Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to Ultrapar's Second Quarter '22 Results Conference Call. We also have a simultaneous webcast that may be accessed through Ultrapar's website at ri.ultra.com.br and the MZIQ platform. Please feel free to flip through the slides during the conference call. The presentation will be conducted by Mr. Rodrigo Pizzinatto, Ultrapar's Chief Financial and Investor Relations Officer. At the Q&A session, we will have Mr. Marcos Lutz, Ultrapar's CEO; Mr. Tabajara Bertelli, Ultragaz's CEO; Mr. Decio Amaral, Ultracargo's CEO; and Leonardo Linden, Ipiranga's Chief Executive Officer. 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 the remarks are completed, there will be a question-and-answer session at which time further instructions will be given. Should any participant require assistance during this call, please press start zero to reach the operator. We remind you that questions can be posted in advance in the webcast, they will be responded in the Q&A session. The replay of this call will be available for seven days. Before proceeding, let us mention that forward-looking statements that are being made under the safe harbor of Securities Litigation are based on beliefs and assumptions of Ultrapar management and on information currently available to the company. They involve risks, uncertainties, and assumptions as they relate to future events and depend on circumstances that may or may not occur in the future. investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Ultrapar and lead to results that differ materially from those expressed in such forward-looking statements. I will now turn the conference over to Mr. Rodrigo Pizzinatto, who will begin the conference. Mr. Pizzinatto, you may proceed, sir.

Good morning, everyone. It's a pleasure to be here once more to talk about Ultrapar's results. Starting off with Slide 2, I'd like to highlight one important topic on the earnings report related to our divestments. Due to the signing of the sales agreement of Extrafarma and Oxiteno, we have classified these companies as assets and liabilities held for sale as of December 2021, and therefore, as discontinued operations. Our financial statements reflect the declassification. On April 1st, we concluded the sale of Oxiteno, and as a result, Oxigen is no longer part of Ultrapar's results from the second quarter of 2022 onwards. The sale of Extrafarma, as you might have seen, was concluded on August 1st, 2022, and its results are shown as discontinued operations. Both the earnings release and this presentation consider the company's pro forma consolidated information that is Ultrapar's data comprise the sum of continuing and discontinued operations. Well, now moving forward to Slide 3 to talk about Ultrapar's consolidated results. As you can see in the chart in the upper left side, our recurring EBITDA from continuing operations totaled 1 billion, BRL $113 million in the second quarter of 2022, 131% higher than that of the second quarter of '21, driven by improved results from the three businesses. EBITDA totaled 1 billion, BRL 119 billion, 45% higher than the EBITDA of the second quarter of 2021, which still had Oxiteno's results. Ultrapar's net income in the second quarter was 460 million, BRL 478 million above the net income of the second quarter of '21, mainly as a result of the improved EBITDA of continuing operations of the capital gain from the sale of Oxiteno amounting to 289 million and the Extrafarma impairment of BRL 395 million registered in the second quarter of '21. These effects…

[Operator Instructions] Our first question is from Vicente Falanga from Bradesco BBI. You may proceed, sir.

Good morning. Lucas, and good morning to everybody from Ultra. We have two questions. You have had a significant improvement in Ipiranga in the second quarter. If you could summarize in your opinion, what this improvement is due to, is it to more mature sourcing strategies commercial strategies, and resale, if there is something that could explain this enhancement that you would like to underscore secondly, from the viewpoint of business and presuming an accommodation in terms of the price of commodities that we have observed, perhaps this will strengthen the price of fuel, which is your viewpoint, how will this impact the distribution business? In our vision, this would be something benign. It would perhaps offset the competitive environment and release working capital. I would like to know if your interpretation is the same. Thank you.

