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

[Interpreted] Good morning, and welcome to Movida's 4Q '24 Earnings Conference Call. Joining with us today are Gustavo Moscatelli, CEO; Daniela Sabbag, CFO and IR Officer; and Camila Francischelli, Head of Investor Relations. This event is being streamed on Zoom and also available on the company's website ir.movida.com.br. [Operator Instructions] We would like to remind everyone that today's presentation will be conducted in Portuguese with simultaneous translation into English. If you do not understand Portuguese or wish to listen to the presentation in English, you can simply click on the interpretation button in the bottom right corner or on the 3 dots for more, if that's not feasible and select English as your preferred language. As of now, participants are welcome to start submitting questions through the Zoom platform. To do so, just click on the Q&A button located on the bottom bar of your screen and type your question. Before we begin, we would like to let you know that any forward-looking statements made during this call regarding the company's business outlook, operations and financial projections and goals are based on Movida's management beliefs and assumptions as well on information currently available to the company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions as they relate to future events and therefore, depend on circumstances that may or may not occur. General economic conditions, industry conditions and other operational factors may affect the future performance of the company and lead to results that differ materially from those in the forward-looking statements. The results discussed in today's presentation are adjusted for nonrecurring items. The respective reconciliations are available in the earnings release and in the financial highlights spreadsheet available on the company's IR website. Now I will hand the mic to Mr. Gustavo Moscatelli. You may go ahead.

