Good morning. Thank you for waiting. Welcome to our earnings presentation of Ultrapar to present the results of the Second Quarter 2023. There is also a simultaneous webcast that may be accessed through Ultrapar's website at ri.ultra.com.br and MZiQ platform. The presentation will be conducted by Mr. Rodrigo de Almeida Pizzinatto, Ultrapar's Chief Financial and Investor Relations Officer. And then for Q&A session, we'll have also with us Mr. Marcos Lutz, Ultrapar's CEO and the CEOs of the businesses, Mr. Tabajara Bertelli, Décio Amaral and Leonardo Linden. We would like to let you know that this event is being recorded and all participants will be in listen-only mode during the company's presentation. After Ultrapar's remarks, there will be a question-and-answer session. At that time further instructions will be given. [Operator Instructions] We remind you that questions, which will be answered during the Q&A session may be posted in advance in the webcast. A replay of this call will also be available for seven days immediately after it's finished. Before proceeding, we would like to emphasize that forward-looking statements are being made under the Safe Harbor of Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Ultrapar 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'd like to turnover to you Mr. Rodrigo Pizzinatto. He is going to begin the conference. Please Mr. Pizzinatto you have the floor.

Good morning, everyone. It is a pleasure to be here once more to talk about Ultrapar's results. Starting on slide number 2, I remind you that at this moment both the earnings release and this presentation consider Ultrapar's data from continuing operations in 2023. As for 2022, the company's data is presented in the pro forma view considering the sum of continuing and discontinued operations as disclosed throughout last year unless otherwise indicated. Moving now to slide number 3 with Ultrapar's consolidated results. As you can see in the chart in the upper left side, our recurring EBITDA from continuing operations totaled BRL933 million in the second quarter of 2023, 15% lower year-over-year due to the lower EBITDA of Ipiranga, partially offset by higher EBITDAs of Ultragaz and Ultracargo. Ultrapar's net income was BRL239 million in the second quarter, 48% lower year-over-year due to the lower EBITDA from continuing operations, the capital gain of $289 million from the sale of Oxiteno in the second quarter of 2022 and the higher depreciation and amortization. These effects were attenuated by lower net financial expenses despite the higher CDI, mainly due to the positive one-off result of BRL47 million in mark-to-market of hedges in this second quarter of 2023 compared to the negative one-off of BRL272 million in the second quarter of 2022. Our Board of Directors as we have already informed approved the payment of BRL274 million in interim dividends referring to the year 2023, equivalent to BRL0.25 per share. Investments from continuing operations totaled BRL385 million in this second quarter, 5% lower than that of the second quarter of 2022 mainly due to lower investments at Ultracargo and Ipiranga, partially offset by higher investments at Ultragaz. We had an operating cash generation of BRL898 million in the second quarter compared to…

[Operator Instructions] The first question comes from Thiago Duarte of BTG Pactual. Thiago, you have the floor.

Hello, good morning. Thank you for the opportunity. I have two questions focused on Ipiranga. And the first one, I think it's alluded to the last sentence that Rodrigo pointed out about expectations for the third quarter. Gradual recovery of margins. What are the assumptions for the gradual recovery to happen in the second quarter? As you've pointed out, there was the impact of loss on inventory levels and the impact of the market, which had a higher demand than initially predicted. Considering these two drivers that have had a negative impact on the margins of the second quarter, I would like to hear you about how you're analyzing those drivers? Is there an expectation of a change in prices in recovery of inventory levels, or do you expect the market not to have a higher offer? And if yes, why? And the second question more in the long run. I remember the first thoughts of Marcos in – regarding conference call in the past, where we discussed the turnaround of Ipiranga being an issue software not hardware. So what our current position is in terms of recovering the software the start – the strategy. We've seen results with the disinvestments of some of stations. They seem to be positive. What else is missing? Of course, considering what's under your control so that the value proposition of Ipiranga keeps on improving concerning what we have observed in recent years? Thank you very much.

Good morning, Thiago. This is Linden speaking. Thank you for your question. First, let's talk about expectations. We have better expectations for the third quarter. The second quarter was very challenging for the reasons that you've pointed out and Rodrigo shared them with us quite clearly. July was more better than June. Even though still slowly recovering and in June, the market was affected for the same reasons that had impacted the second quarter. But what we are observing and considering the variables you've pointed out, there is not going to be an impact on inventory losses. We do not expect to have price reductions. Quite to the opposite the market is pointing towards increases. There is also a volume recovery because of the problems of the market of the second – market of having an excessive offer excessive product. Our network is operating better in terms of volume in the third quarter and as a consequence improves margins. In the third quarter, we expect to have better results than the second. Now concerning software against hardware perspective, as you pointed out, we are maintaining our four-pillar plan. I would say we have evolved significantly in some of them. In others we are still working – it's work in progress. For example logistics and this is no big news. You know what I'm talking about. But I am quite confident with what we've achieved and the work in the second quarter shows that. We have managed to come up with business solutions even during dry conditions. Therefore, I think, we are moving ahead following the plan and the results are quite positive to Ipiranga even though that hasn't really completed our full cycle of recovery.