Vicenti once again, this is Marcos. Well, what has happened in the past is the following. We're carrying out in the company with all of the executives in the room working with several variables that together have a different impact on the results of the company. It's very difficult to underscore a single theme like pricing. We had to mature very quickly in pricing, but it is very difficult to highlight a single theme that would be responsible for transforming our results. It's the sum of multiple activities that are underway. As we mentioned in the past, the year of 2022 was a year for operational enhancements and at the end of the year, we will have a top-level operational quality, and this is how we're going to continue on going forward. Now referring to your second question, it is a fact that the market is quite busy, everything is quite volatile. There's nervousness, we're trying to get it right in terms of the supply process, we are working with trial and aero, but doubtlessly, the market has taught a great deal to everybody, we have a model where we're seeking for supply. This is a winning a smart model that is aiding and abetting us, and it forces everybody to have to learn through transformation. I can't include in your model something that will increase or decrease things as a single thing.

Well, thank you very much, Marcos.

Our next question is from Gabriel Barra from Citibank. You may proceed, Gabriel.

Thank you for taking my question. I have two points making the most that you have Tabajara and others from the team. The consortium of Ultragaz and Supergas. This is a good opportunity to understand what it could end up being and what it will represent in terms of market share? If this could turn into results for the company in the short and medium term and impact the pipeline of the operation, when will we begin to see results in this consortium in the near future? The second point, perhaps for Linden, there was a drop in the figures for fuel, but an increase in the volumes of Ipiranga. Is there a process of cleansing out of the network that is still underway? If you could speak about the cleansing of this network and if this process is going to be ongoing until you have a drop in the number of gas stations and which is the end result of this process? What is it that you want to sell in terms of gallons for different regions? I think this would be very interesting to understand.

Well, Gabriel, I will begin with the Ultragaz consortium. We're following up on this process and in terms of term or period, it will have to be the term that is necessary. What we would like to highlight here is the alignment of this project with what we already spoke about at our Ultra Day, the opportunities we have in terms of operations. This is linked directly with the company, and we observed an environment of transformation, a streamlining of our infrastructure, especially when it comes to LPG, we have seen other projects in the market and all of these projects are at the same level. We look upon this very positively with very good eyes. What we imagine is a greater level of efficiency. This, of course, has nothing to do with the competitiveness in the market, but with market share and we want to have a superior efficiency. This would be very positive. We're going to follow up on what is happening with [Brazilian] antitrust agency, and we do have a very positive outlook for this project.

Gabriel, good morning, and good morning to all of you. First of all, it's important to state that the cleaning out of the gas stations is something natural for the sector. It has always taken place. We mentioned this in Ultra Day and I mentioned specifically that we had a group of 15% that were low potential gas stations that merited special attention. Either you enhance these gas stations or you clean them out, you eliminate them and what you have observed in the second quarter is an elimination of part of that 15% that we were unable to recover. As a counterpart, all of the work that has been done is work of enhancement throughout the entire network. We're working on this with a vision to bring about quality for the network. We're working with 320 cubic meters as an average. If you look at our share background in the last quarter in the Ipiranga banner network, we grew 10% in volume, and there's a drop of 40% in the white banner, so the work that is being carried out is to look upon the network to look at those low potential gas stations to enhance them to invest in quality to enhance the quality of the business as a whole.

Thank you. Our next question is from Thiago Duarte from BTG Pactual. You may proceed, sir.

Good morning, and thank you for taking my question. I would like to lock down the discussion speaking about this cleansing of the gas stations and streamlining of the network and speak from the viewpoint of the market and competition. When we look at the volumes in the quarter vis-a-vis the first quarter, there is a gain of share in diesel, but a loss of share in the auto cycle. I would like to hear your comments on the competitive dynamic. We're aware that this was a rather volatile quarter with opening and closures of import windows, therefore, if you could comment on this competitive dynamic in these two segments, diesel, and the auto cycle and how this converges with the network optimization process? The impression that we are under is that the net effect of all of this is somewhat controversial. You gained share in one segment, lose share in another segment with that accelerated process of eliminating the low potential gas station, so which is the dynamic of this for origination. I think it's important

