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  • 1. Meeting with Investors4Q10 and 2010 Results Carlos Fadigas CEO Marcela Drehmer CFO Sao Paulo, March 22, 2011
  • 2. Forward-looking StatementsThis presentation contains forward-looking statements. These statements are nothistorical facts and are based on management’s objectives and estimates. The words"anticipate", "believe", "expect", "estimate", "intend", "plan", "project", "aim" and similarwords indicate forward-looking statements. Although we believe they are based onreasonable assumptions, these statements are based on the information currentlyavailable to management and are subject to a number of risks and uncertainties.The forward-looking statements in this presentation are valid only on the date they aremade (December 31, 2010) and the Company does not assume any obligation to updatethem in light of new information or future developments.Braskem is not responsible for any transaction or investment decision taken based on theinformation in this presentation. 2
  • 3. Agenda 4Q10 and 2010 Results Growth with Value Creation Petrochemical Industry Outlook and Priorities 3
  • 4. Agenda 4Q10 and 2010 Results Growth with Value Creation Petrochemical Industry Outlook and Priorities 4
  • 5. Highlights Braskem’s EBITDA stood at R$1.1 billion in 4Q10 with a 14.9 % EBITDA margin EBITDA (R$ million) EBITDA (US$ million) 2010 EBITDA reached R$4.1 billion, up 27% from 2009 +27% +41% 4,055 2,308 • Quattor’s EBITDA increased 78% reaching R$1 billion 3,181 1,638 Braskem’s domestic resins sales increased 11% Net Income of R$1.9 billion in 2010 Distribution of R$666 million in dividends 2009 2010 2009 2010 Braskem is committed to its financial solidity: Net Revenue (R$ million) Debt prepayment and long term bonds issues lengthened the average debt term +23% to 12.5 years 27,829 22,647 Net Debt/EBITDA ratio fell from 3.59x (Dec/09 pro forma) to 2.43x in Dec/10 The Administrative Council of Economic Defense (CADE), approved without restrictions the acquisition of Quattor Synergies from the acquisition are expected to reach R$377 million in annual EBITDA for 2011 2009 2010 Exports 23% 26% Ethylene XXI Project – Mexico Letters of interest to the project finance surpassed its financing needs Strategic partnership with Ineos and Lyondell Basell for the use of their technology at the polyethylene plants 5
  • 6. Capacity utilization rates were positively impacted by the improvement of Quattor’s assets Braskem consolidated operating rates % Quattor - Ethylene Ethylene Polyethylene Polypropylene PVC 89% 94% 94% 93% 83% 86% 87% 83% 85% 71% 78% 80% 63% 4Q09 1Q10 2Q10 3Q10 4Q10 2009 2010 2009 2010 2009 2010 2009 2010 Raw material supply regularization, in the Southeast and Rio de Janeiro complex, gradually increased the operating rates of Quattor’s assets: RJ unit presented a record rate of 93% in the last quarter of the year Continuous operational improvement of existing assets (record production rates in the south complex) Scheduled maintenance shutdown at Bahia’s cracker in the 4Q10 had a higher influence in the PVC production, partially impacting the average operating rate of PE and PPSource: Braskem *2009 data does not include Quattor expansion of 200 kton 6
