2. 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 were made (December 31, 2008), 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.
2
3. Agenda
The Company & 2008 Financials
Petrochemical Industry
Key Differentiators
3
3
4. Braskem in a snapshot
Leading petrochemical company in Latin America
Third largest resins producer in the Americas
Diversified portfolio of petrochemical products, with
focus on PE, PP and PVC
18 manufacturing plants in Brazil and annual
production capacity of 11 million tons of chemical
and petrochemical products
Key financials, 2008
Gross revenue = US$ 12.8 billion
Net revenue = US$ 10.0 billion (78% in Brazil)
Ebitda = US$ 1.3 billion
Assets = US$ 9.7 billion
Listed at Bovespa, NYSE and LATIBEX
4
5. Ownership Structure – Leveraging
relationship with Petrobras
% Voting Capital % Total Capital
ODEBRECHT GROUP PETROBRAS BNDESPAR OTHERS
62.3% 39.3% 31.0% 23.8% 0.0% 5.2% 6.7% 31.7%
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
– Consolidation around 2 large competitors (Braskem & Quattor)
– Access to competitive raw materials
– Improved value chain competitiveness
• Corporate governance standards: Shareholders’ agreement
5
6. Enhanced competitiveness
through value chain integration
Industrial integration
Oil/Gas-refineries Basic petchem Resins Converters
Competitive Innovation &
raw material technology
Operational Service and log
synergies barriers
% PE Sales % PP Sales % PVC Sales
CHEMICALS AND
CLEANING MATERIAL RETAIL CLEANING MATERIAL
AGROCHEMICALS
OTHERS CONSTRUCTION
15% 10% AUTOMOTIVE
CLEANING 2%
13% 12% MATERIAL 2%
AGRICULTURE CONSUMER 9% 58%
INFRASTRUCTURE
OTHERS 8% GOODS
ELECTRIC AND
17% 6% 12%
ELECTRONIC
18% 7% CONSUMER ELECTRIC AND
1%
GOODS 6% ELECTRONIC
4%CONSTRUCTION INDUSTRIAL 1%4%
AUTOMOTIVE
4% 31% 5% FOOD 20%
CHEMICALS AND 4% AGRICULTURE
24% 4% AGROCHEMICALS PACKAGING
3% AUTOMOTIVE
COSMETICS AND
COSMETICS AND
FOOD PACKAGING FOOD PACKAGING PHARMACEUTICALS
PHARMACEUTICALS CONSUMER GOODS
Market
Share 50% 53% 51% 6
Source: Braskem / Abiquim
7. Track record of strong and consistent
organic growth and acquisitions
Rank amongst the 10
Become the largest largest petrochemical
thermoplastic resins companies in the world
producer in Latin measured by EV*
America
IPQ / CPS Paulinia
Politeno 2012
Polialden 2007 2008
2006
Trikem
2002
5,901
5,551
Braskem’s Ethylene and
resins capacity (kt) 22% CAGR
3,621 Acquisitions
3,045 3,145 3,225
1,200
Organic growth
2000 2002 2004 2005 2006 2007 2008 * Enterprise Value 7
8. Applied Innovation and technology to
strengthen value chain competitiveness
Structured resource base to support client
needs • Focus on product and
application
development
Over US$ 160 million in R&D assets
– 18% of resin sales
derive from products
200 researchers developed in the last
three years
– Focus on clients’ end
8 pilot plants users
• Targeted initiatives for
219 patents filed breakthrough
technology
Partnership with universities and R&D centers in – Nanotechnology and
intelligent packaging
Brazil and abroad – Renewables
8
Source: Braskem 8
9. Green Polymer:
Pioneering renewables
• Proven higher value added: green label earns price premium
• Demand potential > 500 Kton/y
• Price premium for pioneering
• Competitive production cost compared to standard technology
• Extended R&D network with universities and bio genetic
companies focused on developing new products platforms on
renewable feedstock
• Pilot plant producing @ 12 ton/year – samples under client tests
• Industrial plant under construction
• Ethylene plant from ethanol – 200 Kton/y
• Startup in 2011 in Triunfo, RS
• Investment of US$ 200 million (R$ 488 million)
Certified by Beta Association with
100% renewable
Analytics USA Brazilian and
feedstock multinational
Sugar Cane Ethanol Main laboratory in the world companies
specialized in carbon Food, automotive and
analysis cosmetic industries
9
9
10. Growth combined with
improved competitiveness
Venezuela (JVs with Pequiven – equal ownership):
Venezuela
Polipropileno del Sur (Propilsur)
- 450 kton/y of PP
- Approximately US$1 billion investment
- Start up in 2011
Peru
- Equipment acquisition opportunity
- Project progressing on schedule
Bolivia
- Project Finance expected for 2H09
