Download - Braskem presentation 4_q07_20091201_en
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José Carlos Grubisich
4Q07 Results Conference Call
Carlos Fadigas
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Forward-looking Statements
This presentation contains forward-looking statements. Such statements are not
statements of historical facts, and reflect the beliefs and expectations of Braskem’s
management. The words “anticipates”, “wishes”, “expects”, “estimates”, “intends”,
“forecasts”, “plans”, “predicts”, “projects”, “targets” and similar words are intended
to identify these statements. Although Braskem believes that expectations and
assumptions reflected in the forward-looking statements are reasonable based on
information currently available to Braskem’s management, Braskem cannot guarantee
future results or events.
Forward-looking statements included in this presentation speak only as of the date
they are made (December 31, 2007), and the Company does not undertake any
obligation to update them in light of new information or future developments.
Braskem shall not be responsible for any transaction or investment decisions that are
taken based on information included in this presentation.
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Braskem: 2007 Highlights
• Consolidation of the Brazilian Petrochemical Industry
– Acquisition of petrochemical assets of Ipiranga Group and Copesul
– Delisting of Copesul and cancellation of its registration as publicly-held
company
– Investment Agreement with Petrobras
• Operating and Financial Performance
– 10% growth in the Brazilian resins market (PE, PP and PVC)
– Record resins production and sales in 2007
– Gross revenue reaches R$ 24 billion (US$ 12,3 billion)
– EBITDA of R$ 3.2 billion (US$ 1.6 billion)
– Net Income before minority interest is nearly R$ 1 billion
– Net income after minority interest reaches R$ 568 million
• Dividend Payment of R$ 278.5 million
• Braskem rating upgraded in global scale
– S&P raises rating and Fitch upgrades outlook for Braskem. Moody’s
initiates rating
– Braskem is 1 notch from Investment Grade
• Petroquímica Paulínia operations startup in March 2008
• Growth projects move forward
– Venezuela (450 Kton of polypropylene and 1,100 Kton of polyethylene)
• Joint Ventures created
• Approval of initial investment of US$ 90 million throughout 2008-2009
period
• Innovation & Technology
– In 2007, certification of the first Green Polyethylene in the world – from
sugarcane ethanol – Annual capacity of 200 kton
– Conversion of MTBE units into ETBE units from ethanol
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Braskem: 2007 Highlights
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Braskem:Record resins production and high capacity utilization rates
4Q07
95%
3Q07
96%
pp
88%
PE
3Q07 4Q07
PVC
94%89%
3Q07 4Q074Q073Q07
Ethylene
92%94%93%
Source: Braskem
Resins Production Kton
4Q06 4Q06 4Q064Q06
99%
94%
86%
93%
Utilization Rates %
20072006
2,7402,824
+3.1%
Record annual
production in 2007
=> 2,824 Kton
4Q074Q06
691702
+1.6%
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BraskemRecord resins sales and strengthening of market leadership
*Domestic Sales + Imports
Source: Braskem / Abiquim
Domestic Sales 4Q06 x 4Q07 % Resins Market Share 4Q07
+40%
+ 23 %
+32%+ 33%
+24%
PVCPP Braskem
ResinsPE Brazilian
Market *
Others
Imports
30%
52%
18%
1,932
2,089
2006 2007
Braskem Resins Export Kton
+8%
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Braskem:Improvement in key indicators
21,55023.870
Gross Revenue R$ million Net Revenue R$ million
16,969
18,825
Exports US$ million
2,065
2,311
2006 2007
EBITDA R$ million
3,177
3,023957
Income before Minor. Interests R$ million
2006 20072006 2007
2006 20072006 2007
564
Source: Braskem
+11%+11% +12%
+5%+70%
568
Income after Minor. Interests R$ milhões
2006 2007
117+385%
8
755
3Q07 4Q07PricesFixed
costs/
SG&A
VolumeExchange
Rate
Source: Braskem
