Braskem S.a. · BMFBOVESPA:BRKM3
Braskem — Q3 2021 Earnings Presentation
29 slides from Braskem's earnings presentation, Aug 5, 2021
Slide 1: Earnings Conference Call 3Q21
Braskem participates in COP26 in Glasgow EARNINGS CONFERENCE CALL 3Q21 NOVEMBER 10, 2021
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation includes forward-looking statements. These forward-looking statements represent not solely historical data, but also reflect the goals and expectations of Braskem’s management. The terms “anticipate,” “believe,” “expect,” “foresee,” “intend,” “plan,” “est
Slide 3: In 3Q21, petrochemical spreads remained at high levels
In 3Q21, petrochemical spreads remained at high levels and above the upcycle of the petrochemical industry PE US – Naphtha ARA Spread¹ PE US – Ethane US Spread¹ PP US – Propylene US Spread¹ ($/ton) ($/ton) ($/ton) 1,855 1,839 1,924 1,943 3,226 1,567 1,583 2,579 2,770 1,059 1,088 774 703 904 773 704
Slide 4: 3Q21 Highlights | Consolidated Braskem (1/2)
3Q21 Highlights | Consolidated Braskem (1/2) Recurring Operating Result – 3Q21 and 9M21 Comments: (US$ million) • In 3Q21, recurring Operating Result was US$1,469 Braskem improved its profitability in 2021 (9M21), as shown by the million, down 17% on 2Q21, mainly due to: period's higher recurring op
Slide 5: 3Q21 Highlights | Consolidated Braskem (2/2)
3Q21 Highlights | Consolidated Braskem (2/2) Net Income - 3Q21 and 9M21 (R$ million) Comments: Positive net margin in 2021, reversing the net loss • In 3Q21, Braskem reported Net Income of in the prior year R$3,537 million n.a. 13,455 • Additionally, in the year to September 2021, -52% Braskem repor
Slide 6: 3Q21 Highlights | Brazil
3Q21 Highlights | Brazil Operational Financial Utilization Rate of Petrochemical Crackers Recurring Operating Result BRIDGE (%) Restarting of operations (US$ million) after SMS³ in SP +3 p.p. +1 p.p. 87% 79% 105% 106% 154 76% -25 -294 79% Quarterly record- high -134 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 Eth
Slide 7: Update on geological event in Alagoas - Financial Impact
Update on geological event in Alagoas - Financial Impact Financial Impact¹ – Balance of provisions in 3Q21 Disbursements Schedule (R$ billion) (R$ billion) In 3Q21, the balance of provisions related to the geological event in Alagoas ...with some 68% registered under Current was around R$7.1 billion
Slide 8: Update on geological event in Alagoas – Advances in PCF
Update on geological event in Alagoas – Advances in PCF¹ Status on Update of PCF¹ as of October 31, 2021 October 31, 2021 Around 97% of families outside Acceptance Index for Proposals Submitted of risk areas Financial Compensation Proposals Submitted Payments Made (R$ million)² Families Relocated 99
Slide 9: 3Q21 Highlights | USA and Europe
3Q21 Highlights | USA and Europe Operational Financial Utilization Rate of PP plants³ Recurring Operating Result BRIDGE (%) -4 p.p. (US$ million) -4 p.p. -4 -15 46 99% 98% 96% 94% Levels above the 87% 92% industry average in both regions 3Q20 2Q21 3Q21 US PP Europe PP 519 492 PP sales4 (kt) -2% 406
Slide 10: 3Q21 Highlights | Mexico
3Q21 Highlights | Mexico Operational Financial Utilization Rate of PE plants Adjusted Recurring Operating Result BRIDGE³ (%) (US$ million) 84% Affected by higher 6 68% ethane imports from the -32 58% 21 United States (Fast Track) 2Q20 2Q21 3Q21 187 182 PE PE sales (kt) 222 +3% 155 159 Adjusted Volum
Slide 11: Higher ethane imports from USA to Braskem Idesa
Higher ethane imports from USA to Braskem Idesa Ethane Imports from USA (Fast Track Solution) (thousand barrels per day – kbpd) Comments: The expectation is to • In 3Q21, Braskem Idesa imported increase Fast Track capacity from the USA on average 18,600 to 35 kbpd during 2Q22 35.0 barrels per day, w
Slide 12: Agreements with PEMEX and other Mexican government entities
Agreements with PEMEX and other Mexican government entities Guarantee of feedstock supply until the import terminal permits independence from a single 7 supplier Amendment to ethane supply agreement with PEMEX Terminal Agreement • Commitment of minimum volume of 30,000 barrels per day until: Volume
Slide 13: Braskem Idesa concluded its debt refinancing plan
Additionally, Braskem Idesa also concluded its debt refinancing plan Braskem Idesa Debt Profile (US$ million) – Proforma Debt Indicators Braskem Idesa substituted the remaining balance of US$1.35 billion of Project Finance with new debt under a corporate format with a long maturity profile • Average
Slide 14: Historic quarterly record of operating cash generation
Considering the consolidated result, Braskem posted a historic quarterly record of operating cash generation in 3Q21 Free Cash Generation (R$ million) – 3Q21 Comments: Consistent operating cash generation, in line with the strategy to prioritize • Free cash flow in 3Q21 was R$3,911 efficient capital
Slide 15: Maintenance of very long debt maturity profile
Maintenance of very long debt maturity profile Debt Profile (US$ million) Sep/30/21(1) Debt Indicators Strong liquidity position, with most liabilities maturing in long term (55% after 2030) 55% • Sufficient liquidity to cover liabilities 3,237 12 coming due in next 75 months 1,000 Stand-by credit •
Slide 16: Braskem continued to deleverage and present solid credit metrics
Braskem continued to deleverage and present solid credit metrics Lowest Adjusted Net Debt/Recurring Operating Result¹ leverage ratio ever (US$) Corporate Leverage (Ex-Braskem Idesa) Adjusted Net Debt (Ex-Braskem Idesa) Recurring Operating Result (LTM³) -6.3 7.11 5.84 4.98 2.94 1.80 1.10 0.83 5,906 6
Slide 17: S&P upgraded Braskem's credit risk to investment grade
The risk rating agency S&P upgraded Braskem's credit risk to investment grade Braskem's risk level on global scale (Agency Rating Scales) Comments: S&P Fitch Moody's • S&P upgraded Braskem's credit rating on AAA AAA Aaa the global scale to BBB-, with a stable outlook AA+ AA+ Aa1 AA AA Aa2 o The agen
Slide 18: ESG: MOU with SCG Chemicals and Lummus Technology
ESG: Braskem signed MOU¹ with SCG Chemicals and Lummus Technology Main information about Braskem Main information about Braskem and SCG Chemicals Project² and Lummus Technology Project • Project: conducting feasibility studies for a joint investment • Project: jointly license Braskem's green ethylen
Slide 19: ESG: Partnership with Ecovadis on supplier management
ESG: Braskem has partnered with Ecovadis to reinforce its supplier management program based on ESG criteria PARTNERSHIP WITH ECOVADIS • EcoVadis is one of world's largest sustainability rating companies for global supply chains • The partnership aims to engage suppliers in ESG topics and further str
Slide 20: ESG: Recognized by BloombergNEF in Circular Economy
ESG: Braskem recognized by BloombergNEF in Circular Economy Top 10: Brand Owners and Plastic Producers (Circular Economy Score) Among plastic producers, Braskem beat its peers BloombergNEF's Circular Economy ranking monitors the sustainability strategy of the world's largest brand owners and plastic
Slide 21: ESG: Recognized for Human Rights initiatives by OHCHR and UN Global Compact
ESG: Braskem recognized for its Human Rights initiatives by OHCHR1 and UN Global Compact under scope of RBCLAC project2 HUMAN RIGHTS INITIATIVES • Recognition of practices related to protecting Human Rights in business activities • Twelve cases were selected, two from Braskem: 1. Social Responsibili
Slide 22: ESG: One of the world's best companies to work for, per Forbes
ESG: Braskem is one the world's best companies to work for, according to Forbes FORBES' RANKING • Ranking of world's best employers • Over 150,000 people interviewed with criteria including companies’ positioning and concern with: i. Environmental impacts ii. Efforts to develop new talent iii. Socia
Slide 23: Petrochemical Scenario – Main Chemicals
Petrochemical Scenario – Main Chemicals Main Chemicals - Naphtha ARA Spread¹ Butadiene US - Naphtha ARA Spread¹ Benzene US - Naphtha ARA Spread¹ ($/ton) ($/ton) ($/ton) 1,100 1,196 1,164 1,078 1,903 1,764 1,166 919 996 950 983 819 1,235 1,183 711 747 1,041 969 596 668 762 669 668 762 669 466 544 762
Slide 24: Petrochemical Scenario – PE & PVC
Petrochemical Scenario – PE & PVC PE US – Naphtha ARA Spread¹ PE US – Ethane US Spread¹ PVC Spread – Spread Par¹ ($/ton) ($/ton) ($/ton) 1,855 1,839 1,618 1,924 1,943 1,676 1,462 1,543 1,433 1,567 1,396 1,583 1,420 1,187 1,243 1,052 1,052 867 544 596 668 762 669 468 499 429 514 466 257 321 256 320 3
Slide 25: Petrochemical Scenario – PP
Petrochemical Scenario – PP PP US –Propylene US Spread¹ PP Europe – Propylene Europe Spread¹ PP Asia - Naphtha ARA Spread¹ ($/ton) ($/ton) ($/ton) 2,770 3,226 2,822 2,101 2,024 2,029 1,814 1,302 1,246 1,184 1,271 1,179 2,579 2,449 1,587 1,052 1,339 1,552 1,815 1,248 1,357 1,454 1,330 762 1,609 1,477
Slide 26: Braskem Outlook | 4Q21 vs. 3Q21
Braskem Outlook | 4Q21 vs. 3Q21 Brazil United States Europe Mexico Expected increase in ethylene PP production should be Similar trend for PP production, PE production should be Utilization production, with restarting of impacted by the scheduled with PP production in the region impacted by the sche
Slide 27: Braskem remains an interesting investment opportunity in the global petrochemical industry
Braskem remains an interesting investment opportunity in the global petrochemical industry Multiple EV/Recurring Operating Result LTM¹ Comments: A lower multiple could indicate that a stock is an interesting investment • In 2021, Braskem reported profitability and credit indicators opportunity in it
Slide 28: We remain focused on main objectives for 2021
We remain focused on 6 main objectives for 2021 GEOLOGICAL PHENOMENON 1 ▪ Continue the advances related to the geological phenomenon in Alagoas IN ALAGOAS BRASKEM ▪ Expand the ethane import operation and negotiate definitive agreement with 2 IDESA PEMEX CAPITAL ALLOCATION / ▪ Ensure the Company's co
Slide 29: Thank you!
Thank you!