conference call presentation 1 q09 results
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1Q09 1Q09 EarningsEarnings
Conference CallConference Call
2
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 in these forward-looking statements are
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 (March 31, 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.
ForwardForward--looking Statementslooking Statements
3
Global ScenarioGlobal Scenario
. World governments’ recovery plans start to work out
. Retraction process of some economies begin to ease
. Consumer Index in China out of the contraction level for the first time in 9
months
. Commodities production chain at low levels of inventories
. US producers (gas base) more competitive and local market remains weak
. Supply problems at the Asian market
. Prices in Asia expected to drop in 2H09 due to Middle East and India supply
. Global ethylene capacity:
. 6 MMt starting operations – 80% in the Middle East
. 6 MMt stopped or iddle – USA and Europe (excludes Asia)
. 4 MMt delayed – Middle East and Asia
. Year of economic contraction
4
Regional ScenarioRegional Scenario
. Consumption of non-durable goods in Brazil shows resilience when compared to 2008
. Brazilian industries with best performances in the period: Packages, Home Appliances, Consumption Goods, Personal Hygiene and Cleaning
. Industries still presenting poor performance: Agribusiness, Automotive, Construction
. Imported resins volume still at high levels – ports with fiscal benefits, weak demand in the USA and Latin America (Argentina and Colombia)
. Argentinean market very depressed due to credit restriction – stronger exports to Brazil
. Colombian market – shifting exports from USA to Brazil
5
1Q09 Achievements1Q09 Achievements
. New Naphtha Agreement:
- agreement under confidentiality clause regarding disclosure of price formula
- clause assuring adjustment to ARA quality standard
- price formula to weaken volatility and improve predictability
- foreseen discount and premium over ARA reference
- ~60% of volume from Braskem
- 5 years, renewable for other 5 years
. Maintenance of financial discipline: cash of R$ 3 billion
. Resumption of full capacity in March (95% ethylene)
. Doubled exports when compared to 4Q08
. Inventories average cost leveled with production costs in March
. Productivity program leads to a reduction of R$ 78 million in SG&A in the quarter
. Reduced disbursement with investments 49% lower vis a vis 1Q08
6
1Q09 Highlights1Q09 Highlights
Operating Performance:
. Net revenue of R$ 3.2 billion, 24% down on 4Q08: volume and prices
. Reduction in PVC demand (33% versus 1Q08)
. R$458 million EBITDA, with non-recurring effects, sustains covenants
Strategic Actions:
. Merger of Petroquímica Triunfo
. Launch of the cornerstone for the Green PE project in the Triunfo Complex
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Plants operating at full capacityPlants operating at full capacity
in Marchin March
PE PP PVC
1Q09
ETHYLENE
73%
4Q08
73% 74%89%
70%
97%
76%
104%
UtilizationUtilization RateRate %%
Source: Braskem
1Q091Q08
704611
ResinsResins ProductionProduction KtKt
+2%
1Q08
95%
64%
1Q094Q081Q08 1Q094Q081Q08 1Q094Q081Q08
69%
95%
4Q08
599
MarJan
47%
95%
MonthlyMonthly UtilizationUtilization Rate Rate -- EthyleneEthylene KtKt
Feb
78%
8Source: Braskem
-33%-9% -16%- 12% -13%
PVC
PPBraskemResins
PE BrazilianMarket*
Domestic Sales 1Q08 x 1Q09Domestic Sales 1Q08 x 1Q09 %%
Others
Imports
Resins Market Share 1Q09Resins Market Share 1Q09
* Braskem estimates: Domestic Sales + Imports
46%
25%
29%
Brazilian Market starts recovery Brazilian Market starts recovery
in March in March
- Exports remain strong in January and February
- Resins volume in March is flat when compared to March 2008
9Sourcee: Braskem
601
1Q08 1Q09Raw
MaterialFX Price
458
R$ million
EBITDA Reduced resins prices overcome the positive impact fromlower raw material prices and FX increase on revenues
EBITDA EBITDA ReducedReduced resinsresins pricesprices overcomeovercome thethe positive positive impactimpact fromfromlowerlower rawraw material material pricesprices andand FX FX increaseincrease onon revenuesrevenues
(3,128)
2,447
342
4
FX impact
on revenue
FX impact
on costs
1,339
(997)
Volume
95
Others
97
Taxes (PIS / Cofins)
10Soure: Braskem
565
4Q08 1Q09VolumeRaw
MaterialsFX Price
458
R$ milhões
(1,514)
1,175
2686
SG&A
97
EBITDA Reduced resins prices overcome the positive impactfrom lower raw material prices
EBITDA EBITDA Reduced resins prices overcome the positive impactReduced resins prices overcome the positive impactfrom lower raw material pricesfrom lower raw material prices
FX impact
on revenue
FX impact
on costs
60
(44)
23
Taxes (PIS / Cofins)
11
2016 /2017
Source: Braskem
ShortShort--term debt well managed and longterm debt well managed and long--term debt well term debt well
distributed with an average term of 11 yearsdistributed with an average term of 11 years
R$ Million (03/31/09)
03/31/09
2,970
Cash and EquivalentsCash and Equivalents
2009 2010 2011 2013 2014 /2015
2018 /2019
2020 onwards
10%10%
13%13%12%12%
6%6%
13%13%
9%9%11%11%
14%14%
943943 1,2251,225
1,5701,570 1,4481,4481,3461,346
710710
1,6281,628
1,1581,158
1,814
1,156
3.31
Dec08 Mar08
2.89
+15%
Gross Debt: 12,151Gross Debt: 12,151
Net Debt: 9,181Net Debt: 9,181
Average Term: 10.5 yearsAverage Term: 10.5 years
72% of the debt are pegged to the USD 72% of the debt are pegged to the USD
Net Debt / Net Debt / EbitdaEbitda (x) US$(x) US$
2012
12%12%
1,4571,457
4.00
Dec08 Mar09
3.73
+7,2%
Net Debt / Net Debt / EbitdaEbitda (x) R$(x) R$
PFICO
726
Value related to the loan granted by a Petrobras subsidiary for the delisting of Copesul,
due in October 2009 In US$
In R$
12
Short Term FocusShort Term Focus
� Clients’ proximity
� Priority over financial health and liquidity
� Productivity Program: cost reduction
� Profitability
� Defense against imported products
� Identification of operating synergies with Petrobras
� Construction of the Green PE plant
� Analysis of opportunities arising from crisis: selective acquisitions
� Venezuela
Greater operational and financial strengthGreater operational and financial strength
1Q09 1Q09 EarningsEarnings
Conference CallConference Call