- Investment final approval expected for 2H09
Polietilenos de America (Polimerica)
− 1.1 Mton/y of PE
− Approximately US$3 billion investment
− Start up in 2013
− Technology to be adopted already chosen
Peru: MOU signed with Petrobras and PetroPeru
Bolivia: MOU under negotiation with YPFB
10
11. EBITDA
Impact from raw materials costs, FX and lower sales volumes
overcome gains with price increase
R$ million FX impact
1,095 on costs
269
3,320
FX impact
(1,434)
on revenue
3,250
(3,368)
(673) 2,418
(339) (43)
2007 Price Fixed Costs/ Raw Volume Exchange Others 2008
SGAE Materials Rate
Source: Braskem
11
12. Good debt profile with an average
term of 11 years
R$ million (12/31/08)
Gross Debt: 11,986 Net Debt / Ebitda (x) US$
Net Debt: 9,028
Average Term: 10.9 years 3.06
2.89
74% of the debt are pegged to the USD - 6%
Cash and Equivalents
2,960 Sep08 Dec08
18%
1,901 738 13%
12%
11% 11% 11%
10%
1,408 8%
6%
1,642
1,368 1,259 1,402 1,345
1,059 942 1,169
713
12/31/08 2009 2010 2011 2012 2013 2014 / 2016 / 2018 / 2020 onwards
2015 2017 2019
In R$
In US$ Value related to the loan granted by a Petrobras subsidiary for the delisting of Copesul, due in October 2009
Source: Braskem 12
13. Focus on priority investment projects
R$ million
2,279
Investments in Equity Stake
885
(Ipiranga Group/Politeno)
Capacity increases /
195 Petroquímica Paulínia 909
238 Equipment Replacement
Health, Safety and Environment 172 Capacity increases / Green PE
161
91 Technology Equipment Replacement
213
202
Productivity
Health, Safety and Environment
203
14 Technology
407 Maintenance
74 Productivity
55 Information System
233 Maintenance / Others
45 Quality / Others
2008 2009e
Source: Braskem 13
14. Agenda
The Company & 2008 Financials
Petrochemical Industry
Key Differentiators
14
14
15. Challenge: maintain competitiveness level
throughout the petrochemical cycle
Points of Attention
Global ethylene supply-demand and operating rate,
• US/EU slow down
Mton/y. %
• Incentives to sustain supply buildup
146 – China: import substitution
140 143
130 – Middle East own agenda
134 123
130 114 118 • Credit Availability
114
•Petrochemical industry ownership
91%
change
89%
89% 88%
88%
86% 87%
84% Supply & Demand
83%
82%
Potential positive drivers
5 • Frequent delays in new capacities
2008 2009 2010 2011 2012 • Supply-demand geographical
imbalance leads to logistics barriers
1 2 3 4 5
Supply Demand
Demand • Increased economic importance of
non-OECD countries with material
domestic consumption
CMAI utilization rate – Feb 09
•Asset acquisition opportunities
CMAI utilization rate – Aug 08 •4 Mton of capacity temporarily closed
Source: CMAI 15
16. New supply coming on line in Middle East and Asia
while US and Europe shutdown capacity
Capacities shutdown: New capacity addition (kton):
Dow
- Feb/09: 102 Kton of LDPE in Free Port, USA 9,561
- Dec/08: 522 Kton cracker in Plaquemine, USA
Westlake
4,203
- Dec/08: 544 Kton cracker in Lake Charles, USA
6,487
Lyondell Basell
1,145
- Feb/09: 544 Kton cracker in Chocolate Bayou, USA
452
- Feb/09: 185 Kton of LDPE in Carrington, UK 1,825
- Feb/09: 110 Kton of LDPE in Fos-sur-Mer, France
Formosa Plastics
4,890
- Nov/08: 680 Kton cracker in Point Confort, USA
3,533
ExxonMobil
- Sep/08: 826 Kton cracker in Beaumont, USA
DuPont
- Sep/08: 680 Kton cracker in Orange, USA 2009 2010
Source: Chemsweek’s Business Daily / HSBC / CMAI Middle East Asia Ex-China China 16
17. Resins demand grows even in economic
slowdown periods
PE Demand X World GDP
6.0% 80,000
70,000
5.0%
60,000
4.0%
50,000
3.0% 40,000
30,000
2.0%
20,000
1.0%
10,000
0.0% 0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
World GDP Growth Economic Slowdown PE Demand
Source: CMAI / IMF 17
18. Agenda
The Company & 2008 Financials
Petrochemical Industry
Key Differentiators
18
18
19. Brazil: A stable economy
Structural changes have prepared the country to
the current environment
Economic policy based on inflation target, fiscal
responsibility and floating exchange rate GDP growth and inflation
%
interest % GDP
Competitive, diversified and open economy 7 6
6 5
Liquid financial system
5
4
Mature democracy 4
3
3
Broad and consumerist domestic market 2
2
1 1
