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

Good morning, good morning. Good morning to everyone who's joining us here today and joining us online. It's a cold and rainy day in Sao Paolo. And before we begin the presentation, I've got some safety announcements for those of you who are here in person. We won't have any fire drills or emergency drills today. So if you hear a siren, we do have a team ready to direct you to make sure that you leave the bonuses safely. We have a full morning and we'll start with our CEO, Rodrigo Pizzinatto and then we have the business presentations. Alexandre Palhares talking about finance and then Alexandre [ Lutz ] will also make the closing remarks. Then we'll have a Q&A session. if you're here, you can ask your questions on the mic. And if you're online, you can send us your question through the chat box on the platform. And if we have enough time, we'll answer those as well. So have a great morning, and we'll start with the video. Rodrigo Pizzinatto, can you come up to the stage for the opening remarks.

Thank you, and have a great morning. Ultrapar doesn't just allocate capital. It allocates knowledge and values. [Presentation]

Fantastic. Good morning. It's great to have you here with us again for Ultra Day. And talked a little bit about what we're going to do this morning. We'll have four presentations about the businesses, but we'll have one additional one iconic. It's our JV with Chevron for lubricants. So we'll have some information about that business as well. So without further ado, we'll start by talking about Ultrapar, we got some feedback on Ultra Day last year to have more objective presentations. So our challenge today is to have ultra-morning. The presentation should be shorter. And even with iconic presentation, we'll have a shorter agenda. So to start with Ultrapar, we'll start with safety, which is a nonnegotiable value and our condition is to have a license to operate. And the pursuit for excellence and value creation is what we always aim for. You can see that our lost time incident rate has worsened this year. This is a consolidation for [ TREI ] at Ipiranga and [indiscernible], which have a rate that is higher than Ultrapar. And we also had something happened at Ultracargo and Fulvius is going to talk about that in a minute. This has been our journey over the last few years. I'll try and summarize the last 5 or 6 years in a slide. Everything started with our portfolio in '21, '22, we sold [ Extra pharma, Oxiteno and Connect Car ], we've changed a lot. Our capital allocation has made great progress to have a lot more discipline. We've made acquisitions over the last few years across the different businesses, Ultragaz with new energies and bulk, then network infrastructure. The delivery, bulk field delivery business and also all plan new terminals at Ultracargo and [ virtue ] LNG as well as the acquisition of [ Hydro Vias ], we've consolidated more than 70% there. In addition to allocating capital, the holdco also creates value. And this is how our managed model has progressed. We've got some macro principles here in terms of solidity, institutional power, how we conduct our teams and changes we've made to the business: simplification, compensation model, new leadership. So we're going to zoom into these topics over the next slide. And to start with capital allocation. When we think about cash flow and generated cash, these are the five main cash allocation decisions we make investing in the core businesses, investing in adjacent, which are around the existing businesses, thinking of a new business. And these are the three main things we consider in new businesses, an industry with good potential for growth and value creation, and we, as a shareholder has a leverage to create value and we'll make that business better by going in. And if it's an actual tangible opportunity to go in. If the price is compelling and if the risk is reasonable. Another option on we were highly leveraged was to decrease that if it makes sense in terms of risk. And when we have cash left over and we don't have enough options to have better allocation. You can do a dividend payout or interest on equity or share buyback. And this is the beauty of the whole process. a funnel with discipline and patience allows us to select the best projects with the best potential for value and return on investment. And this is what happened over the last few years. We had over 100 projects that we looked into and we concluded 14. So some figures, 21 to 26, [ Palhares ] is going to show you the return on these investments. I'm just going to give you a macro capital overview. In the last few years, we allocated BRL 28 billion across these five fronts. About BRL 1 billion a year is just to cheap business is going. That's about BRL 1 billion. That's why the dark blue doesn't change. So BRL 1 billion a year in maintenance CapEx. And in the last few years, we invested BRL 10.5 billion in expansion and productivity, adding up CapEx plus growth M&A and productivity. So this includes IT platforms to increase productivity, the extension we mentioned in service stations, bulk Ultracargo and [ Hydro Vias ] and adjacent businesses is everything we've done around the existing business. So we have the allocated capital in biomethane, renewable gas at Ultragaz, electricity at Ultragaz, [ Krispy Kreme ] service stations at Ipiranga. So all of that adds up to about BRL 1 billion. And new businesses BRL 2.9 billion, mainly coming from [ Hydro Vias ], which joined the company. So in expansion, we've got about BRL 10.5 billion expansion and profitability. We paid BRL 7.4 billion of interest on debt, then we consolidated Hydro vias debt, which was much more leveraged. So we're going to deleverage that. And we paid out also BRL 5 billion in dividends and buyback. BRL 570 million was buyback at around BRL 18 close to BRL 19. And out of the BRL 5 billion, BRL 2.5 billion was in 2025. And this doesn't include the dividend payout this year because it was only for the first half of the year and the first 1 was in August. But it shows the rationale as we generate more cash, dividends keep up with that. So that's the return to shareholders of the additional generated cash. Palhares will be sharing more financial information with you. But this is an overview, and then we can share all the figures in the IR website because it was going to make it very confusing here. So the capital -- to execute on capital allocation, you need a top-shelf team. And this is how we've been working on renewing the leadership. It all started in 2022. There was a succession at the Board. In 2025, we had succession at the Ultrapar leadership. And these are the 10 mandates that summarize what the ultra leadership is thinking about, how it's acting. It all starts with the license to operate with ethics and security, humility focusing on the long game, growing with value aligned incentives, continuous improvement, and that's what's in everybody's mind when we think about the ultra leadership. In terms of incentives, how can we make sure that the team at Ultrapar leadership is on the same page. This is for Ultra 1 and 2. In terms of compensation, 30% is fixed and 70% is variable for that group. Out of the variable, 30% is an annual target based on EBITDA and cash flow and 40% is a 3-year target, and it has two components at Ultrapar. Delta EVA, which is a value creation target for 3 years. And the return to shareholder target, which is the share price plus dividends plus the TSR. So for every 3 years, we have a new value creation target measured by Delta EVA plus share valuation plus dividends. If we take the 100 people in the senior leadership, and we add up all the shareholders that were received by the long-term incentives plus the partner plan at the company, and that includes the Board plus executives. There are 25 million shares which accounts for 2.3% of the company's capital. So that is what ensures we're all on the same page between the leadership, shareholders and investors. So to conclude my part, we try to summarize the seven pillars that summarize how Ultrapar creates value. It all starts with a high-performing team to ensure that the strategy is supported and that we have growth management. The implementation of the ultra model with capital discipline with a robust capital discipline, focusing on the long-term governance and incentives ensuring a commitment with the best. So that was my summary to you of how we see Ultrapar, how we have positioned the company to create value. And now Linden is going to come up to the stage to talk about Ipiranga. Thank you for your attention, and have a great morning. [Presentation]