  • 7. Domestic market performance Braskem’s Performance – 2009 Vs. 2010 (Thousand tons) Braskem Origin of Imports in 2010 (PE, PP and PVC) +11% 3,413 3,072 Others 2009 2010 14% Europe 10% North America 29% Braskem’s Sales Profile – 2010 Asia 10% OTHERS Mexico Colombia Argentina 1% 15% AGRIBUSINESS 21% 10% INDUSTRIAL 4% FOOD 29% PACKAGING 4% AUTOMOTIVE 6% RETAIL 7% Americas account for 67% of imports 9% 18% Imports represented 26% of the HYGIENE AND 13% domestic market CLEANING CONSTRUCTION CONSUMER GOODSSource: Abiquim, Braskem 7
  • 8. EBITDA performance: 2010 vs. 2009 R$ million Contribution margin was positive impacted by the higher sales volume and the improvement in resin- naphtha spread. FX impacted by the appreciation in Brazilian real. FX impact on costs 2,089 FX impact 1,979 (3,140) on revenues ( 1,051 ) 4,055 523 ( 441) (135) 3,181 EBITDA Volume Contribution FX Fixed Costs Non recurring EBITDA 2009 Margin SG&A * effect 2009** 2010Source: Braskem *SG&A: R$244 million of non-recurring expenses in 2010 **2009 non-recurring effect amounts R$135 million 8
  • 9. Value creation through acquisitionsQuattor’s EBITDA Performance (R$ million) +19% 361 +41% 302 984 214 +78% +99% 554 107 1Q10 2Q10 3Q10 4Q10 2009 2010Braskem America’s EBITDA Performance (US$ million) 37 114 -30% +73% 32 26* 22 23 66 2009 2010 1Q10 2Q10 3Q10 4Q10 *Excluding the non-recurring positive ajustment in the inventory booking criteria of R$ 10 MM. 9
  • 10. Synergies from Quattor acquisition totaling R$377 million in EBITDA for 2011 2011 EBITDA*: R$377 million 2012 EBITDA*: R$495 million R$ milhões R$ million R$ million 59 87 61 82 495 377 350 234 Industrial Logística Logistics Suprimentos Supply EBITDA Synergies EBITDA Sinergias Industrial Logistics Supply EBITDA Synergies Identification of new opportunities, efficient and rapid implementation of initiatives to capture synergies Integrated planning for industrial units Centralized maintenance plan assets strategy Optimization of freight and gains in distribution and storage Joint purchase of materials for industrial operationsSource: Braskem * Annual and Recurring 10
  • 11. Indebtedness and leverage decrease Dec 2009 Dec 2010 Gross Debt: R$ 17,637 MM -28% Gross Debt: R$ 12,728 MM Net Debt: R$ 11,417 MM -14% Net Debt: R$ 9,839 MM EBITDA: R$ 3,181 MM EBITDA: R$ 4,055 MM LEVERAGE Average Debt Term: 6.6 years Average Debt Term: 12.5 years Gross Debt/EBITDA: 5.54x Gross Debt/EBITDA: 3.14x Net Debt/EBITDA: 3.59x -32% Net Debt/EBITDA: 2.43x 4Q10 3Q10 4Q09 Chg. Chg. 2010 2009 Chg. R$ Million (A) (B) ( C) (A)/(B) (A)/( C) (D) (E) (D)/(E) Net Financial Result (541) 183 (981) - -45% (1,618) 266 - Foreign Exchange Variation (FX) 106 638 166 -83% -36% 405 2,782 -85% Monetary Variation (MV) (65) (40) (140) 63% -54% (355) (511) -31% Net Financial Result (583) (416) (1,006) 40% -42% (1,668) (2,005) -17%Source: Braskem Non-recurring Financial Expenses: approx. R$250 million in 4Q10 and R$464 million in 2010 11
  • 12. Debt reduction and lengthening the average maturityof debt DEBT PROFILE 2010 Amortization Schedule(1) Foreing (million of R$) Entities 1% 12/31/2010 Gov. Entities Capital 26% Market 38% 583* 20% 393 13% 14% 13% 10% 11% Banks 10% 2,5942,889 1,733 1,820 8% 35% 2,496 1,694 1,360 1,245 1,073 1,244 2009 Foreing Entities 5% Capital Gov. 12/31/10 2011 2012 2013 2014 2015 2016/ 2018/ 2020 Market Entities Cash 2017 2019 onwards 21% 22% (1) Does not include transaction costs Invested in R$ Invested in US$ *US$350 million of Stand by Issue of US$450 million in perpetual bonds, project finance prepayment and others financing operations lengthened the average debt term to 12.5 years Banks 52% → More balanced source of funds. 12
