EARNINGS CONFERENCE CALL 1Q21 - MAY 6, 2021 EDF Renewables wind power complex that will supply renewable energy to Braskem
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EDF Renewables wind power complex that will supply renewable energy to Braskem
EARNINGS
CONFERENCE CALL
1Q21
M AY 6 , 2 0 2 1
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 updated as of March 31, 2021, 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.
PUBLIC
Petrochemical Context in 1Q21
In 1Q21, petrochemical supply was impacted by the severe winter storm in the U.S. Gulf Coast, which led to unplanned
production closures affecting resins suppliers. Additionally, demand continued strong
Spread PE US – Naphtha ARA¹ Spread PE US – Ethane Mont Belvieu¹ Spread PP US – Propylene US¹
($/ton) ($/ton) ($/ton)
+93%
1.406
+103%
+49%
1.024 1.001 977 970
717 708 729
663 669 652
589 585
505
355
2017 2018 2019 2020 1Q21 2017 2018 2019 2020 1Q21 2017 2018 2019 2020 1Q21
The petrochemical scenario is dynamic, with spreads fluctuating over time. In 1Q21, international market references were impacted by
the industry's supply and demand dynamics, and PE and PP spreads, for instance, reached the highest levels since 2017
Note (1): External consulting firms.
PUBLIC 3
1Q21 Highlights | Braskem Consolidated
Recurring Operating Result - 1Q21
(US$ million)
Comments:
• In 1Q21, recurring Operating Result was US$1,266
Profitability improves in 1Q21, as shown by the higher recurring
million, up 52% on 4Q20, mainly due to:
operating margin in the period
i. better spreads for PE, PP and main chemicals
52% in Brazil, for PP in the USA & Europe and for
1.266 PE in Mexico
ii. higher PP sales volume in Europe
833
• Compared to 1Q20, recurring Operating Result in
U.S. dollar advanced 341%, due to:
287
i. better spreads for resins and main chemicals
in Brazil, for PP in the USA & Europe and for
PE in Mexico
1Q20 4Q20 1Q21
Recurring ii. higher sales volume of PP in USA & Europe
Operating 10% 24% 31% and of main chemicals in Brazil
Margin¹
Source: Braskem. Note (1): Based on Recurring Operating Result as a ratio of Net Revenue.
PUBLIC 4
1Q21 Highlights | Brazil
Operational Financial
Utilization Rate of Petrochemical Crackers Recurring Operating Result BRIDGE
(%) (US$ million)
-3 p.p.
Impacted by the pit
85% 31
81% 82% stop (rapid scheduled
maintenance
shutdown) in RS 271
5 -44
1Q20 4Q20 1Q21
Ethylene 943
Resin Sales (PE+PP+PVC) 680
(kt)
+8%
-5%
1.002 953 -41%
883
-15%
Recurring FX Volume Contribution FC¹ + SG&A² Recurring
289 201 171 Operating Margin + Other Operating
Result 4Q20 Result 1Q21
1Q20 4Q20 1Q21 1Q20 4Q20 1Q21
Brazilian Market Exports
Source: Braskem. Note (1): FC: Fixed Costs. Nota (2) SG&A: Selling, General & Administrative Expenses.
PUBLIC 5
Higher supply of imported feedstock in Brazil
Naphtha Purchases - Supplier Location
(%)
Comments:
Diversified feedstock supplier base in Brazil, with • In line with the Company’s
several suppliers of naphtha imports strategy to diversify its suppliers,
the Brazil segment continued to
Higher naphtha purchases in Brazil acquire naphtha via supply
in 2020 due to mutually beneficial agreements with international
Brazil Imports opportunity with national supplier
in the first half of year suppliers
• In 1Q21, naphtha imports
31% accounted for around 70% of total
43% 37%
53% 54% naphtha consumption in the
quarter
63% 69%
47% 57% 46%
2017 2018 2019 2020 1Q21
Braskem obtains longer payment periods on naphtha purchases with foreign suppliers,
positively impacting its cash generation
Source: Braskem
PUBLIC 6
Update on geological event in Alagoas - Financial Impact
Financial Impact¹ - Balance of provisions in 1Q21 Disbursement Schedule
(R$ billion) (R$ billion)
In 1Q21, the balance of provisions related to the geological event in Alagoas ...of which approximately 50% was registered
was around R$8.5 billion... under Current Liabilities and 50% under
In 1Q21, Braskem reversed Noncurrent Liabilities
provisions in the amount of
R$139 million
0,8 8,5
1,5
1,5
4,8
4,23 4,23
Relocation and Closing and Socio-Urbanistic Additional Provision Current Liabilities Noncurrent Liabilities
Compensation Monitoring Measures Measures 1Q21
of Salt Wells
The Company cannot predict with certainty future developments in respect of this matter or its related expenses, and the costs
to be incurred by the Company may be different than currently estimated or provisioned
Source: Braskem. Note (1): The total amount of provisions related to the geological event in Alagoas is R$10.4 billion, and at the end of December/20, the balance of provisions was
approximately R$9.2 billion. PUBLIC 7
Update on geological event in Alagoas - PCF¹
Update of PCF¹ as of March 31, 2021
% Acceptance Index for Proposals Submitted
Families Relocated Financial Compensation Proposals Submitted Payments Made (R$ million)
+25% +74%
11.560 712,7
9.213
+58%
409,5
5.447
3.456
Dec/20 Mar/21 Dec/20 Mar/21 Dec/20 Mar/21
99.7% 99.6%
In 1Q21, Braskem continued to make progress on the relocation and financial compensation
of families in the districts affected in Maceió
Source: Braskem. Note (1): PCF: Financial Compensation and Support for Relocation Program.
