Braskem S.a. · BMFBOVESPA:BRKM3
Braskem — Q1 2023 Earnings Presentation
58 slides from Braskem's earnings presentation, May 9, 2023
Slide 1: Earnings Release 1Q23
Slide 2: 1Q23 Highlights
Higher than 4Q22 Representing R$0.53 Us$205 MM (US$-32 MM) and RS184MM per class “A” and class lower than 1022 “B” preferred share ‘About RS1,063 million (usse20 mm) About US$35 million Ensuring coverage Maintenance of the USS2.8 Bi of debt maturities 3.86x Adjusted Net Debt over the next 76 level i
Slide 3: International References (US$/ton)
1923 4022,«1022,— ch International References? (US$/ton) @ a iC (a) (8) (c) (ay/(B)__(a)/(C) Prices Brent (US$/bbl) 81 88 101 8% -20% Naphtha 695 645 884 8% -21% Ethane 185 288 297 -36% -38% Propane 428 414 67 3% -37% Resins (i) 1,006 915 1,369 10% -26% PE US 1,025 941 1451 9% -29% PP Asia 1,028 927
Slide 4: Average utilization rate of petrochemical plants
b) Average utilization rate of petrochemical plants: increase compared to 4Q22 (+5 p.p.) due to higher production volume given the improvement in demand in the period. Compared to 1Q22, the reduction of 9 p.p. is adequate production to the lower demand in the period.
Slide 5: Resin sales in the Brazilian market
c) Resin sales: in the Brazilian market, resin sales increased compared to 4Q22 (+3%), in line with the growth of the Brazilian resin market, due to higher demand for PP and PVC, mainly in the agricultural, hospital, and construction sectors. Compared to 1Q22, resin sales volume in the Brazilian mar
Slide 6: Main chemicals sales volume
d) Main chemicals sales volume 2 : in the Brazilian market, sales increased compared to 4Q22 (+6%), with emphasis on gasoline sales, mainly due to higher product availability for sale given the increase in the utilization rate of the petrochemical crackers. Compared to 1Q22, sales of the main chemic
Slide 7: Geological event in Alagoas
4.1.2 GEOLOGICAL EVENT IN ALAGOAS As assessed by the Company and its external advisors, considering the short- and long-term effects of the technical studies, existing information, and the best estimate of expenses for implementing the various measures related to the geological event in Alagoas, the
Slide 8: Alagoas advances and financial overview
For more information on advances on the action fronts related to the geological event in Alagoas in the quarter, see appendix 7.2 of this document. 4.1.3 FINANCIAL OVERVIEW
Slide 9: Net Revenue
A) Net Revenue: in the U.S. dollar and Brazilian real, net revenue remained stable in relation to 4Q22. Compared to 1Q22, the decrease in the U.S. dollar (-24%) and Brazilian real (-25%) is explained by: (i) the 26% reduction in the average resin price in the international market; and (ii) the reduc
Slide 10: Resins sales by region (% in tons)
Resins sales by region (% in tons)
Slide 11: SG&A Expenses and Recurring EBITDA; Renewables
C) SG&A Expenses: in U.S. dollars, the decrease compared to 4Q22 (-10%) is explained by the efforts to reduce fixed costs carried out in the period. Compared to 1Q22, the increase (+6%) is mainly explained by the increase in expenses with third parties and with maintenance and industrial and buildin
Slide 12: Green PE sales volume
b) Green PE sales volume: decreased compared to 4Q22 (-32%) and 1Q22 (-10%) due to lower product availability for sale given the lower utilization rate in the period due to the scheduled maintenance shutdown to conclude the project to expand in 30% the current production capacity.
Slide 13: Sales (kton) of Green PE
Sales (kkton) of Green PE <t0% > a1 1922 4Q22 1923 MM Green PE
Slide 14: Green PE Sales Volume per Region
Green PE Sales Volume per Region (° oe 1022 4q22 1023 Europe [ill Brazil El south America Asia [NMJ North America
Slide 15: Net Sales Revenue Green PE and ETBE
A) Net Sales Revenue Green PE and ETBE 3 : decrease compared to 4Q22 (-33%) due to lower sales volume, in addition to the drop in the price of Green PE and ETBE. Compared to 1Q22, there was a decrease (-24%) due to the lower Green PE sales volume due to the scheduled maintenance shutdown. 3 Product
Slide 16: Average utilization rate of PP plants
b) Average utilization rate of PP plants: increased (+6 p.p.) compared to 4Q22, mainly due to (i) the inventory management in the quarter given the scheduled maintenance shutdown in 2Q23 in the United States; and (ii) higher feedstock availability in Europe and the improvement in consumer confidence
Slide 17: PP sales volume
c) PP sales volume: remained in line with 4Q22. Compared to 1Q22, sales volume decreased (-5%) due to lower demand in the period explained by (i) the economic uncertainties and the process of destocking in the chain in the United States; and (ii) the economic scenario and geopolitical context which
Slide 18: Sales Volume (kton) US & Europe
Sales Volume (kton) | US & Europe me 7 41% ; [ , 587 515 518 1922 4Q22, 1923 Il PP US and Europe
Slide 19: US & Europe Financial Overview
1923 4Q22 1Q22 Chg. Cha. ation EURUEE (a) @®) © W/B AO Net Revenue 894 765 1,389 17% -36% cocs (780) (725) (1,077) 8% -28% Gross Profit 114 40 312 185% -63% Gross Margin 13% 5% 22% Bpp. -10 pp. SGA (38) (45) (41) 16% 9% Other Operating Income (Expenses) 5 q@) 4 na. 17% Recurring EBITDA 98 15 295 555
Slide 20: SG&A Expenses; Mexico Recurring EBITDA
C) SG&A Expenses: decreased in U.S. dollar (-16%) from 4Q22 due to the efforts to reduce fixed costs carried out in the period. Compared to 1Q22, the decrease in U.S. dollar (-9%) reflects the lower expenses with third-party and logistics and storage services. D) Recurring EBITDA: represented 40% of
Slide 21: Average utilization rate of PE plants
b) Average utilization rate of PE plants: increase compared to 4Q22 (+3 p.p.) due to the prioritization of the higher consumption of ethane supplied by Pemex in the period, reflecting a lower consumption of imported ethane. Compared to 1Q22, the utilization rate decreased (-9 p.p.) to maximize the s
Slide 22: PE sales volume
c) PE sales volume: increase compared to 4Q22 (+11%) due to higher demand and product availability for sale. Compared to 1Q22, the decrease (-10%) is explained by the lower product available for sale, given the lowest utilization rate in the period.
Slide 23: Sales Volume (kton) Mexico
Sales Volume (kton) | Mexico HD 219 ED oe 197 1Q22 4Q22 1923 mre
Slide 24: Net Revenue Mexico
A) Net Revenue: increased in U.S. dollar (+14%) and Brazilian real (+13%) compared to 4Q22, mainly explained by: (i) the increase of 19 thousand tons, or 11%, in PE sales volume; and (ii) the increase of 11% in PE price in the international market. These combined effects resulted in net revenue high
Slide 25: Sales by Economic Activity Mexico
Sales by Economic Activity] Mexico 5% 6% 11% 11% 1922 © 4Q22 1923 Bags & Films Mi Industrial I Packaging Wi others Il Hygiene and Cleaning Hi Chemicals Construction & Infrastructure
Slide 26: Cost of Goods Sold (COGS)
B) Cost of Goods Sold (COGS): decreased in U.S. dollar (-9%) and Brazilian real (-10%) in relation to 4Q22, basically explained by the reductions of 36% and 64% in ethane and natural gas prices considering the moving average, respectively, in the international market. Compared to 1Q22, the increase
Slide 27: SG&A, Recurring EBITDA and Investments
C) SG&A Expenses: in U.S. dollars, the decrease in relation to 4Q22 (-36%) and 1Q22 (-35%) is mainly explained by the efforts to reduce fixed costs carried out in the period. D) Recurring EBITDA: represented 11% of the Company’s segment consolidated Recurring EBITDA. 4.3.3 INVESTMENTS The investment
Slide 28: Ethane Import Terminal
4.3.3.1 ETHANE IMPORT TERMINAL In September 2021, Braskem Idesa approved and started the Ethane Import Terminal project in Mexico, which involves building an ethane import terminal with a capacity of 80,000 barrels of ethane per day, enabling Braskem Idesa to operate at 100% of its capacity. In Dece
Slide 29: Ethane terminal footnotes
4 The amounts disbursed by Braskem Idesa include Value Added Tax (VAT). 5 It considers the reimbursement made by Advario in the amount of US$56 million and it includes Value Added Tax (VAT).
Slide 30: Rating
Rating On March 17, 2023, Fitch Ratings revised its outlook for Braskem Idesa S.A.P.I. from stable to negative and reaffirmed its credit rating of 'BB-.’
Slide 31: Income Statement
‘Income Statement 1923 4Q22 1922 Chg. R$ million (A) (B) (©) (A)/(B) (A)/(C) Gross Revenue (22,389 21,938 31,039 2% -28% Net Revenue 19,446 18,990 26,731 2% -27% Cost of Good Sold (18,461) (19,068) (21,601) 3% -15% Gross Profit 985 (78) 5,130 na. -81% Selling and Distribution Expenses (477) (536) (5
Slide 32: Net Revenue Consolidated
Net Revenue (R$ million) | Consolidated? 26,731 7% 18,990 19,446 6% 6% 10% 12% 56% 61% 1922 4Q22 1923 MM Brazil USA and Europe WM Exports? [ill Mexico ‘Does not consider feedstock resale and others Considers only exports from Brazil
Slide 33: Other Revenue (Expense), Net
5.3 OTHER REVENUE (EXPENSE), NET The Company recorded in 1Q23 total other net revenue of R$685 million as detailed below:
Slide 34: Recurring EBITDA
5.4 RECURRING EBITDA 6 Consolidated Recurring EBITDA was US$205 million in 1Q23 (R$1.1 billion), higher than 4Q22 due to the increase: (i) in the spread in the international market of 15% for PE and 18% for PP in the Brazil segment, of 2% for PP in Europe and of 31% for PE in Mexico; and (ii) in sal
Slide 35: Consolidated result note
6 Braskem’s consolidated result corresponds to the sum of the results in Brazil, United States & Europe and Mexico, less eliminations and reclassifications of purchases and sales among the segments reported by the Company.
Slide 36: Financial expenses and revenue
Financial expenses: decreased in relation to 4Q22 (-1%), mainly due to: (i) the reduction of interest and fines on tax liabilities; and (ii) the reduction in the present value adjustment due to the lower balance of suppliers abroad, which was impacted by the drop in the exchange rate in the period.
Slide 37: Net Income and Investments
5.6 NET INCOME In the quarter, the Company recorded a net income 7 of US$35 million, or R$184 million, representing R$0.53 per class “A” and class “B” preferred share. 5.7 INVESTMENTS The corporate investment forecast by Braskem for 2023 is US$724 million (R$4.0 billion). At the end of 1Q23, Braskem
Slide 38: Sustainable Development investments
In 1Q23, the main investments related to the Sustainable Development Macro-Goals were in: (i) the project to expand green ethylene production capacity at the Triunfo Petrochemical Complex in Rio Grande do Sul; (ii) projects associated with reducing CO2 emissions and capturing energy efficiency gains
Slide 39: Global Growth Strategy
5.7.1 GLOBAL GROWTH STRATEGY In line with its Corporate Growth Strategy, Braskem remained focused during 1Q23 on developing various projects related to its growth avenues, which included the following. 1. Traditional Business: To grow the existing businesses through selective investments, including
Slide 40: Digital transformation and footnotes
Out of the total amount shown, about one-third is associated with Digital Transformation initiatives, which make use of digital technologies, such as (i) automation and instrumentation; (ii) new software and systems; (iii) advanced analytics; (iv) machine learning; (v) cloud services , etc. 8 The am
Slide 41: Debt Maturity Profile and Rating
5.9 DEBT MATURITY PROFILE AND RATING On March 31, 2023, the corporate gross debt balance stood at R$7.6 billion, composed of 96% long-term maturities and 4% short-term maturities. The corporate foreign-denominated liabilities corresponded to 88% of the Company's total debt at the end of the quarter.
Slide 42: Liquidity position
The liquidity position of US$2.8 billion in March 2023 is sufficient to cover the payment of all liabilities coming due in the next 76 months, not considering the international stand-by credit facility of US$1.0 billion available through 2026.
Slide 43: Debt amortization schedule
1,000 Qisd 21% 18% sais 7 oe 6 | 160° war35 saa 20) 3/31/2023 2023=~=«028~=S~S«202S=SCS2ONGSC«OTSCSC«HSCS*«NDSC(0/202——2032 eh comand MM Invested in RS Ml Invested in US$ [ll Local Currency [Ml Foreign Currency Milf Sustainability linked loan? Ij Standby * Does net consider the amount of US$39 milio
Slide 44: Rating
Rating In January 2023, Fitch Ratings reaffirmed Braskem's rating of 'BBB-'/'brAAA' with a stable outlook.
Slide 45: Capital Markets: Stock Performance
6. CAPITAL MARKETS 6.1 STOCK PERFORMANCE On March 31, 2023, Braskem’s stock was quoted at R$19.36/share ( BRKM5 ) and US$7.70/share ( BAK ). The Company’s shares are listed on the Level 1 corporate governance segment of the B3 – Brasil, Bolsa e Balcão and on the New York Stock Exchange (NYSE) throug
Slide 46: Stock Performance
‘Stock Performance 160 120 80 Dec Jan Feb Mar —180V — BRKMS — BRKM3 = BAK Source: Bloomberg
Slide 47: Corporate Debt Securities Performance
6.2 CORPORATE DEBT SECURITIES PERFORMANCE
Slide 48: Bond performance
Bond Unity Braskem '28 - yield % Braskem ‘28 - price usD Braskem ‘30 - yield % Braskem '30 - price usD Braskem ‘33 - yield % Braskem °33 - price usb Braskem ‘41 - yield % Braskem “41 - price usD Braskem ‘50 - yield % Braskem ‘50 - price usD Braskem Hybrid - yield % Braskem Hybrid - price usd US Trea
Slide 49: Alagoas provision action fronts
The current provision can be broken down into the following action fronts: a. Support for relocating and compensating for the residents, business, and real state owners of properties located in the Civil Defense Map (version 4) updated in December 2020, including establishments that requires special
Slide 50: Consolidated Recurring EBITDA Calculation
7.4 CONSOLIDATED RECURRING EBITDA CALCULATION
Slide 51: Recurring EBITDA Statement
Recurring EBITDA Statement (R$ 1923 4Q: Q22. Change ~—Change cor [DATED fA) (B) (Cc) (A)/(B)__(A)/(C) Net Profit 242 (1,883) 3,947 Ma. 94% Income Tax / Social Contribution (98) (344) 1,070 71% Financial Result 352 384 (1,247) 8% Depreciation, amortization and depletion 1,230 1,431 1,010 14% Cost 982
Slide 52: Fiscal Overview by segment
FancalOvervine (R$ milion) CONSOLIDATED 1@29 Net Revonse COGS Gros Profit SaRA—ATUTEY —navemuee | OU? Nera? ond expences Brat 13047 (23.367) 400 (aaa) a 578 610 6 US. and Europe act (4.050) soa (295) = 26 224 su Mexico. 4217 (2,202) 16 (75) = w (6) 140 ‘Segments Total 19,708 (48,618) 4,089. (se) = o
Slide 53: Key indicators and Company Valuation
192: 4Q22 (A) (B) 1922 (A)/(B) (A)/(C) Recurring EBITDA 32 92000 na. -78% EBITDA Margin? “1% 18% 6pp. 12 pp. SG8A/Net Revenue (%) 6% 8% 5% 2pp. Ipp. Adjusted Net Debt 4,911 4,663 4,935 5% 0% Adjusted Net Debt/Recuring EBITDA (LTM)3 3.86x 2.42x 1.00x 59% 285% Recurring EBITDA (LTM)/Interest Paid (LTM
Slide 54: Consolidated Balance Sheet
Mar/23-Dec/22_-——Change ASSETS (R$ million) (a) (B) (A)/(B) Current 36,637 34,458 6% ‘Cash and Cash Equivalents 12,383 12,466 “1% Marketable Securties/Held for Trading 3,828 2,295 67% ‘Accounts Receivable 4,390 3,232 36% Inventories 13,782 14,030 2% Recoverabk Taxes 1,003 1,156 “13% Prepaid expenses
Slide 55: Consolidated Cash Flow
Consolidated Cash Flow Q23 4Q22 1Q22 Change Change R$ million (A) (B) (c) (A)/(B)_(A)/(C) Profit (Loss) Before Income Tax and Social Contribution 144 (2,227) 5,018 na. -97% ‘Adjust for Result Restatement Depreciation and Amortization 1,230 1,431 1,010 -14% = 22% Equity Result (13) (9) (17) 52% = -22
Slide 56: Braskem Idesa Balance Sheet
7.10 BRASKEM IDESA BALANCE SHEET
Slide 57: Braskem Idesa Assets and Liabilities
ASSETS (R$ million) Deci22 Chane (B) (A)/(B) Current 3,470 3,685 “6% ‘Cash and Cash Equivalents 1,803 2,184 "17% Accounts Receivable 279 2B 282% Inventories 1,009 1,108 -996 Recoverable Taxes 307 251 23% Other nm 69 456 Non Current 16,412 16,108 2% Taxes Recoverable 293 289 1% Deferred Income Tax an
Slide 58: 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