Andre Covre - IR and CFO.

Frank McGann - Bank of America Merrill Lynch Gustavo Gattass - BTG Pactual Marcelo Audi - Cardinal Partners.

Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to Ultrapar’s 4Q 2014 Results Conference Call. There is also a simultaneous webcast that may be accessed through Ultrapar’s website at www.ultra.com.br/ri. Please feel free to flip through the slides during the conference call. Today with us, we have Mr.

Andre Covre, Chief Financial and Investor Relations Officer, together with other executives of Ultrapar. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the Company’s presentation. After Ultrapar’s remarks are completed, there will be a question-and-answer session.

At that time further instructions will be given. [Operator Instructions] we remind you that questions which may be answered during the Q&A session may be posted in advance in the webcast. A replay of this call will be available for one 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 future results of Ultrapar and could cause results to differ materially from those expressed in such forward-looking statements. Now, I’ll turn the conference over to Mr.

Covre, who will present Ultrapar’s results in the quarter and discuss about perspectives. Mr. Covre, you may now begin the conference..

Thank you very much, good morning everyone. It’s a great pleasure to be here with you to discuss Ultrapar’s performance and the fourth quarter and in the year off 2014. Here to help me answer your questions I’ve executive officers from our business units and investor relations team.

I’d like to start our discussions by emphasizing parts consolidated performance last year which was once again very good particularly in light with the worsening market economic scenario creating an increasingly challenging business environment.

The economic environment was marked by successes, reductions in the GDP growth expectations which stated the year at around 2% at its currently tempting towards another progression, according to the first graph at the bottom of the slide. As a result diesel sales at Ipiranga both LPG and ultra gas.

The specialty chemicals sold in Brazil by Oxiteno which are all strongly related to PDP were flattish in 2014. In relation to the FX rates, our worsening scenario in the economy is normally followed depreciation of the Riyal.

However, what makes 2014 not only challenging but also atypical is that almost the positive movement procured in the first nine months. Until September the Riyal appreciated will remain stable against the U.S. dollar. This fact created a second negative effect in Oxiteno in addition to the lower volumes as its contribution margins is in dollars.

We also saw a strong growth in the interest rates compared to 2013 which increased financial expenses in a year in which the dollars progression was pressured by the factors I just mentioned. All considered in 2014, we presented consolidated EBITDA of 3.2 billion in net earnings of 1.3 billion 8% and 2% above the previous year.

Our consistent earnings growth and the result in cash generation have allowed the company to increased dividends. The payment of 380 million Riyal dividends for the send half of the year was approved totaling 779 million in the year, with amount which 5% higher than the dividends declared on 2013 earnings.

The dividends represent a 3% dividend yield over the average price of 2014 therefore maintaining the level reaching years and educating our confidence that the good performance will continue. [Indiscernible] is like forward to come in on the performance of our businesses and starting with UP number.

As seen in prior periods the growth in volumes was boosted by the increase in the light vehicle fleet which positively influences sales of the fuels for the light vehicles. As you can see in the bottom left chart the Brazilian vehicle fleet is estimated to have grown at about 5.5% compared to 2013.

This estimate includes the 7% drop in licensing of new vehicles that happened in 2014.

Aiming at reaping the benefits of the market growth and to capture market share from the wide flex we have been investing for several years in the expansion of the good invest service station network through the conversion of unbranded service stations and opening of new ones.

Following this strategy, we closed 2014 with 7,056 service stations, 5% above the number of service stations at the end of 2013. These investments have allowed the company to grow faster than the market in the reseller segment and obtain an improved sales mix as shown in the bottom right graph.

The reseller segment, the refined highest potential rather strategy of differentiation through constant innovation and services and convenience helping to increase the flow of traffic at service station helping to increase customer satisfaction and loyalty.

With this strategy, and consumer has products and services we hired value added, the resellers enjoy an additional source of revenue and the differentiated positioning therefore maximizing the profitability at the whole value chain including the [indiscernible] convenience and service in the gas stations has become well known in Brazil through a number of marketing campaigns the most famous of them are Ipiranga service station and Ipiranga a complete place waiting for you both the band with the value proposition through Ipiranga fltas.

