Ultrapar Participações S.A. (UGPA3) Earnings Call Transcript & Summary

Frederico Curado, the CEO of Ultrapar.

Can you all hear me? People in the back, do you hear well? Well, let's wait for the last people to join us. Well, good morning, all. Thank you very much for being here this morning with us. We have a rather dense agenda. I shall give you a summary and a wider view of our business and our company. And then after that, each CEO will speak in details about their own business. And we shall have a break at about 10:20. We shall have a break, and we will go as far as 11:30, and then we shall have another Q&A session. After the business section, André will talk a little more about the financial side of our operations. Well, I believe most of you will have seen a guidance we issued. It's a new initiative. And the idea is to give more clarity and an alignment to the market expectations, to share with the market openly and in a clear, transparent manner our expectations from the market, both for our individual companies and for Ultrapar as a whole. From the next -- from next year on, we shall align our communications in such a way that, by publishing the results of each year, we will also issue our guidance in terms of investment and the EBITDA in a few weeks after our Ultra Day. So as of 2021, we are still not totally aligned. But as of 2021, we shall align our results, we will share our guidance, vision and we will talk about it in our next Ultra Day. Maybe you will have noticed that this is another premier to show you the evolution of our logo. I will show you a short video for 1.5 minutes to explain to you the history -- our history. The logo is rather faithful to our history, but it is modernized. Rather than focusing on the past, we really want to leverage the whole fantastic future ahead of us. So for the second time, I will show this logo officially. I showed it yesterday to our employees. [Presentation]

Very well. We have tried to act on 4 main drivers: always focusing on the organization of businesses and people, and our management model is one of the important items in our business, looking at constant evolution and all of these under the umbrella of a strategic agenda that I will share with you in details. I will just briefly touch upon each item to share them with you. We have here the issue of people and organization, perhaps 2 main focuses. One of them is like routine, the succession and innovation of our leadership, and this needs to be a continuous process. We managed to do this very smoothly, continuously, without any interruption in our operations. Now we had concentrated effort in the last few years on renewing the directors of Ultrapar, the management of our businesses. This is being done in a planned manner, and it is totally smooth and organized. And this generates a very favorable organizational environment. We have obtained resources from the market, human resources that is, and also internally in the company. And this is our second focus because, very intensely from now on, we shall strengthen our pipeline in terms of business leaders. We want the leaders -- we don't want managers. We want leaders to have business capacity. And this is not just my own focus. It is the focus of every CEO in the company. It's a very clear direction in our work, and it is a fundamental pillar for the future of our company. Now how to organize all our management model? This is essential. And I will focus a little more on this slide because it is full of interesting details. Last year, there was an important change in the Board of Directors. This change wasn't just a change in the members of the council but also in its very structure. Two committees were created. We already had People Committee that was in action. And then another one, the Audit and Risk Committee was created as well as the Strategy Committee. And this was very important because you can think of the Ultrapar council managing 5 businesses, and we may have 6 in the future. If we have, in the council, specialists on each business results in -- too much, and this will not bear fruit. So we decided to focus on governance, and these 3 committees feed our discussions concerning the administration. Any important topic for the future of the company is surely directed to each -- to either one of these committees. So we have to look for specific knowledge in our business to help us in management. We then created these Advisory Boards, and they have been at work for 1 year. Now we are entering the second year. And they all -- well, they help us. They help management in everything from results to the allocation of capital, personnel, compliance, everything. So day-to-day work focuses on these Advisory Boards. And André and I are very close to daily activities in the company, thanks to these Boards. What is also important is the possibility to share knowledge in specific processes that can be uniform for all the companies. They're either very similar or the same. So we created a center in Campinas. Half the people who are there now were in Ultrapar already before, and the other half were hired in the region of Campinas, which is close to the Viracopos Airport. CSC started to operate this year, and the idea is to reduce cost but also intend to obtain an improvement in the services provided to the various companies. Now besides the back office, it's important to mention how we intend to capture commercial synergy and learning synergy among the various businesses, so by creating centralized structures to do that. If you try to concentrate knowledge, centralize it and then decentralize it, well, our businesses are traditionally led by one of our CEOs to give us a good visibility of the organization, and it is also used to bring the various subjects to the Board. These are not organization structures. They are known as squads. They work and gather constantly, and they exchange best practices and knowledge. So we have, today, in operation -- we have 1 for safety, 1 for IT, 1 for innovation and 1 for people. And these are all important elements in our organization. And finally, as our very name shows, Ultrapar, we have participation in companies where we're not 100% owners, but it must be clear that we also act on these companies via our Board of Directors. I tried to summarize everything in this one slide to show you how we're managing the company. Well, I have only one slide to give you an overall view on the business evolution. We have good businesses that are resilient. They are good cash generators. Ultragaz has reinvented itself along the years. It is known for its innovation, and the return on capital is enviable. Ultracargo is the largest private player in the field of liquid storage in ports and so on. Our intention is to increase investments in Ultracargo and Ultragaz. Oxiteno finished last year a very strong cycle of investment. It has very good bases in Brazil, plus presence in Mexico and the United States. Besides, we have this very strong research activity in Oxiteno in order to increase our product mix, thanks to research. Extrafarma is a redirecting of our activities. This is the result of brilliant work by a colleague of ours. And for the first time, we managed to generate positive results already in the second half of last year. As to the future, we see growth for this company with more disciplined investments from now on. And finally, thanks to the efforts of the team, we intend to increase and recover profitability in a very challenging market without giving up on market share. And a very important component here is convenience retail that Marcelo will talk about afterwards. In terms of our strategic agenda, which is like an umbrella covering all our activities, we have a culture of excellence, which has a lot to do with what I said so far. It has to do with safety, quality and productivity, the development of people. We are working for the training of enterprise leaders to be one of our core competencies. We intend to honor our history of [ indisputable ] quality and innovation. And finally, sustainability as well that we will speak about later on. Another important point in our strategic agenda is the capital allocation. Well, we know that capital is finite, and we have knowledge and leverages that can be applied better in one sector than in another, so there's prioritization. And if we speak very candidly, we have this position in the Brazilian downstream chain. We have a very strong position in PLG (sic) [ LPG ]. And in the Petrobras system, we have opportunities to improve the quality of the services provided to the population to improve the return on assets. And whether or not we acquire these assets, we believe that the value chain will benefit as a whole from these privatization movements. As I mentioned just now, the port infrastructure, which is part of this ecosystem, well, obviously, Ultracargo also works with chemicals. But a substantial portion of its growth will be -- will come from the growth of fuels. Brazil is -- has an accident in crude oil and has a deficit in refining and byproducts. We believe there will be new investments in refineries in Brazil. And so the import and export capacity and cabotage are also very important in this system. As to the distribution, I'm talking here about Ultragaz and Ipiranga. We are investing in new fronts, modernization, automation of our bases. And this will be one of the sectors where we shall invest in the coming years. Finally, convenience retail stores. You may think this is totally outside our main capacity. No, no, we have close to 500 retail stores. We have a brand already, and we believe this activity is very valuable. And since last year, in the second half of last year, we had dedicated competence to that, and the results could be obtained already. And finally, I will talk about these last 2 topics. In parallel to what I said, we are using new growth levers. It's probably not very well-known yet. But at the end of last year and beginning of this year, we are structuring a corporate venture capital center, which is a fund that will focus on investment opportunities in start-ups. And this will be more agile and lighter than if it were carried out inside Ultrapar, which is so very large. So we will see what new ideas this can bring to our business, maybe things we cannot see yet today. Innovation is not new to the Ultra Group, but we are increasingly structuring ourselves for innovation, but it needs to be grounded on actual things. For instance, Ultragaz has a Blue Room, which is an idea hatchery. All our companies already work with innovation, and we have this innovation hub in Rio to foster innovation and interaction with the external world. And finally, digital initiatives. All of our activities contain digital initiatives in their strategies. And going back to what was said last year, we see much value in Advantage Kilometer and also Abastece Ai, which are programs we offer to the public. So Abastece Ai resulted in a huge volume, and we are then separating this management unit so as to consider it a separate business. We don't intend to have a positive result from this already this year, but we are segregating it in order to analyze it better independently. In short, we have a positive view on the future on our business portfolio. And I hope by the end of [Audio Gap] Well, I thank you all for your attention. And I invite Tabajara to talk about the history of our business. Thank you.

