Localiza Rent A Car S/Adr

Good morning and welcome to Localiza's webinar. The third quarter results demonstrate the consistency of our execution. We combined growth, commercial excellence, efficiency gains, and disciplined capital allocation, which translated into double-digit growth in net revenue, EBIT and net income. This performance contributed to the continued recovery of the company's return, with a ROIC spread of 6.4 percentage points in the first nine months of 2026. We ended the third quarter of 2026 with consolidated net revenue of R$12.3 billion, EBIT of R$2.5 billion and net income of R$1.125 billion, up 29.1% compared to the third quarter of last year, adjusted for the effects of the green tax on industrialized product production. Our financial discipline is also reflected in the strength of our balance sheet and comfortable leverage ratios. As part of our strategy, we seek to protect the right spread price into fleet rental contracts by hedging the interest rate curve used to price rental for the term of the allocated capital. Accordingly, Of our 33.1 billion in net debt, approximately 24.7 billion is hedged through swap instruments at an average fixed rate of 12.6% plus the funding spread. The remaining 8.3 billion is exposed to changes in the CDI rate. During periods of greater volatility, the strategy provides greater predictability of returns and represents an important relative advantage. In the automotive industry, intensifying competition and promotional activities with entry of new brands, models and technologies, combined with the still restricted credit conditions continue to put pressure on vehicle prices and fleet residual values. In a period marked by higher depreciation, elevated interest rates and lower activity levels, the quality of execution becomes even more important. In fleet rental, our pricing policies already leave us ahead of the depreciation curve despite the recent decline in car prices, creating some level of cushion to reach our target return. In Rent A Car, the recent increases in interest rates expectation combined with the higher depreciation will require price adjustments going forward. Our focus will remain on enhancing customer experience, cost efficiency, productivity gains, and above all, rigor in capital allocation, directing resources toward opportunities, adequate and sustainable returns. In light of this context, we continue to act on several fronts, maintaining conservative assumptions for residual values in fleet rental, continuing to restore car rental rates, expanding sale capacity and commercial excellence in semi-novos, strengthening commercial relationships with new market entrants, seeking to increase the share of electrified vehicles in our fleet under competitive commercial terms. We added the quarter confident in the company's ability to capture market opportunities and maintain a trajectory of solid results and adequate returns even amid an uncertain macroeconomic backdrop and still elevated levels of depreciation and interest rates. We thank our customers, shareholders, partners, and employees for their trust. For details on the results, I'll hand it over to our investor relations director, Nora.

