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Apresentação para investidores   btg pactual latin american ceo conference
 

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    Apresentação para investidores   btg pactual latin american ceo conference Apresentação para investidores btg pactual latin american ceo conference Presentation Transcript

    • Meeting with Investors
    • Forward-looking StatementsThis presentation contains forward-looking statements. These statements are nothistorical facts and are based on management’s objectives and estimates. Thewords "anticipate", "believe", "expect", "estimate", "intend", "plan", "project","aim" and similar words indicate forward-looking statements. Although we believethey are based on reasonable assumptions, these statements are based on theinformation currently available to management and are subject to a number ofrisks and uncertainties.The forward-looking statements in this presentation are valid only on the datethey are made (June 30, 2010) and the Company does not assume any obligationto update them in light of new information or future developments.Braskem is not responsible for any transaction or investment decision taken basedon the information in this presentation. 2
    • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 3
    • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 4
    • Braskem overview Leading thermoplastic company in the Americas Diversified portfolio of Industrial Assets petrochemical products, with focus 3 PP on PE, PP and PVC Annual capacity of 6,460 kton 31 facilities in Brazil and USA 1 PVC 1 Chlorine-soda Naphtha and gas based crackers 1 naphtha cracker Petrobras as the main supplier in Brazil 4 PE 1 PP Attractive project pipeline in Latin 1 PVC 1 Chlorine-soda America Listed in 3 stock exchanges: 1 gas cracker BM&FBovespa, NYSE and Latibex 1 PP 1 PE 100% tag along 1 naphtha cracker Key Financials LTM 2Q10 1 naphtha cracker 2 PP 3 PE Net Revenue: R$ 24.8 billion 1 ethanol cracker 5 PE EBITDA: R$ 3.8 billion 2 PPSource: Braskem 5
    • Track record of success withclear objectives 6,460 Resins Capacity (kton/y) 3,595 Acquisitions 2,341 4,275 1,410 Organic Growth 520 1,821 2,185 2,185 Leader in the 54% capacity 80% capacityAmericas increase increase Leader in Latin America Acquisitions Petroquímica Quattor + 2020 Ipiranga, Copesul Triunfo Sunoco and Paulínia Politeno Polialden 2010 Trikem 2009 OPP 2008 2006 2007 2005 2004 2003 2002 2006 increase and disbursement of After R$3.74 bi capital Quattor and Sunoco acquisitions 2.76x 2,89x 2.98x 3.23x 2.84x 2Q10Source: Braskem Net Debt/EBITDA (US$) 6
    • Leader in the Americas and a top 8 global player in resins capacity 1st 6,460Capacity in the Americas (kt/y) 510 ( 5,307 4,827 4,256 4th 1,230 627 2,915 3,595 3,082 1,731 510 2,340 2,311 4,077 1,090 1,210 1,915 4,200 PVC 3,035 822 875 950 2,525 2,340 2,311 PP 1,995 1,050 1,040 950 PE Braskem Exxon Dow Lyondell Braskem Formosa Shintech Chevron Quattor Sunoco post Mobil Basell Philips transactions 10,914World Capacity (kt/y) 9,311 8,668 8th 7,749 7,284 7,109 6,541 6,460 4,681 4,564 12th 4,303 4,079 3,595 Lyondell Exxon SINOPEC Dow Formosa SABIC Ineos Braskem Total IPIC Reliance PetroChina Braskem Basell Mobil post transactions operations 7
    • Consistent growthEBITDA 1 (US$ million) 23.1% 18.0% 16.9% 15.5% Nominal Capacity (kton) 19.3% 19.1% 14.4% Resins 14.1% 13.5% Ethylene CAGR: 21% CAGR: 19% 2,132 10,212 1,626 1,642 1,337 5,921 871 5,551 851 764 581 2,965 3,045 3,145 3,190 3,621 457 2002 2003 2004 2005 2006 2007 2008 2009 LTM 2010 2002 2003 2004 2005 2006 2007 2008 2009EV 2.4 3.9 5.8 4.2 4.7 7.6 5.1 7.5 13.4(US$ bi)EV/ 5.2x 6.7x 6.6x 5.0x 6.2x 4.6x 3.8x 4.8x 6.3xEBITDA Supported by higher production, market leadership, successful sales policies and industry consolidation 8Source: Braskem 1 Pro-forma figures for 2009 and 1Q10: Braskem + Quattor + Sunoco 8
    • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 9
    • Quattor acquisition Opportunities Bahia PP HOMO/COPO (1979) Capacity: 115 kty Asset concentration in Southeast Technology: Slurry Shell (~70% Brazilian resin consumption); Optimization of logistics distribution related to reduction in external storage; Camaçari Cracker (2005) Diversified RM matrix – balance Capacity: 520 kty ethylene Rio de Janeiro Technology: ABB Lummus – between naphtha-natural gas; ethane/propane Joint administration of raw material Mauá Duque de HDPE/LLDPE (2005) agreements; Paulínia Caxias Capacity: 540 kty Technology: Gas phase - Unipol Renegotiation of service and insurance PP HOMO/COPO (1992) contracts; Triunfo Capacity: 310 kty Unification of production and Cracker (1972) Technology: Bulk – Lipp Capacity: 700 kty ethylene* maintenance practices; Technology: ABB Lummus (naphtha) Unification of Technology and LDPE/ EVA (1972) Innovation centers; Capacity: 120 kty Reduction of working capital costs;São Paulo Technology: HP Autoclave HDPE/ LDPE (2008) Acquisition disbursement: Tax and logistical synergies; Capacity: 240 kty Technology: Slurry – Chevron Phillips R$647.3 million Organizational restructuring. LDPE (1965) Capacity: 140 kty Technology: Tubular Challenges PP HOMO/COPO (2003) Stability of raw material supplies; Capacity: 450 kty Technology: Spheripol Integration of cultures. *200 kty expansion effectively coming online in 2010 10
    • Quattor - key indicators Operational Indicators Operating rate (%) 1Q10 2Q10 Ethylene 71%(1) 83%(1) PE 61% 76% Financial Indicators R$ million 1Q10 2Q10 Net Revenue 1,220 1,425 EBITDA 107 214 EBITDA Margin 8.8% 15.0% Outlook as of 2H10 Cabiúnas and Reduc refineries normalized operation enabled Riopol to have the best Main impact on operational profit in 2Q10 monthly operating rates in July: 86% for ethylene and 77% Increase in operating rates with better stability for PE; of raw material supply: supply from Mauá complex normalized in May 2010 Petrobras’ commitment to normalize supply to enable Riopol to operate at full capacity by October 2010.(1) Considering the 200 kty expansion 11
    • Quattor synergies of R$ 400(a) million in EBITDA as of 2012 R$ million 43 79 400 Investment of R$ 350 million required to capture all 279 synergies Financial synergy NPV estimated in R$ 340 million Industrial Logistics Supply EBITDA Synergies Production mix Maximization of Joint management Seizing the cracker gains from product of feedstock streams distribution purchases (domestic and Renegotiation of Optimization of export markets) third-party inventories Optimization of agreements (a) modesSource: Braskem Recurring 12
    • Braskem America (former Sunoco) R&T Center Pittsburgh, Opportunities PA Global-scale, state-of-the-art assets – technology and age similar to Brazil’s polypropylene (PP) assets; Development of a global production Neal, WV Marcus Hook, PA 1 PP base; 1 PP Consolidation of industrial assets; Competitive costs for some 70% of raw materials; La Porte, TX Platform for greenfield projects in 1 PP Latin America. Acquisition disbursement: US$350 million Challenges Knowledge of North AmericanFinancial Indicators distribution market; Add value to supplier ⇔ client chainR$ million 1H09 1H10 (substitute distributor);Net Revenue 764 1,109 Highly disperse market;EBITDA 88 106 Resumption in demand vs. uncertainty of economic recovery. 13
    • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 14
