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CS LatAm Equity Conference 2010
Forward-looking Statements
This presentation contains forward-looking statements. These statements do not
represent historical fact, but rather reflect the beliefs and expectations of
Braskem’s management. The words “anticipate”, “wish”, “expect”, “estimate”,
“intend”, “forecast”, “plan”, “predict”, “project”, “target” and similar words
are intended to identify these statements. Although Braskem believes that the
expectations and assumptions reflected by these forward-looking statements are
reasonable and based on information currently available to management,
2
reasonable and based on information currently available to management,
Braskem cannot guarantee future results or events.
The forward-looking statements in this presentation are valid only on the date
they are made (September 30, 2009) 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.
Agenda
Quattor acquisition
Strategic direction
Braskem post transaction
Key differentiators
The petrochemical industry
Leader in the Americas, rank
among the 5 largest
petrochemical companies
worldwide measures by EV*
and to be positioned as the
Strategic directionVision 2020 Braskem
and to be positioned as the
preferred partner for global
alliances
* Enterprise Value 4Source: Braskem
Feedstock and energy availability at
competitive costs
Quattor acquisition strongly aligned to
the strategic drivers of the Company
Strategic drivers
Defense of business in Latin America
International expansion in attractive markets
Business differentiation
Diversification of products and business
5Source: Braskem
Agenda
Quattor acquisition
Strategic direction
Braskem post transaction
Key differentiators
The petrochemical industry
Braskem overview
Key Financials 2009 LTM*:
Net Revenue R$ 15.3 billion
EBITDA R$ 2.4 billion
Net Result R$ (328) million
* Last 12 months
Ethylene and resins capacity (kton/y)
1,090
510
6,127
17 petrochemical plants with 1st and 2nd
generations integrated: states of BA, RS, AL, SP (non integrated)
Listed in 3 stock exchanges: BM&FBovespa, NYSE and Latibex
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Profile:
Source: Braskem
* Last 12 months
2,532
1,995
1,090
PVC
PP
PE
Ethylene
Quattor overview
Key Financials 2009 LTM*:
Net Revenue R$ 4.1 billion
EBITDA R$ 462 million
Net Result R$ (256) million
* Last 12 months
Ethylene and resins capacity (kton/y)
3,155
8
Profile:
9 petrochemical plants with 1st and 2nd
generations partially integrated: states of SP, RJ
Private company
Source: Braskem / Company estimates / Quattor
* Last 12 months
1,240
1,040
875
PP
PE
Ethylene
Geographic Complementarities
MaceióMarechal Deodoro
� Country region with the highest
availability of feedstock
� Quattor assets are located in
the SE region;
� The southeast region has the
Complementation and
geographic diversification
Greenfields
Industrial Footprint
Camaçari
Triunfo
MauáPaulínia
Duque de Caxias
� The southeast region has the
largest thermoplastic resins
domestic consumption;
� The privileged location of
Quattor assets represents low
logistics costs on the transport
of products to the final resin
consumers.
Benefits and strategic drivers
� Creation of a world scale player
� Diversification of feedstock supply
� Scale increase and geographic complementarities
� Strengthening of the production chain – petrochemicals and plastics
� Balanced capital structure
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� Value creation for all shareholders
Consolidation of Odebrecht and Petrobras shares in their activities in the
petrochemical sector, strengthening Braskem and the Brazilian production
chain to compete in the international market and ensuring the basis for
global growth, consolidating the leadership in the Americas
Transaction stages (1/2)
1. Creation of BRK Investimentos Petroquímicos SA (BRK) holding Braskem’s common shares from Odebrecht (ODB) and Petroquisa (PTB), followed by a capital increase of R$ 3,5 billion, R$ 1 billion from ODB and R$ 2.5 billion from PTB
BRK
ODB PTB
66,8% 33,2%
BRK
ODB PTB
53.8% 46.2%
AportesODB/PTB
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2. Braskem capital increase through Private Offer between R$ 4.5 billion and R$ 5 billion, with a minimum subscription of R$ 3.5 billion assured by BRK. The Offer share price will be R$ 14.40 per share
