Movida Participações S.A. (MOVI3) Earnings Call Transcript & Summary

Okay. Good morning, everyone. I'm here in person. We are meeting again taking all the safety measures. I would like to welcome the company executives and everyone who is here. It is with pleasure I am Lucy, the Executive President of [indiscernible] to welcome Movida. Movida is part of the sustainability wave. And I invite to the floor, first, I would like to welcome those that are following us on the social media, and I'm going to invite to the floor. Renato Franklin, CEO of Movida; Edmar Neto, CFO and IR Officer. And well, it's up to you now.

Thanks, Lucy, and it's a pleasure to be with you again, keeping our governance and transparency [indiscernible]. We are showing it all in a very pragmatic, transparent way to our investors and market professionals. So thank you very much. Well, first, good morning, everyone. Thanks for those that are following us online on our Movida Day and now to see everyone who is here with us. It's a pleasure for us to be back to a hybrid mode. Last year, it was 100% online. So thanks for those who are attending in person and those that are online. I'm here with Edmar. We're going to make a slightly different presentation this year. Instead of going by business unit, we structure the presentation in 3 topics, 4 steps, so to speak. So what are we going to do? We are going to talk about what we have delivered so far, what Movida is today, which is very different from Movida in past years. The consolidation of [ deliveries ] that gives us the foundation for a new cycle of growth and then the main topic to talk about short-term challenges. We have been getting several questions from the market about points that are challenging for the industry as a whole, and that are essential for us to deliver our commitments before the Board of Directors and you, shareholders. And then we are going to talk about the future, what we see, how we are different, how we are going to get there. so Edmar and myself are here together with other executive officers, some are working but the most of us are here. And in the end, we are going to open for your questions to each owner of the business, a specific subject for you to get to know our executive team. Edmar and I are telling the story, but we have a whole team for the deliveries. Ed I would like to say hello.

Yes. Good morning, everyone. Once again, welcome. As Renato mentioned, it's very good to be once again in person and looking forward and not backwards. Yes, a lot better.

Okay. So before we really look into the future, there is a point for us to put into context. And we brought a slide. That is basically a summary of why Movida today is very different from Movida in the past. So we are going to give each 1 of those points of more color. But I would like to spend 3 to 5 minutes on the slide for us to talk about Movida's capacity of execution, a team that I'm proud to represent. First, organic growth. I do not know any other company in Brazil or abroad with organic growth at this fast. We went from 2,000 cars to 168,000. If you do not consider fleet management and outsourcing, everything is with CS Brazil. It's organic growth, very strong representative and that really transforms the company and gives us a new level of scale and new foundation. Today, we are much better positioned than we were in the past and with the capacity of execution that is just right. Second point is that people are really what sets us apart. We have a team. Every cycle we reinforce the team with more positions, more autonomy to the owners of its business and departments. And the idea is to think of succession of processes but very much prepared for the new phase of this company. Today, we can manage and absorb a much more robust structure. At the IPO, the company was so small. And now we have a team that is together and prepared for the cycle of the next 3 years, which is different than we building the team. The balance sheet right, Edmar, yes, in 2021, we also accessed the international market. Also, we have a very strong cash position that is announced to the [ CapEx ] that we announced last week but the debt profile, very few maturities in the short term, average term of 6-plus years which gives us the comfort as a company to really speed up our growth as we have been doing and even more. And it is what Ed said. We are always known by innovation of products and services. The first company to access the external market. The first company with [ AB ] certificate. So we have the cost of advancing some issues, which are the bottom line of the company, but we use that to very transform the company numbers for the future. So strong delivery then efficiency and [indiscernible] [Foreign Language]

