Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to Ultrapar’s Fourth Quarter 2022 Results Conference Call. There is also a simultaneous webcast that may be accessed through Ultrapar's website at ri.ultra.com.br and MZiQ platform. Please feel free to flip through the slides during the conference call. The presentation will be conducted by Mr. Rodrigo de Almeida Pizzinatto, Ultrapar's Chief Financial and Investor Relations Officer and in the Q&A session, we will have the presence of Mr. Marcos Lutz, Ultrapar's CEO and the CEOs of the businesses, Mr. Tabajara Bertelli, Décio Amaral and Leonardo Linden as well. We would like to inform you that this event is being recorded. [Operator Instructions] A replay of this call will be available for seven days. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act 1996. Forward-looking statements are based on the beliefs and assumptions of Ultrapar’s management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and, therefore, 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 could cause results to differ materially from those expressed in such forward-looking statements. Now I turn the conference over to Mr. Rodrigo de Almeida Pizzinatto. Mr. Rodrigo, you may now begin the conference.

Good morning, everyone. It is a pleasure to be here once more to talk about Ultrapar results. And starting off with a short retrospective or 2022, a year of important advances for the company despite the volatility and uncertainties. Ultragaz and Ultracargo achieved record results while we Ipiranga advanced in its profitability recovery paths mainly with the pricing and resellers engagement from. We completely relevant process of rationalizing our portfolio with the closing of Oxiteno and Extrafarma divestments. We also announced the acquisition of Stella and NEOgás, which mark Ultragaz’s entry into renewable electricity, and compressed natural gas and biomass and the segments, expanding its offering of energy solutions. The acquisition of NEOgás approved by the antitrust authority and was concluded on this past February 1. We continued our management succession and renewal process, including the succession process in the board of directors as detailed in the material notice that we disclosed yesterday. I will now go through our results presentation and go into slide 2, I would like to remind you that at this moment, both the earnings release and this presentation consider the company's pro forma consolidated information. That is Ultrapar’s data for 2022 considers the sum of continuing and discontinued operations to enable the comparison with 2021. Well, let's now move forward to slide 3, with an overview of some of the main indicators that affected our businesses in 2020. The Ukrainian war, as you know, had a huge impact on the prices of oil and derivatives. The commodity prices in general as well as the effects of both the pandemic and the exchange rate affected the inflation indexes and consequently, our expenses. The rising interest rates to fight inflation also affected our financial result. With a post pandemic recovery, the Brazilian economy grew by approximately 3%…

[Operator Instructions] Our first question is from Luiz Carvalho from UBS.

Good morning, and thank you for taking the questions. I have two questions. First referring to the information on the call. Of course, you have had a change in process with the arrival of a new CFO, and there has been a significant change in the board of management. I would like to remark on this process and what you're thinking in terms of alignment of strategy if you could give us more color regarding this because it will be interesting when it comes to capital allocation. And we'll also of course contribute to the new strategy that is underway. The second question refers to the operational part and refers to Ultragaz. I think is the first time that the EBITDA of Ultragaz is the highest for the quarter. This, of course, is something that draws attention. You have an accrued margin. And we would like to know if this is recurrent, how you're looking upon the market. And if you could also refer to Ipiranga as a whole, the results are quite stable in a highly challenging market. But the results are perhaps slower than we had expected. We know that the market is very restricted, there is a great deal of volatility. Now, if you could explain to us what is happening in that trajectory of the closing? And what will happen with your margin vis-à-vis the main competitors. Thank you.

Allow me to answer your first question. In fact, we are renewing our Board of Management in a very significant way from the 11 counselors. As everyone's ready, are leaving, they were the CEO of the company in the past, this is another step and a very significant evolution towards having a company that will be designed for the coming 30 years. Well, I can state that the change is quite complete at present. This is a journey. This is an in-house trajectory. And you did refer to two operational questions. But I have been referring to this. We have companies that find themselves in very different stages. Some are very mature in terms of the value proposition they're growing, they're stable, we have some niches, structural niches that have opted for energy, we're carrying out minor acquisitions to enhance our organic growth. This is very different from Ipiranga, that has had an outstanding evolution, there is a great deal going on a great deal of learning. And without a doubt, the year 2022 ended much better than it had begun, we still have time. And we will end up becoming a benchmark in the segment. You spoke about the changes in our governance. And what I can say is that this has been thoroughly discussed and planned in-house. The novelty perhaps, was the maintenance of the CEO for an additional two years, this was something innovative, it was discussed at length, and it seemed to make sense to remain two additional years and the day to day of the company because of the structure, the acceleration of some projects. And of course, we have made adjustments and the Board of Management for this. Now, our board has a more financial side, it goes beyond that of a company that is fully financial and that works with capital. And to summarize that is it I would like to pass the floor so that we can conclude answering your questions. Still speaking about more financial profile. And of course at different stages at which the companies find themselves on Ultrapar, and others now in the horizon of the company, of course, at the right time, we're going to have an operational turnaround, but this is something that we're still looking at. Once again, we have never deemed this to be a plan simply a possibility. And when you put a company like Ultrapar company with share, of course it has to have that tool for sharing and some of its business at rival and of course, valued that it is offering partners that it is also incorporating the market and securities that we can create with a daily listing. Now, all of this will add a great deal. This has to be part of our menu of possibilities. And the company has to be in the right financial position to take these highly assertive steps. It was not a concrete plan, but of course, it does constitute a possibility.