Good morning, everyone. It's a pleasure to be here and to talk to you about Ultragaz, and our strategy for the coming years. I would like to -- and talk about the market. I would -- the market is going through a very important transformation in the last few years. And our vision is very positive for the years going forward. And I would like to talk to you about our vision. Well, recently, the market has shown a stable behavior with a small retraction in 2019. Our vision is that this is very associated to the economic situation that the country has undergone, and the repositioning of the raw material by Petrobras has given -- put pressure. And this scenario was already different than the second scenario in 2019, which is on your left. You can see that there -- or rather on -- to your right, you can see that there is a pickup. And the market will go back to the historic landmarks, which will increase our GDP and the development of the country. Now we have experienced a very important discussion about GLP, and the GLP market for all the historic evolution it has had, it's a regulation which is very developed. It benefits the consumer, and it gives the consumer the possibility of free choice and the way the brand has been treated. Now the [ National Oil Institution ] has talked about fractioning. And it's important that all the society has participated in the discussions. And we see very clearly that the 90% of the contributions that were made in this procedure were contributions that were contrary to this movement because of the vision of Ultragaz and the union of the gas companies as well. And this is the figure on the left, which shows the market reference and the reference of the brand for a market such as ours. And this is how it should continue. On the other hand, although there is less talk about this, last year was very important in terms of regulation. This is something that lasted 18 years. We had a -- now it's the end of differentiation between bulk and P13. The same molecule had different prices, different rates. With price policies, you can see the most recent evolution that was more different in the past. As of March this month, this will no longer happen. And Petrobras has already practiced this since last year. In terms of competitive capacity, for LPG, it's very important. And this is a very -- we have a very positive vision. And this anomaly has been corrected. So the expectation is -- the second distortion that we have is the restriction of the use of LPG in some uses, which is something that is all over the world. But the reason for this doesn't make sense anymore. So there's a big expectation, and it has already been determined that this will have to be drilled down and analyzed going forward. So our expectation is that these restrictions will be suspended with the free market with more potential. And here, we have some applications, which can work in a more organic and gradual way. And of course, we are already preparing for this transformation. Another modification that we have noticed, and here in Brazil we have this, is the enormous availability of LPG. We have already talked about this in our last meeting. But the market has increased the GLP production. The LPG, due to the shale gas in the U.S. for both supply and demand, have increased enormously. And the surplus of production is very important because there is availability of products. And if we follow the international rates, especially in the Northern Hemisphere, the international prices, this has increased the production of the product. LPG is an international commodity. And the transformations that will happen in Brazil with the increase of supply of associated LPG and the possible and probable opening of the refineries, opening to the supply market, this is supply that's carried out 100% by Petrobras. But I think we're going to have new -- a system that's going to come this year. We have this package of the LPG that gives us the long-term message for LPG, which is very positive. Now talking about the future, we also sponsored last year a review of Ultragaz, starting with a very intense activity to review our proposal of our objective. It was the development of LPG. So the organization itself, it's a development that we say that to use our energy in a more widespread way, not only limiting ourselves to LPG, so that we can give more power to LPG and other possibilities of diversification. We have the corporate and the household use of gas. So our pillars are very focused, and safety is the main thing for our operation, which is LPG. Excellence, market excellence is focused on scale, the development of people, along what Fred has already showed us, and also digital innovation that I can give you some examples further ahead. Now going a little bit further in our strategy. What we have done or rather, what we have thought, so we have a recent path of a lot of success. And we have developed -- we have focused on the -- our client base, our customer base. Our customer base is quite spread out, and the dynamics is very strong. And we have given priority to our customer base. The customer base is very dispersed, and we have worked hard to capture these customers again. We want more efficiency in logistics as well as the commercial service for these customers. This is a very interesting market, but the logistics and the service is more complex for large-sized customers. We have a series of initiatives that have brought us good results. And this is a good leverage for the future of this segment. An initiative that gives us a lot of support that we began recently, the beginning of 2016, was to develop what we call new use for products. We have some examples of this. In this journey, we have already launched commercially 17 new applications. These are applications that we used our knowledge for the customer, for their needs, with specific characteristics of LPG. So generally speaking, we have partnerships with universities, with the academia, and we have the equipment. And that can be seen -- proprietary equipment that are from Ultragaz that gives a -- is very beneficial for the consumer because there's more precision in the control of the procedures or the new product that is developed. So all the segments that we have identified opportunities, I think this procedure has already gone into a continuous system, and we believe that this innovation of customers did not exist, 36,000 tons. And this is a very important direction. And I think we still have a long way to go going forward. Speaking about other segments, which are very important in volume, we are betting on our resale -- resellers. We were focusing on our business how we can improve the service, which is delivered to the consumer. And we have performance and quality of services rendered. And we also have an offer of solutions and marketing packages. And in the end of the 2019 cycle, there was a record of participation. And practically, all the resellers participated in this program. And we believe this is very important to keep the engagement and customer loyalty. Now our challenge, and what we started doing last year, is that there's an important activity with private households and the -- getting closer to the end customer. So the operation of Ultragaz, we have monthly relationship with millions of customers through the resellers' organization. So our objective is to be closer to the end customer, not only from the institutional point of view but also our challenge is that we began last year, and we had good results in the short term, is to have a direct contact with the customer. This will be a partnership with the resellers. This has to be a joint activity with the reseller. But we're going to have a follow up of the customers' journey in these platforms and how the customer wants to interact with us. And we want to give support for this development. We believe that this is the future for the household service. So that consumer, the end consumer, can have contact with us, and so we will know what we could do to improve and evolve. This is important for Ultragaz and the resellers' network as well. Now the 2 main segments in corporate is that we have support activities as well. I think the main transformation that began last year is our investments in safety, in performance, process revisions and assets as well. There was a lot of change in the company. It was the highest value, dedicated value in investments historically in the organization. Our objective to keep this level of investment for the coming years. In 2019, it was BRL 41 million of investments in safety. Another point, which I think Frederico has already mentioned, is that we have seen that, historically, there is LPG which is expanding in the interior and along the coast of Brazil, in the Northeast and the Central-West, and North and Northeast are also expanding. So we want the expansion of infrastructure. And what we've foreseen in our planning that we'll be carrying out this year is to move it -- our infrastructure, to follow this market movement and -- because it is going more inland, and we want to give support for the 2 segments that are spread out in Brazil. We're going to recover a gap in the North and Northeast. And we have other projects foreseen for the coming years. I think we still have some time for all this to be developed, but we decided to begin now. And we already have an investment in the cycle of 2021, which is BRL 85 million, which will be invested in the construction of new production bases to eliminate the bottlenecks that we have. Another pillar that we already have been quite successful, and which has to do with our operation power, it is the operational excellence of production bases and processes. We have repeat results. And we have seen -- we have been able to evolve our productivity. We have developed recently the project supply. We see the whole cycle of the reseller with the company until -- from the beginning of the order until the delivery of the order, going through the whole logistic operation. All this has been reviewed. And we had an enormous increase in customer satisfaction and best experience for the reseller. And we have already seen this result and has been included in our planning. Another transformation that happened more intensely since last year was when we talk about people. We have new working models. In 2019, we decided to work with 14 squads. We have -- all the initiatives that we have mentioned until now came from these 14 squads, even operational efficiency come from this model. We already have -- we have an exposure through our Blue Room, which is -- it has expanded, and the whole company is not only limited to one environment. We participated to the innovation ecosystems. This is -- the company is going through a learning procedure at the moment for this. And we are very dedicated, and the results have been much faster. And I think this is something that will -- and expedite our planning. And the majority of the company is already involved in this new system of organization. We continue giving a lot of approach to sustainability. Sustainability now is culture and education for children and youth. And more recently, we have dedicated our effort for women, to give more female empowerment. And we had BRL 12.5 million projects, and we want to continue with these going forward. Now I would like to say a few words about our short-term vision that would be this year. We have already announced a growth of relevant investment as compared to the previous year. The majority is -- can be explained by the infrastructure movement that I mentioned just a little while ago, mainly in the 2 new bases that we are developing. But there is a cluster we would like to mention. We have a high level investment in safety. This is something recurrent and a bigger allocation in market expansion. We have an expectation of market recovery. And we want to refer this to mirror our investments. And we're going to continue investing in technology, automation as well as the -- with the vision of results because there will be a good return to the company. So our expectation is the expansion of infrastructure and of invested capital. We have a very positive view of the market. We think the market is going to pick up again. Our customer base is more dispersed, and we have more applications to be launched. But the outlook for existing margins that were very volatile last year, our vision is that we think it's going to remain at the level that we have already achieved and capture gains with process automation. And this encourages to open to you our guidance, our EBITDA guidance with an expansion as compared to the previous year. I think I have complied to my time. Thank you very much. I will now invite Décio Amaral for his presentation.

