Operator: 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 & Co's webinar to discuss the results for the second 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 you that you signal 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 BRL million 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 outlooks, projections, and Localiza's operational and financial targets, reflects 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.

Rodrigo Tavares: Good morning, and welcome to Localiza webinar. The strong performance achieved at the beginning of the year was sustained in the second quarter of 2026 with accelerating year-over-year revenue growth across all business lines, supported by consistent execution, disciplined capital allocation, and continued progress in the restoration of returns, reinforcing value creation of the company's shareholders. In Car Rental, we delivered double-digit net revenue growth, with revenue increasing 11.2% compared to the second quarter of 2025, reflecting the combination of volume growth and price expansion. In Fleet Rental, we returned to year-over-year growth in rental days, supported by positive origination in light fleet and car subscription contracts, along with a lower impact from the portfolio reduction of severe use contracts, a process that has been underway since 2024. In Seminovos, we sold 92,000 vehicles during the quarter, compared to 68,000 vehicles sold in 2025, driving a 38.9% increase in net revenue. As we maintain the pace required to optimize the Car Rental fleet life cycle, we directed investments toward expanding retail capacity through the growth of sales team, the strengthening of marketing activities. In addition, during the quarter, we completed the rebranding of our Seminovos stores. Although these investments impacted the quarter's margin, they are expected to support the increase of retail share in the sales mix towards the second half of 2026. The strong progress in fleet rejuvenation process contributed to a 24.1% reduction in the average age of the Car Rental operating fleet, which ended at the period at 28.2 months compared to 10.8 months in the same quarter of last year. Throughout the second quarter of 2026, we observed new and used price vehicles performing in line with our expectation. As highlighted in our first quarter 2026 earnings release, we continued to adjust fleet depreciation rates to reflect the dynamics of the automotive industry, characterized by the entry of new competitors and the launch of increasing technological and competitive vehicle models. In anticipation of this trend, the company has been adjusting rental prices and fleet depreciation rates to reflect residual value estimates aligned with the automotive industry outlook. In the second quarter of 2026, we delivered a net revenue of BRL 12.3 billion, representing a 24.5% year-over-year increase. EBIT total BRL 2.3 billion, up 15.1% compared to the same quarter of last year. Net income reached BRL 1 billion in the quarter, an increase of 30.6% year-over-year. The net income of BRL 1 billion and a ROIC spread of 6.1 percentage points within the company's target range, even under more conservative depreciation assumptions, reinforce the effectiveness and the adopted strategy of the continued progress of the restoration of returns. For the second half of 2026, we will pursue net revenue growth in both Rent a Car and Fleet Rental while sustaining the pace of Seminovos sales through an expansion of retail sales mix. We will remain relentless in our pursuit of operational efficiency across all business lines and expanding the use of technology to enhance our customers' experience. Encouraged by the progress achieved and the results delivered in the first half of 2026, we remain attentive to the macroeconomic environment and the dynamics of the automotive industry. We will continue to pursue disciplined capital allocation strategy focused on sustainable growth and long-term value creation. We would like to thank our customers, shareholders, partners, and employees for their continued trust and confidence. To present the details of the results, I'll now turn the call over to the Head of Investor Relations, Nora.

