Core Insights - Ultrapar Participações S.A. has undergone a strategic turnaround by divesting from non-core businesses and optimizing its investment portfolio, leading to improved fundamentals and cash generation [1][5][19] - The company is currently trading at attractive valuation multiples, with a forward price-to-earnings ratio of 12.2x and a price/free cash flow ratio of 8.2x, indicating potential for shareholder returns [1][16][18] Business Overview - Ultrapar's primary business, Ipiranga, is a leading fuel distribution brand in Brazil, holding a 17.3% market share and generating a recurring EBITDA of R$780 million in Q2 [2][10] - Ultragaz, focused on gas distribution, is the second-largest LPG company in Brazil with a 22.8% market share and a recurring EBITDA of $396 million in Q2 [2][3] - Ultracargo, the logistics arm, leads in liquid bulk storage with a 22.8% market share and a recurring EBITDA of $165 million in Q2, with Ipiranga as its main client [4][10] Financial Performance - Ultrapar reported total revenues of R$128.64 billion and an EBITDA margin of 4.45% [6] - The company has achieved a return on invested capital (ROIC) of 17% following its strategic turnaround [10] - Free cash flow yield relative to market cap stands at 12.2%, significantly higher than the 10-year average of 6.9% [18] Market Dynamics - The fuel distribution sector in Brazil is characterized by intense competition, with Ipiranga's market share slightly declining from 17.7% to 17.3% from 2023 to Q2 2024, while other players have increased their share from 33.9% to 41.8% [12][13] - Ultrapar's recent acquisition of Hidrovias do Brasil aligns with its strategy to enhance logistics capabilities and increase exposure to agribusiness [7][19] Strategic Focus - The company has shifted its focus towards core sectors, emphasizing strategic acquisitions that align with its operational strengths [11][15] - Management has expressed a commitment to disciplined capital allocation, aiming to balance investments with shareholder returns [18][19]

Financial Data and Key Metrics Changes - Ultrapar's recurring EBITDA for Q2 2024 was BRL 1.282 billion, a 37% increase year-over-year, primarily driven by higher EBITDA from Ipiranga [4] - Net income for the quarter reached BRL 491 million, reflecting a 106% growth year-over-year due to EBITDA growth and lower net financial expenses [4] - The accumulated net income for 2024 was BRL 947 million, an 85% increase compared to 2023 [4] - Operating cash generation for Q2 2024 was BRL 1.298 billion, BRL 400 million higher than the same quarter in 2023 [5] - Net debt at the end of Q2 2024 was BRL 7.700 billion, a reduction of BRL 123 million from March 2024 [6] - Leverage decreased from 1.3 times in March 2024 to 1.2 times net debt-to-EBITDA in June 2024 [7] Business Line Data and Key Metrics Changes Ultragaz - LPG sales volume decreased by 1% year-over-year, with a 2% reduction in the bottled segment [8] - Ultragaz's EBITDA was BRL 414 million, with recurring EBITDA at BRL 397 million, a 2% decrease year-over-year [8] Ultracargo - Average stock capacity increased by 12% year-over-year to 1,067,000 cubic meters [9] - Cubic meters sold grew by 19% year-over-year, leading to net revenues of BRL 264 million, a 2% increase from Q2 2023 [9] - Ultracargo's EBITDA totaled BRL 165 million, a 3% growth year-over-year [10] Ipiranga - Volumes sold by Ipiranga grew by 4% year-over-year, with a 5% increase in diesel and a 3% increase in the auto cycle [11] - Ipiranga's EBITDA was BRL 817 million, with recurring EBITDA at BRL 781 million, an 80% increase year-over-year [12] Market Data and Key Metrics Changes - The competitive environment in the LPG market affected Ultragaz's sales volume, particularly in the bottled segment [8] - Ipiranga's market share showed volatility, with expectations for stability in the branded network [21][22] Company Strategy and Development Direction - The company is focused on improving operational efficiency and logistics, particularly in Ipiranga and Ultragaz [30][31] - The integration with SHV is progressing, with full implementation expected by 2025 [23] - Capital allocation remains disciplined, with no immediate plans for new acquisitions but a focus on maximizing returns from existing investments [26][47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of the year, anticipating a more balanced market with normalized inventory levels [19][30] - Concerns were raised about market irregularities and the need for regulatory adjustments to ensure fair competition [40][41] Other Important Information - The company approved BRL 276 million in interim dividends for the first half of 2024, equivalent to BRL 0.25 per share [5] - The company plans to hold an Investor Day on September 6, 2024, to align expectations for the year [27] Q&A Session All Questions and Answers Question: Impact of non-recurring effects on SG&A and future margins - Management acknowledged a BRL 7 to BRL 8 per cubic meter impact on SG&A due to office relocations, which is expected to be a one-off effect [16][56] Question: Market share expectations for Ipiranga - Management anticipates stable market share in the branded network, with lower volatility expected in the third quarter [21][22] Question: Integration with SHV and expected synergies - The integration process is on track, with full implementation expected by 2025, and some marginal benefits anticipated in the upcoming quarters [23] Question: Capital allocation priorities and potential acquisitions - Management emphasized a disciplined approach to capital allocation, with no immediate plans for new acquisitions but a focus on maximizing returns from existing investments [26][47] Question: Dynamics of the spot market and inventory levels - Management noted that the second quarter saw high import levels, maintaining market supply, and expects a gradual normalization of inventory levels in the second half [45][51]