    • Strategic Direction “BECOME THE GLOBAL SUSTAINABLE CHEMICALLEADER, INNOVATING FOR BETTER SERVE THE PEOPLE”. 15
    • Green PolyethyleneFirst Green Plastic Certified in the World Location: Triunfo – RS POLYETHYLENE Capacity: 200 Kton/y Startup: September 2010 Investment: R$ 488 million Consumption of 460,000 m³ of ethanol per year 75% of the ethanol supply is already contracted Demand 3x higher than the installed capacityMain Clients and Partners Partnership in R&D – Renewable Polymers Green PE trading in Asia 16
    • Expansion with increasedcompetitiveness BRAZIL PVC Expansion Operational start-up : 1st half 2012 • Expansion of 200 kton/y in PVC capacity in Alagoas • Investments of US$470 million • Expected NPV ~US$450 million • Disbursements already in 2Q10 • Support for Brazil’s infrastructure projects Comperj and Suape • Braskem participation in Suape Project (textile New Projects complex) and Comperj (1st and 2nd Generation) Industrial Assets under analysis. Projects with PetrobrasSource: Braskem 17
    • Expansion with increased competitiveness LATIN AMERICA Mexico: Ethylene XXI Project Operational start-up: early 2015 • JV between Braskem (65%) and the Mexican group IDESA (35%) for the purchase of ethane from PEMEX • Integrated project: 1 Mty of ethylene and 1 Mty of PE • Investment estimated at up to US$2.5 billion over 5 years (project finance) • Financial Advisor hired: Sumitomo Bank • Structuring of the participation of ECAs and MLAs1 New Projects Industrial Assets Projects with Petrobras 1 Export Credit Agencie (ECA) and Multilateral Agencie (MLA)Source: Braskem 18
    • Mexican Polyethylene Market Currently deficit above 1.1 MM ton (2010) Estimated deficit in 2015 (project start-up): 1.7 MM ton Annual Growing rate foreseen: 4.5 % (Period: 2010-2025 ) Polyethylene Mexican Market 4.0 3.4 3.5 3.5 3.2 3.3 3.0 3.1 2.8 2.9 3.0 2.6 2.7 2.5 2.3 MMton/year 2.5 2.2 2.0 1.8 1.9 2.7 2.0 1.7 1.7 1.6 1.7 2.4 2.5 2.6 1.5 1.6 2.1 2.2 2.3 1.8 1.9 2.0 1.5 1.5 1.7 1.3 1.4 1.1 1.1 1.1 1.2 1.1 1.0 1.0 1.1 1.1 0.5 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.5 0.6 0.7 0.7 0.8 0.8 0.4 0.5 0.5 - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Supply Deficit Demand 19
    • Mexican Converters Industry 3,500 plastics converters 84% small and micro companies More than 5 MM ton of plastics conversion, with 1.8 MM of Polyethylene Main application: Packaging (48% market) Sales to distributors: Braskem ≠ Pemex Converters Profile Big Grandes Médias Medium 4% 12%Pequenas Small 24% Micros 60% Total: 3,500 Converters 20
    • Consolidated project pipeline PeruProj. (+ 600 to 1,000 kty ethylene/PE) Ethylene XXI - Mexico Polimerica – Venezuela (+ 1,000 kty ethylene (+ 1,300 kty ethylene and and + 1,000 kty PE) + 1,000 kty PE) Green PE Propilsur – Venezuela Suape (+ 200 kty ethylene) (+ 300 kty PP) Comperj PVC Expansion (+ 200 kty) 2010 - 2012 2013 - 2015 Projects under evaluation Resin Capacity CAGR for 2010-2015: +4.3% p.y. Diversification of raw materials and world-class assets Fiscal discipline Excellent track record of projects executionSource: Braskem 21
    • Investments in 2010 amount toR$1.6 bi Investments R$ million 1,617 56 Braskem America 35 Venezuela 360 Quattor 10 Quantiq 72 Mexico 254 Green PE 621 192 Equipment Replacement 7 52 Capacity Increase / PVC Alagoas 119 7 317 Maintenance 251 63 61 Productivity New Projects 8 101 208 Industrial Assets 21 Others 44 Projects with Petrobras 1S10 2010eSource: Braskem 22
    • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 23
