Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to Ultrapar's Fourth Quarter 2020 Results Conference Call. There is also a simultaneous webcast that may be accessed through Ultrapar's website at ri.ultra.com.br and MZiQ platform. Please feel free to flip through the slides during the conference call. Today, with us we have Mr. Frederico Curado, Chief Executive Officer; and Mr. Rodrigo Pizzinatto, Chief Financial, Investor Relations Officer, together with other executives of Ultrapar. We would like to inform you that this event is being recorded. . A replay of this call will be available for 1 week. Before proceeding, let me mention that forward-looking statements are being made under the safe harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Ultrapar management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the results of Ultrapar in the future and could cause results to differ materially from those expressed in such forward-looking statements.

Good morning, and welcome to our conference. Thank you for your participation. And let me kick off saying that our fourth quarter was consistent with what we had projected, and it consolidated a very good year for Ultrapar despite the effects of the pandemic on our businesses. Let me also, first of all, to highlight the competence and the dedication of our teams and our companies in managing their operations during the crisis, and this is both from the point of view of the safety of our people. But also the continuity of our operations. We did not have any interruption whatsoever, so we were able to keep a high level of service to our customers and our consumers. Well, the lockdown and the mobility restrictions had a particularly negative effect on Ipiranga's revenues also in Extrafarma revenues. But Ultrapar as a whole managed to exceed BRL2.1 billion of cash generation after investments. And this is a history, this is an all-time record for the company, even more relevant, taking into account the challenges of last year. Three of our businesses, Ultragaz, Ultracargo and Oxiteno, individually also had all-time record results, and also Extrafarma achieved its best performance in several -- in the recent several years, including, for the first time since we acquired the company, a cash breakeven last year, very solid results. So all of that led to an increase of 20 basis points in Ultrapar's EBITDA margin, measured as a percentage of revenues from '19 to 2020. We also saw our net income grow, approaching BRL930 million, which represents a 17% increase compared to 2019. And this is already an apples-to-apples comparison. So in other words, we are excluding here the effect of the impairment that we had in 2019. So on a comparable basis, a 17% increase in our net profit. Also to remark the liability management we performed during the year. We extended the average term of our debt, a small reduction in the cost as well. But also importantly, we negotiated the elimination of the covenants in our debt. We had about 70% of our debt with some sort of covenants. And they are no longer, so it's -- we have a totally covenant-free debt at this stage. These cash management efforts allow us to keep our -- the leverage of our debt unchanged throughout the year despite of keeping a high level of investment, of BRL1.5 billion last year, and also maintain a good level of dividend distribution.

And good morning, good afternoon, everyone. It's very good to be here again to talk about Ultrapar's results. And just before starting, I would like to mention a point regarding the report of our results. In 2020 and 2019, we had some nonrecurring impacts that affected our results that over the year, we highlighted in our releases. You see in our explanations that we have excluded some of these nonrecurring effects, both positive and negative so that we can analyze the recurring operational performance of our businesses and Ultrapar. Very well. Beginning with Ultrapar's consolidated results in Slide 4. Our EBITDA was BRL949 million in the fourth quarter of 2020, a growth of 163% over the same period of 2019. Here, I should point out that in the fourth quarter of '19, we had impairment of BRL593 million of goodwill at Extrafarma and a write-off of BRL14 million of Oxiteno Andina assets. While in the fourth quarter of '20, there was BRL85 million in nonrecurring tax credits for Oxiteno. Excluding these nonrecurring effects, there was a reduction of 11% of our EBITDA in 2020 due to lower EBITDA at Ipiranga and Ultragaz despite the results growth in Oxiteno, Ultracargo and Extrafarma. Fourth quarter results for Ultrapar were in line with what we had indicated in the last conference call of our third quarter results. Some misses were a bit above and others a bit below. Looking now at the results for the whole year of 2020, our EBITDA reached BRL3.479 billion, a growth of 24% compared with that of the previous year. Excluding the nonrecurring effects mentioned in the footnotes for both years, we had a 5% lower EBITDA due to the decline in results at Ipiranga that was severely affected by the pandemic. But for the most part, compensated by strong results in Oxiteno, in Ultragaz, Ultracargo and Extrafarma, what reinforces the resilience of our business portfolio. Moving now to the net income chart, we reported a profit of BRL132 million in the fourth quarter of '20, an increase of BRL699 million compared to the fourth quarter of '19. This was due to the improved financial result and the negative impact of the impairment on the -- at Extrafarma in the fourth quarter of '19. Net income for the year of 2020 reached BRL928 million, a growth of 130% compared with the preceding year and for the same reasons I just mentioned and the higher reported results.