Financial Reporting - Ultrapar Participações S.A. filed its 2023 Form 20-F annual report with the U.S. SEC on April 23, 2024[5] - The complete audited financial statements are available for download on the company's website[5] - A hard copy of the financial statements can be requested free of charge via email to the Investor Relations Department[5]

Foreign Exchange and Economic Impact - In 2021, the Real depreciated by 7% against the U.S. dollar, while in 2022 and 2023, it appreciated by 7% each year due to economic recovery and fiscal improvements in Brazil [128]. - The company is exposed to foreign exchange rate risks linked to commodity prices denominated in U.S. dollars, which could adversely affect its financial condition and results of operations [129]. - Economic conditions in the U.S. and other emerging markets can materially impact the Brazilian economy, affecting the company's ability to borrow funds and raise equity capital [131]. Environmental Regulations and Climate Change - The company faces potential increased costs and operational challenges due to new environmental regulations and climate change concerns, including the adoption of carbon pricing mechanisms [135][137]. - The RenovaBio program in Brazil aims to reduce carbon emissions and promote biofuels, which could impact the company's operations and market share due to compliance costs and market volatility of CBios [138][139]. - The company may incur higher compliance and operating costs if it does not invest in research and development of less carbon-intensive solutions [141]. - Disruptions from climate change events, such as floods and storms, could harm the company's facilities and affect its financial position [143]. Business Acquisitions and Expansions - Ultragaz acquired Stella for R$63.0 million to enter the electricity segment, enhancing its energy solutions offerings [161]. - Ultragaz also acquired NEOgás for R$165.0 million, marking its entry into the compressed natural gas distribution segment [162]. - Ultracargo's acquisition of a 50% stake in Opla for R$237.5 million increased its total installed capacity by 90,000 m³, expanding its operations into inland liquid bulk storage [171]. - Ultracargo is building a greenfield terminal in Palmeirante, expected to add 23,000 m³ of capacity by Q3 2024, and is expanding the Rondonópolis terminal by 14,000 m³ [172]. Operational Strategies and Innovations - Ipiranga's turnaround plan focuses on pricing intelligence, logistics, supply and trading, and network management, aiming for consistent results [179]. - Ipiranga's AmPm convenience stores have a supply structure with four distribution centers to enhance operations and product quality [181]. - In 2023, AmPm initiated a pilot project with exclusive partnerships with brands like Pizza Hut and Krispy Kreme, integrating their products into AmPm stores [185]. - AmPm's new store concept includes a comprehensive digital services package available on major Brazilian marketplaces and delivery applications [184]. - AmPm is testing a new store model called AmPm Office, with two units established in 2023, located in commercial buildings and universities [186]. Financial Transactions and Capital Structure - Ultrapar sold Oxiteno for an initial payment of US$1,326.4 million (equivalent to R$6,283.6 million) on April 1, 2022, with a final payment of US$150.0 million (equivalent to R$749.4 million) due in April 2024 [191]. - Ultrapar sold Extrafarma for an initial price of R$737.8 million, with the last installment of R$182.7 million due in August 2024 [194]. - Ultrapar's capital stock comprises 1,115,404,268 common shares as of February 28, 2024, following the issuance of 191,778 common shares [210]. - On March 24, 2024, Ultrapar acquired 128,369,488 shares of Hidrovias for R$3.98/share, increasing its ownership to approximately 21.87% [211]. - Following additional transactions, Ultrapar's ownership in Hidrovias could reach approximately 26.90% [212]. Market Position and Performance - Ultragaz sold 1.7 million tons of LPG in 2023, achieving a market share of 23.4% in Brazil [216]. - Ultracargo has a total installed capacity of 1,067 thousand m³ in 2023, making it the largest private company in the liquid bulk storage industry in Brazil [217]. - Ipiranga holds a 17.7% market share in fuel distribution in Brazil, with a network of 5,877 service stations [218]. - In 2023, Ultragaz's network served approximately 60 thousand business customers and over 11 million