Nora Lanari: Thank you, Rodrigo, and good morning, everyone. On page three, we begin with Car Rental division in Brazil. In the second quarter 2026, net revenue in the Car Rental division reached BRL 2.8 billion, representing an 11.2% increase compared to the second quarter 2025. This performance was driven by accelerating rental days growth, which increased 6.8% year-over-year, and by higher average daily rates, which continue to reflect the repricing processes. On page four, we present a 3.7% increase in the average daily rate for the quarter, along with a 3.3 percentage points increase in the utilization rate, which reached 81.9% in the second quarter 2026, with a healthy combination of volume, pricing, and productivity. Moving on to page five, we present the performance of the Fleet Rental division. In the second quarter 2026, Fleet Rental reported net revenue of BRL 2.4 billion, representing a 5.8% increase compared to the same period of 2025. Following the slight decline in volumes throughout 2025, driven by the reduction in exposure to severe usage contracts, the Fleet Rental division returned to year-over-year growth in rental days, supported by the expansion of its targeted segments, including Light Fleet Rental and car subscription solutions, which delivered approximately 13% revenue growth in the second quarter 2026 compared to the second quarter 2025. On page six, we present the average daily rate, which increased 5.6% year-over-year, as well as the utilization rate of this division, which reached 96.7% in the quarter, evidencing greater operational efficiency and productivity. Turning to page seven, we bring the evolution of Seminovos' revenue. In the second quarter 2026, we sold 89,043 vehicles in Brazil, sustaining a sales pace above 90,000 vehicle per quarter, which will allow the reduction of the Car Rental division cycles to approximately 15 months over the coming quarters. The average selling price also increased, reflecting a higher share of SUV in the sales mix, contributing to the net sales revenue in Brazil of BRL 7.1 billion, representing a strong increase of 39% compared to the same period of the previous year. The strong performance of Localiza Seminovos reflects the maturation of initiatives focused on commercial excellence, network expansion, and productivity gains. As the pace of sales required to optimize the fleet cycle is maintained, the company's focus shifts towards increasing the share of retail sales within the sales mix. Moving on to page eight, we present the car purchase and sales balances. The strong pace of vehicle sales was accompanied by a higher level of purchases. During the quarter, 92,043 vehicles were sold and 120,626 vehicles were purchased, contributing to the progress of the Car Rental fleet rejuvenation process, reflected in the reduction of the average age of the fleet sold to 19.4 months, compared to 22.2 months in the second quarter 2025. The average age of the operating fleet also showed significant improvement, ending the period at 8.2 months compared to 10.8 months in the second quarter 2025, a year-over-year reduction of 24.1% and contributing to efficiency gains as well as lower maintenance and preparation costs per vehicle. We invested BRL 11.6 billion in vehicle purchases and generated BRL 7.1 billion from vehicle sales, resulting in a net investment of BRL 4.5 billion in the Brazilian operations. On page nine, we present the evolution of the average purchase and sales prices of vehicles. In the Rent a Car division, the last 12 months' average purchase price was BRL 86.1 thousand, while the last 12 months' average selling price reached BRL 74,000, mainly reflecting fleet rejuvenation and the lower average age of cars sold. As a result, fleet renewal CapEx totaled BRL 12.1 thousand per car. In the Fleet Rental, the last 12 months' average purchase price reached BRL 99.7 thousand per car, while the last 12 months' average selling price was BRL 79.8 thousand, resulting in a replacement investment of BRL 19.9 thousand per car. On page 10, we present the end of period fleet. The company ended the quarter with a fleet of 670,446 vehicles, representing a 6.3% increase compared to the second quarter 2025 in anticipation of the July holiday season demand. On page 11, we present the consolidated net revenue for the quarter, which continues to grow at a double-digit pace. On a year-over-year basis, net revenue increased by 24.5%, totaling BRL 12.3 billion. Rental revenues grew 8.8%, totaling BRL 5.2 billion, while Seminovos revenue reached BRL 7.2 billion, up 38.9% compared to the same period of the previous year. On page 12, we present the strong EBITDA growth, which reached BRL 3.8 billion in the second quarter 2026, representing a 14.1% increase compared to the same period last year. We deliver year-over-year margin expansion across Car Rental, Fleet Rental, and Seminovos, reflecting the combination of higher rental rates and volumes, a younger fleet, and lower exposure to severe usage contracts, as well as the continued discipline in cost management and productivity initiatives. In Car Rental, EBITDA margin reached 67.6%, an increase of 1.1 percentage point compared to second quarter 2025, reflecting the combined effects of the higher average daily rates and rental days, lower maintenance and vehicle preparation costs per car, partially offset by a higher volume of vehicles prepared for sales, as well as higher level of tax credits. In Fleet Rental, EBITDA margin reached 75.6%, representing a 4.6 percentage points increase compared to second quarter 2025, driven by higher average daily rates, greater efficiency in vehicle preparation costs, higher fleet utilization rates, and a greater level of tax credits. In addition to lower allowance for doubtful accounts, reflecting the improvement in the quality of the customer portfolio compared to second quarter 2025. Seminovos reported an EBITDA margin of 1.9% in Brazil, slightly above the level reported in the same period of last year, reflecting stable gross margin and greater dilution of the SG&A relative to revenues. Compared to first quarter 2026, the 1.2 percentage point decline in Seminovos margin was driven by a higher mix of SUV in the second quarter sales, which carries a lower gross margin, combined with increased expenses related to store opening, rebranding, personnel, and marketing initiatives. We are further strengthening Seminovos commercial infrastructure, and while these investments pressure margins in the short term, they enhance our ability to capture value in retail sales and sustain a healthy inventory turnover pace. On page 13, we present the evolution of the annualized average depreciation per car. Throughout the quarter, new and used vehicles prices evolved in line with the company's expectations. We will continue to closely monitor the dynamics of the Brazilian automotive industry, including the entry of new automakers and new models launches, adjusting the depreciation, pricing, and capital allocation whenever necessary. In the Car Rental, annualized depreciation per vehicle reached BRL 8,243 in the second quarter 2026, maintaining the sequential increase observed over the past quarters. Considering the current dynamics of the Brazilian automotive industry and their impact on vehicles' residual value expectations, we expect this trend to continue. In Fleet Rental, annualized depreciation per vehicle reached BRL 9,198 in the second quarter. The more pronounced sequential increase in the RAC depreciation reflects its shorter fleet aging cycle relative to Fleet Rental, 15 months versus around 33 months. As the difference between acquisition cost and the estimated net selling price is recognized over the depreciable life of the asset, any downward revision in residual values is spread over a shorter period in RAC, resulting in a greater impact on the depreciation expense. Moving to page 14, we present consolidated EBIT of BRL 2.3 billion in the second quarter, representing a 15.1% increase compared to the second quarter 2025, supported by margin expansion both in Car Rental and Fleet Rental. In the Car Rental, EBIT margin reached 44.5%, an increase of 2.5 percentage points, while Fleet Rental reported an EBIT margin of 49.2% in the quarter, up 3.4 percentage points year-over-year. Turning to page 15. As a result of the acceleration in year-over-year revenue growth and continued discipline in efficient cost management and productivity, even in a context of higher depreciation, we once again surpassed the BRL 1 billion net income mark, delivering a strong 30.6% increase compared to the second quarter 2025. To present cash flow, debt ratios, and ROIC spread, I will turn the floor back to Rodrigo.

