Braskem S.a. · BMFBOVESPA:BRKM3
Braskem — Q3 2022 Earnings Presentation
55 slides from Braskem's earnings presentation, Nov 9, 2022
Slide 1: 3Q22 Earnings Release
—-3Q22 arnings Release Braskem *
Slide 2: 3Q22 Recurring EBITDA and highlights
§ In 3Q22, Recurring EBITDA was of US$371 million, lower 54% than 2Q22, mainly due to (i) the lower exports volume of resins in the Brazil segment, lower sales volume of PP in the United States and PE in the Mexico segment; (ii) lower international spreads for PE, PP and PVC in Brazil, PP in the Uni
Slide 3: Building a new green ethylene plant in Thailand
Building 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 new green ethylene plant in Thailand.
Slide 4: Joint licensing of green ethylene technology
Joint licensing of green ethylene technology (partnership with Lummus Technology) Partnership to develop and license Braskem's technology to produce green ethylene. The partnership will bring complementary expertise to accelerate Braskem's commitment to reach 1.0 million tons of green PE production
Slide 5: Construction of Ethane Import Terminal
Construction of Ethane Import Ter Supply Capacty Estimated Investment Location Status Expected Conclsion Date 80 kbpd 1US$400 millon Mexico Construction phase is in progress, which started in July, icenses obtained for the establishment of the Joint Venture with Advario and purchase of land for the
Slide 6: International references: prices and spreads
3922 2922-3021 = Chg. Ch 9M22 9M21_— Chg. @) @) © we) (©) © oe International References* (US$/ton) Prices Brent (US¢/bb)) 14 73-11% = 37% =~ 105 6 56% Nephtha 624 865 66S 21% LLU 35% Ethane 4060434257 7% 58% 379209 82% Propane 563649607 13% 7% 63D SID 23%, Resins () 1080 14991545 25% = 30% © 1,296 1
Slide 7: Average utilization rate of petrochemical crackers
c) Average utilization rate of petrochemical crackers: increased compared to 2Q22 (+5 p.p.), explained by the restarting operations after scheduled maintenance shutdowns at the petrochemical complex in Rio Grande do Sul and at the PVC plant in Alagoas, which had affected the utilization rate of the
Slide 8: Utilization Rate Ethylene (%)
Utilization Rate Ethylene (%)
Slide 9: Main chemicals sales volume
e) Main chemicals sales volume: in the Brazilian market, sales volume decreased in relation to 2Q22 (-5%) and 3Q21 (-10%), mainly due to the lower sales volume of (i) paraxylene and cumene explained by the lower demand of clients that made scheduled and unscheduled shutdowns in the period; and (ii)
Slide 10: Geological event in Alagoas
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 11: Provision by 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 12: Net revenue
A) NET REVENUE : decreased in U.S. dollar (-10%) and in Brazilian Real (-3%) compared to 2Q22 explained by the reduction in exports volume of resins and the lower prices for resins and main chemicals in the international market.
Slide 13: Braskem Sales by Economic Activity
‘Braskom Sales by Economic Actvity| PE = — <— os ou co saz 2022 soz. (rood Wa vere sectors Winds! Conmeticand Pharmac Braskem Seles by Economic Activity PP sot 2a san i conumergoode Ml ters root 1 Conran Parmaceta areaturtsactor ML Varun Sectors Wi retomstwe Ml Consus raskam Sales by Economic Activi
Slide 14: Sales Volume per Region (%)
Sales Volume per Region (%) 3021 2022 3022 WM vrs Asia and Oceania (ex-china) Ml Others Hl Mercosut Ml china il europe Ml orth america
Slide 15: SG&A, Recurring EBITDA and Renewables overview
C) SG&A EXPENSES: in U.S. dollar, the decrease in relation to 2Q22 (-4%) is explained by lower expenses with third parties. Compared to 3Q21, the increase (+4%) is mainly explained by higher expenses with industrial maintenance services. D) RECURRING EBITDA: represented 80% of the Company’s consolid
Slide 16: Green PE sales volume
b) Green PE sales volume: the demand for Green PE remained at healthy levels in the period, however sales volume decreased (-17%) when compared to 2Q22 due to the seasonality in Europe. Compared to 3Q21, sales of Green PE were higher (+9%), due to the greater availability of logistics for export.