[Interpreted] Good morning, everyone, and welcome to Movida's 4Q '24 Earnings Conference Call. I'd like to begin by thanking our people over 6,000 employees for dedication, efficiency and quality in a succession to deliver our quarterly and full year 2024 results. I also take the opportunity to welcome Daniela and thank Pedro, who is now leading our operations in Portugal. We'll begin on Slide 3, where we bring a summary of the structural progress made throughout the year, with disciplined management with a clear focus on our core commitment that is create value for shareholders. Movida's top priority in '24 was recovered prices in the Rent-a-Car segment. Our average ticket price increased 20% in the quarter compared to the same period last year. And we reached previously announced yield guidance of 4.2% per month ahead of schedule in 3Q. And in 4Q, we exceeded that delivering 4.3% per month. The second priority for '24 is also price related in the GTF segment. We raised the pricing bar in this business, signing new contracts during the year with an average yield of 3.2% amount, way above what we had done in '23. But I also would like to highlight that in the 4Q, the marginal yield to new contracts reached 3.3%. The third key change in '24 was related to long-term capital allocation. We achieved our guidance of having 60% of the company gross fixed income allocated to long-term contracts versus 50% in '23. The initiative is bringing more resilience and predictability to results and cash generation. Another major success was in cost and expense management. We worked hard to reduce cost and expenses throughout the company, alongside our pricing efforts. This helped elevate EBITDA margins in both Rent-a-Car and GTF in '24, reaching record levels in the company. Finally, we made significant progress in improving efficiency in our used cars operations. We met all the guidance set at the beginning of the year, ahead of schedule for this line of business, both in terms of discount reductions against the fifth table and in the number of cars sold per store. In '24, we sold an average of 39 cars per month in retail stores, an increase of almost 40% in-store productivity compared to '23. Now I'm going to move on to our consolidated results on Slide 4. We are reporting another quarter of sequential records in net revenue, EBITDA and EBIT of the company. Operational improvements across all business lines drove a real transformation in our performance indicators throughout the year. In '24, we delivered net revenue of BRL 13.5 billion, EBITDA of BRL 4.7 billion and EBIT of BRL 2.7 billion. We recorded adjusted net income of BRL 305 million and accounting net income of BRL 232 million, an impressive turnaround from 2023. With this, we've reversed the loss of last year and had a return on invested capital up 12.3% in the last year, a 4.3 percentage points from the prior year. It's very important to highlight these indicators and how they evolved when we look at the rental segment, which is our core business. Our operational fleet grew 14% during the year, and net revenue rose nearly 30%. Rental EBITDA increased 41%, and EBIT plus 62% in the same period. This strong performance reflects our improved efficiency and supports a strong value creation cycle for our shareholders. Now moving on to Slide 5. You can see that we met ahead of schedule all the guidance we had established for the end of '24. These targets were defined at the start of the year and formalized in a material fact notice aligned with our strategic plan for the year. The guidance of used cars were surpassed in first Q, GTF second Q and Rent-a-Car in the third Q. During all quarters of '24, we had sequential increases in daily rental prices, reaching our target yield of 4.2% a month and moving to 4.3% a month in 4Q. Price intelligent tools and car distribution tools enable us to combine a nearly 20% increase in prices with a 0.2% uptick in rental volume. As mentioned before, we also hit our used cars target with an average of 39 units sold per store and capital allocation in GTF segment, 60% of gross fixed assets through '24. These results demonstrate our discipline and execution agility, meeting all the indicators we had set. Moving to Slide 6, we bring Movida's consolidated financial results. Net revenue in 4Q '24 reached BRL 3.2 billion, a 30% increase year-over-year. Rental revenue alone rose 34% in the same period. Again, we highlight that our fleet grew 14% year-on-year, reflecting operational productivity gains. EBITDA for the quarter reached BRL 1.2 billion in the quarter, up 40% versus 4Q '23. Rental EBITDA grew even faster, up 45% year-over-year. Our EBITDA margin had growth of 5.2 percentage points, reaching 68.5% in 4Q '24. The expansion shows the accuracy of actions implemented in the year across all rental business lines. EBIT was BRL 685 million in the quarter, up 84% versus 4Q '23. We again delivered solid net income results. In 4Q, the results were BRL 73 million in adjusted net income and BRL 62 million in accounting net income. For the year, we totaled BRL 305 million in adjusted net income and BRL 232 million in accounting net income fully reversing last year's loss. Slide 7 shows our rental EBITDA margins in rental operations since 2016. We show we sustainably reached the best operational results since the IPO. In 4Q '24, Rent-a-Car EBITDA was 66%. GTF margin was 72.5%, reflecting consistent profitability across all segments in recent quarters. This record margins reinforce the success of our efficiency initiatives and solidify Movida's position as the companies with the highest EBITDA margins in the car rental sector in Brazil. Slide 8 covers depreciation trends for our assets. For the Rent-a-Car segment, annualized depreciation per operating vehicle in 4Q '24 was 6,500 in the year, in line with recent quarters, a stable and healthy level in terms of depreciation rents for Rent-a-Car with maintenance of the depreciation of new cars between 8% and 9%. In GTF, annual depreciation per vehicle in 4Q '24 was BRL 10,000. The evolution in the year reflects higher value cars being added to the fleet and lower value vehicles being phased out. Additionally, the vehicles removed from the fleet had lower depreciation rates due to the appreciations we had in the past years. On average, recurrent depreciation rates for new GTF contracts range between 8% and 10% a year. Slide 9 shows the evolution of all the efforts and changes the company went through and the return on invested capital. Our ROIC reached 12.3% in '24, an important increase of 4.3 percentage points versus '23. The result shows the continuity of value creation for shareholders, exceeding the cost of debt by 3.5 percentage points in the year. This evolution combined with ongoing initiatives like continued price recovery in the Rent-a-Car, higher yields in GTF contracts, sustained productivity in used cars and discipline in capital allocation and debt manage leads us to growing and sustainable levels of our ROIC spreads. Going to Slide 10, we provide a preview of our results for the first 2 months of '25. The strong growth of our results reflects the successful execution of our strategic plan. Net income for the period in the first 2 months was BRL 42 million, doubled the result from the same period '24. Net revenue grew 20%, reaching BRL 2.3 billion. It's important to highlight the evolution of the rental net revenue that increased by 26% over the year in the first 2 months, while total fleet went from 268,000 cars in December '24 to 261,000 in February '25, a reduction of almost 8,000 cars this year. This demonstrates our agility and discipline in adjusting fleet size during seasonal periods, which is going to be key for value creation through 2025. EBITDA grew 27% to BRL 864 million in the first 2 months of '25. I'd like to highlight the evolution of EBITDA margins, both for Rent-a-Car and GTF which remains strong, above 64% and 76%, respectively. Used car margins remain stable and within expectations. EBIT grew 26% to BRL 486 million for the period, further enhancing value for the company. And finally, EBIT had growth of 26% reaching BRL 486 million in the quarter. Now I'll hand it over to Camila, our Head of Investors Relations. Camila?