Rodrigo Tavares: Thank you, Nora. On page 16, we present free cash flow before interest. The first half of 2026, cash generation from rental activities totals BRL 5.2 billion and was consumed by net car CapEx of BRL 5.2 billion as well as investments in other fixed assets and intangibles totaling BRL 161 million. These outflows were partially offset by BRL 2 billion increase in accounts payables to vehicle suppliers. As a result, free cash flow before interest and other items total BRL 1.8 billion. On page 17, we present the movement of net debt, which ended the quarter at BRL 32.4 billion, representing an increase of 4.2% compared at the year-end 2025. In July, we completed the largest exchange offer transaction ever executed in the Brazilian market, refinancing approximately BRL 7 billion in debt. The transaction also represented the largest debt issuance by aggregate volume in the company's history and reinforces the consistent liability management strategy adopted by the company over the past several years. In addition to proactively addressing the future debt maturities, the transaction contributed to extending the average debt maturity profile and reducing the average cost of debt, further strengthening Localiza's financial profile, as shown on page 18. We ended the quarter with BRL 11.4 billion in cash, an amount sufficient to cover debt maturities over this year and the following two years. On page 19, we present the debt ratios at comfortable levels, showing improvement compared to the same period of last year. The net-to-fleet value ratio declined from 59%-55% year-over-year, while the net debt to EBITDA ratio ended the period at 2.16 times. On page 20, we present the annualized ROIC for the first half of the year, which reached 16.1% with a spread of 6.1 percentage points over the after-tax cost of debt. In line with the company's expectations and evidencing the solid trajectory of spread recovery, even in a higher depreciation and interest rates environment. We are now available to take your questions.

Operator: Thank you. As a reminder, for the Q&A session, please sign if you are interested in participating via the Q&A icon at the bottom of your screen, indicating your name, institution, and language. When called upon, a prompt to activate your microphone will appear on your screen. To submit written questions, use the Q&A icon at the bottom of your screen and enter your name and institution before your question. Our first live question comes from Lucas Marquiori. We will open the audio so you can ask your question. Please, Lucas, go ahead.

Lucas Marquiori: Thank you very much. Hey, guys. Morning. Two questions here. First one on depreciation and getting to that topic. Just wanted to understand and clarify some things. When we look at nominal depreciation, it was up quarter-over-quarter. When we look at depreciation as a percentage of the asset, it actually decreased quarter-over-quarter. I know, according to the speech, there's still some kind of a conservatism embedded in the forward-looking statements on the macro and automotive market dynamics. Just wanted to understand what's actually the plan and the trend there. I know you guys are not guiding for an inflection there, but at least looking at in percentage terms, it was actually an inflection there. Just wanted to clarify that trend. Number two, on the Seminovos EBITDA margin. Just also clarifying at least, what's the implicit typical seasonal trending mix that we have in Q3, Q4? Is it as concentrated in SUVs as it was in, for instance, Q2? For how long should we continue to expect these investments in expansion capacity at least to last throughout the year? Just so we can understand at least the trend for Seminovos margins in the second half. Those two questions, guys. Thank you very much.

Rodrigo Tavares: Thank you very much, Lucas. First, the depreciation, indeed, it increased in nominal terms. When you look at the percentage, there was a large volume of cars that had been purchased at the end of the period for us to prepare for the high season of July. For that fact, when they are activating the cars, you don't depreciate them in that period. In percentage terms, you may have some short-term effects because of that activation period. When we look at the trend of the depreciation, the trend is continuing as it was. We expect depreciation to continue mildly trending up, especially in Rent a Car. This is what we expect. It's important to highlight that despite the fact that we are increasing depreciation, we're able to do that at the same time that we're increasing profit and return, which shows that we are embedding all these assumptions correctly in our prices. Depreciation is forward-looking. When we estimated the residual values, we have to anticipate what's going to be one or two years from now. We have to factor things as the new market dynamics as well. Once again, these are all embedded in our pricing assumptions. That's why despite the fact that we are increasing depreciation, you see returns up and you also see profits at record levels. In terms of Seminovos margin, let me take a step back. The first mission was to reach the pace to renew the fleet and to get to the optimal life cycle. We did that in the first quarter. We reached 90,000-95,000 cars per quarter. The second mission was to get to the same level in SUVs. We were able to get to the optimal life cycle in the entry-level vehicles. Now we have to do that for the other categories. In the second quarter, we were able to prove that we are indeed capable of selling SUVs and optimize the life cycles of SUVs as well. This will probably continue in the following quarters. When we look what is the next step for Seminovos, we have to increase our sales mix of retail. To do that, we need to invest in advance, basically in people, opening stores, in marketing, and this quarter particularly, we had a rebranding of our stores as well. In the next quarters, these investments will likely continue as the mix of SUVs as well.

