Braskem S.a. · BMFBOVESPA:BRKM3
Braskem — Q3 2024 Earnings Presentation
63 slides from Braskem's earnings presentation, Nov 7, 2024
Slide 1: Earnings Release
Earnings Release Braskem ~
Slide 2: Operating Cash Generation, Recurring EBITDA and cash position
Operating Cash jeneration @) Recurring EBITDA © Cash position US$432 MM USS$2.4 bi US$75 MM Ensuring coverage of debt maturities over the next 52 Around R$416 million months Update on the defense agenda of the Brazilian Chemical Industry >On September 19, 2024, the Executive Management Committee ("G
Slide 3: Operating and financial summary table
3024 2924 3023 ‘Cha. Chg. om24 9M23 hg. Ears Des eee ) (B) © ie) (ayi(C) 0) © ye) Brazil Utilization Rate Ethylene (%) B% 71% 68% 2pp. Sp. 73% 73% Opp. ‘Sales Volume of Main Chemicals (kton) 77 627 ‘547 14% 31% 2,007 1,848 9% ‘Sales Volume of Main Chemicals Exports (kton) 47 71 89 34% TY 192 273 -30
Slide 4: Prices and spreads
3024-2924 23 9. w @) © oe Brent (USS/bb)) 20 85 oh 8% 3 82 Natural Gas (USs/MMBtu) 2202.09 5% -15% 2 2 Be Prices Naphtha 67 gv 82% 3% SG 3% Ethane N60 143219 18% Hd 87-28%, Propane 33 003ml 83 2% 8% = 404377 % Resins (i) 1008 99586 1% 4% 99098 5% PEUS 1091 1051890 4% 23% = 0545S 10% PP Asia 954 9850
Slide 5: 5.1.1 Operational Overview
5.1.1 OPERATIONAL OVERVIEW a) Demand for resins in Brazil (PE, PP, and PVC): lower compared to 2Q24 (-5%), mainly due to (i) lower demand for PE by the beverage sector and higher inventory levels in the chain; and (ii) lower PVC demand explained by inventory construction in previous quarters. Compar
Slide 6: Average utilization rate of petrochemical crackers
b) Average utilization rate of petrochemical crackers: higher compared to 2Q24 (+2 p.p.), mainly explained by the resumption of operations at the Triunfo Petrochemical Complex, in Rio Grande do Sul, which were interrupted during the month of May due to the extreme weather event that affected the sta
Slide 7: Resin sales volume
c) Resin sales volume: in the Brazilian market, the increase compared to 2Q24 (+6%) is mainly explained by the higher sales volume (i) of PP, mainly due to the resumption of operations at the Petrochemical Complex of Rio Grande do Sul and the higher demand from the hygiene and cleaning sectors; and
Slide 8: Exports
Exports increased compared to 2Q24 (+21%) mainly due to (i) the higher availability of product for sale; and (ii) the largest commercial opportunities in South America. The increase compared to 3Q23 (+2%) is mainly explained by the higher volume of PE sales in South America.
Slide 9: Main chemicals sales volume
d) Main chemicals sales volume [1] : in the Brazilian market, the increase compared to 2Q24 (+14%) is mainly explained by the higher sales volume of ethylene, benzene and gasoline, due to the greater availability of product for sale due to the resumption of operations in Rio Grande do Sul. Compared
Slide 10: Exports
Exports were lower compared to 2Q24 (-34%) and 3Q23 (-47%), mainly due to the lower sales volume of (i) gasoline and benzene, explained by the prioritization of serving the local market; and (ii) toluene, due to the lower availability of product for sale.
Slide 11: Updates about Alagoas
UPDATES ABOUT ALAGOAS The Company's Management, based on its assessment and that of its external advisors, considering the short-and long-term effects of the elaborated technical studies, existing information and the best estimate of expenses for implementing the various measures relating to the geo
Slide 12: Alagoas provision by area of action
The amounts included in the accounting provision relating to the geological event in Alagoas, until September 30, 2024, can be segregated between the following areas of action and their respective net balances of accounting provision: (a) support in the relocation and compensation of residents, R$1.