This is Mr. Tabajara speaking. Now to speak about your question referring to Ultragaz and the evolution of profitability. This is something that we have been discussing in the last quarter is the evolution of the company we have conversed about this at length. And we're speaking about the evolution of our operational excellence. And of course, we do have that commercial counterpart. Well, this is our vocation in terms of operation, we are evolving, getting ever closer to what the customer wants, especially in the entrepreneurial segment, we have had a significant reduction post pandemic, of course, in terms of our operations. So there has been a significant evolution in the company. And I hope that this response to your question that referred to the evolution.

Well, good morning, this is Linden, and allow me to address the questions referring to Ipiranga. Yes, we're very satisfied with the year at Ipiranga. We are not happy with the impact that we had in Ipiranga in this quarter. Now, if we look at the dynamic of the fourth quarter, and if we put it into perspective, the fourth quarter was one where we had an inverse parity, it was closed for most of the quarter, practically 70 days. And this highly impacted the market, we had a very open parity in the third quarter. And of course, this generated losses, which in the final accounts have an impact on margin. And we had two movements of reduction of prices in February. But as with an impact on the year, one of these movements caught us at a time where we were creating our inventory, and believing that we would have a return of Cofins, a scenario we had worked with until December 31. There were other events that took place in December, such as a blockade and others in the fourth quarter, we did have that scenario of a lower margin, a loss of inventory because of the reductions at Ultragaz. And because of what happened with the imports. If we look in the rearview mirror, it's always easier to assess the past, there are learning and there seems that we could have done differently. For example, we work with a great deal of imports in our product mix. And perhaps we don't have -- we didn't have the ability to change everything when we have that inversion in parity. And we had odd distribution of products with an impact on the margin, the impact on the margin was more in terms of supply and not in terms…

Our next question is from Pedro Soares from BTG Pactual.

Good morning. A good morning to everybody. I do have two questions and a sort of a follow up of the previous question. Regarding Ipiranga as Mr. Pizzinatto mentioned in the last call, you mentioned that the Ipiranga margins were very similar to those of the third quarter at that time, as the margins have had a deterioration, we can imagine that December was very difficult because of prices because of the opening. I would like to clarify perhaps this now, this was not mentioned, if you could quantify how much was due to a loss of inventory, how much was caused by a greater competition in December? Or if you could speak about the relative importance of each of these items in the company's profitability. Another question about Ipiranga. You didn't execute the full CapEx that you had announced in the last quarter? Was this something that happened by chance? Are you going to do this going forward? Or were there factors that contributed to that? Thank you very much.

Pedro, regarding our margins, I believe I have addressed this what did happen differently since that period onwards, was a reduction of prices, reduction in inventory, and the dynamic of the market that extended more than we had expected throughout the quarter. When it comes to our CapEx, well, there could be a bit of everything, a problem of timing, what we had set forth to do, we did do, and there were some factors that offset that CapEx, but in truth, there is no lagging behind in terms of our planning.

Our next question is from Bruno Montanari from Morgan Stanley.

Good morning, and thank you for taking my questions. A follow up of Ultragaz and products. So that Ipiranga, the margin that is extremely healthy, is it fully structural, or is there a component of referring to the context a transfer of inflation, for example, that could imply higher gains, or if this is not a relevant factor for the level of profitability of the business? I simply wanted to check some points regarding Ipiranga that problem of oversupply if this has been resolved, your inventories continue to look somewhat high. When do you expect to mitigate the level of inventories in the chain? And finally, that cleansing process that has been very intensive and necessary, and how much of the network still needs to be cleaned out so that the level of return can continue to grow as you believe would be adequate? Thank you.

