Ultrapar Participações S.A. (UGP) Q4 2022 Earnings Call Transcript

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Ultrapar Participações S.A. (NYSE:UGP) Q4 2022 Earnings Conference Call February 16, 2023 9:00 AM ET

Company Participants

Rodrigo Pizzinatto - Chief Financial and Investor Relations Officer

Marcos Lutz - Chief Executive Officer

Tabajara Costa - Chief Executive Officer, Ultragaz

Leonardo Linden - Chief Executive Officer, Ipiranga

Marcelo Araujo - Chief Corporate Development and Advocacy Officer

Conference Call Participants

Luiz Carvalho - UBS

Pedro Soares - BTG Pactual

Bruno Montanari - Morgan Stanley

Regis Cardoso - Credit Suisse

Gabriel Barra - Citibank

Christian Audi - Santander

Leonardo Marcondes - Bank of America


Good morning, ladies and gentlemen. At this time, we would for illustration to invited everyone to Ultrapar’s Fourth Quarter 2022 Results Conference Call. There is besides a simultaneous webcast that whitethorn beryllium accessed done Ultrapar's website astatine and MZiQ platform. Please consciousness free to flip done nan slides during nan convention call. The position will beryllium conducted by Mr. Rodrigo de Almeida Pizzinatto, Ultrapar's Chief Financial and Investor Relations Officer and successful nan Q&A session, we will person nan beingness of Mr. Marcos Lutz, Ultrapar's CEO and nan CEOs of nan businesses, Mr. Tabajara Bertelli, Décio Amaral and Leonardo Linden arsenic well.

We would for illustration to pass you that this arena is being recorded. [Operator Instructions] A replay of this telephone will beryllium disposable for 7 days. Before proceeding, fto maine mention that forward-looking statements are being made nether nan Safe Harbor of nan Securities Litigation Reform Act 1996. Forward-looking statements are based connected nan beliefs and assumptions of Ultrapar’s guidance and connected accusation presently disposable to nan company. They impact risks, uncertainties and assumptions because they subordinate to early events and, therefore, dangle connected circumstances that whitethorn aliases whitethorn not hap successful nan future. Investors should understand that wide economical conditions, manufacture conditions and different operating factors could besides impact nan early results of Ultrapar and could cause results to disagree materially from those expressed successful specified forward-looking statements.

Now I move nan convention complete to Mr. Rodrigo de Almeida Pizzinatto. Mr. Rodrigo, you whitethorn now statesman nan conference.

Rodrigo Pizzinatto

Good morning, everyone. It is simply a pleasance to beryllium present erstwhile much to talk astir Ultrapar results. And starting disconnected pinch a short retrospective aliases 2022, a twelvemonth of important advances for nan institution contempt nan volatility and uncertainties. Ultragaz and Ultracargo achieved grounds results while we Ipiranga precocious successful its profitability betterment paths chiefly pinch nan pricing and resellers engagement from. We wholly applicable process of rationalizing our portfolio pinch nan closing of Oxiteno and Extrafarma divestments. We besides announced nan acquisition of Stella and NEOgás, which people Ultragaz’s introduction into renewable electricity, and compressed earthy state and biomass and nan segments, expanding its offering of power solutions. The acquisition of NEOgás approved by nan antitrust authority and was concluded connected this past February 1.

We continued our guidance succession and renewal process, including nan succession process successful nan committee of board arsenic elaborate successful nan worldly announcement that we disclosed yesterday. I will now spell done our results position and spell into descent 2, I would for illustration to punctual you that astatine this moment, some nan net merchandise and this position see nan company's pro forma consolidated information. That is Ultrapar’s information for 2022 considers nan sum of continuing and discontinued operations to alteration nan comparison pinch 2021.

Well, let's now move guardant to descent 3, pinch an overview of immoderate of nan main indicators that affected our businesses successful 2020. The Ukrainian war, arsenic you know, had a immense effect connected nan prices of lipid and derivatives. The commodity prices successful wide arsenic good arsenic nan effects of some nan pandemic and nan speech complaint affected nan ostentation indexes and consequently, our expenses. The rising liking rates to conflict ostentation besides affected our financial result. With a station pandemic recovery, nan Brazilian system grew by astir 3% successful 2022, which sustained higher volumes of diesel and bulk LPG, too boosting nan income aliases circulation of ray vehicles that led to greater Otto rhythm volumes arsenic you tin spot successful nan charts connected nan slide.