Great. Good morning. Pleasure to be back here. I think this is my sixth ultra day -- or maybe the fifth, I'm not sure. I think it's the sixth. And I'm going to show you the continuity of the work we've been doing, and we've been reporting on that work with a great deal of transparency. So we'll start with safety, as Rodrigo said, safety is our license to operate. We've been making considerable progress at Ipiranga, which is a key matter to what we do. And the challenge lies in the businesses we're bringing into the Ipiranga system, as Rodrigo said, because there is a cultural safety gap, and we need to catch up. But as we acquire more experience in bringing in new businesses, working with new teams and creating that safety culture those indexes will definitely improve. It's been a very busy year in fuels. I'd like to say that it's been affected by two main factors. We don't know exactly how much each one of them will affect our business. But the first one is the crack down on illegal trade. We've talked a lot about that over the last few years. A great deal of progress has been made as of the second half of 2025 with benefits to everyone across the chain. Consumers, distributors, obviously, producers, importers, everyone who does serious work in this industry. And to the government, I was with Governor Ricardo Couto 2 weeks ago, and he said that in Rio de Janeiro alone, ICMS tax in the fuels industry, in 2026 has grown by 87%, and it's no different in Sao Paolo. If you add up Sao Paolo and Rio de Janeiro is a 40% growth in fuel ICMS tax, which goes to show the size of the problem we had to deal with and the opportunity that lies ahead. If we can make sure that this is indeed a new and safer business model in Brazil. Of course, there are still challenges. The positive side is that we are all creating that culture. We're all keeping an eye out to illegal practices, organized crime tax evasion. ICL is highly active. A lot of progress has been made, and they're still very active, especially looking at the ethanol chain serious businesses are also very active and keeping an eye on that ball. And we hope that this improvement continues. There's no turning back. And the second thing that has an impact on our business and everybody is going through that are the conflicts in the Middle East, which came after the conflict between Russia and the Ukraine, which when unsolved. And the impact that has on our business in Brazil is a disruption to pace. So cost price, everything is a consequence of that disruption in the product flow. And it's a very tight chain. Let me give you an example. A while back or a few years back, resellers used to work with a 10-day inventory. Now they have a 2-day inventory period. And that efficiency went to the chain, it's efficient from end-to-end, from the service station to the consumer. And if there's a disruption, if the Strait of Hormuz becomes an issue or if there's a logistical problem, if there's a deviation on the route, it does affect the business very significantly. And the world has to find different options. What we're seeing are countries looking for alternatives to mitigate the impact in different ways, but the fact is that there is a disruption in the pace and that leads to instability and supply. Brazil, like most of the regions has been finding different ways to do it. Ipiranga has been working hard on that, always prioritizing supply, especially to our clients, but also playing the role of a structural supplier in the Brazilian market. You keep up with the market. You're all familiar with that. At a certain point, Petrobras left the market. And the companies that have the structure to import and are able to have to cover that space that was left in the market. And that's what we've been doing. We've been focusing on insuring supply, insurance on efficient flow and focusing on meeting our client needs because that's when we show how important it is to have a brand like Ipiranga. Now all this dynamic seen in the market doesn't change what we find is our working journey with these four pillars that I've already mentioned. This is the North Star, our philosophy in the company when we need a supply that generates different options, competitiveness, we need logistic efficiency and extremely competitive value proposition because of everything that Ipiranga can deliver, and we can use our brand as a great driver of engagement that our stakeholders that go to the end customers and our shareholders. This is our working proposition, and it doesn't change. It only strengthens us for dynamic disruptive moments like this. In terms of supply, I already mentioned a couple of things. When we go to the past during the 5, 6 years, this was one of the best decisions that we made to create sound training area. And today, we can see the great value that it offers. Our capacity to originate products in different places in the world, efficiency or intelligence system. To have a good view of all the dynamics in the world regarding fuel supply. This helps us in our business. It's not by chance that we grow 50% in the spot market in consumption volume, the volume of network and this is leverage because we have a good supply model. be internal or through imports, especially during these moments. Now from the logistics point of view throughout the past 5 years, many times when we had a project to create BRL 800 million in efficiency , we just wanted to catch up. And we thought that this was necessary regarding best practices. Now this effort was done, but this doesn't mean that it has come to an end because logistic efficiency is something continues. You are always with the opportunity to improve processes to optimize your fleet to improve contracts. And this is what we have done in the past 5 years. Now we're embarking in a journey year-on-year, and we're finding different opportunities here in logistics and distribution. Now the network has harnessed this moment. And we've benefited a lot from this moment. the major companies and the Ipiranga brand has a very -- is a very important brand in the market. With this, we're growing our network, the adjacent program like AmPm, [ steel wool ] and general, but there's a qualitative effort behind this. As you can see, we have service stations with a new image. We're talking about 60% of the six service stations our product sales profile is growing. These are premium products, and we're improving our products profile. We remodeled that [ KMV ] has gained momentum in the market in terms of creating more loyalty amongst our clients. And this is a good moment for the network, but it is a good moment to pay attention to the network. As this is favorable for our brand. This doesn't mean that we have to lower the bar in terms of quality. This means that we have to raise our compliance bar. When you undergo moments like these, there are many people that operate under the shadows of the illegality and trying to find cover to operate their business. We cannot let this happen. We have to pay attention we need an investment with quality. We need discipline in compliance to maintain the quality of our network because this is a long-term growth. Now regarding convenience stores, we follow the same journey. I've mentioned this a number of times. We focus strongly to add value to the AmPm brand through strategic partnerships, and we've done this throughout the year. Krispy Kreme is a good example of this. We brought the initial idea, and we wanted it to be an important offering in our convenience stores the success of Krispy Kreme has been so great that we haven't been able to do it fully. We have events every now and then, but we've had specific events because we cannot produce what we need to sell and it is a great success and this delays the offering in the store. Now Krispy Kreme always offers an agenda of a retail knowledge. It's very important because we've tried to understand this much better in that. Now in B2B, no novelties, I've outlined a number of times. What we always pursue is the decommoditization of our offering in this industry, this was seen in a marginal way with low margins. It was important to dilute your cost to generate volume. But it doesn't work this way anymore. We reframed our customer portfolio. We've improved. We've seen segments that were more profitable. We participated very little to have an aggressive entry plan the maritime diesel is proof. We are growing in business volume, profit and in market share. And together with this decommoditization concept of B2B, we see the diesel retail operation that is no novelty. These were regional investments together with local partners the partner gives the operational expertise. They contribute with the knowledge of the region and we provide the governance structure include long-term planning that we discuss with the partner, and we put it into play jointly. Our story has been very successful. We have four businesses distributed throughout Brazil. all strictly within what was planned, if not better, with good figures, and this is a business line that you will see evolve in Ipiranga in the upcoming years. We always stress efficiency and what touches the efficiency and ERP platform much more updated than what we have today. This is a project that has been within Ipiranga for more than 2 years. Now -- but more than an exchange of ERP to gain efficiency, this is redefining how we want to improve processes. We want to adjust culture. We want to readjust our organization. So we have a much more efficient operation using this new ERP as a catalyst of this story. Now regarding people, this is the backbone of our business. I remember that during my first Ultra Day, when we were analyzing the different opportunities and the difficulties that we were facing. One of them was the difficulty in succession or successions that were necessary for the company. We worked strongly on the agenda and talent development, 84% of important positions are mapped with successors to take over these positions up to 3 years. We exchanged 45% of the executive team. 45% of -- so we invested strongly. We have invested strongly in talent development. So Ipiranga today is a company that is prepared to follow its quality journey. Now the reality, you can see in the organizational environment. This has always been a strong point, but we want to continue evolving in the environmental climate being excellent, to excel on this point. Now the result of all of this is a year, which has been very important from the financial point of view, and as I mentioned in the beginning, there is a market dynamic that helps us. But this is not just because of a conflict we have in here what represents practically a free fuel market in Brazil from the worst scenario from the regulatory point of view and tax evasion we are facing -- we are focusing to face these moments, but I believe the results have been very positive in 2026, and we're doing everything to close an excellent year in Ipiranga. Well, what I had was this. Thank you very much for your attention. I will meet you again throughout the Q&A session. I would like to call [ Bazanisi ]. [Presentation]