Slide 13: Net Revenue
A) Net Revenue: increase in dollars, compared to 2Q24 (+7%), mainly explained by (i) increase of 45 thousand tons, or 6%, in the volume of resin sales in the Brazilian market; (ii) increase of 90 thousand tons, or 14%, in the sales volume of main chemicals in the Brazilian market; (iii) increase of
Slide 14: Cost of Goods Sold (COGS)
B) Cost of Goods Sold (COGS): increase in dollars (+3%), mainly due to (i) increased sales volume of main chemicals in the Brazilian market; and (ii) increase in resin sales volume in the Brazilian market and exports. In reais, the increase (+9%) is also explained by the depreciation of the average
Slide 15: COGS breakdown
3923 2924 3924 I Naphtha and Wil Fixed Costs? Hl Natural Gas Condensate [Ml Other variable costs? [Ml Deprec / Amort il Gast Propylene Sales Freight Ml Electric Energy "Considers accounting fguree ZIneudes chemicals, adcives, catalyst, fuels, utes, among others “Ines salaries and benafts ‘Gas: Ethan
Slide 16: Sales volume of Green PE
b) Sales volume of Green PE (I’m green TM biobased): the increase (+6%) compared to 2Q24 is mainly explained by the greater availability of product for sale due to the higher utilization rate, which was partially offset by the rebuilding of inventories in the period. Compared to 3Q23, the increase (
Slide 17: Sales (kton) of green PE
‘Sales (kton) of green PE
Slide 18: 5.1.3.2 Financial Overview
5.1.3.2 FINANCIAL OVERVIEW A) Green PE and ETBE [2] net revenue: increase compared to 2Q24 (+5%), mainly explained by the increase of around 3 thousand tons, or 6%, in the volume of sales of Green PE, due to the normalization of operations at the Triunfo Petrochemical Complex, in Rio Grande do Sul.
Slide 19: 5.2 United States & Europe
5.2 UNITED STATES & EUROPE Recurring EBITDA was US$71 million (R$395 million), 53% higher than 2Q24 and 18% higher than 3Q23, representing 15% of the consolidated Recurrent EBITDA of the Company's segments in dollars in the quarter. The increase compared to 2Q24 is mainly explained by the optimizati
Slide 20: 5.2.1 Operational Overview
5.2.1 OPERATIONAL OVERVIEW a) PP demand: PP demand in North America was lower (-2%) compared to 2Q24, mainly due to higher inventories levels in the chain. Compared to 3Q23, demand in North America was higher (+3%), mainly due to the improvement in the economic scenario in the region, compared to th
Slide 21: Average utilization rate of PP plants
b) Average utilization rate of PP plants: lower than in 2Q24 (-2 p.p.) and 3Q23 (-5 p.p.), mainly due to scheduled maintenance shutdowns at the plants in Europe.
Slide 22: PP sales volume
c) PP sales volume: in line with 2Q24. Compared to 3Q23, the reduction (-8%) is mainly explained by the lower availability of product for sale.
Slide 23: Sales Volume (kton) | US & Europe
Sales Volume (kton) | US & Europe 2924 1 PP US and Europe 501 3Q24
Slide 24: Net Revenue and COGS
A) Net Revenue : lower in dollars (-5%) compared to 2Q24, mainly explained by the lower volume of feedstock resale operations in Europe. Excluding this effect, revenue was higher in dollars (+9%), due to the increase in the average price of international PP references. Compared to 3Q23, net revenue
Slide 25: SG&A Expenses and Mexico Recurring EBITDA
C) SG&A Expenses : in dollars, the increase compared to 2Q24 (+36%) is explained by higher expenses with (i) logistics and storage services; and (ii) third parties services. In relation to 3Q23, it remained in line. D) Recurring EBITDA: represented 15% of the consolidated Recurring EBITDA of the Com
Slide 26: Average utilization rate of PE plants
b) Average utilization rate of PE plants: lower compared to 2Q24 (-4 p.p.) mainly due to (i) the lower volume of ethane imported through the Fast Track solution, of 19 thousand barrels per day, compared to 23 thousand barrels in 2Q24, due to the scheduled shutdown of the international supplier; and
Slide 27: PE sales volume
c) PE sales volume: lower compared to 2Q24 (-11%) explained by the lower availability of product for sale, which was partially offset by inventories optimization in the period. Compared to 3Q23 (-3%), the reduction is explained by the greater supply from PE producers in North America.