Slide 17: Braskem Sales of Green PE
Braskem Sales (kton) of Green PE 35 Be 3q2t 2922 © 3Q22 Green PE Green PE Sales Volume per Region ( 3021 2022 3022 H Europe Ml Braz I south America Asia North america
Slide 18: Net sales revenue Green PE
A) NET SALES REVENUE GREEN PE (I’m green TM bio-based) + ETBE (product that uses renewable raw material, ethanol in its composition): decrease compared to 2Q22 (-5%) due to (i) the lower sales volume of Green PE; (ii) the variation in the price of ethanol, which influences the price formula of the G
Slide 19: Average utilization rate of PP plants
b) Average utilization rate of PP plants: in the United States, the utilization rate decreased in relation to 2Q22 (-7 p.p.) and 3Q21 (-20 p.p.), mainly due to (i) the region's weaker demand; and (ii) minor unscheduled shutdowns at PP plants in the period. In Europe, the utilization rate remained in
Slide 20: PP sales volume
c) PP sales volume: in the United States, decreased in relation to 2Q22 (-19%) and 3Q21 (-14%), mainly due to (i) the region's weaker demand associated with the destocking process in the value chain; and (ii) the lower product availability for sale in the period. In Europe, compared to 2Q22, sales v
Slide 21: Braskem Sales Volume US & Europe
Braskem Sales Volume (kton) | US & Europe
Slide 22: Net revenue and COGS US & Europe
A) NET REVENUE : decreased in U.S. dollar (-21%) and Brazilian Real (-16%) in relation to 2Q22, explained by the lower PP sales volume in the United States and the lower PP price in the United States and Europe. Compared to 3Q21, net revenue decreased in U.S. dollar (-42%) and Brazilian Real (-41%)
Slide 23: SG&A and Mexico Recurring EBITDA
C) SG&A EXPENSES : in U.S. dollar, remained in line with 2Q22. Compared to 3Q21, the decrease (-17%) is due to the lower expenses with logistics and storage, and with third parties. D) RECURRING EBITDA: represented 16% of the Company’s consolidated Recurring EBITDA. 4.3 MEXICO Recurring EBITDA was o
Slide 24: Utilization rate of PE plants
c) Average utilization rate of PE plants: increased in relation to 2Q22 (+9 p.p.) due to the higher ethane supply by PEMEX, reaching 26,000 barrels per day in the average of the 3Q22. Compared to 3Q21, the 8 p.p. increase is explained mainly by the higher ethane volume supplied by PEMEX and ethane i
Slide 25: PE sales volume
d) PE sales volume: in comparison with 2Q22, sales volume decreased (-5%) due to the replenishment of Braskem Idesa’s inventories in the period. In relation to 3Q21, the increase (+13%) is explained by the higher product availability for sale given the increase in ethane supply in the period.
