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ItaItaúú Annual Brazil Annual Brazil ConferenceConferenceMay 2009May 2009
2
This presentation contains forward-looking statements. Such statements are not
statements of historical facts, and reflect the beliefs and expectations of
Braskem’s management. The words “anticipates”, “wishes”, “expects”,
“estimates”, “intends”, “forecasts”, “plans”, “predicts”, “projects”, “targets”
and similar words are intended to identify these statements. Although Braskem
believes that expectations and assumptions reflected in the forward-looking
statements are reasonable based on information currently available to Braskem’s
management, Braskem cannot guarantee future results or events.
Forward-looking statements included in this presentation speak only as of the
date they were made (March 31, 2009), and the Company does not undertake any
obligation to update them in light of new information or future developments.
Braskem shall not be responsible for any transaction or investment decisions that
are taken based on information included in this presentation.
ForwardForward--looking Statementslooking Statements
3
AgendaAgenda
� The Company & 1Q09 Financials
� Key Differentiators
3
� Petrochemical Industry
4
Braskem in a snapshotBraskem in a snapshot
� Leading petrochemical company in Latin America
� Third largest resins producer in the Americas
� Diversified portfolio of petrochemical products, with focus on PE, PP and PVC
� 18 facilities plants in Brazil and annual production capacity of 11 million tons of chemical and petrochemical products
� Key financials, 2008Gross revenue = US$ 12.8 billionNet revenue = US$ 10.0 billion (78% in Brazil)Ebitda = US$ 1.3 billionAssets = US$ 9.7 billion
� Listed at Bovespa, NYSE and LATIBEX
5
Ownership Structure Ownership Structure –– Leveraging Leveraging
relationship with Petrobrasrelationship with Petrobras
• Potential for operational synergies with refineries and partnership with Petrobras R&D Center
• Alliance to strengthen Brazil’s petrochemical value chain
– Consolidation around 2 large competitors (Braskem & Quattor)
– Access to competitive raw materials
– Improved value chain competitiveness
• Corporate governance standards: Shareholders’ agreement
Leveraging relationship with Petrobras: NOC alliance
ODEBRECHT GROUP
38.3%62.3%
PETROBRAS
25.3%31.0%
OTHERS
31.3%6.7%
BNDESPAR
5.1%0.0%
% Voting Capital % Total Capital
6
ConvertersBasic petchem Resins
Industrial integration
PE/PP/PVCPE/PP/PVC
Oil/Gas-refineries
Naphtha/GasNaphtha/Gas
Enhanced competitiveness Enhanced competitiveness
through value chain integrationthrough value chain integration
Source: Braskem / Abiquim
ResinsResins MarketMarket ShareShare20082008
51%51%
7
Track record of strong and consistent Track record of strong and consistent
organic growth and acquisitions organic growth and acquisitions
2012
2002
Rank amongst the Rank amongst the 10 10 largest petrochemical largest petrochemical companies in the world companies in the world
measured by EV*measured by EV*
Become the Become the largestlargestthermoplastic resins thermoplastic resins producer in Latin producer in Latin
AmericaAmerica
2006TrikemTrikem
2007PolialdenPolialden
PolitenoPolitenoIPQ / CPSIPQ / CPS
2000 2002 2004 2005 2006 2007
1,200
3,045 3,2253,621
5,551
3,145
2008
5,901
Organic growth
Acquisitions
Braskem’s Ethylene and resins capacity (kt) 22% CAGR
2008
PauliniaPaulinia
* Enterprise Value
TriunfoTriunfo
2009
8
Structured resource base to support client needs
�Over US$ 160 million in R&D assets
�200 researchers
�8 pilot plants
�219 patents filed
�Partnership with universities and R&D centers in
Brazil and abroad
88
Applied Innovation and technology to Applied Innovation and technology to
strengthen value chain competitivenessstrengthen value chain competitiveness
• Focus on product and application development
– 18% of resin sales derive from products developed in the last three years
– Focus on clients’ end users