To have dynamic pricing. So individuals are [ 150 ], [indiscernible] And then by scale have variations. It was a very simplistic pricing machine. Now we can capture a lot more things. And certainly, there is a lot more to do. And this morning, we disclosed the material fact with [indiscernible] numbers of November that shows the strength of our pricing and how fast we are to respond to new times and also the launch of products and services. When we launched Movida Mensai Flex in 2017. Then today, we have ready to deliver Movida car that we launched in the middle of the pandemic. No one is paying attention, but it is a platform that grows a lot like Uber. We were the first to join Uber. Movida is a new Uber with a different profitability and it is a car that is far [indiscernible] used than Uber. So when you go to stores and talk to our manager, you will see what I'm talking about. And also used cars, the Seminovos category and we are going to really reap the fruit in the future. People say, "Well, Seminovos, you're talking about BC clients. This is very fancy. If someone is going to buy a BRL 30,000 car who is going to buy. But now we are selling cars at BRL 90,000. Have you ever been to Seminovos source of ours, take a look we're going to show some pictures just for you to understand how we are positioned and then the digitalization of our shifts. You're going to see the numbers of Visa and Mastercard, it is cheap. And if you see the indicators, Movida is the leader in credit cards in all capitals in Brazil, in all states in use. In digital and individuals, we are leader in the rental car business, in the brand new business, in the used business. So digitally we are very different and we have the recognition of our ESG practices, although we are just starting. We talked about [ ISE ]. For the third year in a row, the only company with a B certificate, the first company that is listed with B certificate. So really, Movida is different And we have a whole transformation to be even perceived by the market. Well, let's go into the presentation now. It's a bit of our history, just as a reminder. So we went from 2,000 cars, very strong organic growth from [indiscernible] that turned getting 168,000 cars. Big company accessing the equity market, twice the debt market several times which really gave us a differentiated position for this new cycle of growth of extension and profitability. Very strong growth and with a different positioning. And why? That's because of our people. Once again, just to gain time, not everybody is going to present, but that was the idea. Later on, we are going to have the Q&A session. But here, it's just for you to know, the years of experience of each one and our team and years of experience in this industry. In our management, you have the main executives. And again, this is a team that knows the industry that is doing what has to do that has been affected by the market but learned in the market and is prepared to grow differently in a structured manner. So you have finance, you have the business unit, you have operations and innovation and culture. That's obviously very important for everything that we want to build and transforming the company. So if you have the opportunity, except for [indiscernible] that is in the rental car stores and this is high season. So he is fully booked -- He has just visited the Northeast, but for really him to ensure our customer experience, he is not here. But the idea is not that they are talking to the investors, just for you to get to know because they have a lot to deliver, and they speak through the numbers that we are presenting. Well, to talk about pros here, the ideas is just to give you a bit of color. And this slide shows our strategy. So first, we wanted to grow in the rental car business. That was gave us sales -- purchase volumes. So we had an IPO that the company was 75% rental car and 25% fleet management and outsourcing. But then we saw an export activity in fleet management and outsourcing, and this is where we are growing the most. We want to be a company with long-term contracts and I'm including brand new vehicles rather than rental car business. So CAGR for the rental car business, 17%; fleet management and outsourcing, with a net revenue of a CAGR of [ 10% ]. And when we have the IPO the companies had less than BRL 2 billion a year in terms of revenue and our run rate. Now it's more than 3x that. If you've been here for longer, we said that we will double the company in 5 years. We are going to triple it in 6 or 7. Yes, we have 55,000 cars in the IPO in 2016, we wanted to double. Now we are at [ 116,000 ]. So we tripled our fleet size. And for next year, it's going to be even stronger. So as important as the growth of revenue that shows the opportunity in the market is growth in profitability. So EBITDA growing at almost 50%, a very strong leverage after the pandemic turned down and we were able to adjust the company, reflects on our net income. You see in 12 months we are close to BRL 700 million. And the run rate is again quite differentiated BRL 2.5 billion in EBITDA, net income of BRL 1 billion. And return, And this is very important to us because this is a trigger for our compensation. we went from returns below what were expected even average and now we brought the company to compete at levels just like the competition with return on equity of 25% and a return on invested capital of 14% and going up. And just to talk about return, we had gaps because we were building the company. We have 2,000 careds. We have preoperational expenses. We still have that they fit the size of the company now. So when you are building Seminovos stores thinking of '23, this today fits our budget. In the past, it was a much higher rate. So you're going to see Movida with the highest return in the market. This is not a guidance. It does a disclaimer, but this is what we believe in. And here Renato already gave a bit of a spoiler when he started talking. But those of you that have been following us for longer. This is just to show how we got here and at IPO. So when we decided to go public, we already see the evolution of what we had in the market. So we had a player with 115,000, occupancy at the rental car business at 70% and margins to show results. We challenged the market. When you look at the last 12 months, you see that -- So we already exceeded what we said we would do. So as Renato mentioned, our fleet is larger. The occupancy rate at the rental car is consistently above 80%, and we have the agility even to deal with things like the pandemic, the recurring margin of each business unit substantially above what we had promised. So we saw the opportunity, costs, revenues and things that were not even mapped when you look at the competition. net income, as I mentioned, above expected and committed. And what is most important, the fleet management and outsourcing share is a very important pillar of growth and development. And why is that? Because this is a business that is underpenetrated with sustainable margins. We brought this to the market and the market is growing since we started. And as Renato mentioned, today, we have a balance sheet that enables us to continue to grow at a faster pace than the competition because that's what we have been doing in the last 18 months. Yes. And here, we bring some recognition. It's not just to boast. But these are certificates from important institutions that show that we are on the right direction and that we are really standing out in the industry. First, the B certificate; ISEB3, the only company. In ratings, we are evolving, and we are going to get even more so because of the extension of debt. So today, we have a different scale, and we have to keep improvement. And the MSCI, we are getting better in terms of ESG and Movida is the best qualified. And here we from Estadão the Sao Paulo newspaper [indiscernible] magazine and being awarded as the best IR manager, so we are really being recognized by what we are doing. And so we believe that there is a transformation in market perception about Movida. And this is what we are going to talk about. That is what is coming. So this is the first block -- So I asked you time just to say what we did today instead of render accounts of what we did. Now everybody is -- what is going to have and everybody is concerned. What are your challenges? Okay. So let's talk about challenges now. First, price. How to transform prices? How can we have prices that are right for the new depreciation and interest levels to come? How are we going to normalize price cost? Second, are we going to be able to buy cost? What is the automotive industry? Are you going to be able to grow? Do you have cost to deliver your business plan? These are your demands. Okay. If you have more questions, you can ask. Demand. With this new price and you can buy cars, are you going to have a demand? Can you rent at these new prices? Are you going to grow all businesses according to your business plan, and we are going to say that we are comfortable and why. And finally selling used cars in this new mix. Retail going down, prices going down, you have to sell cars that were more expensive than what you have. Are you going to be able to do that? And we want to show that we are comfortable with our business plan. We are prepared for these new scenarios. It's not that we don't agree. These are 4 challenges but we see the 4 challenges for almost a year now, and we have been preparing the last 3 years investing in technology, people and processes that will enable us to explore these challenges with new products that will give us the [indiscernible]. Let's start with the first pillar, price transformation. This slide is conceptual. Just to show our changes. So we had the rental car. I told you what it was like. And pricing was either fluctuating to work with individuals, website, stores, and you have corporate agreements general with flat prices. When we launched B2B digital, we started to change that for dynamic pricing. That brings huge gains because when it's flat, it's like this line, the whole year the same price. So you don't capture picture peak and valleys. So now we are able to work with small and large businesses, converting everyone to dynamic pricing. So you're going to have discounts on prices instead of flat prices. That's incredible grains instead of closing tap, tap is always open If a corporate wants a monthly car, you don't have the possibility because you have a peak of demand. At the right price, you have more avenues of growth that we have today. Today, we cannot see everyone. Second point about dynamic pricing. The algorithms are more and more granular. In this slide, you cannot see very well. Maybe you can, if you're remotely access in this event, but this material will be available on our website. In terms of occupation scales, we're trying to bring forward the volume of bookings and therefore, the average price is going up because you would usually get to the top price later on, and we're bringing this closer to us. And this is the RAC concept, but that applies to almost all of our business units because in GTS, you also have different returns and also 0 kilometers for all of that. So in RAC, you have individuals, which is the best prices with the best margins. But here, you have partnerships that have high prices with a little bit smaller margins. And here, you have more competing businesses with lower margins. And today, we don't serve all of that because look at the size of this market. So we're decreasing app cars and growing in individuals. Movida car is in here in mobility apps but we have room to move this from one site to another. And we're going to talk about demand later on. But if you give 2% discount here, you can grow more over here, but with a higher average ticket. And we thought only about the short term, we could have a different model today capturing more money from Movida now. But we're building a company that has all of these avenues well structured in order for us to have the power and the flexibility to move if we have like a pandemic or a lockdown because during the lockdown, the corporate helped us. So you would have a lower return but it is more stable. So you could pay for your cost of capital. So this is a chart that we've been sharing with you for 3 years now. And you can clearly see that there is an adaptation and the company is now more agile to adapt to what is happening in the market. So if we showed you this slide during the pandemic, it would look different. But the idea today, as Renato said, is to show you that we are prepared to respond to the demand that may come, and we are flexible. On the right-hand side of the slide, you can see the commissioning of agencies. So once you change the level of prices and the pricing models then we're also sitting down with agencies to review and change the commission of agencies. And the response has been positive to this movement that Jamyl started. This is all with partnership, focusing on the long term, generating values for partners, for customers and for Movida. And since this gives us more return, the car rentals focus on these 2. So in the pandemic, we were hit. But since we have this more diversified types of avenues we can face these challenging scenarios easily. Well, this morning, we showed you the November numbers. When we look at RAC, in the third quarter, we closed with BRL 96 In November, we went to BRL 119. So an average day rate that is 70% higher than in the third quarter last year. This is a RAC transformation, but look at the trends. Don't look at the snapshot only because this is a movement that is still happening. So you're going to see daily rates that is still higher even after the hot season. You think, well, 1 day, used cars will have lower margins. Yes, it will go back to normal but the price will offset this type of effect and look at the yield 4.2% because I am buying used cars for higher prices, but I still have cheaper cars. So on pricing this preparing the companies in order to replace all the cars for new cars with a new price, generating value. And when we look at GTF, the same applies. Look at my portfolio, the car value went up. But in the third quarter, it was already BRL 2,000. It's still BRL 2,000. So we've been doing that for 4 months now with an average ticket of GTF that you will only see after 15 months. In RAC, the transformation is quicker. In GTF, it takes a bit longer. But we have new contracts. We have new markets. We have new demand for the new price. And for used cars, the transformation is also happening, 40% increase compared to the third quarter 2020. And you'll see that the balance is quick. We see the numbers transforming month after month. You'll see that in December, in January, and this is going to help us to buy new cars. It will help us with our cash. So the premises will be completely different from the premises we had in the past. So we wanted to show you this so that you would understand that in all businesses, the prices are different. Now new cars. This is an example to show you that this pricing is just about a price tree. This is public. Everyone can see this, but sometimes people don't realize. So if you get the [indiscernible] ONIX, like in December 2020, it was the high season. We didn't have any cars available. So the same supply and demand scenario we have today. The price was BRL 1,372. Today, it's BRL 2,200, the same car, the exact same car. That is a 64% increase, and we're selling everything. So if you have another 1,000 cars or 5,000 cars, Okay, bring it on. We have a demand for that. That's what we're seeing. This is a finance cars and new cars that we're selling every day. What about Renegade, the same thing. It doesn't matter if we're talking about a small car, an SUV or a premium car, the percentage increase is very close. This is all simple math, and we have a demand for all of them. If we had another 1,000 SUVs, we could buy them. 2,000, 3,000, we could buy and sell them. That's what we want to make it clear to all of you. This price transformation is already happening, and it will continue happening, right? This is not just a snapshot. This is a trend. What if the interest rates drop? Well, do you think this is going to happen next year? I don't think so. I think the high prices will continue for a very long time. And Brazil has cycles. Well Renato, as a reminder, we are still the only company that works with ready delivery for new cars. This is real price. If you go to our website, you can have a car approved in 1 day, 2 days and the car will be made available in the store. So it doesn't take time. This is the life as it is, real life. Yes. So the price is going through this huge transformation, as I said and that's a trend that we wanted to share with you. Now another pillar. Are you going to be able to buy cars. There is a shortage of cars. When is this going to be normalized? Well, just to give you some context. I asked an OEM, and this is [indiscernible] from Hyundai, the VP of Sales and Marketing at Hyundai to talk a bit about the car industry, about market scenarios, what will come ahead and supply and things like that. So I'm going to share a video just a short 2-minute video to give you some context. [Presentation] Operation scenario is facing many barriers in the local legislation. And who is better positioned to serve this customer with the buying of a car that can still be purchased by them. Players who have scale, great risk management for credit and asset management and digital efficiency and above all, a product with a rental prescription and in term of 24 to 36 months. Those who can do that will have a B2C competitive edge and will benefit in terms of costs since the installed capacity of the industry is much higher than the market demand right now. Thank you very much for the invitation, and I hope that my words have given you some insight. Thank you very much.