Thiago. Let's begin. First of all, volume doesn't have a direct relationship with a number of gas stations. Once again, we work on a process of network enhancement. We will have a greater volume, possibly with a lower number of gas stations. Now lately, and because of all of this supply dynamic in the Brazilian market, it has been very important to look at the business based on segments, the spot business, the consumption business, the white banner, and our gas stations with banner. In fact, we do have a loss in the auto cycle, but as mentioned previously, there is a drop of sales of 36% in the second quarter of '22 vis-à-vis the second quarter of '21, concentrated in the spot market with the white banners, while our network has had a growth of 10%. Now diesel, all of the dynamics that we had during the second quarter and the work carried out by the company from the viewpoint of supply imports to supply its channels, I think, was a positive performance, despite this in the spot market, we did reduce our sales. In the uncontracted market, we had a decrease, and this is one of our strategies. These are discussions that we need to separate here. We're going to see how to clean up the network, rationalize the network, but this should have very little impact on our market share. These are businesses that we're removing from the network that do not contribute with market share. Their market share is close zero to while it's when you work towards having a strengthened network theoretically, the market share should improve. Our spot segment supply to the white banner gas stations, we have eliminated some of these on purpose. The same happened in the consumption spot market. While we invested on our own banner with a guarantee of supply.

Thank you very much, and simply a follow-up in a figure that you gave us in the previous answer, you referred to 15% of your base that has room to be cleaned out or eliminated because of a low productivity. We're referring to 15% of the total base that is of 7,000 gas stations. Does this calculation make sense?

Yes, up to 15%. Remember, we have a group of 15% and this is a characteristic not only for Ipiranga, but of the sector and we have earmarked the 15% because of the slow business to work on to recover or to eliminate these are businesses with an extremely low impact on volume.

Thank you. That's very clear.

Our next question is from Bruno Montanari from Morgan Stanley. You may proceed, sir.

Good morning, and thank you for taking our questions. I will make the most of Linden's presence here. If you could speak about the status of some initiatives mentioned that Ultra day, your enhancement of the pricing strategy, a more robust trading structure, more engagement with your franchisee network. All of these are part of the evolution of these items, and this would be interesting. A quick follow-up, when Rodrigo spoke about volume of the gas stations that were eliminated, I did not understand this very clearly. The second question, the decision of the government, what will happen at the other end, will this represent a lower price for the consumer? Or will this allow you to increase your margins? Thank you very much.

Thank you, Bruno. Let's begin. first, the shortest answer. Rodrigo referred to six cubic meter in practice this is Zero. Secondly, regarding that space, and I'm going to refer to Ultraday once again that you followed up on, we spoke as an evolution pillar that we would have four pillars for action, improving our pricing intelligence, logistics. The third was supply and trading very broadly and forth, management and engagement of the network. Now very generally, I'm very satisfied with the strides that we have made in terms of pricing and the network engagement. We have completely changed our pricing model. We have a team devoted to this carrying out excellent work, accessing price intelligence and evidently, pricing in a more consistent, coherent fashion, something that is more competitive. I'm quite satisfied with the strides we have made in terms of the network engagement. We have had a significant evolution during the last months because of the consistency and in our relationship with resellers simply to illustrate this from 26 states in Brazil, I have visited 20. I'm missing only six, and I have had a direct contact with the seller listening to what is happening in their environments without a filter, and I'm extremely satisfied with the progress we have made. We still have opportunities in pricing and in our value proposal for Cellular, but we have had a good evolution. The other two pillars are advancing more slowly. In logistics at Ultra Day, we mentioned that our focus were the logistics process, not the infrastructure. We need to enhance the processes, we have been working on some processes that are being revisited, and in terms of supply and trading, we have evolved in terms of our trading structure. It's a process of learning because of the change in supply in the country. The change in the model, there is a learning curve, and we are in a process of better defining our own processes and supply strategies. In the last quarter, we carried out excellent work with important corner stores in supply. We had a price increase, we had fiscal exemption, we had a deal with several other points and I think we did very well, but there's still room to improve. Basically, this is it, two pillars doing very well and two pillars with a slower development. I'll give the floor to Marcos.