Hello. Good morning, all. It's the first time I speak on behalf of Ultracargo. As my colleagues said, we worked a lot in the last 3 months last year. And as of January, I became the CEO for the company. Well, to tell you a little about Ultracargo, we are leaders in the area of liquid bulk terminals. No other player in the sector is as [ recognized as us as we have ] geographical presence. This represents a value proposition for our clients. And we also are capable of capturing more capacity in the market. We moved 6 million tons last year. And if we look at the dots we have in our terminals, it comes to 273 kilometers. All that looks simple, but it isn't all that simple. Now talking a little more about our market share. We grew from 23% to 25% last year, and we have 1/4 of the market. This growth from '18 to '19 was based on the 6 million cubic meters in Santos and 18 million in Itaqui. So we now have 60% more available capacity. And this gives us the capacity to capture, in a relevant way, the growth that is to come ahead. Well, there are natural barriers, and it's not easy to have access to ports, but our position gives us an excellent advantage and the capacity to grow. And where do we see growth can come from? Well, in all the segments where we are present. We have surplus capacity of fuel in the world. And we believe there will be an annual growth of 5.4% in terms of liquid fuels. In the field of chemicals, there will be less growth, but it's relevant, 2.2% per year. And ethanol, 3.9% growth per year, and we're capable of acting in the exports of ethanol. Now the market can come to 5.7. And this is equivalent to 3 Ultracargos, so we really have a huge opportunity to grow in the company. Well, I think you have seen before that we are service providers. Our role here is to connect businesses and contribute to logistics in Brazil. We have to be very efficient. We have to be very productive because our clients need that profitability to grow and to make our market grow. And we do that, thanks to our strategic positioning based on 3 points. Reliability and safety, our clients ask us to keep [ their cargo where ] it needs to be kept or stored safely and returned safely. And the second point is agility and productivity because they have to load and unload the product at the speed required by the client. And it has changed a lot because we went from chemicals to fuels. And this was a positive impact for the company. And also, focus on our clients. Our clients are present all over the country, and I have to increase value for them. Now concerning reliability and safety. We can see it in 2 different ways: accident prevention and emergency reaction. So it all depends on the culture of the company and the integrity of it. In terms of prevention, the company started to work in 2015 on a project called Safe Attitude, creating procedures, control checklists, adequate supervision, et cetera. This was the north-south axis. However, Steve Jobs showed us -- or he taught us that hardware is not enough. Efficiency is in the software, which is people, so we have to work on culture. And we started to look on the software. We started to create the concentration of values, beliefs and attitudes in order to develop risk perception. If you perceive risk as not [Audio Gap] in 2015, we depended on controls, inspection, et cetera. Whereas in 2018, already, we started to see we were entering the independents phase. People were taking care of themselves. And when we talk about the second part, the integrity of assets [Audio Gap] in 2016 and '19, the company invested BRL 68 million. And in 2020, we're talking about BRL 50 million. We are talking here about water catchment and automatic systems to avoid the overflowing of tanks, the spreading of foam if there is fuel foam anywhere. So all of these are above Brazilian expectations. It's not enough for me to be independently safe. The whole sector needs to be safe. So we have to work beyond roles in its respect. So when we talk about agility and productivity, there was considerable demand. There was a change in the market profile recently because our company is mostly a company carrying chemicals. Now when the market of fuels starts to grow, it's another thing altogether because I need parallel tanks, and I need to load several wagons. And we had to readapt our assets. But on the other hand, I can generate more income, and I can use my assets more. So in 2009, we grew 8%. And last year, the handling of fuel represented 48% of our activity. And our expectation is that by 2024, about 70% will be represented by fuels. Now this is when we compare our capacity in static capacity. We grew constantly because the CAGR grew by 3.4% per year. Our exposure to the fuel market will have the result of improving the productivity, the profitability also of the company. Customer-centric. We are expanding several of our operations, as I said before, in Santos last year, 84,000 cubic meters additional capacity. And at the end of the year, we purchased other areas adjacent to our terminal that will allow us to grow in a more productive and a more planned way. So each year, we added 30,000 cubic meters of capacity. And this year, we're going to start a new expansion by -- because we want to increase 80% in the Northern region. There is a gap of supply, and there is much demand in that region. Suape, we are going to start the expansion of our terminal, and we're going to increase its capacity by 20% until 2024. Last year, we were successful in the auction. That was auctioned. And we intend to invest in building a terminal there because this is a strategic port, and it is essential for the growth of the region itself. Now talking about customer-centric again, with this geographic coverage and with the good results of our operations in this new market, we managed to maintain and grow client portfolio that is very much diverse. We have managed to have an interesting contract aging. We have about 66% of long-term contracts that is over 3 years. And this allows our income to be predictable. And we maintained our short-term capacity in order to carry out spot operations where you can see profitability. So this is how we work in the long-term and in the spot market. And this is how we maintain our profitability. Now to talk a little about 2020. We imagine -- we intend to end the year with an increase of 12% in average in our static capacity. We intend to have increased profitability from the terminals of Santos and Itaqui, and this will provide for considerable growth in our EBITDA. It was like BRL 230 million last year, and we shall have between BRL 260 million and BRL 300 million in 2020. Well, I saved a little time. It was a pleasure to have been talking to you. I would like to invite Parolin next to talk about Oxiteno.

Good morning, all. Thank you very much for your attendance. We're going to talk a little bit about chemistry now. This is always a different chapter in our presentations, and I will try to make this as painless as possible for everyone. Well, let us begin to talk about our markets where are -- we are active. What you see on the top part of the slide is a gradient between products and solutions. It starts with a product as you can see. And as we go from the right to the left, the specialty chemicals, surfactants; and as you go to the right-hand side are the commodities. So we have this list of products that you see, and 70% of the -- of the share of the company comes from the families on the left, so specialty chemicals and oleochemicals chain. Oxiteno has made important investments, which are geared to the enrichment of our product mix. So we have been able to transform the company into a company which is less dependent of cyclic and volatile commodities. We still have exposure to these products, but this is smaller and smaller. And the objective is to show you the list. We have many new products. These are the markets where we have more specialty products and we have people developing products, the development of applications to the end consumer. When we have the agrochemicals crop solutions and home and personal care, these 2 markets represent 50% of the contribution margin of the company, which -- these are the 2 most relevant markets. Our business is distributed in a range, which [ are different ] markets, but crop solutions and HPC are 50% of the business. We are a B2B business. We sell to companies that make agricultural products such as our competitor, [ BASF ], and our clients produce private hygiene and cosmetics and domestic hygiene as well. So the typical companies are Univelop, (sic) [ Unilever ], Procter & Gamble, Colgate, Natura and others. In the area of coatings, it's paint, Sherwin-Williams and Axle (sic) [ Axalta ]. In oil and gas, we're active in services and oil companies. So it's the Schlumberger, Halliburton and Ecolab, just to give you an idea of the main -- our portfolio -- customer portfolio. These are large-sized, globalized -- global companies. To speak about our company structure, in the Americas, we are the biggest of -- Oxiteno. What are ethoxylates? We are the largest ethoxylates producer in the Americas. I will explain what it is. These are products that make compatible water with organic products. So we have this thing of mixing -- oil and water doesn't mix. So what we put is we put a surfactant and then one takes the hand of the other, and this is how we can wash dishes that are greasy with a lot of water and these products. In textiles, we can use dyes and all the procedures that involve water in a large range of industries that involve the surfactant. We are the leader in Americas of the ethoxylates and surfactant. We have the largest capacity installed and the only producer of ethyl oxalate. Producer -- we are the only producer of ethylene oxide in Brazil and fatty alcohols in Latin America. And these are -- we have a degree of verticalization in the company that gives us a differentiated position, especially here in Brazil. Now we have B2B business that demand long-term partnership with our customers. These customers are long-term partnerships. And this is based on trust, high level of service and cocreation. We do a lot of projects together with our customers. We solve problems that are brought by the customer. And we do have [Audio Gap] have updated. And we have a -- we had a growth of our assets in Latin America and now in North America as well, very recently, with the inauguration of the plant in the U.S. at the turn of '18 to '19. So our asset base is ready for the recovery of the -- recovery in Brazil and to grow also in the U.S.A. So our footprint in the Americas and with this product family is unique, and we understand that this is an important value for our customers, which are global companies -- globalized companies. They want the same kind of product and service in all the countries where they're present. Now our objective is to contribute to the well-being of people through chemistry. This chemistry of good is -- has the pillars of sustainability, so it's the reduction of environmental impact, efficient use of resources and use of renewable sources. These pillars of sustainability is the backdrop of all our research, R&D and applications. So in these target markets, when we talk about the agricultural market, so high productivity is the word of order in the world market. And also, agricultural land is very limited, so high productivity is very important. However, this has to be done consuming less resources, less water with safe products, safe for people and safe for the environment. Now when we go talk about home and personal care [Audio Gap] and they have less energy use in transports, concentrated products and convenience products of more practical use for people. This is going to come up later on. I'm going to show you an institutional video about our developments. Now when we talk about coatings, it's the same principles. When we paint a house nowadays, the idea that this paint should be less toxic as possible, easy-to-use, do-it-yourself, a paint that the family can use and paint their own home [Audio Gap] leave the house for a week because the solvent is toxic and the smell is terrible. Now these are friendly paints. And lastly, oil and gas. Oil and gas also is the main source of efficient energy and the main source of energy in the world without affecting the environment. Now this innovation in these target markets, as I have already mentioned, is connected with these sustainability indicators. And we have invested in innovation. And last year, for example, 14% of the contribution share of the company were products that were developed in the last 5 years. We consider a new product in its first 5 years. Now this percentage has been expanding. And now we're accelerating our procedures for the release and launch of new products using methodologies, which are more flexible, and delivering a better solution so that he can start talking about discussing the project while it is still being developed. Now Oxiteno has a -- the competence of flexibility. And we can go from the concept, to the benchmark, to the pilot and to the plant. We have a big investment in pilot plant, which represents our industrial procedures. So the customer asks us to prepare a molecule so we have a test, and we go from the test to the plant very -- in a very short period of time, which is very important for our customers that operate in dynamic markets. We also -- we monitor new technologies. We use data analytics to see patent and new technologies and market trends, showing where the market is going in the future and what molecules we should invest in and which technologies. We have seen success stories of cocreation with customers. I would like to bring one as an example, which was launched this year by Unilever. This product was due to our OXIFLOW product. This was cocreation together with Unilever, and it includes all the elements that I mentioned. It's a concentrated product that you save plastics, fuel, and then you have the capacity -- it washes out very quickly. Now in terms of operational efficiency, we have work focusing on this -- focused on results. And we have used the automatic process control, using artificial intelligence to increase and to explore our procedures until their limits in terms of safety and efficiency. So this kind of automatic process control, it saves resources, steam and energy. And it brings us increasing productivity and lower costs. Now in several procedures in all the different areas, in prospecting new customers, we have used new data analytics for new companies. When we go to the U.S. for the [ fracking ] market, how we can wrap the main companies, always with data analytics and with database, we can very quickly progress and identify new opportunities. Now robotization of operational processes, of course, we want to increase the efficiency and with more automation. I would like to make a parenthesis about oxytane (sic) [ Oxiteno ] in the United States. The plant was inaugurated last year. And I would like to say the differences and what we want to do in the U.S. Now in terms of technology, we have -- in Oxiteno, we have a series of diversified products. We have more than 400 different projects. Very few companies around the world have the same -- product diversification, especially in surfactant and ethoxylates. The majority of our production is quite ample [Audio Gap] if automation and the plant technology permit us to produce products with high productivity and low level of contaminants. This means that we can act in different market niches, such as the pharmaceutical, food and personal care markets. These products with less contaminants will go to these markets and the entry barrier for the competition -- well, there's [ none in ] United States and the older ones have a very hard time trying to produce this. And for us, this is our flagship. Now in terms of services, we have a complete structure. We have a lab with pilot plant in the development in the state of Mississippi. We -- we're very agile and flexible to develop products for the local need, and we also created a logistics system, which is very agile and expedite for the customers. Now the localization. We can buy the oxytane and ethylene. And this is very expensive, so our cost is very competitive compared to the competition, which is not in the Gulf region. And regarding scale, we have a plant which is adequate to the American market. It's not a small plant. It has a substantial size, and this permits us to interact and start supplying to the large American market companies. In our agenda for 2020, we have the growth of the U.S. operation, which is something that will permit an improvement in profitability. And in 2019, we had some operational hitches, I would say, because the plant was in its first infancy. The technical issues have already been solved. We had a premarketing stock that was substantial. We did the premarketing with products that were produced in Mexico and in Brazil, and the whole inventory was eliminated last year. So last year, our sale was $17 million in the U.S. We sold 35,000 of surfactants in this year. We intend to have a substantial expansion of more than 50% as compared to this number. We began this year better than last year. If you remember, last year, the American agricultural crop was very poor because there was a very long winter and a lot of flood. This year, climate was more favorable. Water is very important for us. And bioethanol and corn ethanol, we have worked in this market as well. And our trend is more positive. In terms -- we want to increase our products, and we want more surfactants in our portfolio. In terms of productivity and improving the performance using digital technology and the cost reduction, well, last year, we launched a program that was to review the organizational cost reduction program and also a planning for the reduction of our expenses using matrix. So we had a matrix system for cost reduction. This is a program that will give us a savings of BRL 40 million, and it will come to BRL 60 million in savings. In terms of people and culture, we have a lighter and more flexible, more horizontal system to leverage the other initiatives. And for 2020, we have a guidance of, one, EBITDA among BRL 360 million with an exchange rate of BRL 4 because now the exchange rate is very high. It's BRL 4.5. But the premise -- the assumption of this guidance is BRL 4 per dollar. So we are living in a better moment than last year, especially things are doing well in Brazil and the United States. And I would now like to show you a video to conclude the [ presentation ] [Presentation]