Well, although he hasn't given us a deadline because no OEMs can give us deadlines, right? And this is just a summary of our conversation with many different OEMs. And they cannot say, well, Our production is going to change in April or in August. This is very hard to say. We try to get dates like that, but it's really hard. They say, well, once the chip normalizes, it will take us 3 to 6 months to normalize production because, of course, we'll start in countries where the margins are higher and then go to the other countries all around the world. But all OEMs believe in subscription cars, they believe in growth of demand and in the rejuvenation of the Brazilian fleet, which is quite old. So There are many movements to take place here, but it will depend on giving access to the population in general. That's why subscription cars are growing so much. We're very confident about that and the industry has production capacity. That's why we are negotiating discounts. We have [indiscernible] annual agreements, and we have the same foundation. Moving on then. When we talk about our history, why are we feeling confident buying cars? Well, we have to look back in order to be able to look ahead. We have delivered the greatest fleet growth in the market. If you look at the right-hand side of the slide, Movida grew 53%. We went from 110 to 168. If you exclude CS, that will be a 36% growth, which is still much higher than our competitors. One has turned 11. The other 1 has grown 12%. So it is a great difference. And when we look at purchase, we are purchasing. We have closed our purchasing gap. We used to buy 3% of the major OEMs, and now it's 30%. So if you look back, it was 92, 109, 120. So we have gained scale, and this is going to give us even a higher scale. Remember as numbers, everything that is LTM is much lower than the last quarter. Today, we have 168,000 cars, but this purchase is an average between 110,000 and 168,000 and the agreements we made for 2022 already considered the new size of the company. So we already have agreements with the OEMs that may suffer adjustments, of course, if there are hiccups along the way. Of course, there can be some variation. But when we look at our agreements signed and compared to previous numbers, we were able to close the gaps. We have better commercial conditions and we have a volume that will make sure we can deliver our business plan. That's why we're very confident about supply. Now another important piece of information. When we talk about sales mix. First, let's look at the different categories. If we look at this at different points in time, the math is similar. In the past, we had a bit more basic cars than the market. And today, it's the same. The market is like 38% retail. And we are at 40%. 40% of what we buy is basic cars. Now 3%. So SUV, 38%. So We're still buying a bit more basic cars than the rest of the market. And you say, well, Movida is growing, it's buying cars, and it has a different mix from the retail but we are actually -- we have a better mix than the retail. So we still have a competitive advantage to renew our fleet later on. In another structural advantage, we have long-term agreements with OEMs, and we will look at the spread of brands go to our stores, RAC or used cars, you'll see the difference. We buy from 24 different brands. our purchases comes from 6 different brands, which is different from the concentration level of our competitors. For [indiscernible] OEMs, we buy 90% of their supply, and we have exclusivity agreements with some of them for 2022 and 2023, which is quite different because we've been working together for a long time. So we have some structural competitive advantages that are not being noticed by the market, but the numbers are showing them why we're buying more cars than the rest.

Just a reminder here, Renato, these numbers that we're sharing with you for October already include the production of many basic models that were not being manufactured during the pandemic. So if you look at the price, 110, this is the new market price. This average is for the 50 -- top 50 cars sold in the Brazilian market. So all the cars are sold. GM is already manufacturing and sell in retail. So this is already more adjusted to the reality we're going to face next year. The average price of BRL 70,000 is no longer true here for next year. The fleet has changed. The mix has changed and the price have changed. Now some people call L7 or PL 7, but this requires more content from cars and there will be an increase in new cars starting in January. New legislation. You include more things and the price will go up. And the inventory since it is a reference to the new cars, we'll see the prices then normalizing. If we get the emission regulation, the trend is that they will have more and more requirements every year, and that will bring us gains since we already have a higher inventory of cars. So if you have used cars here in your parking lot, I'm sure that your asset that has valued the most is your used car. This is not going to happen forever, but that helps us to gain momentum and continue growing and to deliver our business plan. Now let's talk about demand. Demand for the new prices. We have new prices, but where is the demand coming for our growth plan. Let's look at the center of the slide. Let's talk about footprint. We currently have a great footprint. We are present in all capital cities, but there are also major cities, 43 large cities and 347 towns in which Movida is not present for car rental or used cars. I'm talking about cities with over 100,000 in population. They are the second largest cities in the States. And that expense are potential market, addressable market. And sometimes, you can open a new avenue and you can leave aside a niche that is not as profitable in a certain location. And then you can grow in another location in which the return is better because there isn't as much competition. So our focus is to maximize value generation. Therefore, we'll be able to deliver our business plan, generating value and creating this market benchmark. That's why we're confident. Look at RAC, customer penetration is 7%, half of the developed countries and many people don't know that they can rent a car. Jamyl has been establishing partnerships, is launching a new one. I'm not sure we can announce this or not. Yes, we can. So yes, we're launching a new partnership, an unprecedented partnership with MercadoLibre to sell car rentals. So this is a channel that will disseminate our product to many more people. And we are creating market here. These are new customers who've been doing that from the beginning of Movida. We didn't come here in the corporate market to fight with Localiza. We brought in new customers. We grew organically a little by little in the corporate market. And last year, they said we were the only ones working. We were the only ones having monthly in-person meetings, and we had 37% growth in the corporate market last year, where other competitors actually decreased their market share in this part. So we are there to encourage people to use their cars. This is a different business. Look at GTF. We have 3 different lines: public sector. João Bosco is heading that with a lot of beds and a 3% penetration only. And the public sector growing a lot. There is a lot of infrastructure investments to be made here. And this is a very small market share, but we're leaders. And we're the only ones with the transparency and governance benchmark. Someone who goes to the public sector and is professionalizing. Do you think they want a weird company or a serious one that is listed that has electronic bidding and so on and so forth. So we intend to grow a lot here. What about the regular GTF, 8 million cars, the corporate fleet and the market penetration is very small today, almost 6%, but the pipeline is huge. What about new cars, 1 million cars a year. we're selling just a little bit, but this is a huge market that will be greater than any other market in the future. So the demand is here. There is demand. Yes, but there is a risk for next year. What about the omicron variant what if there is another lockdown? What about the whole demand, the economy, the retail, credit is dropping. How will that affect us? What is the risk exposure of each one of our businesses. Well, RAC has a medium risk exposure. It is the most exposed line of business we have, but it's also very resilient. We learned a lot about resilience during the pandemic. Now if we see that things are starting to grow again, then we can protect ourselves much better than we did in the past. And there is a cultural change here that helps us greatly like domestic traveling, working from home. This duration changed dramatically from 4 to 5 days to 7 to 8 days. And this has come to stay. Hybrid models of working. This has changed and they might have to travel. And this is something that has come to stay. And there are also people who have tried driving for the very first time, and they don't want to go back to commuting by public transit, and this is going to grow. Well, RAC today is less than half of our fleet. In the past, remember, during our IPO, that would have an additional execution risk. But today, we have long-term contracts and our pillars and growth avenues are very well established like. So we are going to be able to advance with a lower risk exposure. Yes, for GTF, as I said, our penetration is very small. We have a backlog of 10,000 cars. We have agreements signed and we need to deliver. So the growth is already defined. It's a job here in the [indiscernible] in 43,000 cars being quoted price transformation is here. This is supply and demand, basic economic law and 12,000 cars in public bids, and 1 avenue competes with the other and the price will therefore go up. And they're all competing RAC, new cars, GTF public, GTF private. And with this interest rates and the CapEx budget of companies, this is impacted. Most of the fleet in Brazil is own fleet. So there are more studies ongoing. So we'll see this growing, both in the public and private GTF and the strong growth avenue here. What about new cars? 1,000 additional cars a month. This is what we have, but Considering our website accesses, if we wanted to grow 5,000 cars per month, we could do that. That's the capacity we have. And if it all goes through here, we still have a growth avenue of growing 5,000 new cars a month. There is a demand there for our business plan, and we feel confident and comfortable because for new cars the conditions are much more attractive for financing and this generates more value to us because the perception of financial cost is easier here for customers. And that helps us grow generating value. That's why we're very confident when it comes to demand. And now a little bit more about the new cars. Just to give you some idea of who our customers are and how we're growing in new cars. And this is going to change a lot because it is still small comparing to the addressable market we have here. Rented fleet, it almost more than doubled, 73% growth. It can be men and women, 34% are women, 66% are men. Average age, 66% of them are from 25 to 44 years of age, and 57% of them are in Sao Paulo or Rio. But if I wanted to grow 1,000 cars outside Sao Paulo, so excluding Sao Paulo, I could do that. We are building our base in all states in order to have scale so that when there is an opportunity to grow, we can grow. And there is a great transformation here in new cars that you haven't noticed. We don't have the operational costs for infrastructure in new cars. So if an OEM can sell 10,000 cars at once, which was a problem we had in the past because the GTF terms are more complex. But today, you have this backlog to deliver and the capacity here that once you sell, it's like 20 days for the car to come. But in those 20 days, I have already sold them. So I can deliver from the [ PDI ] straight to the customer. This is disruptive for our industry from the perspective of operational capacity for growth that we didn't have in the past and to make the most of the OEM opportunity. If we did that in the past, that would impact our return in the past. And that doesn't happen today anymore. You open the taps depending on the opportunity you have in hand, and that gives you much more resilience.

