View
1
Download
0
Category
Preview:
Citation preview
Earnings Conference Call 3Q16
Investor Relations São Paulo, November 10, 2016
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,” “plan,” “estimate,” “project,” “aim” and similar terms
are used to indicate forward-looking statements. Although we believe these
forward-looking statements are based on reasonable assumptions, they are
subject to various risks and uncertainties and are prepared using the information
currently available to Braskem.
This presentation was up-to-date as of September 30, 2016, and Braskem does
not assume any obligation to update it in light of new information or future
developments.
Braskem assumes no liability for transactions or investment decisions taken based
on the information in this presentation.
2
3Q16 HIGHLIGHTS
3
Brazil:
Demand for resins (PE, PP and PVC) was 1.3 million tons in 3Q16, growing 8% from 2Q16 and 6% from 3Q15.
Braskem’s crackers in Brazil set a new record for average capacity utilization rate of 96%, higher 2% from 2Q16 and 4% from the 3Q15.
To meet the stronger demand in the Brazilian market, Braskem reduced its resin exports by 7% compared to 2Q16 and 3Q15. Exports of basic petrochemicals was 11% higher than in 2Q16.
The units in Brazil, posted EBITDA of R$2,206 million to account for 75% of the Company’s consolidated EBITDA.
United States and Europe:
The PP plants operated at an average capacity utilization rate of 101% in 3Q16, reflecting the good operating efficiency. Production amounted to 512 kton, growing 4% from 3Q15.
Sales amounted 516 thousand tons representing a 3% expansion compared to 3Q15.
The units in the United States and Europe posted EBITDA of US$161 million (R$524 million) in 3Q16, accounting for 18% of consolidated EBITDA.
Mexico:
Still in the ramp-up phase, the polyethylene plants operated at an average capacity utilization rate of 63% in 3Q16, increasing 31 p.p. from 2Q16.
The segment posted EBITDA of US$66 million (R$214 million) to account for 7% of the Company’s consolidated EBITDA.
Braskem - Consolidated:
Braskem’s consolidated EBITDA was US$924 million, increasing 8% compared to 2Q16 and 6% compared to 3Q15.
Corporate leverage, as measured by the ratio of Net Debt to EBITDA in U.S. dollar, stood at 1.63 times, which is the lowest level in 12 years.
In September 2016, the Board of Directors of the Company approved the distribution of interim dividends for fiscal year 2015, in the amount of R$ 1 billion, which were paid in October 2016.
Brazilian Market of Resins (kton)
BRAZIL
Total Sales – (kton)
8%
6%
3Q16 1,297
2Q16 1,204
3Q15 1,219
-5%
9M16 3,667
9M15 3,846
866 751 780 846 890
454
289415
454 424
0% 1%
3Q16
1,314
2Q16
1,300
1Q16
1,195
4Q15
1,040
3Q15
1,320
Brazilian Market Exports
3Q16
2,206
2Q16
2,293
1Q16
2,165
4Q15
1,934
3Q15
2,658
EBITDA (R$ million) Resins Spread (US$/t)*
20% 16% 18% 18% 20% EBITDA Margin
713 617 642 675 743
948
3Q16
382
4%
1,057
306
4Q15
391
1,008
3Q15
406
1,119 1,108
2Q16
10%
365
1Q16
Resins Spread
Average Feedstock Price
Average Resin Price
55% PE (USA), 32% PP (Asia) and 13% PVC (Asia). 4
UNITED STATES AND EUROPE
5
United States and Europe Sales (kton): Spread PP USA (US$/t)
Spread PP Europe (US$/t)
375 375 352 348 359
128 149147 156 144
3Q16
503
