Braskem S.a. · BMFBOVESPA:BRKM3
Braskem — Q1 2022 Earnings Presentation
57 slides from Braskem's earnings presentation, May 12, 2022
Slide 1: Braskem 1Q22 Earnings Release
Braskem © 1Q22 Earnings Release
Slide 2: 1Q22 highlights
§ In 1Q22, the Company’s Recurring EBITDA was US$920 million, 19% lower than 4Q21, mainly due to: (i) the normalization of international spreads for main chemicals and resins in Brazil, for PP in the USA & Europe and for PE in Mexico; (ii) lower sales volume of main chemicals and resins in the Brazi
Slide 3: Green ethylene capacity expansion in Triunfo
In this sense, the following projects stand out: Project to expand green ethylene production capacity in the Triunfo Petrochemical Complex in Rio Grande do Sul Expansion of the current green ethylene production capacity from 200 kta to 260 kta using feedstock made from sugarcane ethanol.
Slide 4: New green ethylene plant in Thailand (MOU with SCG Chemicals)
Project to build a new green ethylene plant in Thailand (MOU with SCG Chemicals) Execution of a memorandum of understanding with SCG Chemicals to conduct feasibility studies for a joint investment in a green ethylene plant in Thailand.
Slide 5: Green ethylene plant in Thailand details
hylene plant up to double the Capacity addition existing capacity of PE Tm Green™ bio-based Estimated Investment+ To be defined Localization Thaland Status In study +The execution of the investment is subject to the conclusion of the studies, mutual agreement between Braskem and SCG Chemicals and ap
Slide 6: Plastic waste prevention and advanced recycling unit
Additionally, the Company is working to prevent 1.5 million tons of plastic waste from being sent to incineration, landfills, or deposited in the environment by 2030. In this sense, the following projects stand out, which are mainly related to working through partnerships with other companies in our
Slide 7: Transform For Value Program
Transform For Value Program The Transform for Value (TFV) Program ended 2021 on pace to capture approximately US$277 million/year [7] in initiatives that reached more advanced stages of maturity. The accumulated capture in 2021 of these initiatives totaled about US$154 million. During the first quar
Slide 8: International references: prices and spreads
‘ 4921 1921 Chg. Chg. International Referencest (US$/ton} (8) (c) (A)/(B)__(A)/(C) Prices Brent (US$/bb!) 101 80 61 27% 66% Naphtha 884 734 544 20% 63% Ethane 297 290 178 3% 67% Propane 677 650 467 4% 45% Resins (i) 1369 1,454 1,430 6% 4% PE US 14511571 1,567 8% 7% PP Asa 1255 1,234 1,302 2% 4% PVC
Slide 9: Average utilization rate of petrochemical crackers
c) Average utilization rate of petrochemical crackers: in line with 4Q21 (+1 p.p.). Compared to 1Q21, the utilization rate of the petrochemical crackers increased (+4 p.p.), due to the pit stop (rapid scheduled maintenance shutdown) at the petrochemical crackers in Rio Grande do Sul in 1Q21.
Slide 10: Resins sales volume in Brazil
d) Resins sales volume: in the Brazilian market, increased compared to 4Q21 (+2%), positively impacted from stronger demand for PE and PP for the restocking in the chain. Compared to 1Q21, sales volume decreased (-7%), mainly due to weaker resins demand in the Brazilian market, due to the restocking
Slide 11: Main chemicals sales volume in Brazil
e) Main chemicals sales volume: in the Brazilian market, sales volume increased in relation to 4Q21 (+2%), supported by the higher sales volume of paraxilene, due to the higher production in the period as a consequence of the scheduled maintenance shutdown in 4Q21. Compared to 1Q21, sales volume inc
Slide 12: Geological event in Alagoas: provisions
4.1.2 GEOLOGICAL EVENT IN ALAGOAS a) Provisions As assessed by the Company and its external advisors, considering the measures recommended on technical studies in the short and long-term and the existing information and refined estimates of expenses for implementing several measures connected with t
Slide 13: Alagoas provision action fronts
The current provision can be segregated into the following action fronts: a. Support for relocating and compensating for the residents, business and real state owners of properties located in the Civil Defense Map updated in December 2020, including establishments that requires special measures for
Slide 14: Brazil net revenue
A) NET REVENUE: stable in U.S. dollar (+0%) and lower in Brazilian real (-7%) compared to 4Q21, explained by the 6.3% appreciation in the Brazilian real against the U.S. dollar. Compared to 1Q21, the increase in U.S. dollar (+27%) and Brazilian real (+21%) is explained by the higher prices for PVC a
Slide 15: Braskem sales by economic activity
‘Braskem Sales by Economic Activity! PE = my 1g. co 192 rood Broskem Sales by Economic Activity| PP 3028 eat 1922 Consumer gods Ml others eos 1 coxaticand Prarmacnatia 1 Agrattar sector Mi Varo Sectors Hi hctomotve Brasher Sales by Economie Activity| PYC ie a rom rrr 1922
Slide 16: SG&A, recurring EBITDA and Renewables overview
C) SG&A EXPENSES: in U.S. dollar, the decrease in relation to 4Q21 (-4%) is mainly explained by the lower expenses with third parties. Compared to 1Q21, the increase (+32%) is due to higher expenses with communication and marketing and consulting services. D) RECURRING EBITDA: represented 53% of Com
Slide 17: Green PE sales volume
b) Green PE sales volume: green PE sales decreased in relation to 4Q21 (-10%) and 1Q21 (-8%), due to logistic constraints in exports.