That's great. Thank you very much for your answer.

The next question comes from Leonardo Marcondes of Bank of America.

Good morning. Thank you for taking my questions. And I have two questions. Just a follow-up based on what Duarte has just asked. First, I would like to know more about Ipiranga and the market. Could you please tell us about the availability of products in the market? And how availability affects your strategy of commercialization for clients, which are more when it comes to the spot margin? The second question constraints Ultragaz. I'd like to ask you to tell us more about bulk. We've seen this bulk segment has gained more and more relevance in terms of volume. Would you please elaborate on how this segment has impacted your margins, and what are the competitive advantages of Ultragaz in this specific segment? Now piggybacking on Duarte's question Linden said that July was marginally better than June. So June, was it a more challenging month or was it more positive to Ipiranga within the second -- the third quarter?

Good morning. Your questions about availability is very timely. Ipiranga has no problem of product availability. Ipiranga has no problem of supplying regular customers. And I don't anticipate anything that would say, we eventually would get problems in supplying our regular customers. We keep on working in the spot market, and that's quite lagging the branded ones, but the spot market is much more exposed to international prices, because it's a marginal molecule so to speak. There will be occasions in which unless the market has a pricing answer that justifies the international costs, it would be very difficult to develop a segment. Brazil has just settling down in this model and we are still actively involved in it but understanding that this is a market that is more exposed to international prices. And once again, because this is a very important point, I cannot speak of all suppliers in Brazil, but concerning Ipiranga, there is no problem of supply. No problem of shortage of product. Now concerning the month of July, as I said, July was marginally better for Ipiranga. But a very small improvement considering what we expect for the whole industry. We've been dealing with lot of challenges and trying to come up with solutions that can offset market difficulties. But said July was marginally better compared to June and to May.

Hi Leonardo, this is Tabajara speaking on behalf of Ultragaz, about our position in bulk. This is a long-term journey, you probably know and for both segments. But focusing on bulk, I think, there are two possibilities here, things that we've been focusing consistently. We want to be close to our customers. We want to understand and realize what their needs are. We've been launching new solutions for customers and that has meant significant improvement. You've also aware of recent investments, which have led to operational efficiency. Things which are really relevant to us, and we want to expand, but we've operational efficiency quality of operation. This is a long-term process. There's still a lot to be done. But this is one of our focuses here, and we've been paying close attention to it.

Great. Thank you very much for your answers.

The next question comes from Regis Cardoso of Credit Suisse.

Hello. Good morning. I have some questions to Linden, but there is also a follow-up of this last topic. Trying to look towards the future Linden in your answer you said that, the spot market is a market which has prices based on international scene. And my question is what have you anticipated in terms of domestic supplies considering this context where we can see that discrepancy of the price volatility and how it's incorporated by Petrobras. It is a market which is still short and it needs importation to supply some specific regions where there is less refining capacity especially in the North and Northeast of Brazil. So Linden tell us, how you anticipate the supply in the future and how to get adapted to it? So is the teaser does it make sense to keep on having your own stations with branded stations, if that will mean excessive capacity considering your Petrobras quota. So this is the question. And about the divestment of some of the stations what the impact that it has had on volumes? Do you use any metrics of cubic meter sold per station comparing that to new stations just to understand really how many more stations would have to be sold for you to complete your strategy? Thank you.

Good morning, Regis. Well, Petrobras is still the main supplier of Ipiranga, regardless of the circumstances. This is the partner that gives us really the confidence in supply that we need to operate and this is going to remain so. Petrobras does not supply the whole market. There is a deficit which means imports and Ipiranga will keep on importing the product. We've got ready for that. We have our supply area ready to purchase from all over the world. We're going to do it competitively. And I really think that the Brazilian market -- the Brazilian market pricing will get adjusted to the model in which you have Petrobras price and imported prices. Marginal molecules are more exposed to the spot volume and this is how we have addressed it. And this is how the market will get set out. But whether we should keep on investing or not well interesting point because investments of quality are always worth making, because there is a natural churn in the network and you naturally make placements. And just referring back to your point of the closure of stations it's part of the process. Even though, we are dealing with the long tail that we knew you had to close, it's part of our network activities. We're always going to make investments of quality, but as we said right from the beginning our investments are really -- we are raising the bar of the quality of investments and we do that because we want to improve continuously our network. If we get the average of our stations in 2021, it was below 170 cubic meters. The average today is over 220 cubic meters. That's the average of our current stations. So it means healthier business. Here, we have investments over 330 cubic meters, and some -- these investments are on average of 40 cubic meters. So yeah, it's worth investing, provided that they are investments of quality otherwise it would make no sense. I think I've answered all your questions, but if you want to hear anything else please let me know.

No. That's okay. Thank you very much. Great results, guys.