PUBLIC 81Q21 Highlights | USA & Europe
Operational Financial
Utilization Rate of PP Plants Recurring Operating Result BRIDGE
(%) -6 p.p. (US$ million)
+30 p.p.
95% 88% 84% 93% 21
64% 78% Impact from winter storm
Uri in the U.S. Gulf Coast
1Q20 4Q20* 1Q21
PP USA PP Europe 173
* Utilization Rate of 4Q20 in the United States does not consider Delta
315
PP Sales³
4
(kt) +19%
499 543 117
455
131 118 148
368 337 395
Recurring Volume Contribution FC¹ + SG&A² Recurring
Operating Margin + Other Operating
1Q20 4Q20 1Q21
Result 4Q20 Result 1Q21
PP USA PP Europe
Source: Braskem. Note (1): FC: Fixed Costs. Nota (2) SG&A: Selling, General & Administrative Expenses. Note (3): 4Q20 data from United States does not consider sales volume from Delta.
Considering Delta sales in 4Q20, sales volume in the United States in 4Q20 was 415 kton and sales in 1Q21 were lower (-5%) due to the impact from winter storm Uri which affected product
availability in the region. The 1Q21 sales decline was partially mitigated by the sale of product from inventory to meet short term market demand. PUBLIC 9First international shipment from new global export hub facility
Startup of new global export hub
facility in Charleston, South Carolina
• The new hub offers packaging, warehousing and export
shipment services to support Braskem’s six PP plants in the
United States
• The facility has the capacity to support export shipments of
up to 204 kt annually to Braskem clients worldwide
• The new logistics and distribution facility in the port region
Due to the current moment in the PP market in North America,
of South Carolina significantly increases Braskem's export
Braskem is prioritizing sales in the domestic market. However,
capacity in the USA over time, the new hub will enable Braskem to leverage the
production of its assets on the U.S. Gulf Coast, Pennsylvania and
West Virginia to better serve the needs of its international clients
Braskem is the largest PP producer in North America and is focusing on reinvesting in its business
to support clients globally
Source: Braskem.
PUBLIC 101Q21 Highlights | Mexico
Operational Financial
Utilization Rate of PE Plants Recurring Operating Result BRIDGE
(%) (US$ million)
86% +10 p.p.
-15
58%
48% In Mar/21, return of the
natural gas transportation
service with Cenagas
74
1Q20 4Q20 1Q21
PE -29 94
PE Sales
63
(kt) Reduction due to
-27% lower production
213 and inventory
183
availability
134
Recurring Volume Contribution FC¹ + SG&A² Recurring
Operating Margin + Other Operating
Result 4Q20 Result 1Q21
1Q20 4Q20 1Q21
PE
Source: Braskem. Note (1): FC: Fixed Costs. Nota (2) SG&A: Selling, General & Administrative Expenses.
PUBLIC 11Expansion of ethane imports from U.S. to Braskem Idesa
U.S. Ethane Imports from USA (Fast Track Solution)
('000 barrels per day)
Comments:
• In 1Q21, to complement the supply
Additionally, the expectation is of ethane by Pemex, Braskem Idesa
In Dec/20, Braskem Idesa to increase the capacity of Fast
track 2.0 to 26 kbpd imported a daily average of 13,100
concluded the expansion of Fast
Track operation, which currently barrels (~70,000 tons) of ethane from
has expected ethane capacity of the United States, which represents
20,000 barrels per day
around 66% of Fast Track’s current
+85% capacity
13,1
8,1 7,9 • During 1Q21, the operation reached
7,1
~25 thousand barrels of imported
2,4
ethane in a single day
1Q20 2Q20 3Q20 4Q20 1Q21 jun-21 • The volume of imported ethane
Capacity accounted for around 30% of
Fast Track (kbpd)
12,8 12,8 12,8 12,8 20,0 26,0
Braskem’s total ethane supply in the
quarter
Fast Track 1,0 Fast Track 2,0
Braskem Idesa has a plan to increase the ethane supply in Mexico via imports and
the expansion of the Fast Track solution is part of this plan
Source: Braskem.
