Operator: Good morning. Before we begin, for those who need translation, the tool is available on the platform. [Operator Instructions]. Good morning, and welcome to Localiza & Co. webinar on the results for the fourth quarter and full year 2025. Joining us today are Bruno Lasansky, 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 earnings materials are also available. The presentation is available for download on the IR website. [Operator Instructions]. We inform you that the figures in this presentation are stated in millions of reais 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 Lasansky, CEO, to begin the presentation.
Bruno Sebastian Lasansky: 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 BRL 19.6 billion, BRL 1.5 billion 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 used vehicles from 31,000 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 BRL 22.2 billion, 15.6% higher than in 2024. Throughout the year, we expanded the Seminovos 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 pace 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 2 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 Rent-a-Car, we expanded the fleet and number of branches offering digital pickups, surpassing 1.1 million fast contracts in the year. In addition, we intensified the use of artificial intelligence across the entire platform with special emphasis on Liza, 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 Meoo, we continue to enhance physical and digital journeys to provide a superior experience with more convenience and higher operational efficiency. In Localiza Meoo, the use of AI solutions enhanced the quality and performance of the sales and aftersales teams, positively impacting NPS and strengthening the customer experience. In addition, we further improved the Localiza Meoo app by introducing new features such as maintenance, scheduling tools, real-time mileage consumption monitoring and payment management. Additionally, we expanded the PitStop 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 enhanced the processes and scale of the fleet preparation centers, ensuring greater speed, control and quality while also reducing the preparation cost of vehicles for Seminovos. 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 Voll, 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 favorable 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 overview of the results.
Rodrigo Tavares Goncalves de Sousa: Thank you, Bruno, and good morning, everyone. The strong progress across the 6 priorities defined for the year, as previously highlighted by Bruno, supported the delivery of solid results. We ended 2025 with consolidated net revenue of BRL 41.8 billion, up 12.1% year-over-year. EBITDA reached BRL 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 BRL 3.4 billion for the year when annualized ROIC for the last quarter of 2025 reached 15.5% with a 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 returned to its historical value creation spread range and paves the way for further progress through 2026. These results were accompanied by a 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 sold totaled BRL 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 0.57x. -- 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 -- our 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 Seminovos to rejuvenate the rent-a-car fleet. These improvements, together with goodwill amortization from the merger, which reduces cash taxes, will continue to support cash generation and deleverage. 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'll now hand over to the Head of IR, Nora Lanari, to present the details for the last quarter of 2025.
Nora Lanari: Thank you, Rodrigo. Turning to the details of the results on Page 2, we begin with the Car Rental division in Brazil. In Q4 '25, net revenue of the Car Rental division reached BRL 2.8 billion, an increase of 8.8% compared to Q4 '24, driven by a 1.8% rise in volumes and by the increase in the average daily rates. In 2025, revenue totaled BRL 10.4 billion, an 8.1% increase over the prior year, mainly reflecting the expansion of the average daily rate supported by stable volumes. Moving to Page 3. We present another quarter of average daily rate expansion, closing the period at BRL 156.8, a 6.3% year-over-year increase. The utilization rate reached 80.3% in the quarter. This performance reflects our continued focus on productivity and the recomposition of return levels. We ended '25 with an average daily rate of BRL 150.8, up 8.4% year-over-year and a utilization rate of 79.7% -- turning to Page 4. We highlight the Fleet Rental division, which posted net revenue of BRL 2.3 billion in Q4 '25, a 5.3% increase compared to Q4 '24. The reduction in volume versus the same period of last year reflects the continued decrease in exposure to severe usage vehicles from 31,000 cars in December 2024 to fewer than 18,000 in December '25. This trend will continue in 2026 with a smaller impact on our annual volumes. We expect to end the year with fewer than 10,000 cars severe usage and the return levels within the company's target range. For the full year, we ended with BRL 9.1 billion in revenue, an 8.6% increase compared to 2024. Moving on to Page 5. We present the average daily rate of BRL 106 in the quarter, an 8.4% increase compared to the same period of the prior year. We ended the year with an average daily rate of BRL 103.3, up 9.6% compared to 2024 and with higher utilization rate. On Page 6, we present the evolution of Seminovos sales in Brazil. In Q4 '25, we reached a new record for used car