Braskem S.a. · BMFBOVESPA:BRKM3
Braskem — Q2 2020 Earnings Presentation
19 slides from Braskem's earnings presentation, Aug 6, 2020
Slide 1: 2Q20 Earnings Conference Call
NEW PP PLANT IN THE UNITED STATES 2Q20 EARNINGS CONFERENCE CALL A U G U S T, 0 6 , 2 0 2 0 PUBLIC
Slide 2: Disclaimer on Forward-Looking Statements
DISCLAIMER ON FORWARD- LOOKING STATEMENTS This presentation includes forward-looking statements. These forward-looking statements are not solely historical data, but rather reflect the targets and expectations of Braskem’s management. The terms “anticipate,” “believe,” “expect,” “foresee,” “intend,”
Slide 3: Impact of COVID on the Company's operations in 2Q20
Impact of COVID on the Company's operations in 2Q20 Utilization Rate (%) |Brazil Utilization Rate (%) |US & EU Utilization Rate (%) |Mexico +15 p.p. +5 p.p. -3 p.p. +16 p.p. 81% 95% 93% 90% 89% 89% 70% 75% 88% 88% 85% 86% 64% 74% 73% 78% 1T20 Apr-20 May-20 Jun-20 1T20 Apr-20 May-20 Jun-20 1T20 Apr-2
Slide 4: Impact of COVID on the Company's sales in 2Q20
Impact of COVID on the Company's sales in 2Q20 Resins Sales (kton)¹| Brazil Chemicals Sales (kton)²| Brazil Demand Recovery +41% +48% 407 248 355 220 • In Brazil, the global economic 289 116 168 67 120 25 77 slowdown caused by the 96 292 181 COVID affected resin and 193 234 144 143 chemical sales, m
Slide 5: 2Q20 Highlights | Braskem Consolidated
2Q20 Highlights |Braskem Consolidated EBITDA (US$ million) -25% Highlights 414 +5% • Compared to 1Q20, recurring EBITDA was 5% 310 higher due to: 294 I. lower costs of feedstock in Brazil, because of lower inventories cost; II. lower selling, general and administrative expenses in Brazil and Mexico
Slide 6: 2Q20 Highlights | Brazil
2Q20 Highlights |Brazil Operational Financial UTILIZATION RATE EBITDA (%) (US$ million) -19 p.p. -11 p.p. +29% 89% 81% 11 p.p. decrease due 70% to lower demand for -6% resins and main 233 219 chemicals 181 2Q19 1Q20 2Q20 Ethylene BRASKEM RESIN SALES (Kton) -12% -10% 2Q19 1Q20 2Q20 1,199 1,172 1,051
Slide 7: Update regarding the geological event in Alagoas
Update regarding the geological event in Alagoas Agreement with the Alagoas State Public Defender's Office, the Review of Financial Compensation and Federal Prosecution Office, the Alagoas State Prosecution Office and the Federal Public Defender's Office Support for Relocation Program January, 2020
Slide 8: 2Q20 Highlights | US and Europe
2Q20 Highlights |US and Europe Operational Financial UTILIZATION RATE EBITDA (%) (US$ million) -9 p.p +18 p.p -5 p.p -58% -5 p.p 5 p.p. decrease due to 99% 95% 88% 90% 83% lower demand from 65% the automotive sector 107 in both regions -29% 2Q19 1Q20 2Q20 63 PP US PP EU 45 BRASKEM PP SALES (Kton) +2
Slide 9: 2Q20 Highlights | Mexico
2Q20 Highlights |Mexico Operational Financial UTILIZATION RATE EBITDA (%) (US$ million) +8 p.p 13% of the quarter's -6 p.p. utilization rate came 86% +11% 80% from ethane imports 72% +25% from the US, reaching 75% of the project’s 98 expected capacity 88 79 2Q19 1Q20 2Q20 PE BRASKEM PE SALES by dest
Slide 10: Petrochemical Scenario 2020
Petrochemical Scenario 2020 External consulting firms forecast: Jan/20 report vs. Jul/20 report Resins and Chemicals Spreads Brazil US & Europe Spreads Mexico Spreads PE, PP, PVC and Main Chemicals PP US e PP EU PE México +2% +13% +21% +69% +32% +20% -17% PE PP PVC Main PP US PP EU PE Mexico Chemica
Slide 11: Debt Profile
Debt Profile Debt Profile (US$ million) 06/30/2020 (1) (2) 40% Debt KPIs AROUND 40% OF DEBTS DUE AFTER 6 2030 • Sufficient liquidity to cover the 2,796 payment of debts coming due in the next 43 months 809 1,987 • The average debt term around 3,508 14 years 15% 15% 12% 9 • The weighted average cost
Slide 12: Debt Profile Proforma
Debt Profile Proforma Debt Profile (US$ million) Proforma (1) (2) Debt KPIs 52% AROUND 52% OF DEBTS DUE AFTER 6 2030 • Sufficient liquidity to cover the payment of debts coming due in 3,100 Credit facility available the next 55 months 1,000 Prepaid the stand by credit • The average debt term around
Slide 13: Deleveraging plan
Deleveraging plan Initiatives Timeline 1 Hybrid Bond Issuance Issuance in the total volume of US$ 600 million, with 50% equity treatment by Standard & Poor's and Fitch Ratings Jul/20 Reduction of planned investments for 2020 from US$ 721 million 2 CAPEX Reduction (ongoing) to approximately US$ 600
Slide 14: Renewal of contracts with Petrobras
Renewal of contracts with Petrobras Naphtha Contracts Renewal of petrochemical naphtha supply contracts to Braskem's industrial units in Bahia and Rio Grande do Sul The contracts have a term of 5 years after the expiration date of the current contract (Dec/2020) Camaçari (Q1) Minimum annual volume o
Slide 15: ESG: New agreement to purchase solar energy
ESG: New agreement to purchase solar energy Solar Energy Contract New long-term contract for the purchase of renewable energy with Canadian Solar, one of the largest players in the solar energy industry The agreement will enable the construction of a plant in northern Minas Gerais state and assures
Slide 16: ESG: Energy
ESG: Energy Strategy Renewable Energy (% of purchased energy) Strategic Pillars: competitiveness, flexibility, Purchased Renewable Energy reliability and sustainability. +4,9 p.p. 20,7% Ambition: be a reference in the global chemical 17,0% 20,8% 21,1% 16,2% industry in sustainable energy, with a foc
Slide 17: ESG: Recognition in Biopolymers
ESG: Recognition in Biopolymers Braskem's bioplastic recognized at UN event Braskem's production of I'm green™ bio-based polyethylene, was recognized as one of the most transformational cases in sustainable development in Brazil, by ECLAC from the United Nations (UN) and Global Compact Network Brazi
Slide 18: Priorities for 3Q20
Priorities for 3Q20 PRODUCTIVITY Ensure reliability of the industrial plants in all regions AND Advance in the negotiations to renew the naphtha supply for the São Paulo COMPETITIVENESS complex and ethane and propane for the Rio de Janeiro complex FEEDSTOCK AND Continue to ramp up the import s
Slide 19: 2Q20 Earnings Conference Call
2Q20 EARNINGS CONFERENCE CALL AUGUST 06, 2020