Lucas Marquiori: Perfect. Thank you, Rodrigo.

Rodrigo Tavares: My pleasure, Lucas.

Operator: The next question comes from Andre Ferreira. We will open your audio so you can ask your question. Please, Andre, go ahead.

Andre Ferreira: Good morning. Thanks for taking my question. I have two topics here. First, I wanted to get your expectations for used car sales per quarter going forward. What are the key drivers of demand and what do you see as the biggest risk to volumes? Also, quick comments on how July fared in Seminovos volumes, if you could. The second point was, net car purchase was high, higher than the past many quarters. It would suggest optimism with demand. Is that a good assumption or was there an opportunistic window to buy cars? Also, where are those cars being allocated the most? Thank you.

Rodrigo Tavares: Thank you very much, Andre. First, we expected the sales level of Seminovos to remain at this current level, right? Around 90,000, which is the optimal level for us to reach the life cycle that we expect. In July, it followed the same trend. The same type of pace that we saw in the first quarter and the second quarter, we expecting to continue in the third quarter as well here. In terms of the risks, we saw a slight reduction in approval of financing, but that was offset by our commercial efficiency. We saw that banks had a lower appetite for issuing new finance, but we did not suffer that effect because we were able to more than compensate that with internal efficiencies here. Looking forward, I think that it will depend more on the macro than anything else. Of course, we keep improving our operations, and we are confident that we can reach the current sales level in the third quarter as well. Okay. In terms of net car purchase, indeed, we purchased almost 125,000 cars in the second quarter, which is a higher level than typically we do. This was a combination of a higher demand. As you could see, we resumed growth in Rent a Car. In this quarter, we grew revenues by 11.2% year-over-year. This trend in July was a very strong high season as well. On top of that, of course, that we have some particular procurement opportunities that we thought it would make sense for us to take advantage in the end of the quarter.

Nora Lanari: Just to add to that, Andre, after July, of course, we will adjust a bit of fleet. We are still living an environment of higher interest rate and higher depreciation, we therefore will prioritize price over volumes to maintain the consistent trajectory of ROIC spread restoration.

Andre Ferreira: Perfect. Thank you.

Operator: Our next question comes from Guilherme Mendes. We will open the audio so you can ask your question. Please, Guilherme, go ahead.

Guilherme Mendes: Yes. Thank you so much. Good morning, Rodrigo and Nora. Thanks for taking my questions. I have a follow-up on depreciation, if I may. A few quarters ago, we were discussing that if Seminovos margins remain at healthy levels, we could see an inflection on depreciation. We have been seeing Seminovos at a pretty strong performance in terms of sales and also in terms of margins. Still you are still discussing increasing depreciation going forward, and arguably at a faster pace. My two-part question is, first is what has changed on what we are seeing today versus your expectations a year ago? Looking forward on these comments about depreciation continuing to increase. What other variables are you monitoring to give you some comfort on the level of depreciation that you are including on the contracts going forward? Thank you so much.

Rodrigo Tavares: Look, thank you for your question. I would not say that changed our expectations. In the last quarter, despite the questions, we never pointed that there will be an inflection in depreciation. It was exactly the opposite. We signaling that the depreciation trend was up and that what happens in this quarter here as well. We are in the phase here of a new automotive market dynamics. As I said, this is forward-looking. We have to anticipate that by taking into consideration what may happen, and we are going to embed those assumptions in the residual prices. When you are thinking about allocating your capital, you have to be even more conservative, and that's what we have been proving here because our pricing is able to cope with this higher depreciation environment and increase the return. When we look, there are forces that may help car prices as well. For example, the tax for import cars went up from 28% to 35%. That may create some upward pressure in prices. On top of that, the kits, in terms of the imports of the kits, will cease the quotas and the taxes on the end of this year. This all can contribute to improving prices. Having said that, we're talking about a lot of new entrants, a lot of new models, and companies there are competing to gain market share that can lead to greater competitiveness pressures. Having said that, it is important to remind that this is a positive in the midterm because as you have more supply locally, as you have more competition locally, that can lead to better deals, to better opportunities for the largest buyer as Localiza. Looking forward, especially in the short term here, the depreciation trend will continue as it was from the first quarter to the second quarter.

