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

Good morning ladies and gentlemen and thank you for holding. At this time we would like to welcome everyone to the ELTA Group's fourth quarter 21 results conference call. There is also a simultaneous webcast that may be accessed through ELTA Group's website ri.elta.com.br and through the MDIQ platform. Please feel free to flip through the slides during the conference call. The presentation will be conducted by Mr. Rodrigo Pizzinatto, Ultra Group CFO and IRO. And during the Q&A session, we will have the presence of Mr. Marcos Lutz as well, the company CEO. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company presentation. Should any participant require assistance during the conference call, please press star zero to reach the operator. We remind you that the webcast participants can pose their questions that will be Posted in advance in the webcast, the replay of this call will be available soon after the closing for seven days. Please bear in mind that the forward-looking statements made during this conference call referring to the business outlooks of the Ultra Group projections and operational and financial goals are based on the beliefs and assumptions Fulvius Tomelin Fulvius Tomelin Industry Conditions and Other Operating Factors could affect the future results of the Ultra Group and lead to results that differ materially from those expressed in such forward-looking statements. We will now turn the conference over to Mr. Rodrigo Pizzinatto, who will begin the conference. You may proceed, sir.

Good morning, everyone. It's a pleasure to be here once more to talk about UltraPAR's results And starting off with a short retrospective of 2021, which was an important year for the group, with large-scale transformations. It was a great year for UltraGas, UltraCargo and Occitano, which posted record results in profitability. Ipiranga and ExtraFarm, on the other hand, didn't achieve desired levels of profitability, even when considering the improvements seen in the operations during the second semester. On this note, at Ipiranga, We have carried out several changes and operational adjustments to resume the company's profitable growth trajectory over the course of 2022 and 2023. In addition, in 2021, we also made significant progress in reviewing our portfolio. With the signing of the sale agreements of Occitano and Extra Pharma, which are still pending of approval, besides the completion of the sale of our equity interest in Connected Car last October. Finally, I'd like to highlight the significant renewal of our management and governance structures, which reinforces ultra-pillars of perpetuity and growth. along with our new members of the Board of Directors that added complementary experiences and skill sets. We have also carried out the succession of the Executive Leadership Positions of Ultra Group and Ipiranga, in addition to planning the succession of the Chairman of the Board of Directors. I will now go through our presentation, sharing with you our comments on the results of the first quarter and of the year of 2021. After that, we will move on to the Q&A session in which we will count on Marco's participation. Well then, starting with slide number two, I would like to highlight two topics on the earnings report. The first one concerns the 2021 financial statements. Due to the signing of the sale agreement of Extra Farmer and Occitano over the last year, We have classified these companies as assets and liabilities held for sale and discontinued operations. Our annual financial statement released yesterday already reflects this classification. To better enable comparison with previous periods, both the earnings released and this presentation consider the company's pro forma consolidated information. That is, ultraparse data also comprise Occitano and Extra Pharma results, adopting the same concept that we have been reporting in the last years. The second topic I would like to draw your attention to is in relation to the non-recurring effects, both in 2021 and 2020. We had some one-off impacts that have affected our results. which we have explained in our releases throughout the year. By reading the explanations, you will notice that we have excluded such effects, both positive and negative, so we can analyze the operating performance of our businesses and UltraPAR. Moving forward now to slide 3 to talk about UltraPAR's consolidated results. As you can see in the chart in the upper left side, Our recurring EBITDA totaled R$1,144,000,000 in the first quarter of 2021, 32% higher than that during the first quarter of 2020, driven by better results at Bipiranga, Ultragas, Occitano and Ultracargo. Looking at the year's results, our recurring EBITDA totaled R$4,055,000,000, an increase of 22% compared to 2020. with record results of