sales with 77,358 vehicles sold despite the seasonally slower quarter. Net revenues in the quarter was BRL 5.8 billion, up 15.6% versus Q4 '24. For the full year, we sold 296,452 cars, totaling BRL 22.1 billion in net revenue, a 15.1% increase year-over-year in Brazil. The quarter was marked by important advances in sales force productivity, lead generation and conversion as well as the optimization of the wholesale channel, all essential levers for achieving the sale pace required to complete the fleet rejuvenation process in the Rent-a-Car. On Page 7, we present the evolution of the average mileage of cars sold. The company continues to reduce the average mileage at sale, especially in the wholesale, which has supported higher selling prices and lower maintenance and preparation costs. Moving on to Page 8, we present the car purchase and sales volume. In the quarter, 101,067 cars were purchased, of which 73,683 were from the Car Rental division and 27,384 for the Fleet Rental division. Total sales reached 77,358 cars, a historical record for the company with 50,294 coming from the Rent-a-Car and 27,064 from the Fleet Rental. As a result, net investment in the quarter totaled BRL 3.4 billion. During the year, 286,347 cars were purchased and 296,452 were sold, resulting in a reduction of 105, 000 vehicles. This reflects the optimization of the fleet with productivity gains in car rental and the reduction of severe usage vehicle portfolio in the Fleet Rental division. Continue on Page 9, we present the average purchase and sales prices. In the Car Rental division, the average purchase price was BRL 84,700 and the average selling price reached BRL 73,100 in Q4 '25. For the year, the renewal investment was BRL 11,100 per car, substantially lower than the BRL 16,500 recorded in 2024 and reflecting the gradual process -- progress on the fleet rejuvenation process. In the fleet rental, the average purchase price reached BRL 102,200 in Q4 '25, reflecting a mix with higher participation of SUVs and executive models. The average selling price was BRL 80,400, resulting in a renewal investment of BRL 21,800 in the quarter. In '25, net renewal CapEx per car was BRL 20,900, a 9.9% reduction compared to 2024. On Page 10, we show the evolution of the end of the year period, fleet. The company ended 2025 with 655,716 cars in its fleet, a slight decrease compared to 2024, mainly explained by the portfolio optimization strategy in the Fleet Rental division, reducing our exposure to severe usage vehicles. Turning to Page 11. Considering our operations in Brazil and Mexico, consolidated revenues in the quarter was BRL 11 billion, an 11.7% increase compared to the same period last year. Rental revenues grew 7.2%, totaling BRL 5.1 billion, while Seminovos revenue reached BRL 5.9 billion, up 16.1% year-over-year. In 2025, consolidated revenue totaled BRL 41.8 billion, a 12.1% increase with Seminovos advancing 15.6% and rentals growing 8.4% year-over-year. On Page 12, we present consolidated EBITDA. For the year, EBITDA was BRL 13.8 billion, a 15.4% increase year-over-year. In the quarter, consolidated EBITDA totaled BRL 3.7 billion, up 12.1% versus Q4 '24. In the Car Rental, the quarter's EBITDA margin reached 68.6%, a 3 percentage point increase versus Q4 '24, driven by rental pricing recovery, efficient cost management and productivity gains. In the period, rental revenues increased BRL 225 million, while costs and expenses increased BRL 7.4 million, reflecting higher fleet utilization, lower preparation costs and higher tax credits. In Fleet Rental, the EBITDA margin of 76.2% in Q4 '25 represents a 6.4 percentage points increase compared to the same period of 2024. In the quarter, a new useful life review appraisal report was issued for severe usage vehicle, resulting in the recognition of BRL 49 million in additional tax credits referring to the 9 months ' 25 and aligning the pace of PIS/COFINS credits with the vehicle volume. In addition to the tax credit effects, maintenance and allowance for doubtful account lines showed meaningful improvement. As a result, year-over-year, we recorded an increase of BRL 116 million in revenues and a reduction of BRL 112 million in costs and expenses. Seminovos posted a margin of 1.7%. The quarter saw higher advertising investment and early launch of the IPVA free campaign. In addition, 16 stores were opened during the quarter with costs that will be diluted as stores reach maturity. On Page 13, we show the evolution of annualized average depreciation per car. In RAC, average depreciation for the year was BRL 7,771. And in the fleet rental, it reached BRL 8,730 in the quarter, both in line with the company expectations. After the effects of the IPI reduction on new cars in Q3 '25, which affected Seminovos selling prices, we began observing greater price stability throughout Q4 '25. Turning to Page 14. Consolidated EBIT for Q4 '25 reached BRL 2.4 billion, a 17.8% increase versus the prior year. For the year, EBIT totaled BRL 7.8 billion, a significant increase compared to the BRL 5.8 billion recorded in 2024. On Page 15, we present the net income of the company. In 2025, we reported a net income of BRL 1.9 billion, affected by the green IPI totaling BRL 929 million or BRL 613 million after tax and the write-off of Locamerica tax loss carryforwards totaling BRL 937 million noncash. Adjusted for those effects, net income would total BRL 3.4 billion for the year. In the quarter, Net income totaled BRL 939 million, an increase of 12.1% compared to the same period of last year. To discuss cash flow leverage and ROIC, I would like to hand it back to Rodrigo.
