Thiago Duarte: Yes. Thank you.
Operator: Next question comes from Luiz Carvalho, UBS.
Luiz Carvalho: Hello. Good morning. Thank you for taking my question. Congratulations on the results. I have two questions, one for Lutz and one for Linden. And looking at things from a different angle in our last few calls, you shared a lot about this company strategy and capital allocation. But I want to know more details about the time frame and prioritization. So I want to understand how much you’re focused on diversification for capital allocation? And how much that is to be done in terms of operational improvements? I will no longer call it turnaround. So is there anything that you can do fill in terms of your management preparation and that initial plan of having just one position in your board. So how are you allocating time and what are the priorities in the next 12 months?
And my second question going back to Linden’s comment, it is very clear that there was an improvement in your competitive environment. I think it is unanimous that both small and larger players are more focused on profitability. And you mentioned a 20% return rate as an appropriate level for EBITDA that considering all the products [ph]. So how far — thinking of the margin, how far is Ipiranga from the rest of the industry? For example, you talked about diesel and then there’s ethanol do you think we will see a fast improvement in these fields? And how do you see the competitive environment looking forward and your probability of reaching the 20% return rate as you mentioned.
Marcos Lutz: You sound like my mother Luiz. But when you ask about my time allocation, I don’t have a very fixed routine. It will depend on the weeks and the demands on which we — Rodrigo and I, we have a monthly routine with our business. Maybe I’d say it takes 25% of our time and this is part of our routine. And the other 35% depend more on what’s happening during that month in terms of business and also other aspects. Rodrigo and I also dedicate some time to governance to the Board and the transition that is taking place and has been taking place in the Board and the major changes that we made in our governance and the generational transition. So I don’t have a straight answer for you. But I don’t think we have any time restriction if that is your concern for us to dedicate to new investments.
We have the capacity. We have built this capacity over time. So I don’t think there’s any problem in that sense. Luiz I think we have some positive points that allow us to believe that we can go back to the 20% return rate and the industry has been at a level before in the past. And what we also have missed. And it’s not just about — and returning to the 20% level is not just about the margin. It’s the margin, but it is also the environment. And specifically at Ipiranga as we have been saying we have some paths of improvement in our position that will help us get closer to the 20% return rate. Brazil has seen some advancement in the regulatory framework, you talked about some tax-related issues, which are positive. But there are also risks for this environment.
We have the regular trade. We have tax efficient. We have problems with counterfeit products that we need to fight together as an industry. So as I said, you’re looking at a snapshot. If we look at a snapshot of quarter three, we are not that far. But if you look at the movie there’s still a lot of work to be done until we can get to the 20% return rate, but we are in the right track. But it’s important we shouldn’t just wait for the margin to solve everything. We have to work also on the competitive environment and other business aspects and we also have some homework to do, some housekeeping to do to improve Ipiranga’s operations, as we have been doing in the past two years.
Luiz Carvalho: Perfect. Thank you. Very clear.
Operator: The next question comes from Rodrigo Almeida, Santander.
Rodrigo Almeida: Good morning, Lutz and the rest of the team. I have two questions. First, we already talked about this today we’re able to set a different angle. I want to talk about the company’s capital structure. Both in terms of energy and growth, the capital allocation and also the current capital of [indiscernible], so looking at the past six months, I know it is difficult to foresee which opportunities are for the future and in term [indiscernible] and in short-term, it is clear to us that you will continue to generate cash and we’re having — we have a relevant fresh entry expected for the quarter. So, I want to talk about the capital aspect of the company. How do you think the company had in terms of its capital and how we face this capital structure will be three or four quarters from now?
And what are the implications for dividend payout, buyback and inorganic growth? I understand that you have a dividend policy and wanted to understand, how the efficiency of your capital structure in the quarter can have an impact on that? My second question was also about [indiscernible] and you talked about your societal reorganization and how changing the leadership or from [indiscernible] to a holding. And I want to understand, what are your next steps? First, in terms of this reorganization, what can we expect to more capital strength for different business for example on [indiscernible], I don’t know if maybe you want to increase the leverage for Ultragaz and Ultracargo or maybe optimize your — maybe organize the liabilities [indiscernible]?
And also within the portfolio optimization, are you expecting something similar to what you recently did in Ultracargo? Are you going to be similar with Ipiranga? Thank you.
Rodrigo Pizzinatto: Good morning, Rodrigo. Thank you for your questions. Well, since the evolution in results in our cash flow, since we had this evolution in our results and cash flow, we can certainly are in a comfortable position in terms of cash generation. And we are using our cash for investment projects. We have concentration of investments in quarter four and we had a disbursement to acquire Opla [ph] in quarter 3 also the investments in NEOgas and Stella. And the way we look at our investments, Marcos talked about this is very risk sensitive. So, is there a business that we know well because in this place, the risk is much easier to measure and the lower the volatility of the company’s business, the best you can foresee your flow.
Ultracargo is a more stable business and Ultragaz is more volatile. And that’s why the return rate that should go back to the level of 20%, which is suitable to the risk of the business. Now, when we go from very well-known businesses to business that we do know that well, the level of return that we require is higher to the lack of knowledge in that business and the higher level of risk. So looking forward, if we don’t have good applications for the cash and good costs for mid to long-term projects, we will increase the payment of dividends, because we don’t want to be at a sub-optimal capital structure. Now, as for your question about the businesses capital structure, the capital structure for each of the business will reflect that of the holding.
But this is something that will be discussed timely at the right time when the time comes.