Just a side note here, Renato, comparing our lease fleet to the revenue, the price effect here is already very relevant. And we've been touching price much more starting in the second half of the year. And the fleet grew more than 70%, and our revenue has grown over 40 percentage points, and there is more to come. And leasing is better than RAC, right, to sell cars at higher prices than RAC. Look at the premium SUV and basic cars, [indiscernible] 40% of basic cars, and this is 35% here. So the mix is a bit more expensive here. And what is the advantage here. Cars with more accessories will penalize ROIC because you have to look at the average. If you have many cars without accessories and one with many accessories, then the ROIC will be lower. But for new cars, you price for every unit. So if you buy a car with many accessories, you get that in the new cars. I'm sorry, I shouldn't have said that right, anyway. The concept does not apply to all brands. I just wanted to let you know that. Still talking about demand. There is a transformation happening in GTF, which will help us increase our penetration. I just wanted to give you some more flavor here about Guilherme's work. Guilherme's work has a great footprint, and they were working on selling 1 or 2 [ lives ] per customer. And the same is going to be done here. How? With new clients, new customers, we are boosting our e-commerce to work for small businesses, just like in new cars. The B2B digital life cycle is 21 days. It was supposed to be 2 days. It's like you analyze the documents and you accept it. Now the commercial team is there in the field. We need to work with representatives, with partnerships. This is another growth avenue. We can build a new company just based on best and high predictability. The ticket yield new customers will bring us profitability gains because the negotiation power here is completely different and the returns are higher. So that also helps us here. We are readjusting our portfolio. We talked about that in our call. 35% of the portfolio has already been adjusted. And for some of them, we are adjusting prices a bit over the inflation rates. All of our agreements have economic and balanced clauses. So with the maintenance costs we had, we are able to say, well, this is our price composition and we can readjust the prices easily with our customers because of our contracts. Just like in the past, our customers were hit by the pandemic, and we help them to adjust the prices so that they could pay later on. The same is happening here now. This is a living ecosystem. Some customers didn't have enough cars, but they decided to extend their contracts. And this comes into the readjustment arena. So since we didn't have cars for now, they decided to extend the contracts. So an opportunity for us to grow later on, not only today's backlog, but the backlog that is currently being created because many contracts are being extended rather than renewed. And from the perspective of the customer, in e-commerce, we now have a completely digitalized sales that will make sure we have an NPS of 80 for small businesses as well. So in terms of demand, that's why we are comfortable. We have an aggressive business plan, but we are ready for the future scenario. We know it's farther than usual but because the demand is huge, their work is always easy. I cannot say that, but anyway it is easy. Last pillar, Seminovo sales, used cares sales. We have a credit restriction, inflation, higher car tickets. So there is a challenge, and we agree with that. But we are also prepared for that. Once again, we are already expanding our store with a new model for the industry, completely different, and we are going to show the different concept of ours. With installed capacity of more volume than what we have been selling and a more premium mix. In addition, we are investing in new channels and the client's journey. We are the only company that offers e-commerce with a 10% online journey. We are the only company. We are the only 1 that person can buy a car 100% online. So we do have the business, and it's just growing to grow a lot. WhatsApp. So let's just WhatsApp is additional channel, so we are considering with e-commerce, WhatsApp easy for the client. We still do not have maturity to buy on WhatsApp. In the U.S., we do, and this is what we are building here. One year guarantee. We are the only 1 that can offer that and growth in profitability due to added services. And there's lots of opportunities in pricing and dynamic distribution methodologies. We are involving that using algorithms. Of course, operationally, this is a complex, but we only have systems if we didn't have the logistics [indiscernible] could offset almost half of the loss of margin when the market goes back to normal, with this dynamic pricing. You just sell cars at the cities that have better practices. So it's a huge gain of margin and a huge opportunity. It's still -- the market is very mature. If you look backwards in the sale, we evolved a lot. So it's like a marathon. After 10 kilometers, you are tired. But it's just an ultra marathon. It's a hundred kilometers, and we still have a lot to do. And then we brought some of the Seminovos market deal. We brought this in the IPO because people would ask, are you going to sell that many cars when you have to sell 50,000 cars, what is it going to be like? Well, I sell 3% of the market. There are several indicators. This is [indiscernible]. So there are basis that sometimes are a bit complicated. This is the most conservative, 1.1 million cars, all of the whole year, 1.3 million cars. Seminovos, not brand new cars, cars up to 4 years old. And remember, you have fleet management of 36 months, and then you sell the car with 4 years. we have a 3% share. There is no one that really leads the market. There is much room to grow. We have 70 stores at the end of '20. We opened 10 more. We have 8 in '21, and we are going to open another 20 stores. 12 cities that we want to penetrate that we are not today prepare for '23, not '22. For '22, we are already ready. We are preparing for '23, '24. Again, building beforehand. [indiscernible]. We are selling all cars. If it 20% higher, the highest price increase has already taken place. There is a new wave to come. So we are selling even with production with inventory, worst interest rates. And if we do things, we can sell 100,000 cars a year, but you're going to grow and you need more. Okay. Today and built in 2023. In '22, I'm building '24. So we are going to go a little by little. And why can we do that without penalizing the market? Because the gain of scale with the price transformation as you have been seeing that for a long time, even myself, I took us a while to really do the math. But it is quite relevant, and it is really transformational. The historical margins that we have is going to be much higher, even with gains of SG&A. So there is a lot to enjoy in retail and wholesale. And it's not only expansion in the rental car or the fleet management business. There is a huge transformation in the size of store and more and more large stores, combining Seminovos sales and the rental car business, and we are more and more thinking of the opening and increasing the scale of the Seminovos business. Each store will offer the whole portfolio. In the rental car, we opened more stores with changes the new stores. So stores that had 100 cars, now they have 300, 500. There are stores that are 12,000 square meters. And today, we are ready, which is also [indiscernible]. In the past, we are building the business thinking 3x ahead. Sometimes, we were cautious. Now we are thinking about 5 years' time. So what am I going to need? And it's okay, car prices can buy you. So everything is already in our bottom line. We are preparing for the future and they are gains as we start to use the installed capacity. And here, we brought finally some pictures to show that our stores are different. It's not just a car yard so that people go under the sun to see what car they want to buy. We were lucky. These are basically cars that belong to OEMs. They are pretty. They have their conditioning. They have good services. They have coffee. They have kids spaces. The concept is completely different. These are stores that we brought to [indiscernible] you to have an idea of their look. In the past, people would say sometimes our stores were too pretty. People wouldn't go in. But today, they help us with the different average tickets. So I'll give you an example, Renegade. Today is a high volume car. You know how much 1 Renegade that is 1-year-old car cost, BRL 110,000. That's the sales price, the power sale price, Renegade, 1-year-old. This is a new market. This is what we are doing. So there is small video for you to see the [ sort ] from the inside. I was going to have. [Presentation]