Slide 18: Braskem sales of Green PE
Braskem Sales (kton) of Green PE 1924 agai 1922 Green PE Green PE Sales Volume per Region (26) 1021 4o21 1022 Europe ME Brazil I south America Asia ML North Ameria
Slide 19: Net revenue (Green PE + ETBE)
‘Net Revenue (Green PE + ETBE) (MM USS)
Slide 20: Utilization rate of PP plants
b) Average utilization rate of PP plants: in the United States, the rate increased in relation to 4Q21 (+15 p.p.) due to the normalization process of operations after a scheduled maintenance shutdown at one of the plants in the region during 4Q21. Compared to 1Q21, the rate increased (+10 p.p.), mai
Slide 21: PP sales volume
c) PP sales volume: in the United States, sales volume increased in relation to 4Q21 (+9%) and 1Q21 (+3%), due to higher product availability. In Europe, PP sales volume increased (+9%) in relation to 4Q21, reflecting the higher product availability for sale in the period. Compared to 1Q21, the decr
Slide 22: Sales volume US & Europe
Braskem Sales Volume (kton) | US & Europe azn 1922 I PPUSA EPP Europe
Slide 23: US & Europe net revenue and COGS
A) NET REVENUE: increased in U.S. dollar (+4%) in relation to 4Q21, explained by higher PP price in Europe and by higher PP sales volumes in the United States and Europe. In Brazilian real, net revenue decreased (-2%), due to the 6.3% appreciation in the Brazilian real against the U.S. dollar. Compa
Slide 24: COGS 1Q22 United States and Europe
COGS 1922 | United States and Europe* Sales Freight Deprec/Amort Fixed Costs Other Variable Costs? Propylene US Propylene EU Considers seeountng figures Dineludes ealaniee and banat Sineludes alecrety, natural gas, fuels, chemicals, utites, among others
Slide 25: Utilization rate of PE plants in Mexico
c) Average utilization rate of PE plants: stable in relation to 4Q21 (-1 p.p.). In 1Q22, ethane supply by PEMEX was 33,500 barrels per day, higher than the volume established in the amendment to the ethane supply agreement (30,000 barrels per day). Additionally, the Fast Track solution complemented
Slide 26: PE sales volume
d) PE sales volume: increased (+15%) compared to 4Q21, due to higher product availability for sale because of the maintenance of production at healthy levels and consumption of the Company's inventory. In relation to 1Q21, the increase (+63%) is explained by the higher product availability for sale
Slide 27: Braskem sales volume Mexico
Braskem Sales Volume (kton) | Mexico
Slide 28: Mexico financial overview
Chg. Chg. (A)/(B) (A)/(C) Net Revenue 339 341 213 “1% 59% cocs (220) (291) (122) 15% 80% Gross Profit 119 150 90 -21% 31% Gross Margin 35% 44% 42% Opp. 7 pp. SCBA (22) (23) (21) “6% 7% Other Operating Income (Expenses) 1 2) 7) na. na. Recurring EBITDA 136 160 94 -15% 44% Operating Margin 40% 47% 44%
Slide 29: Mexico cost of goods sold
B) COST OF GOODS SOLD (COGS): increased in Brazilian real (+8%) and U.S. dollar (+15%) compared to 4Q21, due to the higher PE sales volume and the higher ethane price in the international market. Compared to 1Q21, the increase in Brazilian real (+71%) and U.S. dollar (+80%) is explained by the highe
Slide 30: Mexico SG&A and recurring EBITDA
C) SG&A EXPENSES: in U.S. dollar, the decrease in relation to 4Q21 (-6%) is mainly explained by the reduction in fixed expenses with communication and marketing. Compared to 1Q21, the increase (+7%) is due to the higher fixed expenses with maintenance and facilities services. D) RECURRING EBITDA: re