3. Braskem acquires Unipar 60% stake of Quattor Participações for R$ 647.3 million in addition to suceed Unipar in a liability with BNDESPAR
Transaction stages (2/2)
4. Braskem merges Quattor shares, consolidating Petrobras/Petroquisa 40% interest in Braskem:
QuattorParticipações
100%
94,11% 65,98% 99,3%
Braskem
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5. Braskem acquires 33.3% of Polibutenos and 100% of Unipar Comercial for R$ 52.7 million
These steps of the transaction are expected to be concluded in 120 days
QQuímica RioPol QPetroquímica
94,11% 65,98% 99,3%
9,02%5,89%25,00% RioPol
permanecem com
BNDESPar
Assets to be acquired
50.0% 33.3% 100.0%
Participações
60.0%
Direct Subsidiaries
40.0%
13
�25.00% of RioPol
remains with
BNDESParSource: Quattor
9.02%
99.30%
Divisão Qu
65.98%
Petroquímica
94.11%
ímica
5.89%
Química
Agenda
Quattor acquisition
Strategic direction
Braskem post transaction
Key differentiators
The petrochemical industry
Braskem post transaction
Key Financials (2009 LTM* ProForma):
Gross Revenue R$ 25.8 billion
Net Revenue R$ 19.4 billion
EBITDA R$ 2.9 billion
Total Assets R$ 33.5 billion
Resins capacity (kton/y)
510
5,510
*LTM: oct/08 to sep/09
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Profile:
Source: Braskem / Company estimates
26 petrochemical plants with 1st and 2nd
generations integration: States of BA, RS, AL, SP, RJ
Listed in 3 stock exchanges: BM&FBovespa, NYSE and Latibex
3,035
1,965 PVC
PP
PE
*LTM: oct/08 to sep/09
� Naphtha cracker
� PE
� PVC
� Chlorine – Soda
� PP
� PVC
� Chlorine - Soda
AL
26 Plants in 5 states
- 17 Braskem plants
- 9 Quattor plants
Assets location overview
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BA
RS
AL
� Naphtha cracker
� Green Ethylene
� PE
� PP
- 9 Quattor plants
� Naphtha and LRH cracker
� PE
� PP
� PVC
� Gas (ethane and propane) cracker
� PE
� PP
QUATTOR ASSETS
RJ
SP
PROXIMITY OF THE CONSUMER MARKET
Quattor acquisition places Braskem as #1 resins producer in the Americas...
Production capacity of resins in the Americas, kton/y2009 basis
4th
1st
1,965
1,230 627
510
5,510
4,827
3,595
4,256
3,082
5,307
Source: Braskem / CMAI / Barclays / Parpinelli Tecnon 17
Braskem post
transaction
Exxon Mobil
Dow Lyondell Basell
Braskem Formosa Shintech Chevron Philips
Quattor
3,035
4,077 4,200
2,525 1,995
1,050
2,311
1,040
1,731
1,090
822 875
510
1,210
2,340
PVC
PP
PE
3,082
2,340 2,311
1,915
10,914
9,3118,668
7,749 7,284 7,1096,541
4,681 4,564 4,303 4,0793,595
1,915
... and in the global ranking, one of the Top 10 in resins
Production capacity of resins (PE, PP, PVC) worldwide, kton/y
12th
19th
2009 basis
Lyondell
Basell
Exxon
Mobil
SINOPEC Dow Formosa SABIC Ineos Total IPIC Reliance PetroChina Braskem Quattor
Lyondell
Basell
Exxon
Mobil
SINOPEC Dow Formosa SABIC Ineos Braskem
post
transaction
10,914
9,3118,668
7,749 7,284 7,1096,541
5,510
8th Braskempost
transaction
Source: Braskem / CMAI / Barclays / Parpinelli Tecnon 18
Diversity and competitiveness of feedstock to compete globally
Feedstock profile (2009*) Refinery Propylene
�USGC international reference with competitive prices
�Petrobras as main supplier
Naphtha/Condensate
�72% of Petrobras naphtha supplied at competitive pricing formula
�28% of purchases via imports46%
92%76%
17%
8%
13%37%
11%
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28% of purchases via imports
Gas
�100% of Petrobras gas supplied with competitive prices in relation to international references
Ethanol
�Matrix with a greater balance and diversification
�Competitive gas pricing in relation to the international reference
(1) Ethane, Propane and LRH(2) Includes naphtha and condensate
Quattor Braskem Braskempost transaction
46%
Liquid (2) Propylene Gas (1)
Concerns with Corporate Governance
� Braskem as a public company - Odebrecht as the controlling shareholder of the company
� Operational issues to be addressed by Braskem Executive Officers
� Sharing of strategic decisions (Board consensus), such as:
� Assets sales, acquisitions, investments etc
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� Professional management - CEO chosen by Odebrecht and executive officers chosen by CEO, with Petrobras nominating 2 out of 8
� Preferred partner for investments in the industry, exclusive choice in Latin America –Peru, COMPERJ, Suape, etc.