Good morning to everyone. It's a pleasure to be here this morning. He said he's his six utra days, my first ultra day. I will give more color to Iconic numbers. Starting with safety, Iconic since its creation, has safety as a value. This is a characteristic that came from our partners. And we've had excellent performance in the past years. We value 3 points on people, how we train and qualify our teams and strengthen the safety culture equipment as well. We have many equipments in our operation, how we specify, install and maintain and put them into play, maintaining our operations running with availability with not causing accidents or incidents, three would be process safety. How can we anticipate risks in our operation, reassuring that we implement safety barriers in order to prevent catastrophic events. Talking about the strength, we've identified four strengths. One would be it would be an infrastructure that you can't copy because of the assets that were applied here. Two, that would be technology Iconic, since the beginning has a center of technology, has the competency of R&D, and I will deep dive regarding the meaning of them because this is a strength, and it's the only dual brand enterprise because we were with [ Saco ] and Ipiranga. There are two iconic brands that are very present in the life of Brazilians that have allowed us to develop important competence that is brand management. And number 4 would be -- it would be the ecosystem of our partners. We have Grupo Ultra, with Ipiranga with 6,000 gas station, B2B that allows us to all the opportunities to sell lubricants and gas and other businesses during certain moments, we are customers, for example, Ultragaz has strongly helped to decarbonize our operations with biomethane in our [ Duca Casilas ] plant. And we also have sales opportunities with businesses that are connected to lubricants. And we have Chevron as a partner, a verticalized oil company. that is present in the three elements that make up lube-based oil additives and finished lubricants. So here, we support each other. And this is a global company with a global relationship with its customers, and we have state of the art technology that is incorporated in Brazil in our products and in our businesses. Now when we see our infrastructure, as I mentioned, the contribution of our partners' assets allowed us to be independent regarding the infrastructure to supply our customers. Therefore, we have a terminal in Rio de Janeiro and [ Sao Christophe ] that gives us flexibility and independence to import our inputs. Now Brazil, for example, is undersupplied in inputs. So it's important to import products in many products need for lubricants. We don't even produce this. So we count with imports, and we have a complete infrastructure in Rio de Janeiro. Now this asset was the only Ipiranga plant. It has allowed us to create new businesses with an investment that is marginal today. And we also have another industrial complex in [ Duke dacacias ] is where we produce all our lubricants. And the third industrial center complex that is coolants and grease plants in [ Osasco ]. In addition to this, we have an authorized distributor network this was excellent because when we consolidated our operation, we had like 50 authorized distributors and the consolidation allowed us to choose which were the best business partners. We do have a network with 80 distributors with scale and capillarity to service 100% of the country, but Iconic is present in for other countries that is Bolivia, Uruguay, Paraguay and Argentina and also servicing these geographies from Brazil with our distribution, and this allows us to reach over 100,000 customers in our country and Southern Cone of South America. We have the [ Duque de Caxias ] plant, and to discuss the technology center because ours is a Brazilian company, we had to develop our R&D expertise, and we kept that iconic and we opened a new tech center, which is state-of-the-art in Rio de Janeiro and allows us to work together with our clients, identify business opportunities and also understanding the different specificities and characteristics in Brazil to do with how to use machinery and equipment, the different characteristics of our fleet taking into account the Brazilian fuel matrix, which is very different to other geographies. So developing the ability to work with our clients has been something that sets us apart. It's allowed us to be innovative and to take innovative products to the market because we have over 50 professionals who hold doctorate degrees, masters degrees. And we also provide services to our clients to identify how our products are performing. And we monitor their life cycle enjoying our relationship with our clients to how we can continue to improve our product. We also have a services department in the technology department that helps us monitor our relationship with our clients. So two iconic brands, as I said, we have great brand management to find the right position for each of the brands. Ipiranga is very active in retail and in the everyday life of Brazilians. It's a very well-known brand. And [ Texaco ], which is a one owned brand internationally. It has a lot of technology. It's a high-performing brand and Chevron considering global trends and also including their technology in our products. And most of our distributors official distributors are also dual brand, which allows them to have the right skill and to operate more efficiently. So given the fact that we have two brands, we have a wide-ranging portfolio. We operate in over 20 different sectors. We have products for motorbikes, cars, trucks, the maritime industry, steel industry, different plants and mills, practically every industry that requires lubricants. And we want to be a one-stop shop for our clients when it comes to lubricants, greases and coolants. And that's why we have a wide product portfolio and our infrastructure has allowed us to start working on new businesses as well. And this is an example of something that happened precisely because we are part of our partners ecosystem. In 2023, we realized that given the inefficiencies in the Brazilian market when it comes to inputs, we could go into a new business, which is base oil distribution. So in 2023, we went into base oil distribution through Chevron, then we started working with additives through [ Oronite ], and that has allowed us to bring in new business partners to add to our offerings in this new business. [ Astelin ] is an example of that. They are our partners for base oil one and [ Nynas ], which is a Swedish company. And that has allowed us to work all of those areas through our partnership with Chevron to develop new partners here in Brazil. And the combination of those elements have led to very positive results. Iconic was founded in 2017. In December, it will be its ninth anniversary and its journey can be split into three stages. First, consolidation. We had to consolidate our teams, our assets, organize the company so that the JV could work well. The second stage was optimization. That's when we started to work on synergies and benefits from the many initiatives and projects that were launched since the joint venture. And more recently, the third stage is the stage of expansion. And that's where we are accelerating Iconic's development. So as I said, we've had some very positive results over the last few years with positive cash generation, which has allowed us to reinvest in the business and to continue to update our assets and compensate our shareholders. In 2026, specifically, there's been a lot of cost volatility due to the geopolitical conflicts, but because we have a robust business, that means at times of volatility such as these, we are ready to continue to supply, provide reliability and trust for the operations and to continue to meet the needs of the Brazilian market and all other markets where we operate. Well, that's it for me. And now I will turn it over to Tabajara from Ultragaz. [Presentation]