Slide 31: Income statement
‘Income Statement 4g21 1921 Chg. R$ milion (8) © (a)/(B) (Ayi(C) Gross Revenue 39 32,870 26,622 5% 17% Net Revenue 26,731 28,212 22,692 5% 18% Cost of Good Sold (21,601) (21,510) (15,454) 0% 40% Gross Profit 5130 6,702 7,238 “23% — -29% Seling and Distribution Expenses (548) (580) (472) 6% 16% (Loss
Slide 32: Consolidated net revenue
[Net Revenue (R§ million) | Consolidated! 28,212 7% 26,731 79% 22,692 5% 10% 560% 1921 4921 1922 Mi Brazil USA and Europe I Exports? [lll Mexico ‘Does not consider feedstock resale and ethers 2onsters ony exports from Bran
Slide 33: Other revenue (expense), net
5.3 OTHER REVENUE (EXPENSE), NET The Company recorded in 1Q22 a net expense of R$133 million, mainly due to (i) the accounting provision of R$88 million related to the updating of expenses associated with the geological event in Alagoas; and (ii) fines, rescissions, and indemnifications in the amoun
Slide 34: Recurring EBITDA
5.4 RECURRING EBITDA [19] In 1Q22, the Company’s Recurring EBITDA was US$920 million, 19% lower than 4Q21, mainly due to: (i) the normalization of international spreads for main chemicals and resins in Brazil, for PP in the USA & Europe and for PE in Mexico; (ii) lower sales volume of main chemicals
Slide 35: Consolidated result note
[19] 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 related to transfers of products among these regions.
Slide 36: Results by segment
= 35404) 8 @ - 65) ey 7 US. and Euope 138 G07) 32 ay - 4 zs 25 weseo = 20 us my : 1 6 13s Segments Total 5252338) ou ae 2) 7a 307 Otner Segments 0 2) 7 4 3 ° rc 3 cooate Unt : : 6) - © es) en craton ana Recetas? 452) 205 33 o : o 52 0 Gresham Total 5120 05) 7 Bs) z Go) 7m 0 "Oses ot conser experars
Slide 37: Financial expenses and revenue
Financial expenses: decreased in relation to 4Q21 (-12%), mainly due to (i) the impact of the appreciation of the real against the dollar on the principal in foreign currency; and (ii) the accounting recognition in 4Q21 of financial expense related to income tax on the loan to be received from Brask
Slide 38: Net income and investments
5.6 NET INCOME In 1Q22, the Company registered net income attributable to shareholders of R$3.9 billion, representing R$4.88 per common share and class “A” preferred share [20] . Additionally, the Company’s net margin in the period was 15%. 5.7 INVESTMENTS The Company’s estimates corporate investmen
Slide 39: Projected investment
The total projected investment of R$5.6 billion (US$1.0 billion) includes R$1.4 billion (US$259 million) for projects related to Braskem’s Sustainable Development Macro-Objectives to be carried out over the course of 2022.
Slide 40: Sustainable development investments and cash flow
In 1Q22, the main investments related to Braskem’s Sustainable Development Macro-Objectives were in: (i) the project to expand biopolymers production capacity at the Triunfo Petrochemical Complex in Rio Grande do Sul; (ii) the projects associated with reducing CO2 emissions and capturing energy effi
Slide 41: Debt maturity profile and rating
5.9 DEBT MATURITY PROFILE AND RATING 5.9.1 BRASKEM (ex-BRASKEM IDESA) On March 31, 2022, the average debt term was around 14.0 years, with 52% of maturities concentrated after 2030. The weighted average cost of the Company’s debt was exchange variation plus 5.3%.