• Targeted initiatives for breakthrough technology
– Nanotechnology and intelligent packaging
– Renewables
Source: Braskem
9
� Venezuela:
� Polipropileno del Sur (Propilsur)
- Negotiations with BNDES Exim for Brazilian equipment and services related
to the project
- Due Diligence expected for the coming months
- Project Finance expected for 2H09
- Investment final approval expected for 2H09
� Polietilenos de America (Polimerica)
− Ongoing licensing agreements with technology suppliers
� Green PE:
− Cornerstone laid for its green ethylene plant in 04/22/09
− Investments of R$488 million and start-up expected for the end of 2010
− Competitive product with oil at US$45/bbl
− 60% of the volume with long-term commercial agreements nearing completion
− Financing package with BNDES approved in 05/ May
Growth combined withGrowth combined with
improved competitivenessimproved competitiveness
10
Global ScenarioGlobal Scenario
. US producers (gas base) more competitive and local market remains weak
. Supply problems at the Asian market
. Prices in Asia expected to drop in 2H09 due to Middle East and India supply
. Global ethylene capacity:
. 6 MMt starting operations – 80% in the Middle East
. 7 MMt stopped or iddle – USA and Europe (excludes Asia)
. 4 MMt delayed – Middle East and Asia
. Consumption of non-durable goods in Brazil shows resilience when compared to
2008
. Brazilian industries with best performances in the period: Packages, Home
Appliances, Consumption Goods, Personal Hygiene and Cleaning
. Industries still presenting poor performance: Agribusiness, Automotive,
Construction
11
1Q09 Achievements1Q09 Achievements
. New Naphtha Agreement:
- agreement under confidentiality clause regarding disclosure of price formula
- clause assuring adjustment to ARA quality standard
- price formula to weaken volatility and improve predictability
- foreseen discount and premium over ARA reference
- ~60% of volume from Braskem
- 5 years, renewable for other 5 years
. Maintenance of financial discipline: cash of R$ 3 billion
. Resumption of full capacity in March (95% ethylene)
. Doubled exports when compared to 4Q08
. Inventories average cost leveled with production costs in March
. Productivity program leads to a reduction of R$ 78 million in SG&A in the quarter
. Reduced disbursement with investments 49% lower vis a vis 1Q08
12Source: Braskem
Braskem sales by industry: growing nonBraskem sales by industry: growing non--durable goods durable goods
%% PE Sales PE Sales % % PE SalesPE Sales
4%
8%
3%
18%
24%
OTHERS
15%
13%
7%
4%4%
INDUSTRIAL
4%
6%
9%
31%
6%
10%
5%
17%
12%
8%
6%
3%
6%
9%
2%
36%
12%16%
2%
33%
15%
7%15%
INDUSTRIAL
8%
7%
6%
3%6%
20O820O8 1QO91QO9
% % PP Sales PP Sales % % PP SalesPP Sales20O820O8 1QO91QO9
55%55%47%47%
37%37%
52%52%
AUTOMOTIVE
CONSUMER GOODS
COSMETICS AND PHARMACEUTICALS
FOOD PACKAGING
RETAIL
CONSTRUCTION
CHEMICALS AND AGROCHEMICALS
AGRICULTURE
CLEANING MATERIAL AND HYGIENE
FOOD PACKAGING
RETAILOTHERS
AUTOMOTIVE
CONSUMER GOODS
HYGIENE, COSMETICS AND PHARMACEUTICALS
CONSTRUCTION
CHEMICALS AND AGROCHEMICALS
AGRICULTURE
CLEANING MATERIAL AND HYGIENE
AUTOMOTIVE
AUTOMOTIVE
AGRICULTURE
AGRICULTURE
OTHERS
OTHERS
FOOD PACKAGING
FOOD PACKAGING
COSMETICS AND PHARMACEUTICALS
CONSUMER GOODSELECTRIC AND ELECTRONIC
CLEANING MATERIAL AND HYGIENE
CLEANING MATERIAL AND HYGIENE
ELECTRIC AND ELECTRONICCONSUMER GOODS
COSMETICS AND PHARMACEUTICALS
13Source: Braskem
ResinsResins Sales Volume in the Sales Volume in the DomesticDomesticMarketMarket 2Q09 2Q09 TrendTrend in the in the DomesticDomestic MarketMarket
March performance shows trends for the March performance shows trends for the
upcoming quarterupcoming quarter
Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09
Volume Price Revenue Cost
PP
PE
PVC
14Soure: Braskem
565
4Q08 1Q09VolumeRaw
MaterialsFX Price
458
R$ milhões
(1,514)
1,175
2686
SG&A
97
EBITDA Reduced resins prices overcome the positive impactfrom lower raw material prices