Rodrigo Tavares Goncalves de Sousa: Thank you, Nora. On Page 16, we present the free cash flow. In 2025, efficient revenue and cost management supported EBITDA growth, increasing cash generation in the rental business, even with the advance of payments to automakers of approximately BRL 2.2 billion in the last quarter of 2025. Rental activities generated BRL 11.5 billion in cash, of which BRL 4.1 billion were allocated to car CapEx, BRL 633 million to reducing accounts payables to automakers and BRL 437 million to investment in other fixed assets. Thus, free cash flow before interest and other effects totaled BRL 6.3 billion, an increase of BRL 3 billion compared to 2024. On Page 17, we present the evolution of the debt. We ended the year with net debt of BRL 31.1 billion, an increase of 3% to the end of 2024, mainly explained by the advanced payment of approximately BRL 2.2 billion to automakers in the last quarter of 2025 at a rate of 115% of the CDR. Moving to Page 18, we present the company's debt profile and cash position. The company closed the quarter with BRL 11.8 billion in cash, enough to cover short-term debt and obligations with automakers. Considering the funding and repayment carryout in January 2026, the cash position would be BRL 11.1 billion. We'll continue to active our active liability management, seeking opportunities to extend duration and reduce funding costs. On Slide 19, we present solid debt ratios. We closed the year with debt ratios at comfortable level, evidenced mainly by the net debt to the fleet value indicator even with the advanced payments to automakers. Lastly, on Page 20, in 2025, the company posted an improvement in adjusted ROIC, which ended the year at 14.6%, resulting in 4.7 percentage point spread over the cost of debt post tax despite the 1.4 percentage points increase in the cost of debt itself. The annualized ROIC for the last quarter of 2025 reached 15.5% with a spread of 5.5 percentage points, returning to the historical 5 to 9 points above cost of debt. We now are available to take your questions.
Nora Lanari: We have the first question, a written one from Lucas Barbosa from Santander and then the operator will open the mic for the remainder questions. Lucas asked about Seminovos. If we could comment on what we are seeing in the dynamics of the wholesale, whether we are seeing the wholesale demand on a consistently manner or any indicative of the level of stocks in the wholesalers?
Bruno Sebastian Lasansky: Thank you, Lucas, for the question. Typically, what happens is that in December, the wholesalers reduced their inventory, right? They do that exactly not to pay for IPVA taxes in the beginning of the year. When we start January, they start to -- it's a very strong purchase exactly to get back to the normal levels of inventory here. In the first 2 months of this year, we saw a strong demand for wholesalers in general with price stability.
Operator: Our next question comes from Lucas Marquiori from BTG Pactual.
Lucas Marquiori: Two questions on my side as well. First one on the -- it's still on the Seminovos discussions, right? And when we look at the margin performance for the Seminovos in the 4Q, you had the 1.7%. And my question here is more to try to understand what were the, let's say, the campaigning costs, the opening of new stores costs, all of these kind of incentivizing campaigns that you guys had, just to try to understand what were the effective kind of a margin regardless of those kind of campaigning costs? And also if you could comment already on the 2 months performance if we're seeing kind of a margin trend upwards versus the Q4? So this is the first question on the Seminovos margin. The second one is more on the strategic topic, right? Exactly out of the results is actually on the BYD's contracts you guys were set to have announced, right, on these 10,000 cars we're supposed to be buying from the Chinese. Just rough thoughts there. What's the goal? What's the strategy? If you could comment if there's room for that to improve, if there's any kind of a reading on the early performance of that contract, if that's kind of performing well in terms of depreciation that used to be kind of a concern of ours. So just kind of a general thought on this contract.
