ULTRAPAR PARTICIPAÇÕES S.A.
Earnings Conference Call - 1Q20
05.14.2020
Disclaimer
Forward-looking statements
- This document may include "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate," "believe," "expect," "estimate," "plan," "outlook," "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Investors are cautioned that such forward-looking statements are based on current expectations that are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. For this reason, readers should not place undue emphasis on these forward- looking statements.
Standards and criteria adopted in preparing the information
- The financial information presented in this document has been prepared according to International Financial Reporting Standards (IFRS) norms. The financial information of Ultrapar corresponds to the Company's consolidated information. The information on Ipiranga, Oxiteno, Ultragaz, Ultracargo and Extrafarma is reported without the elimination of intersegment transactions. Therefore, the sum of such information may not correspond to Ultrapar's consolidated information. Additionally, the financial and operational information presented in this document is subject to rounding and, consequently, the total amounts presented in the tables and charts may differ from the direct sum of the amounts that precede them.
- Please note that all financial information presented in this document consider both the adoption of the IFRS 16 norm and the segregation of certain expenses of the Holding.
- Information denominated EBITDA and Adjusted EBITDA is presented in accordance with Instruction 527, issued by the Brazilian Securities and Exchange Commission - CVM on October 4, 2012.
2 ULTRAPAR > CC1Q20 05.14.2020
COVID-19 - Initiatives for combatting the crisis
Essential activities in the context of the measures implemented to face the pandemic
- Protection and safety of our personnel and operational continuity
Main social initiatives - Ultrapar
- Donation to construction of hospitals (Ipiranga, Ultragaz and Ultracargo)
- Donation of diesel for the delivery of 70º alcohol and distribution of alcohol gel sanitizer at cost price to franchisee stores (Ipiranga and am/pm)
- Concession of discounts on fuels to healthcare workers (Abastece Aí)
- Assistance package for resellers (Ipiranga)
- Collective donation of ventilators (Oxiteno, Ultragaz and Ultracargo)
- Donation of basic food baskets, soap bars, LPG bottles (P-13), face masks and alcohol gel (Ultragaz)
- Disposal of space and infrastructure to vaccination programs at the Pará state and donation of face masks and gloves to the states of Pará, Maranhão and Ceará (Extrafarma and Ultracargo)
3 ULTRAPAR > CC1Q20 05.14.2020
COVID-19 - Main operational impacts
Ipiranga | Ultragaz |
Sales volume (mainly Otto cycle) | Volume for residential use (bottled) |
Inventory losses | Demand from small and medium-size companies (bulk) |
and higher freight expenses |
Oxiteno | Extrafarma |
Lower demand of Asian countries | Lower revenues (7% of stores closed and about 85% with |
Depreciation in exchange rates and higher sales to the | less working hours) |
Home & Personal Care segment
4 ULTRAPAR > CC1Q20 05.14.2020
Ipiranga - 1Q20 performance
Volume
000 m³
Franchises
-2% | ||||||
5,587 | 5,490 | |||||
2,810 | -5% | 2,669 | ||||
2,674 | +2% | 2,722 | ||||
1Q19 | 1Q20 | |||||
Diesel | Otto cycle | |||||
EBITDA
R$ million
-20%
- Otto cycle: sales impacted by the COVID-19pandemic
- Diesel: higher sales to the TRR¹ and the resale segments
Network: 7,106 service stations
¹ Small diesel bulk retailers
✓ 2,373 convenience stores | ✓ 1,488 Jet Oil franchises |
- Penetration of 33%
- 4 DCs in operation
- 8 company-operated stores (6 in SP and 2 in RJ)
597
480 | Lower sales volume |
Lower margins / inventory losses
Management of costs and expenses
For the sixth consecutive year, Ipiranga and am/pm have conquered the "The Best of São Paulo" award, by
Folha de São Paulo newspaper, in the Service Station and Convenience Store categories
1Q19 1Q20
5 ULTRAPAR > CC1Q20 05.14.2020
Oxiteno - 1Q20 performance
Volume
000 ton
0%
International prices
US$/ton
YoY | QoQ |
Ethylene -7% | -2% |
180 32
+2%
181 32
✓ Commodities: spot exports |
1,133 | 1,197 | 1,113 |
1,077 | 1,051 |
PKO | 40% | 48% |
