Ultrapar Participações S.A. Earnings conference call Comments on the company s 4Q15 / 2015 performance and outlook

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Meryl Anderson
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1 Ultrapar Participações S.A. Earnings conference call Comments on the company s / 2015 performance and outlook

2 Considerations Forward-looking statements 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 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. In September 2013, Ultrapar entered into an association agreement with Extrafarma, one of Brazil s ten largest drugstore chains. The transaction was closed on January 31, 2014 upon the approval of the association by the Extraordinary General Meetings of Ultrapar and Extrafarma. Extrafarma s results were consolidated in Ultrapar s financial statements as from February 1, Earnings Before Interest, Taxes, Depreciation and Amortization, and EBIT Earnings Before Interest and Taxes, are presented in accordance with CVM Instruction No. 527, issued by CVM on October 4, ULTRAPAR > CC

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

3 Ultrapar and 2015 performance Resilient businesses, with significant operational scale and differentiation led to one more year of growth Net earnings +29% +25% +21% ROE 19% +34% 916 1,177 3,158 3, ,251 1,513 Allowing increasing dividend payments Even in an environment of economy retraction, rising inflation and interest rates Dividends +12% % 1.60 Dividend yield 2.5% annualized 0.0% Brazilian GDP forecast 2015 Focus research -1.0% -1.3% -1.8% Inflation (IPCA) 6.4% 10.7% and Selic (end of period) 11.75% 14.25% -2.8% -3.2% Dividends declared Dividend per share (R$/share) Jan-15 Mar-15 May-15 Jul-15 Source: Brazilian Central Bank Sep-15 Nov-15 IPCA Dec/14 Selic Dec/15 ULTRAPAR > CC

42 Dividends +12% 871 +13% 1.60 Dividend yield 2.5% annualized 0.0% Brazilian GDP forecast 2015 Focus research -1.0% -1.3% -1.8% Inflation (IPCA) 6.4% 10.

4 Ipiranga and 2015 performance Long term drivers Adverse effects due to the crisis +2.8% 2015 x 2014 Estimated fleet +2.5% # service stations Investments to expand and strengthen the service station network Increased flow, customer satisfaction and loyalty Ask at the Ipiranga service station 2, % Dec/14 Source: IBGE (PME) Unemployment rate 2, % Dec/15 Monthly average income (R$) The growth of the light vehicles fleet was neutralized by the higher unemployment rate Relationship between fuel prices versus disposable income worsened the scenario -2% 6,715-3% 6,588 3,263-1% 3,158 3,365 3,342 0% 000 m³ +21% 25,614 +2% 25,725 2, % 11,952 12,249 2, % ,309 13,096 Otto cycle 1 Diesel Others ¹ Gasoline, ethanol and NGV Extraordinary effects: : R$ 42 M from inventory gains and cease of contingencies : R$ 65 M from inventory gains ULTRAPAR > CC

3% Dec/14 Source: IBGE (PME) Unemployment rate 2,236 6.

5 Oxiteno and 2015 performance -14% % -13% % 86% -14% 85% -7% % 0% 15% 86% -8% 85% 000 ton % % Average R$/US$ Specialties Glycols US$/ton Specialties Strong economic downturn Decision to discontinue a line of products to leather markets Effects of the unscheduled stoppage of the Mauá plant, as a result of the fire accident in Braskem s plant in October Effect of the weaker Real against the US dollar vs. : +51% 2015 vs. 2014: +42% Resilience of the specialty chemicals margins Commodities Volatility in prices and in demand Lower sales volume Effects of the unscheduled stoppage of the Mauá plant (R$ 9 M) ULTRAPAR > CC

33 Specialties Glycols US$/ton Specialties Strong economic downturn Decision to discontinue a line of products to leather markets Effects of the unscheduled stoppage of the Mauá

6 Ultragaz and 2015 performance -1% 000 ton -4% 1,711 1, % % % % % 1,155 1, % Working days Bottled Bulk Economic downturn Partially offset by commercial initiatives to capture new customers (bulk) and new resellers (bottled) Commercial initiatives to qualify resellers and offer greater convenience and satisfaction to customers Lower sales volume ULTRAPAR > CC

commercial initiatives to capture new customers (bulk) and new resellers (bottled) Commercial initiatives to

7 Ultracargo and 2015 performance Effective storage (Monthly average) 000 m³ -9% % % % % % Santos Other terminals Reported ex-santos Reduced activity at the Santos terminal due to the fire accident Other terminals Increased handling of fuels Partially offset by the reduction in the handling of chemicals Fire accident in Santos Lower average storage Expenses related to the fire accident Other terminals Reduction in the handling of chemicals Higher costs and expenses with indemnification and studies and project ULTRAPAR > CC

handling of fuels Partially offset by the reduction in the handling of chemicals Fire accident in Santos Lower average storage Expenses related to the

8 Extrafarma and 2015 performance Number of stores Gross revenues +14% % 32% 68% 67% +4% , % 1, % Dec/14 Dec/15 Under 3 years Abrafarma Matures +7% Gross revenues Growth in the number of stores (2x Abrafarma) moving up 2 positions in the drugstores national ranking (8 th to 6 th ) Revenues ex-mobile phones : 9% / 2015: 16% Slowdown of economic activity Mobile phone sales : -20% / 2015: -4% Higher discount levels in the 2H15 Revenues growth Extraordinary effect in +R$ 7M: extraordinary inventory gain, partially offset by initiatives to improve retail standards in the drugstore network Partially offset by the increased number of new drugstores and slowdown of economic activity ULTRAPAR > CC

of economic activity Mobile phone sales : -20% / 2015: -4% Higher discount levels in the 2H15 Revenues growth Extraordinary effect in +R$ 7M: extraordinary inventory gain, partially

9 Ultrapar Priorities and outlook Investments in expansion to boost earnings and profitability growth Investments 1, , (R) 2016 (E) Ipiranga Oxiteno Ultragaz Ultracargo Extrafarma Ipiranga Investments in expansion of service stations network, focused on the Midwest, Northeast and North regions of Brazil Focus on differentiation initiatives, increasing the offer of products, services and convenience, such as the new concepts of am/pm Super Store and Estação Oxiteno Aspire leadership in surfactants in the Americas Geographic expansion alkoxylation plant in Pasadena (TX) Ultragaz Focus on differentiation initiatives, creating new niche markets and sales channels Ultracargo Resuming activities in Santos terminal Focus on modernization of safety systems of its terminals, reliability and integrity of operations Expansion to strengthen its position as port operator Extrafarma Retail pharmacy management: roll out of the new model of store for the network Faster pace of store openings ULTRAPAR > CC

increasing the offer of products, services and convenience, such as the new concepts of am/pm Super Store and Estação Oxiteno Aspire leadership in surfactants in the Americas Geographic expansion

10 Ultrapar Participações S.A. Investor Relations

Ultrapar Participações S.A. Earnings conference call Comments on the company s 2Q15 performance and outlook 08.07.15

Ultrapar Participações S.A. Earnings conference call Comments on the company s performance and outlook 08.07.15 Disclaimer Forward-looking statements This document may include forward-looking statements