Everybody was tested before the video for us not to have to wear masks. So see how comfortable we are. Again, you can ask any questions you want after we finish the presentation. We really want to have you leave here with no doubt, no questions whatsoever. next chapter, what is to come? We have our DNA to really have our customers specified as possible. And I brought you some slides to show what you and our customers perceive. Innovations. Movida Cargo, our recent unit, carbon-free, we were the first companies to neutralize carbon emission. Sem Parar, which is the tow technology, eliminating time spent in tolls, web check-in the brand new 0 kilometers journey. And last week, I went to 30 stores in the Northeast and customers and employees say that this is really transformational in customer experience. That is, we start the contract with clients on [indiscernible] with the tablet, paper free. So if there is a line someone comes with the tablets, and they already start with the documentation. We have an anti-fraud machine. And little by little, we are going to have everybody receiving services from the tablets. Today, you don't even have to go to the counter. So very disruptive. And there are stores already with electric charge. We have a center now [indiscernible] for app drivers and delivery drivers, and we are going to have an event this week that is going to be in transformational for this target and Movida has the largest electric car feet in the market. Not a lot, but it's the largest and NPS 80%, real good customer satisfaction. So this is for you to see. And we have fixed, we are the only rental car company that [indiscernible]. So this has started back then. The Movidalabs, we have had it since 2017 assessing opportunities with startups, investing. Our focus is not to have venture capital. We are not here to invest in startups. They are a a little, just to keep the partnership. Our business is to know what's modern and internalized. And we have 3 [indiscernible] working. We have monthly meetings. We closed several partnerships. A recent one was trashin and it's a coincidence. After closed with trashin, they were awarded, 1 of the 100 start-ups in the world. So we know how to pick and choose and we help the market. And across this because it's innovation, it's more than the product itself. It is the basis of the foundation of our company. And we've shown examples in each payment. Sales we are selling more than 25 online channels. That's exponential. What we have prepared today, we can sell several channels. Cars upon subscription are going to be sold in different platforms. 70% of our revenues come from digital, very strong. on the IPO, we had 65, the market had 8, which is very different, 60% in digital channels, that is very different In the market, it is 80% in indirect channels, we have [ 60% ] in direct. Customer Services. WhatsApp, lots being built, connected apps, the tablets, as I mentioned, self-service. We have a connected fleet, 100% of the fleet. When you talk about [indiscernible] delinquency, we can really prevent fraud here. In our back office, lots of technology, lots of robots. That's why we have more productivity when you get employees by car at any reference and you compare to the competition, Movida is much leaner, much more efficiency -- much more efficient, I'm sorry, and that is thanks to our products. To give you an example, we have a robot that is fine robot, a startup that started under the leadership of [indiscernible], our IT leader. And we are working with tens of thousands of [indiscernible]. Movida was the first company that joined. And today, they are on XP's platform. One of the investments of XP during the pen. So innovation, there for the sake of innovation is worthless. Our innovation is focused on benefits to the clients. And as Renato mentioned, it has to be part of each of our pillars. And here, we have the slide because we think that the greatest digital transformation is yet to come. What is this. Movida back then the first company to have mobile apps, the only company that have a mobile app, way different from the competition. We have mobile things for a long time now. And now we started with mobile first. And now we are going to mobile only. Forgive me my French. I mean my English. And we are going now to mobile commerce, mobile checking and mobile walkin, mobile care, mobile service, all mobile. Everything is going to be able to be performed at any tablet. You don't need a computer. You don't need to be at the store. It's all mobile. It's not M for mobile. It's Movida commerce. This is our reference. This is what [indiscernible] is building to really disrupt customer experience. And let's talk now a bit about sustainability. Just as a reminder, this area is directly connected to myself from the first minute Renato, myself, together with the Board, discussed where ESG was going to fit. And because it is a strategy, it has to be under our area. We have 3 people only that really lead to the whole of the company with this initiative. It's huge, and that's the idea, to identify opportunities, opportunities like [indiscernible] and bring them in front. And each had the growth to really develop in this area. Some examples. The first -- we are the first company that issued a sustainability-linked bond. We have the largest fleet of electric cars. We implemented the backing of [indiscernible]. In terms of social areas, the development of several discussion groups to extend our representativeness in the whole of the company. And talking about governance, 2 highlights. First, and as already mentioned, our entire structure with the Board of Directors and several supporting committees, where Board members are sitting. But this year, we had an event that was very important for us, which was the unanimous approval by minority shareholders of CS merger into [indiscernible]. The authorities were very impacted by this move, and also bringing CS in, as a reference, from the state-owned industry is another pillar of our governance practices. And Renato went to the CAP26. So this is a recognition of our work as [indiscernible] went there representing will be the -- in the preparation for CAP 2020, I was the only precedent that was there. And last year, CAP grew a lot. I had the opportunity of being there. Brazil has lots of companies there with a very good exchange of ideas to making [indiscernible] to have not only the electric car but other technologies. Of course, there are lots of people that are there just at the sake of it. So there are lobbying for capital plans and others. But this article stick that was approved really changes businesses. It generates business opportunities, but also destroy businesses that will not generate value [indiscernible] loss. And the highlight is that Movida is being invited to be there. Several companies have to be there. You have a different event ID card. So we are really making a difference, and we have such different visibility because of the team and I have been honored to represent the team. And news for the fourth quarter in ESG. We have moving the date that is successful. We have signed language people with a -- any kind of impairment can also follow us and recognitions [indiscernible]. [indiscernible] the only rent-a-car company; MSCI, the corporate sustainability assessment that we conducted and we were the company with the best ranking, and that shows that we are making a difference. On Wednesday, we are going to launch a new store with fast and ultra-fast chargers to make electric cars more easily to be work with. It's not that you're going to buy a house and the metros, but a little by little, we are growing. We are leading this movement. You generate brands to -- value to the industry, and that leads to several benefits because we all have to sell, and this is what we are doing. We're really making a difference in the rent-a-car business and future prospects. Well, this is an exercise that we conducted last year. Before the meeting started, I was talking to a group of investors. So where is growth coming from? So as we did last year, we brought our Visa from the past at 1.6. Our run rate today [indiscernible] 2.5, and we have the room for leverage in our balance sheet. And if we keep the 3x leverage that we have had in recent past, that gives us room to buy 30,000 cars. Just because we are going to deliver more results from now on. 30,000 cars as we have 25,000 this year. And 1 year ago, we said we have the capacity to grow, and we are delivering. If our base case for growth, at this case. Can things change? Yes. Obviously, it depends on the price of the used cars and others. This is the starting line and it shows that we can grow 30,000 cars. And looking at what we have until 2025 as a commitment as a base of 260,000, we can bring 160,000 cars for '23, '24 and '25. So the message is we have room in our balance sheet. The results to come are going to be even greater than what we have shown in the last 12 months. And then the guidance that we gave in the beginning of the year, [indiscernible], is totally achievable. Yes. And when we get the annualized EBITDA 2.5, it considers a lower volume for used cars and taking cost that is lower than what we are going to sell, and the margin for next year is not going to change, because the cards of [indiscernible] today. Even if it goes down, and we have already been increased for January, we have already a margin that can. So the EBITDA for the future is higher than the past. I think no one has any questions. So we have probably much more, and that's why we have more than 30,000 cars. If you were 30,000 a year, we would get here. Let's see. When we have more, we are going to change EBITDA. And we can deliver the plan without a need to go to the equity markets or anything which was the target this year when we issued the bond in January this year. Looking at the 12 months before, the number was BRL 800 million, BRL 900 million. We are very believing at these numbers. So 1.6 is the number. We don't have CS. And when we go and include CS, we are going to have BRL 2 billion of EBITDA. This is a simple math. All that said, [indiscernible] we showed our guide of growth for '25. We're talking about 260,000 with income of BRL 1.6 billion. And we are reassuring the guidance. And what are we showing? The growth that we have for each business unit, we are even delivering more, a bit less in rent-a-car, a bit more in others in terms of gross self cost, and we are always sticking to the business plan. And take a look, that was just released. And we are renting here. Very close to our base. It was 118 to 260. It was a lot. Now it's 170 to 260. As Zona said, what do you do when you get to the target? You double the target. So soon to come, we are very excited about the future. And it -- prepared for you in terms of CapEx. Just to help you, because there are a lot of things going on. The price of cars notably is one of them to sell or to bank. So this is just a table to show you the size of our growth and what it means in terms of leverage. So taking a look at the 85,000 that we talked about. If we go 30,000 and we renewed a 55% of our fleet, we will be even under the guidance that we gave. But we have the perception when we have agreements already closed that indicated that we are going to do more than the 30,000. And therefore, our renewal rates get to levels that are quite interesting. And since the pandemic started, we have one objective, to be taxable, to change purchases and sales the way in which we have been doing. And now we have the newest fleet in the rent-a-car and the fleet management businesses, showing that we have less pressure than the competition, and that we have a space for our discretion in working the fleet for next year. And when you get purchase and sales prices, purchase prices fell as the markets changed. Sales takes 1 year. So we already saw a huge transformation in brand new cars. There's still room to change, but we saw most of it. But in Seminovos, the transformation for next year is on [indiscernible]. So we grew a bit, but we don't have to wait for prices to show in the future. So you're going to see the saving of those prices to go faster -- to increase faster than your projections. So the fed is going up, and it is a transformation. And then we go back to the highlights that we brought in the beginning of the presentation. Just for you to remember, given all this everything we talked about, I would like you to look at Movida as a new company, a different company than the past. When we had the IPO, we had a business plan. It was a plan to build a company of 100,000 cars. This is a given, and we have excelled in all variables. Today, we have a company that is completely different with a very senior management team. Other than me, everybody is very good. We are prepared for our new challenges. And we are very comfortable with our guidance for 2025 that we know that we are going to be able to deliver or accept. We wouldn't be irresponsible of not giving you guidance that we could keep. The company is different and the market hasn't realized that yet. Quite modestly, I don't think there is much a better opportunity of growth. I'm not making a recommendation. But if you see, my company, our directors, we are really fantastic. And we wouldn't be here if we didn't believe. The [indiscernible] the game is not selling anymore, it's really diving into the game because the game is very well structured and ready for us to be improved with a completely different cycle that is just beginning. Once again, we have 1% of what we mentioned for the company. It's not 5%. It's not 10%. Just like our penetration. Okay. Okay. Now we are going to call Lucy that is going to be as gentle as they are always. Well; 2 things. We are going to have attract to both our people in person and online to try electric cars. We have also the Q&A session to come, and I hope that can be very nice. But we have 2 drafts.

I'd say that in addition to the draft, I will be delivering here 3 different things. First, the materialization of the certificate, which is a tradition. And second, in the beginning of the year, you were awarded as the past presentation at BMC. Congratulations. This has already been announced in media outlets, but now you can see that materialize, right, as an award. Back to in-person things, and back book of our association that celebrated 50 years last year, there was no party due to the pandemic. But this year, we held a small party in Rio, and now are giving this to the partner companies, and there will be 4 books left, and we will draw them at the end. How is this going to happen? Well, the whole basis for the price was the assessment. So don't forget to fill in the assessment form at the end. And while you have some coffee, then we will draft and distribute another 4 books to those of you who are here today. And I want to congratulate you because last week, I was there. And you got the [indiscernible] hybrid price of best IR program in the different categories, right? You were in the small and medium categories. So congratulations. Yet another award, and you deserve it, you earned it. Now talking to the IR team, and we agreed that the questions would be asked first by the person audience, and then by the online audience, okay? Great. So you can ask your questions now. Just raise your hand and ask brief questions, 2 at a time at most, to give opportunities to everyone. And the microphones will be going around so that people have joined us online can also hear them.

