Ultrapar Participacoes S.A. (New) American Depositary Shares (Each representing one Common Share)

Good morning and thank you for waiting. Welcome to Ultrapar's earnings conference for the second quarter of 2021. This meeting is also being simultaneously cast to Ultrapar's website ri.ultra.com.br and Emsig platform. Please feel free to flip through the slides during the presentation. With us today are Ultrapar CEO Mr. Frederico Corrado, Ultrapar CFO and IRO Mr. Rodrigo Pizzinatto, and Iparanga CEO Mr. Marcelo Araujo, joined by the group's other executives. Please be advised that this event is being recorded and all participants will be connected in listen-only mode during the company's presentation. After UltraPAR's remarks, the floor will be open for questions, at which time further instructions will be provided. Should you need any assistance during this call, please press star zero to reach the operator. We would like to remind you that questions for the Q&A may be posted on the webcast page at any point during the call and that a recording of this conference will be available on replay for one week. Before we proceed, let me mention that the company's forward-looking statements are being made under the safe harbor of the 1996 Securities Litigation Reform Act. These statements are based on the beliefs and assumptions of Ultrapars Management, as well as information currently available to the company. They involve risks, uncertainties, and assumptions, seeing as they relate to future events and therefore depend on circumstances that may or may not materialize. Investors should understand that general economic conditions, the state of the industry, and other operating factors could also affect UltraPAR's future earnings and could lead to significantly different results than those expressed in said forward-looking statements. Now, let me turn the conference over to Mr. Frederico Corrado. Mr. Corrado, you may now begin the conference.

Hello and good morning, everyone. Thank you for participating in our earnings call. Let me kick off saying that we made good progress in this second quarter, particularly in our strategic agenda, but also in cash management and the gradual reduction of our indebtedness. So, the three transactions I would like to talk about. In May, we signed the contract to sell Extra Pharma to PagMenos. and this transaction now awaits the approval of CAGI to be finalized. We also announced the sale of our 50% stake in Connecticar, in this case to Porto Seguro. This operation has already obtained approval of CAGI and the only pending condition is now the clearance from Brazil's central bank once, of course, Connecticar is a financial institution. And finally, we announced negotiations on our own exclusive basis with Indorama for the sale of Occitano. Our expectation is that we should finalize this rather soon. Speaking now briefly about our businesses, which Rodrigo will cover in detail in a few minutes, we had another excellent quarter in Ultracargo and Occitano. In both cases, the companies recorded new S.A. So, great progress there. I would also like to highlight the advancement, the anticipation of Ultracargo's expansion projects both in Vila do Conde and Itaqui. And this early engine to service will provide an increase in revenues towards the end of this year. Speaking about Extra Farma now, the company achieved another quarter of sequential improvement. It is facing competitive pressure in its main markets, but continues on its trajectory of recovery. Ultraguys had another solid quarter, despite the challenges in the main margins imposed by the continuous increases in the price of raw materials. Just to give you a perspective, in 2021 alone, Prometeo has risen something in the order of 40%, 4-0%. And finally, Ipiranga. We had good volumes in Ipiranga, but we experienced a strong competitive pressure and ended up with margins which are slightly below what we expected. This, of course, is our main point of attention. and the company has been structuring itself for a gradual margin recovery and market share recovery. To that extent, as we have announced previously, Ipidanga has changed its organization and has also implemented a transformation agenda which has four large sets of strategic initiatives. So, given the relevance of this matter, I actually invited Marcelo Araújo to join us at the end of our conference and the ideas that he will be able to share with you this agenda in further detail. Now, back to Ultrapart Consolidated. Our net profit, if we disregard the impairment of Extra Pharma, was approximately R$300 million and that supports the advanced distribution of dividends in the order of R$218 million, which we announced. And finally, let me just highlight the release of our second integrated report, the 2020 Integrated Report. And this year, the report had the certification of GRI and, for the first time, some cross-references with the SAS standard, which it is our intention to provide information in both standards. We continue to advance in the definition of our ESG goals for 2030. And obviously those goals, they will be integrated in our strategy and our idea is to disclose them by year end. So let me make a pause here. Thank you again for your presence. I'll pass the word to Rodrigo and I'll be back in the end for the Q&A. Thank you very much.

