Q2 2026 Localiza Rent a Car SA Earnings Call (English, Portuguese) Transcript
Key Points
- Localiza Rent A Car SA (LZRFY) delivered strong double-digit net revenue growth of 24.5% year-over-year, reaching R$12.3 billion in Q2 2026, with all business lines accelerating.
- The car rental division achieved an 11.2% revenue increase, driven by a 6.8% growth in rental base and a 3.7% rise in average daily rates, alongside a 3.3 percentage point improvement in utilization to 81.9%.
- Fleet rental returned to year-over-year growth in rental days, with targeted segments like light fleet and car subscription growing 13%, and the division's EBITDA margin expanded by 4.6 percentage points to 75.6%.
- Net income surged 30.6% year-over-year to R$1 billion, with an ROIC spread of 6.1 percentage points, demonstrating effective pricing strategies even amid higher depreciation.
- The company completed a landmark R$7 billion debt exchange offer, extending debt maturity and reducing average cost, while maintaining a comfortable net debt-to-EBITDA ratio of 2.16 times.
- Fleet rejuvenation progressed significantly, with the average age of the operating fleet down 24.1% to 8.2 months, leading to lower maintenance and preparation costs per vehicle.
- Depreciation per vehicle continues to trend upward, with annualized depreciation in car rental reaching R$8,243 and fleet rental R$9,198, reflecting conservative residual value assumptions amid competitive pressures.
- Seminovos EBITDA margin declined 1.2 percentage points quarter-over-quarter to 1.9%, pressured by a higher SUV sales mix and increased investments in store openings, rebranding, and marketing.
- The company anticipates continued depreciation increases, particularly in car rental, due to expected deflationary pressures from new market entrants and competitive dynamics in the Brazilian automotive industry.
- Free cash flow before interest was negative at R$1.8 billion, driven by heavy net car CapEx of R$5.2 billion and investments in fixed assets, partially offset by supplier payables.
- Net debt increased 4.2% year-to-date to R$32.4 billion, reflecting higher fleet purchases and investments, though partially mitigated by the recent debt refinancing.
- Seminovos sales pace remains high at around 90,000 vehicles per quarter, but the company expects continued margin pressure in the near term as it invests to increase retail sales mix and optimize SUV life cycles.
Good morning. Before we begin, I would like to remind you that this conference will be conducted in English. For those who require translation into Portuguese, please click on the translation button with the globe icon and select your preferred language. You may mute or unmute the original audio by clicking the mute original audio button.
Good morning and welcome to Localiza and Co's webinar to discuss the results for the second quarter of 2026.
Joining us today are Rodrigo Tavares, Chief Financial Officer and Nora Lanari, Head of Investor Relations.
Please note that this webinar is being recorded and will be available at ri.localiza.com, while the full earnings release materials can also be found. The presentation is also available for download on the Investor Relations website.
For the Q&A session for analysts and investors, we kindly ask you that you final your interest in participating through the Q&A icon at the bottom of your screen, entering your name, institution and language. When called upon, a prompt will appear on your screen asking you to activate
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