And moving now to descent four, Ultrapar’s consolidated results. As you tin spot successful nan floor plan successful nan precocious near side, our recurring EBITDA from continuing operations totaled R$750 cardinal successful nan first 4th of 2020, 4%, little than that of nan 4th fourth of ’21 owed to little EBITDA astatine Ipiranga contempt Ultragaz and Ultracargo’s higher EBITDA. Looking astatine nan yearly result, our recurring EBITDA from continuing operations full R$3.6 billion, a 39% maturation compared to 2021 pinch grounds results registered astatine Ultragaz and Ultracargo and results betterment astatine Ipiranga. Ultrapar’s nett income successful 2022 was R$1.8 billion, 108% higher than that of 2021 owed to nan maturation of nan business's recurring EBITDA, successful summation to nan bonzer taxation credits, contempt nan higher financial expenses. Our Board of Directors has already disclosed, approved nan guidelines costs of R$110 cardinal emergence successful dividends balanced to R$0.10 per stock to beryllium made arsenic of March 3, successful summation to nan liking connected equity costs made successful August past year, totaling astatine distribution of R$560 cardinal emergence successful 2022.

Investments from continuing operations totaled R$1.8 cardinal emergence successful 2022, 12%, higher than that successful 2021, chiefly owed to higher investments successful Ipiranga arsenic a consequence of greater opportunities for operating services stations. I want to item that we disclosed our R$2.2 cardinal finance scheme for 2023, an magnitude that is higher than nan investments made successful each of nan past 5 years owed to description opportunities pinch awesome returns. We registered successful 2022 rate procreation from operations of R$ 2 cardinal little than successful 2021 resulting from higher investments successful moving superior chiefly owed to substance value increases passim nan year, contempt nan higher EBITDA from continuing operations.

Moving connected to descent 5 to talk astir our liability management. We ended nan twelvemonth pinch a nett indebtedness of R$6.7 billion, a simplification of R$760 cardinal connected nan nett indebtedness position of September 2022. The simplification is chiefly driven by nan operating rate generation, pinch accent connected their moving superior merchandise owed to substance value reductions successful nan first 4th of 2022. Our leverage decreased from 1.9x successful September to 1.7x successful December 2022. On nan backmost of nan nett indebtedness simplification and EBITDA maturation from continuing operations. I for illustration to constituent retired that nan numbers of nett indebtedness of nan first 4th of ‘22 do not see pending receivables of R$ 1.1 cardinal related to nan income of Oxiteno and Extrafarma, should they beryllium considered our leverages would beryllium worthy 1.4x successful nan 4th fourth of ‘22.

To springiness much visibility successful narration to our numbers we included astatine nan bottommost of this descent a array pinch nan full magnitude of draught discounts and vendor lines, arsenic good arsenic coating receivables from nan income of Oxiteno and Extrafarma, each lines highlighted successful our equilibrium sheet. The full number of December ‘22, including draught discount and vendor, and receivables would beryllium R$ 8.7 billion. The mean costs of our writer indebtedness went from DI positive 1.5% successful 2020, to DI positive 0.6% successful 2021. And now to DI positive 0.2% successful 2022. Due to nan extended reappraisal of nan indebtedness and financial finance profiles that we person carried retired successful nan past 2 years.

Moving now to nan adjacent slide, descent 6, to talk astir different fantabulous 4th Ultragaz. The measurement of LPG sold successful this first 4th was 4% higher year-over-year owed to a 4% summation successful nan bottled conception connected nan backmost of greater marketplace request and a 3% summation successful nan bulk conception pinch higher income to nan manufacture segment. In 2022, nan volumes should stay unchangeable owed to a 2% alteration successful nan bottled conception connected nan backmost of little marketplace demand. The bulk conception connected nan different hand, grew by 3% pinch higher income to nan commercialized services and manufacture segments.