[Interpreted] Thank, Moscatelli. Good morning, everyone. Going on with the presentation, let's move to our business line highlights. Slide 12 shows the key metrics for Rent-a-Car. In the first chart, we have revenue per car, which continued the upward trend, reaching 3,300 per month in 4Q '24. The improvement combined with optimized capital allocation allowed us to exceed our guidance, reaching a yield of 4.3% per month, as previously mentioned. We also highlight our average daily rate, which reached BRL 151 in 4Q, a 20% increase over '23. Operation occupancy rates remained healthy at 78% for the full year '24 and total rental days grew 6.3% in the same period. Moving to Slide 13, we show the financial indicators for the Rent-a-Car. Net revenue was BRL 809 million in the quarter, a 20% increase compared to the same quarter last year. Our average operating fleet grew by only 9% year-over-year, reaching 88,500 cars in the fourth quarter '24. For the full year '24, net revenue exceeded BRL 3 billion, representing almost 16% growth versus 2023. EBITDA in 4Q '24 was BRL 534 million, growth of 41% versus 4Q '23. On a full year basis, EBITDA grew over 30%, reaching around BRL 2 billion in '24. Again, we highlight the record EBITDA margin in 4Q '24, 66% an expansion of almost 10 percentage points versus the same quarter '23. For the year, the margin improved by 7.3 percentage points, staying close to 65% across all quarters '24. As a result, EBITDA per car continued to grow, reaching BRL 2,009 per month this quarter, a 29% increase compared to the same period last year. For the full year, consolidated was more than 21% in '24 versus '23. On Slide 15, we show operational indicators for fleet management and outsourcing. We closed 4Q '24 with a total fleet of 146,500 cars, up 12% versus 4Q '23. Our backlog of future revenue from active contracts totaled BRL 6.8 billion in 4Q '24, a growth of more than 51% compared to last year. The next chart shows GTF's share in our gross fixed assets, as part of our strategy is to continue prioritizing capital allocation segment due to higher predictability and stability. As shown, GTF share increased from 55% average in '23 to 60% average in '24, in line with our guidance for the year, as Moscatelli mentioned. On Slide 16, we show GTF's financial results. Net revenue for '24 was BRL 943 million, up 49% versus the last quarter last year, while the operating fleet grew at a slower pace, 19% in the same period. As a result, monthly revenue per car increased again, reaching BRL 2,780 per car in 4Q '24, an increase of 22% year-over-year. From '23 to '24, revenue per car increased 21%. EBITDA for the quarter reached an all-time high of BRL 684 million, up 45% versus the same quarter last year. As mentioned earlier, EBITDA margin for the segment remained consistently strong at 72.5% in 4Q '24, stable versus 4Q '23. As in previous years, in the last quarter, we had a concentration of preventive maintenance because of vacation periods for many companies. On a full year basis, EBITDA margin expanded by 2.6 percentage points, reflecting the segment's new level of profitability. As a result, EBITDA per car also delivered healthy results in 4Q '24, averaging BRL 1,791 per month, up 24% year-over-year. On a full year basis, the increase was over 27% compared to '23. Now on Slide 18, we present the used cars performance. Operations continued strong with significant increase in sales volume. In 4Q '24, we sold 21,900 cars, up 27% compared to 4Q '23. For the full year, we hit a record volume with more than 103,000 units sold, a 36% increase over '23. Net revenue in 4Q '24 reached BRL 1.5 billion, up 26% from 4Q '23. The growth also reflects the sale of more basic vehicles compared to last year. In '24, total revenue reached BRL 6.8 billion, a 30% increase over 2023. EBITDA margin remained normalized for this line of business at 1.2% in 4Q '24. It's worth noting that administrative expenses as a percentage of used cars net revenue went down to 6.2%, down 2.4 percentage points from the 9.1% in 4Q '23. This improvement reflects operational efficiency gains and cost dilution across the business. Going on to Slide 19, we highlight the evolution of our inventory mix, which has been a key factor for used cars performance. The current profile is more liquid and commercially appealing with cars that are more basic and available. The percentage of hatchback in the inventory rose sequentially from 41% in 4Q '23 to 66% this quarter. As a result, the average FIPE table value for our cars dropped from 78,000 to 72,000 per vehicle this quarter, and this should continue to support asset turnover in the coming months. In addition to the car mix, Movida has a differentiated market position and strong store infrastructure with no need for expansion. Now I'll hand it over to our new CFO, Daniela Sabbag.