PUBLIC 12Free Cash Flow Generation
Free Cash Flow Generation (R$ million) - 1Q21
Comments:
• Free cash flow generation in 1Q21 was
Consistent operating cash generation, in line with the strategy of
positive by R$1,766 million, mainly due
efficient capital allocation and financial health
to:
6.943 i. the recurring operating result
in the quarter
Impact from higher prices for resins and main
-3.253
chemicals in the international market on accounts ii. the monetization of PIS/COFINS
receivable and from higher naphtha prices on the
credits in the approximate
cost of finished goods in inventory
amount of R$761 million
-436 iii. the lower volume of operating
-1.131 capex and strategic
-318 -54
1.766 investments
15
• These positive impacts were mainly
opposed:
Recurring Working CAPEX Interest Inc. Strategic Other 1Q21 Free i. the negative working capital
Operating Capital Paid Tax/Soc. Investments Cash Flow change
Result Contr. Paid Generation ii. the highest interest payment in
the quarter
FCF Yield¹ 1Q21: 12.0%
Source: Braskem. Note (1): FCF Yield = Free Cash Flow Yield based on cash flow in last 12 months.
PUBLIC 13Debt Profile
Debt Profile (US$ million) 03/31/2021¹
Debt Indicators
Strong liquidity position, with most debt maturing
in the long term • Sufficient liquidity to cover liabilities
49% coming due in next 79 months
3.469 Prepayment of perpetual 11
Available rotating bond (US$500 million) in
1Q21
2.469
1.000 credit facility • Average debt term of ~14 years
643
3.644 • Weighted average cost of debt of FX
18%
14% 15 variation + 5.2%
1.825 133
5% 1.371
5% 933
3% 27 61 3% 3%
23 388 304 217 13 210 17
166
Cash at 2021 2022 2023 2024 2025 2026/2027 2028/2029 2030
03/31/2021 onwards
Invested in R$ Invested in US$ Local currency Foreign currency Stand-by Corporate Credit Risk - Global Scale
(1) Excludes Braskem Idesa and the R$1.3 billion for funding the Financial Compensation and Support for Agency Rating Outlook Date
Relocation Program in Alagoas
Fitch BB+ Stable 07/03/2020
Due to its strong cash position and with the objective of reducing its gross debt levels, in March
S&P BB+ Stable 07/08/2020
2021, Braskem announced the total redemption of the 7.375% perpetual bonds, at face value, in
the amount of US$500 million Moody's Ba1 Negative 07/13/2020
Source: Braskem
PUBLIC 14Corporate Leverage
Net Debt/Recurring Operating Result (US$)¹
Comments:
Significant reduction in
leverage since 2Q20 • In line with its continuous commitment to
-5,31 financial health and with the objective to
7,11 be reassigned as an investment grade
5,84 company, Braskem continued to reduce
4,71 4,98
2,94 its corporate leverage
1,80
-16% • The leverage ratio, measured as the ratio
6.332 of net debt to recurring Operating Result
5.906 5.849
5.369 5.245 4.936 in U.S. dollar, ended 1Q21 at 1.80x, down
39% from 4Q20 (2.94x)
2.741
1.783
1.140 1.011 891 1.175 • Additionally, the Company's Net Debt
decreased approximately US$1.0 billion
4Q19 1Q20 2Q20 3Q20² 4Q20² 1Q21² compared to 1Q20
Net Debt (ex Braskem Idesa) Recurring Operating Result (LTM³)
Corporate Leverage (ex Braskem Idesa)
Source: Braskem. Note (1): Excludes the Project Finance in Mexico and based on recurring Operating Result. Note (2): The leverage calculation considers 50% of the hybrid bond issued in July
2020 as equity as of 3Q20. Note (3): LTM: Last 12 months. PUBLIC 15ESG: Startup of the EDF Renewables wind complex, which will supply
renewable energy to Braskem
Renewable Energy Purchase
• Power supply secured by a 20-year power purchase
agreement signed in 2018
• The partnership is estimated to result in the avoidance of
280,000 tons of CO2 emissions over the life of the
contract
• This is the first renewable energy purchase agreement
to start up operations of the four agreements signed by Our carbon neutral strategy
Braskem as of 2021
1 2 3
• The wind power complex is located in Bahia state and its EMISSIONS
EMISSIONS OFFSET
EMISSIONS
construction complies with key guiding principles of REDUCTION CAPTURE
sustainable development
Project helps Braskem to reduce
its CO2 emissions
This is one of the agreements which put Braskem near to the mark of 1.5 million tCO2e in emissions avoided through long-term
renewable power purchase agreements.