(119)
R$ millionForeign Exchange
impact on costs
Foreign
Exchange
impact on
revenue
Feedstocks
(335)
412
(28)
Others
(3)
(317)
198
Braskem: EBITDA EvolutionCommercial strategy minimizes impact of both Naphtha price increases
and Exchange Rate
648(34)
9Source: Braskem
Braskem: Financial Performance Income before minority interest was approximately R$ 1 billion
R$ million
4Q07 4Q06 Chg % 2007 2006
(A) (B) (A)/(B) (C) (D)
Net Revenue 4,809 4,223 14% 18,825 16,969
EBITDA 648 938 -31% 3,177 3,023
EBITDA Margin 13.5% 22.2% -8.7 pp 16.9% 17.8%
Net Financial Result (54) (260) -79% (284) (1,013)
Net Income before Minority Interest 25 208 957 564
Main Financial IndicatorsChg %
(C)/(D)
11%
5%
-0.9 pp
-72%
70%
Net Income 27 79 568 117 385%
-88%
-66%
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TJLP
8%
CDI
15%Pré
6%
US$ - Non Trade
Finance
36%
US$ - Trade Finance
35%
2016 /
2017
Source: Braskem
Braskem:Debt maturity extension is a priority
R$ Million (12/31/07)
12/31/07
2,259
Gross Debt: 8,382
Net Debt: 6,123
2008
Invested in US$
Invested in R$
Cash & Cash Equivalents
977
2009 2010 2011
1,180
679497
2012 /
2013
2014 /
2015
2018 /
2019Perpetual
14%
31%
8%10%
9%
6% 4%
7%
US$
71%
1,282
•Includes R$ 1.7 billion from the bridge loan for the acquisition of Grupo Ipiranga petrochemical assets
11%
Average Maturity: 11 years
752805895
360 620
892
1,702*
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Net Debt / EBITDA LTM * (x)
Sep 07 Dec 07
1.44
1.93
34%
2.20
Dec 06
2.72
• Moody’s initiates rating with Ba1 - stable
• Standard & Poors raises rating to BB+ - stable
• Fitch upgrades outlook to positive
Braskem Rating
Braskem is 1 notch
from Investment Grade
Conclusion of
Ipiranga
Acquisition -
Estimate
LTM – Last Twelve Months
Source: Braskem / Rating Agencies
Braskem:Leverage reduced by acquisition combined to improved rating
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Braskem: Operating investments surpass R$ 1.3 billion
Source: Braskem
351
327
130
62
120
263
31
1,344
2007
60
R$ million
2008
1,354*
238
227
162
32
197
355
82
61
Equipment Replacement
HSE
Technology
Productivity
Maintenance
Others
Capacity Increases
* Does not include investment of US$ 90 million in Venezuela
Information System
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New Share Buyback ProgramProgram size is US$ 150 million*
• Proposed the cancellation of 16,594 thousand shares held in treasury, in the amount of R$ 244 million
• Decided the new buyback program for preferred class A shares (PNA)
• Bought back shares will be firstly held in treasury and posteriorly sold (sale or exchange) or cancelled
• Program is expected to be concluded in 12 months
• Investment to fully implement the program is estimated at R$ 252 million (US$ 150 million)
(*) Braskem preferred share (BRKM5) price on 02/15/2008
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Braskem: 2008 OutlookGlobal petrochemical player
• Operating and Financial Performance
– Domestic resins market growth ranging from 8% to 10% in 2008
– Resins market leadership
– Reduction in fixed costs and expenses – impact of R$ 100 million from 2008 on
– Strong commitment with profitability in domestic and external markets
• Petroquímica Paulínia operations startup (PP)
• Growth Projects
– Venezuela
• Progress in studies and presentation of PP project to Braskem and Pequiven Boards of Directors
• Innovation and Technology
– Approval of investments for the construction of Green PE Unit, with annual capacity of 200 Kton
• Consolidation of the Brazilian Petrochemical Industry
– Conclusion of Copesul and Ipiranga Group petrochemical assets acquisitions
– Implementation of the Investment Agreement with Petrobras
– Capture of Synergies amounting to US$ 1.1 billion in NPV
Social and Environmental Responsibility
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José Carlos Grubisich
4Q07 Results Conference Call
Carlos Fadigas
Visit our website: www.braskem.com.br/ri