UGP · Ultrapar Participações S.A.

Sustainability anchors Ultrapar’s strategy (Item 1 - Business), woven into capital decisions, investment vetting, and risk frameworks to mitigate long-term viability threats. Yet Item 7 highlights mounting headwinds: stricter environmental regulations, spurred by climate change, could elevate compliance expenses and erode product demand, complicating cost structures. Climate disruptions—floods, storms, windstorms—risk halting production, severing supply chains, and impairing assets, a acute concern for Hidrovias where volumes fluctuate with commodity cycles and rival capacity availability (Item 3 - Legal Proceedings).

Hidrovias integration introduces variability, as operating levels hinge on cargo production rhythms and seasonal logistics gaps, demanding flexible capacity management. Regulatory flux, including CBio market dynamics influenced by government target shifts like the July 2022 postponement, adds pricing unpredictability to decarbonization efforts. Item 7 further flags escalating legal and financial compliance burdens from evolving rules, rendering activities more arduous and expensive, while potential foreign investment curbs via legislative changes could constrain capital access.

Overall, these dynamics underscore disciplined execution to counterbalance integration costs and externalities. Ipiranga and Ultragaz volume drivers signal demand durability, but climate and regulatory pressures necessitate proactive risk mitigation and sustainability embedding to safeguard profitability and growth trajectory into 2026.