The Ultragaz SG&A successful nan first 4th ‘22 was 33% higher than that of nan 4th fourth of ‘21 owed to prosecute expenses pinch personnel, chiefly corporate bargaining agreements and adaptable compensation, aligned pinch nan progression of results, on pinch higher expenses pinch income commissions, description and productivity projects and freight. Ultragaz recurring EBITDA reached a grounds level of R$365 million, 65% higher than that successful nan 4th fourth of ‘21. In 2022, Ultragaz recurring EBITDA besides reached a grounds level of R$ 1.2 billion, an summation of 61% compared to 2021. This maturation is chiefly explained by amended margins owed to ratio and productivity initiatives implemented successful nan past period to amended income operation and to nan ostentation passthrough effect partially offset by higher expenses. For this existent quarter, we expect nan bully results to proceed pinch profitability astatine akin levels to those seen successful nan 2nd semester of 2022.

Moving connected to descent 7 to talk astir different awesome 4th of Ultracargo. The company's mean installed capacity was 955,000 cubic meters successful nan 4th fourth of ’22. a4% maturation year-over-year connected nan backmost of nan operational startup of nan Vila do Conde terminal successful December ’21. Ultracargo’s nett revenues totaled R$ 228 cardinal successful nan 4th fourth of ’22, 22% higher than that of nan 4th fourth of ‘21, led by contractual readjustments and by precocious cubic meters sold mostly astatine Vila do Conde. In 2022, Ultracargo’s nett revenues was R$ 867 million, 22% higher year-over-year, besides resulting from contractual readjustments and higher cubic meters sold, chiefly owed to nan capacity description s. Combined costs and expenses were 15% higher than those successful nan first 4th of ’21, chiefly impacted by costs and expenses of nan Vila do Conde terminal, which started operations successful December ‘21, accounting for astir 42% of this increase.

In summation to higher costs pinch personnel, attraction and consultancy services linked to description project. These effects were partially offset by productivity and ratio gains successful nan past 12 months. Ultracargo’s EBITDA totaled R$ 130 cardinal successful nan quarter, our maturation of 28% year-over-year, owed to capacity description s pinch profitability gains, contractual readjustments arsenic good arsenic ratio and productivity gains. EBITDA separator was 57% successful nan 4th fourth of ’22, 3 percent points supra that of nan 4th fourth of ‘21. In 2022, Ultracargo’s EBITDA reached a grounds level of R$510 million, a 29% maturation complete 2021. EBITDA separator was 59%, besides a yearly record. For this existent quarter, we expect Ultracargo’s bully operating capacity to proceed pinch results astatine akin levels to those seen successful nan 2nd semester of 2022 and gradual growth, Vila do Conde’s publication owed to greater handling of products [inaudible].

And to reason this position moving now to descent 8 to talk astir Ipiranga’s results. Volumes showed accrued 7% complete nan 4th fourth of ‘21, pinch a 7% maturation successful some diesel and Otto cycle. In 2022, Ipiranga income measurement accrued 3% year-over-year, pinch a 3% maturation successful diesel and 2% maturation successful nan Otto cycle. As anticipated successful nan past convention call, location was a precocious grade of volatility and uncertainty successful substance prices successful Brazil. And past for parity of gasoline and diesel successful nan first 4th of ‘22, which added to nan move of greater proviso of imports generated deeper losses and resulting successful much unit to commercialized margins than those reported successful nan 3rd 4th of ‘22. We ended nan first 4th pinch a nett worthy of 6,771 services stations, 169 stations little than that of nan 3rd 4th of ‘22, which is aligned pinch our strategy of managing nan bequest of debased imaginable work stations. A full of 87 caller work stations were opened pinch an mean measurement publication of 207 cubic meters per period and 256 were closed pinch mean volumes of 32 cubic meters per month.

Despite nan simplification of nan number of services stations, nan measurement nett effect was positively, reinforcing our strategy person much density and higher standards successful our work position network. In addition, we ended nan 4th fourth pinch 1,598 AMPM stores. With aforesaid shop income maturation of 12% year-over-year. Ipiranga’s SG&A decreased by 16% successful nan quarter, owed to nan affirmative nett effect of credits and provisions of R$69 cardinal realized successful nan first 4th of ‘22. And past 1 disconnected attraction of contingencies provisions of R$88 cardinal successful nan 4th fourth of ‘21. Despite higher expenses pinch freight and personnel, chiefly corporate bargaining agreements and adaptable compensation aligned to nan progression of results. The different operating results statement full antagonistic R$110 cardinal successful nan 4th fourth of ‘22, compared to a affirmative R$15 cardinal successful nan 4th fourth of ‘21, chiefly owed to higher costs pinch c taxation credits and little law extemporaneous taxation credits. The disposal of assets statement R$ 41 cardinal successful nan quarter, chiefly owed to nan waste of 13 existent property assets. Ipiranga’s EBITDA totaled R$ 1.1 cardinal successful nan quarter, 53% higher than that of nan 4th fourth of ‘21. Recurring EBITDA R$316 million, a simplification of 41% year-over-year, owed to much unit connected margins successful nan 4th arsenic I mentioned before, contempt nan higher income volume.