Slide 28: Sales Volume (kton) | Mexico
‘Sales Volume (kton) | Mexico
Slide 29: Net Revenue
A) Net Revenue: lower in US dollar terms (-3%) compared to 2Q24, mainly due to the reduction of 25 thousand tons, or 11%, in the volume of PE sales, partially offset by the 3% increase in the PE reference in the international market. In reais, the increase (+3%) is explained by the depreciation of t
Slide 30: Cost of Goods Sold (COGS)
B) Cost of Goods Sold (COGS): the reduction in dollars (-17%) and reais (-12%) compared to 2Q24 is mainly explained by (i) the reduction in the price of ethane in the international market in the quarter (-18%); and (ii) a reduction of 25 thousand tons, or 11%, in the volume of PE sales. Compared to
Slide 31: SG&A Expenses and Investments
C) SG&A Expenses: decrease in dollars compared to 2Q24 (-14%) and 3Q23 (-43%), mainly due to lower logistics and storage expenses. D) Recurring EBITDA: represented 16% of the consolidated Recurring EBITDA of the Company's segments in U.S. dollars in the quarter. 5.3.3 INVESTMENTS The total investmen
Slide 32: Braskem Idesa investments
3Q24 9M24 2024e R$MM__US$MM_ff RSMM__US$MM | R$MM US$ MM Mexico Operating 62 it 102 31 254 5st Strategic (ex-TQPM) : - = - Total (ex-TQPM) 62 iL 102 31 254 31 TQPM? 281 ae 533 155 1,016 201 Total 343 62 635 186 1,270 252 TConsiders the amount disbursed by TQPM, which is being financed
Slide 33: Includes Value Added Tax (VAT)
[3] Includes Value Added Tax (VAT).
Slide 34: Corporate Credit Rating – Braskem Idesa
Agency Rating Outlook Date S&P B Negative 07/05/2024 FITCH B+ Negative 12/20/2023 Rating CORPORATE CREDIT RATING – BRASKEM IDESA 6.CONSOLIDATED FINANCIAL OVERVIEW
Slide 35: Consolidated financial overview
3924 2924 ‘cho. oma ‘9623 “ @ One) o) © (oye) Gross Revenue 24,709 22,018 12% 28% «67.640 62,232 ‘300 NetRevenue 24,265 19,075 11% 28% © 5825933878 29 (Cost of Good Sold (is015) (17,685) 5% 18% (63408) (51.365) % Gross Profit 2,249 1,350 62% 295% 4.850 2,013 18108 ‘Seling and Distribution Expenses (
Slide 36: Net Revenue (R$ million) | Consolidated
Net Revenue (R$ mi ion) | Consolidated! =o 6% 7 2 78 Go 55% 3% a 48% 3923 2924 3024 MM brazil_ Ml Green PE +ETBE [lll Mexico MM Exports? Ml USA and Europe ‘Does not considarfeadetock resale and others 2Coneiders only exports from Brea
Slide 37: 6.3 Other Revenue (Expense), Net
6.3 OTHER REVENUE (EXPENSE), NET At the end of the quarter, the Company recorded a total net expense of R$4 million, higher than 2Q24, impacted by (i) other income, mainly formed by the gain from the sale of control of Cetrel; and (ii) other expenses, mainly comprised of expenses relating to the Ala
Slide 38: 6.4 Recurring EBITDA
6.4 RECURRING EBITDA [4] Braskem's Recurrent EBITDA was US$432 million (R$2.4 billion) in 3Q24, 35% higher than 2Q24, mainly due to the (i) increase of 45 thousand tons, or 6%, in sales volume of resins in the Brazilian market in the Brazil/South America segment; (ii) increase of 90 thousand tons, o
Slide 39: Consolidated results note
[4] Braskem's consolidated results are equal to the sum of the results of Brazil, the United States and Europe and Mexico subtracted from the eliminations and reclassifications of purchases and sales between the Company's reportable segments and added to Other Segments.
