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

Good morning. Thanks for waiting. We would like to welcome everyone to the conference call of UltraPars' fourth quarter 23 results. There is also a simultaneous webcast that may be accessed through the UltraPars website at ri.ultra.com.br and MZIQ platform. This presentation will be made by Rodrigo Pizzinatto, UltraPars, Chief Financial Officer and Investor Relations Officer. During the Q&A session, we will also have Mr. Marcos Luz, UltraPars CEO, the CEOs of UltraGas and Ipiranga, Mr. Tabajaro Bertelli and Mr. Leonardo Linden, and also the CFO of UltraCargo, Mr. André Zaya. We would like to let you know that this event is being recorded and all participants will be in listen-only mode during the company's presentation. After Ultrapar's remarks, we will start our Q&A session. At that time further instructions will be given to you. We would like to remind you that all participants in the webcast may submit their questions through our website, questions that will be answered during the Q&A session. The replay of this call will be available for seven days once it's completed. Before moving on, we would like to let you know that forward-looking statements that are made during these conferences are under the safe harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of ultra-power management and on information currently available to the company. They involve risks, uncertainties, and assumptions because they relate to future events. Therefore, they depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors can also affect the future results of UltraPAR and can cause results to differ materially from those expressed in such forward-looking statements. Let me now turn it over to Mr. Rodrigo Pizzinatto. He is going to start by giving us the presentation. So please move on.

