Annual Report 2012 Annual Report 2012 Ultrapar
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ANNUAL REPORT 2012 ANNUAL REPORT 2012 ULTRAPAR REPORT ANNUAL Ultrapar Participações S. A. Av Brigadeiro Luís Antônio 1343 8th floor 01317-910 São Paulo SP Brazil Phone 55 11 3177 7014 Fax 55 11 3177 6107 [email protected] www.ultra.com.br A ANNUAL REPORT 2012 ANNUAL REPORT 2012 ULTRAPAR REPORT ANNUAL Ultrapar Participações S. A. Av Brigadeiro Luís Antônio 1343 8th floor 01317-910 São Paulo SP Brazil Phone 55 11 3177 7014 Fax 55 11 3177 6107 [email protected] www.ultra.com.br CONTENT ULTRAPAR 2 MESSAGE FROM THE MANAGEMENT 4 KEY INDICATORS AND HIGHLIGHTS 6 MANAGEMENT FUNDAMENTALS 12 CORPORATE GOVERNANCE 12 MANAGEMENT MODEL AND STRATEGY 18 RISK MANAGEMENT 24 INNOVATION 28 RELATIONSHIP WITH STAKEHOLDERS 32 SOCIAL AND ENVIRONMENTAL PHILOSOPHY AND SUSTAINABILITY 38 IPIRANGA 44 OXITENO 50 ULTRACARGO 56 ULTRAGAZ 60 RESULTS AND OUTLOOK 66 ANALYSIS OF FINANCIAL PERFORMANCE IN 2012 66 CAPITAL MARKETS 72 INVESTMENTS AND OUTLOOK 76 CORPORATE INFORMATION / CREDITS 80 1 UL TRAPAR In 2012, Ultrapar completed 75 years of history scale, maintaining the trajectory of robust and marked by the conduction of good businesses, consistent earnings growth. As a result of this with outstanding products and services to strategy, and supported by a corporate culture its customers, by the consistent planning based on continuous innovation, sustainability and execution of its strategy, by growth and of its businesses and a corporate governance development opportunities for its employees and designed to ensure the continuity of the company consequent value creation. Ultrapar holds leading and its growth, Ultrapar completed this year 26 positions in its markets: fuel distribution through consecutive quarters of EBITDA growth, attesting Ultragaz and Ipiranga, production of specialty the resilience and consistency of its growth. chemicals through Oxiteno, and liquid bulk storage services through Ultracargo. Continuing this strategy and based on the characteristics of its businesses – partly resilient The company performs its activities throughout and partly leveraged on the economic growth the entire Brazilian territory, with businesses – Ultrapar expects to continue its earnings and that have a widespread reach and are present value growth trajectory. in the Brazilians’ everyday life. Ultrapar also has a growing presence outside Brazil, through Since 1999, Ultrapar’s shares have been listed at the Oxiteno, with industrial plants in the United BM&FBOVESPA (São Paulo Securities, Commodities States, Mexico, Uruguay and Venezuela, as well and Futures Exchange) and at the New York Stock as commercial offices in Argentina, Belgium, Exchange (NYSE), with ADRs level III, and since 2011 China and Colombia. By the end of 2012, Ultrapar in the Novo Mercado listing segment, complying had nine thousand employees in Brazil and in its with the highest standards of corporate governance foreign units. in both markets. In 2012, the company’s shares appreciated by 45%, being one of the companies In 2012, Ultrapar continued its strategy of value with the highest appreciation among those that creation and investments to increase operating compose the Ibovespa. 2 In 2012, the company’s shares appreciated by 45%, being one of the companies with the highest appreciation among those that compose the Ibovespa. PORAT COR E ERNANC GOV E Y I N T I N L I O B V A A N I T I A O T N S U S 3 MESSAGE FROM THE MANAGEMENT In 2012, we continued our business strategy, aimed at At Ipiranga, we continued to invest significantly in the expansion of promoting sustained growth and value creation for Ultrapar its service station network and of its logistics infrastructure, focused and for its stakeholders, strengthening the company as an on higher-growth markets – the Midwest, Northeast and North institution. regions of Brazil. The investments made over the past few years have resulted in increased market penetration, allowing strong The new and innovative corporate governance model growth in sales volume. We also continued the differentiation established in 2011 and consolidated in 2012, associated with strategy by increasing the offer of products and services, keeping earnings growth and Ultrapar’s management practices, led an attentive eye on the convenience of our customers. to several recognitions by the market. Among other awards, Ultrapar was elected once more one of the most admired At Oxiteno, we began to capture the benefits from investments companies in the world in the energy sector by Fortune in the expansion of production capacity completed in 2011, with Magazine (World’s Most Admired Companies 2013, 4th place), significant growth in sales volumes and increased operating one of the most innovative companies in the world by Forbes leverage. In addition, we deepened the process of international Magazine, and the publicly listed company with the greatest expansion, with the acquisition of specialty chemical plants in the evolution in corporate governance by Instituto Brasileiro United States and in Uruguay, and we maintained our strategy de Governança