Manual EVTE – Clarity System

Tércio Lopes
July, 2018
chapter
EVTE MANUAL

MANUAL ST RUCT URE

▪ Introduction

▪ How to create a EVTE

▪ Input Variables
▪ Gain – E.g.: Product – Margin
▪ Cost – E.g.: Others Costs

▪ Variable Edition

▪ Execution

▪ EVTE Reports

▪ EVTE Publication

▪ How to Copy Variables from Other EVTE

▪ Sensitivity Analysis

▪ Scenario Analysis
chapter
EVTE MANUAL

MANUAL ST RUCT URE

▪ Introduction

▪ How to create a EVTE

▪ Input Variables
▪ Gain – E.g.: Product – Margin
▪ Cost – E.g.: Others Costs

▪ Variable Edition

▪ Execution

▪ EVTE Reports

▪ EVTE Publication

▪ How to Copy Variables from Other EVTE

▪ Sensitivity Analysis

▪ Scenario Analysis
chapter

01 EVTE MA NUA L

F E A S I B I L I T Y A N A LY S I S

The growth of a company

• Companies grows with the reinvestment of the cash generated from
the profit of its operations.

• Growth Investments are: increase of production capacity, increase

of productivity, new units…

Why Analyze the Viability?

• To invest in projects that actually have a return on invested capital.
• As faster the return on investment, as greater the project profitability and as greater the company's
growth.
• This analysis is made on the estimated variation of the cash flow of the company with the
implementation of the project.
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01 EVTE MA NUA L

BASIC ALIGNMENT
Before beginning the projection of the future performance, it is necessary that the sponsor looks for some
recommendations, as follows:

▪ The projection should always be in dollars and in currency (which takes into account inflation).
▪ WACC must be in nominal currency (current) dollar.
▪ The use of different currencies (e.g. real vs. dollar) in projections will generate distorted scenarios, rendering feasibility
analysis impractical.
▪ The same can happen if the sponsor does not use the WACC rate in the same currency as the flow. When discounting, for
example, streams conceived in constant terms by WACC Braskem in current terms the sponsor ends up generating a fictitious
higher NPV, making his study unusable.

Incorrect use of premises will result in valuations that are far from the real value created by the project, and may lead
to the approval of actions that destroy Braskem's business value.

▪ In order to avoid hassles, the sponsor counts on the support of Braskem's EVTE model, which includes Braskem's rates and
WACC premises, prices and margins.
▪ These are updated annually by the Strategic Planning area and disseminated by the DEP team to all users of the tool.
▪ If you have any doubts about the design of the model, the DEP team is always available for any clarification.
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01 EVTE MA NUA L

WA C C - We i g h t e d Av e r a g e C o s t o f C a p i t a l

Weighted
Capital Structure Cost of Capital Average Cost of
Capital (WACC)

Third Party Capital Third Party Capital

CT % Kd % CT % * Kd %
+
45 % 6,2 %
CP % * Ke %
Illustrative values
Equity Capital Equity Capital
CP % Ke % Actual: 8,89%
(current dollar)
55 % 13,6 %

WACC (Weighted Average Cost of Capital)

All projects must use WACC Braskem, except for those inv olving
formation of partnerships (JVs, New Companies, etc.).
chapter
EVTE MANUAL

MANUAL ST RUCT URE

▪ Introduction

▪ How to create a EVTE

▪ Input Variables
▪ Gain – E.g.: Product – Margin
▪ Cost – E.g.: Others Costs

▪ Variable Edition

▪ Execution

▪ EVTE Reports

▪ EVTE Publication

▪ How to Copy Variables from Other EVTE

▪ Sensitivity Analysis

▪ Scenario Analysis
chapter

02 EVTE MA NUA L

H O W TO C R E AT E A E V T E
Search for the Project which you want to create an EVTE.

Click on “Home” and after

click on “Projects”

Fill in the Project ID,

“PJ-XXXXXXX” and
click on “Filter”

Click at the Project name

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02 EVTE MA NUA L

H O W TO C R E AT E A E V T E
Access the Dashboard and click on “Create New EVTE” in EVTE.

This action will create a new EVTE, and you will be directed to the created EVTE.

If the project already have some EVTE, you can access the last EVTE created using the link “Last EVTE“
or you can create a new version clicking on “Create New Version”.
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02 EVTE MA NUA L

H O W TO C R E AT E A E V T E
EVTE screen: fill in the fields on the screen to configure the feasibility study.

EVTE Status.
EVTE has three status fields.

▪ Status. Indicates whether there is a

feasibility study calculated for the project or
if already there is a scenario analysis
performed in addition to the study.