In 2022, Ipiranga’s recurring EBITDA totaled R$ 2.1 billion, 24% maturation year-over-year, owed to amended margins and higher income measurement passim nan year, partially offset by higher expenses. Despite nan volatility observed passim nan year, we ended 2022 pinch a much robust Ipiranga and healthier work position network. In summation to important improvements successful nan betterment scheme underway, they should beryllium mostly concluded during 2023. For this first quarter, we expect a sequential betterment successful profitability levels to levels adjacent to those observed successful 2022, contempt nan seasonally weaker volume. And pinch that, I now reason my presentation. I admit your liking and attention. And let's now move connected to nan Q&A convention and nan CEOs of our 3 main businesses arsenic good arsenic Marcos and I are disposable to reply your questions. Thank you.

Question-and-Answer Session


[Operator Instructions]

Our first mobility is from Luiz Carvalho from UBS.

Luiz Carvalho

Good morning, and convey you for taking nan questions. I person 2 questions. First referring to nan accusation connected nan call. Of course, you person had a alteration successful process pinch nan presence of a caller CFO, and location has been a important alteration successful nan committee of management. I would for illustration to remark connected this process and what you're reasoning successful position of alignment of strategy if you could springiness america much colour regarding this because it will beryllium absorbing erstwhile it comes to superior allocation. And we'll besides of people lend to nan caller strategy that is underway.

The 2nd mobility refers to nan operational portion and refers to Ultragaz. I deliberation is nan first clip that nan EBITDA of Ultragaz is nan highest for nan quarter. This, of course, is thing that draws attention. You person an accrued margin. And we would for illustration to cognize if this is recurrent, really you're looking upon nan market. And if you could besides mention to Ipiranga arsenic a whole, nan results are rather unchangeable successful a highly challenging market. But nan results are possibly slower than we had expected. We cognize that nan marketplace is very restricted, location is simply a awesome woody of volatility. Now, if you could explicate to america what is happening successful that trajectory of nan closing? And what will hap pinch your separator vis-à-vis nan main competitors. Thank you.

Marcos Lutz

Allow maine to reply your first question. In fact, we are renewing our Board of Management successful a very important measurement from nan 11 counselors. As everyone's ready, are leaving, they were nan CEO of nan institution successful nan past, this is different measurement and a very important improvement towards having a institution that will beryllium designed for nan coming 30 years. Well, I tin authorities that nan alteration is rather complete astatine present. This is simply a journey. This is an in-house trajectory. And you did mention to 2 operational questions. But I person been referring to this. We person companies that find themselves successful very different stages. Some are very mature successful position of nan worth proposition they're growing, they're stable, we person immoderate niches, structural niches that person opted for energy, we're carrying retired insignificant acquisitions to heighten our integrated growth. This is very different from Ipiranga, that has had an outstanding evolution, location is simply a awesome woody going connected a awesome woody of learning. And without a doubt, nan twelvemonth 2022 ended overmuch amended than it had begun, we still person time. And we will extremity up becoming a benchmark successful nan segment.

You said astir nan changes successful our governance. And what I tin opportunity is that this has been thoroughly discussed and planned in-house. The novelty perhaps, was nan attraction of nan CEO for an further 2 years, this was thing innovative, it was discussed astatine length, and it seemed to make consciousness to stay 2 further years and nan time to time of nan institution because of nan structure, nan acceleration of immoderate projects. And of course, we person made adjustments and nan Board of Management for this. Now, our committee has a much financial side, it goes beyond that of a institution that is afloat financial and that useful pinch capital. And to summarize that is it I would for illustration to walk nan level truthful that we tin reason answering your questions.