EBITDA EBITDA Reduced resins prices overcome the positive impactReduced resins prices overcome the positive impactfrom lower raw material pricesfrom lower raw material prices
FX impact on revenue
FX impacton costs
60
(44)
23
Taxes (PIS / Cofins)
15
2016 /2017
Source: Braskem
ShortShort--term debt well managed and longterm debt well managed and long--term debt well term debt well
distributed with an average term of 11 yearsdistributed with an average term of 11 years
R$ Million (03/31/09)
03/31/09
2,970
Cash and EquivalentsCash and Equivalents
2009 2010 2011 2013 2014 /2015
2018 /2019
2020 onwards
10%10%
13%13%12%12%
6%6%
13%13%
9%9%11%11%
14%14%
943943 1,2251,225
1,5701,570 1,4481,4481,3461,346
710710
1,6281,628
1,1581,158
1,814
1,156
3.31
Dec08 Mar08
2.89
+15%
Gross Debt: 12,151Gross Debt: 12,151
Net Debt: 9,181Net Debt: 9,181
Average Term: 10.5 yearsAverage Term: 10.5 years
72% of the debt are pegged to the USD 72% of the debt are pegged to the USD
Net Debt / Net Debt / EbitdaEbitda (x) US$(x) US$
2012
12%12%
1,4571,457
4.00
Dec08 Mar09
3.73
+7,2%
Net Debt / Net Debt / EbitdaEbitda (x) R$(x) R$
PFICO
726
Value related to the loan granted by a Petrobras subsidiary for the delisting of Copesul, due in October 2009
In US$
In R$
16
AgendaAgenda
� The Company & 1Q09 Financials
� Key Differentiators
16
� Petrochemical Industry
17
Supply
Petrochemical Cycle: Good naphtha X resins spreads Petrochemical Cycle: Good naphtha X resins spreads
even with lower ethylene utilization rateeven with lower ethylene utilization rate
130134
140 143
114 114118 123
2008 2009 2010 2011
146
130
2012
1 2 3 5CMAI Utilization Rate Feb/09 Demand
86%86%
83%83%82%82%
84%84%
87%87%
Source: CMAI
Spread PEAD/Naphtha X Ethylene Utilization Rate
Global ethylene supply-demand and operating rate, Mton/y. %
Potential positive factors
• Frequent delays in new capacities
• Supply-demand geographical imbalance leads to logistics barriers
• Increased economic importance of emerging countries with relevant domestic consumption
• China: raw materials less competitive
• Opportunities from assets on sale
• 7MMton of capacities temporarily shutdown
Points of concern
• US/EU slowdown
• Incentives to sustain supply buildup
– China: import substitution
– Middle East own agenda
• Credit availability
• Change on petrochemicals ownership
Supply & Demand Balance
562528
474
717751 750
638
702
77
91
84
91
Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09
Spread PEAD/Naphtha US$/ton Utilization Rate %
83
Utilization Rate 2009e %
18
5% of the world ethylene capacity shutdown or idle� Dow (USA)
- Dec/08: 522 kton cracker
- Jan/09: 390 kton cracker
- Feb/09: 102 kton of LDPE and 998 kton cracker
� Westlake (USA)
- Dec/08: 544 kton cracker
� Lyondell Basell (USA/Europe)
- Feb/09: 544 kton cracker in USA; 185 kton of
LDPE, UK, and 110 kton of LDPE, France � Basf (Europe)
- Mar/09: 240 kton cracker, Germany� Sabic (Europe)
- Feb/09: 865 kton cracker, UK
� ExxonMobil (USA)
- Sep/08: 826 kton cracker
� Formosa Plastics (USA)
- Nov/08: 680 kton cracker
� DuPont (USA)
- Sep/08: 680 kton cracker
� Flint Hill Resources (USA)
- Jan/09: 348 kton cracker
� Chevron Philips (USA)
- Nov/08: 295 kton cracker
� Eastman Chemical (USA)
- Nov/08: 141 kton cracker Source: Chemsweek’s Business Daily / HSBC / CMAI
4,890
3,533
452
1,825
1,145
4,203
2009 2010
Middle East Asia Ex-China China
New capacity addition (kton):
19Source: CMAI / IMF
Resins demand grows even in economic Resins demand grows even in economic
slowdown periodsslowdown periods
PE Demand X World GDP
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
World GDP Growth PE DemandEconomic Slowdown
20
AgendaAgenda
� The Company & 2008 Financials
� Key Differentiators
20
� Petrochemical Industry
21
-1
0
1
2
3
4
5
6
7
2007 2008 2009 2010
%
interest
-1
0
1
2
3
4
5
6
7
% GDP
GDP Inflation
Brazil: A stable economyBrazil: A stable economy
Structural changes have prepared the country to the current environment