Good morning. Thanks for joining us. Over the next few minutes, I'm going to be talking to you about Ultragaz. And as Linden said, this is also, I think, my sixth Ultra Day. Actually, I've never counted it. Rodrigo challenged us to be much more to the point. So I'm going to talk about Ultragaz's recent journey, what's been affected our organization in the last few years. And then I'll take some time to talk about future prospects and what we'll be doing. So like everybody else, my presentation won't be very long, I'll go over a few points and share a few highlights with you. So I'll start by focusing on safety because safety is extremely relevant to the Ultra Group, and it's the same at the Ultragaz business. Because our main product is LPG. That means we have a great deal of responsibility. Our journey started in 2020, '21. We had a huge challenge. Our product has considerable operating risk, but it is an industrial business and household delivery business. So we monitor the product the whole time. We do have our [ LTIR ]. We've done very well, and we believe we can continue on the same track. Our company largely works with gas cylinders, gas bottles over 10 million bottles are delivered every month. Loading and unloading at a filling base and at the reseller. So we move -- fill bottles 40 million times, full bottle. So any incident, any accident if anybody gets hurt, that affects our indicators. So we are continuing on our safety culture, and there's the benefit of safety per se, which is considerable, but that also leads to operating efficiency and excellence, which is one of the principles to keep to our long-term objective. So we're highly motivated, and we're also very respectful and careful when it comes to safety. Let me share a few highlights about the LPG market with you. There are some specificities to our industry. First, the size of the market, the household residential market is one of the largest in the world in terms of the number of gas bottles and the proportion to population, one of the highest. It's used by 90% of the population. So the gas bottles or cylinders play an important social role. The Brazilian energy grid is also a highlight because it provides dignity to families, efficiency to businesses. So it's a core product to our operation. And something specific to our market is how complex the logistics are. It's hard to see a similar operational model that relies so much on road transportation. It's highly intensive, low inventory levels, so huge turnover. We always like to share key numbers. In Brazil, we delivered 13 gas bottles or cylinders per second. And we conduct surveys all over Brazil. We ask people how long are you willing to wait for a gas bottle and it's close to 15 minutes. Nowhere in the world do people expect for a gas bottle or cylinder to be delivered in less than 15 minutes. And that happens across Brazil. In the Brazilian country side, if you don't deliver it within that time frame, you lose the client. And we're present across all municipalities. And I'll conclude the LPG market by talking about the progress we've made, there's still a lot to be done in terms of regulation. It is the most up-to-date and pro-consumer legislation. We know of it ensures safety and quality to everyone this open trade and competitive market, and we need to make progress in the regulatory framework, but we do have the right ecosystem for that to happen. And we've had it for the last decades. Now let me share some details about the Ultragaz operation. We've got some excellent figures here. And the key message is our go-to-market and our relationship with our clients. It's clearly a very strong brand. It's a pioneering brand, we're highly -- we have a great deal of capillarity in terms of operations and resale. We want to -- we're going to give you more details about our strategy. And this is what we've been doing over the last few years, we've been generating positive results using resources intelligently reinvesting in the business to extract more value and to ensure its longevity. So that's a summary about Ultragaz, and it's a great asset for years to come. As I said, our challenge is to be objective. So I want to share the five drivers behind our strategy. I'll take a deep dive into a couple of them, but this is a key slide to our conversation here today and to address what we do. We start with safety as a value. And to the energy and LPG business, in particular, that is the basis for the development of our organization. Then a relevant footprint in key industries. That's the driver that has most changed the organization in the last 2 or 3 years. Our journey started 4 or 5 years ago and we realized that the market is not as efficient and reliable across all regions and segments. So we've been positioning ourselves and Ultragaz was more dedicated to retailers, finding solutions to resellers that are closer to the end consumer and moving away from nonprofitable segments. And in the business segment, we focus on some target segments that add more value to the clients, and we have been expanding that. I'll give you some more details about that in a minute. Focusing on recognized efficiency by the client. In retail, and there's more segmentation. So operations are more complex. There are new launched products, and we need to make sure that our operation is efficient because this is a market at scale. So we've been doing a lot over the last few years, and there's more to do. And we make sure that it's long lasting through infrastructure and technology. We've been structuring a lot across the company that has been creating value, but there's still a lot more to happen. And we want to have a top-level team focusing on our strategic model that can support the growth we've had and that we want to continue to have. Now let me highlight some of these points, especially beginning with the bottled segment. We realized that the LPG market is a highly competitive industry. There's not much value to be extracted from it. And we realized that the retail market is where you can last a long time and add value to the resellers consistently. So we have been dedicating ourselves to that. We went from 5,000 resellers to 6,300, when we started in 2020, we had fewer than that. So we've added a lot more resellers focusing on retail, and the main change can be seen here in 2022. We had 66% of our volume in retail and the other channels are more wholesalers. Now if I take a step back, that used to be 50-50. Half of the volume which is what the LPG market looks like in Brazil. And 50% through wholesale, which means it's commodities. You're just selling price. You're not selling products or differentiating your offering. So we've made progress. We still have a long way to go, but that model is close to ideal, but we've made some positive progress. And we have the operating efficiency challenge, reducing gate-to-gate time, even though we have more capillarity and more resellers our efficiency has been greater as well. Reseller NPS, we monitor many different NPSs. All of them have made positive progress in 2026. So we're very careful to make sure that we're continuing to do things well done. And a digital relationship using AI is already happening with resellers and end users. So we'll probably get a great deal of value from that in the future. Another segment that's really interesting is the bulk segment. We are the leaders by far in the Brazilian market, although we're not trying to increase the volume here. So the main transformation came from choosing segments where we can add value, develop specific solutions every year, we add new segments. And the idea is to work to have segmented sales, segmented products, segmented operations and that brings in a lot of loyalty in this kind of market, which is interesting to us, considerable operating challenge because the operational scale is crucial. So we've been making progress in the segments that are interesting to us and ensuring positive progress in the NPS across these clients. Now a highlight I want to share with you, we launched the new individual measuring system for apartment buildings and gated communities. We got to our operational capacity limit. We launched it in the first 2 months of 2026. We have 650,000 direct clients. So we have a direct relationship with them. We meter it, we build them. We provide technical assistance directly to them. It's a very valuable segment. And [indiscernible], I'm sure you've all been seeing the approval of some users that are still restricted in this market. So we still have that to come. As I told you, we have individual metering and agribusiness, which is a segment we believe in especially because we've been making a great deal of investments, and there's a huge potential for growth. I want to highlight the other infrastructure [indiscernible], and we've made progress because we're closer to our customers, be it retail or corporate, we need a proper structure, we've evolved a lot, especially in the operational consortium that we created with [ Supergas ]. Our bases are closer to our customers we are benefited because of the service quality and operational costs. We are very close in an optimum point in terms of suppliers service. Now the logistic complexity that we discussed this year. Now we have 100% of our logistic operation monitored by the control tower in this building. We have practically 2,000 trucks that were directly ending directly for Ultragaz and this provides us relevant operational efficiency, and we have a major infrastructure. We have the biggest [ Bobtail ] infrastructure that is the truck that delivers our product and over 26,000 cylinders with our brand, and we will grow more in the upcoming year. We've expanded it in a real operational cost has dropped because of the deployment of the operational consortium we are close and we have better -- we offer better quality without adding any cost to our operation. And we have an important plan to implement up the same terminal to improve our operation and we will inaugurate the new basin [indiscernible] developed for agribusiness. We already have a relevant share in the region, and it will be opened in the coming months, and this will impact our participation in the Agro segment. Now together with infrastructure, I want to show technology. This is this is undergoing a lot of transformation, very similar to their ultra business. We are reviewing our architecture. And currently, we have major project to replace ERP and the satellite project. We have maturing this project in the company, and to deploy this, and there is great potential to improve agility, proximity relationship with our customer and the cost benefit. At first sight, we can drop operation cost on a yearly basis when deployed in 2028, above BRL 100 million. We are adopting AI in the relationship with resellers and customers and we already have an architecture for communication with all of these clients, multi-canality to sell the cylinder. We have contact with our corporate customer. We have a good relationship with reseller, the customer we have an app for relationship, and we have a relationship platform with the reseller with lots of data, lots of customer information, and we can improve the experience is the target to develop resellers so they can make progress. And we have been growing in the market in all these figures in terms of percentage. And now everything that we've mentioned are highlights for but we're aiming at Ultragaz as an energy platform, adding to the offering portfolio, other solutions. Here, we have biomethane, electric energy, natural gas we have consolidated the third operation of special gas, special use of LPG. It is not [ bird as ] the propellant like when you use aerosols probably they use an Ultragaz product. We have infrastructure, laboratory technical knowledge, and we develop this together with our customers. And we're consolidated in the market, and we're paying attention to other innovations. We always offer our service a good vehicle that can offer good things to our portfolio. Electric power we're maturing the integration and the evolution. We're very happy with everything that we've been able to materialize combining business as a special with prospects of opening market. We are selling energy, we're the second biggest, highest high-tension retail seller. So this is a market that we do understand that has an important connection with our core operation and an interesting growth potential. Now in biomethane, we're even more consolidated. We started this journey 2, 3 years ago, focused on the industry. So we were able to do a lot. Opportunities have emerged in the segment of dedicated fleet and Ipiranga helps us allow, we have an adequate supply level to grow in the upcoming years over 45 contracted clients. So more than half our in operation. We recently owed the first internal operation station to work with our fleet that works with biomethane. In the upcoming months, we shall have an operation in a gas, in Ipiranga gas station because they don't have strategic places to supply. So we have a good perspective with this Ipiranga service station. Now my conclusions and running out of time, I believe that the entire journey that allowed us to evolve positively with great results. This strengthens a number of things that we did right and we corrected what we were very assertive but the investment capacity and deliver differently, and we're very excited. So I thank you once again for your time, and I would like to call Fulvius. [Presentation]