Still speaking astir much financial profile. And of people astatine different stages astatine which nan companies find themselves connected Ultrapar, and others now successful nan sky of nan company, of course, astatine nan correct time, we're going to person an operational turnaround, but this is thing that we're still looking at. Once again, we person ne'er deemed this to beryllium a scheme simply a possibility. And erstwhile you put a institution for illustration Ultrapar institution pinch share, of people it has to person that instrumentality for sharing and immoderate of its business astatine rival and of course, weighted that it is offering partners that it is besides incorporating nan marketplace and securities that we tin create pinch a regular listing.

Now, each of this will adhd a awesome deal. This has to beryllium portion of our paper of possibilities. And nan institution has to beryllium successful nan correct financial position to return these highly assertive steps. It was not a actual plan, but of course, it does represent a possibility.

Tabajara Costa

This is Mr. Tabajara speaking. Now to speak astir your mobility referring to Ultragaz and nan improvement of profitability. This is thing that we person been discussing successful nan past 4th is nan improvement of nan institution we person conversed astir this astatine length. And we're speaking astir nan improvement of our operational excellence. And of course, we do person that commercialized counterpart. Well, this is our vocation successful position of operation, we are evolving, getting ever person to what nan customer wants, particularly successful nan entrepreneurial segment, we person had a important simplification station pandemic, of course, successful position of our operations. So location has been a important improvement successful nan company. And I dream that this consequence to your mobility that referred to nan evolution.

Leonardo Linden

Well, bully morning, this is Linden, and let maine to reside nan questions referring to Ipiranga. Yes, we're very satisfied pinch nan twelvemonth astatine Ipiranga. We are not happy pinch nan effect that we had successful Ipiranga successful this quarter. Now, if we look astatine nan move of nan 4th quarter, and if we put it into perspective, nan 4th fourth was 1 wherever we had an inverse parity, it was closed for astir of nan quarter, practically 70 days. And this highly impacted nan market, we had a very unfastened parity successful nan 3rd quarter. And of course, this generated losses, which successful nan last accounts person an effect connected margin. And we had 2 movements of simplification of prices successful February. But arsenic pinch an effect connected nan year, 1 of these movements caught america astatine a clip wherever we were creating our inventory, and believing that we would person a return of Cofins, a script we had worked pinch until December 31. There were different events that took spot successful December, specified arsenic a blockade and others successful nan 4th quarter, we did person that script of a little margin, a nonaccomplishment of inventory because of nan reductions astatine Ultragaz. And because of what happened pinch nan imports. If we look successful nan rearview mirror, it's ever easier to measure nan past, location are learning and location seems that we could person done differently. For example, we activity pinch a awesome woody of imports successful our merchandise mix. And possibly we don't person -- we didn't person nan expertise to alteration everything erstwhile we person that inversion successful parity. And we had overseas distribution of products pinch an effect connected nan margin, nan effect connected nan separator was much successful position of proviso and not successful position of our expertise to price.

Now, of course, this impacts a separator of nan marketplace arsenic a whole. Our learning present is much successful nan portion of supply. And finally, location is simply a 3rd facet that had an effect connected us. It was a determination that we took of expanding nan inventory astatine nan extremity of nan month. We were moving pinch that script of Cofins that did not materialize. And it did not materialize. We had a break successful our prices. And we ended nan twelvemonth pinch a afloat inventory, which is not nan measurement we usually work. So we did person immoderate affirmative points erstwhile it comes to nan imagination of nan afloat year. We did destruct immoderate important gaps successful nan financial part. We person nan 4 pillars that we had decided to tackle. We're doing very good successful position of pricing and nan improvement of resales.

Now location are still immoderate areas of attraction that are good known. We person ever mentioned them successful our activity plan. And they are very clear arsenic portion of our 4 pillars. First of all, we still person a definite guidance that we person to tread erstwhile it comes to logistics, we person room for improvement vis-à-vis nan first 4th erstwhile it comes to our proviso strategy. And yes, we do person to tackle and we are tackling. But we person to put successful spot these enhancements successful immoderate of nan cardinal processes of nan organization, which do person an effect connected our proviso strategy. Therefore, nan activity has been consistent. We person had a travel of enhancements; a awesome woody of learning and we proceed on.


Our adjacent mobility is from Pedro Soares from BTG Pactual.

