Ultrapar Participações S A : Earnings call presentation 3Q19

Ultrapar Participações S.A.

Earnings conference call - 3Q19

11.07.2019

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 3Q19 and 9M19 with the information of 3Q18 and 9M18, discussion of results is shown without adjustments related to IFRS 16 and to the new Corporate segment while references to "3Q19" adopt the same criterion. Any mention of information incorporating these changes will be identified as "3Q19 Post-adjustments". Additional information can be found in note 2.y of the quarterly financial statements of September 30, 2019 and in the financial spreadsheets, available from the Ultrapar website (ri.ultra.com.br).

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Ipiranga - 3Q19 performance

Volume

000 m³

6,200 2,780

Total

0%

+4%

6,185 2,903

✓ Otto cycle: increase of

ethanol in the sales mix

✓ Diesel: lower sales in the

Adjusted EBITDA

R$ million

+24%

	615	676	Management initiatives for
497			reducing costs and expenses
					Reversal in provisioning for
					losses on doubtful accounts

3,301	-4%	3,167
3Q18		3Q19

Diesel Otto cycle Others

B2B segment

					Better results at ICONIC
3Q18		3Q19		3Q19
				IFRS 16*
					* After Corporate segment segregation

Complete service station

✓ 2,386 stores	✓ 1,498 Jet Oil franchises	✓	34% of transactions
•	Penetration of 33%			with KMV
•	4 DCs in operation		✓	32 million participants

• 930 bakeries
• 557 Beer Caves

• Penetration of 10% in Otto cycle payments (vs. 3% in 3Q18)

Network: 7,151 service stations

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Oxiteno - 3Q19 performance

Volume

000 ton	Total
	-5%	✓	Commodities: strong

comparison base in 3Q18

Falling reference prices

US$/ton

1,319	1,260
	1,133

1,197

1,113

YoY

Ethylene -16%

PKO -37%

MEG -36%

205 44

162

-4%

-5%

195 42

153

• Specialties: lower sales volume in several segments and lower demand in Latin America

1,099	982
951		798
	759	698

		Ethylene
727	698	PKO¹
		MEG²
582	601

3Q18		3Q19
Specialties		Commodities

3Q18

4Q18

1Q19

Source: PCI and ICIS LOR

2Q19	3Q19
	¹ Palm Kernel Oil
	² Mono-Ethylene Glycol

EBITDA

R$ million

173	-58%
					Lower commodities unit
			79		margins in US Dollar
		74
	+91%			Lower sales volume
	39
3Q18	2Q19	3Q19	3Q19
			IFRS 16*

QoQ

Higher sales volume

Lower fixed costs

Weaker Real vs. US Dollar

* After Corporate segment segregation

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Ultragaz - 3Q19 performance

Volume

000 ton

+1.8%

450		458
141	+1%	143

309	+2%	315
3Q18			3Q19
		Bottled		Bulk	Market +1.6%

Volume

Bottled: new resellers added

Bulk: higher sales to the commercial and services segments and special gases

EBITDA

R$ million

	+9%
	174	186
159

3Q18	3Q19	3Q19
		IFRS 16*

* After Corporate segment segregation

EBITDA

Higher sales volume

Improvement in gross margin

Reversal of losses on doubtful accounts in 3Q18

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