With all these elements Ipiranga recorded a 14% growth in EBITDA compared to fourth quarter of 2013 and 13% growth compared to 2013, even considering the already mentioned weak economic environment which mainly impacted these sales.

We have some extraordinary effects in the fourth quarter that we highlighted in our earning release and are shown in the EBITDA chart of this slide. These effects were of a very similar dimension in the fourth quarter of 2013 and therefore are neutral on the comparison of the two quarters.

Now moving onto slide 5, I would like to talk a little about the expansion of the service networks strategy and our strategy of differentiation in convenience and service which as I mentioned has helped boost our results. Our expansion has been focused in the mid west north east and north regions of Brazil.

On the left side of the slide this shows its growth potential. In this region, car penetration is 11% lower than the rest of the country. As a result, these regions have presented above national average growth of fleet and fuels consumption.

This illustrates a continued growth potential in these regions supported by the increase in the light vehicle fleet and accordingly the consumption of fuels for light vehicles.

Investment in new service stations and conversions of unbranded ones allowed Ipiranga’s network to grow by 12% in this region in 2014 compared to 3% in the south and south east regions. In the last two years, we had added 380 service stations in the mid west, north east and north regions of Brazil compared to 216 in the rest of the country.

On the right side of the slide we show several activities that we carried during the year to strengthening Ipiranga’s attributes of convenience and services which as I mentioned is one of the pillars of our strategy.

AMPM Brazil's largest convenience store chain continue to grow by increasing its penetration in the Ipiranga service station network with 9% increase in total stores reaching 1708 units in the year. Of those 360 now have decreased and added feature though they’re deploying across the country.

One other thing in 2014 was [BOK] a new beverage purchasing experience for AMPM store customers. It is the [Walken] co-container with a large variety of the national and imported beer brands.

This is the concept of the beer which has been a great success within the Ipiranga network in 2014, a 104 AMPM stores throughout Brazil started offering the beer case. We also had a significant growth in ConnectCar which operates in the segment of electronic payments for tolls, parking and fuels.

It reached 350,000 customers and it’s already accepted in almost all roads in Brazil. Kilometers of advantages Brazil's largest loyalty program reached 18 million subscribers by the end of the year.

In summary, we had a year of relevant strengthening of the convenience and services attributes of Ipiranga’s network which we continue to - we intend to continue going forward.

Now looking to the core and quarter to talk about our expectations, first I would like to remember you that these are not specific projections, the trends and levels of progressions. At Ipiranga the long term trends in the macroeconomic scenario that influence the fourth quarter have not changed and are forced to present in the first quarter of 2015.

However, we expect to have a better earnings projection than that in the fourth quarter due to two well known elements; the one-off imports of oil derivatives and the temporary inventory gains and later one due to the movements in the purchasing costs of derivatives in Brazil. Moving to Oxiteno on slide 6.

Total sales volume increased by 9% in the quarter and remains stable in the year. Glycol sales increased in the two comparisons as a result of the scheduled stoppage at the Camaçari petrochemical complex in the second half of 2015 which impacted glycol sales in the period.

In turn specialty chemical sales were down 2% in both yearly and quarterly comparisons. This decrease reflects the different economic conditions in the two periods. In 2013, the Brazilian economy was grown contrary to 2014.

Additionally as we have highlighted since the beginning of the year we have reduced the level of operations [indiscernible] since the first quarter of 2014 due to the limitations importing raw materials in the country which have also contributed to the overall decrease in the volume of specialty chemicals.

Oxiteno’s fourth quarter dropped by 9% closing to full year with an 8% decrease compared to 2013. In addition to the volume, our last favorable sales mix and lowered local prices in international market also influenced results.

Particularly in the fourth quarter, we also had the facts of extraordinary expenses made on studies and projects partially offset by weakening Riyal.

But a year as a whole and additional and important factor on Oxiteno’s low results is the particularly a typical combination of GDP and FX rates that I mentioned at the beginning of the presentation and which the Riyal remains stable against the dollar and to September despite the slowdown of the current.

