Business environment remained challenging in 2015, with the combination of economic slowdown, higher unemployment levels, inflation above target, rising interest rates and depreciation of the Real.

Political instability created hurdles to approve tax adjustments necessary to Brazil, resulting in the downgrade of Brazil’s credit rating by credit rating agencies. With the purpose of restraining the growing inflation rates found over the year, Central Bank raised the basic interest rate, from 11.75% at the end of 2014 to 14.25% at the end of 2015.

GDP growth expectations in 2015, published by the Focus Bulletin of the Central Bank of Brazil, began the year with a perspective of growth of 0.5% and ended with an expected drop of almost 4%. The average exchange rate of dollar against Real in 2015 was of R$ 3.33/US$ as compared to R$ 2.35/US$ in 2014, an increase of 42%.

The number of light vehicles licensed totaled 2.5 million, allowing the fleet to a 3% estimated growth in 2015.

The deceleration in global economy and the decisions of production of the OPEC member countries had influence on the international oil price, which started the year with a price of US$ 56/barrel (Brent), remained stable in the first semester and ended 2015 with a price of US$ 36/barrel. The drop in the oil prices and the increases in derivatives price by Brazilian refineries maintained average domestic prices above international prices. In the petrochemical market, ABIQUIM data issued a drop of 7% in 2015 in the National Apparent Consumption.

Sales in the retail pharmacy sector, according to data from members of Abrafarma, grew 12% in 2015, continuing in nominal growth but lower than those growth rates seen in recent years.

Sales Balance

At Ipiranga, the volume sold in 2015 slightly increased by 0.4% over 2014, totalizing 25,725 thousand cubic meters. In 2015, the sales volume of gasoline, ethanol and natural gas for vehicles (Otto cycle) increased by 2% compared to 2014, as a result of an estimated 3% growth of the light vehicles fleet and investments made in new service stations and conversion of unbranded service stations, partially offset by the effects of higher unemployment rates over the year and the consequent impact on household consumption. The total volume of diesel decreased by 2% due to the weak performance of the economy.

At Oxiteno, specialty chemicals sales had an 8% decrease compared to the previous year, mainly due to the effects of the Brazilian economy slowdown, resulting in a 7% decrease in total volume compared to 2014.

Ultragaz’s sales volume had a 1% decrease compared to 2014, mainly due to the economy slowdown in bulk segment, partially offset by the capture of new customers in the residential and small and medium-sized companies segments and condominiums and the 1% growth in bottled segment.

Ultracargo’s average storage had an 8% reduction over 2014, mainly as a result of the partial stoppage of the Santos terminal due to the fire occurred in the beginning of April, partially offset by the increased demand of fuels in Suape and Aratu.

Extrafarma ended the year with 14% growth over 2014 in the average number of stores, compared to a growth of 8% Abrafarma, gaining two positions when compared to December 2014 in the Abrafarma ranking, ending the year in 6^th position.

EBITDA R$ million

* Refer exclusively to the months from February to December, 2014.

Comparative performance
2015-2014

Indebtedness

Ultrapar ended the fiscal year 2015 with a gross debt of R$ 8,902 million and gross cash inflows of R$ 3,973 million, resulting in a net debt of R$ 4,928 million, an increase of R$ 953 million compared to 2014, in line with the growth of the company. Ultrapar’s net debt at the end of 2015 corresponds to 1.2 x the EBITDA or the last 12 months, stable compared to the ratio at the end of 2014.

Net debt R$ million

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