Guilherme Mendes: Very clear. Thanks, Rodrigo. If I may also follow up on Andre's questions on the fleet expansion. Also, a few quarters ago, we were discussing about 2027 potentially being a year in which Localiza would resume the pace of growth. Given the higher rates and the increase in depreciation, is this something that we should still expect or not likely at this point? Thank you again.

Rodrigo Tavares: Thank you. I think we were able to prove in the second quarter that despite the fact that depreciation is up, that pricing is up, growth went up as well. Okay. Having said that, our goal is to keep increasing our ROIC spread. Our main target here is to get the ROIC spreads to the upper level of our band here. Okay. The demand has been proven very resilient and robust. The best proof of that was the second quarter and the very strong July that we had here. Once again, because of the high depreciation and high interest expenses, we were going to need to keep increasing tariffs. That may have some effect on the demand, but so far we've seen the demand quite resilient. In 2027, if that persists, we can continue to grow. Once again, our focus is return the profitability as it was.

Guilherme Mendes: Very clear. Thank you, Rodrigo.

Operator: The next question comes from Filipe Nielsen. We will open the audio so you can ask your question. Please, Filipe, go ahead.

Filipe Nielsen: Hey, hello everyone. Thanks for taking my question. I also have two here. The first one is related to demand and pricing. You expanded the fleet significantly in the quarter. We were discussing this in previous questions, I wanted to understand a little bit more about how you're expecting pricing elasticity and what are the factors that drive you to be confident that you will keep increasing prices even with this level of purchases and increase in the fleet? This is my first one. The second one, I just wanted to follow up on the depreciation. We discussed a lot about the car market conditions and et cetera, and your conservatism. Just wanted to understand how you factor in the reduction in the fleet age and in the sale age. When should we expect this to positively impact the depreciation trend, and how you're balancing this factor with all other ones. Thank you.

Rodrigo Tavares: Okay. Thank you, Filipe. First, there is a seasonality here. Third quarter in terms of demand is usually stronger than second quarter. That's why usually you rent more. You had the elections as well. That creates an additional demand for at least in the months of September and October, and we expect that. You have to realize that the elasticity, you have to look at that, not just at the nominal elasticity, but the cross elasticity. Our main competitor is ownership. When you see, for example, fleet rental activity, we see a very strong generation of new contracts, commercial activities. We are living in a very high interest rate environment, and that actually leads most companies to outsource their fleet. You're experiencing a demand despite the fact that we're increasing prices because the alternative, which is financing at a very high cost your own fleet, is increasing even faster than renting a car with Localiza. Okay. That's why we saw in the second quarter there's a strong demand. We saw a strong demand in July, and we think that this trend, at least in the short midterm, is likely to continue. Okay. In terms of the reduction of the fleet age, we are already reaping the benefits. You mentioned about the residual value, the benefits are far beyond that. If you look at our variable costs, this is already happening. Our variable costs are much lower than it was last year. Actually, in some senses, we are back to the 2019 levels in nominal terms. This shows you how is the impact of renewing the fleet. We are feeling the effects first on the Rent a Car rather than in the Seminovos because we're decommissioning the cars with the high mileage. What happens is that you renew the fleet much more in kilometers in Rent a Car than in age in Seminovos. We pick up the pace in Seminovos in the first quarter. It still takes some time for us to get to the optimal level in Seminovos. We expect that to happen in the first half of next year, that we're probably going to reach the equilibrium in the life cycle here. Another benefit that we're already seeing is the utilization. Because the cars are newer, you don't spend much time fixing the cars, and that's why you have more fleet available in Rent a Car as well. I would not like to narrow the benefit to just the residual value, despite the fact that depreciation is the topic, but it's a combination of operational utilization and the depreciation itself.

Filipe Nielsen: This is very clear. Thank you.

Rodrigo Tavares: My pleasure, Filipe.

Operator: Our next question comes from Daniel Gasparete. We will open the audio so you can ask your question. Please, Daniel, go ahead.

Daniel Gasparete: Good morning. Thank you very much for the opportunity. I apologize, but I would like to stress some of the questions that were already answered here. The first of all would be regarding the growth. Just to better understand, if you are seeing the position that you guys are having pretty much as a response to the demand that is coming, or if you guys are actively seeing growth opportunities and placing cars there. For example, these 28,000 cars that you net added in this quarter, do you see it as we are seeing additional growth in the future and we would like to pursue it, or are we are seeing seasonal demand here and we are addressing that? Just to better understand if you are actively or passively responding to that. That would be the question number one. Also, if you could touch on which segments are you seeing most of the demand. Is it leisure, mini lease, replacement? Just to better understand where it comes from. Secondly, I would like just to stress a little bit more about the Seminovos' margin. You mentioned, if I understood correctly, please apologize me if I'm wrong, that we should continue seeing this level of mix in the next few quarters and perhaps at the same level of efforts for improving the retail sales, in the short term. Just to better understand if the underlying conclusion on that would be that perhaps we are likely to see Seminovos likely to be on this 2% level before rebounding back to 3%. Again, I apologize for stressing those questions again.