Congratulations for your 50th anniversary and the first of the [indiscernible] meeting, I was quite young.

Yes, it took us so long to celebrate that we're now celebrating 50 years of operations. Okay. Questions?

Thank you for presentation. Edmar Prado Neto, this is Lucas from BTG Pactual. I have 2 questions. First, when we look at the long-term guidance and the future prospects, we want to understand the depreciation movement, has the prices used cars and new cars accommodate after the peak? What is the depreciation that you're considering in your model to define the 2025 profit so we understand the adjustment levels? That would be my first question. My second question. Renato, we see that you're now focusing on growing on GTF. And your history always been great in racks. So why are you now focusing on GTF more? Is there more opportunity? Is that a less consolidated market? Can you tell us more about this plan?

Sure. First, about depreciation, Lucas. Today, we have a few seasons of cars in the company. Cars that are sold in the short term are already fully depreciated. So the depreciation will be 0. And the cars that will be arriving now would appreciate just like they depreciated before the pandemic. That would be around 6% and 8% on average for the whole fleet. And why is that? Because as Renato said, there will transformation when we sell or rent and that decreases costs substantially. Rather than having 50,000 BRL cars, we see fleets of BRL 90,000. That makes a big difference. The face value will only go up from now on, and we will work and act in advance. That's not going to change much compared to what we've been doing since the second half of 2019 because we have both of our hands on the wheel. And the history was losing 0.8 a month. It would depreciate from 5% to 9%, depending on the model, so 0.8 a month. But the VIP table is growing point 1. So January will be positive, but then we stop before it depreciates once we achieve a margin. So we'll work with this buffer will help us be protected in case of any hiccups along the way so that we have a healthy margin in Seminovos or used cars. Now about GTF and long-term business lines. First of all, our execution capacity is always limited. We have ideas that we are yet exploring yet. Those that are on the table are those for which we are already prepared, but we are also going to explore new ones in the future. Now GTFs. This ad came along and joined us. He said, "we need to grow on GTF." And we were talking about that before our IPO, but internally. And in 2018, we said we need to accelerate that line. And it is growth avenue. So now that we have reached a certain maturity, we can focus here because we know that the other part was being managed well as well. But that was something we had in mind. Before the IPO, RAC was already doing well. And then we focused on GTF. Once things gain momentum, we can focus on different things. We would only accelerate the new cars when Marcelo joined us. So of course, this business depends on people, and there are other avenues that are not being included in our plan, but we're going to include them in our portfolio to increase our resilience for growth and markets. But once we find the right person to have this business, then we'll do that because our commitment is to improve continuously. And now this is connected to leverage. When we include a car in our 2P app, we had 20 extra points in EBITDA. And so that helps in our growth decisions with a 80% renewal rate, you have a critical mass of customers at the company for 6 years. So the decision to grow is made easier because of that.

Victor from Bradesco BBI. Congratulations on your presentation. I have 2 questions. First, looking at the group as a whole, not only Movida, but [indiscernible] in part as a whole, we saw 2 important transactions at Original with the acquisition of [indiscernible] and another dealer in Marinao yesterday. How has this helped Movida in purchasing cards and also expanding the footprint to opening cars. Opening stores for rack used cars. Now about the new cars, you showed us charts with margins and addressable market. Considering the price increases that we see for new cars, what can we expect in terms of ROIC for new cars?

Let me start by answering your first question, the easy one. About the acquisition of the dealers. Yes, this is growing a lot. -- group is doing something different. We are building the largest ecosystem of light vehicles in Latin America. That's what I usually say. It says that it is in the South Hemisphere, but largest ecosystem of light vehicles. Our business is not only to grow in dealers and buy and sell cars, but we want to build a whole ecosystem that will generate to the whole group. And for Movida, this brings benefits in several different lines. The first one, the relationship with OEMs. Just like we have a different relationship because we have a group of dealers of certain brands. We will have a closer relationship with an even largest number of brands. So yesterday, 14 different brands. We purchased a Saga unit in Maringa, the OAB, and we have 9 brands, not only these cross-cutting brands, but all brands, except for Volkswagen, which we already have here and premium brands like BMW, Toyota, Honda, we already have that in our portfolio, which helps us build a long-term alliance. But one of our is maintenance. When we have an over conversation, we can put up a business in which the dealer will provide service to me with all the quality they have, but with competitive prices within our stores without having to move cars around. So we have this opening to create different models that will reduce cost, not only direct maintenance costs, but also movement because when you say you send cars around, you have all this hidden cost. And we will also optimize our wholesale channel. But if you have premium cars that are growing a lot in the segment of new cars, -- where do you sell them? We have dealers today. So if we have to create a to sell super premium used cars. The vaults that I sell for original is sold at a higher price than I can sell because they already have this trend. This is going to happen with all brands. So we are benefited on these 3 pillars. And another important pillar, which is exchange of information because there is a market for everyone. So you're not competing, you're just participating in the same market, but when we share data, we can optimize this internally and generate more value for the group as a whole. So this is quite relevant.

Let me just add to what you said, Renato, just so you have an idea of the scale. In our presentation, we said that the top buyer had 120,000 cars and we have 90,000 cars and the third was like 89,000. So if you add what -- all the dealers purchased in the last 12 months, this number is close to 30,000. So there is no difference of scale in purchase of cars. This is over. 2 years ago, you would buy 33% of what our competitors were buying, but not to mention the other lines that we purchase and they don't like trucks. But in 18 months, our group has built in this purchasing gap. So let's make it clear. So the Samar Group with Movida and the dealers that will be approved has reached 120,000 cars purchased in last 12 months. And in the perspective of credit, infrastructure, robustness and scale of negotiation, we'll look at the group as a whole rather than Movida in isolation. So in a comparison basis here, we're very well positioned as well the other companies in the group with an aggressive growth plan that will contribute as a whole. Now ROIC for new cars, we can't give you any numbers. But we talk about EBITDA margins, okay? We're still learning about the difference between buying and selling, but the perspectives are very positive. When you look at the competitors, they will give you an EBITDA margin that is higher than the traditional GTF. And it will be distorted upwards because the ROIC we were conservative and depreciation. So we have this conservative depreciation and high margins. So the sales will exceed what we had in the business plan. So in the short term, this is going to be even better than it would be in a normal scenario.

Good morning. Well, Victor, about return, it's important to notice that the new cars has a cost structure that is very similar to traditional GTF, and you have special pricing for individuals. If you have technology and you can optimize the whole revenue management part, you can obtain a top line return that is even higher. So very positive prospects.

Just to add to what Renato has already said. The average GTF is always a bit smaller.

That was Rafael, our new car Director.

This is Pedro Bruno from XP. Can you tell us a bit more about the price sensitivity? You talked about that in your presentation, but if you could give us further information? You said how hard it would be to grow in 1 year time or 2 years' time with this new price. It may be more obvious to think that in GTF, we're focusing the greatest part of your strategy, this would be easier because you're working with B2B in 100% of the segment. They rent cars because they need to rent. And if the prices are higher, it's one thing. But in RAC, this is less obvious, but RAC also has the B2B share of the line of business, right? The corporate part. So is this rationale correct? In RAC, the customer has more alternatives, and you said how the new markets are helping you overcome this obstacle. So can you tell us a bit more about that?

Price sensitivity. That is based on the alternatives that customers have. It's about supply and demand. And all of the options or alternatives have also had price increases, so we can readjust prices without any problems. Like Uber. Uber hasn't kept the same service levels, the same prices. So many new demands are rising, and we were able to transfer the price increases to the customers. Yes, it's feasible. We are experiencing a positive moment in the market that joins leisure and corporate. I'm sorry, let me introduce myself. I'm Jamil from Rent-a-Car, 20 years in the car rental industry and 8 years at Movida. I've never seen this in my 20-year experience, corporate and leisure moving together is something new. We haven't gone to volume to the pre-pandemic levels yet. The rates are still high. Corporate are now -- corporate customers are traveling by car. People are traveling all around Brazil. Many services haven't stopped like robotics and other businesses that have not stopped. And there are many people who are now traveling Sao Paulo, Rio, we're not traveling Sao Paulo, Rio or Sao Paulo [indiscernible] by car in the past. But during the pandemic, they started driving once again, and this is going strong. So the corporate business is going strong. Now leisure of course that the holiday season has a very high demand for cars. And for leisure, we have all other countries with their borders closed or in a great situation. It's hard to travel. We don't know if France will accept a 5-year-old that hasn't been vaccinated yet. There are many different rules that are not clear, and Brazilians are traveling more in Brazil domestically. Renato showed us the fluctuating rates in the chart. So Brazilians used to buy air tickets and hotels, and then they would figure out what they would do to rent a car once they got to their destination. But now they know that they need to check their plane tickets and the cars. So there was -- there will be cars available, and that would be very expensive.