Good morning pleasure to be with you and to talk about this company that I'm so proud of and it celebrated 60th anniversary this year. And to talk about Ultracargo is to talk about fuel logistics, the energy, energy transition through biofuel logistics and a number of logistics chain and Ultracargo is part of an infinity of products that are essential for our country for packaging, things that we consume in other industries. And Brazil has exceptional locations like agro the productivity in the agricultural segment that translates into fuel. We have a consuming market of continental size vocation without logistics is a waste. So we want to move all of these products that we store in the best way possible with efficiency to reach the consumers. It could be consumption energy distribution, the best way possible. This is the role that Ultracargo has had in the past 60 years. And our most important role what is it? We have saved operations because the products that we store have a potential to explode into pollutant, we have to maintain high-level safety operation because safety speaks with operational efficiency. This is why our operations are intense and repetitive, and they can only be through well processes, well, good controls and people that dedicate to me rigorously the norms and procedures that are the same attributes that make an operation safe. According to the lost time incident rate, we saw a deterioration in the past 12 months. although all these accidents were low, people spraying their ankles and no process accident incurred in pollution to the environment, but this doesn't drop our responsibility to see each one of these incidents so that we can improve our processes, identify things into controls and processes so that they never happen again. And this is why we've evolved in this agenda because our target will always be 0 accidents. And to talk about our strategy, we like to use this Mandala that represents the union all factors and pillars that are part of the strategy. Number one would be our operational efficiency in our country, Brazil spend 15% of GDP in logistics when we compare it to countries like the U.S. and European countries. This is a 1-digit figure, very close to 8%, 9%. And this is because there is a lot of friction in our logistics system. What we pursue here is to diminish friction guarantee efficiency to connect producers and consumers the best way possible. And this is done through improvement of our processes, pursuing how we can better use our terminal that will provide better return to our investments and the safety of our operations. This is so that Ultracargo have 15% more turnovers in our ports than the market. This shows more productivity. We have indexes like loading, unloading time, flow out of both day-to-day to guarantee that our operations can translate this efficiency not only to us, but also to the value chain of our customers. And this has to be replied in the unique platform at the end of the line. Ultracargo is the biggest independent player of net grains. So all terminals where we work in may show the same efficiency and have to translate the principle of operational efficiency. And to do this in a number of terminals that requires connections through efficient models, models. This is why we have a partnership with waterways and highways, not only to store them our molecules, but their connection. That translates in placing this molecule the best way possible with two pillars that are fundamental and they follow our values. One is safety and the ethical commitment. This is why Ultracargo is the only enterprise of the logistics sector that is associated the Institute Legal Field, Instituto Legal, and this is why we've achieved all of this in the past years. And to translate better what Ultracargo's strategy is and why it's a leader in the market. We have 1.2 million cubic meters in capacity. We have nine operational terminal throughout the entire country, they are located in strategic corridors that allow us to connect production and consumption, import and consumption and the production can be exported. And we also work with [ Cabotage ]. This is why we've been able to handle 11 million tonnes, which represents 17 million cubic meters sold. And another thing that I will mention here is our [ Merittutuba ] terminal that is under construction and will complete the logistics of this region in the Northern Arc with resiliency for the fields that are produced in the center west. And just a map, this demonstrates our strategic position, but all these arrows that you can see here identify our businesses target. In our essence, we store a number of products mainly in the six port terminals where we're present. These terminals are about most importance for the country's logistics. This is the entry and the exit gate to a number of net [ grains ]. And when we talk about import of fuels today, 1/4 of the diesel used in Brazil has to be imported, and this trend and this percentage will only grow in the future with the growth of our economy with the more transportation, more machinery and so forth. So more and more the entry gate will be important to foster the entry of the field needed in the country. Now the growth of this fuel is mainly connected to the new agro frontiers the air is in the interior of the country where economic development is fast then you have the consumption of diesel even greater because these our regions be wrapped of refineries. This is why we have to position our terminal the diesel that goes to the board have to service these consumption centers the best way possible. and the regions that produce biofuel, they should be able to use the same terminals and logistics models taking products back and forth, and this can be used for [ Cabotage ] taking products to other regions. So the same [ medical ] that goes to Ultracargo terminal goes to other two terminals. Therefore, the molecule will reach the consumer with low friction and this diminishes transport cost and enables the production of biofuels and other products. And that's what we do in the central corridor in Brazil, which is connected to ethanol from corn, which is produced in Mato Grosso. Everyone here knows 25% of the ethanol we use comes from ethanol from corn, which is an industry that practically didn't exist 10 years ago in Brazil, and it's been growing at a 2-digit rate every year. That's why in 2036, an additional 10 billion ethanol from [indiscernible] of ethanol from corn produced in the south will have to be transported to reach consumers in the southeast, and that will happen through the central corridor. So that ethanol is connected to the rail network and it gets to the [indiscernible] terminal, it can get shipped to the Southeast. You can even go to Santos to be shipped along the coast to other ports and then other countries. And then that same outflow receives the same byproducts, essentially diesel so that it can supply the different machinery and trucks in the Midwest. So byproducts and biodiesel are transported as efficient as possible, and that means value not only to our value chain but to consumers, our clients and everyone has access to fuel and biofuels with lower emissions and more efficiency. That's the problem that we need to solve across the country. And to complete that solution, I talked about the [ Merittutuba ] terminal. It creates another connection in the North as connecting the [ Villidon ] terminal in [ Barcarena ] in Para, to the [indiscernible] terminal, all of that through waterways. So the ethanol production that comes from [ Mato Grosso ], especially in the north of the state, goes by a road on BR-163 to the [ Merittutuba ] terminal and it gets to [ Villa de conde ] on barges. From there, it can go to the northeast of the country or even for export. Let's not forget that such a huge production and with massive growth products such as ethanol in Mato Grosso it cannot just rely on one logistics mode, whether by road or waterway. If we have options, we can provide more resilience and capacity to meet the needs of production of this key product to energy transition, not only in Brazil, but maybe in the world 1 day. And that's how we think about it. We want to translate more translate that into more efficiency in our chain. And that means responsibility and cost discipline. And we can see that in this chart. Since 2019, our cost and expenses per static cubic meter has been dropping at an average rate of 6% a year, which is a result of our pursuit for continuous improvement and discipline in execution. By doing that, despite a 39% increase in our capacity in the same period, we've had a 154% increase in our EBITDA in the same window. However, let's not forget that what we're doing is literally moving the entire country. So the first thing you need is infrastructure than the industries and the flows get developed. So many of these terminals where we've added capacities like [ Rondonopolis ], [ Polina Santoso ], [ Palmeranti ] are still ramping up and maturing. As flows become more established, as production increases, there will be a gradual process of occupying those terminals, and it will favor economies of scale, which is what we are pursuing. And let me point out that there's been a great deal of delay due to licensing red tape. You know that the -- that's a huge challenge in the country, which delayed the beginning and ramping up of these operations. 2026, as Linden said, has had many challenges and disruptions. And that's what we see here on this chart. There's been a reduction in our EBITDA comparing 2025 to 2024. Let's not forget that in 2025, we had the conflicts in the Middle East, a reduction in attractiveness and importing Russian biodiesel because of the conflict and pricing policy changes in the country. So that led to disruptions. But considering an even more challenging scenario in 2026, where we had the most restricted arbitration in the history of fuels, we've still had positive results in the period. And obviously, our operational cash flow has followed our EBITDA and our results. And that's what we want to continue doing. Having discipline and execution, diversity in products, especially in biofuels, but also working on new fronts such as ethanol logistics. We've been looking for new solutions, and that product goes hand-in-hand with biodiesel production as well as other products such as water coming from oil prospection and exploration, liquid fertilizers to meet agricultural demand through diversity will achieve resilience, not only in logistics in Brazil but also our results over time. I think I've been able to convey a little bit about Ultracargo, which is a key company to logistics in Brazil. And now Hachem is going to talk about how Hydro Vias has been navigated in the last few months. [Presentation]