. What is your assessment in terms of this result that I would say, is under other businesses of the company, also under the main players in the market. And the second question is about allocating capital. I would like to address here 2 different standpoints. If you could make comments specifically on the refining process now that it's public that you're taking part in the refab. And I would like to know the extent to which these last news affect or not the appealing aspect of the assets. And the other point is to have you comment on the strategy to be able to unlock some type of value through in terms of AmPm and the kilometers advantage program.

Luiz, thank you for the question. Let me start by the second one and then Rodrigo can get himself ready for the first one. Just kidding. But anyway, it's important to talk about the full scenario we're at. And I think the question is legitimate and right where we're at. Our thought in terms of the oil and gas downstream, it's a long-term outlook. And there are some pillars that are kept strictly and they're valid. One is that Brazil is a market with a structure deficit of oil derivatives. So what I'm saying is that the refining installed capacity, even if it's optimized, it's still not enough to absorb the demand. So this is an important guarantee in terms of commercial risk for volume of the refineries. The second important thing is that the trend of the big oil companies to be concentrated on production is a global trend, and Petrobras has been very clearly locating that. And this is not a matter of the current executive team. It's a global trend, and this is a need for -- of the company. So there is a need and they're following the right path and we know Shell BP. I mean, all the ones around the world are already paving that path and concentrating on that, which is definitely the one that they can mostly generate value from it. So with that structure view, and also I must say, there is the uncertainty and the question, the anxiety. But -- oh, but if there is some subsidy as we had in the previous years, we also see this as something that is very unlikely. There can be an impact in the short term, yes, some political influence. But structure-wise, when we think about the long term here, on one side,…

Good morning, Luiz, your question about Ipiranga, I'll start by answering about the comparison with the third quarter, and we have an important effect there on this comparison, which we're gaining inventory and with imports when we compare semester. And the delta that we have there compared to the quarters. We're talking about BRL100 million, and this shows BRL17 by cubic meter. And if we explain this difference, that's what you will have from the standpoint of strategy. And looking ahead, we have focused on the network with our brand, as we already have mentioned before. And on the fourth quarter, we gained participation on -- that would be 3.5% in terms of the branded ones. And we have been working with the margins. We see that there is something that hasn't brought us volume in terms of the nonbranded ones. But when we look ahead, I suggest and even to look back and see comparisons, specific situations can bring variations. But as a trend, we can look at the long run over the quarter. We just had the release of our guidance for 2021. That shows the outlook that we're looking ahead in terms of profitability for Ipiranga. And obviously, this can bring oscillations per quarter because of the variation of fuel costs mainly and imports and inventory, but this is where we're at with Ipiranga.

Okay. Because what stands out -- if you could make a last comment there. The volatility is what stands out when we talk about margin and volume of the last few quarters. So you get market share, and you lose some margin, sometimes the other way around. So it's hard for us from outside to really understand what is the strategy of the company there. That's the only point.

Well, this point, you are right, Luiz, it is highly focused on this segment that I talked about the branded and non-branded. So in the sector of branded, we maintain and gained participation.

. Now Thiago Duarte from BTG Pactual.

Frederico and Rodrigo, three questions. The first is if you could, as much as you can, talk to us a bit about the assumptions that brought you to the guidance. When we look at Oxiteno and Ipiranga, we see something that is broader. We can see a worse and better one that's quite distant. It's clear the macro assumptions. It's clear the assumptions because of the volatility and the uncertainty, that is important. But if you could just address what is the implications in terms of the basis and the top for these two splits. I mean, that would help us navigate and understand about your expectations there. That's the first question. The second question, focusing specifically on Ipiranga, and I'll bring a topic that usually we bring on our calls, and it's a bit associated to the previous one, that you completed with 7,000-and-something gas stations. If once again, you could tell us how that works in terms of the 7,107 service stations in terms of loss and gain so we can understand if there's any change in terms of speed of having branded ones and the competitive process to gain more. And lastly, here, I would like you to focus a bit more on the strategy and what is the implication. What are the changes for this new model that you have, especially when we are talking here specifically about the stores and the value proposition for customers and consumers. And lastly, how you imagine this and how you see this penetration of the store base will carry on. It would have increased the penetration greatly and with AmPm.

Thiago, I'm sorry to stop you, but your -- we got a patchy voice there. I'm sorry, we got a bit of a patchy voice. Could you repeat that, please?