2Q16
504
1Q16
499
4Q15
524
3Q15
503
USA Europe
161
212219
131
75
3Q16 2Q16 1Q16 4Q15 3Q15
EBITDA (US$ milhões)
12% 21% 34% 32% 25% EBITDA Margin
610 728 860 742 617
720
1,451
2Q16
1,462
1Q16
683
1,543
4Q15
691
1,418
-17%
3Q16
834
3Q15
731
1,341
Spread PP-Propylene Propylene USG PP USA
431 447 491 513 463
756718639
749
1,130 1,196
3Q15
1,022
1,454
1Q16 2Q16
1,219 1,231
4Q15
-10%
3Q16
PP Europe Spread PP-Propylene Propylene Europe
MEXICO
6
Mexico PE Sales (kton)
3360
20
93
3Q16
153
2Q16
54 Mexican Market
Exports
EBITDA (US$ MM)
66
2
3Q16 2Q16
Mexico PE Spread (US$/t)
3Q16
166
2Q16
84
Mexico PE Production (kton)
3% 40% EBITDA Margin
988 931
140151117130141
10%
3Q16
1,105
1,244
2Q16
1,006
1,156
1Q16
1,048
4Q15
1,118
3Q15
1,079
1,220
Spread PE-Ethane Ethane USGC PE US
7
EBITDA 3Q16 vs. 2Q16
US$ million
71
44
13
33
Spread Volume FX
3
Contribution Margin
Fixed Costs, SG&A and Other
924
EBITDA 3Q16 EBITDA 2Q16
858
EBITDA of US$ 924 million, 8% up to 2Q16:
Higher sales volume of resins in the Brazilian
market;
Better resins spread in the international market;
Result of the complex of Mexico.
Avg. FX 2Q16: 3.51 R$/US$
Avg. FX 3Q16: 3.25 R$/US$
8
EBITDA 9M16 vs. 9M15
134
138
67
230 234
Volume EBITDA 9M15
2,227
FX Spread EBITDA 9M16 Contribuition Margin
Fixed Costs, SG&A and Other
2,562
9M16 EBITDA amounted to US$ 2,562 million, 15% up to 9M15:
Better spread for PP in USA and Europe;
Higher exports volume and sales volume in the International Units;
The Mexico unit beginning to generate results;
Offset by the higher fixed costs and SG&A expenses due to the increases in
wages and benefits, logistics expenses, legal fees and advertising
expenses.
US$ million
Avg. FX 9M15: 3.16 R$/US$
Avg. FX 9M16: 3.55 R$/US$
5,219
315
1,399 9351,652
924 95 27
2,548
2,935
294 665 1,470
2,306 5,198
1,688
7,142
2016 2017 2018 2019 2020/
2021
2022/
202309/30/16
Cash
3%9%
10%
16%
25%
7%
30%
(1) Does not consider discounts from transaction costs
Invested in US$
Invested in R$
Stand by of US$750 million and R$500 million
10,702
7,767
Debt Profile(1)
(R$ million)
09/30/2016
Foreign Currency
Local Currency
2024
onwards
AMORTIZATION SCHEDULE AND DEBT PROFILE
Net Debt/ EBITDA (US$)
9
Corporate Credit Rating
Agência Rating Perspectiva Data
Escala Global
Moody’s Ba1 Negative 02/25/2016
Fitch BBB- Stable 09/30/2016
S&P BBB- Negative 02/17/2016
US$ million 3T15 2T16 3T16
Net Debt(ª) 5,706 5,553 5,057
EBITDA (LTM) 2,788 3,109 3,097
Net Debt/EBITDA 2.05x 1.79x 1.63x
(a) It does not include the financial structure of the Mexico project
CAPEX
10
Braskem invested* R$665 million in 3Q16.
In the first nine months of 2016, investments came to R$2,218 million, as follows:
o Braskem contributions to the Mexico Project: R$1,195 million (54%);
o Investments to maintain the operating reliability of plants: R$828 million (37%);
o Other strategic projects: R$194 million (9%).
Of the R$2,218 million invested in 9M16, R$1,363 million (61%) is related to investments linked to US dollars: (i) operating and strategic investments of the international businesses and (ii) Braskem’s equity contributions to the Braskem Idesa.
(*) Considers operational investments, maintenance stoppages and spare parts of Braskem and its subsidiaries and contributions for the Mexico project.