Ultra-Gas, Ultra-Cargo and Occitano and a gradual recovery in epidemia and extra-formal results. Ultra-Parsnet income in the first quarter was R$390 million, 10% lower than the first quarter of 2020, due mainly to the worsening in the financial results, attenuated by the increase in EBITDA. The worsening of the financial result was driven by three factors. First, higher extraordinary tax credits in the first quarter of 2020, which totaled R$160 million. Second, the temporary negative effect of mark-to-market, of hedges of the bonds, which has no cash effect. And third, the CDI rate increased over the greater average balance of net debt, despite lower cost of debt. In 2021, ultraprocess net income was R$884 million, 5% lower than 2020, due to the decline of the financial results and extra pharmacy impairment, which also has no cash effect, attenuated by higher EBITDA. Our Board of Directors has already informed approved the payment of R$186 million in dividends for the second half of the year, equivalent to 17 cents per share. Investments totaled R$1.9 billion in 2021, an amount 27% higher than that in 2020, in line with the plan announced in December 2020 for the year and directed mainly to Ipiranga, Ultracargo and Ultragas. We recorded a cash flow generated by operating activities of R$2.6 billion in 2021 compared to R$3.1 billion in 2020. The lower generation resulted from investments made in working capital throughout the year, driven by higher fuel, LPG, and raw material costs despite the higher EBITDA. Moving on now to slide number four to talk about our liability management. We ended the year with a net debt of R$11.7 billion, an increase of approximately R$1.2 billion compared to the net debt of 2020. The increase is explained by three factors. The payment of dividends in 2021 in the amount of R$698 million, worse financial results as I mentioned in the previous slide with an impact of R$290 million, in the effect variation of the portion of bonds designated for hedge accounting. The exchange rate rose from 5.2 in 2020 to 5.58 in 2021, adding R$201 million on the net debt position with no cash effect. Throughout the year, we have been carrying out a liability management to improve our financial results. Includin assessing the market through incentivized issuances of infrastructure debentures and an angry business receivable certificate along with anticipating the payment of debts with higher costs. We have also reduced the surplus cash level, reducing the effect of carrying costs. By these measures, The average cost of debt went from 154% of CDI in 2020 to 114% of CDI in 2021. And finally, our leverage went from 3.0 times net debt to EBITDA in December 2020 to 2.9 times at the end of 2021 due to higher EBITDA level in the last 12 months and we also kept the duration stable and 4.6 years. Let's now move on to slide number 5 to talk about Ultragas. Sales volumes during the first quarter were 2% lower than that in the first quarter of 2020, despite the 1% increase in the bulk segment due to the 4% reduction in the bottled segment as a consequence of lower demand for LPG bottles. In the bulk segment, we had also an increase in the volume sold to the industrial, commercial, and services segments, which were more affected by the pandemic in 2020. In 2021, the volume sold was 1% lower than that in 2020, with a 4% reduction in the bottled segment, as a result of greater demand for LPG bottles in 2020, meaning periods of greater social isolation. and a 5% increase in the bulk segment, I reflect a higher number of sales to industry's commercial and services segments. Ultra-gas SG&A in the first quarter of 2021 was 6% higher than that year over year. Due to the greater personnel expenses, provision for doubtful accounts resulting from the updating of accounting parameters, higher expenses with sales, sales commissions and freight, all attenuated by lower expenses with information technology. Ultragaz EBITDA totaled R$222 million in the quarter, 44% higher than that in the fourth quarter of 2020, due to the pass-throughs of LPG cost increases offset by a higher concentration of expenses in the quarter. In 2021, Ultragaz EBITDA was R$729 million, Similar to the level reported in 2020, mainly because of greater operational efficiency and expenses management. Regarding the current quarter, we expect results to continue expanding relative to that of the first quarter of 2021, driven by higher operational efficiency despite of the lower demand in the bottled segment. Now, moving on to the next slide, slide number 6, to talk about another great quarter of ultracarbons. The average stock capacity reached 917,000 cubic meters in the first quarter of 2021, a 9% growth year-over-year, on the back of the startup operations of the Vila do Conde terminal in December 2021, and the expansions in tank capacity implemented