Source: Braskem
PUBLIC 16ESG: Braskem and Trafigura perform the world's first transport of naphtha
with carbon offset1
Offsetting of emissions in the value chain
• Trafigura is a supplier of naphtha imports to Braskem's
petrochemical complexes in Brazil
• In collaboration with Braskem, the first naphtha shipment
was made with offsets and reductions of the carbon
emissions associated with the feedstock, including the
extraction, refining and transportation processes
• The calculation was made by Trafigura and the results were
obtained from:
Offset projects based on nature located in Indonesia
and
Reductions based on energy efficiency gains by cargo This project contribute to CO2 emission offset in the scope 3, which is
under study by the Company
vessels
• All offset data is assured by Verified Carbon Standard
Braskem is committed to its strategy of a carbon-neutral circular economy, and this pilot project is a step forward in the efforts
to offset part of emissions in the value chain
Source: Braskem; Note (1): The term "carbon offset" means that the Seller and Buyer commit to reduce or offset the carbon dioxide equivalent associated with their respective emissions (including naphtha
extraction, storage and transportation) via a combination of reducing demonstrated emissions and carbon offsets with assurance by Verified Carbon Standard. PUBLIC 17ESG: International certification to produce resins and chemicals from
chemical recycling
ISCC¹ Plus and Chemical Recycling
• First Brazilian company to receive ISCC Plus certification
for the use of circular feedstocks, such as pyrolysis oil,
which is used to produce polymers
• Pyrolysis oil is the product of a chemical recycling process
that breaks down thermoplastic resin molecules using heat
• The certification is based on the mass balance concept,
which ensures that the amount of raw material is
transformed into an equivalent amount² of final product Our strategy for eliminating plastic waste
at the certified units
1 2 3
• ISCC Plus will be valid for all Braskem industrial units in the MECHANICAL CHEMICAL SOLID WASTE
ABC Petrochemical Complex in São Paulo state and in the RECYCLING RECYCLING RECUPERATION
Triunfo Petrochemical Complex in Rio Grande do Sul state,
where the certification is already valid for Green PE Certification supports the
development of chemical recycling
This control enables the sustainability of circular products to be duly credited and recognized.
Source: Braskem; Note (1): International Sustainability and Carbon Certification Note (2): Based on percentage production losses
PUBLIC 18ESG: Braskem allocates R$15 million in 2021 to combat hunger and
distributes 48,000 food staple boxes in Brasil
Combating the social crisis caused by COVID
• The COVID pandemic has affected people's lives,
especially with regard to basic survival needs
• Braskem launched the distribution of 48,000 food staple
boxes, 25,000 hygiene kits and three tons of vegetables
for local communities, and also works through other
initiatives
• In all, Braskem will allocate R$15 million in 2021 to Social responsibility actions
initiatives and partnerships in several Brazilian states
1 2 3
SUSTAINABLE INNOVATION &
• In addition, through its employee volunteer program, CONSUMPTION & SUSTAINABLE
LOCAL
Braskem will also donate 3 food staple boxes for 1 box POST-CONSUMPTION ENTREPRENEURSHIP DEVELOPMENT
donated by its employees
These actions are related to the pillar of
developing local communities
This important moment calls for solidarity, joining forces and helping people in need across Brazil to minimize the pandemic's
impacts
Source: Braskem
PUBLIC 19ESG: Certification by the Federal Revenue Service as an Authorized Economic
Operator (OEA) in the Compliance category
Authorized Economic Operator
• International recognition for adopting management processes that:
minimize the risk events existing in import operations
voluntarily comply with the compliance, reliability and security
criteria applicable to the global logistics chain, as well as tax and
customs obligations
• This recognition strengthens relations with international partners and
offers benefits such as reducing import times and cost in the import
process
With the credential, Braskem expands its international footprint and reinforces its image as an increasingly competitive,
responsible and compliant company
Source: Braskem
PUBLIC 20Petrochemical Scenario 2Q21 vs. 1Q21 - PE and PVC
Spread PE US – Naphtha ARA¹ Spread PE US – Ethane Mont Belvieu¹ Spread PVC – Spread Par¹
$/ton $/ton $/ton
1.759 1.796
1.567 1.583 1.515
1.187
1.059 1.088 1.050
904 915
813
703 704 693 690 713
1.609
1.406
1.196 378 427
1.024 932
666 753 178 187 802
467 527 563 156 583 623 496
162 435
141
2Q20 3Q20 4Q20 1Q21 2Q21e 2Q20 3Q20 4Q20 1Q21 2Q21e 2Q20 3Q20 4Q20 1Q21 2Q21e
Spread Naphtha ARA Spread Ethane MB Spread4 Feedstock
PE USG - Brazil Mix² PE USG - Mexico Mix³ PVC Asia
According to forecasts by external consulting firms,
PE and PVC spreads should improve in 2Q21...