Thank you Rodrigo and good morning everyone. On page 3 we will begin with the car rental division in Brazil. In Q3 26 net revenue reached 3 billion reais, an increase of 16.5% compared to Q3 25. This performance was driven by a strong 10.6% growth in rental days and an increase in the average daily rate. Daily rentals to individuals benefited from greater fleet availability to capture demand during July's school break, as well as public holidays, while the corporate rentals maintained a growth trajectory in both volumes and price, also supported by the demand associated with the election period. On page 4, We present the average daily rate of 157.9 real, up 5.2% year-over-year, and the utilization rate of 82.4%, the highest level of the past five years and an increase of 1.6 percentage points on a year-over-year basis. This combination reinforces our commercial excellence and the efficient management of pricing, fleet mix, and productivity. Moving on to page five. We present the evolution of fleet rental. Net revenue totaled R$ 2.4 billion in Q3 26, an increase of 6.8% compared to Q3 25, supported by growth of approximately 10% in the target light vehicle and subscription segments, partially offset by the lower revenue from our reduced exposure to severe use contracts. Growth in the targeted segments mainly reflect strong contract origination supported by the company's commercial strength and excellence as well as strong value proposition of our solutions. In addition, during the quarter, we continue to increase the rental rate to reflect the prolonged higher interest rates and depreciation environment. On page 6, the average daily rental rate reached R$ 110.6, an increase of 6.3% year-over-year, and the utilization rate reached 96.9%, up 2 percentage points and reflecting greater productivity and operational efficiency, as well as the lower exposure to severe used contracts. Moving to page 7, we present the evolution of Seminovos. During the quarter, we sold 87,850 cars in Brazil, an increase of 16.4% year-over-year, maintaining a pace close to 90,000 cars per quarter. Net revenue in Brazil totaled R$ 6.8 billion, up 16.5% compared to Q3 2025. The sales pace supports the optimization of the car rental division's fleet lifecycle and enhances the company's flexibility to adjust its vehicle mix. On page 8, we present car purchase and sales volumes. Following strong fleet additions in the second quarter this year, we reduced purchase volumes in Q3. We purchased 89,811 cars and sold 87,850,000 cars, adding 1.9 thousand cars to the fleet, which resulted in a net investment of 1.8 billion reais in the quarter. The average age of the fleet sold by the car rental division declined to 18.8 months from 21.3 months In the third quarter of last year, while the average age of the operating fleet ended the period at 7.8 months, a reduction of 27.1% year over year, contributing to the efficiency gains and lower maintenance and preparation costs per car. On page 9, we show average purchase and sale prices. In the car rental, the last 12 months average purchase price was R$ 86,700, while the average selling price reached R$ 74,600, resulting in a replacement capex of R$ 12,100 per car. In fleet rental, the average purchase price of R$ 100,300, while the average selling price reached R$ 81,100, resulting in a renewal capex of R$ 19,000 per car. Page 10, we show the end of period fleet. We ended this quarter with 672,000 cars in Brazil, an increase of 6.3% compared to Q3 25, expanding fleet availability for rentals. On page 11, we present consolidated net revenue, including Mexico, which totaled R$12.3 billion, up 14.4% year-over-year. Rental revenue increased 12.5% to R$5.5 billion, while consolidated semi-novos revenue reached R$6.8 billion, up 16%. Page 12, we presented consolidated EBITDA of R$ 4 billion, an increase of 13.7% compared to the adjusted third quarter of 25%. In the car rental division, the EBITDA margin remained above 67%. Year-over-year, rental revenues increased R$ 429 million, reflecting the higher average daily rate and number of rental days, while costs and expenses increased by R$ 156 million, explained by higher personnel and technology expenditures, as well as advertising costs, partially offset by lower maintenance and preparation costs per car. In fleet rental, EBITDA margin reached 78.7% in the quarter, representing an increase of 5.3 percentage points compared to the adjusted EBITDA margin of the third quarter 2025. The quarter's margin was positively impacted by increasing the average daily rate, greater maintenance cost efficiency, lower allowance for doubtful accounts, improved fleet utilization, but also higher level of tax credits. As a result, fleet rental net revenue increased R$155 million, while costs and expenses declined R$88 million. Seminovos posted a margin of 1.6% in Brazil, reflecting the more challenging price environment for new and consequently used vehicles, as well as lower SG&A dilution. On page 13, we present the evolution of annualized average depreciation per car. Throughout the quarter, New and used vehicle prices were impacted by new launches, model year changes, and a competitive environment with more intensive promotional activity. Against this backdrop, we continued to adjust vehicle depreciation rates, which totaled R$ 8,000, R$ 757 in the Rent-A-Car Division and R$ 9,231 in the Fleet Rental Division. The sharper sequential increase in the rental car depreciation reflects the shorter asset cycle compared with the fleet rental. We observe spreads between purchase and sale price between 7% to 9% over a 15-month cycle compared with a spread of 18% to 20% over a 32-month cycle. In response to this dynamic, we will continue to advance the rental repricing process. Moving on to page 14. Consolidated EBIT reached R$2.5 billion, up 11.3% compared to adjusted third quarter 25. Car rental EBIT margin was 42%, while fleet rental reported 53.7%, an increase of 4.6 percentage points year over year. The consolidated rental margin, including Mexico, ended the quarter at 45.7%. On page 15, we present net income of R$ 1,125,000,000, an increase of 29.1% compared to the adjusted net income of Q3 2025. The R$ 254,000,000 increase in the net income of the period reflects the increase of R$ 486,000,000 in EBITDA and lower income tax rate partially offset by higher depreciation and net financial expenses. To present Free Cash Flow, Debt and Right Spread, I will hand it back over to Rodrigo.

Thank you, Nora. On page 16, we present Free Cash Flow. In the nine months of 2026, the $9.7 billion in cash generated by rental activities was consumed by negative net fleet capex of $7 billion, Due to the addition of approximately 16,000 cars to the fleet and investments of $318 million in other fixed assets, partially offset by $683 million increase in accounts payables to vehicle suppliers. As a result, cash generation before interest and other items totaled $3 billion. On page 17, we present the change in net debt, which ended September at 33 billion, an increase of 6.5% compared to the year end of 2025 debt. On page 18, we show the debt profile Throughout the year, we continued to consistently pursue active debt management, extending duration and reducing funding cost spreads. We ended the quarter with $11.4 billion in cash, sufficient to cover approximately 109% of the maturities through 2028. On page 19, we present the composition of the net debt. 75% of the company's net debt is hedged through swap instruments, with duration aligned with that of fleet rental contracts. The hedge portion of $24.7 billion carries an average rate of 12.6% per year, plus the funding spread. Only 8.3 billion or 25% of net debt is exposed to interest rate fluctuations. This strategy demonstrates the company's prudent management and helps mitigate interest rate volatility while preserving the profitability of fleet rental contracts. On page 20, we present the improvement in all leverage ratios year over year. The net to fleet value ratio declined from 60 to 56% in the third quarter of 2026, while the net debt to EBITDA ratio ended at 2.12 times and the financial expense coverage ratio increased to 3.33 times. Finally, on page 21, we presented annualized ROIC for the first nine months of the year at 16.3%, with a spread of 6.4 percentage points over the after-tax cost of that. The improvement in company skip formless indicator reinforces the consistent trajectory of restoring returns if it amid elevated interest rates and depreciation. We are now available for your questions.