    • Braskem consolidated Financial Indicators: 2009 LTM Jun/10 R$ billion Consolidated Consolidated Potential for margin gains Stabilization in raw material Net Revenue 21.5 24.8 supplies; EBITDA 3.2 3.8 Margin equalization Braskem (17%) vs. Quattor(12%) in 3.46x 2.84x 1H10; Net Debt/EBITDA Substitution of 1H09 by 1H10 # Plants: 29 29 80% Capacity 6,460 Increase 510 3,595 1,965 510 PVC Industrial Assets PP 1,090 PE 3,035 1,995Listed on three stock exchanges: BM&FBovespa, NYSE and LatibexSource: Braskem 24
    • Raw material matrix Diversification to compete globally Raw Material Profile* (2009) Braskem Post-Acquisitions* Braskem Post-Projects* 8% 3% 30% 37% 13% Implementation of Project Pipeline** 24% 17% 18% 92% 56% 58% 15% 69% 46% 14% Quattor Sunoco Braskem More balanced and diversified supply of raw materials Liquid (2) Refinery propylene Gas (1) Competitive natural gas price vs. international reference prices Ethanol Propane Naphtha / Condensate USGC reference to competitive prices ~70% of naphtha supplied by Petrobras with competitive price formula Natural Gas 30% direct imports from various international suppliers 100% Petrobras supply with competitive prices versus international prices Ethanol *Based on resin-production capacity. Sunoco buys propane directly(1) Ethane, Propane and HLR; (2) Naphtha and condensate ** Considering the Mexico Project and Green PE 25
    • Strong cash generation and competitive marginsR$ million 2Q10 1Q10 2Q09 Change Change Key Indicators (A) (B) (C) (A)/(B) (A)/(C) Strong cash generation Net Revenue 6,539 6,272 4,996 4% 31% mainly due to the EBITDA 1,042 909 735 15% 42% improvement on Quattor operational performance EBITDA Margin 15.9% 14.5% 14.7% 1.4 p.p. 1.2 p.p. Productivity gains already reflecting on 2nd quarter 2Q10 1Q10 2Q09 Change Change result Financial Result (A) (B) (C) (A)/(B) (A)/(C) Focus on capturing Net Financial Result (575) (880) 1,379 -35% -142% synergies Foreign Exchange (FX) and Monetary Variation (MV) (216) (374) 1,666 -42% -113% Financial Result excluding FX and MV (359) (506) (287) -29% 25% Significant improvement on Interest Expenses / Revenues Net (165) (129) (153) 28% 8% results after financial crisis Tax Assets and Liabilities (40) (287) (30) -86% 34% Others (155) (90) (105) 71% 47%Source: Braskem 26
    • Demand stability in 2Q10 reflects sectors good performanceApparent Consumption (Kton) +10% 4,720 4,173 4,291 4,048 1H10 2007 2008 2009 2010e Food Retail Domestic demand performance Hygiene and Cleaning by sector: Agribusiness Relevant Consumer Goods Moderate Construction Low / Retraction Automotive Electric and ElectronicSource: Abiquim, Braskem estimates, Tendência Report, IBGE, Anfavea 27
    • Historical Prices PE prices evolution (100 basis) PP prices evolution ( 100 basis) 130 140 130 120 120 110 110 100 100 90 90 80 80 Jun-09 09 Jun-10 10 aug/09 aug/10 dec/09 apr/09 feb/10 apr/10 oct/09 Jun-09 09 Jun-10 10 aug/09 aug/10 dec/09 apr/09 feb/10 apr/10 oct/09 International Market Brazilian Market International Market Brazilian Market Resins prices show signs of recovery in the international market Recovery expected already in AugustSource: CMAI 28
    • Market trendBraskem consolidated sales evolution of 3Q10 trend in the Brazilian marketthermoplastic resins (1) – Brazilian market Volume Price Revenue Cost Resins sales evolution (kton) PP PE PVC 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10Source: Braskem estimates and ABIQUIM. (1) 2009 and 1Q10 pro forma data. 29
    • Leverage ratio falls below 3xfor the first time since the acquisition In R$ million (06/30/10) Net Debt / EBITDA Net Debt / EBITDA Gross Debt: 14,384 (million of R$) (million of US$) Net Debt: 10,909 -9% 3.12x 3.23x -12% Average Term: 8.2 years 2.84x 2.84x 64% of debt is pegged to USD Mar 10 Jun 10 Mar 10 Jun 10 * After capital increase of R$3.74 bi and 3,475 disbursement of Quattor and Sunoco acquisitions 1.197 16% 16% 13% 12% 12% 2.346 2.346 9% 9% 9% 1.889 2.278 1.731 1.631 4% 1.299 1.315 1.296 584 06/30/10 2010 2011 2012 2013 2014 2015 2016/ 2018/ 2020 Cash 2017 2019 onwards Invested in R$ Invested in US$ Source: Braskem 30
