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Investors conference Investors conference Presentation Transcript

  • Investors Meeting March, 2011
  • 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
  • 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 (03/18/2011) – US$ 9.9 billion EV – Net debt Dec 2010 – US$ 15.8 billion 3 PPFinancial Highlights 2009 2010 BraskemR$ billion Consolidated Stand alone 1 PVCNet Revenue 15.2 27.8 + 83% 1 Chlorine-soda 1 naphtha crackerEBITDA 2.5 4.1 + 64% 4 PENet Debt/EBITDA 2.67x 2.43x - 9% 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$ 495 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 Nominal Capacity (kton) 19.3 16.9 19.1 14.4 Resins 14.6 Ethylene 14.1 13.5 Green Resin 2,308 10,412 10,212 1,626 1,642 1,337 5,921 5,551 3,621 871 851 2,965 3,045 3,145 3,190 764 581 457 2002 2003 2004 2005 2006 2007 2008 2009 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 Petroquímica Politeno TriunfoEV 2.4 3.9 5.8 4.2 4.7 7.6 5.1 7.5 15.8 Ipiranga, Copesul and Paulínia(US$ bi) Acquisitions Quattor + SunocoEV/ 5.2x 6.7x 6.6x 5.0x 6.2x 4.6x 3.8x 4.8x 6.8xEBITDASource: Braskem 1 Pro-forma figures for 2009 and 9M10: Braskem + Quattor + Braskem America 6
  • 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 Tons) # 38 players 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
  • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 9
  • Quattor - key indicators Operational Indicators Acquisition opportunities Operating rate (%) 1Q10 2Q10 3Q10 4Q10 Asset concentration in Southeast (~70% Brazilian Ethylene(1) 71% 83% 89% 94% consumption); PE 61% 76% 84% 91% Diversified RM matrix; Financial Indicators Joint administration of raw material agreements; R$ million 1Q10 2Q10 3Q10 4Q10 Integrated industrial Net Revenue 1,250 1,459 1,697 1,807 planning; +99% +41% +20% EBITDA 107 214 302 361 Reduction of working capital EBITDA Margin 8,6% 14,7% 17,8% 20,0% costs; Tax and logistical synergies.(1) Considering the 200 kty expansion 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 11
  • 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$350 million Financial Indicators Challenges 2009 2010 Knowledge of North American distribution market; Net Revenue (R$ million) 1,737 2,267 Add value to supplier ⇔ client EBITDA (R$ million) 134 201 chain (substitute distributor); +73% Highly disperse market. EBITDA (USD million) 66 114 12
  • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 13
  • Strategic direction “BECOME THE GLOBAL SUSTAINABLE CHEMICALLEADER, INNOVATING FOR BETTER SERVE THE PEOPLE”. 14
  • 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 15
  • Expansion with competitiveness increase BRAZIL PVC Expansion Operational start-up : May 2012 Expansion of 200 kton/y in PVC capacity in Alagoas Investments of US$470 million Expected NPV ~US$450 million Approval of a financing line of up to R$525 million from BNDES and R$200 million from BNB Expected disbursement of R$380 million in 2011 Support for Brazil’s infrastructure projects Brazil currently imports 30% of its needs PVC Domestic Demand (kton) 1,119 New Projects 982 950 857 Industrial Assets 31% 748 34% 26% 19% 17% Imports Domestic Sales 2006 2007 2008 2009 2010Source: Braskem 16
  • Growth strategy Projects with competitive materials Ethylene XXI Project – JV Braskem and IDESA - MexicoCharacteristics Startup: January 2015 Ethane acquisition from PEMEX Ethylene Ethane Integrated project: 1 Mton ethylene and 1Mton 66,000 bpd 1,000 kton/y 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 Exploration2011 Focus and Production Selection of the cracker technology Structuring of Project Finance: due diligence, negotiation of financial agreements Studies on environmental impacts and beginning of the process to obtain the construction licenses Conclusion of the engineering agreement Definition and negotiation of EPC agreements (Engineering, Procurement and Construction) 17
  • Unique pipeline of growth in the Americas Consolidated Project Pipeline Brownfield/Greenfield expansion projects in Brazil: PE and PP assets 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 18
  • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 19
  • Value added products and potential market growth are key differentiators of value creation 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 20
  • 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 21
  • 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 22
  • 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. 23
  • 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 24
  • Total Investment in 2011 is estimated at R$1.6 billion Investments R$ million 1,777 1,644 373 Maintenance Shutdown 391 HSE * For 2011, capex is estimated at R$ 127 85 142 Productivity 1.6 billion, which approximately 211 94 Capacity Increase / PVC Alagoas 30% destined to capacity expansion 283 407 Equipment Replacement projects, 20% to scheduled 6 Quantiq maintenance shutdowns, and the 343 243 Green PE remaining to operational 47 89 Mexico investments. 301 278 Others 2010 2011eSource: Braskem 25
  • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 26
  • 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. 27
  • Demand growth shall overcome new capacity additions Ethylene 6.7% Demand Capacity CAGR 10-15 (MM ton) 8.4% 5.2% 4.5% 4.4% 4.3% 3.4% 4.4% 2.6% 2.5% 3.3% 2.3% 2.1% Asia Supply Africa 6,521 CAGR 10-15 Middle East 6,090 2.4% 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 28
  • 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% 5.3 - 5.4 Imports 26% Million tons 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 29
  • Agenda Braskem A global player Acquisitions: opportunities and challenges Project pipeline: growth with value creation Braskem consolidated The petrochemical industry Final considerations 30
  • 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 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 Maintaining liquidity and financial discipline 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 31
  • Why Braskem?Pr/share BRKM5 Performance Consolidated (R$ billion) 2011e Multiple 40 EBITDA (consensus) 4.4 35 Synergies to 2012 4.9 30 Market Capitalization 16.5 22.9 25 20 EV 26.3 32.8 + 15 EV/EBITDA 6.0x 6.7x** 10 Price per share 20.60* 28.70 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 30.11 *BRKM5 as of 03/18/11 ** Peer Multiple Feb/2011 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 2011 multiple following the U.S. acquisition below peers’ multiple (6-8x) 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
  • Investors Meeting March, 2011
  • Appendix
  • Leader in the Americas and a top 8 global player in resins capacity 1stCapacity in the Americas (kton/y) 6,460 510 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 (kton/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 35
  • Global Ethylene and Resins supply/demand Global Ethylene Supply/Demand (Mton/y) 156 161 148 150 153 147 143 141 133 130 135 119 123 112 Supply Demand 2009 2010 2011e 2012e 2013e 2014e 2015e Global Resins Supply (Mton/y) Global Resins Demand (Mton/y) CAGR * 09-15 4.0% CAGR* 09-15 223 229 5.7% 214 219 197 207 191 200 181 52 52 53 173 182 50 51 163 45 46 PVC 154 41 43 43 144 39 73 34 37 65 67 70 71 PP 32 64 61 57 61 55 51 54 PE 45 48 90 93 95 98 99 103 83 88 92 82 67 71 75 79 2009 2010 2011e 2012e 2013e 2014e 2015e 2009 2010 2011e 2012e 2013e 2014e 2015eSource: CMAI, March 2011 * Compounded Annual Growth Rate 36
  • 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 2010 estimates 37
  • 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 38
  • World indicative ethylene cash costs 39Source: CMAI
  • Revenues breakdown – 4Q10 Net Revenue by Product(1) (4Q10) Others 10% Fuel 4% ETBE 2% Cumene 2% BTX* 7% Butadiene 4% Propylene 3% Resins 66% Ethylene 4% 1 Does notinclude naphtha/ condensate/crude oil processing and distributor sales * Benzene, Toluene, Paraxylene and OrthoxyleneSource: Braskem 40
  • 4Q10 and 2010 COGS breakdown COGS 4Q10 (1) COGS 2010 (1) Deprec / Amort, Freight, 4.1% Deprec / Amort, Freight, 3.9% 7.5% 7.0% Others, 0.7% Others, 0.9% Services, 1.5% Naphtha , 51.5% Services, 1.5% Naphtha , 53.1% Labor, 3.4% Labor, 3.1% Other Variable Other Variable Costs, 6.9% Costs, 7.2% Natural Gas, Natural Gas, 2.5% 2.4% Electric Energy, Electric Energy, 3.5% 4.3% Gas as Gas as feedstock, 18.4% feedstock, 16.9% 1 Does not include naphtha / condensate / crude oil processing (1) Does not include naphtha / condensate / crude oil processing and Quantiq costs and Quantiq costsSource: Braskem 41
  • Exports Destination – 4Q10 Exports Destination 4Q10 Asia 4% Europe 18% North America 44% South America 29% Central America 4% The Export Market represents 26% of Company’s Net Revenue.Source: Braskem 42
  • 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** 2010 43Source: Braskem *SG&A: R$244 million of non-recurring expenses in 2010 **2009 non-recurring effect amounts R$135 million
  • Debt Profile Gross Debt by Category Gross Debt by Index Foreign Gov. Entities CDI 1% 12% TJLP Brazilian Gov. 20% Entities BRL - PRE 26% 6% Capital Market 38% USD-POS 6% Banks USD-PRE 35% 56% 44Source: Braskem
  • Outstanding Bonds & Outstanding Ratings Coupon Yield * Outstanding Bonds Maturity (% p.a.) (% p.a.) US$250 MM Jan/2014 11.750 3.9 US$250 MM Jun/2015 9.375 4.3 US$275 MM Jan/2017 8.000 5.7 US$500 MM Jun/2018 7.250 5.8 US$750 MM May/2020 7.000 6.3 US$450 MM Perpetual 7.375 7.3 * As of March, 18th Corporate Credit Rating – Global Scale Agency Rating Outlook Reviewed in Fitch Ratings BB+ Positive 01/11/2011 S&P BB+ Stable 05/28/2009 Moody’s Ba1 Stable 05/21/2009 45Source: Braskem / Bloomberg
  • Covenants Net Debt/ EBITDA (R$ million) (US$ million) -8% -7% 2.64x 2.76x 2.56x 2.43x Sep 10 Dec 10 Sep 10 Dec 10 Facility Amount* Dec 10 Currency Type Senior Notes R$ 500 MM R$ 500 MM R$ Issuance Nippon Export and US$80 MM US$40 MM US$ Maintenance Investment Insurance EPP (Export Pre-Payment) US$725 MM US$400 MM US$ Maintenance *The company is prevented from issuing any new debt for the period if it overcomes the 4.5x Net debt / EBITDA ratio. 46Source: Braskem