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Meeting with Investors
Rosana AvolioOctober 18th, 2016
Disclaimer and forward-looking statements
This presentation contains 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 June 30, 2016, and Braskem does not
assume any obligation to update it in light of new information or future
developments.
Braskem undertakes no liability for transactions or investment decisions made
based on the information in this presentation.
BRASKEM
Agenda
Business Model / Strategy Drivers
Risks and Opportunities
Sustainable Development
Conclusion
Leading presence in the Brazilian market: only integratedpetrochemical company in 1st and 2nd generation
Key player of thermoplastic resins (PE+PP+PVC) in the Americasand largest Biopolymer Producer of the World
Largest PP producer in USA
29 units in Brasil, 5 in EUA, 2 in Germany and 4 inMexico:
Braskem
Summary 2015:
Net revenue: R$47.3 billion / US$14.3 billion
EBITDA: R$9.4 billion / US$2.8 billion
EBITDA margin: 19.8%
Net debt: R$21.1 bi / US$5.4 billion
Leverage (net debt/EBITDA): 2.23x (R$) / 1.91x (US$)
Activities divided into 6 segments:
1) UNIB (1st generation): 3.9 MM ton Ethylene/ 1.5 MM tonpropylene
2) UNPOL (PE and PP): 3.0 MM ton PE / 1.8 MM ton PP
3) Vinyls (PVC and chlor-alkali): 710 kt PVC / 539 kt Soda
4) quantiQ (chemicals distribution): more than 1,500 products
5) USA and Europe (PP): 2.0 MM ton PP
6) Mexico (PE): 1.050 MM ton PE
Industrial Assets
1 gas cracker 1 PP 1 PE
1 hybrid cracker 2 PP 3 PE
1 PP Pennsylvania
1 naphtha cracker 1 ethanol cracker 5 PE 2 PP
2 PVC 1 chlor-alkali 1 naphtha cracker
4 PE 1 PP 1 PVC 1 chlor-alkali
2 PP (Wesseling
andSchkopau)
3 PP Texas
1 PP W.Virginia
Listed in 3 stock exchanges: BM&FBovespa, NYSE and Latibex- 100% tag along
Investment Grade by S&P e Fitch
Business Model - Brazil
Solid business model based on the competitive integration of the value chain
Raw material
Naphtha
Ethanol
Ethane
Propane
Basic Petrochemicals Unit
Ethene
Propylene
Benzene
Toluene
Paraxylene
ButadieneCumene
Ethene and Propylene
Clients
Polyolefins and Vinyls Unit
Integrated Petrochemical
Polyethylene
Polypropylene
PVC
Green Polyethylene
Business Model – US & Europe
Propylene
Polypropylene
Diversified sources of raw materials:
Refineries PDH Crackers
Clients
Business Model – Mexico
Gás
Ethane
Ethylene
HDPE
HDPE
LDPE
Clients
Total common shares = 451,668,652
Total class “A” preferred shares = 345,002,978
Total class “B” preferred shares = 593,618
Total Shares = 797,265,248
Odebrecht and Petrobras corporate relations regarding Braskem are regulated by a Shareholders’ Agreement
Odebrecht appoints Braskem’s Chairman of the Board, while Petrobras appoints its Vice Chairman
¹Include shares held in treasury
Source: Shareholders’ Agreement of Braskem S.A., BM&FBOVESPA – Data retrieved in 06/30/2016
Ownership Structure
Corporate Governance Structure SH
AREH
OLD
ERS
STRATEGY AND COMMUNICATION COMMITTEE
PEOPLE AND ORGANIZATION COMMITTEE
FINANCIAL AND INVESTMENT COMMITTEE
COMPLIANCE COMMITTEE
SUPPORT FROM CORPORATE GOVERNANCE AREA
CLIE
NTS
BOARD OF DIRECTORS
FISCAL COUNCIL
INDEPENDENT AUDITORS
BUSINESS LEADER
PERMANENT BOARD OF DIRECTORS SUPPORT COMMITTEE
Corporate Governance at Braskem is based on ethics, transparency and respect for Clients, Team
Members, Shareholders, Suppliers and all other audiences with whom the Company interacts.
CHIEF COMPLIANCE OFFICER
Strategy Drivers
10BRASKEM / Relatório Anual / 11
PURPOSE Improve people's lives by creating sustainable solutions through chemicals and plastics
‘VALUES
(TEO) Trust in people Client satisfaction Partnership among team members
STRATEGY
PERPETUATE
GROW
SURVIVE
• Focus on the client and the market
• Competitive raw material and energy
• Productivity and operacional efficiency
• Geographic diversity
• Serve the Brazilian market
• Develop new paths using renewable
raw material.