Well, first of all, in practice, we have transferred the increases to our prices and we have a virtual product that we sell to the market. Now there is a process of evolution, and we have a very intelligent process that is very good. It's worthwhile betting on this mechanism and working on this to become motivated and to work with that component that is fuel in the matrix. We have had multiple adjustments, something we have just done in a rather tempestive fashion, but what we have in practice is greater liquidity in the sector. There is no obligation of buying, there is no obligation for the sellers at present and the price because of a lack of liquidity increased excessively. Now this decision that was made is to bring down the price and it has had an effect that will be translated into good results, but once again, this shouldn't be looked upon as a forecast for the future, but instead a listen in a learning process that we are undergoing in this new journey. We have to make this mechanism more sophisticated, drafted better, so we will not have this enormous concession towards liquidity.

Thank you very much.

Our next question is from Monique Greco from Itau BBA. You may proceed, Ma'am.

Good morning. Good day. Thank you for the presentation and for taking the questions. You have already remarked on a drop of sales in the white banner spot market a relevant drop. Did this also happen in B2B? How has this positioning reflected on your export decisions during the quarter? Did this stance impact your decision to export as part of supply? If you could speak about your hedging in these exports. I will go on to a second question. We see a relevant highlight in the second quarter and I'm curious and I would like to know if you could share how much of these margin gains that you had in the second quarter, our structural gains, reflecting an advance in that turnaround process that you have just remarked on. Thank you, those are my questions.

Very well, Monique. I have written down the questions. If I forget anything, please remind me. The spot in the B2B, yes, there is an important volume of spot, especially in the TRE segment and at a certain point, well, the quarter was highly dynamic and several things impacted our decisions during the quarter. At a certain point, we were concerned with supply. Our priority was our network and, of course, we ended up changing the management for the uncontracted volumes and uncontracted volumes are contracts with Petrobras or part of our imports, where we should have that opportunistic value in the value chain now, especially in the TRE segment, this is how it operates, and we did reduce sales considerably as well as in the white banner segment. There's a drop of 36% between the first quarter and the second and in TER, 18% drop. Now the supply model for Brazil with a important share of imported products leads you to looking upon your business in a different way and of course, we will have to have different business policies for the contracted and uncontracted markets. This is natural for the market. It has nothing to do with supply basically. The supply is not part of that equation. When it comes to hedge, our policy is very simple. We hedge imported products to allow for a float, we undo the hedge when we use the product in the domestic market simply as protection not to have risks in the operation as the international price undergoes great volatility as the supply cycles are very large, you purchase a product that reaches Brazil 45 days later. We work with hedge once we have the product, we practice the daily price. The third comment, if you could remind me, please.

Your margin gains and how much you can foresee that these will be structural gains in that turnaround process you are putting in place.

Once again, the gain and loss of inventories in this sector is part of the business is going to happen. We have to guarantee that we work with the company to deal properly with these events in the second quarter and of course, there was a market dynamic that favored us, but we did have to do both with positive and negative effects, increase of prices at Petrobras and imported products with a closed quality and of course, the tax exception, so we were faced with gains and losses here. We can't speak about details about our margin here, but what we're working on is to have a business that is ever more stable where we can capture the opportunities that we're developing in our process of recovering Ipiranga I don't know if Rodrigo would like to add something.

I think it has been well addressed.

Well, thank you, everybody, for the answer.

Our next question is from Leonardo Marcondes from Bank of America. You may proceed Leonardo.

Good day. My first question is also about Ipiranga. We have observed that you're always in contact with your seller and the outlook is having a very good relationship with the gas stations, which are the main demands of gas station owner, both of the White banner and Ipiranga when it comes to renewing the contract. This is the first question. My second question is about Ultragaz. The division reported a very strong margin. I would like to understand the pricing dynamic in this quarter to see how much of this margin gain comes from better margins because of your innovation. If you allow me a third question, I would like to understand how advanced your initiatives are of [indiscernible] discussed at Ultra Day and which is the dynamic of the fuel import market now that Petrobras has increased the use of utilization of these refineries. Thank you.