households [219]. - Clients with contracts longer than three years accounted for 63% of Ultracargo's revenues in 2023, indicating revenue stability [233]. Corporate Governance and Management - Ultrapar's corporate governance structure includes independent board members and a robust compliance program, enhancing alignment of interests [239][242]. - The majority of Ultrapar's Board of Directors consists of independent members, promoting strong governance practices [245]. - Ultrapar's management team has a proven track record in the energy, mobility, and logistics infrastructure industries, with a focus on gender equality in leadership [246]. - The company has achieved an average compounded annual growth of net income attributable to shareholders of 18% from 1999 to 2023, without reporting a net loss in any year since its IPO [249]. - From 2020 to 2023, 89% of the senior executives were renewed, enhancing the management structure and governance of the company [252]. Sustainability and ESG Initiatives - Ultrapar has defined seven material topics for its ESG strategy, with specific goals set for 2030, aligning with the UN Sustainable Development Goals [273][277]. - The company published a Sustainability Report for 2023, detailing its financial, operational, and ESG highlights, prepared according to GRI standards [274]. - Ultrapar's risk management framework includes a systemic risk matrix to assess and monitor risks across its business operations [263]. - In 2023, Ultrapar achieved a lost-time injury frequency (LTIF) rate of 0.78, a 37% decrease compared to 2022 and a 19% decrease compared to 2020 [38]. - The company reported a process safety event (PSE) rate of 0.73 in 2023, down 29% from 2022 and 53% from 2020 [38]. - Ultrapar invested R$ 25 million in community initiatives in 2023, which is 21% higher than the amount invested in 2022 [38]. - As of December 31, 2023, Ultrapar's gross debt was R$ 11,768 million, slightly up from R$ 11,750 million in 2022 [280]. - The net debt decreased to R$ 6,121 million in 2023 from R$ 6,689 million in 2022, indicating improved financial liquidity [280]. - In 2023, 100% of the electricity consumed by Ultrapar was from renewable sources, maintaining the same level as in 2022 [38]. - The company achieved a 42% level of gender and ethnic equity in senior management positions in 2023, up 4 percentage points from 2022 [282]. - Ultrapar maintained an AA rating in the MSCI ESG Rating in 2023 and reentered the ISE B3 portfolio with a score of 83 out of 100 in corporate governance [38]. - The company neutralized 29% of its scope 1 emissions and 100% of its scope 2 emissions in 2023, consistent with the previous year's performance [38]. - Ultrapar aims to achieve carbon neutrality for scope 1 and 2 emissions from 2025 onwards as part of its energy transition strategy [38]. Sales and Distribution Developments - Ultragaz's total sales volume of bottled LPG in 2023 was 1,122 thousand tons, a slight decrease of 0.4% from 2022, while total bulk LPG sales increased by 6.4% to 616 thousand tons [306]. - The company has expanded its distribution network significantly, now serving almost all major population centers in Brazil, with new bottling and distribution plants established in Belém and Fortaleza [302]. - Ultragaz's digital initiatives include the Ultragaz app, which reached 5.4 million downloads by the end of 2023, enhancing customer convenience and logistics optimization [308]. - The company has developed a new IoT-based system for controlling seed and grain drying processes in agribusiness, optimizing LPG consumption [309]. - As of December 31, 2023, Ultragaz had 28 million bottles in circulation, with 26 million being 13 kg bottles [316]. - The consortium agreement with Supergasbrás, approved on August 16, 2023, will increase Ultragaz's filling bases from 19 to 24, aiming for operational synergies and cost reductions [314]. - In 2023, Ultragaz requalified 2.1 million LPG bottles, maintaining compliance with safety regulations [326]. - The company sources 17% of its LPG supply from private suppliers other than Petrobras, indicating a diversification in its supply chain [327]. - Ultragaz's contracts with bulk clients typically range from two to five years, fostering closer relationships and opportunities for expanding LPG consumption [312]. - The Lapidar Challenge program aims to standardize best management practices among resellers, enhancing customer experience and compliance with sector laws [319].

