UNIPAR Portfolio March - 2009 Directly Controlled Companies 50% 33.3% 60% 100% Participações Indirectly Controlled Companies Divisão Química 100% 91.1% 66.0% 99.3% Químicos Básicos (*) Petroquímica 8.43% 9.02% (*) formerly PQU - 1 -
International Petrochemical Scenario
Raw Materials Prices Brent Oil & Naphtha Europe Brent Crude Oil (US$ /bbl) 74.9 68.7 58.2 122.2 115.4 96.7 88.7 % % 72.6 97.5 34% 72,6 97,5 34% -52% 55.8 44.2 43.2 Naphtha/Brent Ratio 9.5 9.8 9.0 9.1 8.7 8.1 8.3 % % 9.3 8.1-13% 9,3 8,1-13% -22% 6.5 8.0 9.1 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Jan/09 Feb/09 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Jan/09 Feb/09 Naphtha (US$/t) 670 676 555 803 842 995 959 % 676 790 17% -62% 364 352 395 4Q08 Strong decline of oil and naphtha prices global crisis Lower naphtha/brent ratio indicates reduced activity along the petrochemical chain in Europe 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Jan/09 Feb/09-2 - Source: CMAI
Raw Materials Prices Natural Gas & Ethane US Gulf Natural Gas (US$/MM BTU) 10.9 10.2-33% Ethane / Natural Gas Ratio 15.1 6.7 7.5 6.2 6.9 8.1 % 6.8 9.0 32% 6.8 6.0 4.4 8.8 9.6 13.3 12.6 9.6 % 11.6 9.9-14% 10.7-42% 6.2 6.1 8.1 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Jan 09 Feb 09 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Jan 09 Feb 09 Ethane (USc/gal) 104.4 101.3 105.2 108.9 59.0 72.3 81.9 % 79.4 89.3 13% - 61% 42.0 37.0 35.8 4Q08: Strong reduction of ethane and natural gas prices decline of ethane/ng shows lower activity in U.S. petrochemical market 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Jan 09 Feb 09-3 - Source: CMAI
PE s & PP Prices International Market EUROPE USA 3,000 LDPE LLDPE HDPE PP Price - US$/t 3,000 Price - US$/t HDPE LDPE LLDPE PP 2,500 2,000 1,500 1,000 500 3Q08 4Q08 % LDPE 2,318 1,248-46% LLDPE 2,290 1,252-45% HDPE 2,263 1,287-43% PP 1.979 1,251-37% 1,060 1,034 1,021 969 2,500 2,000 1,500 1,000 500 3Q08 4Q08 % LDPE 2,285 1,573-31% LLDPE 2,109 1,396-34% HDPE 2,219 1,506-32% PP 2,337 1,367-42% 1,433 1,367 1,257 1,168 % % LDPE 1,736 1,916 10% PEBD 1.736 1.916 10% LLDPE 1,645 1,865 13% PEBDL 1.645 1.865 13% HDPE 1,733 1,906 10% PEAD 1.733 1.906 10% PP 1,672 1,761 5% PP 1.672 1.761 5% % % LDPE 1,681 1,971 17% PEBD 1.681 1.971 17% LLDPE 1,505 1,795 19% PEBDL 1.505 1.795 19% HDPE 1,615 1,905 18% PEAD 1.615 1.905 18% PP 1,699 1,932 14% PP 1.699 1.932 14% 4Q08: Sharp decline in international PE and PP prices. Expressive decline in market activity (international crisis) Europe: sharper reduction (stronger signs of recession) - 4 - Source: CMAI
LDPE - Ethylene Integrated Margin International Market EUROPE - US$/t USA - US$/t -9,1% 779 819 861 815 839 760 891-68% 889 898 938 883 953 1.035 1.233 1.121 1.006 1.042 289 395 404 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Jan/09Feb/09 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Jan/09Feb/09 % Integrated Margin 819 695-15% % Integrated Margin 902 1,086 20% 4Q08: Strong decline of integrated margin Europe showing signs of recession 4Q08: Lower margins Reduction in margins due to lower demand. - 5 - Source: CMAI
Domestic Scenario
Domestic Market Thermoplastics 447 72 Quarterly Evolution thousands of tons Polyethylene Polietilenos -(PE s) (PE s) 473 484 500 522-12% 498 480 105 70 98 75 111 98 422 119 2008 vs. 2007 thousands of tons Polyethylene (PE s) 1,904 1,922 315 + 1% 433 375 398 414 402 387 417 382 303 1,589 1,489 1Q07 1T07 2Q07 2T07 3Q07 3T07 4Q07 4T07 1Q08 1T08 2Q08 2T08 3Q08 3T08 4Q08 4T08 Polypropylene Polipropileno -(PP) 323 338 336-26% 309 316 281 40 295 53 53 45 43 39 41 250 40 283 242 264 273 285 283 254 210 2007 2008 Polypropylene (PP) 1,227-1% 1,218 166 186 1,061 1,032 1Q07 1T07 2Q07 2T07 3Q07 3T07 4Q07 4T07 1Q08 1T08 2Q08 2T08 3Q08 3T08 4Q08 4T08 Termoplásticos Thermoplastics 1,045 1,095 1,106 1,171 1,147 156 154 213 259 168 1,230-17% 1,176 263 242 980 256 877 939 952 958 888 967 934 724 2007 2008 Thermoplastics 4,418 4,532 692 + 3% 1,020 3,726 3,512 1Q07 1T07 2Q07 2T07 3Q07 3T07 4Q07 4T07 1Q08 1T08 2Q08 2T08 3Q08 3T08 4Q08 4T08 2007 2008 4Q08: Lower domestic demand (crisis + seasonal effect) 2008: Higher share of imports in domestic demand - 6 -
