Apresentação citigroup   14a conferência anual da américa latina (inglês)
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Apresentação citigroup 14a conferência anual da américa latina (inglês)

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Apresentação citigroup   14a conferência anual da américa latina (inglês) Apresentação citigroup 14a conferência anual da américa latina (inglês) Presentation Transcript

  • Meeting with Investors 14 th. Annual Latin America Conference New Y ork CityJosé Marcos Treiger Luiz Henrique Valverde IRO IR Manager March, 2006
  • Forward‐looking StatementsThis presentation contains forward‐looking statements. Such statements are not statements ofhistorical facts, and reflect the beliefs and expectations of Braskem’s management. The words“anticipates”, “wishes”, “expects”, “estimates”, “intends”, “forecasts”, “plans”, “predicts”,“projects”, “targets” and similar words are intended to identify these statements. AlthoughBraskem believes that expectations and assumptions reflected in the forward‐lookingstatements are reasonable based on information currently available to Braskem’s management,Braskem cannot guarantee future results or events.Forward‐looking statements included in this presentation speak only as of the date on whichthey are made (December 31, 2005), and the Company does not undertake any obligation toupdate them in light of new information or future developments.Braskem shall not be responsible for any transaction or investment decisions that are takenbased on information included in this presentation.
  • Agenda 4 Company Overview 4 4Q05 & FYE 2005 Results 4 Growth & Value Creation
  • Current Shareholder Structure (* ) Market Capitalization of US$ 3 billion and Free float of 47% PREVI PETROQUISA ODEBRECHT NORQUISA PETROS FREE FLOAT 2.5% 2.6% 10.0% 8.4% 48.6% 31.7% 25.4% 9.1% 2.4% 1.2% 11.0% 46.8% 29.5% 29.5% 100.0% 63.7% 35.0% 33.9% POLIALDEN % Voting Capital % Total Capital Investments in Affiliated Companies Controlling Shareholder * As of December 31, 2005Source: Braskem
  • New approach to the Brazilian petrochemical sector  First integrated petrochemical company in BrazilOil exploration  st  1  Generation  nd  2  Generation  rd  3  Generation  Naphtha and Condensate  Competitiveness Competitiveness  INTEGRATION  New dynamics in the value chain 
  • Braskem: Player with the largest scale in the region 5.8 million tons in total annual capacity of petrochemical and chemical products 3,255  Thousand tons / year 525  PVC 580  PP  PE Ethylene 870  1,400  1,135  700  1,060  670  630  625  561  1,280  540  350  150  130  700  520  520  500  476  85  Braskem  Dow  Copesul1  Rio Polímeros2  Ipiranga  Unipar Suzano Solvay  Politeno 1 1. Braskem’s affiliates: a) Braskem jointly controls Copesul with the Ipiranga Group b) Braskem owns 33.9% of Politeno´s total capital2. Jointly owned by Suzano, Unipar, Petroquisa e BNDESSource: CMAI and Braskem – 2005
  • Braskem: A diversified portfolio of products Revenues Breakdown ‐ 2005 %  PE  13%  PP  20% PVC  3% PET  2% Ethylene  4% Propylene  Resins  BTX (Benzene Toluene, Xylenes)  14% 46%  Caustic Soda  12% Caprolactam  Butadiene Others  9% 10% (includes EDC,  2% Isoprene, gasoline,  11% utilities among others) 
  • Braskem: present across several industries and in the daily lives of millions of people 4 Market segmentation for Braskem’s resins in 2005 % of Revenues 4 Perspectives for 2006: OTHERS* 16% 4 Lingering of global economic growth, led by China and India COSMETICS AND FOOD AND BEVERAGES PHARMACEUTICALS 33% 5% 4 In Brazil: AGRICULTURE 7% 4 Gradual reduction in interest rates 4 Increase in public investments in RETAIL infrastructure 9% 4 Probable domestic demand boost coupled with higher expected GDP CONSUMER GOODS growth CIVIL CONSTRUCTION (NON‐DURABLE) 4 Increase in disposable income 15% 15%* Includes personal hygiene, infrastructure, electronics, auto parts and others Source: Braskem and FIERGS/CEPAL (jan/2006) for economic forecasts 
