at the bottom of your screen, entering your name, institution and language. When called open, a prompt will appear on your screen to activate your microphone. To submit written questions, use the same Q&A icon and include your name and institution before your question. We inform you that the figures in this presentation are stated in Millions of Heis and IFRS. We emphasize that the information contained in this presentation, as well as any statements that may be made during the video conference regarding Localiza's business outlook, projections and operational and financial targets, consists of the company's measurements, beliefs and assumptions. as well as information currently available. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions, as they refer to future events and therefore depend on circumstances that may or may not occur. Now, I turn the call over to Bruno Lozansky, CEO, to begin the presentation.

Good morning, everyone, and thank you for joining our earnings call. The year of 2025 was marked by a consistent execution of our strategic priorities with significant progress on all fronts. The decisions made throughout the period reinforce our ability to adapt and generate value, highlighting the company's discipline in execution and the strength of our business model. In rentals, we continue to adjust the average daily rate throughout the year, with an increase of 8.4% in car rental and 9.6% in fleet rental on a year-over-year basis. As a result, rental revenue reached 19.6 billion, 1.5 billion reais higher than 2024. Both business divisions recorded an increase in fleet utilization rates and a reduction in cost lines, especially in maintenance and theft, driven by greater scale in parts procurement and advances in fraud prevention and asset recovery capabilities. As a result, we closed the year with an EBITDA margin of 67% in car rental compared to 62% in 2024 and 72.6% in fleet rental compared to 66.8% in 2024. In Q4 2025, we reported a margin of 68.6% in rental car and 76.2% in fleet rental. In 2025, we continue to optimize capital allocation in fleet rental, significantly reducing our exposure to severe use vehicles from 31 to 18,000 assets and improving the profitability of the remaining contracts. We will maintain this trajectory throughout 2026, expecting to end the year with fewer than 10,000 units of this profile and ROIC spread within the company's target range. A relevant portion of the capital released was allocated to the priority segments of light vehicles and car subscription, which recorded a 17% increase in revenue in 2025. In Seminovos, more than 296,000 cars were sold during the year, an increase of 5.9% year-over-year, contributing to net revenue of $22.2 billion, 15.6% higher than in 2024. Throughout the year, we expanded the Seminovas network with the opening of 21 stores and focused effort on improving the productivity of both the retail and wholesale teams, which resulted in acceleration of sales in the last quarter of the year. We ended the fourth quarter of 2025 with sales of over 77,000 cars, up 7.8% versus the prior year, setting a quarterly record and reaching an annualized base of approximately 310,000 cars. This performance demonstrates the consistent progress of Seminovos, even in a context of declining retail new vehicle sales, which fell 2.4% in 2025. The beginning of 2026 maintained a positive trajectory. In 2026, so far, the company has maintained a sales pace of approximately 59,000 vehicles sold in the first two months of the year, representing a growth of around 15% compared to the same period of 2025. We continue to consistently lead in innovation in our customer experience through convenience, digitalization, and operational excellence, further strengthening our differentiation in customer satisfaction. To highlight a few advancements, in Renault Car, we expanded the fleet and number of branches offering digital pickups, surpassing 1.1 million fast contracts in the year. In addition, we intensify the use of artificial intelligence across the entire platform with special emphasis on Lisa, our virtual assistant that guides customers through the reservation journey through chat, deliver higher productivity, agility, and resolution rates with an NPS above 85%. In Fleet Rental and Localiza Mayo, we continue to enhance physical and digital journeys to provide a superior experience with more convenience and higher operational efficiency. In Localiza Mayo, the use of AI solutions enhance the quality and performance of the sales and after-sales teams, positively impacting NPS and strengthening the customer experience. In addition, we further improve the Localiza Mayo app by introducing new features such as maintenance, scheduling tools, real-time mileage consumption monitoring, and payment management. Additionally, we expanded the PIT SOP network, an innovation introduced by Localiza in 2019, and broadened its portfolio of services, increasing speed, predictability, and convenience in preventive and corrective maintenance processes. In operations, we enhance the processes and scale of the fleet preparation centers, ensuring greater speed, control, and quality, while also reducing the preparation cost of vehicles for semi-novas. In 2025, we also completed the system integration in fleet rental, consolidating operations, standardizing processes, and enabling the capture of additional synergies. The system integration allowed the incorporation of LocAmerica and the start of goodwill amortization arising from the merger, with a positive impact on cash taxes in the quarter and in the coming years. Finally, in November 2025, the company announced the sale of its stake in Vol, a corporate travel and expense management platform. The transaction, concluded in January 2026, represented approximately 5x return on Localiza's investment. We started 2026 with a solid competitive position and well prepared to capture the opportunities of this new cycle. Our priority remains completing the process of restoring returns to the target levels. To that end, we will keep our focus on Seminovos with the goal of reaching, still in 2026, the quarterly sales pace necessary to return to the 15-month cycle in car rental. As we progress in reducing the average age and mileage of cars sold, we expect to capture additional efficiencies gains in the rental operation with a positive impact on the division ROIC and potential favorably effects on rental pricing. Additionally, with fleet rental and subscription return levels within the target, we will invest in developing more customized solutions for our clients, expanding our addressable market. Lastly, in 2026, we will increase investments in brand, branch, and store network and technology, reinforcing our leadership in competitive advantages, always with a long-term value creation mindset. We thank our employees, customers, partners, and shareholders for their trust and commitment throughout the year, and we remain determined and dedicated to building the Localiza of the future. Now, I'll turn it over to our CFO, Rodrigo Tavares, for our overview of the results.

Thank you, Bruno, and good morning, everyone. The strong progress across the six priorities defined for the year, as previously highlighted by Bruno, supported the delivery of solid results. We ended 2025 with consolidated net revenue of $41.8 billion, up 12.1% year-over-year. EBITDA reached $13.8 billion, an increase of 15.4% versus 2024, reflecting the recomposition of rental pricing as well as productivity gains and efficiency cost management. Adjusted net income totaled $3.4 billion for the year, when annualized ROIC for the last quarter of 2025 reached 15.5%, with an spread of 5.5 percentage points above the cost of debt, even with the higher effective tax rate impacted by the write-down of deferred income taxes from LocAmerica in about 3 percentage points. This performance marked the company return to its historical value creation spread range and paves the way for further progress through 2026. These results were accompanied by significant increase in cash generation from rental activities, which, combined with the reduction in renewal capex resulting from improvement in the mix and average mileage of the car sales, totaled $6.3 billion before interest payments in 2025, nearly doubling compared to 2024. Thus, we maintain a balanced capital structure with a near debt to fleet ratio at 0.57 times, reinforce the robustness of our balance sheet and enhancing the company's financial flexibility. With return levels moving back to the historical range, the need for price pass-through in the car rental and fleet rental becomes more moderate. We will remain diligent on cost and efficiency and continue to scale semi-novos to rejuvenate the rental car fleet. These improvements, together with goodwill amortization from the merger, which reduces cash taxes, will continue to support cash generation and the leverage. Supported by adequate capital structure and the expectation of solid results throughout 2026, we are committed to completing the process of restoring the ROIC spread. I will now hand over to the head of IR, Nora Lanari, to present the details for the last quarter of 2025. Thank you, Rodrigo.