Nora Lanari: Thank you, Daniel. I'll start here. Rodrigo may complement if necessary. On the growth front, I would say the following. We had a very strong sales pace. We maintained that in the second quarter. Considering that we will maintain this level of pace, we'll have to accelerate purchase. Also, we were preparing the company for July peak season. We have holidays, school vacation. We have some selective opportunistic purchases and discounts. It resulted in a strong addition of 28,000 cars. Part of this will adjust in the third quarter after the peak season of July. Rodrigo mentioned in the previous question that we also have the elections coming in. We are seeing a good level of demand, a resilient demand, both in daily rentals to individual. Corporate segments grew, app driver segments grew on a quarter-over-quarter basis. Replacement segment also grew. Okay? In spite of that, as Rodrigo said, in an environment of higher interest rates and higher depreciation rates, the focus is going to be less on the volumes and more on the pricing to maintain the trajectory of recovery of ROIC spread. On the Seminovos side, I think margin was impacted twofold here. The first one was the mix of SUVs. SUVs generate more BRL per car when we sell. We usually operate them with slightly lower gross margins. You saw on a quarter-over-quarter reduction of around half percentage point in terms of gross margin there. Also the fact that we invested more on expanding capacity, six new stores plus personnel, plus marketing. Okay? We don't anticipate a big reduction on those expenses. On the contrary, the goal of those expenses is to increase the mix of retail sales that will gradually increase over the course of the next quarter towards next year. We are not, as of now, anticipating a major difference in the trend of the EBITDA margin.

Daniel Gasparete: Okay. That's very clear. Thank you very much, Nora.

Rodrigo Tavares: Thank you.

Operator: Our next question comes from Rogerio Araujo. We will open the audio so you can ask your question. Please, Rogerio, go ahead.

Rogerio Araujo: Yeah. Hey, good morning, Rodrigo, Nora. Thanks for the opportunity. I have a couple here. First one on a higher PIS/Cofins credit this quarter. We understand that now with Brazil's tax reform, there is predictability of usage of those credits above the 9.25% rate. Does it make sense? In this case, what's Localiza's expectations for PIS/Cofins credit in upcoming quarters? A similar level versus second few make sense, at least by year end. My second question regarding cost expansion. We noticed especially salaries and profit sharing were the highlights this quarter. Is it tied somehow to the early share delivery to management under the company's long-term retention program that took place this quarter? If not, what drove the increase besides Seminovos that you already mentioned and the run rate going forward? Thank you.

Nora Lanari: No, thank you, Rogério. Thank you for both questions. Yeah. When we think about the tax credits, PIS/Cofins related credit, we have a few variables here that I would like to mention. The first one is the number of cars in our fleet and the value of the fleet. If you look, first quarter this year, we have a BRL 54 billion fleet value. Now we have a BRL 58 billion fleet value. We bought 120,000 cars. Of course, this impacts on the credit levels. Also, the appraisal reports had a shorter useful life, so each accelerates the pace of credits that we take. If you look on a quarter-over-quarter base, the PIS/Cofins credit increased by around BRL 80 million. Okay? When we look to the cost expansion, it's mostly impacted by the anticipation of the long-term incentive plans, but those refer exclusively to payroll taxes and the anticipation of those taxes, okay? The level of around BRL 80 million as well. More or less one is offsetting the other here. As I said, it is related to the long-term incentive plan, but refer exclusively to the payroll taxes and social contribution here anticipation. Okay? Very clear, Nora. Thank you very much.

Operator: Our next question comes from Bruno Amorim. We will open the audio so you can ask your question. Please, Bruno, go ahead.

Bruno Amorim: Thank you. Thank you very much for taking my question. I also have a follow-up on the car price trends and the depreciation trends. I'd like to ask for your help to understand what's priced in into your depreciation. As you guys argued, depreciation is forward-looking. What type of environment are you embedding into depreciation? We saw in the first half a significant growth in the market share of the Chinese OEMs, but at the same time, the market grew significantly, which means the incumbents, they have not seen any meaningful contraction in their volumes, which argues for a healthier environment vis-a-vis the scenario where we would just be considering the market share dynamics. In July, we saw a nominal contraction in the number of sales from the incumbents, which could eventually trigger some deterioration in the pricing environment, and that's something that pertains more to July and the third quarter than what happened in the first half. I'd like to ask for your help to understand what type of dynamic are you accounting for. Are you accounting for an additional deterioration in the market, or are you accounting for what happened primarily in the first half? Just a second question, a very quick one. Can you help us understand at what moment do you determine the depreciation for each quarter? Is it at the beginning of the quarter? Is it each month? The depreciation for the third quarter, is it already set or is it something you're going to establish until you report the quarter? Thank you so much.