Thank you, Leonardo. Let's begin with the first question. You were asking about the requests or demands from seller and owner and contracts and much more. Well, this did not come out, but the entire Board of Ipiranga has requested that we'd be very close to the recovery process. Now the demands are consistent and competitive when it comes to our value proposition. seller are an extension of our business. They offer to consume what we develop in-house. They want to have a competitive value proposition, good offers, a good brand, a good convenience store tools that will help them to market their product at their respective end. There's another point. More recently, it has become more relevant as the issue of supply. Obviously, supply is one of the strong points for Ipiranga because of the structure that we have 100 bases disseminated through the country and the capacity to supply the market as a whole. What is also important is consistency, consistency in our policies in our work. It's very bad for our partner or reseller when our practices and policies and processes end up being volatile. I think consistency is the best thing and this has helped us a great deal in terms of pricing, we have a consistent dynamic. The last point is proximity closeness and this is a characteristic of Ipiranga has always been very close to its reseller, and we're not going to elude or avoid this characteristic to be closed, to be connected to understand what is happening in the environment of the gas station, understand the demands of our partner. All of this is important. They need to feel that safety that Ipiranga is very close to them. Very well. I will give the floor to Tabajara for the second part of the question. Regarding the question of the present status of Ultragaz. Well, I think you have an indication of the answer already. This quarter was a quarter where we had a recurring result. There was nothing extraordinary, and we observed that evolution, and that's what we have been speaking about in the last few days at Ultra Day. This is a long-term construction and in the last few years, we continue to see this leadership, a new culture, we launched a new brand last year with a different positioning for the company, and we have been able to materialize the front where we are closer to the client innovation, for example, and for the entrepreneurial segment, also working especially with residential clients with a digital journey there's still a great deal to be done, but with this balance, we have greater proximity with the clients with different solutions. We do have some efficiency fronts that we mentioned at the beginning. Altogether, they are allowing for the evolution, the positive evolution we observed in the second quarter.

Leonardo, thank you for the question. Well, our projects of [indiscernible] and our proximity projects. This is working well at all terminals that have helped us to hit records, which is the case of ITAQ. To make this more tangible, Rodrigo mentioned that our expenses in the first quarter were 18% higher. Half of this was for Vila do Conde that did not exist and in the terminals, 19%, there is a part that is depreciation. Our challenge is productivity, so we don't have to transfer inflation, we need to enhance productivity to gain margin vis-a-vis inflation. We have had excellent results. We still have a way to go, but our accrued figures since 2019 are great. We now have lower gains, but gains that are consistent. Well, when we speak about inflation, there was an increase at Petrobras, but Petrobras has reduced its volume in imported gas, and this besides the logistic operator, we were very assertive in our geographic positioning and expansions, we have Vila do Conde that is important in the timing of our projects, we were able to anticipate the projects by one year, and we're benefiting from this movement, which we believe will continue on, and this is reflected in our growth of profitability and volume.

Thank you very much.

Our next question is from Rodolfo Angele from JPMorgan. You may proceed Rodolfo.

Thank you. Good day to all of you. Well, I think most of the discussion has been held. I would like to speak about working capital. You had a significant consumption this semester. If you could refer to what you expect for the coming quarter that would be very helpful. Thank you.

Rodolfo, I'm going to give you an outlook from Ipiranga. Simply to mention some data in the second semester, we had a weighted increase of 50% in fuel, so working capital was spent on fuel. Of course, with the reduction of fuel price, we should have a positive impact on working capital, but in the first semester, the impact due to the price increase was quite soft in truth. It's simple as that.

Okay. Thank you very much.

Thank you. As we have no further questions, I would like to return the floor to Mr. Rodrigo Pizzinatto for the closing remarks. You have the floor, sir. You may proceed.

Thank you very much all for participating and for the questions in the call. We were not able to answer all the questions, but we will answer the questions through the IR team. Thank you very much.

Thank you, the Ultrapar conference call ends here. You can now disconnect from the call. Thank you very much.