So how about next year? Will that still be elastic?

Yes, it will for several reasons. I mentioned some. Renato said the 7% Rent-a-Car penetration here in Brazil. In Europe, that's above 14%. Their prices have gone up more than ours. So we have the ability to increase our prices more and to grow. And also at and Renato said something very important, the number of stores we have. We have major cities to grow, 42 of them, if I'm not mistaken. And another 60 medium-sized cities and towns to grow. So we have the capacity to grow with our stores, we went from 75% to 82% occupancy rates and 2% with an NPS of 80 and with the ability to grow in new cities. So this gives us a great growth potential and also to redefine prices to the whole sector.

This is [indiscernible] from GTF. Let me try and answer all of your 3 questions. We had a process improvement. We're focusing on medium fleets for GTF in the coming years. And how can we transfer this price? We have a different fleet, a different products as Renato said. Now the second point, we -- based on the contracts, the relationship we have with the customers, we can define new prices for older contracts with price adjustments that are higher than the inflation rates. Most of our contracts have GPM as the readjustment index, and this has given us a soundness to the existing businesses. And our geographic footprint, we want to be closer to our customers in regions that are growing so that we can capture in places with differentiated tickets. And the avenues are large. We see the possibility of doing that comfortably. Feasible, as he said, right, they want to go slower. I think we could go faster. And when we do that, I say, "See, I told you so." Because, of course, we can -- we have to take into account where we are going to gain and where we're going to lose. But I think that we could have grown even faster, but we're doing fine. And I got to mention one thing. The corporate business, which is very representative for us today, now has a fluctuating rate. We are the first car rental company to do that. Renato said we were doing that in the B2B [indiscernible] small and medium businesses. We did that 2 years ago, and it worked really well. And then we started to transfer this new concept for all the corporate business, which is helping us with the pricing as well.

[indiscernible] had a question.

Hi, everyone. This is Gustavo from Bank of America. I wanted to further understand 2 different things. You said you're going to give further attention to the fleet in the next 2 years. When we look at the ROIC spread, RAC until Movida entered the market, the returns were higher. This is an industry with a higher entry barrier, but that changed in the last 5 years. We saw major draw rates in this sector. And the ROIC spread decreased whereas the fleet, which is something counterintuitive, had a higher ROIC. But today, we see a scenario in which many people are now focusing on fleet, OEMs, new company of [indiscernible]. So in this new 5-year strategic plan, what are your prospects for ROIC? And this week, we will see [indiscernible] decision. We are not sure what's going to happen. But in case this deal is approved, what do you think the day after will be? If this integration is approved, what is the aftermath will be like?

So okay, first about the ROIC spread. Comparing RAC with GTF, this is an unfair comparison because RAC is what generates scale, but it has all the cost. And GTF can only buy cars for that price because of RAC. So RAC helps GTF have such a high ROIC. If you look at the ROIC of small car rental companies, it's not that high, especially so for OEMs. So it's like a marketing expense. They see what's going to happen, and they go for it. And if you see aggressive plans like Portoceguro's plan, BRL 300 million, 4,000 cars only. It's a very small business. And if you look at the OEMs, their plans are also small. But the market is huge. I'm sure there will be other competitors with different businesses, but the return levels will be high for very long time. I believe until we find a balance between supply and demand, and then that will go to a more reasonable level. But for the next 5 years, I think the spread will be really good and then those that are well positioned with better scale and that can make the most of the whole ecosystem then can have a better return than the others, and that's what we're doing as Movida and as a group. Now about the question of [indiscernible], our strategy doesn't change. Our strategy is fit for both scenarios. We say that we're not that tense. If they ask me about Wednesday, I'm like, "Is that about the soccer match? Oh, no, about Cade." We're not even thinking about that. And the OEMs are more concerned than we are. There are 3 OEMs asking me.

How much more can you buy if this merger is approved? Because they don't want to have a customer that is very dependent. And they're like, well, if this is approved, can you get another 50% or 30%?

Well, if that happens, if that merger is approved, then we need to see if it makes sense to make the most of the acquisition opportunities in order to find a better balance. If we're talking about scale in the pre-pandemic, that's 3x our size. The combined company today is like 2.5x. So we are prepared for either scenario. And there are pros and cons to each one of them. Having 2 players has a price advantage, of course. Any merger will decrease the competition even now that we have this moment of integration. And if that happens, we can increase prices even faster than we are already increasing.

Hi, Renato and Edmar. I think one of my questions has already been answered. It was about the relationship with the OEMs if the deal was approved and you answered that already. Now question for debate. We hear from investors that the sector has been seen a mismatch between cash flow and dairy because the new car margins are very good. ROIC is growing. But on the other hand, we see a great CapEx pressure because of higher car prices. And you said that these prices will not go down, right? It maybe grow at a slower pace. But what do you see between this mismatch between results and cash flow?

Well, that explains some of the movements that we put in place in 2021. Typically, this industry needs money to grow, and it will generate cash before growing. So what will happen now in the new cycle? It will require more cash than usual because of this mismatch between the purchasing price and the selling price. But we believe this is a onetime thing. We'll make an effort now. And based on our assessment, it's better to start earlier, right? If you need to lose 20 pounds to start on Monday and not on the eve of summer. And the effort is real. If we sell a car today for BRL 60,000 and we buy that for BRL 80,000, that means BRL 20,000 to renew the fleet. But that's a cycle. And depending on the fleet profile, we can adjust that in 2 years' time or 3 years' time. We'll have to manage our fleet positively to the market, explaining our strategy. For us, it seems to us that we are ahead, and the market has seen that we have more money for this cycle in which we need more working capital. When we analyze the cash flow, we need to break down to 2 things. First is the operating cash margin, which is improving. So when we look at the operating cash, this is improving. Now when we talk about expansion and renewal, part of what you see as renewal CapEx is actually expansion.

Why is that?

When I replace a [indiscernible] with a compass, yes, I like to use an analogy. If you have 2 room -- 2-bedroom apartment, and you see that the 2-bedroom apartment market has disappeared for any reason, then you need a 3-bedroom apartment. The same thing applies here. You're talking about the same thing, apartments, but a 3-bedroom apartment is worth more and you replace one with another. Same here for Moby and Renegade. These car brands. If you start earlier, it's better for you to dilute the effort throughout time. And this demand is there for other categories as well. The excess of content in a cheaper car bring it closer to a better car. And they say, well, for another BRL 50, I will migrate to a better car. So that is growth. And if you look at an apartment business like that, you wouldn't be able to see the percentage of growth in number of apartments because that's not what matters. But the assets you have, the value you have in stock. The same for cars. When we look at CapEx, our growth is much higher than the number of cars because there is a spread. And the other thing is the difference. The mix of used cars comes later. You transform the rental mix. And when you start selling, the mix is different. So in December, the mix is different from November, and this balance helps us in the spread. And I was reminded that this was considered in our CapEx guidance. So the difference is already there in the numbers that you saw. There are questions on the Internet that are people in person as well, but let's go and take some questions from the web. You see, we have 3 questions. Stress from Filipe from Sanet. And yes, do you believe that the discount levels for the procurement of cars are going to be kept by the OEMs after the market goes back to normal? Second, can you explain what the partnership with Mercado [indiscernible] is going to be like? So 2 and then I'll ask more. Okay, the first discount. For '22, they're normal. What you saw here speaking and the industry will ease our right channel. We even gain weight inside OEMs. So today, we don't know if this is going to change. Perhaps in the future, nobody knows what the business model is going to be like in 5 years time. It will depend on the competition scale. So today, we see discounts as they are and to be bigoted in the short term, even better to have no additional discounts with extra volumes because there is going to be a difficulty because of retail markets, credits, but I don't see agile discounts going down. And for Mercado deal, [indiscernible] is going to explain.

