Conferência btg pactual – fevereiro 2011
Upcoming SlideShare
Loading in...5
×
 

Conferência btg pactual – fevereiro 2011

on

  • 680 views

 

Statistics

Views

Total Views
680
Views on SlideShare
678
Embed Views
2

Actions

Likes
0
Downloads
3
Comments
0

1 Embed 2

http://braskem.riweb.com.br 2

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Conferência btg pactual – fevereiro 2011 Conferência btg pactual – fevereiro 2011 Presentation Transcript

  • BTG Pactual XII CEO Conference São Paulo – Feb 2011 Carlos Fadigas CEO
  • 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 (September 30, 2010) and the Company does not assume anyobligation to 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
  • Overview Braskem has become the leading thermoplastic company Diversified portfolio of petrochemical products, in the Americas with Quattor acquisition in January with focus on PE, PP and PVC 2010 Annual capacity of 6,460 kton Foothold in the USA with Sunoco PP assets acquisition in 31 facilities in Brazil and USA February 2010 Naphtha and gas based crackers Attractive project pipeline in Latin America Petrobras as the main supplier in Brazil Listed in 3 stock exchanges: BM&FBovespa, NYSE and Latibex - 100% tag along Market Cap (02/11/2011) – US$ 9,6 billion EV – Net debt at Sep 2010 – US$ 15,5 billion 3 PPFinancial Highlights 2009 LTM Sep/10 BraskemR$ billion Consolidated Stand alone 1 PVCNet Revenue 15.2 26.3 + 73% 1 Chlorine-soda 1 naphtha crackerEBITDA 2.5 3.8 + 52% 4 PENet Debt/EBITDA 2.67x 2.63x - 1% 1 PP 1 PVC 1 gas cracker 1 Chlorine-soda Potential Upside 1 PP 1 PE 1 naphtha Synergies: 1 naphtha cracker cracker - Additional EBITDA – R$ 400 million on a 1 ethanol cracker 2 PP 5 PE 3 PE recurring basis 2 PP Expectation of cycle recovery as of 2012 Industrial Assets 5
  • 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% 2.132 CAGR: 17% 1.626 1.642 10,412 10,212 1.337 871 851 764 5,921 581 5,551 457 3,621 2,965 3,045 3,145 3,190 2002 2003 2004 2005 2006 2007 2008 2009 LTM 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 PetroquímicaEV 2.4 3.9 5.8 4.2 4.7 7.6 5.1 7.5 15.7 Politeno Triunfo(US$ bi) Ipiranga, Copesul and PaulíniaEV/ 5.2x 6.7x 6.6x 5.0x 6.2x 4.6x 3.8x 4.8x 6.9x Acquisitions Quattor +EBITDA SunocoSource: Braskem 1 Pro-forma figures for 2009 and 9M10: Braskem + Quattor + Braskem America 66
  • Ownership Structure Leveraging relationship with Petrobras - World leader in - Conglomerate; Minority E&P in deep Shareholders waters; - More than 30-years in the petrochemical - Present in the industry; industry as 50.1% / 38.2% 0.0% / 5.9% 2.8% / 20.1% 47.1% / 35.8% investor, supplier - Investment Grade Voting Shares / Total Shares and client; by Moody’s and Fitch. - Investment Grade by all 3 Rating Agencies. • Odebrecht as the controlling shareholder reinforces Braskem’s condition as a listed privately-owned company Governance • Sole vehicle for petrochemical investments of both shareholders, Braskem has the right: - to lead all petrochemical investments identified by Petrobras; - if not of its interest, has the right to commercialize such products.Source: Braskem 7
  • Braskem: strong potential for outperform W.Europe North America # 29 players Braskem: # 32 players Consolidated position in main regional market of thermoplastic resins* N.Asia M.East ~# 150 players Capacity (000 Metric # 38 players Tons) S.Asia Braskem: 5,510 Petroken: 180 ~# 40 players Ecopetrol: 548 PETROQUIM: 120 Mexichem: 416 Petroquímica Cuyo: 130 South America PBB Polisur: 650 Polinter: 495 # 12 players Pequiven: 185 Propilven: 115 Petro Dow: 42 Solvay Indupa: 541Source: Analysts reports, CMAI capacity list * PE, PP and PVC 8
  • Stability throughout the cycles 23.1%In 2008, Braskem Margin managed to 18.0% 16.9% 15.5% 19.3% 19.1% 14.4% maintain its 14.1% 13.5% profitability throughout the 2002 2003 2004 2005 2006 2007 2008 2009 LTM 2010 financial crisis despite the observed volatility, while other players such as Nova Chemicals and Westlake posted negative margins during that same period 9
  • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 10
  • Quattor - key indicators Acquisition opportunities Operational Indicators Asset concentration in Operating rate (%) 1Q10 2Q10 3Q10 Southeast (~70% Brazilian consumption); Ethylene 71%(1) 83%(1) 89%(1) PE 61% 76% 84% Diversified RM matrix; Joint administration of raw Financial Indicators material agreements; R$ million 1Q10 2Q10 3Q10 Integrated industrial planning; Net Revenue 1,220 1,425 1,663 +99% +41% Reduction of working capital EBITDA 107 214 302 costs; EBITDA Margin 8.8% 15.0% 18.2% Tax and logistical synergies.(1) Considering the 200 kty expansion 11
  • Quattor synergies of R$ 400 million in EBITDA* as of 2012 Synergies 2012 Synergies 2011 R$ million R$ million 13 43 49 79 400 235 279 173 Industrial Logistics Supply EBITDA Industrial Logistics Supply EBITDA Production Maximization Joint Synergies Synergies mix of gains from management Seizing the product of feedstock cracker distribution purchases streams (domestic and Renegotiation Efficient and rapid implementation of actions to export of third-party capture synergies: additional of R$ 235 million in Optimization markets) agreements of inventories EBITDA* as of 2011 Optimization of channelsSource: Braskem * Annual and recurring 12
  • Braskem America (former Sunoco Chemicals) Acquisition opportunities Global-scale, state-of-the-art R&T Center assets – technology and age similar Pittsburgh, PA to Brazil’s polypropylene (PP) assets; Development of a global production base; Marcus Hook, PA Consolidation of industrial assets; Neal, WV 1 PP 1 PP Competitive costs for some 70% of raw materials; Platform for greenfield projects in Latin America. La Porte, TX 1 PP Disbursement: US$350 million Challenges Financial Indicators Knowledge of North American Million 9M09 9M10 distribution market; Add value to supplier ⇔ client Net Revenue (R$) 1,252 1,737 chain (substitute distributor); EBITDA (R$) 112 162 Highly disperse market. EBITDA (USD) 53 +72% 91 13
  • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 14
  • Strategic direction “BECOME THE GLOBAL SUSTAINABLE CHEMICALLEADER, INNOVATING FOR BETTER SERVE THE PEOPLE”. 15
  • Growth strategy On the path to leadership in sustainable chemicals Innovation Pipeline Green PP 2013 Meet global demand for Green PE sustainable products 2010 Innovation in bioplastic Guarantee CO2 sequestration market Partnerships for the Successful track record for Production integrated with development of competitiveBraskem becomes implementing projects: green propylene technologiesa global leader in term and costs – 200kton Capture of 2.3t CO2/t PP biopolymers for R$ 488 million operational since Sep 10 Cooperation agreement with Capture of 2.5t CO2/t PE Cenpes (Petrobras Research Partnership with Clients Center) Development of other cracks streams 16
  • Expansion with increased competitiveness 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$450 million • Disbursements already in 2Q10 • Support for Brazil’s infrastructure projects • Brazil currently imports 30% of its needs PVC Domestic Demand (kton) 1,113 New Projects 982 950 857 31% Industrial Assets 748 34% 26% 19% 17% Imports Domestic Sales 2006 2007 2008 2009 2010 LTMSource: Braskem 17
  • Growth strategy Projects with competitive materialsEthylene XXI Project MEXICO EthyleneCharacteristics Ethane 66,000 bpd 1,000 kton/y Startup: 2015 PEMEX Gás (Basic Petrochemicals) JV Braskem (65%) and IDESA (35%) Cracker Integrated project: 1 Mton ethylene and Ethane 1Mton PEs Gas Investment: US$ 2.5 billion Financial advisor: Sumitomo PolyethyleneFocus 2010/2011 1,000 kton/y Selection of technology Manufacturing Definition of EPC agreement and Industry PEMEX Exploration project’s FEED and Production Structuring of Project Finance: already received US$ 3 billion in letters of interestAttractiveness Today Mexico imports around 70% of its demand Proj. (1.8 million ton/year of PE) EXXI in 2014 1st quartile in cost curve Fragmented market: 3,500 converters 18
