Braskem S.a. · BMFBOVESPA:BRKM3
Braskem — Q1 2021 Earnings Presentation
49 slides from Braskem's earnings presentation, May 6, 2021
Slide 1: Braskem
» Braskem ~
Slide 2: 1Q21 highlights
§ In 1Q21, the Company’s recurring Operating Result was US$1,266 million, 52% higher than 4Q20, mainly due to: (i) better spreads for PE, PP and main chemicals in Brazil, for PP in the United States and Europe and for PE in Mexico; and (ii) higher PP sales volume in Europe. Compared to 1Q20, the rec
Slide 3: PE spread
§ PE Spread [6] : increase compared to 4Q20 (53%) and 1Q20 (161%). The higher PE price in the United States was mainly due to: (i) the impacts caused by winter storms on the U.S. Gulf Coast, which led to the temporary closure of some PE plants in the region, affecting the product’s supply; and (ii)
Slide 4: Main chemicals sales volume
d) Main chemicals sales volume: in the Brazilian market, sales declined in relation to 4Q20 (-3%), due to the lower product supply, given the lower utilization rate of the petrochemical crackers. Compared to 1Q20, sales in the Brazilian market increased (+17%), led by gasoline (+20%), due to the imp
Slide 5: Situation in Alagoas
2.1.3 SITUATION IN ALAGOAS a) Operational Average PVC utilization rate: considering the plants in Alagoas and Bahia, the utilization rate stood at 73%, higher than in 4Q20 (+9 p.p.), mainly due to the advances in implementing the integrity and reliability program and the higher supply of EDC after t
Slide 6: Alagoas provision action fronts
The amounts included in the provision may be divided among the following action fronts: a. Support for relocating and compensating the residents and owners of the properties located in the risk protection and monitoring areas, including properties that require special measures for their relocation,
Slide 7: Brazil results table
1Q21 4Q20 1920 Cho. Cho. © YB) ANC) 2,041 13% 857) 4% 1% 184 38% na. 9% bpp. 25p.p. (62) 19% 20% Other Operating Income (Expenses)# na, Reaurring Operating Result? 219 39% Reaurring Operating Margin? 11% 6 pp. 36% 28% Net Revenue 9,054 16% cocs 8,231) 6% Gross Profit, 823 40% Gross Margin 9% = 6 pp.
Slide 8: Braskem sales by economic activity
‘raskem Sales by Economic Activity] PE ‘Sraskom Sales by Economic etvity| PY raskun Sales by Economic Activity] ro aa 1a 1020 a 1020 we nat oot mm vaousetes corona [Stal tnnee Mi Inisreare 1B tetra Sector Hair cre B commrgete Ore ote Cnctracon Wi ttomotve Ml Cocructon entire
Slide 9: Sales volume per region
Sales Volume per Region (3) 3021 Oceania (e-china) Ml Others erent Asan Bi Mercosur Ml China Eerope | North America
Slide 10: SG&A and recurring operating result
C) SG&A Expenses: down in relation to 4Q20 (-19%) and 1Q20 (-30%), mainly due to the lower expenses with third-party services and other general and administrative expenses. D) RECURRING OPERATING RESULT: accounted for 70% of the Company’s consolidated recurring Operating Result.
Slide 11: PP spread
§ U.S. PP Spread [10] : increase compared to 4Q20 (28%) and 1Q20 (63%). The PP price in the United States increased mainly due to: (i) the severe winter storm in the U.S. Gulf Coast, which led to the unplanned production closures affecting suppliers across the region and (ii) continued strong demand
Slide 12: PP and propylene prices
10 U.S. PP – U.S. propylene price 11 EU PP – EU propylene price
Slide 13: PP sales volume
c) PP sales volume [13] : in the United States, considering the sales of the new PP plant (Delta) only in 1Q21, sales increased in relation to 4Q20 (17%) and 1Q20 (7%), mainly due to the increase in production capacity after the commercial startup of the new PP plant (Delta) in the region in Septemb
Slide 14: United States sales volume note
12 United States 4Q20 data does not consider production volume from Delta. 4Q20 data from United States does not consider sales volume from Delta. Considering Delta sales in 4Q20, sales volume in the United States in 4Q20 was 415 kton and sales in 1Q21 were lower (-5%) due to the impact from winter
Slide 15: Net revenue and COGS
A) NET REVENUE: in U.S. dollar, increase of 50% and 91% compared to 4Q20 and 1Q20, respectively, explained by the higher PP price in the United States and Europe and the higher PP sales volume in Europe. In Brazilian real, increase of 53% and 136% compared to 4Q20 and 1Q20, respectively, explained b
Slide 16: SG&A and recurring operating result
C) SG&A Expenses: increase compared to 4Q20 (+2%) and 1Q20 (+29%) due to the increase in general and administrative expenses, tax expenses and selling expenses. D) RECURRING OPERATING RESULT: accounted for 23% of the Company’s consolidated recurring Operating Result.