Sure. Sure. I was talking about AmPm stores. If you could tell us a bit more of the details of what is this new model, new value proposition from the owner of the service station and from the consumers' standpoint and how you see the penetration of convenience stores. There was one higher than 30%. And now it dropped a bit from last year, how you see that should carry on into the future.

Thiago, thank you for the questions. So going through the first assumptions, for the guidance for Ipiranga and Oxiteno. For Ipiranga, the 2 main factors for this interval is the oscillation of fuel cost and the margins, especially ethanol, where they're very much different from what we had before the pandemic. And what explains that are the two factors, expectation of oscillation in terms of cost and also marginal fuel especially for ethanol. Now at Oxiteno, we have more volume and also the margin in dollar because of some oscillation in reference prices. So these are the two main factors that have brought us to define this interval that is a bit larger for both Ipiranga and Oxiteno. And the second point in terms of the service stations and adding and closing for the fourth quarter. In this one, we had 100 closed. So we opened 100 and closed 100. And what we have been noticing and we've been working on is for the new service stations, to have them bigger than what we had on average. And in terms of the ones that are closing down, so we're closing the worst ones and getting the new ones at something bigger in terms of 15%, 20%. So this is where we're at when it comes to the network of service stations for the fourth quarter. And now in terms of the third point, on the AmPm convenience stores. The change of our model in terms of the stores that we've implemented is related greatly to the fact that you're creating a more welcoming environment at the convenience store, increases the display of stacks with products that go beyond what would be obvious of what you could get at a convenience store. So you're in the store to buy something quick,…

It's very clear, Rodrigo. And just in terms of the model, does anything change in terms of a more macro view that you have when we thought about Ipiranga station and the store was one of the top leverages that you have everything on the Ipiranga service station? So with the change of mix, which is -- is it based on margin? Or does it change the concept of what a convenience store must be or what a service station must be?

Well, no, it doesn't change the view. I mean, with the company-operated stores, the benefit will be greater than what we had before because of these results that are incremental that we see where there's the ones of our own management and with the operations model we have. So we're more optimistic than what we had in terms of the results of AmPm for the full network.

To complement, Thiago, that last part to the answer. What we see around the world is a contribution that is more relevant, not in Brazil. And I believe that what we see is an increase in the relevance of the convenience stores at the service stations. That is a global trend. So the strategy is the same. But we're paving the way so that we can increase proportionally the relevance.

Our next question comes from Andre Hachem from Itaú.

Frederico and Rodrigo, can you hear me well?

Yes. Yes, we can.

Well, I had one question that I'd like you to explore a bit more. And Luiz also talked about the refinery. With all that we see recently, and I know that we're talking about a long-term view here, there's volatility in the market. So together with that, there's another point that the refineries now are on different pages. For -- I mean is different and we also see in advance. So I want to see from your view how do you see that. Will only refab would be sold and the other one would not? So I want to understand if you could give up on it if there's any cause there. And I understand that all the assets are not going the same steps. So one refinery being sold. So I want to understand how would be your theory there. So I want to understand what are your thoughts there in terms of the refinery, if we were talking about -- if you would keep being engaged on buying it or not. And if some way -- I mean how would you leave or carry on with these options that you have to keep in the process of acquiring the refineries.

Well, Fred, this is Andre here. Thank you for your question. Well, first of all, our situation -- I mean, I'll answer the question, but I have to say, not exactly where we're coming from. You saw our manifestation right after this whole confusion with the antitrust agency with a public notice of the Petrobras duty to have investing half on volume. So that is where we're coming from. But being objective to answer your question here, well, really from what we know and also it's a public information, the contract has been signed. So this is something that, for us, has already been sealed. Refab will carry on. Obviously, it's quite complex, like I said, but I believe that the most extreme case wouldn't be just refab. It would be reland and refab. So if that would be the case, the way we see is unlikely and also for some time limited as well. In the long run, we would have maybe a greater opening to the market. But Petrobras could even leave the refinery sector as a whole as many of the international ones have. But if we get refab and reland together, this should give us 15% to 20% of our national amount, and this is relevant already in the private sector. So I believe this is already enough and strong for the sector. So obviously, all of this are just likelihoods, but this is what we see as the most logic. And we have a situation at this point, and it's been a few months in negotiations. So we'll see if there's any variable that has no obviously we'll be considering once they come up. But at this point, that's where we're at.

One extra question here. Hypothetically, obviously, I mean, it's not the case I Know that you're coming from. If you would not want to carry on with the purchase, are there penalties? At what point can you cancel the effort of buying it?