[Interpreted] Thanks, Camila. Good morning, everyone. It's a pleasure to be in my first earnings call of Movida's. And before going to Slide 21, I would like to say that I'm very enthusiastic in taking this position. In less than a month, I've had a warm welcome, had the chance to interact with my teams and find a highly skilled group of people to tackle the challenges ahead. I hope to contribute to Movida's financial strategy with a focus on operational efficiency and long-term value creation. On Slide 21, we are talking about debt profile. On the left-hand side, we have our debt maturity schedule broken down by quarter between '26 and '26 -- '25 and '26. I'd like to highlight that our schedule is extremely healthy. No significant concentration of maturities in any single quarter over the next 2 years. Cash position closed the year at BRL 4.3 billion, enough to cover all gross debt payments through mid-'26. Net debt ended the year at BRL 14.7 billion with an average cost of CDI plus 2.1% a year and average maturity of 3.9 years. 2024, was a very dynamic year for spending activity with BRL 5 billion in new debt raised further validating our strong access to capital markets. Our latest debenture issued in December '24, was also completed under very favorable terms to the company. The total amount was BRL 1 billion is split into 2 tranches of BRL 500 million each, with maturities of 4 and 7 years and average cost of CDI plus 2.5% a year. On Slide 22, we bring our leverage and interest coverage metrics. On the left, net debt-to-EBITDA ratio decreased to 3x in 4Q '24 continuing the downward trend we saw throughout the year. Based on 4Q '24 annualized figures, leverage would be 2.8x, and we expect this trend to continue into 2025. In addition, our interest coverage ratio, EBITDA over net financial expenses reached 2.5x showing again, sequential improvement. Our net debt to fleet ratio remained stable at 1.5x in 4Q '24. The net fixed assets for the fleet reached BRL 21.6 billion, exceeding our net debt by BRL 6.9 billion in 4Q '24, an improvement of more than BRL 450 million compared to 4Q '23. On the bottom right, we show our supplier payment schedule focused on OEMs only. As of year-end, we secured improvement payment terms with OEMs with over BRL 2 billion scheduled for payment in 2Q '25 and 3Q '25. The table at the bottom shows our debt evolution, which totaled BRL 14.7 billion in 4Q '24, showing a growth at a slower pace than our EBITDA. Now I'll turn the call back to Gustavo Moscatelli to close the presentation.

[Interpreted] Thanks, Daniela. We'll start with Slide 23. And I'd like to share the key priorities of our 2025 strategic plan. First, we will continue to implement price adjustments in both the Rent-a-Car and GTF segments. As you have seen, our results for the first 2 months of '25 already reflects the trend with rental net revenue growing 26%, while the fleet grew only 12% in the period. Second, we will focus on consolidating our differentiated positioning in the used car segments. We'll maintain high levels of productivity and efficiency in per store sales, while further reducing the discount to the FIPE table across all sales channels. Also important to say is that we already have a sufficient number of stores in place to meet our sales volume for '25. No expansion will be necessary this year. These initiatives together will allow us to maintain EBITDA margins for used cars as we saw in the first 2 months, around 1%. The third priority will pursue even greater operational efficiency through continued cost and expense reduction initiatives, combined with higher yields in the Rent-a-Car and GTF segment, these efforts will continue to support strong operational margins in both businesses. Our fourth priority is reducing the company's leverage throughout '25. As we've done over the past 2 quarters, we will continue this agenda over the coming year to optimize our capital structure and increase returns to shareholders. To wrap up, I want to express that we are very excited about the results and the transformation underway at Movida. The results give us the confidence to continue executing our strategic plan with discipline and focus as we move towards operational excellence. This allows us to generate sustainable long-term value for our shareholders while continuing satisfying our customers, delivering solid formula for sustainable business development. I'm confident we are on the right path, and we still have much more to deliver. Once again, I'd like to thank our people for their commitment and everything that we'll continue to bid together to shareholders, suppliers and customers, our thank you very much for your trust. Now we can open for your questions. Thank you.

[Interpreted] [Operator Instructions] Our first question comes from Andre Ferreira from Bradesco BBI.