Thanks very much for your attention. We're going to have a short 20-minute coffee break. And this is what I had to say. Thank you. [Break]

I now invite Rodrigo Pizzinatto, the CEO of Extrafarma, to please take up the floor.

Good morning, all. I'll give some time for everyone to sit down. It's a great pleasure to be with you here with -- for another Ultra Day. I will talk a little about Extrafarma. As Rodrigo said, we are working on redirecting this activity, which is a diversion from our initial activities. At the end of 2018, I showed you a slide with our plans for 2019. And I will show you what was achieved in 2019, what we did in terms of managing retail and our systemic platform, which is very important, which was implemented and how our people and culture have evolved to support this plan, beginning with a few of the market. In the pharmaceutical retail in the last few years, the market, despite what we have seen in the economy, continues to grow at a very healthy pace, which is leveraged also by the aging of the population. In 2019, it went beyond BRL 120 billion in the last year. And the market growth seems to have accelerated lately. However, growth uniformed throughout the country. Our largest chain is in the north and northeast of the country, which was most affected by the economic crisis recently. So they grew a little less than south and southeast. So if you take Pará, which represents 1/3 of our business, there was huge increase in competition. If you take the second quarter 2018 and the second quarter 2019, there was an increase of 80 more stores to compete with us. This affected our operation a lot because it is equivalent to 1,000 new stores in São Paulo, for instance. So from the market point of view and in our performance, we have seen a reduction in the volume of business in drug stores. And we have also witnessed shutdown of drug stores because many competitors, which opened recently, concluded that there is not enough market for everyone. And they started to close. So this context is the basis of much what we have done in the last few months. In our main markets, which are Pará, Maranhão and Ceará, in these regions, the main focus in our investment has been the renovation and extension of our stores. We have to improve the quality of our stores in order to compete with the new stores that opened to compete with us. Now in parallel, we have had recent expansion in 3 large markets where we focus, which are Pernambuco, Bahia and São Paulo. And in these 3 markets, we opened 29 stores in 2019. And in parallel to that, something we started in 2018 and accelerated in 2019, we have had great tolerance with stores with a low performance. We closed 46 stores in 2019. And in Piauí and Alagoas, which are 2 markets that are relatively small, we had a small chain there. And they are far away from our distribution centers. The potential there was very low. So we stepped out of these markets. We had little performance in Palmas. Here, we stayed in Araguaína, which is close to the South of Pará, and we also closed a few other stores in the other states. This came to a total of 46 stores closed down in 2019. So we ended the year with less stores than we had in the beginning of this process. Now we increased our investment to expand our logistic network. Last year, the São Paulo operation and -- all our 48 stores was served by air. This was very expensive and inefficient. So in -- we opened a distribution center in August 2019. And with that, we also have a new management system. And it allowed us to improve our level of service, and we can also daily resupply or replenish the stores we have in São Paulo. Now this year, we are going to open a distribution center in Maranhão. Due to tax reasons, the opening up of our center in Maranhão allowed us to obtain a gain of 5 percentage points, and besides, it freed BRL 70 million of working capital in the coming years, which is very important. This also allows for daily replenishing of our stores there. Also, there are other states where there is not enough volume to justify the opening of a distribution center. So for some products of greater margin, especially generic drugs, we can concentrate our distribution on those. Now talking a little about the evolution of some aspects in retail. In September, we launched our own brand. We started off with 30 SKUs. They're all exclusive with our own brand. And there was a very good acceptance. And these SKUs, in their respective categories, already have 40% to 50% market share. So some of our brands are very well accepted, and they bring us good margins. Our intention then is to more than double our portfolio with proprietary brands. And the participation of these brands in our whole volume of sales is rather important. Another very important initiative for us was the new store system. We started by changing our cashiers. If you ever went to one of our stores, you will have noticed that the conclusion of the sale took very long at the cashier. And now the new system allows for less queues to pay. We could reduce the number of cashiers, operators, and there is a better flow of clients in the store. We now have a new counter system and checkout. Our search for products can now be done at a computer. And you -- if you buy medications, you know that there are some promotions, meaning discounts or other benefits, and this increases sales. There will also be personalized promotions. This promotion, for instance, close to 90% of our sales require the purchaser to identify himself. So you capture the data of that client, and the new system allows us to harvest these data. This is very important because the average purchase increases, you can do directed promotions. And it also allows us to better manage our inventory. So we are working on this, on our image and our sales, and we also intend to gain productivity in the operation. Beginning with the personnel, talking about expense control. This is our total SG&A divided by the number of stores. If we take 2017 compared to 2019, you will see a 7% reduction in the head count. And we did not work out the cost reduction in 2019, referring to personnel reduction, [ but ] the actual benefit was greater than 7%. For every lease renewal of the stores, we managed to renew lease contracts at a rate that was lower than inflation, which was also very important. Finally, electric energy, which is one of our big expenses, we adopted a type of lighting that allows for the reduction in consumption, and it also improves the whole illumination of the store. So at the same time, we reduce the electricity bill and improved the lighting of the stores. And this will represent a reduction in our electricity expenses. Now when we look at the future of the sector and how we prepare to cater to this future, I would like to mention 4 points. The first of them is digital as the main lever for growth. This is where -- for 2020, for instance, much of our CapEx will be devoted to digital in 2020. In the past, we signed a partnership with Omni55. They specialized in online retail. And we have partners that have been in retail -- in digital retail since 1990, and they now work exclusively for us in the pharmaceutical sector. And they train the teams, they choose the platform and they implement them. We also chose Omni and Quiroga, our partners for digital, also to allow us to skip stages and to help us build a journey that makes sense to our customers. And the system should also generate cash flow a long time. Now Quiroga, from Omni, has done this for several clients it worked for. And this is what's going to be done for us now. Well, the store now stores data on customers, and this allows us to prepare a predictive model that can be optimized. Several things that can be done in drugstores nowadays are being offered to our customers, such as pharmaceutical services, vaccines, point-of-care testing, other related services. This is already implemented and being offered in São Paulo. And I don't need to have all the products present in the store's inventory, but I can offer the products, and they can be delivered from our distribution center. We see the importance of attendants also in the stores because they are a factor of differentiation from other drugstore chains. In view of all of this, sustainability and diversity are very important and our employees. Well, we have many activities promoted by the drug stores to favor the surrounding communities. We care for health management, energy and waste savings and greater diversity. And to close my presentation, I would like to talk about the short-term prospects. We intend to have an improvement in our competitive environment with very selective expansion. We want the opening of new stores, digital as the main lever for growth; considering year-on-year growth of results with cash generation in the process. Now in 2020, we started off from a very low level, BRL 27 million. And when we look ahead, we continue to see the growth potential in the market, be it due to the aging of the population and more available income in the population due to some economic growth. And we still have a very new chain, and this requires investment, focusing on digital. Well, a process of consolidation will happen shortly. And this is what I had to say to you. Thank you very much.