�Economic policy based on inflation target, fiscal responsibility and floating exchange rate
�Competitive, diversified and open economy
�Liquid financial system
�Mature democracy
�Broad and consumerist domestic market
�Greater competitiveness of Brazilian multinationals
�Focus on improving social conditions (health, education, income distribution)
�Sovereign debt in a record low, rated investment grade (S&P, Fitch)
Source: Tendências Consulting - Bradesco and Santander Perspectives
GDP growth and inflation
22
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
PE PP PVC
Brazil: dynamic market with still low Brazil: dynamic market with still low
per capita consumptionper capita consumption
• PE, PP and PVC per capita consumption (Kg per person)
22
*Compound annual growth rate Source: CMAI
11.112.5
13.6 14.5 15.4 16.2 16.6 16.1 17.8 17.518.7 18.0
20.2
22.7
81
71
55
USA Europe Japan
Brazil
5.2%CAGR*
21.9
23
In Brazil, companies are exposed to a In Brazil, companies are exposed to a
dynamic market with resilient growthdynamic market with resilient growth……
• Domestic demand for resins
Source: Abiquim – domestic sales + imports
PEPPPVC
2,880
3,435 3,3773,694
2001 2004 2005 2006
4,048
2007
1,695
990
692
1,833
1,114
1,964
1,228
856
5.4%CAGR
10%
9%
749
• USA Demand for resins (Kton)
23,276
25,90424,749
25,020
2001 2004 2005 2006
24,212
2007
6,350
6,081
6,287
12,826
6,153
12,638
5,421
-1.2%CAGR
-3%1%
5,907
12,318
Source: NAD - CMAI
4,172
2008
3%
5,922
11,091
5,563
4,328
1,833
1,114
749
2008
21,341
-12%
1,972
1,218
982
24
24
…… and a high level of consolidationand a high level of consolidation
• 2 Top producers share• Number of Producers
BRAZIL USA
Source: Braskem / CMAI
PEPP PVC
1311
9
32 2
PP PVCPE
100% 100%93%
30%52%42%
25
Braskem is prepared to seize the Braskem is prepared to seize the opportunities offered by this environmentopportunities offered by this environment
Assure regional low-cost raw
material and energy supplies
B
Expand access to attractive markets
C
• Operational and commercial excellence
• Relationship with Petrobras
• Value-chain virtual integration– Refineries and raw materials
– Logistics and services
– Innovation and technology
• Enhancement of aromatics and crackers’products
• Regional leadership
• Gas crackers in Latin America
• Brazilian sugar cane ethanol
• Expansion of Green-PE and renewable
• M&As
• Global Alliances
Increase and protect core Latin American business
A
Strengthen current position
Grow w
ith valu
e creat
ion
26
Short Term FocusShort Term Focus
� Clients’ proximity
� Focus on financial health and liquidity
� Productivity Program: cost reduction
� Defend Brazilian petrochemical and plastic chain against imported
products
� Identification of synergies with Petrobras
� Construction of the Green PE plant
� Analysis of opportunities arising from crisis: selective acquisitions
Greater operational and financial strengthGreater operational and financial strength
ItaItaúú Annual Brazil Annual Brazil ConferenceConferenceMay 2009May 2009
Appendix IAppendix I
28
29
Resins Capacity in the Americas
29
Source: CMAI
Quattor** Solvay EcopetrolMexichemBraskem*
3,600
1,895
682521 438
692
Dow
**JV between Unipar (60%) and Petrobras (40%). The production is segregated between 1,020 kt in PE and 875 kt in PP
PVC
PEPP
2,040
FormosaDow LyondellBasell
Braskem ShintechIneos
5,774
3,600
4,646
2.949
2,161
615
6464
5,0952,813
1,833
1,975
1,110
515515
978
761
1,2101,210
926
1,235
Capacity of resins in Latin America, kt
Capacity of resins in Americas, kt
Brazilian assets
* Includes Petroquimica Triunfo´s plant
30
IncomeIncome statementstatement
Main Economic Main Economic IndicatorsIndicators
1Q09 1Q09 (A)(A)
4Q08 4Q08 (B)(B)
1Q08 1Q08 ( C)( C)
ChangeChange
% % (A)/(B)(A)/(B)
ChangeChange
% % (A)/( C)(A)/( C)
2008 2008 (D)(D)
2007 2007 (E)(E)
Change Change
% % (D)/(E)(D)/(E)
Net Revenue 3,155 4,132 4,401 (24) (28) 17,960 18,788 (4)
EBITDA 458 565 601 (19) (24) 2,418 3,250 (26)
EBITDA Margin 14.5% 13.7% 13.7% 0.8 p.p. 0.8 p.p. 13.5% 17.3% -3.8 p.p.