Thank you, Fred, and good morning, everyone. It's a pleasure to be here once more to talk about UltraPAR's quarterly results. So let's start with UltraPAR's consolidated results on slide number four. As you can see in the upper right graph, our recurring EBITDA totaled 898 million reais in the second quarter, a 50% increase over the second quarter of 2020. The quarter most affected by COVID, especially due to the significant drop in fuel consumption that affected Ipiranga. We also had, in the second quarter, the signing of the sale of extra pharma, which generated asset impairment that negatively affected EBITDA by 395 million reais. I remind you that this impairment does not have any cash impact. Our net income excluding the impermanent effect was R$290 million. Andres Almeida Pizzinatto, Fulvius Tomelin We recorded R$1,150,000,000 cash flow generated from operating activities in this second quarter, compared with R$871,000,000 in the second quarter of 2020. The improvement in cash generation was driven by the higher EBITDA despite greater investments in working capital on the back of higher prices of oil derivatives and raw materials that in 2020 were in a downward trajectory. Moving now to slide number five, let's talk about the progress in liability management. We ended the quarter with a net debt of R$10.9 billion. which is R$ 1 billion less than that of March 2021. This reduction is explained by the increased operating cash generation that I just mentioned and by the exchange rate variation effect on the net debt portion of bonds designated for hedge accounting. I highlight that during the second quarter, we settled with cash resources, the remaining portion of the emergency debt contracted during March and April of 2020 at the beginning of the pandemic. These debts had higher costs and shorter-term maturities. Therefore, such liquidation contributes to the reduction of the debt-carrying costs without losing flexibility and financial security. The combined improvements in operating cash flow in the last 12 months EBITDA excluding the impairment resulted in the reduction of our leverage from 3.3 times in the first quarter of 2020 to 2.8 times in the second quarter of 2021, as you can see in the graph, which is the lowest level in the last two years. It reinforces our commitment to financial soundness and demonstrates the resilience of our portfolio. It is worth pointing out that since the first quarter of 2020, as a result of IFRS 16, we have been adding the leases payable line item to the net debt calculation. This inclusion contributed to the increased leverage, even though these leases are not financial debt. Moving now to slide number 6 to talk about Ultra Gas Quarter. Volumes sold in the second quarter were 1% higher than those in the second quarter of 2020, with 17% growth in the bulk segment and a 4% reduction in the bottled segment. The growth in the bulk segment is driven by increased sales to industry, commerce, and services segments, which were the most affected by the restrictions imposed during the pandemic last year. The drop in the bottled segment is explained by the strong demand during the second quarter of 2020 on the back of social distancing measures. Ultragas EBITDA was R$137 million in the quarter, a 34% reduction over the same quarter of 2020. Despite the increased sales volume, the EBITDA reduction reflects the strong comparison basis and the subsequent increases in LPG costs. In addition, we had higher expenses with personnel and freight due to higher sales volume and higher diesel prices. For the third quarter, the perspective is seasonally stronger volumes as well as more stable LPG costs, allowing an important evolution of results in relation to the second quarter of 2021, although lower than that of the third quarter of 2020, which was also more benefited by the pandemic. Now let's move to slide 7 to talk about UltraCargo. The average stalled capacity reached 859,000 cubic meters in the second quarter, a 3% growth over the second quarter of 2020, a result of expansions in tank capacity when implemented in Itaqui over the last 12 months. Cubic meters sold increased 7% year over year. mainly due to the fuel handling increase at Itaqui allowed by such expanded capacity. Net revenues for Ultra Cargo totaled R$ 176 million in the second quarter, 30% above that of the second quarter of 2020, mainly the result of the expansions and contractual readjustments. Combined costs and expenses increased 10% in the quarter, mainly due to increasing in product handling and increased expenses in rent readjustments and depreciation resulting from the capacity expansions, as well as an increase in expenses with information technology and engineering services to support expansion projects, productivity gains, and digital transformation. Therefore, Ultracargo's EBITDA reached a new record level of R$100 million in the quarter, 9% above the second quarter of 2020, the result of increased sales partially offset by increased costs and expenses. Ultracargo continues to follow its path of expansion with profitability. EBITDA margin excluding no recurring effects, as you can see in the graph, and the rest of the participants. I'd like to call your attention to the new anticipation as highlighted at the bottom of the graph, of the start of operations in the new terminals. We anticipated five months on average in Itaqui that concluded this July. We also anticipate about three months the Vila do Conde terminal that should conclude in the fourth quarter of this year. As already mentioned by Fred, both of these new terminals contribute to results still in 2021. It reflects the dedication and evolution