Good morning. Good morning. There's only me and André, and things are -- there's so much information, a ton of information that I'm conveying to you. And I know you know our business. So our main objective here, of course, is to give you an updated vision as to how we see and what we see and how we're building our future. In the case of Ipiranga, it's not different. I'm going to go quickly over the context. I'll give you a vision of the scenario in this turbulent regulating system world, but we want to talk about our strategy for the construction of our future. Well, the scenario -- well, there's nothing new. Fuel in Brazil is going through its major transformation in the last few years. I think since the '50s, with Petrobras, this is the moment of the biggest transformation of our industry. On the side of demand, things are slower. We see a consistent growth [ in demand ] in 10 years, but we see very clearly the penetration of biofuels and the beginning of a very slow energy matrix because the strength of biofuel is going to have in our matrix, it is a very gradual process in the coming 10 years going forward. Now in the supply, the refining and logistics of Petrobras is going to cause an enormous transformation, a multiplicity in this field -- in this industry, new sources of supply, new businesses with more possibility of contracts and agents. And we see this as something very, very positive in time. But of course, this is a process and it needs 2 or 3 years. It is going to generate a lot of turbulence. Now regulation. The regulation, there is the tax reform, which is not really structured the way it has been addressed by the government. I would like to come back this in next slide because I think it's worthwhile to drill down our vision about regulation. And lastly, completing this, the consumer that is in accelerated transformation. It is not someone that has been changing its expectations, and of course, being more active in its buying decision. Now I would like to open a parenthesis to talk about regulation. My objective here is to make things very, very clear, how we see the priorities of what should be a structure in agenda of [ regulatory ] issues in Brazil. It starts with the very basic, most important point, which is the tax simplification. We are operating at the base of the economy. It's the blood that feeds the health of the fuel industry. So in an industry like ours that 45% to 50% of the price of the end user is taxed in the margin, take this product to the end user, it doesn't even reach 15% of the end price. So the complexity of all this, so the tax complexity that we experience here in Brazil, this leads to a deterioration of the competitive market. So we have seen here in Brazil an important increase of informal work and tax evasion. And the main business school here, FGV, they made a study of the estimate of tax evasion, from BRL 7 billion to BRL 10 billion of tax evasion in our industry. So it is still in the downturn, and this is a solution which is well known, it is tested in the majority of country. It is to be -- have a single phase, a single rate. So this single phase and single rate and a convergency between the different quotas, so that there is no -- we eliminate this trend of -- this simulation, distortions and tax distortions among the different agents. So -- and a taxation based on the ad rem, which is a fixed value per volume and not on ad valorem, which is a percentage on a future price. So with the daily volatility that we experience in our industry because of the exchange rate mainly, this reinforces all those stimulus to deteriorate the competitive environment. So tax simplification is fundamental. The -- and it's very important that this should happen in Brazil in the coming years. So this reform, on the one hand, it has taken this spade that was over the Brazilians' heads. Now we need the tax reform that will give a thrust for growth. It will be attractive to invest, and we will have the recovery in Brazil. Another fundamental issue that has to be discussed, and it has been very, very, very [ timid ] in the current agenda is the focus on the new regulatory agenda for the logistics of refineries at Petrobras. It will no longer be the main guarantor as it has been ever since ever, forever. [Audio Gap] but we will never remember when the fuel was lacking [Audio Gap] last year. So we saw how frail the whole system is depending on the truck drivers' union. We're working together with all the agents in the industry because we want to have -- and I wouldn't say association but a forum to talk about the refinery, the logistics and distribution, all the other agents of the downstream in oil and gas in Brazil. So that we can also give assistance, and we want to [ redeem ] the Brazilian oil industry. Now incentives to investments in infrastructure, this is with the support of our studies but downstream in Brazil is going to demand BRL 100 billion in investments in the coming 10 years. Investments in infrastructure, in storage, in pipelines, port structure, railroads. We have an enormous gap that has to be eliminated with all the issues we have in infrastructure if we want low cost and efficient system in Brazil that will give the support of the economy recovery. So we need a stable and foreseeable future because it's very capital-intensive. The return is very long-term, the ROI. So we have, for example, only 8,000 kilometers in pipelines, and in the U.S. it's like 160,000 kilometers. So it's 8,000 to 160,000. So these are very expensive long-term investments, and it demands stability, regulatory stability for the future as well. So the principle of any regulation, and as complex an industry such as ours, we have to respect the freedom of price among agents. Any attempt to control this, and we've tried everything, we always try different things, and in the end, we know that it's the society that will have to pay the bill. And of course, this inhibits investments. And lastly, we also have to fight against irregular market. This is a very important agenda in Brazil. We seem not to notice how this irregular market, which is called informal -- it's sort of poetic to say informal, but it's tax evasion. And also people steal fuel, and also they manipulate the fuel. They add water or alcohol or something. And we have to fight at [Audio Gap] really has worsened the competitive environment, and it also has an impact in the end. At the end of the day, the impact is on the population. So this is something that we have been talking about in our industry and also brought this topic for us to discuss. So let's go back to the scenario. The short-term scenario continues to be a short term, very competitive, very intense competition. The pressure on margins continue and -- from everything with a growing price for the consumer, much higher than taxes, and we seem to not be able to go beyond this. The contracted demand causes a pressure on the margins in our chain. We have seen a growing demand of imports ex Petrobras, refined products coming into Brazil, which are not from Petrobras, not only due to the price policy at Petrobras and also the gradual exit of Petrobras as being the only oil supplier for the country. So this brings -- this stimulates the growth of regional independent companies, which are more focused on the spot market, and they can take the best use of the arbitrage of pricing causes among the different supply sources that exist. Well this is the tone of our scenario. Now unfortunately, we have this in [Audio Gap] couple of years ago. We have to recover, we have -- need value creation, and we are prepared for this because this scenario also shows us a lot of opportunities. Now let us -- we have to go back to our essence, to our purpose, to our objective. We have to see the society, which is evolving into our passion for facilitating people's lives and mobility in their daily activities. So our strategy, it has, at the center, a gas station or [Audio Gap] ] more competitive, has been very robust, and this is the direction we're taking on going forward. We are taking over our role as retailers very strongly so. So there's an interesting characteristic. It's very easy to be explained but very difficult and very complex to carry out on large scales. So this is what we know how to do very well. If you do -- it's not only one thing well done, we have to do many things simultaneously with synergy and efficiency. So this has been the story in the winning story of our company, which -- of Ipiranga, which is a retail company. And of course, it is the main [Audio Gap] around the country. 2019 was the year that we focused on quality and proximity of our resellers. We cleaned out the network. We try to make our competitors more competitive -- less competitive, and we are very successful. We did not lose market share in our flagship network. We increased 12% the productivity of our stations, [ in fact ], the profitability of the reseller. This is so important for our business. So this increase in productivity permits us to look ahead and say, we are ready for the recovery and breadth selectively, focusing on quality and consistency. We're going to have big surge of growth, and our objective is to grow consistently in the coming years. Doing this, we're going to redeem the pillars of any retail, which is focused on excellence and services and product quality. So we are getting ready and preparing for excellence in service with our training, training our resellers and our sales force so that this can happen. And we're going to invest more in our product quality, especially in an environment which has deteriorated so much. So we're going to -- this is going to show how our consumers trust our brand. Well, in advanced analytics, this has permitted us to evolve in our pricing system. I think we are now ready to collect in the coming years the benefits. As we learn and extract this gigantic database that we have, we are going to be able to operate and navigate in this market, which is so much more volatile, which is the fuel market in Brazil. But I think it's like this all over the world. It's not a privilege of doing -- of being here. It's not that it's going to go back to what it was. We're never going to have this situation in which the price will change 3 times a year, no. Now it's like 7 times a month. And we have to be prepared to give support to our resellers because sometimes, even more than once a day, there's a change in price at the pump. Another thing is retraining and new role of the sales force. The market is in transformation. We have to be certain that our team is prepared, trained to be the big consulters -- consultants and assistants. So we have to focus on the quality. I cannot see anywhere a distributor that has -- does not have strong resellers as partners. And this is our role, to be close and to ensure value creation for our partners. Proximity and strengthening of the reseller is the challenge in the service stations. Now the future is partially here. The convenience stores is not a marketing tool to sell more fuel, but it is now an important destination in the daily journey, of mobility of our consumers. So there is a -- IBM (sic) [ am/pm ] is being more and more professional. IBM, that is already the biggest -- the ABM (sic) [ am/pm ], which is the biggest convenience network in Brazil, the ABM -- am/pm. Now we have to create value for us and for our resellers. If we and our resellers and our partners that are our franchisees, if we really want to make money in that, we have to learn. We have to be the best convenience stores in the country. That's as simple as that. This is -- so for 2020, we're going to have 50 stores that are going to be proprietary operation. We have to have a model of products and stores, which in fact, brings us value, and for our resellers, this is fundamental, so that we can recover and grow again. So we're going to work with different models that are in test, working 12, 24, 36 months, so that we can accelerate and have the recovery of our own network and our franchise network as well. Now the am/pm is being tested. We already have an urban store, which is our proprietary store, working in Rio de Janeiro, and we're going to inaugurate with these new concepts. We're going to inaugurate another 150 or -- to 200 stores. So using the concepts that are being tested and developed here, so the am/pm network with a lot of investments in the mix. And site location, site location and intelligence is fundamental for a business like ours, and this is what makes us believe that the am/pm, which is a leader company in this industry, is going to continue being a leader in a growth cycle that we see with enormous potential for the coming years. Very different from what happens in the market that are already more mature, so the penetration and the habit of using convenience stores in Brazil is very low. And it is growing in an accelerated way. It seems very clear that there is a potential and a trigger for the future. This is our vision for the am/pm. Another retail initiative, which is Jet Oil, it's also one of the biggest in the country. But there's going to be a rebirth. So Jet Oil has to be the am/pm for cars, it's going to be a complete place that it goes beyond just changing oil in your car. But -- that we may be the really -- the real -- and managing, giving assistance to our customers' cars. Our vision of the future is very clear. It is independent what is the energy model that you're going to choose. But we want people -- people are going to continue. There's going to be people moving around. There's going to be more and more mobility. And cars are going to make these people move around. And these people in these cars, they are going to demand services that are more and more flexible and more and more complete. This is the vocation of our retail. This is the vocation also of Jet Oil. And for 2020, you will feel operations with the objectives of being able to expand your model of products and services. Now these retail businesses that we have is for the Ipiranga consumer. So the objective is to get closer, to have a relationship with our consumers, be more involved with this consumer. This is why in 2019, we accelerated greatly our 2 main assets of relationships. First, there is the largest loyalty program in Brazil. We have 150 partners that are very active. We already have more than 1/3 of all the Ipiranga supply in Brazil. There is a transaction of accumulating loyalty points or redeeming something. So this shows the potential of this program. On the other hand, it has reached 3.7 million users paying to use fuel through this app. It is the first app for discounts payment here in Brazil. And every month, it keeps growing. In December 2019, we attained 11.3% penetration in the Otto cycle pump sales. And they have already been paid with this app. So this represented in the year a volume of BRL 4 billion, as Fred mentioned at the beginning of our day here today with you. Well, these are 2 assets, which are extremely [Audio Gap] to go further, they want us to expand these apps so that -- have more benefits. They don't want only the fuel to go into the am/pm or the Jet Oil. Since last year, they already accept the fuel, but they want this [ platform to be ] relevant for these consumers. This is why our business unit and the digital relationship that we created last year is preparing to become autonomous independent. We are building an independent company, which will continue to be the loyalty program and also discounts on the fuel, but it can go even way beyond. This platform can be developed and it can transcend Ipiranga, bringing more value to our consumers. And André, who is going to speak next, he's going to talk about our investments in this direction. Now retail, to support itself in time with refeeding -- and this is a very strong brand and very powerful here with all these transformations, with all these optimization, cost reduction and reallocation of capital that we saw in 2019, we have been very cautious to protect the investments in our brand and have consistent messages that our brand takes to the consumer. We have done this very successfully in 2019. We have followed this very frequently every quarter with market research, which are done by independent companies, and we are the best -- have the best recall, the best prestige and the brand that has most referrals for consumers and retailers. So this is something very important for the company. We don't stop here. We already have on its way a revolution in the Ipiranga architecture, so that we can adapt our strategy, the strategy of our brand to this environment that we see with business units with more autonomy, where our products and services are going to gain the -- more visible so that Ipiranga brand can have other attributes, which is convenience, innovation, digital transformation, important attributes that will add to the brand name, and then this can be used to strengthen the brand, giving it a new leverage. This is end of our -- at the end of my presentation, I will give you like a spoiler of what we're going to be doing next year, be more visible with our products and services. So these initiatives in our retail, which are complemented by other new investments like ICONIC, which is the leader company in lubricants in Brazil, and it has been doing very well and it is growing enormously. And it has a possibility of expansion, which is very substantial. Or the pro-fleet, which has its own innovative system, and it's called Pró-Frotas, and they have made a difference in the management of fleets and has been growing it in an accelerated -- or Ipiranga online with products and services for our resellers, focusing on our resellers and for the resellers' teams. So we have a set of tools, which supplements this, and we don't want to be just one more service station. We want to be the best complete service station in the country. This is the challenge of our team. This structure, working by -- with independence but everything integrated by a marketing strategy in relation -- with a good relationship with the consumer. It has the strong power of triggering and adding value for us and to our consumers. This is our vision. This is the vision of our retail activity business. But Ipiranga is not only a business, our corporate is very robust, is very significant, very important for our strategy. And so this is something that gives us the scale, which is enormous. It guarantees our competitiveness. And we're also there with the new structure, focusing on quality, with the segmentation being more segmented for our customers. And we're also expanding our vision so that we may simply not -- no longer be a gasoline station selling services, no, we want to be a complete physical and digital services, full service, operating and managing everything for our customers. This has given us relevant results in 2019. The results of more proximity, more segmentation has given us good results. This is an activity that has been -- we've been working on a couple of years already, and we are way ahead of our competitors in this vision. So this is another very important pillar. And of course, we cannot simply be only thinking of the [ mermaids ] of consumption and retail, we are a fuel distributor. So if we do not have -- appreciate -- to give value to life, if we don't buy very well and distribute efficiently and if we do not have a complete and total obsession for low cost and discipline in capital allocation, we cannot guarantee competitiveness for the retail business for our consumers. So in this direction, we are committing more than BRL 500 million in the coming 3 years ahead. This is the investment in the city called Barueri, which will give us our competitive advantage, the main -- for the main region in Brazil, which is the greater São Paulo area. So our investments are to recover infrastructure north and northeast, which was lost when Ultra bought Ipiranga, the north and northeast of the infrastructure. Everything in Ipiranga stayed with BR. And since then, we are trying to sort of regain this infrastructure wherefore the investments in the coming years are very focused exactly on this. Our cost efficiency program, we have 3 main pillars: one is organizational structure to guarantee that we have not only a company which has high productivity but also that we have an organizational dynamic which is more flexible, more horizontal, with less levels, organizational levels; and a matrix system to see our -- matrix budgeting to see our costs; and lastly, logistical optimization, this is where we have the potential. This program has identified BRL 200 million in savings over 3 years, of which we are investing to capture BRL 100 million still to be captured. We started at the end of '18, and it will end at the end of '21. Now all these transformations, all these changes, they start from inside and going out. This only happens if and with people. So a big evolution of our organizational culture is on its way, so that we may become a lighter company, more agile so that we don't have to carry extra weight when we have to improve our growth, a company which is more flexible so that we can adapt better with the change in transformation and a company which is -- have higher performance, and we want to be more connected with our customers and resellers so that we can anticipate changes. This is going to be a company with more agility, more flexibility, more data-oriented. This is our objective, and we are doing this, accelerating our engine with a turbo engine, and it was created [Audio Gap] 2019, and we've already trained 500 professionals that are already being impacted. And we have mapped 500 start-ups, 50 of which we already have a relationship with, we're already working with them, identifying possibilities of improvements and new products and services. So to speak a little bit better about what is happening in Ipiranga at this moment, I think this is the way of describing what we are experiencing, this frenetic moment because we are really experiencing a moment with a lot of things happening. I would like to show you a video, which will help more than words to give you an idea of all of this. [Presentation]