  • Gross Revenue over R$ 15 billion Significant and consistent revenue growth Gross Revenue  Revenue R$ million Gross Revenue US$ million 14,342  15,193  6,252  11,284  4,900  8,858  3,688  3,013  20% CAGR 28% CAGR  2002  2003  2004  2005  2002  2003  2004  2005  Net Revenue R$ million Net Revenue US$ million 11,607  11,044  4,775  9,191  3,771  6,991  3,008  2,375  18% CAGR 26% CAGR  2002  2003  2004  2005  2002  2003  2004  2005 Source: Braskem
  • EBITDA Evolution Consistent growth in US$ since 2002 EBITDA R$ million EBITDA  EBITDA US$ million 2,549  871  851  2,090  1,776  581 1,335  457  16% CAGR  23% CAGR  2002 *  2003  2004  2005  2002  2003  2004  2005  * Excludes non­recurring effects in the amount of R$ 779 million Source: Braskem
  • Consistent improvement in Profitability Net income reaches US$ 270 million in 2005 Net Income R$ million Net Income US$ million 691 677 245 268 215 59 2002 2003 2004 2005 2002  2003 2004 2005 (301) (794)Source: Braskem
  • Sound Capital Structure and decreasing financial leverage  leverage Net Debt / EBITDA  EBITDA 5.1 Net Debt Evolution US$ million  3.5  1.5  1.4  2,166  1,929  2002  2003  2004  2005  1,457  1,211  Debt / Equity 57%  52%  2002  2003  2004  2005  80%  78%  48%  43%  20%  22%  2002  2003  2004  2005 Source: Braskem
  • Agenda 4 Company´s Overview 4 4Q05 & FYE 2005 Results 4 Growth & Value Creation
  • High Capacity Utilization Rates Reflecting sound operating performance 4 Capacity utilization rate ETHYLENE  ETHYLENE PE  PE PP  PP PVC 91% 91% 94% 93% 94% 95% 87% 90% 2004  2005  2004  2005  2004  2005  2004  2005  Comparison to 2004  Production of Thermoplastic Resins (ton) + 7.5% Sales of Thermoplastic Resins (ton) + 8.4%Source: Braskem 
  • Total Sales  9% increase in resins sales comparing 4Q05 vs. 4Q04  4 4Q05 Performance impacted by the period’s seasonality 4 Low inventory level at customers by the end of 2005  000 Ton 4Q0 5 3Q0 5 4Q0 4 Var.% Var.% Sales ‐ main products (1) (A) (B) (C) (A) / (B) (A) / (C) Ethylene k ton 290 291 295 0% ‐2% THERM OPLASTIC RESINS k ton 401 486 369 ‐1 7% 9% PP k ton 121 149 107 ‐1 9% 1 4% PE k ton 175 210 166 ‐1 7% 5% PVC k ton 105 127 96 ‐1 8% 9% (1)  Consolidates sales in the domestic and export markets, including the Southern Cone.Source: Braskem 
  • Total Sales Commercial flexibility in a low growth domestic market 4 An 8% increase in sales of thermoplastic resins driven by the 51% increase in export volume 000 Ton 2005 2004 Var.% Sales ‐ Main Products (1)  (A) (B) (A) / (B) ETHYLENE k ton 1,170 1,099 6% THERMOPLASTIC RESINS k ton 1,728 1,594 8% PP k ton 518 461 12% PE k ton 768 705 9% PVC k ton 442 428 3% (1)  Consolidates sales in the domestic and export markets, including the Southern Cone.Source: Braskem 
  • Exports reach ~ US$ 1 billion Strategic and commercial flexibility reflected in a record performance in 2005 4 Exports increase more than US$ 500 million in only 3 years  Exports US$ million  Destination of Exports – 2005  2005 959  Europe  710  21%  617  North  South  415  America  47%  America  20%  ROW  12%  2002  2003  2004  2005  % of net revenue 2002  2003  2004  2005 23% 25% 19% 20% Source: Braskem 
  • Naphtha ARA price increases 26% in 2005  4 Increase in naphtha prices negatively impacts CoGS by over R$ 1 billion Quarterly price evolution for oil and  Naphtha impact on CoGS  Naphtha impact on CoGS  naphtha (Brent and ARA)  R$ million  100  600 187 90 1,176 500 80 5,281 476 70 400 4,707 (789)  60 378 50 300 40 274 200 30 Brent oil (US$/barrel) 20 Naphtha ARA ‐ US$/ton 100 Naphtha ARA annual average ‐ US$/ton 10 0 0 Foreign  2003  2004  2005  2004  Price  Volume  Exchange  2005  +26%  +38%  476 Average Price – Naphtha ARA (US$/ton) Average Price – Naphtha ARA (US$/ton)  378 274  2005  2004 Source: Braskem  2003 
  • Evolution of Naphtha ARA prices prices  4 High volatility with a recent downward trend  640 590  540  490  440  390  2005  2006  Daily Naphtha Prices ARA (US$/ton) 30‐day moving average 20‐day moving averageSource: Bloomberg 
  • EBITDA Analysis – 4Q05 vs. 4Q04 Foreign exchange and naphtha offset the effect of better prices and volumes Main Variations  Variations R$ million  83 58 148 661 (378) 480 (92) 4Q04 Price Volume Others Raw Foreign 4Q05 Materials Exchange Source: Braskem 