Rodrigo Tavares: Thank you, Bruno. Let me start with the second question because it's just technical and easier. No, the depreciation is month by month, okay? There is no quarter depreciation here. At the end of each month, you mark to market every single car in our fleet, and that results in that month particular depreciation, okay? It is not something that you contract in advance for a quarter. In terms of the pricing trends, it is of course hard to tell. You saw the first half. It is, as you said, the whole demand was quite strong, so the Chinese and the new entrants gained market share, but in terms of volumes, it was very healthy. When we look ahead, what we're embedding here in our depreciation and in our pricing is some kind of deflation. There are some arguments that you could say that actually that's not going to happen because, as I said, taxes were going to increase, the import taxes will increase. You're not going to have the kits imported anymore. Since you're going to have more entrants, you're going to have more competition. What we are factoring here in advance, there will be some kind of price inflation, and we're already putting that in our assumptions. In the pricing, we take a step back and become even more conservative in that sense because we want to be sure that we allocate the next dollar in a very consistent way here.

Bruno Amorim: Thank you, Rodrigo. Is it possible to give us an idea, ballpark of what type of.

Rodrigo Tavares: I don't know if it was clear.

Bruno Amorim: deflation?

Rodrigo Tavares: I said deflation. Yes, not inflation, deflation.

Bruno Amorim: Yeah. Understood. Is it possible to help us quantify? Are we talking about assuming one, two, three percent, half a percentage points? Is it possible to help us quantify what's embedded into your depreciation assumptions?

Rodrigo Tavares: We don't give specific details of our depreciation assumptions. We just give the general trend here, that's why we expect that this trend will continue. The other effect is that, as you saw in the second quarter, the mixes get a little bit more premium, right? The value of the car is increasing. Even as a percentage point, if you increase depreciation in nominal terms, if you keep the same percentage depreciation will rise in nominal terms as well. Today

Bruno Amorim: Of course

Rodrigo Tavares: we are expecting some kind of a deflation in our both pricing and depreciation assumptions.

Bruno Amorim: Thank you. Just one very last follow-up. In July, we saw, to the point that I've made before, some deterioration in the environment. Have you perceived any step down in prices since June until now, or are you seeing kind of the same trends that you were seeing before in terms of the evolution of prices in the market?

Rodrigo Tavares: No. In July, we didn't see any different trend in Seminovos prices that we were experiencing the first half of the year.

Bruno Amorim: Thank you

Rodrigo Tavares: we haven't seen any change in direction of the price dynamics in Seminovos.

Bruno Amorim: That's very helpful.

Nora Lanari: Bruno, one evidence of that is on the Fipe tables, right? I think they have some caveats here, but the July Fipe chart show a stronger decline in car prices, whereas August Fipe price that reflects July reduced the pace of declining prices. As of now, pretty much the average remains well-behaved, okay? We are anticipating the potential deflationary cycle on our depreciation.

Bruno Amorim: Thank you. That's very helpful.

Operator: Our next question comes from Jens Spiess. We will open the audio so you can ask your question. Please, Jens, go ahead.

Jens Spiess: Yes. Hello, and thank you for taking my question, Rodrigo and Nora. I might be a bit repetitive to previous questions and your comments. Obviously, it seems that being conservative was definitely the right strategy, and that at the end of the day, high depreciation doesn't matter as long as you price it correctly. Well done in that regard. My question is on going forward, and right, addressing the question you just answered, do you think there's more risk to the downside or to the upside for your Seminovos margin going forward? I know there's a lot of moving parts, right? Things are behaving well, and you're being conservative. With that backdrop, what is your sense of how things might evolve? Thank you.

Rodrigo Tavares: Hi, Jens. Yes. First of all, thank you. Yes, indeed. I think more important than the level of depreciation itself, it is the fact that we're pricing that and that every next car that we're going to allocate our capital, we have this assumption. To make sure if there is a scenario, we are prepared for that. Thank you for highlighting that. Your question is a bit tricky about the upside and downside risk. I can argue both ways. We're renewing our fleet, you could see retail mix improving. We still have some efficiencies that's going to happen. There are some positives. I could also claim that taxes will go up, the new cars that will be imported will go up in prices. There are these arguments. On the other hand, it is very uncertain what's going to happen with the competitive dynamics when you have 20 brands coming here in Brazil and they want to gain some kind of market share. You have a price competition or you have a market competition here that it's hard to quantify that. It is difficult to answer your question exactly here because I see factors for both an upside and a downside, and we're taking a more conservative approach as we always did.

Nora Lanari: Jens, just to reinforce here, we always mention the margin in a low single digit where it still is. Between 1% and 3% is a reasonable margin for us, of course, with a margin of error here.

Jens Spiess: All right. Makes sense. Cheers, guys.

Operator: Our next question comes from Lucas Marquiori. We will open the audio so you can ask your question. Please Lucas, go ahead.