Let's begin with Ultragaz and the evolution of profitability. In the previous question I remarked on this, this is a very structural evolution based on the plan that we had highlighted with an operational highlight last year, we operated in the North East, we had a very relevant logistic network set up and we have a network that is closer to the customers, we have expanded resales for our entrepreneurial or industrial customers. And all of this will enable us to position ourselves differently in the market .We can also underscore that this provided a higher upside that we had expected. Now the new uses of LPG also have contributed a great deal in the last quarters. And of course, this is something structural, it has an impact on our performance. Now in the fourth quarter in terms of our sales mix, I do believe we have positioned ourselves much better in the industrial market. And of course, the results are being positive. This is not something temporary, it's due to the market context. And we did have that transfer of the inflation that persisted throughout the year 2022. And this is of course, something structural, we have been following up on the evolution of these strategic measures set forth by the company. And while this has had a positive impact on our market share, so far, it is a positive combination as a whole, we have been able to have an evolution and market share. Once again working in that segment, which is our true vocation. Here we have three points regarding Ipiranga. The market has been somewhat impacted, but not with the same levels of the fourth quarter. Yes, we do have a very high inventory level, we have observed some adjustments and of course, the level will return to normal stock levels. In terms of this cleansing it should, we have 70% of what we wanted to do the rest will be carried out during 2023. Now the impact of this will be practically now on our business. We're speaking about volumes without any negative financial contribution, quite the contrary.

Our next question is from Regis Cardoso from Credit Suisse.

Hey, good morning, everybody. Thank you for taking my question. Some very quick topics. Is there a definition of who will be the Chairman for the Board? I did not see this in any relevant way. In terms of the margins of the first half of the year, you're speaking about margins aligned with the rest of 2022. There were good margins, which are the right drivers for this very good evolution of margin. And we should keep in mind that we have had a price reduction during the quarter. Are you counting upon these Cofins or markets with higher margins for the first quarter something that will offset the inventory you have? If you allow me a last question on Ultragaz. I don't know about product and help me to understand where your margin evolution comes from, if that refers to all segments, because it was a highly relevant margin evolution almost doubling. I would like to understand if this is due to new segments that are coming in? Whether it is proportionately higher margin much higher than the margins you have so far vis-à-vis your consolidated margin. If its margin increases across origin, the segments that already exist in the retail segment in the bottled segment. Thank you.

This is Marcelo, in our bylaws the Chairman of the Board is elected advisory board itself, the entire board, if elected will hold its first meeting to define who will be the Chairman of the Board. Now referring to track as to simply speed up the questions, you refer to all of the topics, basically, the margins, Cofins, the different segments. We also do have that segmentation and that type of service, services with margins and Ultragaz. And we measure this based on tons. And perhaps we lose something out here we have a great deal of service. And we could add value with a different approach towards the segment perhaps. Hedges, regarding the assumption for the first quarter. It's what you said. And I would add that our assumptions for margin are to have that return of these Cofins.

Our next question is from Gabriel Barra from Citibank.

Good day, everybody. We have two questions at our end. Two questions referring to Ipiranga. Two points that are not very clear, in my opinion, when you look at Ipiranga during the quarter. And great part of the release of reals comes from your vendors, your suppliers. And this is a factor that seems to appear consistently at the end of every year, if you could explain this more in depth if this is recurrent, when this will return to a normalized level in this first quarter, this my first question. The second point that you have already harped on significantly higher inventory of course, market players taking advantage of the tax system in the chain as a whole and the fact that there is a higher inventory. Now, what is your vision this dynamic? Will there be an exacerbation vis-à-vis what we saw in the fourth quarter because of what we observed in the market? Or are things not as bad as they seem to be? And the last point, an interesting factor is the switch of volume or cost. It's interesting here. When you look at the price of gallon for Ipiranga, on the other hand, we see increasing volume, we see very well structured and well operated service stations. Of course, this is your great competency. And the convenience stores the AMPM. Is it simply a one off factor something we have not understood or is this also part of that cleaning process? Are there some stores that have not carried out their work? Thank you very much. These are my three points.

Okay, Gabriel, let's answer your questions. I think I got everything. Well, first of all, cash. There was increase in inventory greater cash burn and the calendar of the end of the year, which was somewhat a typical, and of course the price per gallon. Now, when it comes to the high inventory, I think that I have already remarked on this. Yes, we do have a high inventory that we're going to mitigate during the first quarter with outlook about the return of PIS and Cofins. But of course we can reduce the inventory at any point. Now when we speak about our service station. When you clean out the network, of course you'll gain productivity at service stations and the stores accompany this. This is the rationale. And this has a financial justification.

