Braskem S.a. · BMFBOVESPA:BRKM3
Braskem — Q3 2018 Earnings Presentation
31 slides from Braskem's earnings presentation, Nov 13, 2018
Slide 1: Excludes the Project Finance in Mexico.
1 Excludes the Project Finance in Mexico.
Slide 2: International spreads of key chemicals and resins
4 Spreads of key chemicals 2 produced by Braskem, US$404/ton, were up 3% and 12% from 2Q18 and 3Q17 respectively, mainly due to higher butadiene prices, driven by strong demand from construction, automotive and electronics sectors. 4 Average international spread of the polyolefins 3 produced by Bras
Slide 3: Brazil operations: utilization, demand, sales and COGS
4 In 3Q18, the crackers operated at an average capacity utilization rate of 95%, 5 p.p. higher than in 2Q18, due to the normalization of production after the end of logistics constraints arising from the truck drivers' strike. Compared to 3Q17, the average capacity utilization rate increased 3 p.p.,
Slide 4: United States and Europe operations
4 In 3Q18, the capacity utilization rate was 87%, up 3 p.p. from 2Q18, reflecting lower downtimes caused by unscheduled shutdowns. Compared to 3Q17, the capacity utilization rate fell 7 p.p., due to (i) the scheduled Turnaround of the Wesseling Unit in Germany; (ii) logistics constraints on propylen
Slide 5: Mexico operations
4 In 3Q18, the PE plants operated at a capacity utilization rate of 78%, 6 p.p. higher than in 2Q18, when capacity utilization was adversely affected by the scheduled shutdown in May. Compared to 3Q17, the capacity utilization declined 9 p.p. due to the lower supply of ethane. 4 In the quarter, PE s
Slide 6: Consolidated income statement
307 2g18 3Q18 (5) (8) © 12,162 13,786 16,348 (9,162) (10,504) (12,714) 3,283 3,634 24% 22% (912) 68 (Other Operating Income (Expenses) Investment in Subsidiary and Associated Companies 1 Operating Profit 2,790 Net Financial Result (931) Profit before Income Tax and Social Contribution 1,859 Income T
Slide 7: Net Financial Result
NET FINANCIAL RESULT
Slide 8: Consolidated result by region
10 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 9: Debt profile and liquidity
On September 30, 2018, the average debt term was approximately 15 years, while the average weighted cost of the Company’s debt was equivalent to exchange variation + 5.63%. Braskem’s liquidity position of US$1,525 million is sufficient to cover the payment of all obligations maturing over the next 3
Slide 10: Risk-rating agencies
Risk-rating agencies: Braskem maintained investment grade ratings at Standard & Poor's (BBB-) and Fitch Ratings (BBB-); above Brazil’s sovereign risk, with stable outlook at the three main agencies. The reports are available on the Investor Relations website ( http://www.braskem-ri.com.br/ ). 6. INV
Slide 11: Investments
11 Considers operating investment, maintenance shutdowns and acquisitions of spare parts.
Slide 12: Sustainable Development: Circular Economy positioning
8. SUSTAINABLE DEVELOPMENT 4 Positioning Circular Economy In November, Braskem announced its global positioning for the Circular Economy. Braskem recognizes that adequate management of the disposal of post-consumer plastic waste is a growing global concern. For society to leverage the benefits that
Slide 13: Appendix II: Calculation of Consolidated EBITDA
APPENDIX II Calculation of Consolidated EBITDA
Slide 14: EBITDA Statement
EBITDA Statement (R$ million) 3017 2g18 3Q18 Change Change = 9M17_ © 9M18_~—Change CONSOLIDATED fA) (B) (c) (O/(B)__(C)/(A). (A) (B) (B)/(A) Net Profit 764 493 1,442 193% 89% 3,820 3,086 9% Income Tax / Social Contribution 28 (198) 417 “311% 83% = 1,387 495, Financial Result 240 2142 931 “57% “1% 2,
Slide 15: Assets
ASSETS (R$ million) dec/17 sep/18 ‘Change (A) (B) (A)/(B) Current 17,992 21,948 22% Cash and Cash Equivalents 3,775 4,801 30% Marketable Securties/Held for Trading 2,303 2,081 -10% ‘Accounts Receivable 3,281 4,496 37% Inventories 6.847 8,945 31% Recoverable Taxes 1,349 1147 “15% Dividends and Intere
Slide 16: Liabilities and shareholders' equity
* On the reporting date of the quarterly financial statements, Braskem was in unremedied default with part of the non-financial obligations contracts. As a result, the entire balance of non-current liabilities, in the amount of R$10,136,271, was reclassified to current liabilities, in accordance wit