Domestic Market PE s & PP Prices (*) Domestic Market Prices (ICIS) 5,000 4,500 4,000 3,500 3,000 LDPE LLDPE HDPE PP 3Q08 4Q08 % LDPE 4,758 4,714-1% LLDPE 4,646 4,559-2% HDPE 4,717 4,642-2% PP 4,907 4,851-1% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 4,851 4,714 4,642 4,559 Annual Average Price 2007 2007 2008 2008 % LDPE PEBD 4,028 4.028 4,326 4.326 7% 7% LLDPE PEBDL 4,033 4.033 4,245 4.245 5% 5% HDPE PEAD 4,058 4.058 4,487 4.487 11% 11% PP PP 4,282 4.282 4,668 4.668 9% 9% Though the annual average prices were higher compared to 2007, 4Q08 prices showed signs of weakening (falling domestic demand + decline in international prices + high inventories) (*) in R$/t, ex-icms, including PIS/Cofins - 7 -
UNIPAR Results - Consolidated / Parent Company
Net Income Loss of R$ 152 million in 2008 versus Net Income of R$ 145 million in 2007 Exchange variation on foreign currency debt of indirect subsidiaries Riopol and Quattor Petroquímica Current petrochemical industry scenario: compression of margins and lower demand, especially in 4Q08 Maintenance stoppage in the ABC Petrochemical Complex (operating expenses of R$ 51 million) Non-recurring expenses of R$ 53 million (provision for inventory losses) Non-operating gain of R$ 461 million sale of Petroflex and União Terminais Impact of Law 11638/07 Loss of R$ 50 million in 4Q08 Quarterly Results- R$ million 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 41 41 47 56 16 (18) 25.4 (50) Excluding the impacts of Law 11638/07 of R$ 75.8 million on UNIPAR s statement, 4Q08 result would be reverted to a Net Income of R$ 25.4 million (140) - 8 -
Performance Indicator UNIPAR - Consolidated Net Revenue - R$ million - 2,180 2,306 2,544 2,815 4,594 Gross Profit - R$ million - 540 509 603 485 774 2004 2005 2006 2004 2005 2006 EBITDA - R$ million - Net Income - R$ million - 396 356 323 425 413 204 186 91 145 (152) 2004 2005 2006 Impacted by the provision for inventory losses in the amount of R$ 53 MM and operational expenses of R$ 51 MM related to scheduled QQB stoppages 2004 2005 2006 The consolidation of 100% of Quattor Participações, beyond the impacts of Law 11638/07 and non-recurring expenses, distorts comparisons with previous periods - 9 -
Debt in Dec, 31 2008 UNIPAR Consolidated Total Debt Foreign Currency 20% - R$ 9,008 million - Short-Term 17% Net Debt - R$ million - Total Debt 9,008 Cash and Cash Equivalents 1,291 Net Debt 7,717 Brazilian Currency 80% Long-Term 83% Debt predominantly long-term and pegged to local currency - 10 -
Results 2008 UNIPAR - Parent Company INCOME STATEMENT - R$ million - 2008 2007 % Net Revenues 46.6 546.0-91% COGS (46.1) (509.3) -91% Gross Profit 0.5 36.6-99% Gross Margin% 1.1% 6.7% -84% Operating Expenses (204.0) (60.5) >200% Equity Income (299.3) 224.4-233% Financial Result (73.9) (54.1) 37% Operating Income (576.6) 146.5 >200% Non-Operating Result 457.1 (1.5) >200% Income Tax and Social Contribution (54.1) 0.0 - Reversal of Interest on Equity 21.4 0.0 - Net Income (152.3) 145.0-205% Reduced equity income due to narrower margins and foreign exchange impact on indirect subsidiaries with foreign-currency debt (mainly Riopol and Quattor Petroquímica). - 11 -
Debt in Dec, 31 2008 UNIPAR - Parent Company Total Debt - R$ 908 million Short-termCP 6% Net Debt R$ million Total Debt 908. Short Term 50. Long Term 858 Cash and Cash Equivalents 437 Long-term LP 94% Net Debt 471 Total debt predominantly in long- term and fully in Brazilian currency - 12 -
Directly Controlled Companies
Conference Call Directly Controlled Companies 2008 vs 2007 UNIPAR COMERCIAL EBITDA 15.9-22% 12.4 CARBOCLORO EBITDA + 26% 231 183 POLIBUTENOS EBITDA 13.6-35% 8.9 Net Income 5.2-20% 4.2 Net Income + 7% 120 112 Net Income 7.7-30% 5.4 + 7% volume sales. - 7% unit gross margin Narrower margins due to higher resale costs. + 5% volume sales. + 15% average sales price (recovery of international caustic prices + US$ appreciation). + 11% unit gross margin - 13 - - 13% volume sales and + 12% average sales price + 21% average feedstock price (isobutylene) - 18% unit gross margin (isobutylene price linked to naphtha quotation).