Rodrigo Tavares Goncalves de Sousa: Thank you, Lucas. I'll take the Seminovos part, and then Bruno can comment on the BYD contract here. In the last quarter is typically starting by mid of November, you start these campaigns of IPVA, right? Because that's something that's usual, okay? That's not something that just Localiza does. It's general for the whole market. Otherwise, most of the wholesalers and retailers would postpone their purchase and not to pay those taxes. If you combine these effects that we had with more marketing expenses, we can give or take something close to 0.7% impact of the margin. So if you account for those effects, you should see in the first quarter a margin that is closer to the third quarter rather than the last quarter of the year, okay? But once again, those impacts were close to 0.7 percentage points in the margin of Seminovos. We started this -- the first 2 months and it was a solid result. Of course, that January is a very strong month. I explained that most of the wholesalers tried to buy to get their inventories to the regular level. But we've seen here a maturation of a lot of the actions that we are taking here in the past. And there are a few sales force management, some of the incentives maturation of new stores. So these first 2 months reflect the work that we have been doing in the last year, and it was a solid 2 months performance here. So to comment on the BYD, I'll pass to Bruno.
Bruno Sebastian Lasansky: Thank you, Lucas, for the question. And I think that the BYD deal actually, it's a confirmation of what management has been talking about. When you start seeing these new players coming into the market and considering the significant CapEx and OpEx level that they have in the local manufacturing facilities, then Localiza becomes a strategic partner so that they get scale to dilute their fixed cost. They get a lot of predictability in a very long value chain and also they get association with the #1 and one of the leading brands in the country. And for us, this is additional supply and also continue to have the most modern and broader portfolio for our customers in Rent-a-Car, in subscription, in fleet and so on. So this is a pretty significant milestone for us. Of course, this is -- we announced 10,000 cars for a fleet of over 650,000 cars. So it's a first step, but an important one. And also, I'd like to comment that it's more geared towards hybrid vehicles. Actually, if you see what happened last year, hybrid vehicles grew 77% year-over-year, whereas electric vehicles grew 33%, which shows that for every electric vehicles sold last year, 2.5 hybrid vehicles were sold in the market, and I'm speaking about brand-new cars. So it's a positive milestone for us, additional supply for Localiza, better products for our customers. And before engaging into this agreement, we have been testing the cars to see customer acceptance, spare parts behavior and also how residuals were behaving. Of course, we don't have large volumes yet, but we see that those models that are scaled behave within our expectations so far. So that's what I can share at the moment.
Operator: Our next question comes from Filipe Nielsen with Citi.
Filipe Ferreira Nielsen: Congrats on the results. So my 2 questions here, I think the first color you gave on Seminovos was very helpful. Just trying to reconcile that with the depreciation trends. How do you see this conversating with how you're expecting depreciation going forward this year? Do you still see it stable? Or if Seminovos trends continue evolving in this direction, should we expect potential drops going forward this year? And my second question relates to ROC spread. The annualized number now back to historical levels if -- and your comments regarding the need to pass through prices a little bit lower. So just wanted to understand if we're probably getting closer to Localiza that resumes growth expectations? Or should we still see the company more stable in size and still seeking even higher ROIC spread before we get to this new growth phase?
Rodrigo Tavares Goncalves de Sousa: Thank you, Filipe. First of all, the depreciation, the trend should continue the same as we are seeing right now. We still have to see solid results from Seminovos or upward trend in Seminovos margin before we have any discussion about changing the level of depreciation. So the trend, at least in the short and the medium term, should be the same as the one that we are seeing at this moment, okay? In the terms of ROIC spread, you're right, we are closer here to our targets. And so we don't need to pass-through as much pricing as we had in the past. But this year is still the year that we deliver the ROIC spread target of the corporation. So ROIC spread continues to be our main goal here. And -- but at the same time, we start to look for some opportunities for a new cycle of growth that probably will happen in 2027. So 2026 is still a year that we focus on optimizing our portfolio in our efficiency in passing through some pricing, not as much as we did in the past, so we can have our profitability levels close to what it was pre-pandemic.
Operator: Our next question comes from Andre Ferreira with Bradesco BBI.
