Braskem S A : 2020 Management Report

Contents

• 1. MESSAGE FROM MANAGEMENT ......................................................................................... 4

• 2. OUTLOOK ........................................................................................................................... 6

• 3. COVID IMPACTS ................................................................................................................ 7

• 4. OPERATIONAL PERFORMANCE IN 2020 ............................................................................ 8

  4.1 BRAZIL ............................................................................................................................. 8

  4.2 UNITED STATES & EUROPE ............................................................................................ 17

  4.3 MEXICO .......................................................................................................................... 20

  4.4 CONSOLIDATED RESULT (FINANCIAL) .......................................................................... 24

• 5. INNOVATION & TECHNOLOGY ........................................................................................ 33

• 6. VALUE LEVERS ................................................................................................................. 35

• 7. CAPITAL MARKETS & INVESTOR RELATIONS ................................................................. 36

• 8. SUSTAINABLE DEVELOPMENT STRATEGY ....................................................................... 37

• 9. ENVIRONMENT ................................................................................................................ 38

• 10. SOCIETY ........................................................................................................................... 41

• 11. CORPORATE GOVERNANCE ............................................................................................. 46

DISCLAIMER ON FUTURE STATEMENTS

This Management Report may contain prospective statements. These statements are not historical facts, they are based on the current vision and estimates by the Company's management regarding future economic circumstances and other industry conditions, performance and financial results, including any potential or projected impact of the geological event in Alagoas and related legal proceedings, and from COVID on business, financial situation and operating results of the Company. The words "foresee", "believe", "estimate", "expect", "plan" and other similar expressions, when referring to the Company, are used to identify prospective statements. Statements regarding possible results of legal and administrative processes, implementation of operations strategies and financing and investment plans, direction on future operations, as well as factors or trends which can affect the financial condition, liquidity or operating results of the Company are examples of prospective statements. Such statements reflect the current views of the Company's management and are subject to various risks and uncertainties, many of which are beyond the Company's control. There is no guarantee that the events, trends or expected results will actually occur.

The statements are based on various premises and factors including general economic and market conditions, industry conditions and operational factors. Any change in such premises or factors, including the projected impact of the geological event in Alagoas and related legal proceedings and the unprecedented impact of the COVID pandemic on business, employees, service providers, shareholders, investors and all other individuals related to the Company may lead to results that in effect are significantly different from current expectations. Consult the reports filed with the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários, CVM), in particular the factors discussed in the sections for a full discussion of the risks and other factors that may impact any prospective statements contained in this document.

MANAGEMENT REPORT

BRASKEM 2020

The Management of Braskem S.A. ("Braskem") submits for your consideration this Management Report and corresponding Financial Statements, accompanied by the opinions of the Independent Auditors and the Audit Board, for the fiscal year ended December 31, 2020.

1. MESSAGE FROM MANAGEMENT

The year 2020 was impacted by atypical uncertainties and volatility, influenced mainly by extraordinary external factors, such as: the COVID pandemic, the weaker global demand for fuels (which affected international oil prices) and the U.S. presidential election.

In this scenario, Braskem maintained discipline in its capital allocation, reinforcing its commitment to financial health and presented net cash generation of R$1,276 million in 2020, mainly due to (i) the strong operating recurrent results; (ii) the monetization of PIS/COFINS credits of R$1,786 million; and (iii) the reduction of the Company's projected investments by 23%. These impacts were partially offset by the impact from working capital on cash flow in the first half of the year, given the cash consumption caused by the change in the feedstock profile, with lower volumes of imported naphtha.

As a result, corporate leverage measured by the ratio of net debt to recurring Operating Result in U.S. dollar stood at 2.94x in the end of 2020, presenting a significant reduction when compared to leverage at the end of 2019, which was 4.71x. This result was achieved due to the initiatives implemented by the Company under its deleveraging plan aiming to be reassigned as investment grade credit rating. The initiatives included: (i) the issue of Hybrid Bonds (subordinated debt) in July 2020, in the aggregate amount of US$600 million, with 50% equity treatment by Standard & Poor's and Fitch Ratings; (ii) reducing fixed costs by approximately 9% compared to the same period of 2019; and (iii) optimizing working capital with key suppliers, in addition to the aforementioned factors that affected net cash generation.

In regard the global petrochemical scenario, the dynamics observed were more positive than initially expected by external consulting firms in early 2020, with thermoplastic resins spreads in the international market healthier in all regions where Braskem has production capacity. In 2020, new capacity startups for PE (-10%), PP (-9%) and PVC (-28%) were below the initial projections of external consulting firms made in early 2020.

On the operational front, the Company remained focused on operational and commercial efficiency at its units in Brazil, United States, Mexico and Germany. During the year, the Company adopted a series of measures to ensure its operating and commercial efficiency, such as temporarily reducing of capacity utilization in Brazil and the United States in the second quarter given the impacts from COVID, which was normalized as from the third quarter with the recovery in demand. On the commercial front, Braskem continued to focus on partnerships and close relations with Clients and on strengthening the entire petrochemical chain, ended 2020 with higher sales in its businesses in the United States, Europe and Mexico. In Brazil, the Company ended 2020 with higher sales in the domestic market but lower export volumes, which is explained by the prioritization of Brazilian sales.

From the strategic standpoint, the Company continued devoting efforts to: increasing its international footprint, diversifying its feedstock profile, making concrete contributions to sustainable development, maintaining discipline in its capital allocation, operational efficiency, maintaining competitiveness and its Governance and Compliance standards. The highlights of these efforts in the year include:

•  Productivity & Competitiveness: (i) Improvement in the people safety performance and the best historical result in process safety; (ii) signing of new long-term feedstock agreements for all