    • Braskem: Ratings confirmed after acquisition RATING Post-Acquisitions Upgrade Conditions: ‣ Maintenance of high liquidity (cash or equivalents - stand- + by) above R$3 billion. Cash above R$3 billion since Ba3 BBB- Dec/2008. - Investment Grade Jan/09 May/09 + ‣ Capitalization of Braskem as pre-condition for acquisition. Ba1 BB+ Shareholder movements; stable Mar/09 - Jan&Feb/10 ‣ Successful integration with capture of synergies and increase in cash generation; Ba2 BB The acquisitions: ‣ Decrease in Net Debt/EBITDA ratio expected to 2.5x. In ‣ Strengthened strategic positioning; first post-acquisition quarter we already reduced this ratio from 3.46x to 3.12x. In 2Q10 we reduced to 2.84x. Ba3 BB- ‣ Increased # of plants, sites and geographic diversification; ‣ Diversification of raw material mix; ‣ More disciplined and less volatile domestic market ; B1 B+ ‣ High governance standards; ‣ Petrobras participation. 2009 2010 Braskem Ratings (National Scale) Braskem Ratings (Global Scale) Moody’s Aa2.br / Stable Outlook Moody’s Ba1 / Stable Outlook Fitch AA / Stable Outlook Fitch BB+ / Stable Outlook S&P AA+ / Stable Outlook S&P 31 BB+ / Stable OutlookSource: Braskem
    • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 32
    • Outlook on the global petrochemicalindustry Ethylene: Operating rate 1H10000 ton Industry at 1H201020,000 90 89 89 Producers already responded to the 84 86 86 84 83 82 81 demand slowdown in 2Q10 by15,000 79 77 reducing the operating rates10,000 Competitive cost base allows the US 5,000 to operate at higher rates than other regions 0 Braskem back to operate at a rate Europe N. America Asia M. East World Braskem above world average in 2Q10 Capacity 2Q Operating rate 2Q10 (%) Operating rate 1Q10 (%) Global Scenario Ethylene: Supply and Demand Balance New capacity additions can lead to000 ton the closing down of non competitive200,000 88.4 90.5 assets on a permanent basis, 87.0 83.8 83.1 especially in Europe and US150,000 80.4 Global economic outlook volatility100,000 versus petrochemicals demand 50,000 Expectation of improvement in the industry profitability as of 2H11 0 2009 2010e 2011e 2012e 2013e 2014e Capacity Demand Operating Rate 2010e (%)Source: CMAI 33
    • 2010 Ethylene capacity additions Additional Effective Region Company Start up Capacity 2010 Capacity 2010* Middle East Morvarid PC 334 2Q10 208 New players are located in Middle East RLOC 975 2Q10 / 3Q10 650 Middle East (38%) and Asia Middle East Kayan 300 4Q10 300 (59%) Middle East Petro-Rabigh 325 1Q10 325 Middle East SHARQ 1,100 2Q10 800 Feedstock matrix of the Middle East Yansab 433 1Q10 108 new capacities:51% Middle East Borouge 700 3Q10 650 naphtha and 49% gas Asia Baotou Shenhua 100 3Q10 100 Asia CNOOC & Shell PC 150 2Q10 150 Delays already reduced in Asia Dushanzi PC 667 2009 667 18% the start up of new capacity for the year Asia Fujian Ref & Chem 533 2009 533 Asia Panjin Ethylene 450 2Q10 305 A demand growth of 4.5 Asia Secco 150 2009 150 million tons of ethylene is Asia Shenyang Paraffin 87 2009 87 expected in 2010, up by 4% Asia SINOPEC/SABIC Tianjin PC 1,000 1Q10 / 3Q10 750 compared to 2009 Asia ZRCC 750 2Q10 750 Asia JX Nippon Oil & Energy Corp. 220 3Q10 220 Delays and learning curve Asia LG Chem 75 2009 75 from the commissioned Asia YNCC 33 2009 33 plants shall positively Asia Shell Chemical 667 2Q10 667 impact the 2010 Asia MOC 675 2Q10 675 supply/demand balance Asia PTT Polyethylene 917 3Q10 500 Others 275 275 TOTAL 10,916 8,978 -18%Source: CMAI / Parpinelli / Braskem Analysis * Estimated data. Does not consider the plants operating rates and possible additional delays. 34