[Interpreted] Congratulations on your results. I have 2 questions. One is about the suppliers line. You talked about BRL 6 billion quarter-on-quarter. Looking at the behavior of the 4Q '23 that was similar. It reflects the acceleration of the car purchases in the year. And based on the preliminary results of the first 2 months of '25, we see new -- used cars, BRL 1.1 billion, better cash flow because of the net reduction of the fleet, which is about BRL 650 million and now that could be used to pay this line. And if we extend that to 3 months, almost BRL 3 billion in the schedule and a bit more. So first, I would like to confirm if I understand this line correctly, and if you see a need to issue a new debt to close these numbers and continue with the schedule of payment to suppliers along the year. Second question, GTF margins, you had a drop of almost 3 percentage points quarter-on-quarter, but the preliminary results of '25 goes back to 76%. The question is, what should we expect for the coming quarters for the margin? And if the drop was in a specific segment of GTF?

[Interpreted] Andre, Moscatelli speaking. Thanks for your questions. Okay. Dynamics of the supplier line, as you mentioned. I think seasonally, and you are used to that, we grow the fleet at the end of the year to benefit from the months of December and January, which are the best years -- months of the year for the Rent-a-Car business. So seasonally, this is something that we always do. And with that, we advanced approximately 12,000 cars to be purchased in the beginning of '25 to the end of '24, given the terms that we had with the OEMs. But immediately after the seasonality, we started to sell the cars, as you said, almost 8,000 cars until February and a bit more predicted for March. So the dynamic of cash flow, as you also mentioned, was very strong. The operational result for the first 2 months was really spectacular you saw both in services and car sales. In March, we are going probably to have the best month in the history of Movida in both segments, rental and sales, and that will make us to cope with the BRL 3 million that you mentioned, basically organically. That is with the generation of operational cash. But in January, we had a bilateral funding of about BRL 450 million. Other than that, no plans. The cash for the fourth quarter, almost BRL 4.3 billion in balance, we reinforce that with another fundraising of BRL 1 billion, as we disclosed to cope with the first quarter and the purchases that we had. So it will continue strong in the first quarter. And it's important to give you the message about March that I mentioned that is going probably to be the best men ever for Movida, both in cash generation coming from the rental segment and the used car sales. The second question, GTF margins. We organize ourselves together with customers to have downtime for maintenance in the period where you have the collective vacation period. So you have a lot more volume of maintenance and that pressures margins a bit. But this is what happens every year that happened in '23, and as you very well said, it was back to above 76% in the first 2 months of '25. And you are going to see even more than that because of the initiatives we said, the pricing of Rent-a-Car, we really changed also prices for the GTF, and the work on cost reduction that we started for the Rent-a-Car and is now being transferred to the GTF business. So I expect even higher margins for GTF than what we mentioned in the first 2 months of '25. If you have any further questions, just let me know.

[Interpreted] No, very clear.

[Interpreted] Our next question comes from Daniel Gasparete from Itaú BBA.

[Interpreted] I also have 2. The first is to try and understand a bit more the rental car utilization or occupancy rate. I would like to understand the drop we had in occupancy rate to understand a bit of demand stability because you are adjusting prices. So if you can help us by segment, occasional, monthly, if you see anything or if demand remains strong. The comment about March being the best month ever is really impressive. So I'd like to have more visibility about that. Second question, Moscatelli, I think we cannot fail to ask about car price behaviors at the end side, if you see what's going on with the FIPE table, just your comments in general.

[Interpreted] Thanks for your questions. Well, we'll start with Rent-a-Car occupancy rates, as you mentioned, we did excellent work in terms of prices, but also in terms of distribution and the right allocation of cars at the right place. So an intelligent tool that we mentioned, and that is bringing excellent results. And within the portfolio of products that we have, we changed the mix given the profitability of the product we call occasional that is daily rents are bringing. So just to give you a bit more color, we had in the end '23, a mix of almost 67% in monthly products and 35% in occasional products. And we reversed that. Today, we have 43% in occasional and 57% in monthly. So the occasional product has less occupancy but also less severity of use, less mileage and a higher ticket. So in terms of profitability, the mix is a lot better now even with the occupancy rates 3x to 4x lower than the previous year. And we are going to continue with the strategy along the year. As for prices, purchase prices I see all OEMs adjusting their prices up in the beginning of the year. Many said that they will further adjust their prices in April. The exchange rates takes a token here. So I do not see a scenario of prices down, quite the opposite. I see stable at some brands, but most going up, which will probably bring further stability to depreciation rates with some potential reduction, although I'm not considering that in our plans. So this is the environment that I see for car prices this year.