Quattor Participações 2008 Consolidated INCOME STATEMENT - R$ million - 2008 Net Revenue 3,706 Cost of Products and Services Sold (3,140) Gross Profit 566 Gross Margin,% 0 Operating Expenses (456) Financial Expenses (842) Equity Income (86) Operating Income (818) Non-Operating Revenue 0 Income and Social Contrbution Taxes 107 Minority Shareholders 46 Net Income (Loss) (665) Exchange variation on debt in foreign currency of Rio Polímeros and Quattor Petroquímica monetary losses of R$ 550 million Impact of non-recurring expenses recached R$ 112 million, including provision for inventories loss (R$ 53 million) and maintenance stoppage of ABC Complex (R$ 51 million) - 14 -
Indirectly Controlled Companies
Conference Call Indirectly Controlled Companies 2008 vs 2007 DIVISÃO QUÍMICA QUATTOR QUÍMICOS BÁSICOS 19 +79% EBITDA 34-12% volume sales + 74% unit gross margin (higher cumene-naphtha spread + US dollar appreciation) 307 EBITDA - 26% volume sales -49% + 12% average sales price 157-15% unit gross margin POLIETILENOS UNIÃO RIO POLIMEROS QUATTOR PETROQUÍMICA EBITDA EBITDA EBITDA 73-49% 278-14% 238 182 37-69% 57 + 17% volume sales + 10% average sales price - 42% unit gross margin - 9% PE volume sales - 17% unit gross margin - 15 - - 18% PP volume sales - 27% unit gross margin
Conference Call Indirectly Controlled Companies 2008 vs 2007 DIVISÃO QUÍMICA Net Income + 70% 22 QUATTOR QUÍMICOS BÁSICOS Net Income 172 13-90% 17 Higher margins Drop of volume sales and unit margins POLIETILENOS UNIÃO Net Income (*) 37 RIO POLIMEROS Net Income 133 QUATTOR PETROQUÍMICA 145 Net Income - 110% (4) (*) after goodwill amortization Lower margins <200% (160) Lower PE sales and unit margin Exchange variation on foreign currency debt - 16 - <200% (340) Lower PP sales and unit margin Exchange variation on foreign currency debt
Expansion Programm Companies Scope Total Investment Disbursed until Dec 2008 Progress Conclusion R$ million R$ million % % Indirectly Controlled Companies. Carbocloro + 100,000 mt/yr of chlorine 265 253 96% 100% 3Q08. Polibutenos + 15,000 mt/yr of polyisobutylenes 38 29 77% 80% 1Q09. Quattor Participações 2,331 2,084 89% - - Divisão Química + 100,000 mt/yr of cumene 100 83 83% 100% 4Q08 Quattor Químicos Básicos + 420,000 mt/yr of basic petrochemicals 1,532 1,322 86% 94% 2Q09 Polietilenos União + 230,000 mt/yr of PE 490 475 97% 99% 1Q09 Quattor Petroquímica - RJ + 100,000 mt/yr of PP 117 117 100% 100% 2Q08 Quattor Petroquímica - SP + 90,000 mt/yr of PP 92 87 94% 99% 1Q09 TOTAL 2,634 2,366 90% - - Expansion programm almost fully concluded. QQB and Polibutenos projects are in the final step of their implementation Long-term financing corresponding to 70% of total investment - 17 -