Andre Ferreira: I have 2. So first, when we look at the first 2 months of used car sales growing 15% since we're looking at year-over-year, correct me if I'm wrong, but last year, you also had the IPVA discounts. And last year, Carnival was in March and this year is in February, which should play against, right? So are you optimistic for year-over-year growth in sales in March and could total quarter sales then exceed 80,000 units? And my second question is regarding maintenance and preparation costs. It's been a good surprise. In the fourth quarter, we see that down 2% year-over-year in the previous quarter, even more, but you also had more Seminovo sales in the fourth quarter, so more preparation. Any -- is there any color you can give regarding how much, if so, or at least a direction this maintenance line can go down in 2026? That's it from my side.
Bruno Sebastian Lasansky: Thank you, Andre, for the question. I'll answer -- I'll take the first part, and then I'll hand it over to Rodrigo. As for this year, Rodrigo mentioned, and I agree fully that we started to see the fruition of the initiatives that we've been sharing with you and implementing. In particular, we see an increase -- a continued increase of the productivity per sales team member -- and that is a positive thing because we can potentially get more cars per FTE. That's also tied not only to training and development, but also incentives. And finally, we start seeing that the stores that we opened in the past cycle start maturing as well. We're not at the point where we're going to share our expectations for March, but it's -- you're right in that February includes the Carnival, which usually tends to be a slower week of sales. So we are excited about these 2 months, and we will continue to work so that we resume the 15-month cycle for Rent-a-Car by growing Seminovos. Rodrigo?
Rodrigo Tavares Goncalves de Sousa: Yes. Andre, regarding preparation and maintenance costs, like the trend is positive. In preparation, of course, that you may have some variation depending on the quantity of the cars that we prepare, right? And since we're selling more cars in Seminovos, it is expected that we are preparing more cars and increase the turnover of the whole fleet of Localiza. Having said that, what we are seeing right now is the cost per car prepared dropping. So the efficiency is coming as part of the scale and part because we are rejuvenating the fleet as well. And the same can be said for maintenance. So for both costs in maintenance and preparation, once again, when you look at per car rented in maintenance or per car prepared in terms of preparation, the trends are positive here.
Nora Lanari: Just to build on the fleet rental side, Andre, also there, as we reduce the exposure to severe usage car, we also expect a positive trend here, which in both cases, takes off the pressure from the pricing, as mentioned before.
Rodrigo Tavares Goncalves de Sousa: Thank you, Nora, for complementing that.
Operator: Our next question comes from Guilherme Mendes with JPMorgan.
Guilherme Mendes: Yes. Two questions as well. The first one is regarding the automakers market. We continue to see increasing news about new OEMs coming to Brazil, especially Chinese ones. and a lot of discussions if this could continue to pressure vehicle prices. So I was just wondering how much of that you already incorporate on your depreciation rate? How much of that do you still see as a risk for vehicle prices going forward? And the second question is on the competitive environment for the Rent-a-Car and fleet management business. If you can share some details of how competition has been behaving in these 2 segments.
Rodrigo Tavares Goncalves de Sousa: Thank you, Guilherme. You're right. There is a lot of new entrants in the automaker segments, and it's a positive in the midterm at least because the more suppliers we have, the more oversupply we have, the more leverage we have in terms of the negotiation here. Having said that, our assumptions for depreciation are not expecting any kind of increase in residual values are not expecting any kind of inflation Actually, we are already embedding in the way that we price our vehicles a deflation of price. So we are somewhat taking into consideration this new market dynamic. So the depreciation and our pricing already reflects that dynamic that you described, okay? In terms of the competitive environment for both Rent-a-Car and fleet rental, in Rent-a-Car, we see a benign environment with players being disciplined about prices in general. In fleet rental, it's a little bit -- depending on the player, you can see some irrational pricing. But in general, the competitive environment has been positive.
Operator: Our next question comes from Daniel Gasparete with Itau BBA.
