Ultrapar Participações (UGP) 12 Nov 222022 Q3 Earnings call transcript

Good morning, ladies and gentlemen.

You are most welcome to Ultrapar’s 3Q 2022 Earnings Presentations.

We are broadcasting on the web -- on the net and can be accessed at ri.ultra.com.br. The presentation will be conducted by Mr. Rodrigo Pizzinatto, Ultrapar’s Chief Financial and Investor Relations Officer and in the Q&A session, we will have the presence of Mr. and of CEO; businesses, Ultrapar’s Lutz; the the CEO’s Mr. Marcos as Decio Amaral; Bertelli; well. Leonardo Tabajara Linden We would in inform and the like to presentation. all being event company’s participants recorded is will be listen-only during you mode that this be After and Q&A given. that there be session will a Ultrapar’s instructions completed remarks are will further this replay [Operator be for Instructions] of A seven available will call days.

statements Securities Before proceeding, of under the Litigation the Act made let me are mention Safe being that XXXX. Reform forward-looking of Harbor

assumptions and other factors are of affect on in of and statements. company. future future management involve expressed because based also the information Ultrapar, operating results on available statements risks, therefore, assumptions, Investors circumstances and currently the forward-looking such occur those beliefs Forward-looking cause materially or may that from future. differ on Ultrapar conditions the and depend events, may results general in and to to and to could They that understand they could the relate not industry should economic conditions, uncertainties

I over begin the Rodrigo you Pizzinatto, Mr. conference the have to turn conference. Mr. will the who Pizzinatto, Now, will floor.

statements presented financial off to topic have our from everyone. results slide to the that pleasure It as is the starting Oxiteno here of signing operations Due two I in and be our these end more to two, divestments. Extrafarma, the relates talk on important the sale the we of discontinued of companies morning, since about agreements earnings XXXX. results highlight and to an to want Ultrapar’s Good once a with report

of consider longer their closing discontinued results of consider this regard, highlight earnings both with to now our of forward the operations. fourth operations. their for the August data consolidated month July. information, third of At continuing and Xst Ultrapar’s results continuing moment, dates. In sum only and quarter quarter From of this results onwards, forma release this as results respective company’s Extrafarma the that Ultrapar’s of Well, Ultrapar’s presentation sale and on respective the three, With April consolidated will Ultrapar’s on the the that for pro in results quarter no the are XXXX. in Oxiteno discontinued slide third is the Xst, this operations reflect we only comprise of moving Extrafarma comprise

occurred our improved can As from the continuing income of R$XXX the to Supreme effects. had that XXXX, XXXX, million, third Brazilian of chart, was driven XXXX, of the businesses. you to the in R$XX you quarter in we in of favorable we see two totaled higher of from decision amount which by that In quarter I And third the quarter. mainly XXXX, in lower remind the recurring than net which XX% results in from the R$XXX quarter million, third operations the side, a from in quarter results income affected of R$XXX effect adjustment the the one-off of effects left third reversion million the tax both due quarter of income quarters. tax over third upper the Ultrapar’s in credits monetary that had positive the the Court XXXX, three of million than negative EBITDA quarter due for third net

in working of were These our in August, million four XXXX R$XXX XXXX, R$XXX of fuel from continuing capital investments offset which capital quarter of August. third of mark-to-market amount the during inventory disclosed, the driven the by XXXX, R$XXX on well reductions the opportunities and Extrafarma to installment their partially moving higher lower now million the quarter of June operations XXXX. management, Board And within release of want offset additional by already we from mainly the XXXX the to leasing the to the third investment of sale continuing the in quarter equity cash in I of the first as and in operations. that this have in R$XXX XXXX. reduction third as in hedges The I the third higher with despite of than in cash the the effects stations. we highlight totaled mainly of the to investment year, debt that of of reduction working in in outflow the by related The of of in higher million, R$XX year consolidated the Extrafarma. service is from for XX% These addition operations the more two release Ipiranga of of Ipiranga. and on generation payment that a million. as results that were plan Investments to Oxiteno has price resulted the compared net million partially the XXXX, bring generation EBITDA Extrafarma million R$XXX liability EBITDA in that sales from due Directors Oxiteno for a at was billion, an quarter the relates explained our to the quarter first made closing addition mentioned. of debt compared and to relates to net management, mainly included back adjustments the higher of million number second to the of million quarter about amount the by of receipt of We to new of closing debt resulted R$X.X to cash The registered effects the this we third billion, net talk cash interest from R$XXX to R$X.X just the obligations quarter from approved slide R$XX ended

include receivables balance be in be went years. the out cost our first sheet. third of nine carried months CDI debt X.X% R$X.X like continuing debt-to-EBITDA billion XXXX the the point X.X% decreased the The the of plus do of in debt related in XXXX leverage that not receivables in our sales see the of the to of back of the you as debt growth Extrafarma, X.X I’d of of to of they quarter our review Oxiteno net and numbers the September to plus to we XXXX last considered, profiles the X.X due from in net average from and of in leverage pending operations. X.X net times third that XXXX. to XXXX reduction would quarter accounts can times financial EBITDA XXXX, times of CDI debt Our the the out investment June have extensive on two from in Should and

on X% year-over-year, Now to EBITDA record moving with five in R$XXX commissions. personnel, with The the due a sales result, reduction inflation LPG agreements another expenses by about in quarter better due aligned variable reached growth XXXX, a due higher effect, margins a the of bottled X% of along of Ultragaz. demand. on third on with to X% sales level the Ultragaz to with the the lower the The bargaining volume gases, productivity quarter segment progressions to that of this slide segment initiatives than of the million, strong of Ultragaz XX% the other collective to implemented compensation partially mainly better with higher of third higher market expenses higher XXXX talk of in month great segments. XX% explained in to This the bulk higher hand commercial efficiency entered the mainly special service in quarter by mix, offset was last was year-over-year. third of and back by growth sold expenses. grew quarter and lower pass-through is SG&A sale