Good morning. It's a pleasure to be here with you. I'm here representing [ Decio ] today. And I'll start by talking about safety. As we've heard previously, safety is a nonnegotiable value to the group and it's our license to operate. There's been an increase in LTIR in '24 and '25, which has to do with a culture adaptation process across the group, but the group does believe it's a nonnegotiable value. More reports has given us a clear diagnosis of our operation, and that has led to more effective action plans, which has been reflected on the 2026 rates. We've made progress, but we are still far from the levels of the other companies in the group. A well-defined process and a well-designed process is a safe, efficient and productive process. A lot of our journey has to do with that, having better processes, better practices and more efficiency and productivity. And you will see that safety will come with that. We've had two intense transformative years. And I'm going to share with you the progress we've had since we've joined the Ultra Group. I'll talk about our portfolio optimization, capital structure, financial discipline institutional and regulatory frameworks, governance and alignment and people and culture. Starting with our portfolio, I think the main starting point was reviewing our strategic plan. We looked into the company's competencies, strengths, synergies, and we grouped our business into two main categories. Navigation, which consolidates the navigation assets in the North and in Paraguay, and there are plenty of synergies here across knowledge, processes and maintenance because a large part of the Paraguay fleet is the same as the North fleet. And terminals where we have [ Merittutuba ], [ Barcarena ] and Santos. They also show a great deal of knowledge. And in review of our portfolio, we realized that the coastal shipping business wouldn't be our best partner wouldn't have a great deal of leverage and synergies with the other businesses. So we divested from that, and we concluded that process at the end of last year. Moving on to capital structure and financial discipline. We had a BRL 1.2 billion capital injection with that. And with the Ultra group coming in and joining our risks. We reviewed our financial management and our indebtedness as a whole. Right now, our debt profile is longer at lower costs and our FX exposure, which used to be a detractor and destroyed a great deal of value in the past, our exposure is hedged through instruments and derivatives. So our leverage has gone from 7x to 2.4x, supported mainly by better results. We've also managed our working capital with key reductions in time to receive payments and now we are focusing on inventories. We've had better tax planning by restructuring our ownership structure and we'll have a simple structure. We'll see that next year. And by doing that, we've reduced expenses a great deal. Now moving on to the institutional and regulatory agendas, the last couple of years have seen a great deal of progress. The whole industry has become a lot more present on the government agenda and the public agenda in Brazil as a whole. Last year, the [ Par ] Environmental Act was approved creating legal safety for maintenance strategy, which is key. And this year, the main technical agencies have been approved concerning the need to dredge the Tapajos River especially considering the more extreme climate scenario we've had around the world and super El Nino, which is coming. Right now, we have the legal and regulatory framework we need for dredging to take place. All we're missing is the execution. There's been a great deal of mobilization of different links in society and in the media and the North Arch right now is extremely relevant to Brazilian exports and Brazilian agriculture as a whole. It's no longer about a business agenda. It's about an agenda for the country and for the country's agriculture. Now moving on to governance and alignment. This -- there's been a great deal of change here as well. But it's important to remember that. It reviews has only been around for 16 years. It started from a PowerPoint and it had to overcome a good deal of obstacles. Its culture has a lot to do with entrepreneurship and start-ups. It's not focused so much on governance and discipline. Now it's scaled up very, very quickly. So now that culture and that lack of processes has become an obstacle to gaining economies of scale. So we have been improving the company as a whole. Agility and simplicity is probably the key factor. Our main project is [ Simplifica ], and [ Atravi ] is not complex. It can be complicated though. So we need to accelerate a lot of things. We reviewed our governance process, our structures, our guidelines, our policies, and this project is going very well. Now considering management discipline, we are working on continuous discipline. We are focusing on indicators and having financial discipline, which is a lot closer to what the group does with all the invested companies. focusing on clients, as you saw in Ipiranga and Ultragaz is a focus of the group as a whole. And since the beginning, there is a specific area of focusing on working closer to clients. And last but not least, there's been wide change in executive alignment. Rodrigo touched on some of the group's values and creating value in the long term and renewing leadership, which is probably one of the main charts. Hydro vias has undergone a great deal of leadership renewal. The average time in the leadership is 1.3 years and across leadership as a whole 2.7 years. We have people who came from the market, bringing best practices from other companies, people from the group itself and internal promotions. As was to be expected, such huge changes in a company with a shortage of processes requires time and adaptation so that the teams can work together and so that we can rebuild some key learnings that may have been lost along the way. Now let me talk about 2026 and what happened in our operation in Brazil. The year started at the peak of the season with a lot of corn. There was a great deal of rain and transport was difficult. There were externalities, but there were also internal factors that affected that. It was very hard to receive cargo at our transshipment terminal. So it was hard to increase our integrated system, and we partially offset by increasing the land loading in the external terminals. There were a lot of key learnings. And over the second Q, we were able to recover those rates. Results at the end of the day was that the peak of the season, we were unable to capture the volume. We wanted from the integrated system. There were major key learnings for next crop, right now, we have third-party capacity to diversify our transshipment terminal to feed the integrated system. We also have more players in [indiscernible] so we'll be able to organize the flow better and we are expanding our receiving capacity at the terminal so that we can receive more trucks. So key learnings from this year will lead to a much better 2027. Moving on to Paraguay. Also major learnings here. We started the year redesigning our operation and migrating practically the entire fleet to iron ore. As you know, iron ore volume is what adds the most value to our system. The assumption was, if we can mobilize the entire fleet to iron ore and we have a shorter cycle, we'll be able to have scale enough to justify cost increases, there was appetite on the client side. We were able to increase iron ore, but the cycle time fell short of what we needed to achieve the scale we wanted. There were some internal factors, some key learnings and externalities to do with receiving time at client port terminals, which have led to some key learnings. Revenue went up in the first half but so did the cost? So it offset all the gains. Now next year, there will also be some key learnings. Can we do more iron ore? Yes. And probably at the scale we had anticipated. Now let me talk about growth and the future. The way we look at [ Hydro Vias ] or the way we split our North market is into three blocks. First, navigation. We have some idle capacity and navigation, and we can navigate for third party routes. That's something we are beginning to develop now. We've done some pioneering cargoes to begin with for our route and third-party routes, but there will be a great deal of value in developing in the future. Now looking at the BR-163 and the integrated system. We can unlock value here as well. When we look at Origin products at 163, in addition to corn and soybean, there can be soybean meal, sorghum and DDG, which are also expanding in exports. Now considering destination on 163, there's the fertilizer market, which is developing and where we are increasing share. There's a great deal of opportunity and capturing more share here. Now on the 158, and this is basically road transportation cargo. This opportunity for growth, considering Origin products at 158, the demand is much higher than the supply. We are rejecting demand because we are prioritizing the integrated system. Now we can capture more volume. Now considering the 158 destination, we're talking about fertilizer cargo. Unfortunately, our private terminal can do that. And the fertilizer business, in addition to being profitable, it makes a whole route more compelling because you can develop also a cargo on the way back for partners. So let me talk about our expansion projects. Reallocation of our floating tipper, the goal to our private use terminal with very little investment. We can receive things through the highway, especially for alternative low cargo. When we see this in a broader way and discussing the other -- it would be the private use Road terminal. Here, we have a drop of 50% of the original project basically through come the nation of structural assets and modular assets. this new way of a project allows us to do this in stages. We can bring capacity in modules according to the demand curve. So we don't have to so we don't have to invest strongly and run with idleness, we can capture alternative cargoes. We can work with more than one product without the current problems that we face in our storage is this is a license project. And if you work with infrastructure, you understand the value of this. It is already part of our growth acceleration program. And we want to put it into fruition by 2027. Now I've mentioned this year, we started below last year's results. Here, we have a learning curve that we are analyzing. We expect next year to be better in the peak of the harvest we can see sound figure because we have -- we want to -- we have a good cash profile. With this, I bring my presentation to the end, and I will hand it over to Palhares.

