The document discusses Braskem's meeting with investors and contains forward-looking statements that are valid only as of the date given and are subject to risks and uncertainties. The agenda includes discussing Braskem as a global player, acquisitions of Quattor and Sunoco, Braskem's project pipeline for growth, and the petrochemical industry in general. Final considerations will also be presented.
2. 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 (June 30, 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.
2
3. Agenda
Braskem
A global player
Acquisitions: opportunities and challenges
Project pipeline: growth with value creation
Braskem consolidated
The petrochemical industry
Final considerations
3
4. Agenda
Braskem
A global player
Acquisitions: opportunities and challenges
Project pipeline: growth with value creation
Braskem consolidated
The petrochemical industry
Final considerations
4
5. Braskem overview
Leading thermoplastic company in
the Americas
Diversified portfolio of Industrial Assets
petrochemical products, with focus
3 PP
on PE, PP and PVC
Annual capacity of 6,460 kton
31 facilities in Brazil and USA 1 PVC
1 Chlorine-soda
Naphtha and gas based crackers
1 naphtha cracker
Petrobras as the main supplier in Brazil 4 PE
1 PP
Attractive project pipeline in Latin 1 PVC
1 Chlorine-soda
America
Listed in 3 stock exchanges: 1 gas cracker
BM&FBovespa, NYSE and Latibex 1 PP
1 PE
100% tag along
1 naphtha cracker
Key Financials LTM 2Q10 1 naphtha cracker
2 PP
3 PE
Net Revenue: R$ 24.8 billion 1 ethanol cracker
5 PE
EBITDA: R$ 3.8 billion 2 PP
Source: Braskem 5
6. Track record of success with
clear objectives 6,460
Resins Capacity (kton/y)
3,595
Acquisitions 2,341 4,275
1,410
Organic Growth 520
1,821 2,185
2,185
Leader in the
54% capacity 80% capacityAmericas
increase increase
Leader in Latin
America
Acquisitions
Petroquímica Quattor + 2020
Ipiranga, Copesul Triunfo Sunoco
and Paulínia
Politeno
Polialden 2010
Trikem 2009
OPP 2008
2006 2007
2005
2004
2003
2002
2006
increase and disbursement of
After R$3.74 bi capital
Quattor and Sunoco
acquisitions
2.76x 2,89x 2.98x 3.23x 2.84x
2Q10
Source: Braskem
Net Debt/EBITDA (US$)
6
7. Leader in the Americas and a top 8 global
player in resins capacity
1st
6,460
Capacity in the Americas (kt/y)
510
(
5,307
4,827
4,256
4th
1,230 627
2,915
3,595
3,082
1,731 510
2,340 2,311
4,077 1,090 1,210 1,915
4,200 PVC
3,035 822 875 950
2,525 2,340 2,311 PP
1,995
1,050 1,040 950 PE
Braskem Exxon Dow Lyondell Braskem Formosa Shintech Chevron Quattor Sunoco
post Mobil Basell Philips
transactions
10,914
World Capacity (kt/y)
9,311
8,668 8th
7,749 7,284 7,109
6,541 6,460
4,681 4,564 12th
4,303 4,079
3,595
Lyondell Exxon SINOPEC Dow Formosa SABIC Ineos Braskem Total IPIC Reliance PetroChina Braskem
Basell Mobil post
transactions
operations 7
9. Agenda
Braskem
A global player
Acquisitions: opportunities and challenges
Project pipeline: growth with value creation
Braskem consolidated
The petrochemical industry
Final considerations
9
10. Quattor acquisition
Opportunities
Bahia
PP HOMO/COPO (1979)
Capacity: 115 kty Asset concentration in Southeast
Technology: Slurry Shell
(~70% Brazilian resin consumption);
Optimization of logistics distribution
related to reduction in external
storage;
Camaçari
Cracker (2005) Diversified RM matrix – balance
Capacity: 520 kty ethylene
Rio de Janeiro Technology: ABB Lummus –
between naphtha-natural gas;
ethane/propane Joint administration of raw material
Mauá Duque de
HDPE/LLDPE (2005) agreements;
Paulínia Caxias Capacity: 540 kty
Technology: Gas phase - Unipol Renegotiation of service and insurance
PP HOMO/COPO (1992) contracts;
Triunfo
Capacity: 310 kty Unification of production and
Cracker (1972) Technology: Bulk – Lipp
Capacity: 700 kty ethylene* maintenance practices;
Technology: ABB Lummus
(naphtha) Unification of Technology and
LDPE/ EVA (1972) Innovation centers;
Capacity: 120 kty
Reduction of working capital costs;
São Paulo
Technology: HP Autoclave
HDPE/ LDPE (2008) Acquisition disbursement: Tax and logistical synergies;
Capacity: 240 kty
Technology: Slurry – Chevron Phillips R$647.3 million Organizational restructuring.
LDPE (1965)
Capacity: 140 kty
Technology: Tubular Challenges
PP HOMO/COPO (2003) Stability of raw material supplies;
Capacity: 450 kty
Technology: Spheripol Integration of cultures.
*200 kty expansion effectively coming online in 2010 10
11. Quattor - key indicators
Operational Indicators
Operating rate (%) 1Q10 2Q10
Ethylene 71%(1) 83%(1)
PE 61% 76%
Financial Indicators
R$ million 1Q10 2Q10
Net Revenue 1,220 1,425
EBITDA 107 214
EBITDA Margin 8.8% 15.0% Outlook as of 2H10
Cabiúnas and Reduc refineries
normalized operation enabled
Riopol to have the best
Main impact on operational profit in 2Q10 monthly operating rates in
July: 86% for ethylene and 77%
Increase in operating rates with better stability for PE;
of raw material supply: supply from Mauá
complex normalized in May 2010 Petrobras’ commitment to
normalize supply to enable
Riopol to operate at full
capacity by October 2010.
(1) Considering the 200 kty expansion 11
12. Quattor synergies of R$ 400(a) million in
EBITDA as of 2012
R$ million
43
79
400
Investment of R$ 350 million
required to capture all
279 synergies
Financial synergy NPV
estimated in R$ 340 million
Industrial Logistics Supply EBITDA Synergies
Production mix Maximization of Joint management
Seizing the cracker gains from product of feedstock
streams distribution purchases
(domestic and Renegotiation of
Optimization of
export markets) third-party
inventories
Optimization of agreements
(a)
modes
Source: Braskem Recurring 12
13. Braskem America (former Sunoco)
R&T Center
Pittsburgh, Opportunities
PA
Global-scale, state-of-the-art assets –
technology and age similar to Brazil’s
polypropylene (PP) assets;
Development of a global production
Neal, WV Marcus Hook, PA
1 PP
base;
1 PP
Consolidation of industrial assets;
Competitive costs for some 70% of raw
materials;
La Porte, TX Platform for greenfield projects in
1 PP
Latin America.
Acquisition disbursement:
US$350 million Challenges
Knowledge of North American
Financial Indicators distribution market;
Add value to supplier ⇔ client chain
R$ million 1H09 1H10 (substitute distributor);
Net Revenue 764 1,109 Highly disperse market;
EBITDA 88 106 Resumption in demand vs.
uncertainty of economic recovery.
13
14. Agenda
Braskem
A global player
Acquisitions: opportunities and challenges
Project pipeline: growth with value creation
Braskem consolidated
The petrochemical industry
Final considerations
14
15. Strategic Direction
“BECOME THE GLOBAL
SUSTAINABLE CHEMICAL
LEADER, INNOVATING FOR
BETTER SERVE THE
PEOPLE”.
15
16. Green Polyethylene
First Green Plastic Certified in the World
Location: Triunfo – RS
POLYETHYLENE
Capacity: 200 Kton/y
Startup: September 2010
Investment: R$ 488 million
Consumption of 460,000 m³ of ethanol per year
75% of the ethanol supply is already contracted
Demand 3x higher than the installed capacity
Main Clients and Partners
Partnership in R&D – Renewable Polymers
Green PE trading in Asia
16
17. Expansion with increased
competitiveness
BRAZIL
PVC Expansion
Operational start-up : 1st half 2012
• Expansion of 200 kton/y in PVC capacity in Alagoas
• Investments of US$470 million
• Expected NPV ~US$450 million
• Disbursements already in 2Q10
• Support for Brazil’s infrastructure projects
Comperj and Suape
• Braskem participation in Suape Project (textile New Projects
complex) and Comperj (1st and 2nd Generation) Industrial Assets
under analysis. Projects with Petrobras
Source: Braskem 17
18. Expansion with increased competitiveness
LATIN AMERICA
Mexico: Ethylene XXI Project
Operational start-up: early 2015
• JV between Braskem (65%) and the Mexican group
IDESA (35%) for the purchase of ethane from PEMEX
• Integrated project: 1 Mty of ethylene and 1 Mty of PE
• Investment estimated at up to US$2.5 billion over 5
years (project finance)
• Financial Advisor hired: Sumitomo Bank
• Structuring of the participation of ECAs and MLAs1
New Projects
Industrial Assets
Projects with Petrobras
1 Export Credit Agencie (ECA) and Multilateral Agencie (MLA)
Source: Braskem 18
20. Mexican Converters Industry
3,500 plastics converters
84% small and micro companies
More than 5 MM ton of plastics conversion, with 1.8 MM of Polyethylene
Main application: Packaging (48% market)
Sales to distributors: Braskem ≠ Pemex
Converters Profile
Big
Grandes
Médias
Medium 4%
12%
Pequenas
Small
24% Micros
60%
Total: 3,500 Converters
20
21. Consolidated project pipeline
PeruProj.
(+ 600 to 1,000 kty ethylene/PE)
Ethylene XXI - Mexico Polimerica – Venezuela
(+ 1,000 kty ethylene (+ 1,300 kty ethylene and
and + 1,000 kty PE) + 1,000 kty PE)
Green PE Propilsur – Venezuela Suape
(+ 200 kty ethylene) (+ 300 kty PP) Comperj
PVC Expansion
(+ 200 kty)
2010 - 2012 2013 - 2015 Projects under evaluation
Resin Capacity CAGR for 2010-2015: +4.3% p.y.
Diversification of raw materials and world-class assets
Fiscal discipline
Excellent track record of projects execution
Source: Braskem 21
22. Investments in 2010 amount to
R$1.6 bi
Investments
R$ million
1,617
56 Braskem America
35 Venezuela
360 Quattor
10 Quantiq
72 Mexico
254 Green PE
621 192 Equipment Replacement
7 52 Capacity Increase / PVC Alagoas
119
7
317 Maintenance
251
63
61 Productivity New Projects
8
101 208 Industrial Assets
21 Others
44
Projects with Petrobras
1S10 2010e
Source: Braskem
22
23. Agenda
Braskem
A global player
Acquisitions: opportunities and challenges
Project pipeline: growth with value creation
Braskem consolidated
The petrochemical industry
Final considerations
23
24. Braskem consolidated
Financial Indicators:
2009 LTM Jun/10
R$ billion Consolidated Consolidated Potential for margin gains
Stabilization in raw material
Net Revenue 21.5 24.8
supplies;
EBITDA 3.2 3.8 Margin equalization Braskem
(17%) vs. Quattor(12%) in
3.46x 2.84x
1H10;
Net Debt/EBITDA
Substitution of 1H09 by 1H10
# Plants: 29 29
80% Capacity
6,460
Increase
510
3,595 1,965
510 PVC
Industrial Assets
PP
1,090
PE
3,035
1,995
Listed on three stock exchanges: BM&FBovespa, NYSE and Latibex
Source: Braskem 24
25. Raw material matrix
Diversification to compete globally
Raw Material Profile* (2009) Braskem Post-Acquisitions* Braskem Post-Projects*
8% 3%
30%
37%
13% Implementation of
Project Pipeline** 24%
17% 18%
92%
56% 58% 15%
69%
46%
14%
Quattor Sunoco Braskem More balanced and diversified supply of raw materials
Liquid (2) Refinery propylene Gas (1) Competitive natural gas price vs. international reference prices
Ethanol
Propane Naphtha / Condensate
USGC reference to competitive prices ~70% of naphtha supplied by Petrobras with
competitive price formula
Natural Gas 30% direct imports from various international suppliers
100% Petrobras supply with competitive prices versus
international prices
Ethanol
*Based on resin-production capacity. Sunoco buys propane directly
(1) Ethane, Propane and HLR; (2) Naphtha and condensate ** Considering the Mexico Project and Green PE 25
26. Strong cash generation and
competitive margins
R$ million
2Q10 1Q10 2Q09 Change Change
Key Indicators
(A) (B) (C) (A)/(B) (A)/(C) Strong cash generation
Net Revenue 6,539 6,272 4,996 4% 31% mainly due to the
EBITDA 1,042 909 735 15% 42%
improvement on Quattor
operational performance
EBITDA Margin 15.9% 14.5% 14.7% 1.4 p.p. 1.2 p.p.
Productivity gains already
reflecting on 2nd quarter
2Q10 1Q10 2Q09 Change Change
result
Financial Result
(A) (B) (C) (A)/(B) (A)/(C)
Focus on capturing
Net Financial Result (575) (880) 1,379 -35% -142%
synergies
Foreign Exchange (FX) and Monetary Variation (MV) (216) (374) 1,666 -42% -113%
Financial Result excluding FX and MV (359) (506) (287) -29% 25% Significant improvement on
Interest Expenses / Revenues Net (165) (129) (153) 28% 8%
results after financial crisis
Tax Assets and Liabilities (40) (287) (30) -86% 34%
Others (155) (90) (105) 71% 47%
Source: Braskem 26
27. Demand stability in 2Q10 reflects
sectors good performance
Apparent Consumption (Kton) +10%
4,720
4,173 4,291
4,048
1H10
2007 2008 2009 2010e
Food
Retail
Domestic demand performance
Hygiene and Cleaning by sector:
Agribusiness Relevant
Consumer Goods Moderate
Construction Low / Retraction
Automotive
Electric and Electronic
Source: Abiquim, Braskem estimates, Tendência Report, IBGE, Anfavea 27
28. Historical Prices
PE prices evolution (100 basis) PP prices evolution ( 100 basis)
130
140
130 120
120 110
110
100
100
90
90
80 80
Jun-09
09
Jun-10
10
aug/09
aug/10
dec/09
apr/09
feb/10
apr/10
oct/09
Jun-09
09
Jun-10
10
aug/09
aug/10
dec/09
apr/09
feb/10
apr/10
oct/09
International Market Brazilian Market International Market Brazilian Market
Resins prices show signs of recovery in the international market
Recovery expected already in August
Source: CMAI 28
29. Market trend
Braskem consolidated sales evolution of
3Q10 trend in the Brazilian market
thermoplastic resins (1) – Brazilian market
Volume Price Revenue Cost
Resins sales evolution (kton)
PP
PE
PVC
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
Source: Braskem estimates and ABIQUIM. (1) 2009 and 1Q10 pro forma data. 29
30. Leverage ratio falls below 3x
for the first time since the acquisition
In R$ million (06/30/10)
Net Debt / EBITDA Net Debt / EBITDA
Gross Debt: 14,384 (million of R$) (million of US$)
Net Debt: 10,909 -9%
3.12x 3.23x -12%
Average Term: 8.2 years 2.84x 2.84x
64% of debt is pegged to USD
Mar 10 Jun 10 Mar 10 Jun 10
* After capital increase of R$3.74 bi and
3,475 disbursement of Quattor and Sunoco acquisitions
1.197
16% 16%
13%
12% 12%
2.346 2.346 9% 9% 9%
1.889
2.278 1.731 1.631
4% 1.299 1.315
1.296
584
06/30/10 2010 2011 2012 2013 2014 2015 2016/ 2018/ 2020
Cash 2017 2019 onwards
Invested in R$
Invested in US$
Source: Braskem 30
31. Braskem: Ratings confirmed
after acquisition
RATING Post-Acquisitions
Upgrade Conditions:
‣ Maintenance of high liquidity (cash or equivalents - stand-
+ by) above R$3 billion. Cash above R$3 billion since
Ba3 BBB- Dec/2008.
- Investment Grade
Jan/09 May/09 +
‣ Capitalization of Braskem as pre-condition for acquisition.
Ba1 BB+ Shareholder movements;
stable
Mar/09 -
Jan&Feb/10 ‣ Successful integration with capture of synergies and
increase in cash generation;
Ba2 BB The acquisitions: ‣ Decrease in Net Debt/EBITDA ratio expected to 2.5x. In
‣ Strengthened strategic positioning; first post-acquisition quarter we already reduced this ratio
from 3.46x to 3.12x. In 2Q10 we reduced to 2.84x.
Ba3 BB- ‣ Increased # of plants, sites and geographic diversification;
‣ Diversification of raw material mix;
‣ More disciplined and less volatile domestic market ;
B1 B+
‣ High governance standards;
‣ Petrobras participation.
2009 2010
Braskem Ratings (National Scale) Braskem Ratings (Global Scale)
Moody’s Aa2.br / Stable Outlook Moody’s Ba1 / Stable Outlook
Fitch AA / Stable Outlook Fitch BB+ / Stable Outlook
S&P AA+ / Stable Outlook S&P 31
BB+ / Stable Outlook
Source: Braskem
32. Agenda
Braskem
A global player
Acquisitions: opportunities and challenges
Project pipeline: growth with value creation
Braskem consolidated
The petrochemical industry
Final considerations
32
33. Outlook on the global petrochemical
industry
Ethylene: Operating rate 1H10
000 ton Industry at 1H2010
20,000 90 89 89 Producers already responded to the
84 86 86 84
83 82
81
demand slowdown in 2Q10 by
15,000 79
77 reducing the operating rates
10,000 Competitive cost base allows the US
5,000
to operate at higher rates than other
regions
0 Braskem back to operate at a rate
Europe N. America Asia M. East World Braskem above world average in 2Q10
Capacity 2Q Operating rate 2Q10 (%)
Operating rate 1Q10 (%)
Global Scenario
Ethylene: Supply and Demand Balance New capacity additions can lead to
000 ton the closing down of non competitive
200,000
88.4
90.5 assets on a permanent basis,
87.0
83.8 83.1
especially in Europe and US
150,000
80.4
Global economic outlook volatility
100,000 versus petrochemicals demand
50,000 Expectation of improvement in the
industry profitability as of 2H11
0
2009 2010e 2011e 2012e 2013e 2014e
Capacity Demand Operating Rate 2010e (%)
Source: CMAI 33
34. 2010 Ethylene capacity additions
Additional Effective
Region Company Start up
Capacity 2010 Capacity 2010*
Middle East Morvarid PC 334 2Q10 208 New players are located in
Middle East RLOC 975 2Q10 / 3Q10 650 Middle East (38%) and Asia
Middle East Kayan 300 4Q10 300 (59%)
Middle East Petro-Rabigh 325 1Q10 325
Middle East SHARQ 1,100 2Q10 800 Feedstock matrix of the
Middle East Yansab 433 1Q10 108 new capacities:51%
Middle East Borouge 700 3Q10 650 naphtha and 49% gas
Asia Baotou Shenhua 100 3Q10 100
Asia CNOOC & Shell PC 150 2Q10 150
Delays already reduced in
Asia Dushanzi PC 667 2009 667
18% the start up of new
capacity for the year
Asia Fujian Ref & Chem 533 2009 533
Asia Panjin Ethylene 450 2Q10 305 A demand growth of 4.5
Asia Secco 150 2009 150 million tons of ethylene is
Asia Shenyang Paraffin 87 2009 87 expected in 2010, up by 4%
Asia SINOPEC/SABIC Tianjin PC 1,000 1Q10 / 3Q10 750 compared to 2009
Asia ZRCC 750 2Q10 750
Asia JX Nippon Oil & Energy Corp. 220 3Q10 220 Delays and learning curve
Asia LG Chem 75 2009 75 from the commissioned
Asia YNCC 33 2009 33 plants shall positively
Asia Shell Chemical 667 2Q10 667 impact the 2010
Asia MOC 675 2Q10 675 supply/demand balance
Asia PTT Polyethylene 917 3Q10 500
Others 275 275
TOTAL 10,916 8,978
-18%
Source: CMAI / Parpinelli / Braskem Analysis * Estimated data. Does not consider the plants operating rates and possible additional delays. 34
35. Brazil’s macroeconomic outlook
Annual real GDP growth
• Brazil’s economy is still relatively closed, with exports 9,0% 7,8%
corresponding to 14% of GDP, distributed among 8,0%
7,0% 6,1%
various trade partners.
6,0% 4,7% 4,6%
4,5% 4,5% 4,5%
5,0%
3,5%
• Strong external solvency ratings and floating exchange 4,0% 5,2%
4,4% 4,3% 4,3%
3,0%
rate system curbed speculation against the BRL during 1,3%
2,0%
the crisis. 1,0% -0,2%
0,0%
• Brazil’s banking system is well capitalized and highly -1,0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
regulated.
Real GDP On August 2010 On December 2009
• Household consumption corresponds to 61% of GDP,
while government consumption corresponds to 20%.
GDP is highly influenced by consumer behavior, which Average monthly income (March 2002 = base 100)
has been driven by growth in average income levels.
180
• Brazil is still an unleveraged economy, but with 160
growing access to credit (the ratio of available credit
to GDP is currently 45% and is expected to increase to 140
49% in 2010), which ultimately spurs consumption. 120
100
80
Average Income
Rendimento Médio
Source: Santander 35
37. Consumer driven
Braskem’s domestic sales breakdown in 1H10
HYGIENE AND CLEANING
COSMETICS AND PHARMACEUTICALS
CONSUMER GOODS 9% AUTOMOTIVE
3%
13% 6%
RETAIL
6%
14% CONSTRUCTION
3% ELECTRIC AND ELECTRONIC
FOOD PACKAGING 4%
28% 4% INDUSTRIAL
5% INFRASTRUCTURE
4%2% AGRIBUSINESS
OTHERS
CHEMICALS AND AGROCHEMICALS
Source: Braskem / Abiquim 37
38. Market development
Construction of light slabs using Parts for tractors, harvesters and
polypropylene spheres. tools migrating to PE rotational
molding.
BUBBLEDECK Agro-machinery
Substitutes concrete wells for a
Project developed with Unipac and rotation-molded structure. Support from
Toyota-Tsusho. Flooring that allows CNO and partners Asperbras, Fortlev and
water permeability. Brinquedos Bandeirante
CROSSWAVE
Manholes
Substitution of asbestos by PP Substitution of fiberglass tanks for
fibers with fiber-cement volumes greater than 2,000 l.
reinforcement.
FIBER-CEMENT Large Tanks
New washer molds, with PP cabinets Plastic silos for grain storage.
(replacing steel) in final validation Partnership with Suzuki.
stage.
TRAVELING Silo Bags
BLOCK
38
39. Agenda
Braskem
A global player
Acquisitions: opportunities and challenges
Project pipeline: growth with value creation
Braskem consolidated
The petrochemical industry
Final considerations
39
40. Why Braskem?
Pr/share BRKM5 Performance
35
30 Consolidated (R$ billion) 2Q10 Multiple
25 EBITDA LTM 3.8 3.8
20 Synergies to 2012 4.2
+ Market Capitalization 13.3 18.8
15
EV 24.2 29.7
10
EV/EBITDA 6.3x 7.0x**
5 Price per share 16.6* 23.6
0 Proj. NPV to 2012 > R$1.12 bi
jan-02 jan-03 jan-04 jan-05 jan-06 jan-07 jan-08 jan-09 jan-10 Value added by projects to
share price 1.40
R$ US$
*BRKM5 as of 9/29/10 ** Peer Multiple 2010.
Largest thermoplastic resin producer in the Americas Source: Bloomberg.
Leader of important projects in Latin America with
competitive raw materials
Emerging consumer market with potential per-capita growth Huge potential for value creation
as additional driver
EBITDA increase
Above-peer profitability
Access to one of the world’s largest consumer markets EV/EBITDA multiple below
following the U.S. acquisition peers’ multiple (6-7x)
Successful trajectory of organic growth and acquisitions
Shareholders hold long-term view with strategic synergies
for growth and value creation
Leader in green chemicals
40
45. Resins demand by region
2010 Resins (PE, PP, PVC) Demand by region
Africa
3%
China Europe
27% 18%
North America
17%
Asia ex-China
23%
South America
6%
Middle East
6%
The Brazilian demand for resins represents 3% of global demand
Source: CMAI, June 2010 45
46. Ownership Structure
Leveraging relationship with Petrobras
% Capital Votante % Capital Total
Odebrecht* Petrobras* BNDESPAR Outros (1)
50,1 % 38,3% 47,0% 35,8% 0,0% 5,5% 2,9% 20,2%
(1) Does not include shares held in treasury
Leveraging relationship with Petrobras: NOC alliance
• Potential for operational synergies with refineries and partnership with
Petrobras R&D Center
• Alliance to strengthen Brazil’s petrochemical value chain
– Access to competitive raw materials
– Improved value chain competitiveness
• Corporate governance standards: Shareholders’ agreement
Source: Braskem, as of August 31, 2010. 46
47. Corporate Governance post acquisition
Odebrecht as the controlling shareholder, with all results fully consolidated,
reinforcing Braskem’s condition as a publicly traded private company;
Braskem executives entrusted with the Company’s management and business plan,
approved by a simple majority of the Board of Directors;
Sharing of strategic decisions, with consensus approval by Board of Directors, including
for:
– divestments greater than 10% of long-term assets
– acquisitions greater than 30% of long-term assets
Board of Directors with 11 members, out of which 1 is independent:
– Odebrecht nominates Chairman of the Board, CEO and CFO
– Petrobras nominates Vice Chairman of the Board, the Chief Investments and Portfolio
Officers
Investment decisions based on objective criteria for returns and profitability, such as
project IRR and NPV.
Clear financial policy that stipulates the strict conditions, with derivatives used solely
for hedging;
Being the sole vehicle for petrochemicals investments gives Braskem the right to:
- Act as the leader for all investments identified by Petrobras that are of interest to
Braskem;
- If not interested, the right to sell the products.
47
48. Increase in Quattor capacity operating
rate positively impacted 2Q10
Braskem consolidated operating rate %
Ethylene Polyethylene Polypropylene PVC
92%* 89% 95% 98%
87%
84% 81%* 76% 83% 83% 79% 81%
2Q09 1Q10 2Q10 2Q09 1Q10 2Q10 2Q09 1Q10 2Q10 2Q09 1Q10 2Q10
Quattor better performance:
12 pp growth in ethylene operating rate – 83% in 2Q10 versus 71% in 1Q10
15 pp growth in PE operating rate – 76% in 2Q10 versus 61% in 1Q10
Crackers and 2nd generation plants, in general, show recovery of operating level in 2Q10
Scheduled shutdown in Camaçari affected PVC operating rate in 2Q10
Source: Braskem * 2009 data does not include the 200 kton expansion in Quattor 48
50. Revenues breakdown – 2Q10
Net Revenue by Product(1)
(2Q10)
Others 7%
Fuel 4%
ETBE 2%
Cumene 3%
BTX* 8%
Butadiene 4%
Propylene 4% Resins 62%
Ethylene 5%
1 Does notinclude nafta/ condensate/crude oil processing and QuantiQ sales
* Benzene, Toluene, Paraxylene and Orthoxylene
Source: Braskem 50
51. COGS breakdown – 2Q10
COGS 2Q10 (1)
Others 1.0% Deprec / Amort
Services 1.7% 6.3%
Labor 3.5%
Other Variable
Costs 6.9%
Natural Gas 2.5%
Electric Energy
4.6% Naphtha 56.6%
Gas 16.8%
1Does not include naphtha / condensate / crude oil processing and costs of
Quantiq
Source: Braskem 51
52. Exports Destination – 2Q10
Exports Destination (2Q10)
Asia 6% Others 1%
Europe 16%
North
America 44%
South
America 27%
Central
America 6%
The Export Market represents 32% of Company’s Net Revenue.
Source: Braskem 52
53. EBITDA Trends
1Q10 Pro Forma vs. 2Q10
The better domestic prices through May, following the R$ million
international market, offset the higher raw material prices in
2Q10
FX Impact on
26 Costs
FX Impact
-38
on Revenue
213
(5) 1,042
(12)
(20) (43)
909
EBITDA Contribution Volume FX Fixed Costs + Others EBITDA
1Q10 Margin SG&A 2Q10
Source: Braskem 53
54. Outstanding Bonds & Outstanding Ratings
Coupon Yield *
Outstanding Bonds Maturity
(% p.a.) (% p.a.)
US$250 MM Jan/2014 11.750 3.8
US$250 MM Jun/2015 9.375 4.6
US$275 MM Jan/2017 8.000 5.6
US$500 MM Jun/2018 7.250 5.9
US$750 MM May/2020 7.000 6.0
US$150 MM Perpetual 9.750 9.5
US$200 MM Perpetual 9.000 8.9
US$450 MM Perpetual 7.375 7.4
* As of September, 30th
Corporate Credit Rating – Global Scale
Agency Rating Outlook Reviewed in
Fitch Ratings BB+ Stable 03/02/2009
S&P BB+ Stable 05/28/2009
Moody’s Ba1 Stable 05/21/2009
54
Source: Braskem / Bloomberg
55. Covenants
Net Debt / Ebitda (x)
RATIO
Net Debt / EBITDA US$ R$
2.84 2.84
< 4.5X
Jun 10 Jun 10
Facility Amount* Jun 10 Currency Type
2010 and 2011
R$800 MM R$500 MM R$ Incurrence*
Debentures
2014 Medium Term
US$250 MM R$250 MM R$ Incurrence*
Notes
Nippon Export and
US$80 MM US$49 MM US$ Maintenance
Investment Insurance
EPP (Export Pre-
Pre-
US$725 MM US$625 MM US$ Maintenance
Payment)
*The company is prevented from issuing any new debt for the period if it overcomes
the 4.5x Net debt / Ebitda ratio.
55
Source: Braskem
56. Applied Innovation and technology to
strengthen value chain competitiveness
Structured resource base to support client needs
Focus on product and
application
Over US$ 330 million in R&D assets development
More than 190 researchers 18% of resin sales
derive from products
8 pilot plants developed in the last
three years
More than 260 patents filed worldwide
Focus on clients’ end
Partnership with universities and R&D centers in users
Brazil and abroad
Targeted initiatives for
breakthrough
technology
Intelligent packaging
Renewable products
56
56
Source: Braskem
57. Sustainable development
Sustainable Development:
A way of doing businesses to satisfy all Results
stakeholders, today and in the future
2002 Public Commitment Acknowledgements
2005, 2006, 2007, 2008, 2009
Responsibe
Care ISO 14.001*
OHSAS 18.001**
57
58. Health, Safety and Environmental Results
Strong Improvement since 2002
Total Recordable Cases Accidents Rate Effluents Water Consumption
(employees and contractors – 1.000.000 mh) (m3/t) (m3/t)
-54% -27%
5.12 -83% 2.71 5.49
2002 2002 2002
0.88 1.23 4.02
2009 Brazil CI: 2.8 2009 World CI: 27.8 2009
Brazil CI: 11.8
Lost Time Cases Accidents Rate Solid & Liquid Residues Energy Consumption
(employees and contractors – 1.000.000 mh) (kg/t) (GJ/t)
0.85 -79 % 9.93 -72% 11.96 -6%
2002
2002 2002
0.18 2.76 11.22
World CI: 3.9 2009 Brazil CI: 11.9 2009 Brazil CI: 7.4 2009
2008 Brazilian Chemical Industry data (Abiquim 2009)
Source: Braskem 2007 World Chemical Industry data (ICCA, 2009) 58