Our next question is from Christian Audi from Santander Bank.

Good morning, everybody. And thank you for taking my questions. I have three, Lutz, you have always spoken that since you joined the company, this processes the journey, what is happening with the speed of this journey in your opinion, given everything you were able to do last year, and the enhancements? Are you going to continue with these enhancements? Are you at a very good point? Simply to understand how much is left vis-à-vis what you have already done. A second question about Ipiranga. Your work with the vendors, I would like to understand your logistic and supply pillars, how much is missing to enhancing those pillars? Are you at the first stage or the second stage at the end of the game, therefore, so how much is missing to be able to conclude this process? And the last question refers more to your capital, you have announced a new CapEx, which will probably not change as that was set forth recently, you have been able to reduce and leverage to 1.7x. Now are there any remarks in terms of is there any room for further reduction for your expected enhancement and at Ipiranga, if you're going to improve the payout of dividends? Thank you.

Let me see if we can respond to all of your questions. Now regarding this journey. We don't know how much longer it will take. And well joking aside, this is a journey that will never end. We are opting for things that are easier and faster. And I would say that in logistics, we have a very significant number still pending for the coming three years, relevant areas where we still will continue to seek out efficiencies. When we get there, we will be ever more efficient. Now when it comes to processes in general for the company, we have had a considerable evolution. There's still a great deal missing in terms of the integration with industries, it's difficult to respond to when trying to speed up the process. But in my reading the speed of the process is quite adequate. Because we do have to work in the day to day management. We have to follow up, enhance processes without impacting them. Yes, we had a quarter with a creative learning with a combination of areas, we have ended the quarter with a learning which means that we will never have the same problem in a similar quarter, but the journey continues to be a lengthy one. When it comes to capital allocation, we believe that a total amount is adequate reminder that we still have a R$ billion to receive in terms of receivables and we will then reach the ideal indebtedness level we will have a strong cash that should come and the future of evolution of Ipiranga will bring in greater cash drives. So in fact, the future outlook is for dividend payout to improve. We all have that desire and hope, of course. And it's extremely important for the company to have growth plans, plans that are healthy. And as a company, we do have to create investment opportunities that are above and beyond what shareholders would have. In general, we have already consumed our ROIC in such a way that we could accelerate this capital allocation. So we're doing our homework. As you can see, the company has gained in terms of mass generation, we have an idea leverage. Brazil has enhanced its investment grade. And the rest, of course, will come as a result of all of this, and what is left over of capital will of course be paid out as dividends.

Our next question is from Leonardo Marcondes from Bank of America.

Good morning, everybody. And thank you for taking my questions. Three questions on our end first, about Ipiranga. You had a net loss of service stations this quarter. And I would like to know if you can give us more color in terms of your brand and service stations for 2022. How many are you planning to close down this year? The second question refers to Ultragaz. How many M&A you have and which will be the impact on the company this year already? My third question which would be the main goals for the next two years of mandate for the CEO. Now, if you could perhaps list the three main goals so that we can better understand which will be the focus for Ipiranga. Thank you very much.

Well, first of all, regarding the branding of service station, you used a word you said a loss of service stations in 2003. Now that cleansing out is not really a loss, it's a business decision. When it comes to 2023, the plan is to have a very similar plan for that of 2022 to invest selectively in businesses that will add productivity at higher levels than those that we normally have in our station network to bring the good businesses in-house and those opportunities do exist and to clean out eliminate what does not increase our productivity. Your question referring to Ultragaz. Once again, we are following the plan that we disclosed very recently, the business on our platform, our network of vendors and our work with industries. We began this operation this month, it won’t be relevant but it is a strategic decision. We spoke about the goals and the goals are to organize the company, prepare it to invest more. Obviously, the governance is under a process of becoming fully stabilized. I would say that we have attended all regarding that. But the Ultra group as a whole is a company that generates cash. It has a very strong balance. And we want to make investments with returns that are above what we expect for our dividends.

Thank you. As we have no further questions, we will return the floor to Mr. Rodrigo Pizzinatto for the closing remarks. Mr. Pizzinatto, you may proceed.

Well, thank you all for your questions, for your attendance. The IR team will respond to the questions of the webcast. So we do expect to see you in the conference call and the event we will hold on March 6. Thank you very much. Have a good day.

Thank you. The earnings results call for Ultrapar ends here. You can disconnect. Thank you, once again.