Well, good morning. I'm very happy to be with you to have you in our place. This is my second year spearheading Ultrapar's Financial Department. Welcome, and I hope that you're enjoying today. In order to start, I believe that last year, I demonstrated 2023, we reached a new result level of our business and during 2025, both Ultrapar and Ipiranga [indiscernible] reached a new level but here, we have [ Hydro Vias ] to consolidate. And this is a consolidation of the result of [ Hydro Vias ]that was positive in 2026. Here, we have the effect mentioned by Linden but, we have structured effects that is the crackdown against [ delocality ] and this is aligned with what we delivered last year in terms of results. So the improvement of results [ Hydro Vias ] together with a great discipline of capital management and working capital. Our cash was very strong since 2023. We have reached a new level but this sum up together with [ Hydro Vias ] increase our cash in 2025 and 2026 because of all the working capital that was necessary in Iconic and Ipiranga with the results of the first quarter. Now when we see the company's leverage position, the discipline in capital management. As Rodrigo mentioned, the divestment of [ oxiten extrafarma ] [indiscernible] together with the improvement of the results of our businesses. But this ace deleveraging process that starts in 2021 and 2023, we're slightly above 1x. There's a capital to have a good position and [indiscernible] consolidation of is in the result of our company that is highly leveraged. And our leverage is slightly above 1.7 and 2020 strong results, strong cash generation put our leverage at 1x that in the context of today with lots of volatility and uncertainty, I believe this is a comfortable level. There is a target between 1.5% in an environment of uncertainties is an environment where we feel comfortable to operate. And the strong result and improvement of operational results and a business cash improvement. This gives us net revenue, which is highly relevant, not only since 2023, but also now during the first semester of the year, which -- of course, the fuel market was good. And here, we had the effects of the entire situation. And when we see the return here, there we interact with you and we insist on the importance to see this in the long term. So the trend when we see this window is positive. Now when we see in the long term, the risk is to have a positive or negative bias. This is why it's important to see a long cycle. 2026 offered an extraordinary result. Nonetheless, during this period, it's important to remember that there was a carry of because of tax credits that went to our balance. But when we see the value generation delta here, we're talking about BRL 2.5 billion of delta value that was added to the company. Now this is plan in cost management efficiencies in the business cannot be different in Ultrapar. Therefore, this pursuit for efficiency applies to us when we see throughout this period, we didn't only reduce the amount people overhead because of a constant pursuit of simplicity and simplification, we've reduced the cost of the holding from BRL 260 million to BRL 220 million in a context where we increased the portfolio of our companies. We improved the result. We created cash, but all ways focusing on efficiency and simplification. And at last, sustainability is a theme in evolution and connected with the evolution of Ultrapar. We also focused on updating our matrix regarding relevant subjects. And I would like to underscore to the importance of capital allocation and the relationship with our customer base. This important, because this reaches the broad concept of corporate sustainability. We tout environmental, social points. how do we guarantee that sustainability is long-lasting within the company. And we like to show this information. Here, we have the performance of our share since the IPO. Here, we have a temporal perspective, a window on 5 years, we had good performance. There was a complex context because we reached the peak of the regularity level, this -- when there was uncertainty regarding the role of [ Hydro Vias ], could we create value within this context that has been corrected because of the market. And now we've seen this share valuated, I would like to thank you for your participation. I would like to call Marcos so he can make his final comments and so that we can spend the afternoon together.