Now looking out, we believe it's very difficult for a company to be successful and to sustain their success in a society that is a failure. So as Fred said in the beginning of the presentation -- of his presentation, we are revitalizing our initiatives in sustainability, and more and more, we take on this role of promoters of sustainability. We would have an important place in the lives of people, and we must have very transparent initiatives on the subject. So we have a zero carbon program since 2007. Since then, we have been working on carbon reduction. In Scope 1 and Scope 2, this is what we'd neutralized in carbon emission, and we help our clients do the same. Our intention is to make all these initiatives transparent, and in 2021, we are preparing to issue the first Ipiranga sustainability report. And I would like to mention a very important program for us, which is that of diversity and inclusion that we launched in 2019. With this program, we want not just to welcome what is diverse, but we want to stimulate -- include and stimulate diversity in our daily lives because this makes us stronger. These are very important and very dear things to Ipiranga right now. Now moving towards the end of my presentation, I would like to leave with you a summary of what our vision is for the next coming years. Not only 2020, but beginning with our motto, which is as Fred mentioned when he spoke about Ipiranga in his presentation, the focus must be on profitability and gradual growth in market share. So all of these initiatives, once they start bearing fruit, will result exactly to that. To accelerate the retail businesses, to consume -- the consumer relationship platform, infrastructure and competencies of supply and trading, to our obsession for operational efficiency and capital discipline and the transformation of the Ipiranga culture. This will allow Ipiranga to have another cycle of 80 years of much success. We have to continue holding on to our values of making the EBITDA grow. There has been a growth already from '18 to '19, and we shall continue in 2020, even in the very turbulent short-term scenario we have right now. In short, this is what we expect. And I can tell you that I see today an Ipiranga that is highly energized, highly mobilized. We have huge challenges ahead of us, but we have this highly capable team to deliver the results. And we have no doubt we shall deliver them because there is one thing, a complete company, only... [Presentation]

An Ipiranga you'll only find in Ultra Group.