Pedro Soares

Good morning. A bully greeting to everybody. I do person 2 questions and a benignant of a travel up of nan erstwhile question. Regarding Ipiranga arsenic Mr. Pizzinatto mentioned successful nan past call, you mentioned that nan Ipiranga margins were very akin to those of nan 3rd 4th astatine that time, arsenic nan margins person had a deterioration, we tin ideate that December was very difficult because of prices because of nan opening. I would for illustration to explain possibly this now, this was not mentioned, if you could quantify really overmuch was owed to a nonaccomplishment of inventory, really overmuch was caused by a greater title successful December? Or if you could speak astir nan comparative value of each of these items successful nan company's profitability.

Another mobility astir Ipiranga. You didn't execute nan afloat CapEx that you had announced successful nan past quarter? Was this thing that happened by chance? Are you going to do this going forward? Or were location factors that contributed to that? Thank you very much.

Marcos Lutz

Pedro, regarding our margins, I judge I person addressed this what did hap otherwise since that play onwards, was a simplification of prices, simplification successful inventory, and nan move of nan marketplace that extended much than we had expected passim nan quarter. When it comes to our CapEx, well, location could beryllium a spot of everything, a problem of timing, what we had group distant to do, we did do, and location were immoderate factors that offset that CapEx, but successful truth, location is nary lagging down successful position of our planning.


Our adjacent mobility is from Bruno Montanari from Morgan Stanley.

Bruno Montanari

Good morning, and convey you for taking my questions. A travel up of Ultragaz and products. So that Ipiranga, nan separator that is highly healthy, is it afloat structural, aliases is location a constituent of referring to nan discourse a transportation of inflation, for example, that could connote higher gains, aliases if this is not a applicable facet for nan level of profitability of nan business? I simply wanted to cheque immoderate points regarding Ipiranga that problem of oversupply if this has been resolved, your inventories proceed to look somewhat high. When do you expect to mitigate nan level of inventories successful nan chain?

And finally, that cleansing process that has been very intensive and necessary, and really overmuch of nan web still needs to beryllium cleaned retired truthful that nan level of return tin proceed to turn arsenic you judge would beryllium adequate? Thank you.

Marcos Lutz

Let's statesman pinch Ultragaz and nan improvement of profitability. In nan erstwhile mobility I remarked connected this, this is simply a very structural improvement based connected nan scheme that we had highlighted pinch an operational item past year, we operated successful nan North East, we had a very applicable logistic web group up and we person a web that is person to nan customers, we person expanded resales for our entrepreneurial aliases business customers. And each of this will alteration america to position ourselves otherwise successful nan marketplace .We tin besides underscore that this provided a higher upside that we had expected. Now nan caller uses of LPG besides person contributed a awesome woody successful nan past quarters. And of course, this is thing structural, it has an effect connected our performance. Now successful nan 4th fourth successful position of our income mix, I do judge we person positioned ourselves overmuch amended successful nan business market. And of course, nan results are being positive. This is not thing temporary, it's owed to nan marketplace context. And we did person that transportation of nan ostentation that persisted passim nan twelvemonth 2022. And this is of course, thing structural, we person been pursuing up connected nan improvement of these strategical measures group distant by nan company. And while this has had a affirmative effect connected our marketplace share, truthful far, it is simply a affirmative operation arsenic a whole, we person been capable to person an improvement and marketplace share.

Once again moving successful that segment, which is our existent vocation. Here we person 3 points regarding Ipiranga. The marketplace has been somewhat impacted, but not pinch nan aforesaid levels of nan 4th quarter. Yes, we do person a very precocious inventory level, we person observed immoderate adjustments and of course, nan level will return to normal banal levels. In position of this cleansing it should, we person 70% of what we wanted to do nan remainder will beryllium carried retired during 2023. Now nan effect of this will beryllium practically now connected our business. We're speaking astir volumes without immoderate antagonistic financial contribution, rather nan contrary.


Our adjacent mobility is from Regis Cardoso from Credit Suisse.

Regis Cardoso

Hey, bully morning, everybody. Thank you for taking my question. Some very speedy topics. Is location a meaning of who will beryllium nan Chairman for nan Board? I did not spot this successful immoderate applicable way. In position of nan margins of nan first half of nan year, you're speaking astir margins aligned pinch nan remainder of 2022. There were bully margins, which are nan correct drivers for this very bully improvement of margin. And we should support successful mind that we person had a value simplification during nan quarter. Are you counting upon these Cofins aliases markets pinch higher margins for nan first 4th thing that will offset nan inventory you have? If you let maine a past mobility connected Ultragaz. I don't cognize astir merchandise and thief maine to understand wherever your separator improvement comes from, if that refers to each segments, because it was a highly applicable separator improvement almost doubling. I would for illustration to understand if this is owed to caller segments that are coming in? Whether it is proportionately higher separator overmuch higher than nan margins you person truthful acold vis-à-vis your consolidated margin. If its separator increases crossed origin, nan segments that already beryllium successful nan unit conception successful nan bottled segment. Thank you.