Daniel Gasparete: I would like to follow up on 2 questions that were already made regarding Seminovos and also appreciation, if I may. The first one is still on the Seminovos part. I mean, I apologize for exploring more about that because I think that is one of the most important information about the release. This January and February performance was very strong, even though even more so considering that, again, there was Carnival and you still have Selic of 15%. So I would like to explore more about your views about how do you think that will unfold throughout the year. Bruno commented on the beginning of the call that he's on track to delivering the amount of sales enough to reduce the fleet to 15 months, correct if I'm wrong. And you already mentioned in the last call that -- that should be around 350,000 cars. So I would like to confirm that if you guys are positive on that. I mean, if we're on track to deliver this 350,000 for the year, if it makes sense, if there's upside to that considering that we have lower selic and everything that you already did in terms of increasing productivity. So that will be the first question. I apologize if it's too long to understand more about how guys you are -- how you guys are positive about Seminovos. And secondly, if I may, on depreciation, I mean, Rodrigo was very clear right now regarding that he doesn't see room for a decrease in depreciation right now. But I'd like to understand more what you need to see? I mean you mentioned in the last call that you need to see margins remain at the high level for a couple of quarters. So I'd like to confirm that if we should see, for example, first quarter is rebound, so we're going to see first quarter and then second quarter, if you're going to wait until elections pass, so we know what's going to happen in the macro environment. What exactly do you need in terms of macro information or dynamics so you can feel comfortable about saying that, well, we have reached the peak. Perhaps we can think about lower depreciation rates looking forward since Seminovos is doing well. We are selling more cars, so on and so forth. And I apologize for stressing those questions again.
Rodrigo Tavares Goncalves de Sousa: All right. Thank you, Daniel. Let me start with the second one, and then we can come back to the first one. In terms of depreciation, once again, as we were describing, we are still seeing new entrants. We're still seeing, as you say, high interest rates. So we want to be somewhat conservative here before we start reducing the pace of the depreciation. The Seminovos margin is the lead indicator, right? When we start to see robust Seminovos margin that is consistent quarter-over-quarter over-quarter, we can start thinking if you need to adjust our depreciation and maybe reduce. At the same time, we're always monitoring other variables such as the price of the market, as we said, the new entrants, models that are coming in and coming out. So there are a lot of variables here that we look. But the main one, the lead indicator is a consistency and the level of Seminovos margin that we have to see across a few quarters here before thinking about changing the levels of the depreciation. So that is one. Regarding the Seminovos and then Bruno can complement, I just want to clarify that the 350,000 is the pace that we need to get to the car the 15 months. Not necessarily, you're going to get to the 15 months by the end of this year. So when we start to sell at that pace, then it takes 15 months for you to get to the car to the 15 months. But so we are very close by the performance of these 2 first months to get to the pace that we need to get the cars to the 15 months. Then after we do that, it's a matter of time to rejuvenate the fleet itself.
Daniel Gasparete: Great. I'm not sure if Bruno wants to complement something on productivity, how is going to see the productivity throughout the year? If not...
Bruno Sebastian Lasansky: No. I think that Rodrigo covered well, Daniel. Thank you for the question.
Operator: Our next question comes from Rogerio Araujo with Bank of America.
Rogério Araújo: I have a couple here made on costs. The first one on tax credit, it has been somewhat higher than the tax rate of 9.25% for a couple of quarters now. Is this related to Unidas Incorporation, which is a one-off impact or maybe the concentration of technical reports or could it already be a strategic plan looking ahead into the beginning of a tax reform that is beginning, and we think it's going to keep the depreciation benefits of the assets purchased until the end of this year? Therefore, would remain seeing a higher tax credits than the 9.25% rate in the upcoming quarters? That's the first one on costs. And the second one on the other lines that called our attention on the ITR reports, there is bad debt costs and also the line of other costs in the breakdown. Is this a new level of net debt provisions in the fourth Q that we see, we should expect this level going forward or is there any kind of provision reversion? Also on other cost line, if you could address what enters there? And if this reduction is sustainable as well?
Rodrigo Tavares Goncalves de Sousa: Rogerio, in terms of the PIS/COFINS, we are actually catching up right? Before the incorporation of we're not doing the appraisal reports. And after now, we were doing them regularly. So you have this catch-up effect that temporarily leads to a credit that is slightly above the debit, as you mentioned here. In this quarter, particularly, we had the appraisal reports of the severe usage business unit here, which led to increase physical fees credit, okay? We should see going forward a more normalized level. So this is something that we were supposed to taking those credits if you were doing this appraisal records before the incorporation. And now, as I said, we are catching up. And then you have 2 strong quarters in that sense. In the first quarter, you should see somewhat more normalized level here close to the 9.25%, which is the debit. In terms of the cost and bad debt, thank you for the question. Throughout this year and by the end of 2024, we experienced some challenges, especially on the truck vehicles and in some specific areas here. So we were much more conservative in the way that we have credit. And now when I see the vintage, I see an improvement month after month. So when I look at this vintage, it's a very, very healthy vintage. So I think this level of bad debt is sustainable. Of course, that you may have some reversion of provision here in 1 quarter or another. But when I look at the whole quality of the credit that Localiza is giving, it's a much healthier 1 and we should see a much more normalized level of bad debt going forward as well.