Slide 42: Liquidity position
The liquidity position of US$1.8 billion is sufficient to cover the payment of all liabilities coming due in the next 69 months, and it does not consider the international stand-by credit facility of US$1 billion available through 2026. In January, the Company disbursed the funds related to the firs
Slide 43: Debt profile
Debt Profile (US$ million) 03/31/2022" g 1355 te wis = 20. 23 72004 2025 2026 2023/30/20 aOR omar i tovestedin RSH Inverted in USS LocalCuraney Foren Cureny Bl Standby (1) Dam cri th aunt RS ion dined tothe EranlCorpestin ad Reno SupprtPrgrmia Alon and te aourtl REL ill ‘crag the jncon eile ent ncat
Slide 44: Braskem Idesa debt
5.9.2 BRASKEM IDESA On March 31, 2022, the average debt term was around 8.6 years, with 93% of maturities concentrated after 2029. Braskem Idesa’s average weighted cost of debt was exchange variation plus 7.1%.
Slide 45: Braskem Idesa net debt and debt profile
mar/22 mar/21 0. (a) (8) (c) (a)/(B) (ayi(c) 2,210 2,206 2,330, 0% 5% : = a. ma. in US$ 2,210 2,206 2,330 0% 5% (-) Cash and Cash Equivalents 394 318 175 24% 126% in RS = * e na. na. in US$ 394 318 175 24% 126% (=) Net Debt 1,816 1,888 2,155, 4% 16% in RS % is s na. na jin US$ 1,816 1,888 2,155 4% 1
Slide 46: Recycled resins sales and eco-indicators
§ Brazil: compared to 4Q21, the sales of recycled resins decreased (-21%), due to inventory buildup in the production chain. Compared to 1Q21, recycled resin sales volume increased (+157%), reflecting the strategy to expand sales and mature the business. Sales volume of chemicals [21] decreased in r
Slide 47: Governance footnotes
[25] ISO 37001 is the Anti-bribery Management System developed by the International Organization for Standardization (ISO). [26] Board of Directors.
Slide 48: Corporate debt securities performance
7.2 CORPORATE DEBT SECURITIES PERFORMANCE
Slide 49: Bond yields and prices
Bond Unity Braskem '23 - yield % Braskem '23 - price usp Braskem '24 - yield % Braskem '24 - price usp Braskem '28 - yield % Braskem '28 - price usp Braskem '30 - yield % Braskem '30 - price usp Braskem "41 - yield % Braskem "41 - price usp Braskem 'S0 - yield % Braskem '50 - price usp Braskem Hybri
Slide 50: Annex II: Consolidated Recurring EBITDA Calculation
ANNEX II Consolidated Recurring EBITDA Calculation
Slide 51: Recurring EBITDA reconciliation
192200 492101021. Change Change (CONSOLIDATED @) (8) (CEO OMEEONG) Net Profit 3,947 4682414 74396 64% Income Tax / Social Contribution 4,070 780 863 57% 24% nancial Result (27) 2874 3,463 na. na. Depreciation, amortization and depletion 4,010 4,366 ‘932 26% 8% Cost 733 1,096 et “52% 15% Expenses 267
Slide 52: Indicators
Indicators. 192200 421 1921 US$ milion. a B) ©) Operating Recuing EBITDA 920 1435 1,266 -19% 27% Operating Margin* 18% 22% 31% 4pp. — -12pp. SGBA/Net Revenue (%) 5% 5% 5% Ope. Opp. Finandalt : : Adjusted Net Debt 4,935, 5,061 5242 2% 6% Adjusted Net Debt/Recuring EBITDA (LTM)* 1.00x 0.94 1.80x 6% 4%
Slide 53: Balance sheet assets
‘mar/22 dec/21 Change ‘ASSETS (RS milion)
Slide 54: Consolidated cash flow
Consolidated Cash Flow 1922, 4Q21 1921. Change Change R$ million (O) (8) © We) AIO Profit (Loss) Before Income Tax and Social Contribution 5018 1248 3,277 aa, 53%. ‘Adjust for Result Restatement Depreciation and Amortization 4010 1,366 932 26% 8% Equity Result a7) © (2) 189% 600% Interest, Monetary
Slide 55: Annex VII: Braskem Idesa Balance Sheet
ANNEX VII Braskem Idesa Balance Sheet
Slide 56: Braskem Idesa assets and liabilities
ASSETS (R§ milion) iio chs IR sits “ () [Ono Current. 3966 4,173, “5% ‘Cash and Cash Egle 1,867 1773 59 ‘Accous Receivable i) 1225 2% Invertores 956 1010 5% Recoverable Taxes 23 2 410% Other 3 38 3% ‘Non Current 14570 17,210 “15% Taxes Recovereble Za 268 4% Deferred income Tax nd Social Contribution
Slide 57: Forward-looking statements
This report on Form 6-K may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are statements that are not historical facts, and are based on our management’s current view and estimates of future economic and other circumst