  • Unique pipeline of growth in the Americas Consolidated Project Pipeline Brownfield/Greenfield expansion projects in Brazil: RioPol, PP, LDPE Ethylene XXI - Mexico New Biopolymers Plants in Brazil – (+ 1,000 ktony ethylene integrated project (1st and 2nd and + 1,000 ktony PE) generation) Green PE Green PP Comperj (+ 200 ktony ethylene) (+ 30 ktony ethylene) PeruProj. PVC Expansion (+ 600 to 1,000 ktony ethylene/PE) (+ 200 ktony) Projects in Venezuela (+300 ktony PP) (integrated ethylene/PE) 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
  • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 20
  • Value added products and potential market growth are key differentiators of value creation Brazilian Market - Consumer driven (9M10) Chemicals & Industrial Infrastructure Agrochemicals Braskem Sales by Sector 9M10 X 9M09 Others Electric & Electronic CONSUMER GOODS 4% 2% 5% 37% 3% Agribusiness 6% DURABLE GOODS 31% 3% Construction AGRIBUSINESS 43% 33% 11% CONSTRUCTION 11% Automotive 6% Food Packaging OTHERS 4% 3% 8% 7% 11% Cosmetics & Pharmaceutical Retail Hygiene and Cleaning Consumer GoodsSource: Braskem 21
  • Innovation pipeline: new developments to aggregate further valueApplied Innovation and technology to strengthenvalue chain competitivenessStructured resource base to support client needs Over R$ 330 million in R&D assets PE PE Large More than 190 researchers Rotomolded water 8 pilot plants Manhole tanks More than 260 patents filed worldwide Partnership with universities and R&D centers in Brazil and abroad PE PVC Roof Tiles PVC Windows Innovation pipeline Biopolymers NPV: ~US$ 500 million PP PP auto grade PP Buckets PVC 22
  • Raw material matrix Diversification to compete globally Raw Material Profile* (2010) Braskem Post-Acquisitions** Braskem Post-Projects*** 3% 3% 8% 30% 13% 37% Implementation of 24% 17% Project Pipeline 17% 92% 58% 56% 15% 67% 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 USG 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 ** Considering Green Ethylene capacity(2) Naphtha and condensate *** Considering the Mexico Project 23
  • Lower leverage and longer average debt term Net Debt/ EBITDA (R$ million) * Including the perpetual bond issue in October and the call in -24% December 2010 of US$ 150 million in perpetual bonds. Average term 3.46x increases to 11.9 years 2.63x 3,505 762 2,781* 16% 501 14% 14% 13% 17% 13% 10% 2,155 1,946 Dec 09 Sep 10 2,743 1,889 2,281 1,747 1,683 1,375 3% 386 09/30/10 2010 2011 2012 2013 2014 2015/ 2017/ 2019 Cash 2016 2018 onwards Does not include transaction costs Invested in R$ Invested in US$ Foreign Foreign Entities 0% Entities 5% More balanced sourceDebt Profile Gov. Entities Bank 37% Gov. Entities of funds 26% 22% Bank 52% Capital Market 21% Capital Market 37% 24
  • Braskem: Reaffirmed post-acquisition ratings On January 11, 2011, Fitch changed from BB+ with stable outlook to BB+ with positive outlook and placed the Company on review for a potential upgrade Upgrade Conditions: RATING + Maintenance of high liquidity (cash or equivalents - Baa3 BBB- - Investment Grade stand-by) above R$3 billion. Cash above R$3 billion May/09 since Dec/2008. Jan/09 + Ba1 BB+ stable - Jan&Jul/10 Capitalization of Braskem as pre-condition for acquisition. Shareholder movements; Ba2 BB Successful integration with capture of synergies and increase in cash generation (EBITDA increase R$ 3,1 Ba3 BB- bi to R$3.8 bi); Post-Acquisitions Decrease in Net Debt/EBITDA ratio expected to B1 B+ 2.5x. In first post-acquisition quarter we already reduced this ratio from 3.46x to 3.12x. In 2Q10 we reduced to 2.84x, and to 2,63x in 3Q10. 2009 2010 The acquisitions: Braskem Ratings (Global Scale) Strengthened strategic positioning; Ba1 / Stable Outlook Increased # of plants, sites and geographic diversification; Diversification of raw material mix; BB+ / Stable Outlook More disciplined and less volatile domestic market ; High governance standards; BB+ / Positive Outlook Petrobras participation.Source: Braskem 25