Slide 17: Mexico utilization rate and ethane supply
b) Average utilization rate of PE plants: increased from 4Q20 (+10 p.p.), due to production based on an experimental business model implemented in January and February, following the unilateral interruption of natural gas transport service by Cenagas in early December 2020. In early March, after exe
Slide 18: PE sales volume
c) PE sales volume: declined compared to 4Q20 (-27%) due to the lower availability of product in inventory, which was partially consumed in 4Q20 after the suspension of operations in Mexico in December 2020. Compared to 1Q20, the decline (-37%) is explained by the lower availability of product for s
Slide 19: Braskem sales volume Mexico
Braskem Sales Volume (kton) | Mexico rom
Slide 20: Net revenue
A) NET REVENUE: increase in Brazilian real (+5%) and U.S. dollar (+3%) compared to 4Q20 due to higher PE price in the international market. Compared to 1Q20, the increase in U.S. dollar (+16%) is explained by the higher PE price in the international market. In Brazilian real, net revenue increased (
Slide 21: Cost of goods sold
B) COST OF GOODS SOLD (COGS): decrease in Brazilian real (-23%) and U.S. dollar (-25%) in relation to 4Q20, reflecting the lower sales volume. Compared to 1Q20, the decline in U.S. dollar (-15%) is explained by the lower sales volume in the period. In Brazilian real, COGS increased (+6%) reflecting
Slide 22: SG&A and recurring operating result
C) SG&A Expenses: reduction in relation to 4Q20 (-10%), due to the lower general and administrative expenses and expenses with third-party services. Compared to 1Q20, the decline (-10%) was due to lower expenses with taxes. D) RECURRING OPERATING RESULT: accounted for 7% of the Company’s consolidate
Slide 23: Consolidated income statement
4q2000——«:1Q20 Gig. Gig. ® © (SOMEEONO) 22288 15,119 19% 76% 22,692 18738 12,625 21% ‘20% (as.a54) (13,78) (41.454) 12% 35% 7238 494000 4,173 a0 na ‘Sling and Detebution Expenses 72) (482) (40) 2% 7% (Less) revered forimpsiment of accourts recehable # 0), @) aa sal General and Administrative Expense
Slide 24: Net revenue consolidated
Net Revenue (R$ milion) | Consolidated 22.692 18.738 1920 4920 121 Moras USAand Europe Mi Exports! fll Mexico "Dots not conde feodstock resale and eters "Considers only expos fron Brant
Slide 25: Other net revenue (expenses)
C) OTHER NET REVENUE (EXPENSES) In 1Q21, the Company posted revenues of R$779 million. The increase compared to 4Q20 and 1Q20 is mainly due to (i) the effect from the recognition of PIS/COFINS tax credits in the amount of R$558 million; and (ii) the reversal of the provision for payment of damages i
Slide 26: Recurring operating result
D) RECURRING OPERATING RESULT [15] In 1Q21, the Company’s recurring Operating Result was US$1,266 million, advancing 52% on 4Q20, mainly due to: (i) the better spreads for PE, PP and main chemicals in Brazil, for PP in the United States and Europe and for PE in Mexico; and (ii) the higher PP sales v
Slide 27: Net financial result
E) NET FINANCIAL RESULT BRASKEM (ex-BRASKEM IDESA)
Slide 28: Financial expenses and revenue
Financial expenses: increase in relation to 4Q20 (48%) and 1Q20 (47%) due to: (i) the effect from exchange variation on interest expenses; (ii) the prepayment of the perpetual bond in March 2021; and (iii) the higher expenses with derivative liabilities. Financial revenue: increase in relation to 4Q
Slide 29: Cash flow hedge zero-cost collars
rrike Call Notional Cash Flow Hedge Term nS aon) Zero-Cost Colar 2azt 1.570 Zero-Cost Collar sat Sat 2.530 Zero-Cost Collar aot aus 50 1580 Zer-Cost Colar 1022 45 525 238 Zero-Cost Collar 2022 an sat soz Zero-Cost Colar 3022 48 70 1088 Zero-Cost Colar 4022 as 72 ra Zero-Cost Color 1023 475 752 Ea To
Slide 30: Financial expenses
Financial expenses: down compared to 4Q20 (-1%) explained by the impact from the lower interest liabilities involving leasing operations and by the impact from lower expenses with derivative instruments
Slide 31: Liquidity and capital resources
G) LIQUIDITY & CAPITAL RESOURCES BRASKEM (ex-BRASKEM IDESA) On March 31, 2021, the average debt term was around 14 years, with approximately 50% of maturities concentrated after 2030. The weighted average cost of the Company’s debt was exchange variation plus 5.2%.
Slide 32: Liquidity position
The liquidity position of US$3,469 million is sufficient to cover the payment of all liabilities coming due in the next 79 months, considering the international rotating credit facility of US$1 billion available through 2023. Due to its strong cash position and with the objective of reducing gross d
Slide 33: Debt profile
Debt Profile (US$ million) 03/31/2021 Ca sits asd a..t wo ly win aa ‘/s4/20n 2028 22 2023 204 2025 2026/2027 2028/2029 2030 onwards een {vested in Rf LocalCurrency ll Standby (Bi ovestod in US$. Foreign Currency (1) bosentan te acu RE. illen destined othe Financ Cmperton and loston Super Program n A
Slide 34: Braskem Idesa
BRASKEM IDESA On March 31, 2021, the average debt term was around 5 years, with approximately 39% of maturities concentrated after 2029. The weighted average cost of the Company’s debt was exchange variation plus 5.34%.