• Technology
• People and Organization
• Sustentability and Innovation
Reinvestments Self-development of people Return for shareholders
BRASKEM
Agenda
Business Model/ Strategy Drivers
Risks and Opportunities
Sustainable Development
Conclusion
Diversification through competitive raw material: current feedstock profile with higher exposure based on
naphtha that presents higher costs and that could create exposure to carbon pricing mechanisms.
Acess to competitive feedstock
Raw Material Profile
Recent investments to diversify feedstock:
1. Braskem Idesa complex: 1,05kt PE production using 100% ethane as feedstock.
2. Feedstock flexibility project in Bahia: Braskem is investing R$ 380 million to enable the cracker in Bahia to use ethane for up to 15% of its feedstock. The project is scheduled to start operating in the second half of 2017.
Brazilian Market Challenges
Brazilian Market of Resins (kton):
2015
2,372
5,385
-7.6%
4,926
2014
5,331
1H162013
Good operational performance, exports and
international units results : record EBITDA
even in a year of an unfavorable Brazilian
economy (2015 GDP: - 3,5%)
Exports:
862 778 680921
520
415312 388
386
288
+22%
2015
1,307
2014
1,068
2013
1,090
2012
1,277
1H16
808
PE
PP
Program of costs reduction:
Competitive Energy: Chesf (valid until 2037 withcontribution to a fund to develop energy sector)
Client support:• Pic Plast• Braskem Visio
Allegations
• In early March 2015, in connection with the operation by Brazilian Federal Police called Operation Car Wash (Lava Jato),
statements made by defendants against former executives were mentioned in allegations asserting that improper payments were
made in connection with certain feedstock supply agreements entered into with Petrobras.
• In light of said facts, the Company's Management and Board of Directors immediately approved the engagement of law firms
States and Brazil to conduct an independent internal investigation into the allegations mentioned above. Through said Expert
Firms, Braskem voluntarily contacted the agencies regulating the capital markets in Brazil and the United States, as well as the
U.S. Department of Justice – DoJ, to advise them of the launch of the Investigation.
• The Expert Firms report directly to the Board of Directors of the Company and to the applicable authorities. The Company,
through the Expert Firms, has maintained frequent contact and cooperated with said authorities.
Material Fact (October 3th):
• Braskem has started discussions with DoJ and SEC, that the Company hopes will lead to formal settlement negotiations and theresolution of the allegations of misconduct. In addition to the conversations with DoJ and SEC, the Company intends to startsimultaneous discussions in Brazil with the same purpose.
• The discussions are being conducted by the Executive Officers of the Company, and the independent investigators, in cooperationwith the competent authorities, shall continue to investigate with the purpose of verifying the accusations of misconduct object ofthe potential settlement.
• The Company believes that any possible settlement with the authorities may result in relevant monetary obligations, in addition toother possible sanctions and/or non-monetary obligations. Due to the nature of this kind of negotiation, it is not possible toestimate its duration or its final result.
BRASKEM
Agenda
Business Model/ Strategy Drivers
Risks and Opportunities
Sustainable Development
Conclusion
Materiality Matrix
14
2015 Results
14
9,4EBITDA Record
Billion
R$
External Funding
R$11
6,1Loss Avoided
Million
R$
13,4Water Saving
Million
R$
116Energy Saving
Million
R$ 16%
Reduction CO2
Scope 1+2 Emissions
15New Resins Revenue
84% Applications SDG Linked
%
Listed In
Sustainable Indexes
2,78Green PE
Life Cycle Analysis
tCO2/t
100Recycled Resin
8 projects
tons/month
Million
BRASKEM
Agenda
Business Model/ Strategy Drivers
Risks and Opportunities
Sustainable Development
Conclusion
Braskem PerformanceRenov. Contrato nafta Aprovação
impeachment/ câmbio apreciado
-
5
10
15
20
25
BRKM5*
em R$
Release 2014
Allegations
Release 1TQ5
AgreementCHESF
Release2Q15
F/X ratedepreciation
Release 3Q16
PTB Divest plan
Release2015
Brexit
Impeachment/F/X rate apreciation
8,20x 7,75x 7,82x 7,55x
5,45x4,53x
3,56x4,07x
EAST
MA
N
MEX
ICH
EM
DO
W
SOLV
AY
LYO
ND
ELL
BA
SELL
WES
TLA
KE
BR
ASK
EM(U
S$)
BR
ASK
EM(R
$)
Peers Average (US$) 6,88x
EV/EBITDA – June 2016:
Braskem EV / EBITDA in dollars is discounted
by 48% when compared to the
average of its peers.
SO WHY INVEST IN BRASKEM?
Solid company investing to ensure its long term strategy through geographic, marketand feedstock diversification, leading the way on renewables.
Responsible in its management of direct and indirect social and environmental impacts.
Focused on developing sustainable products, working with its value chain and society.
Significant market expansion prospect of plastics which can make a meaningfulcontribution to sustainable development and reducing environmental impact.
Thank you!