Good morning, all. Do you hear me in the back? Thank you, Marcelo. I was thinking to myself, how can I keep the momentum of the presentation after the spoiler with new Ipiranga campaign, saying -- you -- [ there's only there ], this is the translation of the motto for the new campaign. Anyway, I would like to talk about 2 corporate initiatives Fred mentioned in the beginning, which are very important for what we've been doing in terms of other opportunities we believe we have, and that will generate value for our shareholders and stakeholders. Along the second half of last year, we worked on the creation of a venture capital initiative, corporate venture capital, for some objectives. And this work concluded in the launch of an initiative in the beginning of 2020, and we're beginning to work in that way. Now this initiative basically consists in the creation of a fund for corporate venture capital for the purpose to invest BRL 150 million over the coming 5 years. This is not going to be invested immediately. You know well how this works, the venture capital traditional activity. But this is not a venture capital proper. The purpose of this is to use our ecosystem in business, the Ultra businesses that are present in the lives of people, businesses that attain and affect a very large number of end users, and that also take into account more than 16,000 employees that we have in the Ultra Group. This activity aims at finding business opportunities that are adjacent to our businesses. To use a very current word, this fund is not going to be agnostic to our results. [Audio Gap] shown our effort to approach start-ups, and we have several other initiatives in the sense of making start-ups feasible using our venture capital because normally, when you find a start-up and you try to bring it into our corporate life, the dynamics of these companies that -- these start-ups that are agile, light, well, they are hampered by entering our own structure. So ideally, we should support them in their own style. So this venture capital is not agnostic. It focuses on adjacent start-ups, and there will be an Investment Committee that will make decisions concerning opportunities, [ with ] its own governance, allowing for a lighter, a more flexible performance. This is only just beginning. And as I said, the target is to invest around BRL 150 million in the coming 5 years. The other initiative Fred mentioned is the creation of our shared services. As you probably know, Ultra and the corporate area of Ultra's for many years was already providing back-office operational services to the 5 companies in the group, and we decided to better organize this activity using our Campinas unit in order to have like standardized services, aiming at more quality, more efficiency, optimization of cost, investing in technology to improve the processes. And when I talk about the development of talent, it's very important because this is some work we did for collaborators. I believe people devoted to CFC, once they are trained, start measuring services better. They start to understand the services better. And in the case of a corporate service, such as the one we have in the financial holding, it is very important. So I will talk a little about the businesses and how they are connected to everything that was said by my colleagues so far. This is a new initiative. We have never published guidances before, but we thought this would be important. And beginning with Ultragaz, I think Tabajara made it quite clear that Ultragaz is a business that has reinvested itself a lot. They have this capacity -- innovation capacity in a market that doesn't grow much, but they are still generating value in the last few years. The return on the ROIC is considerable. And this is a guidance. This is the CapEx. We announce it at the end of the year, as we always do. But as Fred said, as of this year, our intention is that with publishing the results of the fourth quarter, we show results in EBITDA and CapEx. In the case of Ultracargo, they continue to invest to solidify their position in the market of bulk liquid storage. This company was substantially just for storage of liquid bulks, but they focused on operational efficiency and the leveraging of their capacity. Well, this market growth, thanks to the increase in demand, there is more demand than supply, and we are investing and expanding. We believe we can have significant growth with very good results for Ultracargo in 2020 and the coming years. Oxiteno, Parolin has given us a lesson in chemistry, even if we're not specialists, but it showed how specific the Oxiteno business is. They had a difficult year last year, but we see considerable recovery from 2020 on. Of course, the exchange rate is something -- is an important element, but there are other factors that may reassure us in terms of having a good recovery in the results. Also, in terms of the CapEx, they have only just concluded an important investment cycle. We are now at a CapEx level that is lower. But I believe the goal here is to make it grow. Fred always says that in the case of Oxiteno, the purpose or the goal must be execution and execution and execution because this will generate lots of cash in the next years. In Extrafarma, we remodeled our strategy, and it was very important. We started to focus in infrastructure investment, both logistics and IT, and we worked to generate cash. For the second quarter in a row, we had this profit. And the results are quite important in the case of Extrafarma. In the case of Ipiranga, the continuity in recovering, we've been saying in the last 3 quarters we see a process of improvement in market participation and also in profitability. In 2009, we started -- in 2019, we started to recover. We see a trend here in the recovery of our results. And after a sequential reduction in CapEx in 2017, '18 and '19, we see a recovery start. And what is interesting is that you, analysts, are going to ask us many questions. The number of petrol stations was between 200 and 250. And you're going to ask us how we're going to select the new spot for the new stations. Well, this is a high generator of cash. It has been so far, and it will continue to be. With that, when we look at our consolidated performance, and we add up all of the results we have seen so far, we see a recovery in the Ultrapar results for 2020 when we compare that to 2019. The recovery of results will also come with generation of cash, and we see the growth of EBITDA from 2020 on. And looking into the guidance, we see that all of the businesses present a growth in EBITDA for 2020. And I think at this point, we should explain this [Audio Gap] Fred has mentioned this as well, but I think the main reason here has to do with the segregation of our digital initiatives from Ipiranga and with Abastece Ai and Kilometers of Advantage, the 2 campaigns we have, we are investing and putting together a structure by hiring people, developing the business in order to make it an independent business. And so this line of in -- which are in the shape of expense is shown here in this lower line. It doesn't come out of Ipiranga to go to the holding? No. Right now, we are developing the business. But our clients want more. And so we are investing in order to develop a business that will bring more possibilities to our consumers that belong to Abastece Ai and Kilometers of Advantage, the 2 campaigns. If we have this digital platform, we'll be able to accommodate many more clients. We want these initiatives to be more flexible, and we want to show them separately and in detail for you to see the details. Now in terms of cash generation, there are 2 important comments. The first of them relates to our CapEx budget for 2020, showing a more positive view regarding the economy. You can see the curve in CapEx, and we're investing for the future. Now the cash, the operational cash flow, a dent here in 2017, and then again in 2019 as compared to 2018, but it's back to a positive. In 2017, we started this tendency to recover. And the dents are a passing effect. Now our leverage and the debt profile is the following. For the last 5 years, we have been working on the adjustment of our debt profile. We have changed the profile of our creditors. Instead of a bilateral debt with banks, we now have the capitals market. And we believe this prepares us for future growth that makes us ready for other investment opportunities there may be. So we are working to deliver the guidance we showed you, clearly, with a reduction in leveraging, taking us to more comfortable levels. And with this profile, we will have the capacity to take higher flights. I close at this point. And for the Q&A session, I would like to ask you something. You were issued questionnaires, in paper, I would like you please to fill them in and leave some just outside this hall when you leave. Now lots of people are listening to us via our webcast. And so please ask your questions into the microphone so listeners may understand you. We are dead on time.

I have 2 questions. First of them related to natural gas. Does Ultrapar intend to go into this new market? Are you considering that? Or will the importing of natural gas continue? Second question has to do with refining. What is the synergy with Ultracargo or with Ipiranga with the existing refineries?

Okay, let's both reply. In terms of natural gas, we are considering it. We have a small team devoted to studying this sector and the value chain. Well, there's much confusion in the market. LPG is a different market chain. And we believe in marketing and distribution, we have enough knowledge in Ultragaz to take on natural gas as well. But we see this to happen further on in time. We don't think this is going to happen immediately. You mentioned the issue of gas, petrol. It is a complex case because this company has a minority participations in several states in Brazil. So it seems to us that the design is somewhat challenging because you become a minority player in various states. So we are looking into the value chain as a whole from distribution all the way to the end consumer. We believe the privatization of assets will bring differentiation and prices because volume predictability and long-term commitments don't mean anything differently from the rest of the planet, and importing mechanisms in the case -- in case -- it's virtually impossible to import LPG nowadays.

In terms of fuel, it mostly belongs to Petrobras and Transpetro. Now we believe this integration will depend on who the players will be to operate this activity. If it's us with or without partners, the several factors are going to define the interests to be aligned because we may have a totally integrated operation like you see in the U.S. and Europe, but even then, there is much synergy to be planned, planning inventories, pricing, et cetera. So we are interested in analyzing it carefully, and we are doing it.

And where would it fit in the capital structure?

A lot depends on the society. On the partnership structure, and the leveraging can be twice -- 2, 2.5x. We see lots of possibilities and abundance of financing possibilities to include this activity in Ultrapar. Another point to be mentioned is that it depends a lot on the valuation, and how this is going to be proposed. I believe this is a high cash generator. And once it is part of our activity, it will quickly reduce a possible leveraging increase that it may have caused in the company's balance sheet.

Luiz Carvalho. I will summarize my question. No, I will go back in time. In the beginning of this decade, or last decade, the group made investments that were very useful [Audio Gap] In 2015, there was a perception that part of the company's businesses came to maturity -- or maybe the markets came to maturity. And this made the group decide to invest in other businesses. Oxiteno, and you have a plant now in the U.S., Extrafarma is a new business and Ultragaz itself. So in a way, this capital allocation must not [Audio Gap] So the question is, how can we understand the capital allocation from now on, maybe the group learned with past events? And what is the lesson going forward? And what are the opportunities you see in refining or in natural gas? The second question, if I may, refer to Marcelo. In the last few years, we saw mostly Ipiranga and Shell having a ball. They were dominating the market because Petrobras was involved in so much corruption and so on. Other players died out. And we now see a very competitive market from now on. Global players coming to Brazil, Total coming back, BR coming back. And at the same time, we have a very important landmark, which is the refining monopoly. I would like to know what the company thinks over the coming years in terms of competition. And how can you differentiate from the market to resume the level of market share and image you had in the past?

Feel free to comment at any point, if you wish. Anyway, in terms of capital allocation, it requires lots of pragmatism. We're not good at everything. We are good at a few things. In the last few years, we had much capital allocation in terms of the CapEx. We had this investment at Oxiteno and in order to expand the Ultrafarma chain. Well, all the flagging of the new petrol stations can be considered an investment as well. Now discipline is essential. And clearly in the last few years, we have made a big effort to make quality investments. Well, the history of Extrafarma, well, it is a new chain altogether. All our businesses have this growth potential. And if we focus on distribution and on the chain, we have Ultragaz and Ipiranga. And the infrastructure, we see that the market is going to grow for another 15 years, at least. And the peak of fuel demand in Brazil is further ahead in future than in other countries. And we know this terrain very well. We have competence. We have the team. We have a brand and we have the knowledge of how it operates. So we are beginning to shape our long-term vision to understand what comes afterwards.

Well, everyone was very much excited about investment here -- about growth, rather. But there is a very important process here to be developed by the Board and the whole administration focusing on diversification, investment, geographical expansion. But so far, we are allowing businesses to keep [ operating ] and I would like to complement a little because I think it's 2 different things, Luiz. I think Fred made clear in his presentation, and this is what we are preparing. Our main focus to allocate capital, time and energy was a chain of oil and gas where our business has a strategic synergy. When you compare the present to the past, there is a difference between capital allocation decisions. And you mentioned the cases of Alesat and Liquigás. We are sure they would have been a good capital allocations. However, CADE wouldn't let us by them. So from the viewpoint of capital allocation, the decision was correct. But for some reason, at that point in time, our antitrust laws or department wouldn't allow us to buy Liquigás.

Is there a type of discussion between management and the Board about the composition of the society? As you said, the group owns 100% of the 5 main businesses. Would you ever think of adopting a partner for Ipiranga or something? You cannot give us details in case you have these plans, but they are -- is there anything you can say about it?

