Braskem S.a. · BMFBOVESPA:BRKM3
Braskem — Q2 2021 Earnings Presentation
27 slides from Braskem's earnings presentation, May 6, 2021
Slide 1: Earnings Conference Call 2Q21
Braskem's PP plant in Schkopau, Germany EARNINGS CONFERENCE CALL 2Q21 AUGUST 5, 2021
Slide 2: Forward-Looking Statements
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,” “plan,” “estim
Slide 3: International petrochemical scenario continued favorable in the quarter
The international petrochemical scenario continued to be favorable in the quarter PE US – Naphtha ARA Spread¹ PE US – Ethane US Spread¹ PP US – Propylene US Spread¹ ($/ton) ($/ton) ($/ton) 1,855 1,924 2,579 2,770 1,567 1,583 904 1,059 915 1,088 1,279 1,407 1,664 774 703 773 704 1,194 1,609 1,477 414
Slide 4: 2Q21 Highlights | Braskem Consolidated (1/2)
2Q21 Highlights | Braskem Consolidated (1/2) Recurring Operating Result - 2Q21 & 1H21 (US$ million) Comments: • In 2Q21, recurring Operating Result was US$1,776 Profitability improves in 2Q21 and 1H21, as shown by the higher million, up 40% on 1Q21, mainly due to: recurring operating margin in the p
Slide 5: 2Q21 Highlights | Braskem Consolidated (2/2)
2Q21 Highlights | Braskem Consolidated (2/2) Net Income - 2Q21 & 1H21 (R$ million) Comments: Positive net margin in 2021, after reporting a net loss in the prior year • In 2Q21, Net Income was R$7,424 million, up 198% from 1Q21, corresponding to R$12.47 per N/A common share and class “A" preferred s
Slide 6: 2Q21 Highlights | Brazil
2Q21 Highlights | Brazil Operational Financial Utilization Rate of Petrochemical Crackers Recurring Operating Result BRIDGE (%) (US$ million) -6 p.p. Impacted by scheduled 82% 76% general maintenance 70% shutdown at ABC -11 Complex -62 376 2Q20 1Q21 2Q21 -119 Ethylene 1,127 Resin Sales (PE+PP+PVC) 9
Slide 7: Update on Special Regime for the Chemical Industry (REIQ)
Update on Special Regime for the Chemical Industry (REIQ) REIQ – Reduction in PIS/Cofins tax rates Comments: (%) • On July 15, the President of the Republic sanctioned the proposed text by the National Congress in the Period REIQ Conversion Law Project no 12/2021, arising from the approved modificat
Slide 8: Update on geological event in Alagoas - Financial Impact
Update on geological event in Alagoas - Financial Impact Financial Impact¹ - Balance of provisions in 2Q21 Disbursement Schedule (R$ billion) (R$ billion) In 2Q21, the balance of provisions related to the geological event in Alagoas ...of which around 58% was recorded under was around R$7.7 billion.
Slide 9: Update on geological event in Alagoas - Advances in PCF
Update on geological event in Alagoas - Advances in PCF¹ Status in Update of PCF¹ as of July 31, 2021 07/31/2021 Approximately 96% of families Acceptance Index for Proposals Submitted outside of risk areas Financial Compensation Proposals Submitted Payments Made (R$ million)² Families Relocated +19%
Slide 10: 2Q21 Highlights | USA & Europe
2Q21 Highlights | USA & Europe Operational Financial Utilization Rate of PP Plants Recurring Operating Result BRIDGE (%) +3 p.p. (US$ million) +20 p.p. Production recovers to 9 90% 83% 93% 98% 96% normal levels, after the 78% winter storm impacts in 130 1Q21 2Q20 1Q21 2Q21 38 US PP Europe PP 492 PP
Slide 11: 2Q21 Highlights | Mexico
2Q21 Highlights | Mexico Operational Financial Utilization Rate of PE Plants Recurring Operating Result BRIDGE (%) (US$ million) 80% Impacted by isolated 21 58% 58% instability in power supply in May/21 65 2Q20 1Q21 2Q21 20 200 PE PE Sales (kt) 94 227 +15% 155 134 Recurring Volume Contribution FC¹ +
Slide 12: Consistent operating cash generation
Consistent operating cash generation Free Cash Generation (R$ million) - 2Q21 Comments: Consistent operating cash generation, in line with the strategy of • Free cash generation in 2Q21 was efficient capital allocation and financial health R$1,554 million, explained mainly by: i. by the strong recur
Slide 13: Braskem continues to reduce its gross debt
Supported by its robust cash position, Braskem continues to reduce its gross debt Gross Debt (ex-Braskem Idesa) (US$ billion) Comments: in R$ in US$ • In 2Q21, due to its strong cash position and with the objective of reducing the levels of gross debt, the Increase due to the disbursement of the In