For the current quarter volume trends observed in 2014 have not changed.

On the other hand we had changes in two elements the Riyal is now weakening and the cost of raw materials are decreasing as a result of the lower oil prices which allows us to have an EBITDA margin expectation above the levels seen since our completion of the expansion cycle in 2011.

Moving to slide 7, in ultra gas in the fourth quarter sales volume grew 2%, the growth was mainly due to commercial initiatives and market growth in the north, north east regions and the investments made to capture new clients now we focus segments which are the residential condominiums and smaller and medium size business.

Such growth was partially offset by the lower demand of large customers influenced by the macroeconomic scenario.

EBITDA increased by 30% in the quarter mainly as a result of increased sales volume, commercial initiatives of differentiation and sales channel management, reduction of cost and expenses and the beginning of the higher requalification program of LPG bottles in the fourth quarter of 2013.

Volume and EBITDA behavior for the year was influenced by basically the same factors of the fourth quarter with the fact of the requalification of increased number of LPG bottles present and to the end of the first half of the year. Looking ahead, general trends have been changed.

The progression seen in volumes and EBITDA in 2014 is representative for the first quarter except by the fact of increased requalification on the first half of 2014. And with that we expect an EBITDA progression in the first quarter of 2015 higher than that one observed between the years in 2014 and 2013.

Moving to Ultracargo, the average storage had a 2% reduction in the quarter and 3% increase in the year. The main elements, the negatively influence the performance to lower exports of ethanol and the facts of the slowdown economy on the movements and handling of chemicals.

On the other hand, we had positive effects from the higher handling of fuel oil for power plants and automotive fuels due to the growth of the segment. Ultracargo EBITDA grew 1% in the quarter and 6% in the year mainly due to tariff recurring adjustments and lower expenses related to potential investment projects.

We guided the first quarter here as well the performance in 2014 is representative of trends both in volume and EBITDA and we expect for the first quarter of the year and evolution similar to that of 2014.

Moving onto slide 9 to discuss our retail products of Extrafarma, during the fourth quarter as planned we completed Extrafarma’s preparation to start a more accelerated growth this included adopting our structures and redesigned process to allow a faster opening of stores seeking a great specialization and agility.

With that - those activities completed, we have been able to start our more accelerated expansion with opening of 13 stores in the quarter. We finished the year with 223 stores in the north and north east regions, a 14% increase in relation to last year.

Gross revenues increased by 18% in the quarter closing the year with 16% growth above the average growth in the national market as measured by Ultrapharma. The growth was due to the increase in the same-store sales and increase in the number of drug stores.

Due to the integration of our Ultrapar and restructuring of Extrafarma for a more accelerated growth, we include in planned expenses of 50 million in the quarter and 39 million in the year as previously announced.

The [indiscernible] in the quarter was 3 million or if we exclude the integration and structuring expenses 90 million which is a 69% increase in comparison to the fourth of 2013. Such growth is due to the grater revenue, partially offset by the greater number of stores opened less than a year ago which have in the first year like negative EBITDA.

In 2014, as the whole, with coverage 30 million if we exclude again the integration and structuring expenses 69 million at 29% increase.

Before we talk about the first quarter trends, I would like to remind you that separation of the integration and structuring expenses used in 2014 was had the objective of presenting a comparison base with the results of 2013. From now on, we will start talking about simply the report [indiscernible] for 2015 and 2014.

Of the expenses that we made for integration and structuring approximately a little more than half are recurring expenses as they were related to structuring, trading new instructions and processes for the faster opening the stores.

For the first quarter, the trends of EBITDA is close to that reported in the fourth quarter affected by the costs of the new distribution center and the faster opening of stores during the last quarter which is I mentioned has net excess EBTIDA.

Before closing the discussion with our overall longer-term outlook, I would like to quickly pass you a few messages on slide 10. As you may know we completed 15 years as a publically traded company in 2014. Hence the IPO in ’99 we had invested R$20 billion in the organic projects and acquisitions.

The investments allowed in three geographical footprints of Ipiranga’s and Ultragaz distribution networks with increasing quality of the resellers and differentiation to clients. At Oxiteno, we strengthened the focus on specialty chemicals with greater differentiation scale.

