Braskem S.a. · BMFBOVESPA:BRKM3
Braskem — Q2 2018 Earnings Presentation
26 slides from Braskem's earnings presentation, Aug 9, 2018
Slide 1: In the case of the class “B" preferred shares, the amount is R$0.03 per
1 In the case of the class “B" preferred shares, the amount is R$0.03 per share. 2 Excludes Project Finance in Mexico.
Slide 2: Braskem's result in Brazil
9 Braskem’s result in Brazil corresponds to the sum of the results from the Chem7icals, Polyolefins and Vinyls units less eliminations from the revenues and costs with transfers of products among these segments. In 2Q17, EBITDA from Brazil includes the capital gain from the divestment of quantiQ, of
Slide 3: Chemicals segment
10 The Chemicals segment is formed by and operates four petrochemical complexes (Camaçari, Triunfo, São Paulo and Rio de Janeiro) producing olefins, aromatics and utilities. These units have total annual ethylene production capacity of 3,952 kton, of which approximately 78% is naphtha-based, 16% is
Slide 4: Chemicals: capacity utilization, sales volume and COGS
Capacity Utilization Rate: negatively affected compared to 2Q17 and stable compared to 1Q18 by the aforementioned events. Sales Volume – Brazilian Market: the reduction compared to 1Q18 was influenced by the logistics constraints mentioned above. However, this effect was partially offset by higher s
Slide 5: International references (IHS)
International references (IHS):
Slide 6: Polyolefins and Vinyls segments
International references (IHS): 14 Cost of goods sold: ethylene and propylene are the main feedstocks used to make PE and PP, respectively. For PE production, 100% of the ethylene used is supplied by the Chemicals Unit, as is 65% of the propylene used to make PP, with the remainder supplied by Petro
Slide 7: International references (IHS)
International references (IHS):
Slide 8: United States and Europe: capacity utilization, market, sales volume
Capacity Utilization Rate: down compared to 1Q18 and 2Q17, explained by the 50-day scheduled shutdown at the Oyster Creek Unit in Texas and by operational issues at the Marcus Hook Plant in Pennsylvania. Market: in the USA, demand for PP continued to post solid growth, despite higher resin prices, l
Slide 9: International references (IHS)
International references (IHS):
Slide 10: Net revenue
NET REVENUE 21 Braskem’s consolidated result corresponds to the sum of the results in Brazil, United States & Europe and Mexico, less eliminations from the revenues and costs from the transfers of products among these regions.
Slide 11: Cost of goods sold (COGS)
COST OF GOODS SOLD (COGS) In 2Q18, the reduction in consolidated COGS in U.S. dollar compared to 1Q18 is explained by lower sales volume in all regions, except for PP in Europe, which offset the increases in international price references for feedstock.
Slide 12: gs 1g Cho HIB HIT Chg.
gs 1g 017 Cho HIB HIT Chg. cosouaTD coc (G} (0) iG] (0)/(E) {OES (U5 mon 059) (5.59) 608 ete .s 3% fae 14 mm Be frome 2 ye ie Prefers A sot sa ism Prayers rope 353 sade cc ca a8 1 cua cos a Doe Pore ste cow en enacted 2% = ‘cw Proprlene o Propylene + pepe rmsae |: SEOs, + toot soy | Ramet, 2 gers |:
Slide 13: Financial expenses and income
Financial expenses: affected by the effects from the 16% Brazilian real depreciation in the comparison period on consolidated net exposure. Financial income: increase in relation to 1Q18 due to the higher balance of financial investments in Brazilian real. Net exchange variation: affected by the eff
Slide 14: Debt term and liquidity