[Interpreted] Our next question comes from Rogério Araújo from Bank of America.

[Interpreted] First, just to check for the Rent-a-Car business. From what I understand, occasional was -- is using higher yields, but with lower occupancy. Is that what we should expect? And if you could talk a bit about demand post Carnival both for leisure and corporate, that would help me a lot. And I'll ask you the next question, following your answer.

[Interpreted] Yes, you are absolutely right. We are allocating capital in what brings more return to shareholders. And today, I believe that our mix is a lot healthier than we had before, although occupancy rates are lower. So higher tickets, you're going to see probably in the first quarter '25, even higher than 4Q '24, occupancy rates equal or slightly lower, but higher yield. So we are focusing on results per car, return per car with this mix that is more for occasional rentals than monthly rentals. Carnival was fantastic, the best carnival we had in the company ever. And after Carnival, as expected, tourists drop a bit, but corporates came back stronger than what we had before. So as I mentioned, the month of March has everything to be the best month ever for the company. If you want to ask your second question.

[Interpreted] About debt, if you could give us a bit of color of the range of the cost of debt that was issued in January, what is the marginal cost for issuance today? And we see the market a bit stressed considering the listed debt. Anything in terms of expectation to have a buyback as you did have in the past, perhaps, I don't know, fundraising to buyback your shares that are a bit stressed. So whatever you can talk about the funding market and costs would be really helpful.

[Interpreted] Okay, Rogério, thanks for your second question. We worked very hard last year, and we elongated our debt schedule and reduce the spread. In the beginning of the year, I mentioned that we had a bilateral transaction. The cost was CDI plus 1.9%, very close to our average cost. But you're right, the market is more pressured and we saw our stock also very much stressed in the secondary market. We tried to buy back some large batches in the secondary market. But the second market, at least for our stocks is very tight. So we're not able to have any relevant purchase, but this is something we always look into because it may create value to shareholders, depending on the price of discount. We have 2, 3 credit lines in negotiation with banks that should be completed in the next 60 to 90 days. I'm very comfortable with that. And the cost of debt is not CDI plus 2.10%, it's 20, 30 bps above that. but because the period is more pressured for the market as a whole. So I do not see the cost of debt in the short, midterm, different from what we have today, CDI plus 2.10%. I don't know if I was clear.

[Interpreted] Yes. Very clear. And Daniela, good luck for the challenges ahead of you.

[Interpreted] Our next question comes from Guilherme Mendes from JPMorgan.

[Interpreted] Two points. First, I would like to talk about your fleet. The fourth quarter, you had a relevant change. We saw a deterioration. What is your mindset Gustavo for the fleet during the year? Are you going to keep the '24 cars that you added in the fourth quarter. And what's the impact of that on leverage? And the second question, we talked about Rent-a-Car and GTF prices, thinking about how that turns into ROIC spread? What's your expectation for the year?

[Interpreted] Thanks for your 2 questions. Okay. Your first question, as I mentioned, we advanced the purchases of 12,000 cars in 4Q. We expected to have this purchase in the first quarter '25. We already talked about the sold of almost 8,000 cars. So almost all this prebuy is going to be settled in the first quarter or a bit more. That shows discipline and sense of opportunity, because when the market is in the peak of seasonality, we have this capacity of growing and decreasing the fleet without stressing the company's capital structure. I think this is the good work that we developed in 2 years of really looking the fleet at a different way with granularity and capturing the most of our capital invested. So I see the fleet stable after the advanced purchase, very flat along the year without growth, and the company very much focused on improvements in operational efficiency to further increase profitability and together with that, reducing our leverage. If you don't grow the fleet naturally with improvements in EBITDA that we have annualized, it would be already close to 2.8%. So that's what I see along the year. Obviously, given that our recycle is at least 12 months, you're not going to see any steep movements along the quarters. You're going to see in the 4 quarters of the year. As you saw in the last 2 quarters, we went from 3.2% to 3% in December '24. ROIC spread, we are at 3.2%. We've ended ROIC with 12.3%, the best for the industry in Brazil, and with the improvements, if you look at the results of the first 2 months of the year, we are very close to 4 percentage points. But undoubtedly, looking at the level of interest rates that the market expects, we have to implement more operational improvements to keep our ROIC spread between 4% and 6%, which is what I think the company is going to deliver with the visibility that I have of the business. So I'm confident we are on the right path. As I mentioned, the first 2 months, we said that in the material fact was excellent and March should be our best month in history, which will make our results even better and spreads even higher. So thanks again for your question. And if you have any further questions, just let us know.