Lucas Marquiori: Thanks, guys, for the follow-up. Just changing subject here quite briefly, we are now heading for the migration of the systems for the new tax reform. I know you touched on that topic slightly before, but just wanted to touch base on that again. I know we have been questioning you guys for a long time about that, and I know that you guys have been studying that for a long time as well. Maybe just provoking and trying to hear from you what's the final decision, if not, what's the latest reading on tax reforms and necessity to raise prices and maybe end impacts throughout the whole business as a whole. It would be nice to hear about that. Thanks very much.

Rodrigo Tavares: Thank you, Lucas. First of all, there is the operational side of the tax reform. You have to issue the invoices and everything, the systems and prepare. There is a side here that is basically operations that we're putting a lot of effort to comply with everything that we require here. In terms of the competitiveness level, I'll be a little bit more conceptual here, but what's happening is that we see that with the tax reform, we most likely are going to gain for a B2B, both in terms of affordability and relative competitiveness against the ownership. Okay? When you look at B2B, which is closely 70% of our business, the impact of the tax reform is somewhat positive in both the affordability and in also the relative competitiveness. When you see B2C, then we see that we're going to lose some competitiveness against ownership here, but we still are able to offer here a good deal for our customer. To put that in a summary, in 70% of our business, we see some positive impacts, and in 30% of our business, some negative impacts here. It's important to highlight that that will be a slow transition. What I'm saying, I'm pointing there to 2033 when the tax reform is fully implemented. We're going to have a very long transition phase. Specifically for Seminovos, we have a mechanism that allow us to cope with that, and those impacts are just gradual year-over-year. For the very short term, we don't expect a major change in that. There will be some changes in how you present your balance sheet, in the credits of PIS/Cofins, how you allocate that. In general, we don't expect a lot of changes. There is a positive, though, that we expect a positive impact on cash generation as well because of the life cycle of the credits of the PIS/Cofins. In the short term here, you may have a positive impact on cash generation. I'm a bit conceptual here, but just want to highlight the main points that we anticipate.

Lucas Marquiori: It does help. Thanks a lot.

Rodrigo Tavares: Thank you.

Operator: Our next question comes from Alberto Valerio. We will open the audio so you can ask your question. Please, Alberto, go ahead. Our next question comes from Pedro Bruno. We will open your audio so you can ask your question. Please, Pedro, go ahead.

Pedro Bruno: Hi. Good morning, everyone. Thanks for the space. Two questions on my side. The first one, Rodrigo, you mentioned a lot throughout all the answers, the competitive environment in the OEM space. My question is on how do you guys separate the competitiveness that we have seen so far to the one that we may see in the future, in the sense that we've seen a clear movement towards the SUVs, which I understand have a lower potential impact to the Car Rental company's fleet. Whereas now we've been seeing more news towards the more entry-level cars. I know we've discussed, you've been recently to China, Of course, have been doing lots of studies in the subject. If you can help us understand a little bit how you are looking at the subject. That's the first one. I can make the second one in a second.

Rodrigo Tavares: Thank you, Pedro. Even though they're talking about launching entry-level cars, the difference in price is significant, right? When you look at a very entry-level car in Brazil, we're talking about cars of BRL 60,000, BRL 70,000. Even those entry-level cars that they're claiming is more than BRL 100,000. It's not 100% a direct competition. The segment that we see really this competition intensifying is probably in the small SUVs, that here we start to see some action. In the very entry level, they still do not have a product to challenge those cars here. Okay.

Pedro Bruno: Perfect. Thank you very much. The other question is on the Fleet Rental side, changing subjects. Question is how comfortable you are now with the current portfolio of Fleet Rental having passed, let's say, the Unidas fleet that you had acquired also exiting some more, let's say, heavy vehicles exposure and et cetera. Also, if you can put into the context the segments with the Localiza Meoo, the long-term rental for individuals, how you've been incentivizing or not, let's say, this product most recently. Overall, the question is more on how comfortable and how you would describe the portfolio to date, which is something we have less visibility on.

Rodrigo Tavares: Yeah

Pedro Bruno: Given the more longer term, I guess, profile of it.

Rodrigo Tavares: Pedro, I like very much the quality of the vintages that we're investing here. Since the end of 2024, we started to be more conservative in the way that we allocate our capital, and we started to change the portfolio. At the time, we had close to 50,000 Seminovos vehicles, and today we have less than 14,000. When I see the quality of the portfolio, I see the return going up every single month. The assumptions that we embedded when investing that money are proving to be correct, and the quality and the return that we expect for this portfolio are very robust, okay? In terms of the profitability, today, it doesn't have a large difference between Meoo and corporate fleet. Both here, we have a very strong discipline in the way that we price, in the way that we allocate. If it is one area that we are very comfortable in and we like the quality of the investments that we have been making for the last two years, it's the Fleet Rental.

Pedro Bruno: Perfect. Thank you very much.

Operator: To close, I will now hand the floor to Rodrigo Tavares.

Rodrigo Tavares: Thank you all for joining us. Our investor relation team remains available for any further questions. Thank you very much.