  • Investments in 2010 amount to R$1.6 billionThe same amount is estimated for 2011 Investments R$ million 1,617 1,644 56 Braskem America 35 Venezuela 234 Quattor 36 360 Quattor Braskem America 380 10 Quantiq PVC Alagoas 72 Mexico 1,011 20 Green PP 12 254 Green PE 191 440 Operational 47 192 Equipment Replacement Maintenance Shutdown 52 Capacity Increse/PVC Alagoas 311 391 Mexico 317 Maintenance 116 89 18 Others 54 61 Productivity 175 31 208 Others 2011e 66 * For 2011, capex is estimated at R$ 1.6 billion, which 9M10 2010e approximately 30% destined to projects of capacity expansion, 20% to scheduled maintenance shutdowns, and the remaining to operational investments and spare parts.Source: Braskem 26
  • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 27
  • Outlook on the global petrochemical industry Ethylene: Operating rate 9M10 Current global 2010 operating000 ton rate is estimated at 85% Industry at 9M2010 20,000 94 91 Operating rates increased from 2Q10 89 90 86 83 86 supported by better demand 15,000 84 82 81 79 78 80 Competitive cost base allows the US 77 10,000 to operate at higher rates than other 70 regions 5,000 60 Braskem continuously improving its operations reached 91% in 3Q10 0 50 Europe N. America Asia M. East World Braskem Global Scenario Capacity 3Q Operating rate 3Q10 (%) Operating rate 2Q10 (%) New capacity additions can lead to Ethylene: Supply and Demand Balance the closing down of non competitive000 ton assets on a permanent basis,200,000 88.4 90.5 especially in Europe and US 87.0150,000 83.8 83.1 Global economic outlook volatility 80.4 versus petrochemicals demand100,000 Lower operating rates indicate 2010 50,000 as the trough of the cycle 0 Expectation of improvement in the 2009 2010e 2011e 2012e 2013e 2014e industry profitability as of 2H11 Capacity Demand Operating Rate 2010e (%)Source: CMAI , Parpinelli Tecnon 28
  • Leadership in Brazil – strong potential growth Industrial Assets Brazilian’s thermoplastic demand – Million tons Potential Growth 4,9 4,2 4,3 4,0 3,7 2006 2007 2008 2009 2010E Per-capita consumption of PE, PP and PVC (kg/person) 63Market Share 57 Others9M10 6% 41 22,2 28 Imports Braskem 25% 69% Brazil USA Europe Japan China 29
  • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 30
  • PrioritiesExisting assets To strengthen the Brazilian Petrochemical Sector, ensuring the supply of local competitive raw material Maintaining growth in domestic sales in relation to 2009, aligned with the better performance of the Brazilian market (thermoplastic demand growth of 15%. GDP should exceed 7%) Strengthening the relationship with our Clients, adding value and differentiation to our products and services and consolidating the market share to prevent imports Ensure capture of the identified synergies Adding value through the acquired assets Quattor: continue improvement in its operational efficiency Braskem America: return above capital employedFinancial To balance the investments and dividends equationGrowth Expand the use of renewable feedstock maintaining the leadership in bioplastics Implementing Projects in Latin America, which are based on competitive raw materials Green Chemicals 31
  • Why Braskem?Pr/share BRKM5 Performance Consolidated (R$ billion) 3Q10 Multiple 40 EBITDA LTM 3.8 35 Synergies to 2012 4.2 30 Market Capitalization 16.1 22.9 25 EV 26.0 32.8 20 + 15 EV/EBITDA 6.9x 7.8x** 10 Price per share 20.20* 28.60 5 Proj. NPV to 2012 > R$1.12 bi 0 Value added by projects to 1.40 share price R$ USD Price per share after projects 30.00 *BRKM5 as of 12/21/10 ** Peer Multiple Dec/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 (7-9x) Successful trajectory of organic growth and acquisitions Shareholders hold long-term view with strategic synergies for growth and value creation Leader in green chemicals 32
  • BTG Pactual XII CEO Conference São Paulo – Feb 2011 Carlos Fadigas CEO