Good morning, everyone. It is a pleasure to be here once more to talk about UltraPars results. I will start with a brief retrospective of 2023. Last year, we had significant improvements in the company even with an environment of volatility and uncertainties. Ipiranga, UltraGas and UltraCargo, our three main businesses, reached record results. The strong operating cash generation allowed the company to achieve the lowest financial leverage level of the last 15 years and contributed to the recovery of our investment rating by Standard Imports. We completed the acquisitions of Stellanel Gas by Ultragas and the acquisitions of Opla and Rondonopolis Base by Ultracargo. We also announced the construction of the first liquid bulk terminal in the Tocantins State. Additionally, we obtained the approval of the Antitrust Authority for the partnership between Ultragas and Supergasbras for sharing operating assets. And we also continued our ESG journey, making public commitments to the 2030 goals. I will now go through our earnings presentation for the fourth quarter and the year of 2023. And on the slide number two, I remind you that both the earnings release and this presentation consider ultraparse data from continuing operations in 2023. As for 2022, the company's data is presented in the pro forma view, considering the sum of continuing and discontinued operations, unless otherwise indicated. Moving on to slide 3 with UltraPars consolidated results. As you can see in the chart in the upper left side, our recurring EBITDA from continuing operations totaled R$1,666,000,000 in the first quarter of 2023, 122% higher year-over-year. This increase is due to the higher EBITDA of the three main businesses, particularly Ipiranga, results that I will detail in the next slides. Looking at the year's results, our recurring EBITDA from continuing operations totaled R$5,615,000,000, a 55% growth over 2022, with record results registered at Ipiranga, Ultragas and Ultracargo. Ultrapartisan income was of R$ 2,518,000,000 in 2023, 37% higher than that of 2022 due to the EBITDA growth and the lower level of net financial expenses. These effects were partially offset by the lower recognition of extraordinary tax credits for R$ 108,000,000 below the level of 2022. Our Board of Directors, as we have already announced, approved the additional distribution It will be paid as from March 15, in addition to the payment made in August last year, totaling a distribution of R$713 million in 2023. Investments from continuing operations totaled R$1,949,000 in 2023, 11% above 2022 due to higher investment at Ipiranga, Ultragas and Ultracargo. We had a robust operating cash generation of R$ 3.8 billion in 2023, R$ 1.8 billion above the cash generation of 2022. This increase is due to the higher EBITDA and the lower investment in working capital due to the decreases in fuel prices throughout 2023. These effects were partially offset by the R$1.6 billion reduction in the draft discount line. If we exclude this reduction, the operating cash generation in 2023 would have been of R$5.5 billion. You can also see in the chart in the lower right side the recovery of the company's profitability in the last five years measured by ROIC. And moving now to slide four to talk about our liability management. We ended the year with a net debt of R$6.1 billion, a reduction of merely R$1 billion in relation to September 2023. This reduction was a consequence of the greater operating cash generation despite the concentration of investments in the fourth quarter last year and the reduction of R$135 million in the debt-draft discount balance in the quarter. Our financial leverage was reduced in the last 12 months and went from 1.7 times to 1.1 times in December 2023, the lowest level in the last 15 years as I have already mentioned. The decrease is due to the higher EBITDA with cash generation and consequent reduction in the net debt. And I'd like to point out that the numbers of net debt for the first quarter still do not include pending receivables and Extra Farma. You can also see at the bottom of the slide a table with the total amount of draft discount and vendor lines, as well as pending receivables from the sales of Occitano and Extra Farma. The net debt of December 23 adding the draft discount, vendor and divestment receivables would be R$6.5 billion, which is R$2.2 billion lower than the balance of December 22. And moving now to slide number five to talk about another excellent quarter for UltraGas. The volume of LPD sold in the fourth quarter was 2% lower year over year due to the 5% reduction in the bottle segment on the back of lower market demand, attenuated by an increase of 3% in the bulk segment, mainly reflecting higher sales to industries. In 2023, the volume of LPG sold was 2% higher year over year, as a result of the 6% growth in the bulk segment due to greater sales to industry, while the bottled segment remained stable. Ultragas SG&A in the fourth quarter was 3% lower than that of the fourth quarter of 2022, due to lower expenses with personnel and with expansion and productivity projects. Ultragaz EBITDA totaled R$406 million in the quarter, 11% above the fourth quarter of 2022. If we look for the year, Ultragaz EBITDA was R$1,648,000,000 in 2023, a growth of 41% over 2022. Both annual and quarterly growth are explained by the initiatives to increase efficiency and productivity implemented in the last quarters, by better sales mix, and by inflation pass-through. And for this first quarter, we expect the continuity of the good results with profitability levels similar to those seen in the first quarter of 23. and moving now to slide 6 to talk about another great quarter of ultracarbon. The company's average stock capacity was 1,067,000 cubic meters in the fourth quarter of 23, a growth of 12% over the fourth quarter of 22 due to the capacity additions coming from Opla, Vila do Conde and Rondonópolis throughout the third quarter of 23. These capacity additions still had no material impact and many more. In the upcoming months, operations will ramp up. The cubic meter sold grew by 16% year-over-year, mainly due to greater handling of fields in Santos, Vila do Conde and Itaqui, and the start-up of operations in Nopla and Rondonópolis. Ultracargo's net revenues was R$ 257 million in the fourth quarter of 2023, 13% higher than that of the first quarter of 2022. In 2023, Ultracargo's net revenues was R$1,016,000,000, a 17% growth over 2022. The growth in both comparisons reflects their higher cubic meters sold and spot sales. Combined costs and expenses were 6% above that of the fourth quarter of 2022 as a consequence of two main factors. Higher personnel expenses, mainly collective and the depreciation costs due to the capacity additions. Ultracargo's EBITDA totaled R$155 million in the quarter, 19% higher than that of the fourth quarter of 22 due to greater capacity of occupancy with profitability gains to spot sales and productivity and efficiency gains, despite higher expenses. EBITDA margin was 60% in the fourth quarter of 23, three percentage points above that of the fourth quarter of 22. For the year 2023, Ultracargo's EBITDA totaled R$631 million, a 24% growth over 2022, for the same reasons I've just mentioned. EBITDA margin was 62%, 3 percentage points above that of 2022. And for the first quarter, we expect Ultracargo's good operating performance to continue, with levels close to those seen in the first quarter of 2022. And moving now to slide 7, let's talk about Ipiranga's results. Volume sold in the quarter increased by 1% over the fourth quarter of 2022, with a 1% growth in both Otto cycle and diesel. For the year 2023, Ipiranga's sales volume remained stable year over year, with an increase of 2% in the Otto cycle and a drop of 1% in diesel. We ended the fourth quarter of 2023 with a network of 5,800 A total of 147 new service stations were added to the network, with an average volume contribution of 301 cubic meters per month. On the other hand, 86 service stations were closed, with an average volume contribution of 143 cubic meters per month. We concluded in September the legacy management process of service stations that in the last two years registered a net service station closing of 1,227 service stations. At the end of this process, we have now a more robust and healthier network. And besides that, we ended the quarter with 1,548 MPM stores, with same-store sales growth of 8% in the fourth quarter of 2013. I take this opportunity to draw your attention to a partnership that AMPM and Krispy Kreme have just established. We will have exclusivity to sell Krispy Kreme products in our convenience stores in Brazil, which is aligned with the strategy of associating AMPM with iconic brands. Ipiranga's SG&A increased by 36% Nguyen Nguyen Nguyen Nguyen The other operating results line totaled a negative R$131 million in the quarter, a worsening of R$22 million over the fourth quarter of 2022 as a result of higher costs with carbon tax credits attenuated by the higher constitution of extemporaneous tax credits. The line of results from disposal of assets totaled R$14 million due to the sale of six real estate assets. Ipiranga's EBITDA totaled R$1,767,000 in the quarter. The recurring EBITDA totaled R$1,170,000 in the quarter, 270% above that year-over-year. The higher EBITDA mainly reflects the continued normalization of the commercial environment in the first quarter of 2023 compared to the higher supply of products and inventory losses in the first quarter of 2022. These effects were partially offset by higher expenses in the fourth quarter of 2023. For the year 2023, Ipiranga's EBITDA totaled R$4.354 billion, recurring EBITDA totaled R$3.6 billion, a growth of 68% over 2022, reflecting the normalization of the commercial environment partially offset by higher expenses. For the first quarter, with the continuation of the And to conclude this presentation, moving on to slide number eight, let's talk about the investment plan we just released yesterday. In 2023, the main variation in relation to the plan was at the pyramid. The greater allocation to expansion, with higher investments made to brand service stations and to increase our logistics infrastructure, was more than offset by divestments, such as the Rondonópolis base and the sale of assets, besides the postponement of some investments. The investment plan for 2024 totals R$2,670,000. The allocation of investments through expansion is the main highlight of growth, 47% above that of 2023. At Ipiranga, investments will be mainly directed towards branding stations and expanding logistics infrastructure. At Otorgás, the investments focus mainly on new customers in the box segment, on revitalizing and opening points of sale, on optimizing operations Dias, and Stella. At Ultra Cargo, investments will be mainly focused on the construction of the railway branch at Opla, on increasing the stock capacity of Itaqui, Santos, and Rondonópolis, and on building the Palmeirantes Terminal in the state of Tocantins. The portion of the and Information Technology. And with that, I now conclude my presentation. I appreciate most more your interest and attention. And let's now move on to the Q&A session in which we are available to answer questions. Thank you very much.

Thank you. We are going to start now the question and answer session, and it's open for investors and analysts only. If you want to ask a question through the Zoom platform, please raise your hand. The first question comes from Monico Greco, Itaú BBA. Please unmute your microphone.