the seasonally For lower expect this first to be third despite quarter, results volumes. quarter, to that we similar of

a efficiency the in from results in the impacted offset slide, XXXX, the by good of third cubic current XXXX, more above personnel average months for Ultracargo’s And of the efficiency of reached XXXX, expect was a of a readjustments cycle. XXXX. one and also cubic mainly expenses X% continue, months. by of partially R$XXX terminal, capacity Conde the months. start-up those gains, Ipiranga’s Conde X% inflation million to next to to the by third of of and costs third XXXX, and diesel productivity quarter contractual seven XXX,XXX terminal were third the And a the now growth margin for December than slide These of seen accounting the by EBITDA at readjustment, and and this XX and quarter, on higher capacity percentage cost sold auto Ultracargo. arising the quarter were terminal expansions levels talk Combined capacity and increased results. this made to the those The profitability at back over conclude increase XXXX, six expansions of of higher expansions last XX% and the with investments December of capacity quarter X% talk XXXX, expansions. R$XXX as Vila level year-over-year the by points on a of XX the third quarter due quarters. and last do to presentation with slide to million Ultracargo’s implemented gains last productivity the capacity with this the quarter third of that do to XX% XX higher XX% X% XXXX X in EBITDA the installed to operations in in number as costs record contractual growth that expenses the last started of the of reaching growth the higher depreciation Ultracargo’s of to growth record of in XX% similar sold we in operations gains. meters year-over-year Volume in in quarter net of quarter, XX% in performance effect third and results due over record operating well a led in about moving than which quarter in a in company’s XXXX, meters over tankage Itaqui revenues about totaled Moving and effects the about was of inputs. quarter level Vila

of more with far XXXX.This volume reduction pressure had aligned still This to of Relations Ultra is month contributed publishing opened, Investors anticipated Investor net below with meters the and the our compared to from number low in our availability, third margins, quarter losses capital, in of of commercial we standards to A highlight capital product the and the evolution potential. of positive, mentioned of of contribution a per announced margins. which X,XXX businesses. service costs, our the important the Linden XXXX release we As with on legacy stations, fuel were the reinforcing Despite month. this to service services in half inventory to especially of tax the quarter of quarter, the Day stations, in of reduction the market more first network stations improvement quarter due the had the prices station on pressured strategy financial new effect imports with Along of we of volumes call, the the with as were of conference which main stations and in Ipiranga’s ended last of last the management. working volume the the total I XX strategy reduction in of average pressure average rate. more decreased margins density level website, by reported ICMS due occurred in XX ones potential an the XX a return managing the stations the and was in closed, with quarter-over-quarter, cubic network. volume our that inventory less in and Despite an per meters Petrobras higher want two its we of -- Day. highest that, are third the an reduction this the with the although, years, new XXX highlight capital of started invested XXX spreadsheet invested were reached service prices higher the we cubic the our of We return

reversals higher for were increased three higher freight variable growth effects we by X% year-over-year. personnel, the prices of addition, sales and higher and the especially by and due higher expenses to expenses bargaining collective Ipiranga’s store with quarter year-over-year. with agreements units higher increases by AmPm ended aligned third progression X,XXX sales with due diesel SG&A provisions accounts. volume, increased to higher compensation stores in offset In partially with from units AmPm the expenses operated company XX% These to stores, results for quarter, in influenced XXX the with and XXX of same or which doubtful

line other of XXXX, result of down of despite the tax due in million a million sales totaled higher XX% totaled R$XXX of on carbon with the higher tax operating quarter volume, improved the R$XXX EBITDA extemporaneous compared the Ipiranga’s of estate of assets. carbon credits of million last year-over-year totaled to higher the quarter expenses quarter third costs back EBITDA sale of and as equipment third quarter higher Recurring with credit. quarter, XX% results disposal the of R$XXX The the third the real in than R$XXX in in growth was that the negative third XXXX. costs million, a quarter, increased tax eight margins credit line mainly and R$XX assets million to XXXX, in year. The recorded

see With appreciate Thank quarter. and of to Like, now the domestic in reported to uncertainty third effects the mind you to For are to in three that of in roads. degree and this well profitability in let’s move levels now quarter, we Marcos that, and I those With and the we first businesses parity your very attention, my this in diesel, concerning fourth main answer interest CEOs still on presentation. moment, of as session. close questions. the the expect of quarter your in prices our gasoline I Q&A much. high I a addition available obstructions at quarter, last conclude

from Our is UBS first Luiz Instructions] question Bank. Carvalho, [Operator

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you, you, Tabajara. Thank you. Thank Linden. Thank

next Bank America. of Our from Marcondes, comes question Leonardo

Thank Good my you for morning. taking questions.

on my from if in Presidential gain know is at next Regis doing might business Ultracargo, Let like would Petrobras importing productivity, more fuel how Ultragaz. country know me on where efficiency the and on the you refining margins to stops up follow well, on elections you I’d next plan. to gains business can and come these question but for the I’d invest long-term. from? see like company again is question’s see that -- do And affect the the how once and to very year,

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Thank you.

you. Thank

Mr. As there I for give Rodrigo more floor remarks. no will are Pizzinatto the back closing to questions, his

have the You floor.

be later Thank you questions we were on. answered The able you. not will to answer all of

Thank will contact you. We you much. very

will We meet in again February.

results This call. Ultrapar’s you. concludes today’s conference Thank

your disconnect lines at You time. may this