    • Brazil’s macroeconomic outlook Annual real GDP growth • Brazil’s economy is still relatively closed, with exports 9,0% 7,8% corresponding to 14% of GDP, distributed among 8,0% 7,0% 6,1% various trade partners. 6,0% 4,7% 4,6% 4,5% 4,5% 4,5% 5,0% 3,5% • Strong external solvency ratings and floating exchange 4,0% 5,2% 4,4% 4,3% 4,3% 3,0% rate system curbed speculation against the BRL during 1,3% 2,0% the crisis. 1,0% -0,2% 0,0% • Brazil’s banking system is well capitalized and highly -1,0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 regulated. Real GDP On August 2010 On December 2009 • Household consumption corresponds to 61% of GDP, while government consumption corresponds to 20%. GDP is highly influenced by consumer behavior, which Average monthly income (March 2002 = base 100) has been driven by growth in average income levels. 180 • Brazil is still an unleveraged economy, but with 160 growing access to credit (the ratio of available credit to GDP is currently 45% and is expected to increase to 140 49% in 2010), which ultimately spurs consumption. 120 100 80 Average Income Rendimento MédioSource: Santander 35
    • Brazil: Dynamic Market Still-low per-capita consumption Per-capita consumption of PE, PP and PVC (kg/person) 63 63 57 57 Brazil: 41 41 5.4% CAGR 28 28 21.9 22.7 22.2 22.2 20.2 18.7 18.0 16.6 17.8 17.5 15.4 16.2 16.1 14.5 12.5 13.6 11.1 9.6 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 PE PP PVCSource: CMAI, IBGE, Abiquim, Braskem * Compound annual growth rate 36
    • Consumer driven Braskem’s domestic sales breakdown in 1H10 HYGIENE AND CLEANING COSMETICS AND PHARMACEUTICALS CONSUMER GOODS 9% AUTOMOTIVE 3% 13% 6% RETAIL 6% 14% CONSTRUCTION 3% ELECTRIC AND ELECTRONIC FOOD PACKAGING 4% 28% 4% INDUSTRIAL 5% INFRASTRUCTURE 4%2% AGRIBUSINESS OTHERS CHEMICALS AND AGROCHEMICALSSource: Braskem / Abiquim 37
    • Market development Construction of light slabs using Parts for tractors, harvesters and polypropylene spheres. tools migrating to PE rotational molding.BUBBLEDECK Agro-machinery Substitutes concrete wells for a Project developed with Unipac and rotation-molded structure. Support from Toyota-Tsusho. Flooring that allows CNO and partners Asperbras, Fortlev and water permeability. Brinquedos BandeiranteCROSSWAVE Manholes Substitution of asbestos by PP Substitution of fiberglass tanks for fibers with fiber-cement volumes greater than 2,000 l. reinforcement.FIBER-CEMENT Large Tanks New washer molds, with PP cabinets Plastic silos for grain storage. (replacing steel) in final validation Partnership with Suzuki. stage.TRAVELING Silo BagsBLOCK 38
    • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 39
    • Why Braskem?Pr/share BRKM5 Performance3530 Consolidated (R$ billion) 2Q10 Multiple25 EBITDA LTM 3.8 3.820 Synergies to 2012 4.2 + Market Capitalization 13.3 18.815 EV 24.2 29.710 EV/EBITDA 6.3x 7.0x**5 Price per share 16.6* 23.60 Proj. NPV to 2012 > R$1.12 bi jan-02 jan-03 jan-04 jan-05 jan-06 jan-07 jan-08 jan-09 jan-10 Value added by projects to share price 1.40 R$ US$ *BRKM5 as of 9/29/10 ** Peer Multiple 2010. Largest thermoplastic resin producer in the Americas Source: Bloomberg. Leader of important projects in Latin America with competitive raw materials Emerging consumer market with potential per-capita growth Huge potential for value creation as additional driver EBITDA increase Above-peer profitability Access to one of the world’s largest consumer markets EV/EBITDA multiple below following the U.S. acquisition peers’ multiple (6-7x) Successful trajectory of organic growth and acquisitions Shareholders hold long-term view with strategic synergies for growth and value creation Leader in green chemicals 40