Well, well, good morning. I'm going to be very brief because I leave everything has been said here. I just wanted to tell you how I feel regarding this company. I started working here as a trainee in 1994, so 32 years ago. That just flow. And this has been an important evolution in the company. And you just saw a chart regarding the value creation. And here, we could see, you can blame the field sector that faces problems of taxation. This is not the only point to blame. We have a lot to learn as an organization. We made lots of mistakes, one of the things that was underscored here. Yes, we really have to underscore here would be -- I believe that things that we strongly built within the group's culture is to recognize and to learn through our mistakes. ,[indiscernible] I never lose or I win or I learn. And this wasn't something strong. This is something that we're strengthening more and more to make -- you make a mistake, you make a mistake quickly, you correct. And this is this is necessary for all organization cultures, things are ever changing. Things change rapidly. If you always want to be assertive or you will not do anything or you will -- you'll do anything, which is not good because I wanted to strengthen this because we've made lots of mistakes. We've made more good decisions than bad decisions. So now we talk more about the problems with the opportunities to improve. And this is clear. Now I wanted to state this. because this is part of a lot that was presented here. Very briefly, I would like to talk about the regulatory part because we interact at the Brazilian economy depends more and more with the regulatory agencies, and in order to build a new terminal of Ultracargo, you need at least four complex licenses. And when I started working for the company, you only needed one license, you needed. Well, you needed a license from the environmental agency, sometimes installation and operations. Now you have from, you have a whole bunch of agencies that have to provide you a license. And on one side, you have a barrier of -- this is a barrier of entry for other players as -- but as a country, this can slow down as investors, you take more risks to be part of a business or -- well, the fact is for a long period of time, we've been structuring and strengthening the regulatory environment with and we need to support these agencies. We need better and stronger regulators. There's no use in saying that it's bad that it doesn't work. It works, it has to improve. We have to improve the efficiency we have to help them improve this. And we've made an effort to do this. When we talk about ragas underwent a process of regulatory review, Brazil is a worldwide benchmark. For LPG, we have 10 million or 11 million residential clients. We haven't heard of a cylinder explosion for a long period of time and let alone Ultragaz. The fact is that we have very special things and many times are threatened, and you also have to defend this within the LPG consumers of Brazil, perhaps the -- this is the best service of LPG consumption at very low cost because of the scale and the efficiency, although we have good margins. The return of overinvestment is of high quality. So when you for -- this is a properly structured industry with high levels of efficiency and safety. Now when we think about [ Hydro Vias ], as a matter of fact, one of the first meetings that I held in [ Hydro Vias ], I said we have to change it. This has to be navigable beds of Brazil because you don't we don't have lots of maintenance when you start saying that you need maintenance. This means taking out sand from the bank of the river. And well, [ Hydro Vias ] has decided to do this and to invest in this that is incomparable that in comparison, it is much low, it's a low cost. We had to talk a lot in Brazil to explain in Brasilia how important this is -- everything is organized today. In Brazil, we have a regulatory structure that allows us a lot of environmental approval that excludes maintenance. So now this work because today, for instance, you need an environmental license to cover a highway, for example, our whole in a highway. So things are evolving right now. And I just wanted to mention this because obviously, when we think about fuel, well, this appeared a lot in the newspapers. The other day, I was with the Governor in Sao Paolo, and she said is ICMS increased by BRL 300 million because of this. Now what the -- and this was a competitive advantage of the legal competition. So we cannot think that this is resolved. There is lots of new. We still have lots of people interested on this money, and we have to continue supporting these agencies. But I wanted to say something that I'd like to repeat. We human beings have the bad tendency to overestimate in 1 year and overestimate something that we can do in 10 years. You can do anything in 10 years. If you want to be a doctor in 10 years, you can be a doctor in 1 year, you can't. So we're building and transforming an organization because we want it to be more modern, more nimble. There is a great effort in infrastructure. Rodrigo and his team have Gaston governance management will be focused on a change of culture. So now that we're almost celebrating 90 years so we will pay good 90 years in the future to create value. I would like to thank you once again for being here. We will have a who will be able to talk. It is excellent to organize this event in our office. This is our -- the routes. This is where we're rooted. So we're very pleased to receive you and I hope you can make the best of this day. Thank you very much.

This -- we will go to our Q&A session. So if you wish to pose a question, please raise your hand, and we will take the microphone to you. For those that are online you can pose your questions through your chat. And if we have maybe additional time, we will answer your question. Otherwise, our Investor Relationship team will contact you. We'll have an opportunity to ask questions of the executive Vicente, please go ahead.

Thank you. This is Vicente from Bradesco BBI congrats on the event. My first question is the impression I get from talking to investment funds here and abroad is that depending on the results of the elections, the case rotation will be less leveraged, less cyclic. And I think Ultra fit into that. with category of being more cyclic and more leveraged. If that happens, will Ultra and Ultra shares end up suffering because of that technical shift? What about the company's willingness to buy back shares? I think this year, that was something new in your case, right? the share buyback. And the second question is I've been reading in the media about Rumo's purchase process, apparently two buyers decided not to go ahead. Will that change your capital allocation process?

Thanks, I'll start. About the decision-making process. We talked a little bit about what we consider when we are thinking about capital allocation. And that doesn't change depending on the scenario. What does change is the ability of closing a good project, a good transaction. . If the economy is thriving, obviously, that means there will be more investment projects. So we do have a more resilient portfolio. I think that helps in the event of an uncertain scenario. But we'll still have the opportunity to leverage growth if the economy means we have more of an opportunity to grow. And buyback is always an option just as dividends are. So we'll look at the different transaction opportunities and the excess cash that's generated. In addition to project options will be distributed via reallocation or dividend payout. So the scenario is part of the context, but that doesn't mean we'll have an opportunity to use it if the economy picks up. Now about transactions, and that goes to any kind of transaction. We have three factors. The industry has to have good growth prospects, value perspectives, and we have to do better through our management and a good entry equation. Entry equation made price risk and governance. If we find that in a project, then we'll go ahead with it. If not, we won't. So that goes to any goes for any investment opportunity or transactions we are considering. I won't go into any specifics, but that's what we're looking for, and that's what we are pursuing.

I think there are three here.

Eric from Itau BBA. I have two questions. The first is considering the M&A opportunities we've been discussing. I don't think this is a watershed year. But looking at the next 3, 4, 5 years ahead, how will the company navigate leveraging, considering 2027 and potential differences? And the second question is about imports. As a segue to Linden's presentation. We've been seeing some different strategies and distribution companies when it comes to using subsidies or not. So I'd like to hear from you what you take into consideration, when you go into it or not, what were the upsides and downsides you consider it, and that's it.

I can begin talking about leverage and then I'll turn it over to Linden. A while back, 1.5 to 2x was a comfortable leverage level. We've taken that down to 1 to 1.5x for 2 reasons. First, because we're in a more uncertain macro scenario, geopolitics is more uncertain. And second is that given a more uncertain scenario, there may be other opportunities to use cash. There may be opportunities to make good investments. During cash scarcity is when you see good acquisition and investment opportunities. So there are both sites, the same story, uncertainty and opportunity. And we're working with the scenario. Right now, it's not clear to us what the winning scenario will be. So that said, we have to be ready for both scenarios. How we're going to position ourselves if things move left or if things move right? And given that our company invests BRL 4 billion in Brazil a year, how will that company continue to make investments and to grow regardless of the -- of who wins the elections? When it comes to subsidies, our rationale is simple. It's all about market dynamics. It's a large part of the market is using subsidies and price at the end is being composed considering the subsidies, then obviously, you're going to use it because you're going to have to come to that price to sell. Prices in Brazil don't follow the cost of imported molecules because Petrobras affects the price and there are subsidies when it comes to imports. Otherwise, it will be much higher. So you need to compete at the same price level. And to do that, you can use the subsidies. That's what subsidies are for to make sure that end prices are more competitive. It's a simple equation, really.

Good morning. Tasso from UBS. I have two. First, we talked about regulatory conversations across all businesses. We started with Linden at Ipiranga then LPG, Ultragaz, [ Hydro Vias ] as well. So I'd like to hear from you, how over the next few years and considering elections the next weekend will bring risks or opportunities in that context? Some of the decisions have been more political than rational. So what might be the risks or opportunities as these discussions move forward? . And my second question is to Lutz as a segue to your presentation. The company has been making a lot of mistakes in the last few years and learning from its mistakes. Could you give us some examples or tell us a story about what you've learned in the last few years? What have been the key learnings and looking forward 5 to 10 years from now, where do you think there's room for improvement or key learnings and improving processes?