Note (1): External consulting firms. Note (2): PE USG Brazil Mix = 0.3*LDPE US + 0.3*LLDPE US + 0.4*HDPE US. Note (3): PE USG Mexico Mix = 0.286*LDPE US + 0.714*HDPE US. Note (4):
Spread Par: PVC + (0.685*Soda Asia) – (1.5984*Naphtha ARA) – (1.014*Brent). PUBLIC 21Petrochemical Scenario 2Q21 vs. 1Q21 - PP
Spread PP US – Propylene US¹ Spread PP Europe – Propylene Europe¹ Spread PP Asia – Naphtha ARA¹
$/ton $/ton $/ton
2.579
2.477
1.985
1.664 1.609 1.587
1.407
1.264 1.302 1.250
1.194 1.190 1.205 1.214
1.072 1.066 1.081
908 899
768 846 865 806
679
577
1.213
970
617 639 757 770 689 758 688
520 570 522
394 344 340
2Q20 3Q20 4Q20 1Q21 2Q21e 2Q20 3Q20 4Q20 1Q21 2Q21e 2Q20 3Q20 4Q20 1Q21 2Q21e
Spread Propylene US Spread Propylene Europe Spread Naphtha ARA
PP US PP Europe PP Asia
...in the USA & Europe, PP spreads are also expected to improve,
with a reduction in PP Brazil in 2Q21
Note (1): External consulting firms.
PUBLIC 22Braskem Outlook | 2Q21 vs. 1Q21
Brazil United States Europe Mexico
Ethylene production in line, Higher PP production, with the Higher PE production, due to
with higher production in RS expectation of returning PP production in line, due to the return of gas transportation
Utilization
after the pitstop in 1Q21 and production at all plants to expectation of an inventory services and the expectation of
Rate¹ the schedule shutdown at the normal levels, after the impacts rebuilding trend higher ethane supply (Fast Track
SP complex in April/May from weather events in 1Q21 solution)
Increase in sales, due to the
Total resin sales in line and
Expectation of sales in line, due greater availability of product,
continuity of the strategy to Higher sales due to increased
Sales Volume¹ to the maintenance of product after the gradual
prioritize sales to Brazilian and product availability
availability reestablishment of the
SAM market
operation
Healthier PP-Propylene spreads
Healthier PE e PVC spreads due
Healthier PP-Propylene spreads in Europe, due to continued Healthier PE-Ethane spreads in
to continued healthy demand.
Petrochemical in USA due to continued strong strong demand, scheduled USA due to continued strong
For PE, there also is the impact
Spreads² demand and gradual recovery shutdowns at the region's demand and gradual recovery in
of the gradual recovery in PE
in PP supply in the USA producers and lower imports PE supply in the USA
supply in the USA
from Asia
Increase Stability Decrease
Note (1): Braskem expectation. Note (2): Expectation of external consulting firms.
PUBLIC 23We remain focused on 6 main objectives for 2021
GEOLOGICAL PHENOMENON
1 Continue the advances related to the geological phenomenon in Alagoas
IN ALAGOAS
BRASKEM Expand the ethane import operation and negotiate definitive agreement with
2
IDESA PEMEX
CAPITAL ALLOCATION / Ensure the Company's continued financial health, risk management and
3
FINANCIAL HEALTH disciplined capital allocation
IMAGE & Strengthen Braskem's image and its recognition from employees, clients,
4
REPUTATION suppliers, investors and the general public
INNOVATION & DIGITAL
5 Increase efficiency in innovation and accelerate digital transformation
TRANSFORMATION
ESG¹
6 Move forward in implementation of our ESG commitments
POSITIONING
Safe operations are and always will be a focus of Braskem's operations, as a
PERMANENT AND NONNEGOTIABLE VALUE OF OUR STRATEGY
Source: Braskem Note (1): ESG: Environmental, Social and Governance.
PUBLIC 24Thank you!
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