MEG | -17% | -5% |
148
0%
148
✓ Specialties: higher sales in the Crop |
Solutions and HPC segments, softened |
by lower exports of solvents to Asia |
798 | 727 | 698 |
698 | 582 | 601 |
979 | Ethylene | |
697 | PKO¹ | |
665 | MEG² | |
661 | ||
1Q19 | 1Q20 | |
Specialties | Commodities | |
Average exchange rate
R$/US$
4.46 | |||
4.12 | ✓ +18% YoY | ||
3.92 | 3.97 | ||
✓ +8% QoQ | |||
3.77 | |||
1Q19 2Q19 3Q19 4Q19 1Q20
6 ULTRAPAR > CC1Q20 05.14.2020
1Q19 | 2Q19 | 3Q19 |
Source: PCI e ICIS LOR
EBITDA
R$ million
193
71
+207%
40 122
1Q19 1Q20
Non-recurring (tax credits)
4Q19 | 1Q20 |
¹ Palm Kernel Oil
² Mono-Ethylene Glycol
Better margins in US Dollars
Real devaluated against US Dollar (R$ 0.69/US$)
Ultragaz - 1Q20 performance
Volume | EBITDA |
000 ton | R$ million |
+7% | +34% |
Brazil: +5% |
395 | 421 | ||
126 | +6% | 134 | 110 |
270 | +7% | 288 |
147
1Q19 1Q20
Bottled Bulk
1Q19 | 1Q20 |
Volume | EBITDA |
Bottled: impacts of COVID-19 in the final weeks of March/20 and higher | Higher sales volume |
sales in the Mid-West and Southeast regions | |
Lower expenses | |
Bulk: higher sales to industries, condominiums, and for special gases | |
(propellants) |
7 ULTRAPAR > CC1Q20 05.14.2020
Ultracargo - 1Q20 performance
Effective storage - monthly average
000 m³
+20%
907 758
1Q19 | 1Q20 |
Volume
Higher handling of fuels (capacity expansions at Santos and Itaqui terminals)
Increase in handling at Suape and Aratu terminals
8 ULTRAPAR > CC1Q20 05.14.2020
EBITDA
R$ million
+52%
55% 47%
91 60
1Q19 | 1Q20 | ||
EBITDA | EBITDA Margin (%) | ||
EBITDA
Higher revenues (higher handling and contractual readjustments) Cost dilution - operating leverage
Extrafarma - 1Q20 performance
Number of stores (end of period)
-7%
440 411
16% 6%
54% | 38% | 34% | 40% |
Gross revenues
R$ million
-5%
546 521
EBITDA
R$ million
+630%
9 |
46% | 60% | |
1Q19 | 1Q20 | |
Up to 1 year 2 to 3 years > 3 years
1Q19 1Q20
1 | |
1Q19 | 1Q20 |
Store selectivity - YoY | Gross revenues |
✓ 49 closures due to weak performance | Smaller number of stores |
✓ 20 openings | Lower revenues at the wholesale segment |
Ramp up process of new stores |
9 ULTRAPAR > CC1Q20 05.14.2020
EBITDA
Better margins
Productivity gains
Tax credits in 1Q19 = R$ 9 million
Ultrapar - 1Q20 performance
EBITDA | ||
R$ million | +12% | |
782 | +3% | 880 |
71 | ||
809 |
1Q19 | 1Q20 |
CAPEX
R$ million
+31%
350
268
1Q19 1Q20
Non-recurring (tax credits at Oxiteno)
10 ULTRAPAR > CC1Q20 05.14.2020
Net income
R$ million | |
-30% | |
243 | Higher financial expenses |
169 | EBITDA growth |
Tax credits at Oxiteno |
1Q19 | 1Q20 |
Operational cash flow¹
R$ million
+184%
731
257
1Q19 1Q20
¹ CF of operational activities - CF of investment activities (ex-financial investments)
Ultrapar - Debt profile
Financial leverage
R$ million | 3.27 x |
3.03 x | |
10,269 | 11,418 |
1,704 | |
1,589 | |
8,681 | 9,713 |
Dec-19 | Mar-20 |
Leases payable (IFRS 16) | |
Net debt | |
Net debt (IFRS 16) / Adjusted EBITDA LTM¹ |
Amortization profile
FX variation on US$ debt:
- No cash impact = R$ 730 M (US$ debt protected by hedge accounting)
- Adjusted financial leverage = 3.06x
Breakdown by currency
2%
9%
45%
53%44%
Local currency | Foreign currency | Unrealized losses from hedging instruments | |||
Hedged | Non hedged | ||||
R$ million | Financial debt | |||||||
7,249 | ||||||||
5,753 | ||||||||
5,073 | ||||||||
1,806 | 1,623 | 30% | 1,989 | 718 | 34% | |||
12% | ||||||||
11% | 10% | |||||||
4% | ||||||||
Cash and Up to 1 year 1 to 2 years 2 to 3 years 3 to 4 years | 4 to 5 years > 5 years | |||||||
cash | ||||||||
equivalents | 1Q20: ✓ Duration (years): 4.7 ✓ Average cost (% CDI): 121% | |||||||
- Adjusted EBITDA LTM does not consider the impairment at Extrafarma for Dec-19 and Mar-20 11 ULTRAPAR > CC1Q20 05.14.2020
Initiatives to reinforce liquidity
- New credit facilities of R$ 1.5 billion
- R$ 1.3 billion in promissory notes
- R$ 0.2 billion in bank credit securities
- Reduction of ~30% on the investment's plan for 2020
ULTRAPAR PARTICIPAÇÕES S.A.
Investor Relations
55 11 3177-7014 invest@ultra.com.br ri.ultra.com.br
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Ultrapar Participações SA published this content on 14 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2020 13:29:05 UTC