Nora Lanari: And Rogerio, on the other line, it is explained by the sublease of cars from Localiza to Locamerica and vice versa. After the merger, once we merge the 2 companies, the number declined, and we anticipate the number at a lower level. So the decline is sustainable, okay?
Operator: Our next question comes from Joao Frizo with Goldman Sachs.
João Francisco Frizo: I have just a quick follow-up on the used car sales, right? When we look at first 2 months data, it's a strong level. March is even stronger on a historical seasonal as-adjusted basis. So just wanted to hear from you guys your thoughts on the balance between accelerating sales, rejuvenating the fleet versus the spread between the new and used car prices. How should this evolve going forward?
Rodrigo Tavares Goncalves de Sousa: Thank you. Regarding the spread between new and used car prices, we see stability. We just had access to a couple of days ago regarding March, and the trend is positive. It's even better than what we saw. So we see this somewhat stable here going forward. At the current levels of prices at this trend, we will continue to accelerate our sales. We are happy with the prices that we're selling right now. So if you have the chance to sell additional volumes, we will do so.
Nora Lanari: Joao, just building up because I believe your question relates to the spread of buying and selling within the quarter that we report in the earnings release. We usually don't assume a specific quarter as a trend because the mix of cars we buy and sell might vary within a quarter per quarter. So we'd like to look on a moving average, usually the 12 months makes more sense. We saw specifically the higher mix of SUVs and intermediary cars impacting the purchase price of the cars, whereas in the Seminovos prices were affected by the campaign that reduces the selling price of the car with a slight increase in the spread between buying and selling in the quarter versus Q3, but not relevant on a year context, okay?
Rodrigo Tavares Goncalves de Sousa: In that sense, if I can complement, in the first quarter, usually in January, you have a greater sales of economic cars as well. As I said, wholesalers tend to increase their inventory, most of their focus in economic cars. So that can affect the mix of sales. But in general, the trend in terms of buying and selling differences is positive.
João Francisco Frizo: Okay. So if we look on a moving 12 months average, the dispatch will remain the same roughly, right? Is the best way to think about it?
Nora Lanari: I would say, in the rental car, we still have room to improve the spread as we renew the fleet, but it's going to be more a function of the fleet renewal than anything else.
Operator: Our next question comes from Jens Spiess with Morgan Stanley.
Jens Spiess: Yes, so I mean the main questions have been answered. I just wanted to delve into the EV incorporation. I know it's -- it's obviously a small amount of cars within -- well, it will be a small amount, of course, within your fleet. But I think it could maybe give us some insight into the future and how things will evolve. So just trying to understand like the broader economics of what you're assuming. So first of all, how discounts versus traditional OEMs compare? What's the depreciation that you're assuming? Is it closer to 1% per month or how can we think about it? Because at the end of the day, lower discounts, higher depreciation, potentially lower utilization, you will have to price it accordingly and prices will probably be much higher. Rental rates will be much higher than with equivalent traditional OEM. So just trying to understand what are your expectations, what you're assuming and so on?
Bruno Sebastian Lasansky: Jens, thank you very much for your question. I think that the reason why it's taken some time for piloting and testing for us before getting into this agreement that we just announced has to do with the fact that we were engaging with the OEMs in showing them these new OEMs in the country in showing them the value of the Localiza platform as I mentioned, in terms of brand awareness, in terms of scale, predictability selling to a AAA rated company. And after time piloting and testing, they actually came to appreciate the value Localiza has in the automotive industry. And the main focus is hybrid vehicles, less so on EVs, pure electric -- battery electric vehicles. We see that the electric vehicle are more for those use cases that run a lot of miles. So Uber drivers, last mile delivery and also some of the higher, higher-end luxury cars, but that's not kind of the large part of the market. We see that the EVs will have more adoption in big cities, but less so in the remainder of the country. So our purchase program is more catered to hybrid vehicles, which behave more similar to ice vehicles. We've been vocal over the last few years that we saw the future moving first into hybrid and longer term, potentially full electric out of the fact that the charging infrastructure is very small in Brazil, which is a continental large country and so on. And as for the unit economics, one would reckon that we would enter into such agreement once we get the terms that the company needs for an attractive ROIC spread scenario. So we piloted this vehicle on operational and residual value point of view, and we got to the terms and conditions that we deem necessary to get attractive returns for these new supply that is coming into the market.