  • 13. Agenda 4Q10 and 2010 Results Growth with Value Creation Petrochemical Industry Outlook and Priorities 13
  • 14. Strategic Direction “BECOME THE GLOBAL SUSTAINABLE CHEMICAL LEADER, INNOVATING FOR BETTER SERVE THE PEOPLE”. 14
  • 15. Innovation pipeline: new developments to aggregatefurther valueInnovation and Technology Center Strenghtening the value chain competitivinessStructured resource base to support client needs: Over R$ 330 million in R&D assets PP More than 190 researchers Coffee Bags 8 pilot plants More than 400 patents filed worldwide Partnership with universities and R&D centers in Brazil and abroad 12% of Polymer Business Unit revenues results from new products launched in the past 3 years PVC Doors PE Innovation pipeline BIOPOLYMERS PP NPV: ~US$ 510 million PVC Windows PVC 15
  • 16. Growth strategyIncrease efficiency and the use of assets in the local market Brazil PVC Expansion Investments Startup: May 2012 (R$ million) Capacity: 200 kton/year 1,644 Investment: US$470 million Disbursement 2011e: R$380 million Maintenance Shutdown Expected NPV: ~US$450 million 391 Project Financing: HSE BNDES: up to US$525 million 142 94 BNB: R$200 million Productivity Attractiveness: to supply the increasing Brazilian demand 407 Capacity Increase / PVC Alagoas COMPERJ Equipment Replacement 243 Project configuration and raw material definition together with Petrobras 89 Mexico 278 Brownfield Projects (under review) Others PE assets: RJ, RS, SP PP assets: SP, BA 2011e 16
  • 17. Growth strategy On the path to leadership in sustainable chemicals Development Green PP 2013 Partnerships for the Green PE development of competitive technologies 2010 Innovation in bioplastic market Successful track record for Production integrated withBraskem becomes implementing projects: green propylene Cooperation agreement witha global leader in term and costs Capture of 2.3t CO2/t PP Cenpes (Petrobras Research biopolymers Center) Capture of 2.5t CO2/t PE Partnership with Clients Development of other cracks streams to sustainable chemicals PE integrated project study 17
  • 18. Growth strategy Projects with competitive raw materialEthylene XXI Project – JV Braskem and IDESA - MexicoCharacteristics Startup: January 2015 Ethane acquisition from PEMEX Ethylene Ethane Integrated project: 1 Mton ethylene and 66,000 bpd 1,000 kton/y 1Mton PEs PEMEX Gas (Basic Petrochemicals) Investment: US$2.5 billion (project finance) Ethane Mexico imports 68% of its PE demand (1.8 Cracker million ton/year) Gas Financial advisor: Sumitomo Bank Strategic partnership with Ineos and Lyondell Basell for PE plants technologies Polyethylene 1,000 kton/y Structuring of Project Finance: already received US$5 billion in letters of interest Manufacturing Industry PEMEX Exploration and 2011 Focus Production Selection of the cracker technology Structuring of Project Finance: due diligence, negotiation of financial contracts agreement Studies on environmental impacts and beginning of the process to obtain the construction licenses To finalize the engineering agreement, and the conclusion of the project engineering Definition and negotiation of EPC agreements (Engineering, Procurement and Construction) 18
  • 19. Agenda 4Q10 and 2010 Results Growth with Value Creation Petrochemical Industry Outlook and Priorities 19