� Board of Directors with 11 members, out of which 1 is not nominated by the controlling shareholders
ProFormaSep 09
Estimated Capital Increase R$4.5bi -
Acquisitions
Estimated Capital Increase R$5bi -Acquisitions
Availabilities 4,274 8,074 8,574
Capital structure post transaction
� High liquidity, with availability around R$9 billion
� Capital structure with leverage (net debt/EBITDA) around 3x
� Opportunity to extend maturities and reduce the cost of debt through renegotiation
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Gross Debt 17,470 17,470 17,470
Net Debt 13,197 9,397 8,897
Net Debt / EBITDA 4.55x 3.24x 3.07x
Shareholders’ equity
7,270 11,770 12,270
8,774
Braskem debt profile post transaction
� Short term cash balance of Braskem post transaction, without any capital injection, is enough to amortize debts maturing in 2009 and 2010
In R$ million
R$4.5 bi
Consolidated Debt
No injection R$4.5 bi injection
Cash 4,274 8,774
Gross Debt 17,470 17,470
Net Debt 13,197 8,697
Consolidated Debt Profile (R$ million)
R$ 47%
US$53%
Cash andEquivalents
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 + Perp.
752 1,204
1,644 1,254 1,202
796 333 69
494
1,144 728
1,556
1,264 1,086
620
601 447
123
Braskem Debt (sep/09) Quattor Debt (sep/09)*
1,896
1,140
516
934
1,416
2,2882,518
3,200
1,932
900
156
617
22
Average Term: 7.1 years
R$4.5 bi injection
R$3.5bi injection
4,274 3,828>
* Braskem Estimates
Partnership in new projects
All corporate
and contractual
instruments
� 700 kton/y PTA
� 450 kton/y PET
� 240 kton/y textiles polymers
� Suape: integration of the
petrochemical Complex
businesses into the Company
assets
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instruments
shall be signed
within 120
days.
� 860 kton/y PE
� 850 kton/y PP
� 500 kton/y PTA
� 600 kton/y PET
� 700 kton/y PTX
� 608 kton/y Benzene
� 157 kton/y Butadiene
� Comperj: production and
marketing of resins and basic
petrochemicals
� Maintaining financial solidity
Growth combined with improved competitiveness
• Venezuela (JVs with Pequiven with equal ownership) – Under Review:
• Green PE: - 200 kton/y of green PE
- Ethylene made from 100% renewable raw material, with sugarcane ethanol used as feedstock
- Investments of R$ 488 million and startup expected for the end of 2010
- Financing package with BNDES approved in May/09
- 70% of the ethanol volume required on final contract negotiation
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• Polipropileno del Sur (Propilsur)
- 450 kton/y of PP
- Startup in 2013 and investments estimated at US$1.2 billion
- Front end engineering design (FEED) at its final stage, EPC contract negotiation and financing structure
with the ECA´s and multilaterals in progress
• Polietilenos de America (Polimerica)
- 1.3 Mton of ethylene and 1.1 Mton/y of PE
- Integrated project using the natural gas available in Venezuela as feedstock
- Startup in 2014 and investments estimated at US$3.25 billion
- Technology license agreements signed for the PE plants and 79% of the PE Project Design Packages
(PDPs) concluded
Source: Braskem
Growth combined with improved competitiveness
• Mexico:• Project Ethylene XXI
- Partnership with the Mexican group IDESA for the acquisition of ethane from PEMEX to be
used as feedstock for an integrated petrochemical project
- 1 Mtons/y of ethylene and 1 Mtons/y of PE
- Investment initially estimated in up to US$ 2.5 billion over the course of 5 years, planned to be
financed by a project finance model with 70% debt and 30% equity
• PVC Alagoas:
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• PVC Alagoas: - 210 kton/y of PVC capacity expansion in Alagoas, Brazil
- Investments around US$500 million and startup expected for the second half of 2012
Source: Braskem
• Peru: - Braskem, Petrobras and PetroPerú concluded studies for the technical and economic pre-
feasibility phase of an integrated project to produce 600 kton to 1.000 kton/y using the natural
gas available in Peru as feedstock
Agenda
Quattor acquisition
Strategic direction
Braskem post transaction
Key differentiators
The petrochemical industry
Brazil: dynamic market with still low per capita consumption
Brazil:
76
68
57
• PE, PP and PVC per capita consumption(Kg per person)
27
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
PE PP PVC27
* Compound annual growth rate Source: CMAI
11.112.5 13.6
14.5 15.416.2 16.6 16.1
17.8 17.518.7 18.0
20.2
22.7
USA Europe Japan