At Ultracargo, we significantly expanded our storage capacity with expanded terminals and wider geographical coverage. Finally, we invested in entering the new segment Extrafarma which combine with other businesses form part of the sustained growth platform of the company.

During these 15 years, [indiscernible] recorded an average of 20% annual growth in its EBITDA, 23% in the net earnings and the total shareholder return of 22% per year on average. Over this period, we have undergone through the most diverse economic and political environments both in Brazil and abroad.

For example, we had Brazilian GDP growing 7.5% and dropping by 0.3%. We had the Brazilian exchange rate R$4 and R$1.5. At the interest rates in Brazil at 7.5% per year and 45% per year. We have inflation of 3.5% per year and 12.5% per year. We had oil prices at $130 and at $10 per barrel.

And in spite of these very diverse economic and political environment, we have reached approximately 20% of revenue growth and EBITDA earnings and shareholders return.

This performance undergone through this most [indiscernible] as a consequence of the investment made resilient nature of our business, our corporate governance design to that equation and with the accretion capability for our internal things.

Looking to the future, we tend to continue to make investments, we paid the way for a similar trajectory as shown in the investment plan for 2015 which is in the last slide, slide 11.

The investment plan approved by the Board of Directors with the [indiscernible] amounts to 1.4 billion which demonstrate the continuity of good opportunities to grow to increase scale and productivity gains as well as modernization of existing operations.

Among main growth initiatives we have our Ipiranga expansion of service station network of am/pm and Jet Oil focus on the Midwest, Northeast and North regions of Brazil, as well as the expansion of the related logistic infrastructure.

At the Ultragaz, the growth initiatives are mainly focused on the capturing new clients in the small bulk segment and continuing the construction of the newer filling plant in São Luís in the state of Maranhão. At Oxiteno, we have investments in the modernization of its production plant in the greater probability.

At Extrafarma, we invest to accelerate the opening of new stores and the finally the Ultracargo’s main growth investment would be the expansion of the Itaqui terminal which we expect to start operating in 2016.

The fundamentals of our business in these investments allows us to have its ability to continue the growth trajectory over the next few years. I’ll conclude our what we are prepared and we are now available to your questions..

Thank you. The floor is now open for questions. [Operator Instructions] The first question will come from Frank McGann of Bank of America Merrill Lynch. Please go ahead..

just in terms of demand trend, I am just wondering how you are seeing peak in Ipiranga demand growth in the early part of the year and what your expectations are now that it seems that the economy is weakening somewhat more than have previously been expected? And then secondly, a little bit more of big picture question but just looking at your investment program and the returns on your different businesses, I am wondering how you are seeing the return on your investments say in Extrafarma versus Ipiranga versus some of the other segment and how that effects your decision of work to deploy capital?.

Thanks Frank. We are happy you are with us today. In terms of the demand trend for Ipiranga, we continue to see the combined demand of gasoline, ethanol and natural gas for vehicles following the evolution of the fleet of cars.

For the last year, the fleet grew about 6% - 5.5% to 6% in Otto cycle fields as well and we are sooner to putting up here and it seems that expectations that I passed just a few moments ago. There was a [indiscernible] correlation [indiscernible] through economy so we have had flattish to negative evolution and that’s the trend for the moment.

In terms of the return investment question, we sensibly take our investment decisions on a case by case basis for considering the cost of capital of each one of our business units and the risks with [indiscernible] opportunity and its potential benefits.

[indiscernible] as textbook says, we want to have significant MPV, positive MPV and we will now compare the returns of the project and business A with project or business B. At least, so far we haven’t done that because our investment process has not so far overall these years was to have more cash than projects.

In other words, if we have the positive MPV project we are good. If we don’t have the positive MPV projects then we don’t do it. We haven’t had the situation where we only have as much as to do with too many positive MPV projects. So again it’s our philosophy to deal with on as a phase by phase basis.

Probably the reason we never had the situation where we had excess projects in relation to excess cash is that our corporate governance is designed both to generate a lot of business opportunities but also to be still and separate and separate the good ones from the bad ones. So when it comes to decide we only have the very answer I have..