Slide 17: Cash flow statement
218 3018 Change ge MI7—OMIB Change @® © ye) OVA) (CO) Profit (Loss) Before Income Tax and Social Contribution and the result of discontinued operations 991 2951859 530% «88% 5B 35813096 ‘Adjust for Net Income Restatement na. o 0 na. Depreciation, Amortization and Depletion 745 72 788 9% 6% = 2,169 2
Slide 18: Exhibit VI: Balance Sheet - Deconsolidation Braskem Idesa
EXHIBIT VI Balance Sheet - Deconsolidation Braskem Idesa
Slide 19: Assets (R$ million) deconsolidated
ASSETS (R$ million) nsolidated ExBraskem Idesa dec/17 sep/18 Braskem Idesa ‘Consolidated dec/17 sep/18 dec/17 Himinations Consolidated sep/18 dec/17 sep/18 ‘Gurrent 16,667 19,827 1,424 2,380 (148) __ (209) 17,943 21,998 (Cash and Cash Equivalents ‘Marketable Securities/Held for Trading ‘Accounts Rec
Slide 20: Consolidated cash flow ex Braskem Idesa
Consolidated Consolidated Cash Flow (R$ million) Ex Braskem Idesa ‘oM17 _9M18 Profit (Loss) Before Income Tax and Social Contribution and the result of discontinued operations 4,661 3,503 ‘Adjust for Net Income (Loss) Restatement. 2,803 6,014 Depreciation, Amortization and Depletion 1,685 1,684 Equi
Slide 21: Financial result Braskem Idesa
Financial Result (R§ milion) 3017 2q18 3018 ‘M7 BRASKEM IDESA a) O) iG} (0) Financial Expenses (238) (262) (298) 14% 25% (733) (806) Interest Expenses (218) (256) (274) 7% 26% (638) (741) 16% Others (1) © (24) 297% 16% (04) (64) -32% Financial Revenue 8 16 1 94% —-88% cry 20 88% Interest 2 5 8 63% 4
Slide 22: Brazil chemicals production and sales
3QU7 2018 3Q18 Chg. Chg. 9M17 9M18 Chg. Lsboiated (a) (8) © O@ ay (0) © eyo Production Ethylene 865,570 841,720 901,635 7% 4% 2,615,886 2,576,242 2% Utilization Rate* 92% 90% 95% Spp. SDP. 93% 92% -lpp. Propylene 367,016 320,628 351,158 10% 4% 1,084,903 994,100 -B% cumene S274 S353—««GHE7B«C2%~=—«3%
Slide 23: Chemicals international references
3Q17 2Q18 3Q18 Chg. Chg. 9M17 oM18 chi (A) (8) (c) (C)/(B) _ (C)/(A) (D) (e) (E)/(D) Ethylene Europe 1145 1,312 1,320 1% 15% 4124 4,313 17% Butadiene USA 930 1,487 1,581 6% 70% 1,497 1,378 8% Propylene Polymer Grade USA 919 1,146 1,323 15% 44% 954 4,213 27% ‘Cumene USA 784 ‘940 983 5% 25% 841 ‘954 1
Slide 24: Brazil polyolefins production and sales
3Q18 Chg. Chg. M17 Chg. roe © (O/) OLA) (0) ©) Production PE 670,673, 659,783, 698,510, 6% 4% = 2,021,927 2,050,523, 1% Utilization Rate* 88% 87% 91% 4pp. 4pp. 89% 90% Ipp. PP 430,534 389,442 432,378 11% 0% 1,284,988 1,233,246 4% Utilization Rate* 92% 84% 93% 8pp. Opp. 93% 89% -4 pp. Total 1,101,207
Slide 25: Polyolefins international references
Polyolefins International References* 3Q17 2918 3Q18 Chg. Ch 9M17 omis Ch US$/ton) iG)) (B) (c) (c)/(B)_(C)/(A) (D) (E) (E)/(D) PE US 1,157 1,272 1,138 -11% = -2% 1,180 1,245 6% PP Asia 1,083 1,245 1,219 -2% 13% 1,059 1,228 16% ‘Average Price® - Polyolefins (2) 1,129 1,262 1,169 =7% 4%. 1,134 1,239
Slide 26: Vinyls production and sales
— 3Q17,-2Q18=—3Q18-— Chg. = Chg. «9 OM17_—s« OMB Chg. (A) (B) (Cc) (C)/(B) (C)/(A)_(D) (5) (E)/(D) Production PVC 157,052 134,213. 152,362 14% 3% 453,888 391,326 -14% Utilization Rate* 88% 76% 85% = 9pp. -3pp. 85% 75% -11pp. Caustic Soda 108,807 101,045 97,382 -4% — -11% 299,081 219,932 -26% Utiliza
Slide 27: United States and Europe
UNITED STATES AND EUROPE International References (IHS):
Slide 28: Mexico
MEXICO International References (IHS):
Slide 29: Financial overview by segment
Financial Overview (R§ million) COGS Gross Profit Qrcratans CONSOLIDATED 3018 Profit Brazil 12,125 (9,675) 2,450 (669) (29) 1,752 2,218 Chemicals 9,158 (7,892) 1,266 (224) ro) 1041 1,351 Polyolefins 6408 (5,413) 995 (329) (2) 645763 Vinyls 1,022 (851) a (4) Q 262 liminations and Reclassifications (4
Slide 30: Net revenue breakdown
Net Revenue 3Q18 Exports from Resins Brazil Exports Il chemicals Ml potyotetins IE Mercosur [ Viovs [Mothers HH erazitian market Hi chemicas Ml exports Hl chemicals [Ml Polyotetins ll US and Europe Il Poyatetins J Vinyls i mexico Vinyis Net Revenue M18 aux. 17% L J 54% 55% Exports from Resins Brazil
Slide 31: Signatures and forward-looking statements
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: November 13 , 2018 BRASKEM S.A. By: /s/ Pedro van Langendonck Teixeira de Freitas Name: Pedro van