  • EBITDA Analysis ‐ 2005 vs. 2004 Foreign exchange and naphtha offset the effect of better prices and volumes Main Variations R$ million  1,234 Foreign 129 exchange impact on 1,977 costs (1,886)  Foreign exchange impact on revenue 2,549 (1,826) 2,090 (652) (87) 2004 Price Volume Raw Foreign Others  2005 Materials ExchangeSource: Braskem
  • EBITDA Analysis in US$ High levels of raw materials and thermoplastic resins prices  Main Variations US$ million  149 662 870 851 (720) (110) 2004 Price Volume Raw 2005 Others  MaterialsSource: Braskem 
  • Indebtedness Profile Average debt maturity of 11 years with only 12% due in the short term4 Indebtedness Profile Fixed 1% TJLP R$ million (On 12/31/2005)  26% Gross Debt: 5,004 43% 44% CDI Cash and Cash equivalents: 2,170 18% Net Debt: 2,834 US$ Trade Finance 55% 12%  Subordinated debentures with payment of interest and principal scheduled for Amortization Agenda  in years July 2007, fully subscribed by the Average maturity: 11 controlling shareholder.  2,170  890  (in R$)  26%  17%  931  13%  12%  9%  1,280  8%  7%  7%  (in US$)  867  446  380  670  359  355  620  376  Dec/05  2006  2007  2008  2009  2010  2011 to 2014  2015  2016 to ...  Cash and cash  equivalents Source: Braskem
  • P&L Summary  2005 Results reflect the strength of Braskem’s business model   4Q05 4Q04 Var.% 2005 2004 Var.% Income Statement (A ) (B) (A) / (B) (C) (D) (C) / (D)Net Rev enue R$ M M 2,848 2,798 2% 11,607 11,044 5%EBITDA R$ M M 480 661 ‐27% 2,090 2,549 ‐18%EBITDA M argin % 16.9% 23.6% ‐ 6.8 pp 18.0% 23.1% ‐ 5.1 ppNet Financial Results R$ M M (440) (60) 633% (662) (1,181) ‐44%Equity Income R$ M M (25) 15 ‐ 60 76 ‐21%Net Income R$ M M (5) 487 ‐ 677 691 ‐2%Source: Braskem 
  • Free Cash Flow over R$ 1.2 billion  R$ 717 million invested in 2005  Free Cash Flow* R$ million Investments R$ million  717 1,258 1,179 374  7%  92% 2004  2005  2004  2005 *after taxes and capex 
  • Distribution of R$ 326 million to shareholders60% increase when compared to 2004Dividends and Interest on Equity R$ million Dividend Pay ‐out % 326 48 204  30  60% 60% 2004  2005  2004  2005 
  • Agenda 4 Company´s Overview 4 4Q05 & FYE 2005 Results 4 Growth & Value Creation
  • The petrochemical cycle: global balance remains favorable  Capacity utilization rates should stay above 90% through 2008   4 Ethylene capacity additions  Iran 000 ton  China 000 ton 2,510 1,700 1,537 1,270 Global utilization rates (%)  (%) 920  92.5% 92.6% 91.5% 0 2006  2007  2008  2006  2007  2008  2006  2007  2008  Middle East (ex‐Iran) 000 ton ü Demand growth during the 06‐08 Asia (ex‐China) 000 ton period should exceed that of supply, 2,307  1,925 keeping utilization rates above 90% ü There are still uncertainties 760 concerning the capacity additions 646 schedule in Iran 505 295  2006  2007  2008  2006  2007  2008 Source: CMAI, March­06 
  • Short‐term price evolution Spreads over international prices above 30%  Polyethylene Prices Polypropylene Prices International and Braskem’s (normalized) International and Braskem’s (normalized) PEAD ­ Asia (CMAI) Normalized  141%  PEAD ­ Braskem (domestic) Normalized  142%  143%  126%  107%  106%  PP ­ Asia (CMAI) Normalized  100%  100%  PP ­ Braskem (domestic) Normalized  Jan­05  Feb­05  Mar­05  Apr­05  May­05  Jun­05  Jul­05  Aug­05  Sep­05  Oct­05  Nov­05  Dec­05  Jan­05  Feb­05  Mar­05  Apr­05  May­05  Jun­05  Jul­05  Aug­05  Sep­05  Oct­05  Nov­05  Dec­05  PVC Prices Spreads over Asian prices International and Braskem’s (normalized) (December 2005) PVC ­ Asia (CMAI) Normalized  153%  PVC ­ Braskem (domestic) Normalized  PE + 34% 135%  PP + 33% 100%  93%  Jan­05  Feb­05  Mar­05  Apr­05  May­05  Jun­05  Jul­05  Aug­05  Sep­05  Oct­05  Nov­05  Dec­05  PVC + 43% Source: CMAI / Braskem 
  • Performance in the Domestic Market  Sales increase of 7% for thermoplastic resinsBrazilian domestic market – Sales Volume + 17% + 17% + 7% ‐ 7% PP PE PVC Resins Ytd Feb 05 Ytd Feb 06 
  • Increase in Capital expenditures: confidence in the future R$ 900 million to be invested in 2006  Investments  Investments R$ million 26% 900 Capacity Increases 717 244 Equipment 202 Safety, Health & 374 151 Environmental Protection Technology 134 176 118 Productivity 51 Quality and others 2003  2004  2005  2006 