Slide 14: Debt maturity profile remains concentrated in very long term
Debt maturity profile remains concentrated in very long term Debt Profile (US$ million) Jun/30/2021(1) (2) Debt Indicators Strong liquidity position, with maturities concentrated in the long term (50% in 2030 or after) • Sufficient liquidity to cover liabilities 50% 3,274 13 coming due in next 78 mo
Slide 15: Reducing corporate leverage with solid credit metrics
With the objective of being reassigned as an investment grade company, Braskem continued to reduce its corporate leverage and has solid credit metrics Lowest Net Debt/Recurring Operating Result¹ leverage ratio (US$) ever Corporate Leverage (ex-Braskem Idesa) Net Debt (ex-Braskem Idesa) Recurring Ope
Slide 16: Advances in indicators to be reassigned as investment grade
Braskem remains committed and advances in the indicators to be reassigned as an investment grade company MAIN FINANCIAL INDICATORS BRASKEM DELIVERIES FOR THE RATING AGENCIES IN 2021 Leverage (Ratio) Maintenance of leverage Lower historical leverage in 1.8 (ex-Braskem Idesa) in up 2Q21, in addition t
Slide 17: Transform for Value Program continued to make progress
Transform for Value Program (TFV) continued to make progress in mapping new opportunities and in implementing the initiatives already mapped Capture of Recurring Gains by end-2023 by TFV Program (US$ million) Comments: The company’s previous estimate called for recurring gains of around US$340 milli
Slide 18: ESG: Investment in Recycling Island at Triunfo complex
ESG: Braskem invests R$150,000 in Recycling Island at Triunfo Petrochemical Complex in Rio Grande do Sul Recycling Island • The project will be responsible for testing the performance of recycled resins, developing innovative and sustainable products, meeting clients needs • Advances in the quality
Slide 19: ESG: Recognized in bronze category of WEP Awards
ESG: Braskem recognized for second straight time in bronze category of WEP Awards WEPs Awards & Diversity • An initiative recognized by the United Nations, the Women's Empowerment Principles (WEPs) Awards work to encourage and recognize the efforts of companies that promote a culture of gender equal
Slide 20: ESG: Compliance and Governance, ISO 37001 and CCAE
ESG: Improvement in general Compliance and Governance practices, with ISO 37001 certification and creation of CCAE Recent Highlights in Compliance & Governance • Certified by ISO 37001, an international standard that establishes the rules and standards for Anti- bribery Management Systems¹ ISO 37001
Slide 21: Innovation: Key pillar of Braskem's business strategy
Innovation: Key pillar of Braskem's business strategy Braskem has an extensive pipeline of Braskem constantly strives to achieve Important contribution to I&T¹ projects, with 120 projects positive environmental impacts with its Braskem from new grades contributing to its growth I&T¹ projects (launch
Slide 22: Petrochemical Scenario - PE & PVC
Petrochemical Scenario - PE & PVC PE US – Naphtha ARA Spread¹ PE US – Ethane US Spread¹ Spread PVC – Spread Par¹ ($/ton) ($/ton) ($/ton) 1,855 1,831 1,595 1,924 1,949 1,462 1,278 1,567 1,472 1,583 1,653 1,510 1,187 1,233 1,198 1,052 1,052 867 690 768 821 743 669 466 544 596 637 589 559 175 178 192 2
Slide 23: 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 3,057 2,664 2,101 2,057 1,879 1,302 1,246 1,173 1,110 2,579 2,243 1,587 1,616 1,052 1,091 1,552 1,339 1,609 1,683 1,066 1,248 1,372 1,294 1,089 1,477 1,
Slide 24: Braskem Outlook | 3Q21 vs. 2Q21
Braskem Outlook | 3Q21 vs. 2Q21 Brazil United States Europe Mexico Higher ethylene production based on expectations on the Similar PP production, following Higher PE production on Similar PP production, with PP Utilization normalization of operations at the resumption of PP expectations of an increa
Slide 25: Braskem remains an interesting investment opportunity
Braskem remains an interesting investment opportunity in the global petrochemical sector Multiple EV/Recurring Operating Result LTM¹ Comments: A lower multiple could mean that a stock is an interesting investment • In 2009, Braskem was a 100% Brazilian company and mostly opportunity in the industry
Slide 26: Six 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 27: Thank you!
Thank you! Braskem >