Slide 26: Braskem Sales Volume Mexico
Braskem Sales Volume (kton) | Mexico Ce)
Slide 27: Net revenue Mexico
A) NET REVENUE: decreased in U.S. dollar (-21%) and in Brazilian Real (-15%) in relation to 2Q22 due to the lower PE price in the international market and the lower sales volume in the period. Compared to 3Q21, decreased in U.S. dollar (-21%) and Brazilian Real (-20%) due to the lower PE price in th
Slide 28: Cost of goods sold Mexico
B) COST OF GOODS SOLD (COGS): increased in U.S. dollar (+6%) and Brazilian Real (+13%) in relation to 2Q22, basically explained by the inventory effects caused by higher ethane and natural gas prices in the international market and the accounting effect of realization of inventories in the net amoun
Slide 29: SG&A and Ethane Import Terminal
C) SG&A EXPENSES: in U.S. dollar, the decrease in relation to 2Q22 (-23%) and to 3Q21 (-13%) is mainly explained by lower expenses with legal services and third parties. D) RECURRING EBITDA: represented 4% of the Company’s consolidated Recurring EBITDA. 4.3.3 ETHANE IMPORT TERMINAL Construction of t
Slide 30: Income Statement
Income Statement 32 8 220 RS milion a @) a (0) © 2 Gross Revenue 73,036 2% 89,778 89,990 ‘0% NetRevenue 25,387 28,299 0% 0% = 77,530 77,413 0% ‘Cast of Good Sol (23.158) (13955) we 6% (G0) (2.058) Ba Gross Profit 2223, 3305 45% «73% «11437 25,355 55% ‘Seg ard Devon Expenses 5) (co) % eS) (4476) 7% (
Slide 31: Net Revenue (R$ million) Consolidated
Net Revenue (R$ million) | Consolidated! 28,299 6% 25,411 25,387 6% 59% 8% 60% 3Q24 2922 3Q22 brit USA and Europe I Exports? lll Mexico \Does not consider Fedstack resale end others 2Coneiders only exports from Braz
Slide 32: Other revenue (expense), net
5.3 OTHER REVENUE (EXPENSE), NET - ORD The Company recorded in 3Q22 a net expense of R$234 million, mainly due to (i) the accounting provision for the geological event in Alagoas of R$160 million, related to inflation adjustment of the provision for socio-urbanism measures and other adjustments rela
Slide 33: Recurring EBITDA
5.4 RECURRING EBITDA [24] In 3Q22, Recurring EBITDA was US$371 million, down 54% on 2Q22, mainly due to (i) the lower exports volume of resins in the Brazil segment, lower sales volume of PP in the United States and PE in the Mexico segment; (ii) lower international spreads for PE, PP and PVC in Bra
Slide 34: Footnotes
[24] 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. [25] Accounting effect of realization of inventories in accordance with accountin
Slide 35: Financial income (expense)
5.5 FINANCIAL INCOME (EXPENSE)
Slide 36: Financial expenses and income
Financial expenses: decreased in relation to 2Q22 (-13%), due to (i) lower amortization transaction costs associated with prepayments, which were higher in the prior period; and (ii) lower financial expenses with derivatives. In relation to 3Q21, the increase (+4%) is mainly explained by the increas
Slide 37: Net income and investments
5.6 NET INCOME In the quarter, the Company reported a net loss [26] of R$1.1 billion, which mainly reflects the lower operating result and the effects from exchange variation on the financial result given the depreciation in the Brazilian Real and Mexican peso against the U.S. dollar at end of perio
Slide 38: Total 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 Goals to be carried out over the course of 2022.
Slide 39: Main investments and cash flow
In 3Q22, the main investments related to Braskem’s Sustainable Development Macro-Goals were in (i) the project to expand biopolymers production capacity at the Triunfo Petrochemical Complex in Rio Grande do Sul; (ii) projects associated with reducing CO2 emissions and capturing energy efficiency gai
Slide 40: Debt maturity profile and rating
5.9 DEBT MATURITY PROFILE AND RATING 5.9.1.1 BRASKEM (ex-BRASKEM IDESA) On September 30, 2022, the average debt term was around 13.4 years, with approximately 53% of maturities concentrated after 2030. The weighted average cost of the Company's debt was exchange variation +5.7%. In September, Braske
Slide 41: Liquidity position
The liquidity position of US$2.2 billion is sufficient to cover the payment of all liabilities coming due in the next 63 months, not considering the international stand-by credit facility of US$1.0 billion available through 2026. In line with Braskem's sustainable development strategy, Braskem contr
Slide 42: Debt Profile (US$ million)
Debt Profile (US$ million) 09/30/2022" 26% i a ~ | ith am oi ae aaa? esisoim 2022 2023 2024 2025 2028 27 2028/——2090/2031 2032 onwards eas Ed (Wi iovested in tS ML Invested in USS Local Currency Foreign Currency Ml standby Hl Sustanabty Linked Loon (USS)? * Doe net cords the aun cf USE 2 rin deine t
Slide 43: Braskem Idesa debt
5.9.2 BRASKEM IDESA On September 30, 2022, the average debt term was around 8.1 years, with 92% of maturities concentrated after 2029. Braskem Idesa’s weighted average cost of debt was exchange variation plus 7.2%.