Well, Andre, the process of negotiation of contracts -- I mean it's not really canceling the purchase. Actually, it hasn't been sealed. We were selected as the best price offer, and there's a whole negotiation that is so complex that can come through or we might not get to the right terms in one of the contracts that we are addressing. So it's not a matter of canceling anything that has already taken place. It's actually not carrying out something that both companies are looking into. So I believe that's where we're at.

Our next question comes from Regis Cardoso from Crédit Suisse.

There are a few topics here that I'd like to talk to you about. First, in terms of the fourth quarter of EBITDA, and the margin that was lower is a result of some specific dynamics maybe of the imports or if you somehow saw a competitive environment that pressed margins down. If you can even expand this comment of what you've seen for this first quarter of 2021. And based on that also, I'd like to understand if cybernetic attack or now this disruption that is potential. I don't know if you felt that, but a possible disruption of supply of diesel from Petrobras. If any of these, in your view, could get in the way of the performance of Ipiranga in the first quarter. And then still, based on the effect of all the recent news, if it's possible to get the detail of the price from the pump at the service station, showing how the cost is comprised and explaining also about inventory. From -- I understand the president even wanted to see the margin of the distributor and the reseller. So is that possible? I'd like to know from you. And also lastly, still talking about this whole process that has to do with what we saw in the last announcement. If the taxes piece and co-fees, if -- I mean, it's clearly that would be favorable to the sector, but I would like to understand from you that it should be uniform by states. And what type of arbitration can come from that. It seems quite controversial in terms of the approval.

Thank you for your questions. I'll start answering them comparing here between the gross margin for the fourth quarter. Like I said, comparing the fourth quarter with the third quarter, a delta of gain of inventory and loss of imports because of the closing of the window, BRL100 million, which has an impact in the comparison. The gross margin of BRL7 by cubic meter. That is the main impact when we talk about the margins. Your second question was related to taxes. And I will pass the floor to Fred here.

Well, I believe -- I mean, it's -- let me see if I understood the question right, but I believe we do not have any material impact there. From what I understand, there was a question there about supply issue from Petrobras. And the answer is that we do not see that. I'm not sure I understood your questions right. But Rodrigo can add later on. But in terms -- I mean, where we're talking about the taxes, the federal taxes. I mean, we see that it's very important in all processes. I mean, this is a win-win situation because, on one side, it would simplify greatly the whole tax process, which is so complex. And also -- I mean, there's the point about the ITMS, the local VAT, I mean, it would be based on volume and not in terms of price and expectation. I mean these are things that would be very positive for -- prospect as a whole. So we believe that this will not represent any reduction in tax collection. So obviously, when we talk about the representation by states, I mean, that would be also positive. But still, there are distortions. And also when we talk about tax dodging, frauds, in any case, I believe that one single tax application would be very important. This also change of tax, if it comes through, would be tax dodging. In our sector, we know that it's one that is subject to tax dodging because the taxes are much greater than the cost of distribution itself. So it's impossible to beat the tax dodgers in that way. Unfortunately, it's still a reality that gets in our chain, and it has even increased a bit recently. So we're highly favorable in a simple tax format. And also, Regis, if you could repeat the question that you said, which I'm not sure I quite understood. Well, there was a question also about understanding if this dynamics of the fourth quarter of margin...

I understand that the inventory in imports, there was impact. So thinking about the first quarter of 2021, what would be the impact? So I believe that one of the topics, the cybernetic attack. And the other topic is the newspaper news that we had recently seen. And that's why I asked you if you have seen a risk of Petrobras not being able to supply the delivery forecasted for March. And if this can be a risk for the results in any way.

I see, Regis. I think that the first part I have already answered. Now the second part, I think there is -- I mean, a lack of fuel supply possibility. But we are mitigating that with our own volume to manage. So we have a low-risk for our operations.

I see. But on the other hand, I mean, if the price is still like that, so this is something that has an impact on the fourth quarter, is that it?

Well, there are variabilities in the last few weeks. If there is a negative window, there can be an impact in loss of imports result. If it's positive, there's a gain. So it depends on this revolution over the semester -- this evolution, excuse me. Okay. Thank you.

This concludes the questions and answers section. At this time, I would like to turn the floor back to Mr. Rodrigo Pizzinatto for any closing remarks. Mr. Pizzinatto, the floor is yours.

Thank you all for your attention, and I will be with you in our next event, which will be the Ultracargo event in March. So thank you, everyone, and have a good day.

Thank you. This concludes today's Ultrapar's results conference call. You may disconnect your lines at this time.