Slide 40: Financial result
Financial expenses: lower compared to 2Q24 (-8%), mainly explained by lower expenses with (i) interest due to the lower consolidated gross debt balance in the period; and (ii) reversal of interest on tax liabilities due to the update of the prognosis of classified as probable to closed/success. Comp
Slide 41: 6.6 Net Income (Loss) and Investments
6.6 NET INCOME (LOSS) In the quarter, the Company recorded a net loss of US$106 million, or R$593 million, mainly due to the impact of R$1.2 billion of negative exchange rate variation on the financial result. Year-to-date, the Company recorded a net loss attributable to shareholders of US$1.1 billi
Slide 42: Investments in Macro-Goals for Sustainable Development
In 3Q24, the main investments related to the Macro-Goals for Sustainable Development were (i) projects associated with the reduction of CO 2 e emissions and the energy efficiency of industrial assets; and (ii) projects related to industrial safety.
Slide 43: 6.7.1 Global Growth Strategy
6.7.1 GLOBAL GROWTH STRATEGY Driven by its Corporate Growth Strategy in the quarter, Braskem remained focused on advancing projects related to its growth avenues, highlighting the following: 1. Traditional Business: a. Launch of Braskem's first leased ethane vessel On September 29th, in China, the f
Slide 44: 6.9 Debt Maturity Profile and Rating
6.9 DEBT MATURITY PROFILE AND RATING As of September 30, 2024, the balance of corporate gross debt was US$8.2 billion, with 95% of maturities concentrated in the long term and 5% in the short term. Regarding net debt, the balance at the end of September 2024 was US$5.6 billion. Corporate debt in for
Slide 45: Liquidity
The liquidity level of US$2.4 billion, in September 2024, guarantees the coverage of debt maturities in the next 52 months and does not consider the international revolving credit line available in the amount of US$1.0 billion, maturing in 2026.
Slide 46: Bond issuance in October
Additionally, the Company issued a bond in October that received around US$4.5 billion in orders, allowing it to issue US$850 million at a cost of 8.00% p.a. The operation was carried out to repurchase the Hybrid Bond maturing in 2081 and to enhance liquidity, including debt maturities in 2024/2025,
Slide 47: Credit ratings and stock performance
Agency Rating Outlook Date FITCH BB+ Negative 10/07/2024 S&P BB+ Negative 10/07/2024 Agency Rating Outlook Date FITCH AAA(bra) Stable 10/07/2024 S&P brAAA Negative 10/07/2024 Rating CORPORATE CREDIT RATING – GLOBAL SCALE CORPORATE CREDIT RATING – NATIONAL SCALE 7.CAPITAL MARKETS 7.1 STOCK PERFORMANC
Slide 48: Stock Performance
Stock Performance 160 120 Dec Jan Feb Mar Apr May Jun July Aug Sep — TBOV — BRKMS — BRKM3 = BAK Source: Bloomberg
Slide 49: 7.2 Performance of Corporate Debt Securities
7.2 PERFORMANCE OF CORPORATE DEBT SECURITIES
Slide 50: Corporate debt securities performance