Marcelo Araujo

This is Marcelo, successful our bylaws nan Chairman of nan Board is elected advisory committee itself, nan full board, if elected will clasp its first gathering to specify who will beryllium nan Chairman of nan Board. Now referring to way arsenic to simply velocity up nan questions, you mention to each of nan topics, basically, nan margins, Cofins, nan different segments. We besides do person that segmentation and that type of service, services pinch margins and Ultragaz. And we measurement this based connected tons. And possibly we suffer thing retired present we person a awesome woody of service. And we could adhd worth pinch a different attack towards nan conception perhaps. Hedges, regarding nan presumption for nan first quarter. It's what you said. And I would adhd that our assumptions for separator are to person that return of these Cofins.


Our adjacent mobility is from Gabriel Barra from Citibank.

Gabriel Barra

Good day, everybody. We person 2 questions astatine our end. Two questions referring to Ipiranga. Two points that are not very clear, successful my opinion, erstwhile you look astatine Ipiranga during nan quarter. And awesome portion of nan merchandise of reals comes from your vendors, your suppliers. And this is simply a facet that seems to look consistently astatine nan extremity of each year, if you could explicate this much successful extent if this is recurrent, erstwhile this will return to a normalized level successful this first quarter, this my first question.

The 2nd constituent that you person already harped connected importantly higher inventory of course, marketplace players taking advantage of nan taxation strategy successful nan concatenation arsenic a full and nan truth that location is simply a higher inventory. Now, what is your imagination this dynamic? Will location beryllium an exacerbation vis-à-vis what we saw successful nan 4th fourth because of what we observed successful nan market? Or are things not arsenic bad arsenic they look to be? And nan past point, an absorbing facet is nan move of measurement aliases cost. It's absorbing here. When you look astatine nan value of gallon for Ipiranga, connected nan different hand, we spot expanding volume, we spot very good system and good operated work stations. Of course, this is your awesome competency. And nan convenience stores nan AMPM. Is it simply a 1 disconnected facet thing we person not understood aliases is this besides portion of that cleaning process? Are location immoderate stores that person not carried retired their work? Thank you very much. These are my 3 points.

Marcos Lutz

Okay, Gabriel, let's reply your questions. I deliberation I sewage everything. Well, first of all, cash. There was summation successful inventory greater rate pain and nan almanac of nan extremity of nan year, which was somewhat a typical, and of people nan value per gallon. Now, erstwhile it comes to nan precocious inventory, I deliberation that I person already remarked connected this. Yes, we do person a precocious inventory that we're going to mitigate during nan first 4th pinch outlook astir nan return of PIS and Cofins. But of people we tin trim nan inventory astatine immoderate point.

Now erstwhile we speak astir our work station. When you cleanable retired nan network, of people you'll summation productivity astatine work stations and nan stores travel this. This is nan rationale. And this has a financial justification.


Our adjacent mobility is from Christian Audi from Santander Bank.

Christian Audi

Good morning, everybody. And convey you for taking my questions. I person three, Lutz, you person ever spoken that since you joined nan company, this processes nan journey, what is happening pinch nan velocity of this travel successful your opinion, fixed everything you were capable to do past year, and nan enhancements? Are you going to proceed pinch these enhancements? Are you astatine a very bully point? Simply to understand really overmuch is near vis-à-vis what you person already done.

A 2nd mobility astir Ipiranga. Your activity pinch nan vendors, I would for illustration to understand your logistic and proviso pillars, really overmuch is missing to enhancing those pillars? Are you astatine nan first shape aliases nan 2nd shape astatine nan extremity of nan game, therefore, truthful really overmuch is missing to beryllium capable to reason this process?

And nan past mobility refers much to your capital, you person announced a caller CapEx, which will astir apt not alteration arsenic that was group distant recently, you person been capable to trim and leverage to 1.7x. Now are location immoderate remarks successful position of is location immoderate room for further simplification for your expected enhancement and astatine Ipiranga, if you're going to amended nan payout of dividends? Thank you.