[Interpreted] Our next question comes from Filipe Nielsen from Citi.

[Interpreted] Congratulations on your results. I have one question and a small follow-up. Starting with the follow-up, I'd like to understand thinking about the car market dynamics, you talked about OEMs increasing new prices, depreciation stable, but I would like to understand if you see any possibility of -- in a heated car market seeing used car prices going up and therefore, bringing you even better used car margins. Or if we should continue to see a used car price stable, even with new car prices going up. So this is the first follow-up. And the second and -- first question, so in used car sales. If you could give us a bit more color on the mix between wholesale and retail and also FIPE table discount. I saw that you had a much -- a mix with much more basic cars. So if you could give us a bit more color, that would be highly appreciated.

[Interpreted] Thanks for your questions. As for the first, the car price, as I mentioned, car prices were adjusted in the beginning year by all OEMs. I think this year will show at least one more price adjustment up. So I do not see new car prices going down. And used car prices are based on new car prices. All that said, I do see opportunities for used car prices to go up. And with that, we might have an even better margin than expected and even a reduction in depreciation rates. But that's not my basic scenario. My scenario is stable price and margin around 1%, which is what we have been disclosing in the first -- in the last 4 months and the first 2 months of '25. So that's about car prices. About inventory mix for used cars. This is a consequence of the accuracy in capital allocation in the last 2 years, the cars that we are selling are now are the cars we bought 2 years ago, it was a strategic decision to change our fleet mix. It was before 90,000, 95,000 average ticket and now 78,000. And that's why it is a lot more liquid today in used cars. As you saw on Slide 19. We stopped disclosing the FIPE discount we are operating with because I have to admit that this brought a bit of difficulty in some negotiations with customers. They saw our discount on average, any negotiations, especially in wholesale, it did affect our negotiations. So we stopped disclosing this number. But just for you not to have anything, it is better than the guidance for last year. And I do not see why to change that given the predictability in terms of sales of car is very similar to the inventory today, very liquid and et cetera. And another thing that I mentioned in a previous question, as we are renting more occasional cars, we have less mileage. And that, again, gives us more liquidity, and we can cap better prices in the sale of used cars. Thanks for your questions, Filipe.

[Interpreted] Our next question comes from Alberto Valerio from UBS.

[Interpreted] Congratulations on the work throughout the year in a difficult scenario. I was just congratulating you on your operation during a challenging year. But Moscatelli, I have 2 questions on my side. The purchase of the fourth quarter, how good was it? And how about purchases in the first quarter of '25? Is it better in terms of prices. We saw some discounts. And also, I'd like to have your opinion about the industry as a whole. We are seeing some changes in numbers, Rent-a-Car depreciation closer to GTF depreciation. These lines are very much a part in the past, perhaps higher utilization in the Rent-a-Car as we had historically, so I would like to have your opinion about the markets, the industry. What changed last 1.5 years, so to speak, in your opinion in terms of the industry as a whole. These are my 2 questions.

[Interpreted] Alberto, thanks for your questions. It shopped a bit, but if I failed to answer just let me know, okay? Well purchases last year. I think there were 2 important factors. First, we had 75 days in terms of payment terms. It's almost 3% further discount and a discount of almost 2% higher compared to the same car, the same discount and the same prices that we had before the negotiation. So it was a very timely negotiation. I think it was an opportunity, and we did well in buying and enjoying the high seasonality to generate value with the cars we bought. And after that, we started selling these cars as we mentioned, and it was very clear. The second thing about the industry as a whole. I see depreciation of Rent-a-Car and GTF, very different, especially because of utilization and asset turnover, although you mentioned, you said they're closer. I think they are very apart. But the industry dynamics has changed. The industry went through a huge period of growth in that last 5 to 7 years. And now not only us, but other industries as well, we are focused on operational efficiency on adjusting prices. The prices were stable for almost 2 years. And I think this has been very healthy for the sector as a whole. We are leading the initiative in price adjustments, and we will continue to do so in '25 and being vocal because this is the company's top priority. I think we did well in '24. It really transformed our results. You saw the results, the returns that we are generating, undoubtedly the company is a benchmark in profitability today. And that's what we are going to continue to do in '25 based on what I mentioned on the last slide prices for GTF and Rent-a-Car GTF was stable in prices for some time. And now in the last 15 months, we are adjusting GTF prices up by almost 20%. So very, very substantial. So I think the industry has changed as a whole. And I think it's a matter of really maturing. The industry is not growing as much in the short-term, but it's maturing and is focusing on operational efficiency and extracting value of what was built in the past, and Movida is no different.