Ultrapar Participações S.A. (NYSE:UGP) Q4 2023 Earnings Conference Call February 29, 2024 9:00 AM ET Company Participants Rodrigo Pizzinatto - CFO and IR Officer Marcos Lutz - CEO Leonardo Linden - CEO, Ipiranga Conference Call Participants Monique Greco - Itau BBA Thiago Duarte - BTG Luiz Carvalho - UBS Gabriel Barra - Citi Bruno Montanari - Morgan Stanley Operator Good morning. Thanks for waiting. We would like to welcome everyone to the conference call of Ultrapar's Fourth Quarter 2023 results. There is ...

Ultrapar Participações S.A. (NYSE:UGP) Q3 2023 Earnings Conference Call November 9, 2023 9:00 AM ET Monique Greco - Itau BBA Leonardo Marcondes - Bank of America Thiago Duarte - BTG Pactual Luiz Carvalho - UBS Rodrigo Almeida - Santander Bruno Montanari - Morgan Stanley We would like to inform you 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 open the floor for questions and at that time, further instru ...

ULTRAPAR PARTICIPAÇÕES S.A. Volume EBITDA 294 286 292 157 156 164 451 442 456 3Q22 2Q23 3Q23 +4% 0% +1% 000 ton R$ M | --- | --- | --- | --- | --- | --- | --- | --- | |--------------|-----------------------|-------|-------------------------|----------------------------------------------------------------------------------------------|------------------------------------------|---------------------|--------------------------------------------------------------------------------------------------------------- ...

Ultrapar Participações S.A. (NYSE:UGP) Q2 2023 Earnings Conference Call August 10, 2023 10:00 AM ET Rodrigo de Almeida Pizzinatto - Chief Financial & Investor Relations Officer Marcos Lutz - Chief Executive Officer Tabajara Bertelli - Chief Executive Officer, Ultragaz Leonardo Linden - Chief Executive Officer, Ipiranga Thiago Duarte - BTG Pactual Leonardo Marcondes - Bank of America Regis Cardoso - Credit Suisse Matheus Enfeldt - UBS The presentation will be conducted by Mr. Rodrigo de Almeida Pizzinatto, U ...

ULTRAPAR PARTICIPAÇÕES S.A. 2Q23 Earnings Conference Call 08.10.2023 Disclaimer Forward-looking statements ✓ This presentation may include forward-looking statements about future events. Such statements reflect only the expectations of the management of the Company. Forward-looking statements may be identified by the use of words such as "anticipate", "believe", "expect", "estimate", "plan", "outlook", "project" and other similar expressions that predict or indicate future events or trends or that are not s ...

As filed with the Securities and Exchange Commission on April 25, 2023 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FORM 20-F OR (Mark one) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPO ...