Conference call presentation 4 q10 and 2010 results
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Conference CallConference CallConference Call4Q10 and 2010Conference Call4Q10 and 2010
Investor Relations
São Paulo, March 18, 2011
Investor Relations
São Paulo, March 18, 2011
Forward-looking Statements
This presentation contains forward-looking statements. These statements are not
historical facts and are based on management’s objectives and estimates. The words
"anticipate", "believe", "expect", "estimate", "intend", "plan", "project", "aim" and similar
words indicate forward-looking statements. Although we believe they are based on
reasonable assumptions, these statements are based on the information currently
available to management and are subject to a number of risks and uncertainties.
The forward-looking statements in this presentation are valid only on the date they are
made (December 31, 2010) and the Company does not assume any obligation to update
them in light of new information or future developments.
Braskem is not responsible for any transaction or investment decision taken based on the
information in this presentation.
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� Braskem’s EBITDA was R$ 1.1 billion in 4Q10 with a 14.9 %
EBITDA margin
� 2010 EBITDA reached R$ 4.1 billion, a 27% growth over
2009
� Quattor EBITDA increased 78% reaching R$1 billion
� Braskem’s domestic resin sales rose 11%
� 2010 Net Income was R$ 1,9 billion
3,181
4,055
2009 2010
EBITDA (R$ million)
+27%
1,638
2,308
2009 2010
EBITDA (US$ million)
+41%
Highlights
3*Last 12 Months EBITDA (LTM)
� Braskem is committed to its financial solidity:
� Debt prepayment and long term bonds issue, lengthened the average debt term to 12.5 years
� Net Debt/EBITDA* ratio fell from 3.59x (Dec/09 pro forma) to 2.43x in Dec/10
� The Administrative Council of Economic Defense (CADE), approved without restrictions the acquisition of Quattor
� Synergies from the acquisition are expected to R$377 million in annual EBITDA for 2011
� Ethylene XXI Project – Mexico
� Letters of interest for the finance of the project surpassed its financing needs
� Strategic partnership with Lyondell Basell for the use of the technology at the polyethylene plants
North America
29%Asia
Europe
10%
Others
14%
� Origin of Imports in 2010
(PE, PP and PVC)
� Braskem’s Sales Profile – 2010
� Domestic Resins Performance – 4Q10 Vs. 3Q10
Braskem’s Sales
Brazilian market
-6%
-5%
Domestic market performance
Argentina
21%
Colombia
15%
Mexico
1%
Asia
10%
Source: Tendências Consultoria, Abiquim, Braskem
Americas account for 67% of imports
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� Imports continued to represent 26%
of the domestic market
29%
18%
13%
9%
7%
6%
4%
4%
10%
FOOD
PACKAGING
RETAIL
HYGIENE AND
CLEANING
CONSUMER
GOODS
CONSTRUCTION
AUTOMOTIVE
AGRIBUSINESS
INDUSTRIAL
OTHERS
1,033
345
64
75 32
1,074
FX impact
on costs 127
FX impact on
revenues(191)
( )
( ) ( )
R$ million
EBITDA performance: 4Q10 vs. 3Q10
� Although sales volume was impacted by lower seasonal
demand, contribution margin was offset by the higher
prices in Brazilian real. FX impacted by the appreciation in
Brazilian real.
134
75 32
EBITDA
3Q10
Volume Contribution
Margin
FX Fixed Costs
SG&A
Others EBITDA
4Q10
( )
( ) ( )
Source: Braskem 5*SG&A: R$29 million of non-recurring expenses in 4Q10
EBITDA performance: 2010 vs. 2009
� Contribution margin was positive impacted by the
higher sales volume and the improvement in resin-
naphtha spread. FX impacted by the appreciation in
Brazilian real.
R$ million
1,979
FX impact
on costs 2,089
FX impact
on revenues(3,140)
6*SG&A: R$244 million of non-recurring expenses in 2010Source: Braskem
3,181
523
1,051
441 135
4,055
EBITDA
2009
Volume Contribution
Margin
FX Fixed Costs
SG&A
Non recurring
effect 2009
EBITDA
2010
( )
( ) ( )
Strong cash generation and competitive margins
786
1,036 1,074
12.1% 14.1% 14.9%
-60.0%-40.0%-20.0%0.0%20.0%40.0%
3,181
4,055
14.0% 14.6%
EBITDA (R$ million) and
EBITDA Margin (%)
7Non-recurring Financial Expenses: approx. R$250 million in 4Q10 and R$464 million in 2010Source: Braskem
-140.0%-120.0%-100.0%-80.0%-60.0%
3Q09 3Q10 4Q10 2009 2010
4Q10 3Q10 4Q09 Chg. Chg. 2010 2009 Chg.
(A) (B) ( C) (A)/(B) (A)/( C) (D) (E) (D)/(E)
Net Financial Result (541) 183 (981) - -45% (1,618) 266 -
Foreign Exchange Variation (FX) 106 638 166 -83% -36% 405 2,782 -85%
Monetary Variation (MV) (65) (40) (140) 63% -54% (355) (511) -31%
Net Financial Result (583) (416) (1,006) 40% -42% (1,668) (2,005) -17%
R$ Mill ion
Leverage decrease and longer average debt term
2.43x
2.64x
3.59x
Dec-10
Sep-10
Dec-09
Net Debt/EBITDA(R$)
-32%
-8%
393
583*
20%
Amortization Schedule(1)
(million of R$)
12/31/2010
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Issue of US$450 million in perpetual bonds, project finance
prepayment and others financing operations lengthened the
average debt term to 12.5 years
2.56x
2.76x
4.00x
Dec-10
Sep-10
Dec-09
Net Debt/EBITDA(US$)
-36%
-7%
2,4961,733
1,245
1,8201,694
1,0731,360
1,244
2,594
393
2011 2012 2013 2014 2015 2016/
2017
2018/
20192020
onwards12/31/10
Cash
13%
10%
14%13%
8%
11%10%
2,889
(1) Does not include transaction costs
*US$350 million of Stand byInvested in US$
Invested in R$
2011 EBITDA*: R$377 million 2012 EBITDA*: R$495 million
350
495
87
59
R$ million
377
82
61
R$ milhõesR$ million
Synergies from Quattor acquisition totaling R$377 million in EBITDA for 2011
* Annual and Recurring
350
Industrial Logistics Supply EBITDA Synergies
Source: Braskem
234
Industrial Logística Suprimentos EBITDA SinergiasIndustrial Logistics Supply EBITDA Synergies
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Identification of new opportunities, efficient and rapid implementation of initiatives to
capture synergies
� Integrated planning for industrial units
� Centralized maintenance plan assets strategy
� Optimization of freight and gains in distribution and storage
� Joint purchase of materials for industrial operations
2011 Capex and Projects
Ethylene XXI (JV Braskem and IDESA) – Mexico
� Startup: January 2015
� PEMEX guarantees the supply of ethane
� Integrated project: 1 Mton/year ethylene and 1Mton/year PEs
� Investment: US$ 2.5 billion (project finance)
� Mexico imports 68% of its total PE demand (1.8 Mton/year)
� Financial advisor: Sumitomo
� Strategic partnership with Ineos and Lyondell Basell for the use of the technology
at the PE plants
� More than US$5 billion in letters of interest for the project finance
391 Maintenance Shutdown
1,644
Investments
(R$ million)
10
� More than US$5 billion in letters of interest for the project finance
� 2011 Focus
� Cracker technology definition
� Structuring of the Project Finance
� Conclusion of the engineering and construction agreement
PVC Alagoas - Brazil
� Characteristics:
� Startup: May 2012
� Expansion of 200 kton/y in PVC capacity
� Investments of US$470 million and expected NPV ~US$450 million
� Approval of a financing line of up to R$525 million from BNDES and R$200
million from BNB
278
89
243
407
94
142
2011e
HSE
Productivity
Capacity Increase / PVC Alagoas
Equipment Replacement
Mexico
Others
Outlook and Priorities
Petrochemical Market
� Political instability in Arab countries and oil price volatility
� Global petrochemical scenario continues to be marked by recovery, but oversupply is still
expected for 2011. Mitigating factors:
� Operational instability, delays on the startup of new plants and trade sanctions imposed on Iran
� Strong demand from emerging countries like China, India and Brazil
Braskem priorities
� Strengthening of the Brazilian petrochemical and plastics production chain
To follow the domestic resins’ market growth: 9-10% in 2011� To follow the domestic resins’ market growth: 9-10% in 2011
� Ensure capture of the identified synergies
� Adding value through the acquired assets
� Quattor: continue improvement in its operational efficiency
� Braskem America: return above capital employed
� Maintaining liquidity and financial discipline
� Growth Projects
� PVC Alagoas
� Implementing project in Mexico, which is based on competitive raw materials
� To define Comperj’s configuration with Petrobras
� Expand the use of renewable feedstock
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Conference CallConference CallConference Call4Q10 and 2010Conference Call4Q10 and 2010
Investor Relations
São Paulo, March 18, 2011
Investor Relations
São Paulo, March 18, 2011
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