    • Meeting with Investors
    • Appendix
    • Global Ethylene supply/demand Global ethylene supply / demand (Mton/y) 151 154 143 146 146 140 130 133 133 125 127 121 114 111 111 115 Supply Demand 2007 2008 2009 2010 2011 2012 2013 2014Source: CMAI, June 2010 * Not considering additional delays and shutdowns 43
    • Global Resins supply/demand Global Resins (PE, PP, PVC) Supply (Mton/y) 215 219 205 209 198 173 182 168 51 52 47 49 51 44 45 41 PVC 64 64 66 68 55 60 PP 49 51 PE 78 79 83 90 92 93 97 99 2007 2008 2009 2010 2011 2012 2013 2014 Global Resins (PE, PP, PVC) Demand (Mton/y) 181 191 161 172 149 152 141 143 41 43 37 39 35 34 PVC 32 32 60 53 57 PP 44 47 50 43 44 PE 69 71 75 79 83 88 66 67 2007 2008 2009 2010 2011 2012 2013 2014Source: CMAI, June 2010 44 44
    • Resins demand by region 2010 Resins (PE, PP, PVC) Demand by region Africa 3% China Europe 27% 18% North America 17% Asia ex-China 23% South America 6% Middle East 6%The Brazilian demand for resins represents 3% of global demandSource: CMAI, June 2010 45
    • Ownership Structure Leveraging relationship with Petrobras % Capital Votante % Capital Total Odebrecht* Petrobras* BNDESPAR Outros (1) 50,1 % 38,3% 47,0% 35,8% 0,0% 5,5% 2,9% 20,2% (1) Does not include shares held in treasury Leveraging relationship with Petrobras: NOC alliance • Potential for operational synergies with refineries and partnership with Petrobras R&D Center • Alliance to strengthen Brazil’s petrochemical value chain – Access to competitive raw materials – Improved value chain competitiveness • Corporate governance standards: Shareholders’ agreementSource: Braskem, as of August 31, 2010. 46
    • Corporate Governance post acquisition Odebrecht as the controlling shareholder, with all results fully consolidated, reinforcing Braskem’s condition as a publicly traded private company; Braskem executives entrusted with the Company’s management and business plan, approved by a simple majority of the Board of Directors; Sharing of strategic decisions, with consensus approval by Board of Directors, including for: – divestments greater than 10% of long-term assets – acquisitions greater than 30% of long-term assets Board of Directors with 11 members, out of which 1 is independent: – Odebrecht nominates Chairman of the Board, CEO and CFO – Petrobras nominates Vice Chairman of the Board, the Chief Investments and Portfolio Officers Investment decisions based on objective criteria for returns and profitability, such as project IRR and NPV. Clear financial policy that stipulates the strict conditions, with derivatives used solely for hedging; Being the sole vehicle for petrochemicals investments gives Braskem the right to: - Act as the leader for all investments identified by Petrobras that are of interest to Braskem; - If not interested, the right to sell the products. 47
    • Increase in Quattor capacity operatingrate positively impacted 2Q10 Braskem consolidated operating rate % Ethylene Polyethylene Polypropylene PVC 92%* 89% 95% 98% 87% 84% 81%* 76% 83% 83% 79% 81% 2Q09 1Q10 2Q10 2Q09 1Q10 2Q10 2Q09 1Q10 2Q10 2Q09 1Q10 2Q10 Quattor better performance: 12 pp growth in ethylene operating rate – 83% in 2Q10 versus 71% in 1Q10 15 pp growth in PE operating rate – 76% in 2Q10 versus 61% in 1Q10 Crackers and 2nd generation plants, in general, show recovery of operating level in 2Q10 Scheduled shutdown in Camaçari affected PVC operating rate in 2Q10Source: Braskem * 2009 data does not include the 200 kton expansion in Quattor 48
    • World indicative ethylene cash costsSource: CMAI 49