Slide 44: Braskem Idesa Debt Profile
Sep/22 Jun/22 p21 a) (8) (c) 2,219 2,184 2179 2% z : a. 2,219 2,184 2179286 400 405 302 1% z = na. 400 405 32-196 1,819 1,779 1877 2% z ma. US$ 1,819 1779 1877286 Recurring EBITDA (LTM) 426 579 542___-26% ‘Net Debt/Recurring EBITDA (LTM) 427% 3.07% 346x___39% Braskem Idesa Debt Profile (US$ million)
Slide 45: Recycled resins sales and eco-indicators
§ Brazil: increased in relation to 2Q22 (+6%) and 2Q21 (+55%), driven by stronger demand for resins with recycled content. For circular chemicals [28] , sales increased compared to 2Q22 (+33%) and 3Q21 (+711%), due to the higher availability of product for sale, mainly resulting from the inclusion o
Slide 46: Corporate debt securities performance
7.2 CORPORATE DEBT SECURITIES PERFORMANCE
Slide 47: Bond Performance
Chg. (OE) Bond Performance Braskem '24 - yield Braskem ‘24 - price Braskem ‘28 - yield Braskem ‘28 - price Braskem '30 - yield Braskem '30 - price Braskem "41 - yield Braskem "41 - price Braskem '50 - yield Braskem '50 - price Hybrid Bond - yield Hybrid Bond - price US Treasury 2y 132 bps US Treasur
Slide 48: Annex II Consolidated Recurring EBITDA Calculation
ANNEX II Consolidated Recurring EBITDA Calculation
Slide 49: Recurring EBITDA Statement
Recurring EBIIDA Statement (R$ milion) 32-221 hange | Ghange | 922 M21 Change: ‘CORSOLDATED a) (2) cg One oe) Net Profit (az) (1453) 3.518) na 1063 13493 92% Income Tax Social Contin 46 (5) m2) na igi 3219 Fharil Rest 4693383103 SB Se as Depreciaton amortization ane deleton ets 2% 322s Cox 755 ie si
Slide 50: Key indicators and company valuation
3022 2922 3021 Chg. Cha. @ (8) ©) (ay/(B) (D/C) Recurring EBITDA 371 802 1469 54% “75% EBITDA Margin? 8% 16% 27% -8pp. 19D. SGRA/Net Revenue (2%) 5% 5% 4% Opp. Ipp. ‘Adjusted Net Debt 4,639 4,890 4,308 5% 8% ‘Adjusted Net Debt/Recuting EBITDA (LTM)* 1.55x 1.22x 0.83x 27% 86% Recurring EBITDA (LTM)/I
Slide 51: Balance Sheet
Jun/22 Change @) _ aya) ASSETS (R$ million) ‘Current. Cash and Cash Equivalents Marketable Securties/Hel for Trading ‘Accounts Recewvable Inventories Recoverable Taxes Prepaid expenses Derivatives Other Assets ‘Non Current. Marketable Secuities) HelitoMatuty ‘Accounts Recewvable Taxes ecoversble Inc
Slide 52: Cash flow statement
3Q21 Change Change © _ Are WO Provision of Geological Eventin Alagoas IS and COFINS credits - exclusion oF MS from the calculation base = nan, 031) 10086 ne. 2 @ na Provision fr loses and write-off of long-lived asst ° na, 798% 39s) na ‘ath Generation before Working Caprtal 3287 8393 ~a% 7% 10,117 7
Slide 53: Annex VII Braskem Idesa Balance Sheet
ANNEX VII Braskem Idesa Balance Sheet
Slide 54: Braskem Idesa Balance Sheet
eh Sep/22 Jun/22_— Change 1} (O} (OO) Current 42219 4,312. -20% ‘Cash and Cash Equivalents 2162 2120 236 ‘Accounts Receivable 747 954 22% Inventories 1.050 1006 3% Recoverable Taxes 145 20 82% other 14 142 19% ‘Non Current 16,011 16,077, 096 Taxes Recoverable 236 22 6% Deferred Income Tax and Social
Slide 55: Forward-looking statements
This Earnings Release may contain forward-looking statements. These statements are not historical facts, but are based on the current view and estimates of the Company's management regarding future economic and other circumstances, industry conditions, financial performance and results, including an