2019
Integrated Report
About the Report
The Ultra Group is publishing this integrated report containing market, economic, financial, operational and environmental, social and governance (ESG) information for its businesses for the year 2019.
In this report, we have sought to integrate new ESG information, in order to provide a greater level of transparency in the disclosure of information. We believe that this has the potential to generate value for the businesses over time, as is indicated by the International Integrated Reporting Council (IIRC).
On the left, Pedro Wongtschowski, Chairman of the Board of Directors. On the right, Frederico Fleury Curado, CEO of the Ultra Group.
Statement by the Administration
The majority of the Ultra Group’s business activities are concentrated in Brazil. They are important to the country’s economy and provide products and services that are essential to people’s daily lives.
We entered 2019 with an optimistic outlook regarding the country’s economic growth and expectations of the positive effects on the business environment. However, after a few months, this optimism proved to be unrealistic since progress on achieving the expected economic reforms was slow. Despite the low economic growth, it was a year in which the Group’s businesses evolved and they performed as expected, considering the national economic situation.
Ultra Group Overview
Over a period of more than eight decades, the Ultra Group has evolved to become one of the main business conglomerates in Brazil, holding leadership positions in the various market segments in which it operates.
We create value for society by investing in companies that are sustainable and essential to people’s daily lives. Through our five main businesses, Ultragaz, Ultracargo, Oxiteno, Ipiranga and Extrafarma, we are present in 85% of all Brazilian municipalities, in all the Brazilian States and the Federal District, as well as in eight other countries.
Strategic and Market Context
The decreasing level of inflation in 2019 allowed the Central Bank to make four consecutive cuts in the base interest rate (Selic), down to 4.50% p.a. by the end of 2019, a historically low level. The BOVESPA share index appreciated by 32%, driven by the increased demand for higher-yielding assets. The average R$/US$ exchange rate in 2019 was 3.95 compared to 3.65 in 2018, a devaluation of 8%.
The macroeconomic scenario proved challenging in 2019. The country was slow to gain momentum and the GDP growth for the year was 1.1%, well below the market forecast of 2.5% made at the beginning of the year.
ESG Strategy
The Ultra Group is present in the daily lives of millions of Brazilians through its Ipiranga service stations, am/pm convenience stores, Extrafarma drugstores, Ultragaz gas bottles and Oxiteno’s range of surfactants, which are inputs for a multitude of consumer products. To ensure the supply of fuels to Ipiranga’s service stations, Ultracargo plays an important role in Brazil’s logistics infrastructure, in addition to providing storage for other products present in people’s day-to-day routines.
ESG Performance
The definition of the Ultra Group’s material topics was based on an analysis of the public positioning on ESG topics of investors, sectoral class entities, government agencies and legislation with the potential to impact its business over time. Furthermore, in 2019, the Holding and the businesses also consulted with representatives of their respective stakeholders, which generated more inputs for the process of defining material topics.
Financial and Economic Performance
Ultrapar’s shares reported a closing price in 2019 of R$ 25.48 on B3, a decline of 4% in the year while the Ibovespa stock index recorded appreciation of 32% in the same period. On the NYSE, Ultrapar’s shares recorded a depreciation of 8% at year-end closing at US$ 6.26, while the Dow Jones Industrial Average rose 22% in the same period. Ultrapar’s average trading volume including trading on both B3 and NYSE, was R$ 154 million/day in 2019 (+11%). Ultrapar closed the year with a market capitalization of R$ 28 billion.
GRI Indicators and Index
Access below and see the indicators and GRI Index: