Braskem S.a. · BMFBOVESPA:BRKM3
Braskem — Q3 2020 Earnings Presentation
21 slides from Braskem's earnings presentation, Nov 12, 2020
Slide 1: 3Q20 Earnings Conference Call
3Q20 EARNINGS CONFERENCE CALL NOVEMBER, 12, 2020
Slide 2: Disclaimer on Forward-Looking Statements
DISCLAIMER ON 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,”
Slide 3: New goals related to mitigating climate change and eliminating plastic waste
New goals related to mitigating climate change and eliminating plastic waste MITIGATING CLIMATE CHANGE ELIMINATING PLASTIC WASTE • Achieve carbon neutrality by 2050 • Expand I’m green™ portfolio aiming to include 300,000 tons of thermoplastic resins and chemicals • Provide a 15% reduction in carbon
Slide 4: Our strategy on carbon neutrality and circular economy
Our strategy on carbon neutrality and circular economy 1 2 3 EMISSIONS REDUCTION EMISSIONS OFFSET EMISSIONS CAPTURE • Reduction of emissions • Offsetting emissions with • Capturing carbon CARBON focusing on energy efficiency, potential investments in the emissions through research NEUTRALITY and inc
Slide 5: 3Q20 Highlights | Braskem Consolidated
3Q20 Highlights | Braskem Consolidated EBITDA (US$ million) Comments: 69% 126% • The Company’s recurring EBITDA was US$699 699 million, 126% higher than 2Q20, mainly explained by: • the better spreads of PE in Brazil, PP in 413 the United States and PE in Mexico 310 • an increase in sales volume in
Slide 6: 3Q20 Highlights | Brazil
3Q20 Highlights | Brazil Operational Financial Normalization of UTILIZATION RATE BRIDGE EBITDA operations in 3Q20 (%) (US$ million) 2 p.p. 17 p.p. 85% 87% 70% 53 -12 172 3Q19 2Q20 3Q20 Ethylene 529 105 BRASKEM RESINS SALES Record resins sales -2 (Kton) volume in Brazil 3% 24% 1,309 213 1,270 1,051 2
Slide 7: Update regarding the geological event in Alagoas (1/2)
Update regarding the geological event in Alagoas (1/2) Provisions announced until 3rd Quarter of 2020 1st Provision 2nd Provision 3rd Provision January, 2020 July, 2020 September, 2020 (~R$3.4 billion) (~R$1.6 billion) (~R$3.5 billion) • ~R$1.7 billion: Support the relocation • ~R$850 million: possi
Slide 8: Update regarding the geological event in Alagoas (2/2)
Update regarding the geological event in Alagoas (2/2) Financial Compensation and Support for Relocation Program Updated until September / 2020 6,654 reallocated properties as of September 2020 The Residents’ Center has been set up to service residents of the Financial Compensation and Support +7,50
Slide 9: 3Q20 Highlights | United States and Europe
3Q20 Highlights | United States and Europe Operational Financial Normalization of UTILIZATION RATE operations in 3Q20 BRIDGE EBITDA (%) 8 p.p. (US$ million) 12 p.p. 9 p.p. 4 p.p. -4 8 91% 90% 83% 99% 87% 75% 78 3Q19 2Q20 3Q20 PP USA PP Europe 133 BRASKEM PP SALES (Kton) +8% 11 10% 493 531 41 484 126
Slide 10: New PP plant in the United States
New PP plant in the United States Delta Conclusion Delta Pellets • Braskem has started the commercial production of Polypropylene (PP) in its new facility in the United States • The new plant is located at La Porte, in the state of Texas, and it has a production capacity of 450 thousands of tons per
Slide 11: 3Q20 Highlights | Mexico
3Q20 Highlights | Mexico Operational 13% of the quarter Financial utilization rate was UTILIZATION RATE from the Fast Track BRIDGE EBITDA (%) solution (US$ million) 12 p.p. 4 p.p. 12 -10 80% 84% -2 -0.2 72% 3Q19 2Q20 3Q20 PE 98 97 BRASKEM PE SALES (Kton) 12% -2% 227 222 198 2Q20 Volume Contibution F
Slide 12: Petrochemical Scenario 2020
Petrochemical Scenario 2020 External consulting firms projection: Jan/20 report vs. Oct/20 report Brazil Spreads US & Europe Spreads Mexico Spreads PE, PP, PVC and Main Chemicals PP US and PP EU PE Mexico +26% +9% +26% +102% 538 +41% 650 685 497 595 427 407 -19% +20% 544 288 314 246 253 332 277 PE P
Slide 13: Positive Free Cash Flow Generation
Positive Free Cash Flow Generation Free Cash Flow Generation (R$ million) – 3Q20 Comments: • Free cash flow generation was positive 3,765 3.765 in R$747 million mainly explained by • the increase in recurring EBITDA in -1,349 the quarter • monetization of PIS/COFINS credit for approximately R$332 mi
Slide 14: Debt Profile
Debt Profile Debt Profile (US$ million) 09/30/2020(1) Debt KPIs AROUND 50% OF THE TOTAL DEBT DUE AFTER 2030 50% • Sufficient liquidity to cover debt 11 maturities in the next 53 3,349 months 1,000 1.000 • The average debt term is around 2,349 19 years 4,141 4.141 • The weighted average cost of 1,104
Slide 15: Braskem remains focused on implementing the deleveraging plan initiatives
Braskem remains focused on implementing the deleveraging plan initiatives Initiatives Description Status • Issuance in the total volume of US$600 million, 1 Hybrid Bond Issuance with 50% equity treatment by Standard & Poor’s and Fitch Ratings Issuance concluded in July/20 CAPEX • Reduction of plan
Slide 16: ESG: Braskem and AEPW engaged to eliminate plastic waste
ESG: Braskem and AEPW engaged to eliminate plastic waste Letter signed by the CEO • Annually, AEPW¹ organizes the Progress Report, a report that celebrates the advances aimed at eliminating plastic waste in the environment • In the 2020 publication, a letter from Braskem‘s CEO highlights the Company
Slide 17: ESG: Partnership for the removal of plastic waste from landfills
ESG: Partnership for the removal of plastic waste from landfills Agreement signed between Braskem and Tecipar • The agreement will prevent more than two thousand tons of plastic waste from being discarded annually in the landfill of Santana do Parnaíba, São Paulo • The volume is equivalent to 36 mil
Slide 18: ESG: Advance in research on plastics chemical recycling
ESG: Advance in research on plastics chemical recycling Moving to a Circular Economy New Cooperation Agreement Simplified Chemical Recycling Structure on Chemical Recycling • Braskem has signed a cooperation agreement with FCC¹, SENAI² CETIQT³ e COPPE/UFRJ4 • The agreement was obtained after Braskem
Slide 19: ESG: Diversity & Inclusion
ESG: Diversity & Inclusion • Greater focus on Our Diversity & Inclusion actions in recent years diversity in the Internship Program, with flexible selection criteria 2014 2015 2016 2017 2018 2019 2020 • Diagnosis of • Adequacy of the • Launch of the • Training of • Leadership • Global strategy work
Slide 20: Our priorities for 4Q20
Our priorities for 4Q20 Start up Chlor-Alkali operations in Alagoas PRODUCTIVITY AND COMPETITIVENESS Conclude negotiations to renew the supply of naphtha of the industrial unit in São Paulo and ethane and propane in Rio de Janeiro Continue the ramp up of the complementary solution (Fast Track)
Slide 21: 3Q20 Earnings Conference Call
3Q20 EARNINGS CONFERENCE CALL NOVEMBER, 12, 2020