Net Financial Result (209) (2,243) (219) - (5) (3,685) (367) 903
Net Income / Loss 10 (2,140) 80 - (88) (2,492) 642 -
31
RevenuesRevenues breakdownbreakdown
32
CoGsCoGs BreakdownBreakdown
33
Plants operating at full capacityPlants operating at full capacity
in Marchin March
PE PP PVC
1Q09
ETHYLENE
73%
4Q08
73% 74%89%
70%
97%
76%
104%
UtilizationUtilization RateRate %%
Source: Braskem
1Q091Q08
704611
ResinsResins ProductionProduction KtKt
+2%
1Q08
95%
64%
1Q094Q081Q08 1Q094Q081Q08 1Q094Q081Q08
69%
95%
4Q08
599
MarJan
47%
95%
MonthlyMonthly UtilizationUtilization Rate Rate -- EthyleneEthylene KtKt
Feb
78%
34
Outstanding Bonds & Outstanding Bonds &
Outstanding RatingsOutstanding Ratings
8.07.250Jun/2018US$500 MM
11.19.750PerpetualUS$150 MM
Perpetual
Jan/2017
Jun/2015
Jan/2014
MaturityMaturity
8.18.000US$275 MM
11.7
7.6
7.5
Yield * Yield *
(% p.a.) (% p.a.) Outstanding BondsOutstanding Bonds
Coupon Coupon
(% p.a.)(% p.a.)
US$250 MM 11.750
US$250 MM 9.375
US$200 MM 9.000
Corporate Credit Rating Corporate Credit Rating –– Global ScaleGlobal Scale
Source: Braskem / Bloomberg
Ba1
BB+
BB+
RatingRating
StableMoody’s
AgencyAgency OutlookOutlook
Fitch Ratings Stable
S&P Stable
* As of May, 15th
35
CovenantsCovenants
US$725 MM
US$80 MM
US$250 MM
R$800 MM
AmountAmount
MaintenanceUS$Nippon Export and Nippon Export and Investment InsuranceInvestment Insurance
Maintenance
Incurrence*
Incurrence*
TypeTypeFacilityFacility CurrencyCurrency
2010 and 2011 Debentures2010 and 2011 Debentures R$
2014 Medium Term Notes2014 Medium Term Notes R$
EPP (Export PreEPP (Export Pre--Payment) Payment) US$
Net Debt / EBITDA
< 4.5X 3.31
Mar09
* The company is prevented from issuing any new debt for the period if it overcomes the 4.5x Net debt / Ebitda
ratio.
Net Debt / Net Debt / EbitdaEbitda (x)(x)
4.00
Mar09
RATIORATIO
R$R$US$US$
Source: Braskem
36
Focus on priority investment projects Focus on priority investment projects
R$ million
Capacity increases /Petroquímica Paulínia
Health, Safety and Environment
Technology
Equipment Replacement
Productivity
Quality / Others
Information System
MaintenanceTechnology
Productivity
Maintenance / Others
Capacity increases / Green PE
Equipment Replacement
161
238
2,279
2008
45
195
91
202
407
55
885Investments in Equity Stake (Ipiranga Group/Politeno)
203
213
909
2009e
172
14
74
233
Source: Braskem
Health, Safety and Environment