5.2%CAGR*
21.9
In Brazil, companies are exposed to a dynamic market with resilient growth
• Domestic demand for resins (Kton/y)
856 9823,696
4,048
5.4%CAGR
10%
9%4,172
3%
3,435 3,377
28Source: Abiquim – domestic sales + imports Source: NAD - CMAI
1,695 1,833 1,964 1,972
9901,114
1,228 1,218
692
749
2001 2004 2005 2006 2007 2008
PE PP PVC
3,435
2,880
3,377
Structured resource base to support client needs
�Over US$ 190 million in R&D assets
�> 170 researchers
�8 pilot plants
Applied Innovation and technology to strengthen value chain competitiveness
� Focus on product and application development
– 18% of resin sales derive from products developed in the last three years
29
�8 pilot plants
�> 240 patents filed
worldwide
�Partnership with universities and R&D centers in
Brazil and abroad
29
years
– Focus on clients’ end users
� Targeted initiatives for breakthrough technology
– Intelligent packaging
– Renewables
Source: Braskem
Agenda
Quattor acquisition
Strategic direction
Braskem post transaction
Key differentiators
The petrochemical industry
Points of concern
• Uncertainty regarding the extent of the global economic recovery
• Incentives to sustain supply buildup
– China: import substitution
– Middle East own agenda
• Stronger activity of capital investors in the commodity market
Supply & Demand
Global ethylene supply-demand and operating rate (Mton/y, %)
Petrochemical CycleGood naphtha x resins spreads even with lower ethylene utilization rate
130134
140 143 146 148
111 112 115120
127134
86
8383
84
87
91
31
694
626
688702
638
750751717
474
528562
609
77
91
84
91
77
Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09Spread HDPE/Naphtha Utilization rate
79
3Q09 Estimated utilization rate
77
Potential positive factors
Supply & Demand Balance
Source: CMAI
• Frequent delays in new capacities
• Operational and logistics problems
• Increased economic importance of emerging countries with relevant domestic consumption, as Brazil and China
• Supply-demand geographical imbalance leads to logistics barriers
• Opportunities from assets on sale
• Limited utilization rates helps to balance the market
Spread HDPE/Naphtha X Ethylene utilization rate (US$/ton, %)
2008 2009 2010 2011 2012 2013
Supply Demand Utilization Rate CMAI - May/09
05,00010,00015,00020,00025,00030,00035,00040,00045,000
North Europe Middle Asia
82%77%
67%
88%
12 million tons of ethylene capacity lost in USA and Europe
• Lower global demand
growth and new
capacity additions
expected to come on
stream limiting the
2009 expected utilization rate: Kton
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North
America
Europe Middle
East
Asia
Nameplate Capacity Effective Production
utilization rates of the
actual players
• New capacity additions
could be delayed
New ethylene capacity additions globally (Mton):
Source: Parpinelli Tecnon / CMAI / SRI
0
2
4
6
8
10
12
2009 2010 2011 2012 2013
Delayed
Go ahead
Major ethylene capacity additions in 2009: 9.5 Mtons of nameplate capacity in Asia and Middle East, of which 4.5 Mtons effectively operating
Country Company Startup
Effective capacity
in 2009 (Kton)
Nameplate
Capacity (Kton)
Kuwait TKOC 1Q09 850 850
Saudi Arabia Petro-Rabigh 2Q09 975 1,300
Saudi Arabia Yansab 3Q09 867 1,300
Qatar RLOC 3Q09 325 1,300
China Fujian Ref & Chem 3Q09 400 800
China Secco 3Q09 150 300
Saudi Arabia SHARQ 4Q09 100 1,200
China Dushanzi PC 4Q09 417 1,000
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4,040 4,0333,083
2,475
1,450
3,832
1,240
202
888
2009 2010 2011
China
Asia ex-China
Middle East
Source: CMAI / updated in Oct 30th.
Total ethylene capacity
additions (kton)
5,130
10,340
5,773
China Dushanzi PC 4Q09 417 1,000
Thailand PTT Polyethylene 4Q09 250 1,000
China Panjin Ethylene 4Q09 113 450
4,447 9,500
World indicative ethylene cash costs
34Source: CMAI
Management’s main priorities
� Implementation of the Quattor Transaction
� Analysis of the Transaction by CADE
� Continued strengthening of long-term relationship with Clients
� Prioritizing financial health and liquidity
35
Financial strength and respect for minority shareholdersFinancial strength and respect for minority shareholdersOpportunities for internationalizationOpportunities for internationalization
Prioritizing financial health and liquidity
� Construction of Green PE plant
� Projects in Latin America: competitive feedstock
� Selective acquisitions in North America
CS LatAm Equity Conference 2010