Ultrapar Participacoes : Earnings call presentation 2Q19

Ultrapar Participações S.A.

Earnings conference call - 2Q19

08.15.2019

Considerations

• Forward-lookingstatements
• This document may include "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. 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 statements of historical matters. Investors are cautioned that such forward-looking statements with respect to revenues, earnings, performance, strategies, prospects and other aspects of the business of Ultrapar Participações S.A. ("Ultrapar") are based on current expectations that are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. Ultrapar is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. For this reason, readers should not place undue emphasis on these forward- looking statements.
• Standards and criteria adopted in preparing the information
• The financial information presented in this document has been prepared according to International Financial Reporting Standards (IFRS). The financial information of Ultrapar corresponds to the company's consolidated information. The financial information of Ipiranga, Oxiteno, Ultragaz, Ultracargo and Extrafarma is reported without elimination of intercompany transactions. Therefore, the sum of such information may not correspond to the consolidated financial information of Ultrapar. In addition, the financial and operational information presented in this document is subject to rounding off and, consequently, the total amounts presented in the tables and charts may differ from the direct sum of the amounts that precede them.
• Information denominated EBITDA and Adjusted EBITDA is presented in accordance with Instruction 527, issued by the Brazilian Securities and Exchange Commission - CVM on October 4, 2012.
• As from 2019, two changes have been introduced in the presentation of Ultrapar's financial information: (i) we have adopted the IFRS 16 published by IASB - International Accounting Standards Board prospectively; and (ii) we have separated out certain corporate expenses, previously distributed among Ultrapar's business units, to a new segment named "Corporate". In order to retain comparability between 2Q19 and 1H19 with the information of 2Q18 and 1H18, discussion of results is shown without adjustments related to IFRS 16 and to the new Corporate segment while references to "2Q19" adopt the same criterion. Any mention of information incorporating these changes will be identified as "2Q19 Post-adjustments". Additional information can be found in note 2.y of the quarterly financial statements of June 30, 2019 and in the financial spreadsheets, available from the Ultrapar website (ri.ultra.com.br).

2 ULTRAPAR > CC2Q19 08.15.2019

Ipiranga - 2Q19 performance

Volume

000 m³	Total
	-4%
5,859

Otto cycle	ANP +7%
+2%

Diesel

ANP +5%

-9%

	5,610
46%	49%
52%	50%
2Q18		2Q19
Diesel		Otto cycle		Others

2,675		2,721
696	+26%	876
1,903	-7%	1,768
2Q18		2Q19

Gasoline Ethanol NGV

3,067 2,787

50% 47%

50% 53%

2Q18 2Q19

Service stations		B2B

• Otto cycle: increase of ethanol in the sales mix
• Diesel: lower sales in the TRR¹ segment
• • Small diesel, bulk, retailers

Complete service station

Adjusted EBITDA

Network: 7,186 service stations

R$ million

am/pm and Jet Oil

Digital

+11%

508

relationship

447

402

✓ 2,409 am/pm stores

✓

KMV - loyalty program

Truckers' strike in 2Q18

•

Penetration of 34%

•

35% of transactions with

• 4 DCs in operation

KMV

Lower sales volume

•

933 bakeries

• 31 million of participants

•

554 Beer Cave

✓ Payment App (Abastece Aí)

✓ 1,500 Jet Oil franchises

•

Penetration of 9%

2Q18

2Q19

2Q19

(Otto cycle)

Post adj*

* After IFRS 16 and Corporate segment segregation

3 ULTRAPAR > CC2Q19 08.15.2019

Oxiteno - 2Q19 performance

Volume

000 ton	Total

-5%

193 183

21% 21%

79%

79%

Specialties

-4%

152 146

54 -6%50

98 -3% 95

Commodities

-9%

41 38

• Commodities: Strong comparison base in 2Q18
• Specialties:
• • Brazil: lower sales volume in several segments, despite the truckers' strike impacts in 2Q18

✓ International markets: lower

2Q18

2Q19

2Q18

2Q19

2Q18

2Q19

demand in Mercosur and Asia

Specialties

Commodities

Brazil

International markets

Falling reference prices

EBITDA

US$/ton

YoY

R$ million

Ethylene

-7%

-68%

1,291

1,319

1,248

PKO

-46%

1,197

MEG

-36%

Lower unit margins in

1,133

1,128

1,099

121

US Dollars - commodities

982

1,033

798

Ethylene

+13%

Lower sales volume

951

727

PKO

Weaker Real vs. US Dollar

759

MEG

39

44

34

698

- R$ 0.31/US$

556

Slight recovery

2Q18

3Q18

4Q18

1Q19

2Q19

2Q18

2Q19

2Q19

1Q19

vs. 1Q19

PKO: palm kernel oil

Post adj*

Source: PCI and ICIS LOR

MEG: monoethylene glycol

* After IFRS 16 and Corporate segment segregation

4

ULTRAPAR > CC2Q19 08.15.2019

Ultragaz - 2Q19 performance

Volume

000 ton

	-5%
444		421
133	-1%	132

311	-7%
289

2Q18		2Q19
		Bottled		Bulk	ANP -3 %

Volume

• Bottled:
• • Market contraction specially in the Southeast region
  • Remaining impacts of the temporary interruption of LPG supply at some refineries
• Bulk: reduction in sales in line with the market decline

EBITDA

R$ million

-25%

148

111	121

2Q18	2Q19	2Q19
		Post adj*

* After IFRS 16 and Corporate segment segregation

EBITDA

• Lower sales volume, specially in the bottled segment
• Higher expenditures in the quarter

5 ULTRAPAR > CC2Q19 08.15.2019