Yes, you're right. We cannot talk about it today. If we have something concrete, we shall inform the market. However, our goal is the generation of value. If for that we see a partnership with -- that will allow us to get there, we will look into it. It's not true that we only operate with companies 100% controlled by ourselves. We are not looking for partners. In some companies, we have. But if partners turn up that will enhance the value of these companies and enhance the possibility of profiting, then we're open for the possibility.

Well, thank you for your question, but I'll be very straightforward in my answer. Our vision -- in our vision, both the independence of BR and the coming in of new players, such as BR and Total, are very welcome in a market that is excessively fragmented. You cannot have a market with 200 players because this is a business that requires scale and logistics and so on. So even if these companies come to the market, they will only make the competitive environment more rational. Now if we're going to go back to the past margins, we're talking about structural aspects.

I'm Vicente from Bradesco BBI. My questions refer to guidance. You mentioned an exchange rate of BRL 4. Well, this seems a little too optimistic in the current scenario, and I would like to know what would your guidance be if the exchange would be BRL 4.40, for instance. We know that every BRL 0.10 on the exchange orders BRL 10 billion in the EBITDA, but if you could perhaps give us an idea as to what the exchange rate. Also concerning the expenses of the holding, it has a lot to do with the acceleration of investment. Could you separate for us the DNA of Abastece Ai, which is one of the promotions -- one of the campaigns they have at Ipiranga?

Well when we do this, it's all based on a budget process that was performed last year. I can tell you that it doesn't make sense to change that because it's difficult for just anyone to guess what the exchange rate is going to be. Nobody can get it right. If you say it's BRL 4.40 or BRL 4.50, you have no idea. But we shall adjust that along the year. You're right that there is an impact when you value or devalue the currency. But 2019 was a year when the currency devalued the real. But you had problems from elsewhere. So this is a suggestion of exchange rate but not [Audio Gap] tailwind gives you the good results you expected. We shall be adjusting the exchange rate, in any case, in our calculations. Now of the BRL 200 million, about BRL 80 million is investment in expenses, really. Now the beginning of the activities requires investment that will bring in results in future. You will reap the results in the future. And this investment was about BRL 80 million.

Now concerning those BRL 200 million, you have 2 entirely different things. Now the cost of the holding is also very important when we discuss the management model. I believe that for all of you, investors, and those of you who follow our company, this makes the cost of the [Audio Gap] This allows André and myself to demand from ourselves cost and clarity.

I am Duarte from BTG. I would like to ask 2 questions on guidance, and then another third question. Concerning the guidance of Ipiranga, if I'm not mistaken, 2019 had an extraordinary impact from the exclusion of tax, ICMS, PIS/COFINS. Was that adjusted? Do you believe this tax benefit will continue in 2020? Because maybe in your EBITDA, it will grow less than it is growing in your calculation. Now considering your strategy, from what I understand are, these BRL 200 million are a point of departure, right? You are creating a CCC and some of the technologies, et cetera. We can imagine this figure growing in future or not. So I would like to understand what we should believe. The other question, André mentioned something, he mentioned 250 petrol stations. Last year, we were surprised by the high number of inauguration of stations, and this was accelerated at the end of last year. It's important for you to mention how many were canceled in total for us to know how healthy the company is.

Thank you for your question. When we talk about Ipiranga, this base of calculation of taxes called PIS/COFINS, there was some impact in 2019. We always disclose the other operational results. We don't see a big difference. However, perhaps, it had more impact in 2019 than it will have in 2020. So this statement that you made that looking with this vision that the growth will be more than what appears here, maybe you are right. Now regarding the holding expenses, we do not expect -- but we have to separate things because one thing are these expenses, and there's a technical expense. I don't want to go into this. But when you think about the holding expenses, it goes a little bit up in 2020, simply because of profit sharing below the goal in '19. And you always make the budget for 2020. So there is an adjustment. Now the BRL 80 million, this is the result of this new business. So during the year, you'll see when this is more mature. But we will give more visibility to our business, and we can say that it would be like a 6th business. Well, as this is going to grow and flower at the beginning, it just consumes a lot of cash. It has to start generating a result in itself, the order of [ grandeur ] drops. And this is a number that we will pursue. There's no -- is not going to grow in an uncontrolled way.

Well, we can go in more detail if necessary. The fact is that we foresee, for this year, a recovery in growth in 200 service stations. In 2019, the number of new inaugurations was above. But what we did is we left a lot of businesses or markets that were not really core to our business, what we used to call -- that you only buy it when it was interesting. But we had to sort of filter and select some businesses. We still have a few things to delete. But in 2019, we eliminated a lot of things, companies and activities that had nothing to do with our core. So this now will give us a good recovery. Now very little impact in volumes because this represents a very small share of the business, the -- they're marginal volumes, in fact. But it was sort of polluting our numbers in our network than -- it was not part of the network with our flagships that we consider or flags that we consider.

My name is Regis from Crédit Suisse. Well, Ipiranga, you were talking about fuel pricing and perhaps you're now more a price taker. I would like to understand what you see in this new system of pricing, the number of margins. Is this a growth and drop? Is there anything in return in this industry? Well, it's not that I want to know if the number is going to go up or down. I would like to know what is the reasoning. What are the considerations you make about this? Another topic I'd like to understand better, if possible, how do you imagine the end day of the kilometer that is becoming more important with the loyalty program? And how does this -- and also, I would like to hear about refinery. Are you going to invest more in more conventional, more traditional? Or is this going to be more innovation? And what are you going to do to segregate this more innovative and isolate the value?

Well, this is a million-dollar question, isn't it? I mean how do I -- how can we say how the margin is going to behave? The issue of pricing, just to make things very clear, the pricing model is the one that more and more is going to be based on artificial intelligence that maps the volume and the volume exchange and the prices of each one of the micro market. This is why it is statistically a model that needs time. You set it up, and then you start following and how it has -- it curves of elasticity. And these are models that are quite complex, mathematically speaking, and it's almost impossible to say. Even the owner of the [Audio Gap] the person that is present there to give the fine-tuning of this optimization because each service station, if you increase BRL 0.05 or BRL 0.10 in the price, the other will react with BRL 0.10 and BRL 0.05 on the other side, the third will also react. So it's practically impossible to be able to map this in an effective way, and we -- to be able to maximize the strategy, to maximize on capital, depending on the strategy of each operator at that moment. Now this intelligence of our pricing tries to show, for us and our resellers, we want to work on the optimum point of the trade-offs, margins and volumes to maximize the total result. Now the added margin in this industry, I think it has come to a point of anchor -- anchoring with this last compression that has happened in the last 3 years. The margins in the system of distribution and reselling have been compressed. I think there's very little space to keep continuing. It's -- the resellers are also very frail, financially speaking. So this more added margin is going to keep on happening if you have a source of supply that artificially generated product availability. But in our opinion, this is our vision, they will tend to recover with a small recovery. Now we do not -- no longer imagine the moment that already existed in Brazil in the past where you had the unique factors, which will not repeat at least for a long time. There was a growing demand estimated by a fleet that is being subsidized, growing in a subsidized way. Fuel prices maintained artificially low to contain the inflation, so growing demand of fuels in an environment of places that permitted the chain as a whole to benefit from high margins. Now this scenario that I just mentioned, with this set of factors, I think it will no longer happen. We might have a pickup of more consumption that might favor more of the margins of our chain. But the truth of the matter is we have to learn how to make money and add value with a scenario that exists, or a little bit better than this, which is what we're betting on. I think you can make money and you can be far more efficient, whether it is in fuels itself or in all the complementary business that a network of 7,000 points of sale can bring.

Well, the second part of your question, Regis, what is the endgame. The endgame is for you to use this ecosystem of kilometers of advantage through the app to enlarge the ecosystem, to expand the use and to expand the users of this app. As Marcelo said, both the loyalty program and the -- knowledge is something for the supply of your relationship with Ipiranga. The vision of future is to fight for this space and people to use this to do other things, including to have a cash back so that you can consume in other retail outlets. But I don't want to give a lot of spoilers because people are working on this model. Now [ distribution ] of capital allocation downstream of oil and gas shows that this is an initiative that could be managed with a different kind of governance. We are very clear about this. We do not see -- rather, we need to have a system of governance. We have even designed this in a different way than from the other business. We need our own governance and with partners to accelerate this. So another management model that Fred [ showed us ]. This business fits in very well. This is what it was designed for. So I think it coexists with the investment that is being thought about in the area of downstream.

My name is Carlos from [ Totem ]. I didn't hear you talk about electric cars. Are battery go down because I think that cars -- the price of cars in -- electric cars in Brazil is very high, but I think it will go down.

Yes. Well, yes, we are thinking about this. Electrification is a world trend. In fact -- but in Brazil, I think, it's going to take at least 1 decade. Regarding this process, the reasons are our own infrastructure, but also that biofuels, ethanol and biodiesel are in itself an alternative with a very smaller footprint, carbon footprint. So the demand during the [ '30s or '40s ], I think, it's difficult to give you clarity. But I can say the following, Ipiranga has initiatives along this line, but it's more sort of in lab. We have a partnership with BMW. We're going to have chargers all along the Dutra Highway. If you have an electric car, you can go all the way down to -- from São Paulo to Rio, we're going to have chargers. We have chargers, but the use is still very minimal because of -- the car prices are very high. But we are -- whenever requested, they -- when people ask us, we do install an electric charger. It's still something very, very small is -- in its infancy. It will expand certainly.

So long term, what's going to happen 30 years from now?

Well, of course, we have to start building for the future. But there are opportunities that are short term. Well, thank you very much for the questions. We're going to close the meeting now, and thank you for your attendance. [Statements in English on this transcript were spoken by an interpreter present on the live call.]