of Ultracargo's team in managing these expansion projects, reducing both the initially planned capex and anticipating the startup of operations. Now moving to slide number 8 to talk about another excellent quarter for Occitano. Volumes sold during the second quarter of 2021 were 15% stronger than that of the second quarter of 2020. Volumes of specialty chemicals were 15% higher due to increased closing sales segment most affected at the beginning of the pandemic and crop solutions segment that has maintained its strong performance. We also registered sales volumes 36% higher in the United States. The volume of commodities also grew 16% due to the demand drop last year as a result of the pandemic. The EBITDA of Occitano has also reached a record level of R$ 274 million in the quarter, a 69% growth over the EBITDA of the second quarter of 2020. This performance results from the increased sales volume and better margins, which were negatively impacted in the second quarter of 2020 by this zero-cost collar hedging, which limited Occitano's upside from exchange rates depreciation. These effects were partially offset by higher costs and expenses with four main effects. Freight and storage due to higher volumes and unit costs in real, personnel expenses in line with the progressions in results, and maintenance mainly related to the MAUAS plan schedule shut down this quarter. For the third quarter of 2021, the outlook remains positive, with volume growth more normalized and a level of results similar to that of the second quarter of 2021, assuming the current level of exchange rates. Let's now talk about Extra Pharma on slide number 9. We ended the quarter with 400 stores, a network 2% smaller than that in the second quarter of 2020, which reflected greater selectivity in expansion and increased rigor towards underperforming stores. It is also worth noting that 17% of the stores are still in the ramp-up stage. Ross revenues were R$ 542 million, Above that of the second quarter of 2020, we registered same-store sales growth of 10% excluding mobile sales, partially offset by the number of stores 2% lowered and the strong comparison basis in mobile sales in the second quarter of 2020 due to the temporary closing of no-incision commerce at that quarter. Recurring EBITDA for Extra Pharma totaled R$22 million in the quarter, a 58% growth over the second quarter of 2020, resulting from the closing of underperforming stores and the increased profitability at the existing network. These effects were partially offset by the inflationary impact on personnel and services, and by the contingency expenses carried out in the second quarter of 2020. With the signing of the contract to sell extra pharma to PagMenos' quarter already mentioned, we also recognized assets impairment in the amount of R$395 million, representing the difference between the book value and the value announced in the transaction. I reinforce this impairment does not have a cash impact and is still subject to closing adjustments. We expect results from this current quarter to be similar to the levels achieved in the second quarter of 2021. Moving now to slide number 10, let's talk about the piranga. Volumes sold were 21% stronger than those in the second quarter of 2020, with a 25% growth in the Otto cycle volume and a 17% growth in diesel. There has been an important volume recovery as you can see in the upper graph. We were also able to recover most of the market share loss during the pandemic, getting closer to the pre-pandemic levels. We ended the second quarter of 2021 with a network of 7,110 service stations, practically flat when compared to the first quarter of 2021, with 66 new service stations and 63 service stations closed during this quarter. The average volume contribution of new service stations is between 250 and 300 cubic meters per month, while the closed ones had volumes below 100 cubic meters per month. SG&A increased 36% over the second quarter of 2020, with three main effects. Higher freight and lubricant expenses due to higher sales volume, Expenses Contingency in the Second Quarter of 2020 and Higher One-Off Contingency Expenses in the Second Quarter of 2021 and the Growth of AMPM Company Operated Stores. The other operating results line showed a R$52 million increase over the second quarter of 2020, mainly due to tax credits net of write-offs of R$97 million in the second quarter of 2021, partially offset by the costs with new carbon tax relating to Renovabil targets of R$32 million in the quarter. Therefore, Ipiranga's EBITDA was for R$122 million during the second quarter, 136% higher than that of the second quarter of 2020, on the back of stronger sales volume and improved other operating results, partially offset by pressured margins, especially ethanol and diesel, and higher expenses. Looking at Ipiranga's third quarter, we anticipate higher sales volume, Returning to pre-pandemic levels of the third quarter of 2019 with recovering margin levels but still pressured. I'd like also to call your attention to AMPM on this slide. As mentioned in the recent event of the series Meet UltraPars Leaders, we will begin to disclosure the total GMV sales figures for AMPM to improve visibility of the progress in plans and results. These sales correspond to the total sales of franchise and company operated stores. We ended the second quarter of 2021 with 101 company operated stores and already have over 120 company operated stores in operation. And with this, I conclude my presentation and now we pass to Marcelo Araújo who will update you on the main initiatives of Ipiranga's transformation journey. Marcelo, now it's up to you. Thank you.