On June 30, 2018, Braskem’s average debt term was approximately 17 years, while the average weighted cost of the Company’s debt was equivalent to exchange variation + 5.71%. Braskem’s liquidity position of R$1,681 million is sufficient to cover all obligations maturing over the next 36 months. In Ma
Slide 15: Debt amortization schedule
1,000 616 16% 34 2% 1,065 35, 1,020 2% 3% 26 [13527 =] 06/30/2018 2018 2019 2020 2021 Cash fanrerat tec coer Bieae cree Sony 610553 en mn) 06/30/2018 40% 4) 17% oe 86. 13% 64 _ a 2022/2023 2024/2025 2026 onwards (2) Does not cones dacunt tom vast cate
Slide 16: Free cash flow
FREE CASH FLOW 23 In 2Q18, Braskem recorded free cash flow of R$3,321 million, representing an increase of R$1,556 million compared to 1Q18, primarily explained by: (i) the higher EBITDA; (ii) variation in the balance of trade payables (suppliers), mainly due to higher feedstock costs and the weaker
Slide 17: Value levers: new PP plant in the United States
VALUE LEVERS 4 New PP plant in the United States At the end of 2Q18, Braskem already had invested US$281 million and reached 28% completion, as follows: Engineering detailing – 91% completed Equipment acquisitions – 77% completed Construction – 19% completed Braskem America entered into a credit fac
Slide 18: Indicators summary
Indicator 21819182017 Chg. US$ milion (a) ® (Cy (A)/(B) _(A)/(C) eaITDA e77 2652 3,029 57% 71% EBITDA Margin (36) 23% 20% 26% 3p Sap. SGRA/Net Revenue (%) 53% 55% 6.0% = pp Opp. Net Debt 5396 5,606 5,071 “HOM Net Deby/EBITDA LTH ee ed EBITDA/interest Paid LTM 5705.20 6.23 10% Share Price (Final) B20
Slide 19: Exhibit II: Calculation of Consolidated EBITDA
EXHIBIT II Calculation of Consolidated EBITDA
Slide 20: EBITDA statement
[EBITDA Statement R$ milion 1Hi8——1HI7_—— Change CONSOLIDATED. w) ON) Net Prof “came Tax/ Social Contibuton Finacial Result Deprecasor,enerization and depletion Cost Eipenses a ‘asic EBITDA 2.654 Provisions fr the impairment of lng lived assets () i) Resuts fom equity imestmets (3) © Adjusted EBITDA
Slide 21: Assets
ASSETS (RS milion) n/t dec/17 Change @ @ ae) Current 19997 17,992 11% ‘Cash and Cash Equvlenes 550 3775 30% Marketable Securties/Held fer Trading 2,056 2.303 “1% Accounts Receivable 3.306 3281 1% Ivertares aid 597 199% Racoverable Taxes 2 1308 2% Dedede and intrest on Eauty 6 a 46% Prepaid Expenses
Slide 22: Liabilities and project finance default note
* On the reporting date of the quarterly financial statements for the period ended June 30, 2018, Braskem was in unremedied default with the obligations typical of project finance. As a result, the entire balance of non-current liabilities, in the amount of R$10,038 million, was reclassified to curr
Slide 23: Consolidated cash flow
[Consolidated Cash Flow ‘2q17 Change Grange = HIS HIT Change es milion @ wre O_o ‘Profit (Loss) Before Income Tax and Social Contribution and the Peres) Te 1am ta ro ‘Adjust for Net Income Restatement 3. 0 0 na. Cena Soy ten mom Get ae cure ao = Ge Boi hiney adtchoge els te sett Be ot oe Passio bam
Slide 24: Exhibit VI: Balance Sheet - Deconsolidation Braskem Idesa
EXHIBIT VI Balance Sheet - Deconsolidation Braskem Idesa
Slide 25: Consolidated vs Braskem Idesa balance sheet
Consolidated = Braskem Hes ‘ASSETS (RS non) ExBraskem Mesa Consokdated _-—-«“Eminations Consolidated ju/18 —dec/17 _jun/18 —dec/17__jur/18 _dec/17_jn/18 _dec/17 Current 5025167712088 1370_ (72) (448) 13,987__ 17,992 Gash nd GE 445340073 OE $50 3775 erlaableSecarseeHl for Trading 2oss 2303, 2ose 2303
Slide 26: Exhibit VIII: Financial Result - Braskem Idesa
EXHIBIT VIII Financial Result - Braskem Idesa