  • 20. Outlook on the global petrochemical industry Ethylene: Operating rate 2010MM ton20 94 Industry in2010 91 90 89 88 84 86 84* Operating rates decreased in 4Q10 driven15 82 83 81 78 80 by the rigorous winter in the Northern10 74 hemisphere and operational problems at in 70 Europe and Middle East 5 60 Competitive cost base allowed the US to operate at higher rates than other regions 0 50 throughout 2010 Europe N. America Asia M. East World Braskem Global operating rate at 83.5% in 2010, 3.1 Capacity 4Q Operating rate 4Q10 (%) Operating rate 3Q10 (%) p.p. over previous forecast Global Scenario Ethylene: Supply and Demand BalanceMM ton New capacity additions can lead to the 200 90.7 91.3 closing down of non competitive assets on 88.7 86.3 a permanent basis, especially in Europe 83.5 83.9 150 High volatility in oil prices boosts naphtha 100 prices. Prices of resins and basic petrochemicals follow this trend 50 Expectation of improvement in the 0 industry profitability as of 2H11 2010 2011e 2012e 2013e 2014e 2015e Capacity Demand Operating Rate (%)Source: CMAI, Parpinelli Tecnon * Impacted by the scheduled maintenance shutdown in Bahia’s cracker for 52 days. 20
  • 21. Demand growth shall overcome new capacity additions Ethylene Demand 6.8% 5.2% CAGR 10-15 Capacity 6.7% 4.5% 4.4% 4.3% (MM ton) 3.4% 4.4% 4.0% 3.2% 2.3% 2.6% Supply 2.1% Asia CAGR 10-15 Africa 6,521 6,090 2.8% Middle East 4,514 Europe 9,010 2,805 Americas 3,216 3,423 3,229 3,814 400 3,417 Closures 2,652 2,545 Postponed/Delayed 468 1,816 2,462 3,774 2,067 529 1,200 490 Supply Growth % 743 962 550 375 (1,282) (699) (150) Demand Growth % (1,227) 2010 2011 2012 2013 2014 2015 -19% Delayed Limited additional capacity until 2015 No new investments announced motivated by financial crisis Sanctions in Qatar restrict investments in petrochemicals No further availability of cheap gas for new projects Greenfield projects: 4-5 years to startupSource: CMAI, March/2011 21
  • 22. Brazil: strong potential growth Brazilian’s thermoplastic demand (PE, PP, PVC) X GDP Growth% 2010 Market Share 7.0 - 7.2 7.5% Others 4.5% 5% -0.6% Imports 5.3 - 5.4 26% Million tons 4.9 4.3 69% Braskem 2009 2010 2011e 2015e Brazilians thermoplastic demand (MMton) GDP (Growth %) Per-capita Consumption of PE, PP and PVC (kg/person) 65 58 Brazil: 46 23 25 31 21 22 18 19 18 20 17 2002 2003 2004 2005 2006 2007 2008 2009 2010 USA Europe Japan ChinaSource: Abiquim, Braskem, CMAI, Ipeadata and IBGE. * Estimate: Resins Demand = 1.5x to 2.0x GDP 22
  • 23. Agenda 4Q10 and 2010 Results Growth with Value Creation Petrochemical Industry Outlook and Priorities 23
  • 24. Outlook and PrioritiesPetrochemical Market Political instability in Arab countries and oil price volatility Global petrochemical scenario continues to be marked by recovery, but oversupply is still expected for 2011. Mitigating factors: Operational instability, delays on the startup of new plants and trade sanctions imposed on Iran Strong demand from emerging countries like China, India and BrazilBraskem’s priorities Strengthening of the Brazilian petrochemical and plastics production chain To follow the domestic resins’ market growth: 9-10% in 2011 Ensure capture of the identified synergies Adding value through the acquired assets Quattor: continue improvement in its operational efficiency Braskem America: return above capital employed Growth Projects PVC Alagoas Implementing project in Mexico, which is based on competitive raw materials To define Comperj’s configuration with Petrobras Expand the use of renewable feedstock 24
  • 25. Meeting with Investors4Q10 and 2010 Results Carlos Fadigas CEO Marcela Drehmer CFO Sao Paulo, March 22, 2011