Greater competitiveness of Brazilian multinationals
0 0
2007 2008 2009 2010
Focus on improving social conditions (health, education, GDP Inflation
income distribution)
Sovereign debt in a record low, rated investment grade
(S&P, Fitch)
Source: Tendências Consulting - Bradesco and Santander Perspectives 19
20. Favorable business environment in Brazil
Brazilian financial scenario Moderate domestic demand growth
Net Debt / GDP (%) Higher availability of credit - credit/GDP, %
55
50 34.9
35
45
40 35.8 30
26.7
35
30 25
2004 2005 2006 2007 2008
20
50% Reserves (Liquidity) / Total Debt (%)
38.0
40% 15
30% 2001 2002 2003 2004 2005 2006 2007 2008
20%
10%
Larger middle class, driving up consumption
0%
2004 2005 2006 2007 2008
Foreign Resources (Accumulated, in US$ billion) 49%
50 45.1 46%
2002
40 2006
32%
30 26% 25%
22%
20
10
0
dez-95
dez-96
dez-97
dez-98
dez-99
dez-00
dez-01
dez-02
dez-03
dez-04
dez-05
dez-06
dez-07
dez-08
E&D C B&A
Source: Central Bank of Brasil, FAO, USDA, Datafolha Institute, Ipedata, Bradesco 20
21. Brazil: dynamic market with still low
per capita consumption
• PE, PP and PVC per capita consumption (Kg per person)
81
71
55
Brazil
5.2%
CAGR*
21.9
22.7
18.7 20.2
15.4 16.6 16.1 17.8 17.5 18.0
14.5 16.2
13.6
11.1 12.5
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
USA Europe Japan
PE PP PVC
21
Source: CMAI *Compound annual growth rate 21
23. … and a high level of consolidation
• Number of Producers • 2 Top producers share
100% 100%
12 93%
12
9
42% 51%
4 30%
2 2
PP PE PVC PP PE PVC
BRAZIL USA
23
Source: Braskem / CMAI 23
24. … allows the Company to seize the
opportunities offered by this environment
o n
eati C
lu e cr
with va Expand access to
w attractive markets
Gr o
B
Strengthen current position Assure regional
low-cost raw
A material and energy
supplies • Green-PE and renewables
Improve and • M&As
protect core Latin
American business • Global Associations
• Gas crackers in Latin America
• Leveraging relationship with • Brazilian sugar cane ethanol
Petrobras
• Value-chain virtual integration
– Refineries, raw materials
– Service and logistics barriers
– Innovation and technology
• Operational, commercial excellence
• Regional Leadership 24
25. Braskem:
High Upside Potential
Dominance in the domestic market with superior profitability
Exposure to the Brazilian market
Synergies and focus on reducing costs to increase
competitiveness
Growth projects with increased profitability and high ROCE
Proven expertise to implement greenfield projects
Strategic alignment with Petrobras
Innovation and Technology as key value drivers: green polymer
Experienced management team focused on liquidity, efficiency
and value creation
Commitment to Sustainability 25
25
28. Outstanding Bonds &
Outstanding Ratings
Coupon Yield
Outstanding Bonds Maturity
(% p.a.) (% p.a.)
US$250 MM Jan/2014 11.750 10.1
US$250 MM Jun/2015 9.375 10.4
US$275 MM Jan/2017 8.000 11.0
US$500 MM Jun/2018 7.250 12.4
US$150 MM Perpetual 9.750 11.9
US$200 MM Perpetual 9.000 12.7
Corporate Credit Rating – Global Scale
Agency Rating Outlook
Fitch Ratings BB+ Stable
S&P BB+ Stable
Moody’s Ba1 Stable
Source: Braskem / Bloomberg 28
29. Covenants
RATIO Net Debt / Ebitda (x)
Net Debt / EBITDA US$ R$
3.73
< 4.5X 2.89
Dec08 Dec08
Facility Amount Currency Type
2010 and 2011 Debentures R$800 MM R$ Incurrence*
2014 Medium Term Notes US$250 MM R$ Incurrence*
Nippon Export and
US$80 MM US$ Maintenance
Investment Insurance
EPP (Export Pre-Payment) US$725 MM US$ Maintenance
* The company is prevented from issuing any new debt for the period if it overcomes the 4.5x Net debt / Ebitda
ratio.
Source: Braskem 29
30. Operating Cash Flow
R$ Million 2008 2007
Adjusted profit before cash financial
1,966 2,119
effects
Working Capital 1,665 1,380
Operating Cash Flow 3,631 3,499
Interest Paid (572) (541)
Income Tax and Social Contribution (121) (377)
Investments Activities (2,214) (3,792)
Free Cash Flow 725 (1,212)
Source: Braskem 30
31. Net debt increases by US$500 million on
investments of US$1.3 billion
US$ million
175
355 337 3,864
3,350 1,297
(1,325)
2,230
(271)
(54)
Working PPSA
Net Debt Interest Dividends Ebitda FX / MV Net Debt Investments Net
Debt
Capital Consolidation
Dec07 Dec08 Dec08
Source: Braskem 31