Operator: Our next question comes from Alberto Valerio with UBS.
Alberto Valerio: I would like to back on that spreads subject about the same car when you buy and sell this car. I remember in 2024, you were talking about a recurring level of minus 2%, minus 4%, it was positive in the past, plus 5 plus 7. And current depreciation, I think, is tagging the minus 4 for 50 months. But if you -- we have more than 15 months would be a little bit higher than minus 4. How is your view going forward if this might change or not?
Rodrigo Tavares Goncalves de Sousa: Alberto, thank you for the question. I think your assumptions are in line like when we still need to rejuvenate the fleet in order to get to the spreads for our assumptions here in the depreciation, right? So today, we're selling a car that's 20 months old. So when you start selling a car that it's 15, 14 months old, you're going to sell a car with a much more higher proportion in retail and with a much higher price, which will reduce the spread. So once again, this is aligned with our assumptions here.
Alberto Valerio: Perfect. And if I may, Rodrigo, we have seen the beginning of this year some new models of and also this week, with coming at lower price from -- than the old models of 2025. Do you guys have any protection against this on the contract with the discounts or this might be a risk for this year?
Rodrigo Tavares Goncalves de Sousa: We do not comment particular conditions that we have with the OEMs or these types of eventual protections. But this is something that happens, right? So sometimes you change the model, sometimes you do a face lift or you change completely the car. So it's not something that is unusual here for our industry. We usually try to compensate for with a higher discount or we buy less of those cars and something like that. But this is something that is regular to our market dynamics.
Operator: Our next question comes from Pedro Bruno from XP.
Pedro Bruno: I would like to go back to the growth discussion, especially in the Rent-a-Car and not the growth itself, but to the dynamics or to the, let's say, the -- how you are looking at the potential revenue growth, let's say, for this year and even a bit further than that? We have been hearing from, let's say, the industry, let's say, relatively optimistic scenario, which I think we see in a positive way thinking of discipline, as you already mentioned, et cetera. But I would like to -- if you can give us a little bit further details of how -- on how you're seeing the revenue management between eventually pricing versus volumes? And an embedded question there that how do you see, let's say, the limit to growth? If you right now see a limit more coming from, let's say, the revenue management in the rental side itself or if you have also it limited by Seminovos as you were still, let's say, tackling the challenge of reducing average age of the fleet, et cetera? So a bit more detail on that side, please.
Nora Lanari: Pedro, thank you for the questions here. On the growth side, let me state again that the main focus of 2026 remain on the recovery of the ROIC spread. So probably the balance between price and volume growth will be taking towards a bit more pricing than volume per se, okay? We believe that by the end of the year, we should be in a good pace of ROIC spread and then we can resume a bit more of the growth of the company in 2027. The good news is that we will start paving or seeding for some of the growth during 2026, okay? But for now, is we don't need to pass through too much prices as we did. Rodrigo mentioned that in his comments. So it's going to be a mild passing through with a mild volume growth in the year. Revenues should post a decent pace of growth in the Rent-a-Car. In Fleet Rental, the focus is going to be on launching new products and more customized products, especially So we will see the growth 2026, but we are still decommissioning the severe usage, which still impacts the volume on a lower scale. And of course, in the meantime, we are continuing to be scaling up Seminovos so it won't be a bottleneck for the growth of the company in the future, okay? We've been constructive on the Seminovos, big topic of this call. We started the year with a strong pace of growth. And we do have, of course, interest rates moving down. It takes pressure not only in the pricing requirements for the Rent-a-Car, both fleet rental as well, but also accelerate or tend to help on the Seminovos side, which is very dependent on okay? So we are constructive. But this year is still a year of accomplished the mission of ROIC spread.
Bruno Sebastian Lasansky: Thank you all for joining us today, and our IR team remains available for any additional clarifications. Thank you very much.