Well, the Mercado Libre is going to work as an online travel agency to say, booking.com, [indiscernible] but are sell the car rental. And Mercado Libre is going to be one more. We are the first company to close the partners with Mercado Libre, but it has fees model for individuals. Remember, when we closed with Ipiranga in the past, a long time ago, 2016 -- '15 before 2014, a long time ago. People said, if we are, well, it is Brazil's greatest loyal program. It was a very, very low penetration. And it became a large source. We had first number of points reduction. And Catlin to lease, lots of people have not even considered renting cars, and they are going to see say, well, in making sense, it's only to be regress. So in terms of our platform for Mercado Libre go there and rent yours. More questions online. This is an interval and refine. And his question is, how can we convince people that having a subscription car makes more sense than renting? Well, do the math on the website, you have a spreadsheet. This is your sales pitch. Okay. You have 2 major benefits. The first benefit is comfort. You have a subscription car, so you don't have to pay PPAs. We don't have to take the car for inspection. Everything is part of the bank. And we know that in a connected where connectivity is a trend. And the second many cases, and we see that case by case, we simulate conditions to clients, depending on the price trends, we see that 80%, 90% of the time, you do have a financial banks. So that is the best of all worlds. With the economy going down, with people is more concerned with economic scenario, the [indiscernible] growing product. So the 2 benefits together are quite powerful and ensures an avenue of growth for the coming years. And of course, we buy at scale, we sell these markets to have efficiencies on cost and operations that are passed on to clients. I think there is a question between subscription costs and advantage costs. What decisions is that you have monthly rentals on the Rent-a-Car business, and you'll be in for 30, 60. There is a gain, but then you can change over very well. 2 is a long-term contract you have a better financial gain because it's a longer can competitive. Now to brand new cars. See how much drive and the cost that we have volumes, it is 10%, 15% savings in addition to the comfort and not having to use the money now. Other people have a cost of content opportunities that is even greater. The last question that we got is from of Santen also intent what is the limit of the used car market? When the growth of fleet will be affected by the limited capacity of the used car market, heavy or cost? So as I mentioned, the market has 1.5 million cars even with the retraction what I believe in the future. If the industry thinks that it's going to be more and more subscription. But we are going to have more penetration in the sales of used cars. So it should be completely diligent today. Today, we have a little share. After some time, what happens. It is the second lap of the renting cars. It takes time instead of buying your stock because can I rent this 1 for more 2 years. So you gain market. So you're talking about this 1.5 million cars a year in terms of capacity, there is some other client value, but it is the aging of our fleet. Last production ages to fleet. Give us some color about used cars, talk about capacity of sales? And then we are more responsible person in our test question. Everybody talks about the size of the market. We have underpenetration, 3% market share in the market of 1.2 million cars. So we believe there's huge potential. And in addition to what we are bringing in duties, we have more prepared stores, very strong digital channels. So 40% of our sales are digital. That double whether -- So we are more prepared to provide online services selling online, 100% using one it from other sources, a smaller store that has capital at. We have 100 stores in Brazil. We can receive your used car, we can sell asset services. So in a market cars, we can increase market share. Like there's room for everyone, and we are leading the segment. This is what I think. From the DC. Net CapEx of 5.1 billion to 6 billion. How much is that for fleet renewal? And how much is for expansion? And how do you see the average age of our fleet in the cycle if it's going to be close to the pandemic or more as. And also 1,000 cars amounting renew cars, what is the period? This is the average of the years in 30 days. The 1,000 cars alone. This is not our target. This is our rate, and it has been sold for some months. So it is consolidated operation. As we have been saying for some time now, we are the only company that is delivering brand new cars without waiting line. That shows the strength of our operations, led by [indiscernible] renewals, and that's why we showed you the table. Because we are still not sure and we are working in the market. What we say is that the 30,000 cars for gross seeing achievable without no extra effort and being able to substantially renew our view. We have the youngest leads of the 3 largest players. So with a low renewal rate and growing 30,000, we should be at a lower age than what we have today. So the scenarios would help us with our maintenance and again, the effort to target a long time ago. I think the advantage to this that I think we have the opportunity to buy more cars. We have the steering wheel. We can grow in different avenues of growth, and we can renew the fleet. So I can test renewal because we have no look about the used car business. So it is very different. We have a lot more discussion. So renewal is also an avenue that can to help us grow the company. Of course, we have to wait days so that we can maximize returns. But it will depend on the demand. But the average rate is going down. The average age is going down, to be quite straightforward.

If you could please talk update about the potential market for the Movida car imitative? And what is the strategy of the business, like agreements, just an overall of the Movida car initiative?

I'm going to let [indiscernible] and the Mupita cargo business. I'm sorry. Well, in the beginning, we started to see a need in the Brazilian market to try to work with their feet. So people would go there, some with older cars, other newer cars, different, different brands and the costs didn't have much capacity. So not any [indiscernible] was our first partner, and we conducted the study and developed the product with them because the driver received per package on board a bit. So if they have the capacity on a boy watch for 70 packages 1 day, they start to use Purina,and they can carry 100 packages. So that was to work so that it will be a win-win negotiation. [indiscernible] would deliver at, we would win by having a good price, and the drivers will have a higher volume -- It's a Chinese market that we use for Cedric -- We started working with large customers like Magazine Luiza, but we also have a small and medium businesses. We have an OTA for events that is renting our events by hour, by day, by month. So this is a market we highly believe is growing a lot in recent months, and there is much room to grow. And it open stores to other types of cars to help Daniel in the sales mix. It's not only [indiscernible]. We worked with [indiscernible], with [indiscernible] that can in even better for the retailer drivers. And today, we have larger vehicles. So it is a different business in terms of devaluation. This is a point to be considered. But [indiscernible] was something that we were used to. And [indiscernible] has a market. It has a higher mileage, but there are people that want it. It's very different to sell with 8,000 and Fiorino with 8,000. It is secular. There is a niche for this type of car. Yes, cargos cars have longer life. You changed after 2, 3 years, but they have a much larger life with other operators. We are getting close to our time. Good morning. Piano first congratulations on your presentation.

And if you could please give us a bit more color on your mix strategy? And here I'm talking about the rental car and fleet management businesses given those strikes of 85,000 that you have in your guidance. What is the impact? How much is from mix? And how much from gate demand -- In our presentation for our call in the third quarter. mentioned about how we got to the 85,000?

Part of this was because of price increases and also a larger part of it because of a changing mix. So when you take a look at the 85,000, that's why we already bring the information of 100 -- 10,000 for used car sales. Because on October base, we are talking about the most basic make that are being manufacturer again, and they were not in the third quarter. So the combination of changing prices. But I would say the highest impact is the change in the sales mix and aware of the team that leads the business units is exactly that the right price at the right car to the right clients. And we are doing that with more than 80% of occupancy in the rental car, prices grows to 120, fleet management with a very movement to change prices for new agreements, revenue costs, just the same. So overall, we have been able to get to the front end of new prices for the cars with price increases. And again, this is an even -- and again, it is giving and the advantage of having several avenues is that sometimes push up into the company, generally expect for instance. I didn't want a larger car. On the fee but the OEM said, well, but if you buy this one, I'm going to have you and we said, okay, you have me out. And today, the average it rolls up, C has higher tickets and this is above our average. So as Ed mentioned, this mix, well, it's different. [indiscernible] is going up. That is the average price increases. So now we have balance mix and perhaps more similar to what we want in the future. So we're going to have less mix variation. And as smaller cars are manufactured because with the lack of checks, they were the ones that were most affected. we're probably going to have an increase of brand new cars in terms of prices, but we are going to have a better mix, less expensive cars with a mix very similar to what we are having today. That's what we believe in terms of scenario. I don't think that mic likes you, but we are trying to hear. I think that's it. Anything?

Has just asked to talk a bit about electric cars and normalization of the lease. Well, electric cars, all OEMs are very much interested in launching in May and people say, there is a batch of electric cost. We wanted to buy it and that is going to be good for us.

And as are you going to keep the whole batch?

And I'd say how many cars? And I say, yes, sure. So we have hundreds of electric cars, lead is selling well. We are renting well -- We have today a proforma with an interesting mix, meaning copper, lift, bans, BOB, there are many things. But still spent. It's growing little by little. We have been pioneers. We are being able to be profitable with the small -- But today, I cannot buy a 100 electric cars amounts so you're going to have a problem with returns our case man, we can grow with market, with profitability. And when we are selling, it's also one-time electric cars. It's not easy to sell 1,000 use electric cars. We have now a lot of construction that is specific for electric cars. So we are doing our homework to make things easier for customers. Some are on board. They are doesn't want, they say, because we have the possibility of subscription. So it's a pleasure to drive. It's a pleasure to have the and it's not exactly because of the price rationale. So some models are starting to be more appealing to be closed to regular cars, but it is still not the main driver for the change of mix that we are having.

What was the other -- now November was already a bit better. At the end of the month, we were able to normalize production. The forecast certain volume. But at the end of the month, they had additional volumes. So it's starting to normalize. Some people are very optimistic about the first quarter. Others are a bit more conservative. We have the PL 7 volumes. Cars that will have their engines replaced, we need to approve for regulatory is January and February. In the supply, we'll be a bit lower because of that. But we -- it's not that we'll be able to buy everything we want. But in the short term, I don't think we're scared. Okay. Thank you very much, once again, for your presence. It's great to have a hybrid event, partly in person and partly online. Well, below your chairs, you'll find a gift. And one of the chairs, actually, you will find a gift. So see who view is the lucky one? For those of you who are online, the [indiscernible] guys are collecting the list of the names of all of you who have stayed till the end, and we will share also addressed with you later how we see the winner is here in the room. Congratulations, you used an electric car and never want to go back to a regular car. After you taste an electric car, you know that cars will be electric in the future because it's simply better. And you will want to change your consumption habits, focusing more on ESG and so on. Please fill in our assessment sheet so that Movida can participate in the contest of the best meeting and win again. So it will take you like 3 minutes, and then I will hand out 4 different copies of the book. It's 3 minutes. It will take you 3 minutes. It's the time I need to drag the book...