    • Revenues breakdown – 2Q10 Net Revenue by Product(1) (2Q10) Others 7% Fuel 4% ETBE 2% Cumene 3% BTX* 8% Butadiene 4% Propylene 4% Resins 62% Ethylene 5% 1 Does notinclude nafta/ condensate/crude oil processing and QuantiQ sales * Benzene, Toluene, Paraxylene and OrthoxyleneSource: Braskem 50
    • COGS breakdown – 2Q10 COGS 2Q10 (1) Others 1.0% Deprec / Amort Services 1.7% 6.3% Labor 3.5% Other Variable Costs 6.9% Natural Gas 2.5% Electric Energy 4.6% Naphtha 56.6% Gas 16.8% 1Does not include naphtha / condensate / crude oil processing and costs of QuantiqSource: Braskem 51
    • Exports Destination – 2Q10 Exports Destination (2Q10) Asia 6% Others 1% Europe 16% North America 44% South America 27% Central America 6% The Export Market represents 32% of Company’s Net Revenue.Source: Braskem 52
    • EBITDA Trends 1Q10 Pro Forma vs. 2Q10 The better domestic prices through May, following the R$ million international market, offset the higher raw material prices in 2Q10 FX Impact on 26 Costs FX Impact -38 on Revenue 213 (5) 1,042 (12) (20) (43) 909 EBITDA Contribution Volume FX Fixed Costs + Others EBITDA 1Q10 Margin SG&A 2Q10Source: Braskem 53
    • Outstanding Bonds & Outstanding Ratings Coupon Yield *Outstanding Bonds Maturity (% p.a.) (% p.a.)US$250 MM Jan/2014 11.750 3.8US$250 MM Jun/2015 9.375 4.6US$275 MM Jan/2017 8.000 5.6US$500 MM Jun/2018 7.250 5.9US$750 MM May/2020 7.000 6.0US$150 MM Perpetual 9.750 9.5US$200 MM Perpetual 9.000 8.9US$450 MM Perpetual 7.375 7.4* As of September, 30th Corporate Credit Rating – Global Scale Agency Rating Outlook Reviewed in Fitch Ratings BB+ Stable 03/02/2009 S&P BB+ Stable 05/28/2009 Moody’s Ba1 Stable 05/21/2009 54Source: Braskem / Bloomberg
    • Covenants Net Debt / Ebitda (x) RATIO Net Debt / EBITDA US$ R$ 2.84 2.84 < 4.5X Jun 10 Jun 10 Facility Amount* Jun 10 Currency Type 2010 and 2011 R$800 MM R$500 MM R$ Incurrence* Debentures 2014 Medium Term US$250 MM R$250 MM R$ Incurrence* Notes Nippon Export and US$80 MM US$49 MM US$ Maintenance Investment Insurance EPP (Export Pre- Pre- US$725 MM US$625 MM US$ Maintenance Payment) *The company is prevented from issuing any new debt for the period if it overcomes the 4.5x Net debt / Ebitda ratio. 55Source: Braskem
    • Applied Innovation and technology to strengthen value chain competitiveness Structured resource base to support client needs Focus on product and application Over US$ 330 million in R&D assets development More than 190 researchers 18% of resin sales derive from products 8 pilot plants developed in the last three years More than 260 patents filed worldwide Focus on clients’ end Partnership with universities and R&D centers in users Brazil and abroad Targeted initiatives for breakthrough technology Intelligent packaging Renewable products 56 56Source: Braskem
    • Sustainable development Sustainable Development: A way of doing businesses to satisfy all Results stakeholders, today and in the future 2002 Public Commitment Acknowledgements 2005, 2006, 2007, 2008, 2009 Responsibe Care ISO 14.001* OHSAS 18.001** 57
    • Health, Safety and Environmental Results Strong Improvement since 2002 Total Recordable Cases Accidents Rate Effluents Water Consumption (employees and contractors – 1.000.000 mh) (m3/t) (m3/t) -54% -27% 5.12 -83% 2.71 5.49 2002 2002 2002 0.88 1.23 4.02 2009 Brazil CI: 2.8 2009 World CI: 27.8 2009 Brazil CI: 11.8 Lost Time Cases Accidents Rate Solid & Liquid Residues Energy Consumption (employees and contractors – 1.000.000 mh) (kg/t) (GJ/t) 0.85 -79 % 9.93 -72% 11.96 -6% 2002 2002 2002 0.18 2.76 11.22 World CI: 3.9 2009 Brazil CI: 11.9 2009 Brazil CI: 7.4 2009 2008 Brazilian Chemical Industry data (Abiquim 2009)Source: Braskem 2007 World Chemical Industry data (ICCA, 2009) 58