Slide 35: Braskem Idesa debt
Braskem Kiesa Debt USS millon Gross Debt nS ins (Gash and Cash Equivalents
Slide 36: Investments and value creation
H) INVESTMENTS & VALUE CREATION The Company’s expected investments for 2021 are: (i) US$667 million for operating investments; (ii) US$97 million for strategic investments; and (iii) US$34 million for operating investments in Braskem Idesa. Operating Investments 1Q21: most operating investments were
Slide 37: Value creation: Transform for Value program
VALUE CREATION Transform For Value Program During 1Q21, the Transform for Value (TFV) Program advanced in its implementation of the initiatives mapped to end the quarter with the combined capture of US$93 million/year [16] . Focusing on initiatives with expected gains by end-2023, the program adopts
Slide 38: Recycled products
Recycled products (I’m green Recycled) · Brazil: reduction in sales of recycled resins compared to 4Q20 (-27%), mainly due to the lower demand explained by the uncertainties with the new COVID wave in Brazil. The increase in relation to 1Q21 (+178%) is due to the Company’s progress in expanding its
Slide 39: Eco-indicators
ECO-INDICATORS [20] In the year, the ecoefficiency indicators of Braskem’s plants were mainly affected by the higher production volume resulting from the restarting of the chlor-alkali plant in Alagoas state and the startup of the new PP plant in the United States. The solid waste generation indicat
Slide 40: Stock performance
Stock Performance 20 — aS 0 "oe an Feb er Source Bloomberg — oy — aris — erie — enk Free Float distribution in Shareholding composition in 03/31/2021 03/31/2021 (B3 + NYSE) Odebrecht Brasiins Ti Foreigners i Legal Porson i Pevrobras MADRS hysical Person Others Tresury
Slide 41: Credit ratings and 2Q21 modeling
Since the last disclosure of results, the risk-rating agencies Fitch Ratings, Standard & Poor’s (S&P) and Moody’s have kept their ratings for Braskem on global scale unchanged. In the case of Fitch Ratings and Standard & Poor’s (S&P), the rating on the global scale remained BB+, with a stable outloo
Slide 42: Indicators
Indicators 4Q20 1920 Chg. Cha. US$ milion ® © (AY) (AO, Recurting Operating Resut 267 52% Operating Marght 10% 62. SGRA/Net Revenue (96) 8% rae. Net Debt 5,557 590-50 Net Debt/Recuring Operating Resut (LTM) 294% S.84x 39% Recurting Operating Resuit (LT™M)/ Interest Paid (LTM) 5.02 270 24% Share Pree
Slide 43: Annex II: Consolidated Recurring Operating Result Calculation
ANNEX II Consolidated Recurring Operating Result Calculation
Slide 44: Recurring operating result statement
string Operating Result Statement (R$milion) 1921 4Q20, 1@20 Grange corsouDaTeD ~) ® (9 cayi(a) Net Profit 24878 (4,059) 17596 ‘Income Ta/ Sadal Cartrbuton 6300 aL (his) 2555 Fancial Resut 3463 (es) 5.254 na. Depreciation, amortization and depistion o2 0 LUE a3 D5 Gat or oa a 29% rere: 28 2 250 736
Slide 45: Assets and liabilities
ASSETS (R$ miion) ee oe © Curent 39.694 34.190 16% (Ga nd Ga Equa ass isa so Mate Secs for Trading 3073677 aoe 693 a7 a5 Teventones ums 93882 pai ee 17 11 ae Drea expenses ies 1s 20m, ‘Died and terest on Equity a2 020% Pra expenses a 52K Danette 20 4 ae Jude depest a other Arts bo 4es__ 308 ion Gure
Slide 46: Cash flow statement
Profit (Loss) Before Income Tax and Social Contribution 32772029 (5,877) 6196 na. Adjust for Resut Restatement Deprediation, Amortization and Depletion ce ee aL Equity Resut 2 8 nan Irterest, Manetaryand Exchange Variation, Net 3453 (318) 7685 na, 5555 Reversal of provsiors cae ) -$%one. ‘Provision
Slide 47: Annex VI: Braskem Idesa Balance Sheet
ANNEX VI Braskem Idesa Balance Sheet
Slide 48: Braskem Idesa balance sheet
Current 257 Goh ad Gh ESS ca ee 1055 Decounts Racaiable 78 8 30% iene Ca = 2% Recverable To 5 8 TH One 12 2 Pi Non Gurren es 1728 Pee Toes Recole 5 25 1% Déerat ieome Tex are Socal Greaton 2250 ir 20% Deinetve Qpestons ° - na. one 8 v7 125% Property Pla and Exipamert 1314836 6% angie Ase 2 220 655 R
Slide 49: 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