in Itatiport over the last 12 months. UltraCargo's net revenues were R$187 million in the first quarter, a 13% growth year-over-year, led by contractual adjustments, improvements in the mix of products and terminals, and the expansions above mentioned. In 2021, UltraCargo's net revenues reached R$713 million, 11% higher than that in 2020, due to the same reasons of contractual adjustments, mix, and expansions. Combined costs and expenses were 5% higher than those in the fourth quarter of 2020, as a result of higher depreciation costs arising from expansions in capacity, in addition to higher information technology expenses to support productivity gains and digital transformation projects. Ultracargo's EBITDA was R$101 million in the quarter, 32% higher than that in the fourth quarter of 2020, Due to the expansions with profitability gains, contractual readjustments, and productivity gains. The EBITDA margin reached 54% in the first quarter of 2021, well above the 46% margin of the first quarter of 2020. In 2021, Nutrocargo's EBITDA reached a record level of 396 million reais, An increase of 22% compared to the recurring EBITDA of 2020. And for the current quarter, we expect the continuity of the positive operational performance of UltraCargo, with similar levels of results as those seen in the last quarters. It is worth noting that we will gradually ramp up the Vila do Conde operations throughout 2022. Moving now to slide 7 to talk about Occitano, Volumes sold in the first quarter of 2021 were 6% lower year-over-year, mainly driven by the 34% reduction in commodity sales due to the prioritization of specialty chemicals in the mix of products during periods of scheduled shutdowns. The volume of specialty chemicals decreased 1% as a result of lower sales to the home and personal care segment. Offset by Higher Sales to the Crop Solutions Segment. We also registered a 35% growth in the U.S. plant. In 2021, the volume sold by Occitane was 3% higher than that in 2020, with an 8% growth in specialty chemicals driven by higher sales in the crop solutions and coating segments, in addition to 24% higher sales in the United States, while commodity sales dropped by 17%. Occitano's SG&A increased by 16% year-over-year as a consequence of higher expenses with freight and storage resulting from higher unit costs in reais and personnel expenses in line with the progression of results. It is worth mentioning that in the first quarter of 2020, Occitano's results were benefited from the constitution of Extraordinary Tax Credits in the amount of R$85 million. Occitano's EBITDA was R$252 million in the quarter, an increase of 42% when compared to the recurring EBITDA of the fourth quarter of 2020. Such an increase is due to better margins, which were affected in 2020 by the negative effect of the zero-cost collar hedging and of the more devaluated exchange rate attenuated by higher costs and expenses. Occitano registered a record EBITDA level in 2021 in the amount of one business, R$104 million, an increase of 75% over the recurring EBITDA of 2020. And for this first quarter of 2022, we expect Occitano's good results to continue with a recurring EBITDA higher than that of the fourth quarter of 2021. Moving on to slide 8, let's talk about Ipiranga. Volume sold were 2% lower year over year, with a 7% decrease in the auto cycle largely due to greater participation of gasoline instead of ethanol in the product mix, while diesel increased 2%. In 2021, Ipiranga posted Sales volume 5% higher than that of 2020 due to lower effects of the pandemic in the fuel consumption in Brazil in 2021, with an increase of 3% in Autocycle and 6% in Diesel. We ended the first quarter of 2021 with a network of 7,104 service stations, 16 more than the third quarter of 2021. with 127 openings and 111 closures in the quarter. The average volume contribution of the new service station is 438 cubic meters per month, while the closed ones had volumes below 19 cubic meters per month. In addition, we ended the first quarter of 2021 with 206 AMPM's company operated convenience stores, 57 more and we had in the third quarter of 2021. FG&A increased 50% in the quarter with some large effects. The first is the one-off concentration of extraordinary provisions of our contingencies in the amount of 88 million reais, which involves mainly civil and fiscal proceedings with recent decisions that increase the risk profile of such losses. In addition, We also had the impact of inflation on expenses, higher provision for DAFO accounts, and the growth of AMPM's company-operated stores, which went from 55 stores in the first quarter of 2020 to 206 stores in this last fourth quarter. It is important to keep in mind that in 2020, Ipiranga had temporarily held back expenses on several fronts due to the pandemic.

which contributes to this reported increase.