2. Forward-looking Statements
This presentation contains forward-looking statements. These statements are not
historical facts and are based on management’s objectives and estimates. The words
"anticipate", "believe", "expect", "estimate", "intend", "plan", "project", "aim" and similar
words indicate forward-looking statements. Although we believe they are based on
reasonable assumptions, these statements are based on the information currently
available 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 are
made (December 31, 2010) and the Company does not assume any obligation to update
them in light of new information or future developments.
Braskem is not responsible for any transaction or investment decision taken based on the
information in this presentation.
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3. Highlights
EBITDA (R$ million) EBITDA (US$ million)
Braskem’s EBITDA was R$ 1.1 billion in 4Q10 with a 14.9 % +27%
+41%
EBITDA margin 4,055 2,308
2010 EBITDA reached R$ 4.1 billion, a 27% growth over 3,181
1,638
2009
Quattor EBITDA increased 78% reaching R$1 billion
Braskem’s domestic resin sales rose 11%
2010 Net Income was R$ 1,9 billion 2009 2010 2009 2010
Braskem is committed to its financial solidity:
Debt prepayment and long term bonds issue, lengthened the average debt term to 12.5 years
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 R$377 million in annual EBITDA for 2011
Ethylene XXI Project – Mexico
Letters of interest for the finance of the project surpassed its financing needs
Strategic partnership with Lyondell Basell for the use of the technology at the polyethylene plants
*Last 12 Months EBITDA (LTM) 3
4. Domestic market performance
Domestic Resins Performance – 4Q10 Vs. 3Q10 Origin of Imports in 2010
(PE, PP and PVC)
-5% Brazilian market
-6% Braskem’s Sales
Others
14%
Europe
Braskem’s Sales Profile – 2010 10% North America
29%
Asia
OTHERS 10%
AGRIBUSINESS
10% Mexico Colombia Argentina
INDUSTRIAL 4% FOOD 1% 15%
29%
21%
4% PACKAGING
AUTOMOTIVE 6%
RETAIL 7%
9%
Americas account for 67% of imports
HYGIENE AND 18%
CLEANING 13% CONSTRUCTION Imports continued to represent 26%
of the domestic market
CONSUMER
GOODS
Source: Tendências Consultoria, Abiquim, Braskem 4
5. EBITDA performance: 4Q10 vs. 3Q10
R$ million
Although sales volume was impacted by lower seasonal FX impact
on costs 127
demand, contribution margin was offset by the higher
prices in Brazilian real. FX impacted by the appreciation in
Brazilian real. (191)
FX impact on
revenues
345
( 64) 1,074
1,033
( 75 ) ( 32)
( 134 )
EBITDA Volume Contribution FX Fixed Costs Others EBITDA
3Q10 Margin SG&A 4Q10
Source: Braskem *SG&A: R$29 million of non-recurring expenses in 4Q10 5
6. EBITDA performance: 2010 vs. 2009
R$ 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
Source: Braskem *SG&A: R$244 million of non-recurring expenses in 2010 6
7. Strong cash generation and competitive margins
EBITDA (R$ million) and
EBITDA Margin (%)
14.0% 14.6%
12.1% 14.1% 14.9% 40.0%
20.0% 4,055
0.0% 3,181
1,036 1,074 -20.0%
-40.0%
786
-60.0%
-80.0%
-100.0%
-120.0%
-140.0%
3Q09 3Q10 4Q10 2009 2010
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$464 million in 2010 7
8. Leverage decrease and longer average debt term
Net Debt/EBITDA
(R$)
Amortization Schedule(1) Dec-09 3.59x
(million of R$)
12/31/2010
-32%
Sep-10 2.64x
-8%
583*
20% Dec-10 2.43x
393
13% 14%
13%
10% 11% Net Debt/EBITDA
10% 2,594
2,889 1,733 1,820 8% (US$)
2,496 1,694 1,360
1,245 1,073 1,244
Dec-09 4.00x
12/31/10 2011 2012 2013 2014 2015 2016/ 2018/ 2020 -36%
2017 2019 onwards
Sep-10 2.76x
Cash
(1) Does not
include transaction costs
Invested in R$ -7%
Invested in US$ *US$350 million of Stand by
Dec-10 2.56x
Issue of US$450 million in perpetual bonds, project finance
prepayment and others financing operations lengthened the
average debt term to 12.5 years
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9. 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 operations
Source: Braskem * Annual and Recurring 9
10. 2011 Capex and Projects
Ethylene XXI (JV Braskem and IDESA) – Mexico
Startup: January 2015
PEMEX guarantees the supply of ethane
Integrated project: 1 Mton/year ethylene and 1Mton/year PEs
Investments
Investment: US$ 2.5 billion (project finance) (R$ million)
Mexico imports 68% of its total PE demand (1.8 Mton/year)
Financial advisor: Sumitomo 1,644
Strategic partnership with Ineos and Lyondell Basell for the use of the technology
at the PE plants 391
Maintenance Shutdown
More than US$5 billion in letters of interest for the project finance
HSE
142
2011 Focus
94
Cracker technology definition Productivity
Structuring of the Project Finance 407
Capacity Increase / PVC Alagoas
Conclusion of the engineering and construction agreement
243 Equipment Replacement
PVC Alagoas - Brazil 89
Mexico
Characteristics: 278
Others
Startup: May 2012
Expansion of 200 kton/y in PVC capacity 2011e
Investments of US$470 million and expected NPV ~US$450 million
Approval of a financing line of up to R$525 million from BNDES and R$200
million from BNB
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11. Outlook and Priorities
Petrochemical 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 Brazil
Braskem 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
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