Cupom Var. Var. Var. Outstanding “ (#)- (8) _(4)-(©)_(@)-(0) Braskem ‘28 1,175.0 Jan/28 45% 6.5% 7.5% TT% -2.0% 3.0% -3.2% 1,500.0 Jan/30 45% 7.0% 8.0% 8.3% 2.5% -3.5% -3.8% Braskem ‘31 850.0 Jan/31 8.5% 7.3% 8.1% 8.7% 1.2% 0.4% 0.1% Braskem ‘33 1,000.0 Feb/33 7.3% 74% 8.2% 8.5% 0.2% 1.0% “1.2% Bras
Slide 51: Resin sales by sector | Mexico segment
Resin sales by sector (%) | Mexico segment
Slide 52: Sales by Economic Activity | Mexico
‘Sares by Economic Activity | Mexico: z 3% 2 12% 10% 3023 2924 3924 . Wi industrial I Packaging others I hygiene and Cleaning Wi chemicals Construction & Infrastructure
Slide 53: Alagoas action fronts
The total amounts recorded from the beginning of actions related the geological event in Alagoas until the period ending September 30, 2024, are segregated into the following action fronts:
Slide 54: Support for relocation and compensation
a. Support for relocation and compensating: Refers to actions to support for relocating and compensating for the residents, business, and real state owners of properties located in the Civil Defense Map (version 4) updated in December 2020, including establishments that requires special measures for
Slide 55: 8.5 Consolidated Recurring EBITDA Calculation
8.5 CONSOLIDATED RECURRING EBITDA CALCULATION
Slide 56: 8.6 Recurring EBITDA by Segment
8.6 RECURRING EBITDA BY SEGMENT
Slide 57: Recurring EBITDA reconciliation by segment
Recurring Financial Overview (RS million) CONSOLIDATED 3924 —- EBITDA Brael* 14.886 (5310) 1576 (401) + (89) 586 1858, US, and Europe 5087 (4574) SB (8) - @ 234 295 Mevico 1405 (1.087) 318 (115) - 3 205 45 ‘Segments Total 2388 (48971) 247 734) Ei (Gos) 1175 2697 ‘Other Segments 37 ay @ z © (00) ea)
Slide 58: Recurring EBITDA, net debt and market cap indicators
3Q24 2924 3Q23 Chi Chg. US$ milhdes (a) (B) (©) (A)/(B) (A), Recurring EBITDA 432 320 187 35% 130% EBITDA Margin? 11% 9% 5% 3pp. 6pp. ‘SGBAYNet Revenue (%) 6% 6% 7% Opp. -Ipp. ‘Adjusted Net Debt 5,967 5,685 5,172 5% 15% ‘Adjusted Net Debt/Recuring EBITDA (LTM)> 5.76x 6.79x 1221x -15% -53% Recurring
Slide 59: Consolidated balance sheet
Sep/24 Jun/24 Change (a) (B) (a)/(B) Current 34,266 37,136 -8% Cash and Cash Equivalents 11,919 14,213 =16% Marketable Securties/Held for Trading 2418 3,116 “22% ‘Accounts Receivable 3,524 3,550 “1% Inventories 13,948 13,512 3% Recoverable Taxes, 1,216 1,335 9% Prepaid expenses 477 713 “33% Derivati
Slide 60: Cash flow
3924 2924 = 3923. Change Change = 9M24. 0 9M23_— Change @) (e) © _ Ae) WO __©) ©) _ (Ve) Profit (Loss) Before Income Tax and Social Contribution (312) (6,021) (3,030) -78% -57% (9,404) (4,366) 11596 ‘Adjust for Result Restatement Depreciation and Amortization 129312881285 0% 198 3810 3820 0% Equity
Slide 61: 8.11 Braskem Idesa Balance Sheet
8.11 BRASKEM IDESA BALANCE SHEET
Slide 62: Braskem Idesa balance sheet
See Sep/24 Jun/24 Change iG) (B) (A)/(B) Current 2,936 3,546 -17% Cash and Cash Equivalents 1,287 4,717 25% Accounts Receivable 160 198 -19% Inventories 890 971 8% Recoverable Taxes 519 547 5% Other 80 113 -29% Non Current 17,754 18,791 -6% Taxes Recoverable 268 Pz 1% Deferred Income Tax and Social
Slide 63: 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