Localiza Rent A Car S/Adr

Good morning! Before we begin, I would like to remind you that this conference will be conducted in English. For those who require translation into Portuguese, please click on the Translation button with the globe icon and select your preferred language. You may mute or unmute the original audio by clicking the Mute Original Audio button. Good morning! And welcome to Localiza and Co.' 's webinar to discuss the results for the first quarter of 2026. Joining us today are Rodrigo Tavares, Chief Financial Officer, 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 earnings release materials can also be found. The presentation is also available for download on the Investor Relations website. For the Q&A session for analysts and investors, we kindly ask that you sign all your interest in participating through the Q&A icon at the bottom of your screen, entering your name, institution, and language. When called upon, a prompt will appear on your screen asking you to activate your microphone. Questions may be asked in either Portuguese or English. To submit written questions, please use the Q&A icon at the bottom of your screen and fill in your name and institution before submitting your question. Please note that all figures presented are in millions of reais and prepared in accordance with IFRS. We also emphasize that the information contained in this presentation, as well as any statements that may be made during the conference regarding business outlook, projections, and Localiza's operational and financial targets, reflect management's beliefs and assumptions, as well as information currently available. Forward-looking statements are not guarantees of performance and involve risks, uncertainties, and assumptions as they relate to future events and, therefore, depend on circumstances that may or may not occur. I will now turn the call over to Rodrigo Tavares, the company's Chief Financial Officer, to begin the presentation. You may proceed.

Good morning and welcome to Localiza Webinar. We started 2026 with solid results, supported by consistent and disciplined planning and execution. We continue to make progress in restoring the ROIC spread and reaffirm our priority on pricing management and efficiency across both car rental and fleet rental. In first quarter of 2026, car rental demonstrated the strength of our brand and our commercial excellence, delivering year-over-year revenue growth. In Fleet Rental, we continue the process of reducing our exposure to severe use segments. At the same time, we maintain a disciplined capital allocation with residual value assumptions aligned with market conditions and reflecting the competitive dynamics of the automotive industry. The capital release from the ramp down of severe use contracts continues to be redeployed to our target segments, Fleet Rental and Subscription, which delivered approximately 14% year-over-year revenue growth, with ride spread within the company's target range. In semi-novos, as previously anticipated, the start of the year was very strong. We closed the quarter with sales of 95,000 vehicles, placing the company on a consistent fleet renewal pace toward the returning of a 15-month cycle in car rental. Throughout the quarter, we observed healthy pricing dynamics in used cars and a slight increase in new car prices, even in a highly competitive environment. As a result of this strong operational performance, we reported consolidated net revenue of $12.3 billion, EBITDA of $4.1 billion, EBIT of $2.7 billion, and a net income of $1.2 billion, representing a 45% increase year-over-year. The result was positively impacted by the recognition of the gain of approximately $177 million after-tax related to the divestment of subsidiaries, as previously disclosed to the market in the last quarter of 2025, in line with our portfolio optimization and simplification strategy. Excluding these effects, net income totaled 1.045 billion, surpassing for the first time the 1 billion mark in a single quarter. Leverage indicators continue to improve, reflecting the evolution of operating cash generation. We ended the quarter with net debt equivalent to 55% of the fleet value. Quarterly, ROIC reached 17.1%, with a spread of 7.1 percentage points above 1%. after-tax cost of debt. Excluding the effects related to the divestment of subsidiaries, Reich stood at 15.9% with a spread of 5.9 percentage points, reflecting companies' focus and consistency in the process of restoring return levels to historical standards. With the objective of further strengthening our competitive and quality differentiators, we increase investments in brand and technology. This year, we will complete the rebranding of our stores and branches, explicitly equipped with digital pickup technology, enhancing customer experience while delivering additional cost and productivity efficiency gains, and advance the use of artificial intelligence to improve customer journeys, increase productivity, and support decision-making. An important milestone of the quarter was the launch of our application integrated with ChatGPT, positioning Localiza among the first companies in Latin America to transform generative AI into direct business channel, once again reinforcing the company's leadership in innovation. Encouraged by the process and results delivered in the first quarter, we remain attentive to the macroeconomic environment in Brazil and abroad, as well as to the dynamics of automotive industry. Accordingly, we will continue to maintain the discipline in capital allocation and focus on sustainable growth with value creation. We would like to thank our customers, shareholders, partners and employees for their committed trust. To present the details of the results, I will now turn the call to our Head of Investors, Nora.