Million
Operational (R$) 301 37% 338 51% 828 37% 1,797 49%
Brazil (R$) 292 337 815 1,601
United States and Europe (US$) 6 8 15 48
Mexico (R$) 426 53% 253 38% 1,195 54% 1,327 36%
Mexico (US$) 121 80 330 329
Strategic Projects (R$) 79 10% 73 11% 194 9% 537 15%
Brazil (R$) 13 22 40 255
United States and Europe (US$) 17 14 40 69
Total (R$) 807 100% 665 100% 2,218 100% 3,661 100%
Brazil (R$) 305 358 855 1,855
Mexico, United States and Europe (US$) 143 102 385 447
9M16 2016e2Q16 3Q16
Investments
PETROCHEMICAL SCENARIO - ETHYLENE
11
Greenfield projects postponed
U.S.: American players new capacity startup postponed
China/Asia: (i) High cost of investment; (ii) Infrastructure
issues; (iii) Attractiveness of coal-based projects relative to
lower naphtha prices.
Source: IHS
In Thousand tons
4,812 4,553
-31.0%
4,414 4,209 4,164 4,387
8,713 8,028 7,997
+9.0%
+6.0%
-19.6%
-3.6%
6,931 6,811
8,623
4,264
5,407
6,180
3Q16 2Q16 1Q16
2016 2017 2018 2019 2020
28,709
-8.9%
29,267 31,517
New Capacity: Quarterly Vision
2016-2020
Latest IHS forecast shows reduction of 8.9% in the total capacity addition in the 2016-
2020 period
PETROCHEMICAL SCENARIO - RESINS
12 Source: IHS
PP-Propylene U.S./Europe Spread
Still in healthy levels, spreads may show volatility due
to:
(i) Higher PP imports;
(ii) DBN’s in U.S. units and;
(iii) Lower propylene supply in Europe explained by
more imported ethane being used in the crackers.
PE-Ethane Mexico Spread:
Gas-based producers are still the most competitive
although fall on spreads due to: (i) Lower PE prices
after new capacities startup and (ii) Higher ethane
price due to higher demand of the product.
567 524 557576680
770798866813
720
2Q17e
1,327
1Q17e
1,322
4Q16e
1,434
3Q16
1,389
2Q16
1,400
PP-Propylene Spread
Propylene USG/Europe
PP U.S./Europe
679 627 633743675
2Q17e
421
1,054
1Q17e
406
1,033
4Q16e
412
1,091
3Q16
365
1,108
2Q16
382
1,057
Resins Spread
Avg. Feedstock Price
Avg. Resins Price Brazilian Market Resins Spread (PP, PE and PVC):
Lower spreads due to (i) oil recovery and naphtha price
rise; and (ii) resins price fall due to new capacity being
added from 2017 onwards.
Despite this fall, spreads are expected to stay above
historical levels.
908 952981
1,162
210
3Q16
220
1,191
4Q16e
1,000
191
1,128
1Q17e
1,077
140
1,217
2Q16
151
1,132
2Q17e
PE-Ethane Spread
PE U.S.
Ethane USG
BRASKEM PRIORITIES 2016
13
Brazil:
To ensure operating efficiency to supply Brazilian demand
To assure the export of the surplus volume not sold in the Brazilian market
To implement a maintenance shutdown in one of the cracker lines in Bahia
To implement the feedstock flexibility project in Bahia
U.S./Europe:
To ensure operational and commercial efficiency
Seek PP growth opportunities from competitive propylene in the U.S.
Commissioning of UTEC's new Texas plant
Mexico:
To ensure the operational stability of the complex
To sell PE in the domestic market, consolidating the relationship with clients in the Mexican market
To export from Mexico, benefiting from synergies with the operations of Braskem in US, Europe and South America
Liquidity/Financial Health:
Focus on cash generation
Continue to implement the expense reduction program, generating potential recurring savings of R$400 million per
year, which should be fully achieved in 2017
Internal investigation process:
Advancing the dialogue with authorities to find a solution.
Earnings Conference Call 3Q16
Investor Relations São Paulo, November 10, 2016
Recommended