UGP — Ultrapar Participações S.A.

Summary of Ultrapar's Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Adjusted EBITDA: BRL 1.6 billion for Q4 2025, a 34% decrease year-over-year, attributed to nonrecurring effects. For the full year, adjusted EBITDA reached BRL 6.8 billion, a 2% increase from 2024.
• Recurring EBITDA: BRL 1.7 billion in Q4, a 36% increase year-over-year. Full-year recurring EBITDA totaled BRL 6.2 billion, up 15% from 2024.
• Net Income: Q4 net income was BRL 256 million, down 71% year-over-year but would have been BRL 439 million (up 49%) without nonrecurring effects. Full-year net income was stable at BRL 2.5 billion.
• Operational Cash Flow: Record operational cash flow of BRL 5.5 billion for the year, leading to a leverage ratio of 1.7x, stable compared to the previous quarter.
• Dividends: Total dividends paid in 2025 amounted to BRL 1.4 billion, with a dividend yield of 7%.

2. Strategic Updates and Business Highlights:

• Regulatory Progress: Approval of key regulations such as the persistent debtor and single-phase taxation for naphtha, enhancing competitive and regulatory certainty.
• Expansion Initiatives: Completed expansion of Ultracargo's Rondonópolis base and acquired a 37.5% stake in Virtu GNL. Investment plan for 2026 set at BRL 2.6 billion, focusing on expansion and efficiency.
• Technological Advancements: Migration of Ultracargo's SAP system to SAP 4HANA to improve operational efficiency.

3. Forward Guidance and Outlook:

• Market Conditions: Entering 2026 amid geopolitical tensions and economic volatility, Ultrapar aims to leverage its strong operational foundation and focus on efficiency and sustainable growth.
• Ipiranga's Performance: Anticipated growth in volumes and margins, particularly following the closure of the import arbitrage window, which could stabilize market dynamics.

4. Bad News, Challenges, or Points of Concern:

• Declining Metrics: Significant decline in Q4 adjusted EBITDA and net income due to nonrecurring effects and increased depreciation and financial expenses from Hidrovias consolidation.
• Market Pressures: Ipiranga faced competitive pressures in January, with market share fluctuations attributed to oversupply and inventory levels, raising concerns about sustaining margins.
• Ultragaz Performance: LPG sales volume declined by 2% year-over-year, with challenges in the bulk segment due to lower industrial demand and competitive dynamics.

5. Notable Q&A Insights:

• Ipiranga Margins: Strong December margins were attributed to improved market conditions and regulatory enforcement against irregularities. However, January showed a decline in market share, viewed as a temporary setback.
• Ultragaz Strategy: Focus on operational excellence with no major changes expected. The government’s subsidy program is anticipated to positively impact the bottled market.
• Capital Allocation: Ultrapar emphasized a disciplined approach to capital allocation, balancing investments in growth with shareholder returns. Concerns about market rumors regarding Ipiranga's potential divestment were addressed, with no current plans for sale.

Overall, Ultrapar demonstrated resilience with strong operational cash flow and strategic initiatives, despite facing challenges in certain segments and market conditions. The company remains focused on growth and efficiency as it navigates a complex economic landscape.