[Interpreted] If you allow me very clear. Just one more question. How do you see the competition? We follow the 3 major players, but small and midsized companies. Do you see them having more difficulties in renewing their fleet. They are surviving, they are adjusting prices? How do you see competition with mid and small players?

[Interpreted] I see the competition more favorable to larger players. Undoubtedly, one of the main costs for rental company is access to credit and the cost of credit. And at a time of restriction that affects smaller players, much more than larger players. We have a large group of small rental car companies that almost work as an asset-light operation, they rent cars from large players and rents to their customers. And we kind of restricted that a bit, and with that, we are reducing the number of small players. And in a tougher macroeconomic scenario, they are going to be more affected and will be less present than in the past. For us, especially the 2 large players in Brazil, this is positive in terms of volume.

[Interpreted] Our next question comes from Bruno Amorim, Goldman Sachs.

[Interpreted] Just a follow-up on the discussion of capital allocation strategy. Last year, you grew double digits in fleet number of daily rentals and it a reflect of a macroeconomic scenario that looked better. And now if I understood your take message is a more flat fleet for this year. So first, just to know if I understand it correctly. And the follow-up then is to try and understand your mindset. Let's suppose that the macroeconomic scenario gets better. The interest rates normalizes. Are you going to use a better macroeconomic scenario to normalize ROIC spreads to get to your targets? Or do you think with a better scenario you are going to grow more? So just to understand your mindset and your reaction in terms of growth vis-a-vis a change in the macroeconomic scenario.

[Interpreted] Bruno, thanks for your question. The company has a strategic plan for '25. That is very clear. KPIs 100% objective. And we are going to execute and deliver as we did in '24, all of them. And the bottom line of this conversation and all discussions with the company is to create value to shareholders that is sustainable in the long-term. So no decision that myself or the management will make thinking about the next quarter instead of long-term. This is a company that is being rebuilt or is continuing to be built, thinking in the long-term, of course, looking into opportunities and challenges in the short-term. This is something important. Today, the scenario that we have and everybody in the market Has an interest rate that is higher price is going up, and we have to work with the capital structure that we have while creating value to shareholders. For that, we are going to adjust prices, reduce costs, as I mentioned, in all our business lines and take care of our capital structure, deleveraging the company along here. This is what we are going to do. If things change, I think the company showed in the past very well, it's agility to change in a company with 270,000 cars today. Very few companies can do that, but this is a difference of ours. We make decisions fast to enjoy opportunities but also to replan itself when scenarios are tougher. So today, the scenario mentioned we don't have it. We are not working with it. We are being cautious in terms of capital structure. but if it thinks that better, yes, I'm going to have new plans and execute these new plans. But again, the agenda is to create value in the long-term looking into short-term opportunities.

[Interpreted] This concludes today's Q&A session. Now I will invite Gustavo Moscatelli, to go on with his closing remarks. You can go ahead, sir.

[Interpreted] Okay. I'd like to thank you all for joining us in our call. Those of you that follow the company, special thanks to all the people that are with me in the company on the day-to-day, more than 6,000 employees, all of them waking up every day to do better and deliver the best services possible to our customers. And together with all that, having more operational efficiency to generate the maximum value to our shareholders. I believe, in this equation, and I think it is long-term value creation. This is why we are here to do things right for our customers, employees and shareholders. I'm very confident about 2025, it's just challenging in the macroeconomic scenario. But in the micro scenario, you saw in the first quarter, we are at a level of operational excellence that is fantastic. March is going to be the best month ever, and that shows that the company has, as I mentioned, agility to make changes when necessary, in any macroeconomic adversity or to enjoy short-term opportunities. So once again, thank you very much customers, suppliers, banks, investors, analysts on the sell side, buy side that is always close to us, but mainly the people next to me every day doing excellent work. Thank you very much.

[Interpreted] This concludes Movida's earnings call for today. Thank you very much for joining us, and have a good day. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]