Next question comes from Matheus Enfeldt from UBS.

Hello, good morning. Thank you for taking the question. The first one about capital allocation and your expectations. Recently, I mean, as an expert and there is the whole know-how of Ultracargo. This kind of format or companies, what we've been analyzing is there still room for purchasing anything larger or different diversification thinking about your process really more than anything specific. My second question about Ultragaz. Margins are still impacting the results but it has been a consistent surprise to the market, but there are two points about maintenance of margins. Thinking in the long-term much more than let's say 2024 in hearing about the regulatory concerns about the regulations over the gas bottling, and how are you dealing with the regulatory risk? And secondly, do you think that this margin levels would open the possibility of replacing sources maybe going more into natural gas, when price of fuel is going down, wouldn't be a risk of margin just to focus on this specific gas applications you have?

Thank you for the questions. In terms of capital allocation, we've already told you, the experience that we have today because this is the year, that we just put an end to the level of investments to go into further leverage, an investments. The activity of M&A is constantly -- really gaining more momentum and considering possibilities. We believe in smaller acquisitions as you've pointed out, as accelerators of strategies of our both companies. Ipiranga does it as well with its network of stations or let's say, with terminals in other operations our strategy is just to do it, to speed up the portfolio, but always analyzing better opportunities with greater volume, but there is nothing mapped so far. We really tried to focus on enhancing our analysis, and been constantly exposed to what's happening in the market. But 2023, is the year where we strengthened our operations. We are constantly talking about the volatility of the market, but we've been really expanding our operations. We are much better company than we used to be two years ago. Really creating that critical mass, that allows us to do other things, but we are still more focused on creating muscles rather than taking any major leaps. Hope, I have answered your question. Well, I think you made two questions to Ultragaz. First, about the regulatory landscape. In our opinion, regulations here in Brazil, are very modern probably one of the most updated in the world. It's been in place for over 20 years. It gives the freedom of choice for end consumers for specific cylinders and autos, and the resellers operation has a very competitive dynamic. We can see space in reducing some users because LPG is not there, yet, because of regulatory limitations. Our expectation is to have that expanding…

The next question by Georgina [indiscernible] from Citibank.

Hi, good morning. Thank you for taking my questions. Follow-up on Duarte's question. Could you please tell us more about the pillars, the four pillars of the turnaround of Ipiranga, which one is the most developed? Which one is lagging behind? What are the difficulties you come across? And how long will it take for you to close all the doors so to speak? I can see that -- in stations and it's very successful. I don't know if it's an ongoing process or whether we are going to come to a halt eventually? And secondly, concerning the CapEx against the guidance, it seems that it's somewhat lagging behind, do you expect any spillover or will you reach the guidance of the year in all different terms? Does Ultracargo seems to be the ones which is taking longer to use its CapEx? So, please -- these are my questions. Thanks.

Good morning Georgina. Concerning disinvestment and the sales of our stations, we expect to finish this movement now in September, in this quarter; the bulk of it at least. Four pillars,[Indiscernible], this pillar is very important to us but in our -- this is something ongoing in our operation. This is something that we have structured quite well, the pillar has been completed and now we are going to keep on finetuning our policies to have stable competitive position and policies which are in sync with the market. The pillar of trading has evolved significantly as well. When we launched this pillar at first, we had no structure of trading at that time. Today, we have a very robust trading structure with a capacity to originate products wherever we are always adding value and it has contributed to reducing the issues we faced in the second quarter. And similarly competitiveness now we're going to just keep on focusing that as a critical issue for us. The next pillar was the engagement has also experienced significant progression in the past 18 months. It has improved our relationship with the network at large. Our processes and policies are much more consistent and this is very important for the network. We are closer to our resellers, which is something expected at Ipiranga. We've expanded the network. We have gained more space in our branded stations. It's a pillar to be maintained. The pillar with which we are still working on is logistics and operations because it requires deeper changes of processes and this is not the first time I mentioned it. I know I'm just being consistent with what was said in the past, but it's clear that by the end of the year, it would have -- we will have covered most of what we had intended to be our plan. There are very significant progresses, but the rollout for all over Brazil, for all our distribution bases, it takes time because we are deeply reviewing processes. So, as I told you the part of selling the stations and disinvestments will be completed by September. Let's say we'll talk about CapEx. Well, concerning CapEx and similarly to previous years, we just forecast and there is some seasonality of the investments in expansions and branded operations concentrating more on the second half of the year and this year is not going to be different because it's not a linear plan.

That’s great. Thank you.

Thank you. If there are no further questions, I would like to hand it back to Mr. Rodrigo Pizzinatto for his closing remarks.

Well, let me thank you all for your questions and for your interest. Let me remind you that the questions that were submitted through the webcast will be answered by our Investor Relations team. And on September 5th, we're going to have our Ultra Day and I hope to have you all there with us. Thank you all very much.

Thank you. The earnings release call of Ultrapar is completed now. Please hang up now. Thank you very much. Have a nice day.