The next question will come from Gustavo Gattass of BTG Pactual. Please go ahead..

over the course of this last year, we heard a lot of noise about the potential for changing and the procedures that were really done in your negotiations between yourself and service stations over those five year contract I was just wondering if you talk about anything about whether or that idea to potentially change the relationship you have with the service stations is evolving in any different way or if you guys think that is just going to continue in the way that has been for the last years.

Thank you..

Thanks for the questions. On the first one, there is no shift in account polices. The numbers that you see relates to two things, one is the negative EBITDA of ConnectCar which is part of its early success, it’s in the income stages of its life and therefore has negative EBITDA.

Second element there is a number of expenses related to the Extrafarma transaction. So those are the basically the two most relevant once than explained, between 80% to 90% of it..

Are those in any way you recurring?.

No Extrafarma - no it’s finished now. ConnectCar I want to believe that obviously it will be a positive EBITDA in some time in the future but it will probably take next year.

Can I move to the next one?.

Yes sure. Sorry about that..

And the expectation for Ipiranga in the first quarter, I meant to say that the percentage of the evolution would be higher than the percentage of evaluation between four quarters..

Perfect..

And the third question I believe is about I suppose is about the way - so called ramification works between the [indiscernible] Brazil and [indiscernible] is that correct?.

Yes..

Okay, both ways of contracting the payment, the service station owners exist in the market, the most common one is where you make enough from payment when the gas station owner signs the contract, that amount of money is normally used to service the gas station or to construct to fits a new gas station and it’s accounted as a intangible asset and it amortize over the life of the contract.

The second type is using a discount to the gas station owner and the price of fuels that acquires. If he achieves certain metrics normally of volume purchase over the life of the contract, this one is accounting as a discount to price so it reduces the gross margins. Most of the market practice both of them and we are not different.

The first one the upfront one is by far the most relevant one. We have heard true investment community that one of our competitors and find it to be more of the second type and maybe that’s for sure [indiscernible] we are open to both cases. It depends on what is better our interest and the reseller interest.

And evolution of the subject will depend for on how [indiscernible] on both parts evolve over the time..

[Operator Instructions] and we have a question from Marcelo Audi of Cardinal Partners. Please go ahead..

I have two questions one is you always recently give the guidance that the electricity of the auto-cycle should be considered in line with the increase of the fleet.

What is changing is that the disposable income of the families who likely deteriorate which is something that we haven’t seen at least not since 2003, do you consider a more conservative assumption on the growth of the auto-cycle in the coming years?.

Well Marcello, we had last year’s indication already because last year wasn’t a good year and every respect of the economic scenario and the auto-cycle did grow in line with the fleet and we are seeing anything different so far this year. So we don’t expect any meaningful effect in relation to that..

Okay and my second question is do you plan the launching of any new initiative regarding loyalty strategy of customer such as the kilometer [indiscernible] the am/pm any new strategy related to loyalty plans for this year or next?.

Marcello we have this philosophy to run our Ipiranga distribution [indiscernible] mentality and it is one of the well known aspects of the key management that you have to do novelty all the time. So we have as a philosophy to bring at least something, one thing new every year.

The number of years go was the Ipiranga brand [indiscernible] then the kilometer of advantage then the bakery I think last we have the [indiscernible] as I mentioned and there will one or two new things this year which we will be able to talk about once they are launched in larger scale may be in the next -- stating in the next quarter..

Okay. Thank you..

And ladies and gentlemen that will conclude our question and answer session. I would like to turn the conference back over to Mr. Andre Covre for any closing remarks..

Thank you very much for your presence. We look forward to have you on the first quarter, this one we have finished with reiterating two aspects.

One is we are with the consensus that the economic environment in Brazil inspires a lot of [indiscernible] that we feel very blessed be in a position where we can look towards 2015 expecting a better year than we had in 2014 in terms of evolution of EBITDA and profits. We look forward to seeing in the next call. Thanks..

Ladies and gentlemen, the conference has now concluded thank you for attending today’s presentation. You may disconnect your lines at this time..