Thank you, Rodrigo, and good morning, everyone. Starting the presentation of the results on page 3, we begin with the car rental division in Brazil. In the first quarter of 26, net revenue in the car rental division reached R$2.8 billion, representing an 8.5% increase compared to Q1-25. Volumes grew 1% year-over-year, in line with our priority of restoring the right spread and our focus on pricing adjustments and productivity, as shown on page 4. On this slide, we highlight the 7% increase in the average daily rate for the quarter, which ended the period at 157 real. We also emphasize the 3.1 percentage points increase in the utilization rate, which reached 82.1% in the first quarter 26, the highest level since 2021, reflecting efficient fleet pricing and mix management. Moving on to page five, we present the performance of the fleet rental division. In Q126, fleet rental reported net revenues of 2.3 billion reais, representing a 3.8% increase compared to the same period of 2025. The year-over-year reduction in the number of rental days continues to reflect the portfolio optimization process in fleet rental, with lower exposure to severe usage contracts, which totaled 15.5 thousand vehicles at the end of the quarter, compared to the 30.7 thousand vehicles in these segments at the beginning of 2025. The capital relief from the ramp-down of severe usage contracts continued to be allocated to our targeted segments, which delivered approximately 14% revenue growth in the first quarter 26 compared to the first quarter 25, with a wide spread within the company's target levels. Moving to page 6, we present an average daily rate of R$107, representing a 6.9% year-over-year increase. The utilization rate reached 96.8% in the quarter. Turning to page 7, we present the evolution of Seminova's revenue. We achieved a new sales record in Seminovas with 95,384 vehicles sold in Brazil in the first quarter of 2016. Net revenue totaled 7.1 billion reais in the quarter, an increase of 34.5% compared to the first quarter, 25. The strong performance of Localiza Seminovas reflects the maturation of initiatives focused on commercial excellence, network expansion, and productivity gains, as well as other fronts aimed at accelerating the fleet renewal cycle. These initiatives contributed to reducing the average age of fleets sold in the car rental division, segment to 19.7 months in the quarter. Moving to page 8, we present the car purchase and sale balances. The strong pace of vehicle sales was accompanied by a higher level of purchases. During the quarter, 95,384 vehicles were sold and 82,080 vehicles were purchased. The reduction in the fleet size in Q1 is explained by seasonality and occurred following the peak holiday period. Total investment in vehicle purchase amounted 7.6 billion reais, while proceeds from vehicle sales totaled 7.1 billion, resulting in a net investment of 465 million reais in the Brazilian operation. On page 9, we present the evolution of the average purchase and sale price of vehicles. In the car rental division, the average purchase price was 86.5 thousand reais, reflecting a lower mix of entry-level vehicles compared to Q25, while the average selling price reached R73,400 in Q1, resulting in a renewal capex of R13,100 per vehicle. In fleet rental, the average purchase price reached R97,700, while the average selling price was R77,500, resulting in a renewal investment of R20,200 in the first quarter of the year. On page 10, we show the end-of-period fleet. The company closed the quarter with a fleet of 642,111 vehicles, representing a 2.6% increase compared to Q1 2025. Moving on to page 11, consolidated net revenues continue to grow at a double-digit pace this quarter. The company reported consolidated net revenue of 12.3 billion reais, an increase of 21.2% compared to the same period last year. Rental revenues grew 6.4%, totaling 5.1 billion reais, while semi-novice revenues reached 7.1 billion, up 34.6% year-over-year. On page 12, we present a strong growth in EBITDA, which reached 4.1 billion reais in the first quarter this year, representing a 23.7% increase compared to the same period last year. We highlight margin expansion across all business lines. In car rental, EBITDA margin reached 67.4%, an increase of 2.2 percentage points compared to Q1-25, driven by rental prices recomposition, efficient cost management, and productivity gains. Rental revenues increased by 218.7 million, while cost and expenses rose by only 16.7 million, reflecting the effect of the higher fee utilization improvements in maintenance and preparation costs per vehicle, partially offset by the higher volumes of vehicles prepared, and a higher level of fiscal fees tax credits. In the fleet rental, EBITDA margin reached 88%, representing an increase of 18 percentage points compared to Q125. The margin in the quarter was positively impacted by defects of the divestment of subsidiaries totaling R$282.4 million before taxes. Excluding these defects, the margin would have been 75.9%, an increase of 5.9 percentage points versus Q125, mainly driven by the higher average daily rates, lower maintenance costs and allowance for doubtful accounts, improved utilization rates, and a higher level of tax credits. On a year-over-year basis, net revenues increased 84 million, while costs and expenses in this division declined by 111.5 million reais. Seminovals reported an EBITDA margin of 3%, reflecting the strong increase in volumes as well as higher average selling price, which contributed to a gross margin of 7.9%, a 1 percentage point increase compared to the same period last year. On page 13, we present the evolution of the annualized average depreciation per vehicles. The automotive market continues to operate in a highly competitive environment marked by new entrants and the launch of new models, alongside still elevated financing rates. As a result, while new and used car prices showed healthy dynamics during the quarter, we remain attentive to automotive market conditions and will adjust depreciation, pricing, and capital allocation as needed. In the car rental, the annualized average depreciation per vehicle was R7,986 in Q1-26, maintaining the sequential upward trend observed over recent quarters. In fleet rental, the annualized average depreciation per vehicle was R9,081 in the first quarter, also maintaining the trend observed in recent quarters. Moving to page 14. We present consolidated EBIT of R$2.7 billion in Q126, representing a 32.4% increase compared to the same period of last year. In the current, the EBIT margin reached 47.3%, an increase of 4.9 percentage points year-over-year, while Fleet Rental reported an EBIT margin of 63% in the quarter or 50.8%, excluding the effect of the divestment of subsidiaries. Turning to page 15, as a result of advances in pricing, cost management, and productivity, the company reported net income of 1.2 billion in the quarter, representing a 45% increase compared to Q125. Even excluding the positive effect after tax of 177 million related to the divestment of subsidiaries, our net income surpassed for the first time the 1 billion real mark. To present cash flow, debt ratios, and ROID spread, I will now turn the call back to Ruto.