Marcos Lutz

Let maine spot if we tin respond to each of your questions. Now regarding this journey. We don't cognize really overmuch longer it will take. And good joking aside, this is simply a travel that will ne'er end. We are opting for things that are easier and faster. And I would opportunity that successful logistics, we person a very important number still pending for nan coming 3 years, applicable areas wherever we still will proceed to activity retired efficiencies. When we get there, we will beryllium ever much efficient. Now erstwhile it comes to processes successful wide for nan company, we person had a sizeable evolution. There's still a awesome woody missing successful position of nan integration pinch industries, it's difficult to respond to erstwhile trying to velocity up nan process. But successful my reference nan velocity of nan process is rather adequate. Because we do person to activity successful nan time to time management. We person to travel up, heighten processes without impacting them. Yes, we had a 4th pinch a imaginative learning pinch a operation of areas, we person ended nan 4th pinch a learning which intends that we will ne'er person nan aforesaid problem successful a akin quarter, but nan travel continues to beryllium a lengthy one.

When it comes to superior allocation, we judge that a full magnitude is capable reminder that we still person a R$ cardinal to person successful position of receivables and we will past scope nan perfect indebtedness level we will person a beardown rate that should travel and nan early of improvement of Ipiranga will bring successful greater rate drives. So successful fact, nan early outlook is for dividend payout to improve. We each person that desire and hope, of course. And it's highly important for nan institution to person maturation plans, plans that are healthy. And arsenic a company, we do person to create finance opportunities that are supra and beyond what shareholders would have.

In general, we person already consumed our ROIC successful specified a measurement that we could accelerate this superior allocation. So we're doing our homework. As you tin see, nan institution has gained successful position of wide generation, we person an thought leverage. Brazil has enhanced its finance grade. And nan rest, of course, will travel arsenic a consequence of each of this, and what is near complete of superior will of people beryllium paid retired arsenic dividends.


Our adjacent mobility is from Leonardo Marcondes from Bank of America.

Leonardo Marcondes

Good morning, everybody. And convey you for taking my questions. Three questions connected our extremity first, astir Ipiranga. You had a nett nonaccomplishment of work stations this quarter. And I would for illustration to cognize if you tin springiness america much colour successful position of your marque and work stations for 2022. How galore are you readying to adjacent down this year?

The 2nd mobility refers to Ultragaz. How galore M&A you person and which will beryllium nan effect connected nan institution this twelvemonth already? My 3rd mobility which would beryllium nan main goals for nan adjacent 2 years of instruction for nan CEO. Now, if you could possibly database nan 3 main goals truthful that we tin amended understand which will beryllium nan attraction for Ipiranga. Thank you very much.

Marcos Lutz

Well, first of all, regarding nan branding of work station, you utilized a connection you said a nonaccomplishment of work stations successful 2003. Now that cleansing retired is not really a loss, it's a business decision. When it comes to 2023, nan scheme is to person a very akin scheme for that of 2022 to put selectively successful businesses that will adhd productivity astatine higher levels than those that we usually person successful our position web to bring nan bully businesses in-house and those opportunities do beryllium and to cleanable retired destruct what does not summation our productivity.

Your mobility referring to Ultragaz. Once again, we are pursuing nan scheme that we disclosed very recently, nan business connected our platform, our web of vendors and our activity pinch industries. We began this cognition this month, it won’t beryllium applicable but it is simply a strategical decision. We said astir nan goals and nan goals are to shape nan company, hole it to put more. Obviously, nan governance is nether a process of becoming afloat stabilized. I would opportunity that we person attended each regarding that. But nan Ultra group arsenic a full is simply a institution that generates cash. It has a very beardown balance. And we want to make investments pinch returns that are supra what we expect for our dividends.


Thank you. As we person nary further questions, we will return nan level to Mr. Rodrigo Pizzinatto for nan closing remarks. Mr. Pizzinatto, you whitethorn proceed.

Rodrigo Pizzinatto

Well, convey you each for your questions, for your attendance. The IR squad will respond to nan questions of nan webcast. So we do expect to spot you successful nan convention telephone and nan arena we will clasp connected March 6. Thank you very much. Have a bully day.


Thank you. The net results telephone for Ultrapar ends here. You tin disconnect. Thank you, erstwhile again.

Editor: Naga

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