  • Growth with Value Creation  Investments with high rates of return  4 Capacity Expansions  Venezuela 4Polyethylene (1Q06) 4 Investment: R$ 9.9 Million; 4 Additional Capacity: + 30 k ton / year (+3.5%); 4 Rate of Return: 58%; 4 Location: Camaçari, State of Bahia Brazil / Alagoas 4Isoprene (November 2006) Bolivia 4 Investment: US$ 29 Million; Bahia 4 Additional Capacity: + 9 k ton / year (+50%); 4 Rate of Return: 49%; Paulínia 4 Location: Camaçari, State of Bahia 4Paulínia (4Q07) 4 Investment: US$ 240 million 4 Additional Capacity: +350 k ton / year Triunfo (+60%) 4 Location: Paulínia, State of São Paulo Source: Braskem (2005) 
  • Growth with Value Creation  Strong strategic position in the region  Venezuela New greenfield projects based on competitive raw materials   4PP: Venezuela: annual 400 k ton in Brazil / partnership with Pequiven* Bolivia  Bolivia 4PE: Brazil/Bolivia Complex: annual 600 k ton (2009)* With the Venezuelan and Bolivian units, Braskem expects to consolidate its strategic and differentiated position in the region* To be presented to Braskem’s Board of Directors 
  • Growth with Value CreationCost competitiveness 4 Reliability in the supply of raw materials 4 Naphtha supply guaranteed by long‐term contract with Petrobras; 4 Partnerships in the international markets; 4 Naphtha supply contract for up to 600kt per year with PDVSA with competitive conditions; 4 Flexibility in raw materials supply (Naphtha and Condensate); 4 Competitiveness in logistics: 4 Investment on increasing the storage capacity at Aratu´s Port terminal tank park – State of Bahia.
  • Growth with Value CreationValue‐creating process leveraged by the Braskem Business System A World­Class  Company Strong platform  for growth  •  Best Practices R$ 350 million per year in recurring synergies, already captured  R $  million  •  Simplification  •  Integration  2 4 0  26 0  2 8 5  3 10  3 5 0  3 3 0  (2 004 )  •  Compliance to  20 8  New Levels of  to SOx  Competitiveness  Ma r/03  Ju n/03  S ep/03  Dec /03  M ar/0 4  Dec /04  T arget  5  5  Innovation &  Technology  Synergies  Braskem Business System 
  • Innovation & Technology to leverage Value Creation  Important Achievements in 2005  R$ 58 million gain with the sale of technology to Petroquímica Paulínia Technological Autonomy 1st patent in nanotechnology filed by a Brazilian Petrochemical company Launch of 20 new resins Start‐up of the 7th pilot plant Alliances with Universities and Research Centers Modern Management of the innovation processWorld‐wide technological cooperation agreement R$ 370 million in assets with BASELL 136 patent registrations filed FINEP and 171 researchers ABIQUIM Awards 7 pilot plants
  • Braskem +  Significant acceleration in capturing productivity gains  R$ 256 million in productivity gains captured by 2005 Results Achieved by 2005 R$ million / year 420 360 256 170 + 51%  Target by Achieved by Target by Target by 2005 2005 2006 2007On annualizing and recurring basis
  • A New Step in the Value Creation Process  A new integrated Project management system encompassing all business processes4  110 employees allocated to the project 4  Investment of R$ 130 million 4  Implementation concluded by  Oct. 06 4  NPV of R$ 260 million
  • The Petroquisa Option Potential for relevant synergies and future cash flow impacts  Designated assets & respective ownership interests : VOTING CAPITAL INCREASE: 15.6%  Up to 30% 85.0%  From 10% 40.0%  Assets Listed Assets Listed  09/29/2005 Option Deadline Option Deadline  03/31/2006 Assets Valuation Assets Valuation  DCFBraskem has 29.5% of Copesul’s capital and jointly controls it along with the Ipiranga Group
  • A Unique Investment Opportunity 4 Market leadership in the region4 Consistent operational performance4 Solid financial structure4 Ongoing competitive improvements: and4 Structural market growth opportunities in the region4 Consolidation in the Brazilian Petrochemical Industry: an opportunity for value creation4 Greenfield projects in the region based upon access to competitive raw materials4 Technology autonomy to pursue internationalization  High Standards of Corporate Governance High Standards of Corporate Governance