Corporativa (Brazilian Institute of Corporate of developing products and applications, strongly supported by Governance – IBGC Corporate Governance Award). investments in innovation and in the growing use of renewable raw materials. In May 2012, we announced the succession process of Ultrapar’s Chief Executive Officer. Thilo Mannhardt, then In Ultracargo, we took relevant steps to expand its scale, adding member of the Board of Directors, has assumed the storage capacity through acquisitions and expansion of existing company’s CEO position from 2013 on, succeeding Pedro terminals. We acquired Terminal Marítimo do Maranhão – Wongtschowski, who held the position from 2006 to 2012 Temmar, installed at the port of Itaqui, in the state of Maranhão, and became a member of the Board of Directors of Ultrapar in order to capture business opportunities generated by the in 2013. The company’s solid and strengthened management economic growth of the country. The same motivation drove the system enabled a planned and organized transition process, expansion of the Santos and Aratu terminals, which represented a renewal with no disruption. This was another evidence of an increase of storage capacity of about 10% for the company. Ultrapar’s institutionalization – the corporate governance and culture of the company allow that decisions are taken by In Ultragaz, we captured the results from investments in professionals aligned towards a common goal to the benefit strengthening its positioning and scale of operations in the bulk of the company’s interests. LPG segment, in which it was the first mover, reaping benefits from the acquisition of Repsol in 2011. Ultragaz has also begun In 2012 Ultrapar also presented continued growth, both in initiatives for earnings recovery with the focus on reducing costs size, enabled by investments, and in results and value creation. and expenses. 4 Message from the Management Annual Report 2012 Ultrapar Thilo Mannhardt, Paulo G. A. Cunha and Pedro Wongtschowski The strategies developed by Ultrapar provided, once again, The achievements and results of 2012 reiterate the robust results in 2012. Since its IPO, Ultrapar has implemented success of a strategy that involves an innovative and an ambitious investment plan for the expansion of its carefully implemented corporate governance structure, businesses, a plan that amounts to R$ 12 billion, of which which preserves and reinforces Ultrapar’s commitment to R$ 1.5 billion was invested only in 2012. Investments in continuously create value. As a result, the company is well recent years have contributed to a growth of 18% and 19% in positioned to benefit from the good opportunities that it Ultrapar’s EBITDA and net income compared to 2011. pursues, prepared for new growth cycles. The significant earnings growth, with increasing returns, was recognized by the capital markets with the corresponding Paulo G. A. Cunha appreciation of Ultrapar’s shares. The company has an average Chairman of the Board of Directors total shareholder return of 24% per year since its IPO, much higher than that presented by the Ibovespa index and by the Pedro Wongtschowski CDI, which had average appreciation of 14% and 15% per Chief Executive Officer until December 2012 year, respectively, over the period. In 2012, a year in which our operating results had significant evolution, despite a modest Thilo Mannhardt economic growth, Ultrapar’s shares appreciated by 45%, while Chief Executive Officer since January 2013 the Ibovespa index rose by 7%. 5 KEY INDICATORS AND HIGHLIGHTS 6 Ultrapar closed 2012 with a market value of R$ 25 billion, approximately three times higher than that of five years ago. 7 SHAREHOLDERS’ RETURN AND ACQUISITIONS AND INVESTMENTS CAPITAL MARKETS • Ipiranga expanded its reseller network by 374 • Ultrapar’s shares presented a 45% and service stations and 391 new am/pm and 30% appreciation during the year on the JetOil franchises. The company also invested BM&FBOVESPA and the NYSE, respectively. in the construction and expansion of 12 In the same period, both market indexes storage facilities. appreciated by 7%. • Oxiteno concluded two acquisitions outside • Ultrapar closed 2012 with a market value Brazil: a specialty chemicals plant in Pasadena, of R$ 25 billion, approximately three times Texas (USA), and American Chemical, a higher than that of five years ago. specialty chemicals company in Uruguay. • Dividends declared totaled R$ 627 million, • Ultracargo acquired Terminal Marítimo corresponding to a 62% payout over 2012 do Maranhão S.A. – Temmar, establishing net income and a 3% dividend yield. a footprint in the port region of Itaqui, in Maranhão. Ultracargo also increased its • Once more, Ultrapar has been selected storage capacity by approximately 10% to be part of the portfolio of the through the expansion of its terminals in BM&FBOVESPA’s Corporate Sustainability Santos and Aratu. Index (ISE), comprised of companies with outstanding recognition regarding their • Ultragaz directed its investments mainly commitment to social and environmental to capturing new clients in the LPG bulk responsibility, corporate governance and segment.