▪ Publish Status. Indicates whether the

outcome of the Feasibility Study has already
been published for the project or not.

If any mandatory field for the calculation is not filled, the user will be alerted when attempting to perform the operation.
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02 EVTE MA NUA L

H O W TO C R E AT E A E V T E
The User must return to the project dashboard to create a specific cost plan for EVTE
under evaluation.

Click here to return

to the dashboard

On the project’s dashboard Click

on “Financial Planning Upload” to
upload the financial planning
spreadsheet
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02 EVTE MA NUA L

H O W TO C R E AT E A E V T E
The User must download the template, fill it in and upload it.

Click on “Here” to download the

financial template
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02 EVTE MA NUA L

H O W TO C R E AT E A E V T E

The user must complete the months based on the start of the project disbursement.
The user must to fill in the spreadsheet consider the month that the expenditure will happen. Also, if the project
already has been started, the realized cost must be filled in the correct month.
chapter
EVTE MANUAL

MANUAL ST RUCT URE

▪ Introduction

▪ How to create a EVTE

▪ Input Variables
▪ Gain – E.g.: Product – Margin
▪ Cost – E.g.: Others Costs

▪ Variable Edition

▪ Execution

▪ EVTE Reports

▪ EVTE Publication

▪ How to Copy Variables from Other EVTE

▪ Sensitivity Analysis

▪ Scenario Analysis
chapter

03 EVTE MA NUA L

INPUT VARIABLES (Earnings/Costs)

On “Variables” tab

Click on “New” button

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03 EVTE MA NUA L

IN PU T VARIABLES (Ear ni ng s / Co s ts )
EARNINGS CURVES
Fill in the fields as below.

The user can named the

variable as him want

Type of Earnings

The user must choose a type of curve to create: Product - price, Product - margin, Other Gains, Raw Material, Input,
Utility or Other Costs.

The curves, product - price, product - margin, raw material, input and utility have pre-registered values of price or margin (for
each year) and the user must to fill in the planed quantity (ton).
The Product - price, Product - margin and Other Gains curves represent positive values for the cash flow. The others represent
negative values. In both cases, Fill in the curve’s values always greater than zero. The system adds or subtracts the values in
the stream according to the type.
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03 EVTE MA NUA L

IN PU T VARIABLES (Ear ni ng s / Co s ts )
EARNINGS CURVES
Fill in the fields as below.

After fill in all the fields, click on “Save” button.

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03 EVTE MA NUA L

IN PU T VARIABLES (Ear ni ng s / Co s ts )
In the Quantity section fill in the quantities for each year and click on “Save”.

The respective quantity

values for each year must
be filled in the
corresponding fields, for 3
available scenarios.
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03 EVTE MA NUA L

IN PU T VARIABLES (Ear ni ng s / Co s ts )
Another option is to access the edit panel of variables

Click on the
button

The respective quantity

values each year must be
entered in the corresponding
fields, for the 3 available
scenarios.
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03 EVTE MA NUA L

IN PU T VARIABLES (Ear ni ng s / Co s ts )
OTHERS EARNING / COSTS

Click on “New” button

Fill in the data as follows and Click on “save” bottom:

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03 EVTE MA NUA L

IN PU T VARIABLES (Ear ni ng s / Co s ts )
OTHERS EARNING / COSTS

Input the other gains in

USD mil.
The calculation memory
must be attached on “1 –
Properties”.
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03 EVTE MA NUA L

IN PU T VARIABLES (Ear ni ng s / Co s ts )
OTHERS EARNING / COSTS

Click on the
bottom
Fill in the fields
with the annual
earning

The calculation memory

must be attached on “1 –
Properties”.

And Save
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03 EVTE MA NUA L

IN PU T VARIABLES (Ear ni ng s / Co s ts )
If the gains are not in current currency, the user must adjust using a specific inflation curve.

Click on “Knowledge Store”

Click on “EVTE” Click on “Tendências

Macroeconomicas” Chose the
spreadsheet from
your region
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03 EVTE MA NUA L

IN PU T VARIABLES (Ear ni ng s / Co s ts )

O usuário deverá aplicar o iIGPM US$ (acumulado).

chapter
EVTE MANUAL

MANUAL ST RUCT URE

▪ Introduction

▪ How to create a EVTE

▪ Input Variables
▪ Gain – E.g.: Product – Margin
▪ Cost – E.g.: Others Costs

▪ Variable Edition

▪ Execution

▪ EVTE Reports

▪ EVTE Publication

▪ How to Copy Variables from Other EVTE

▪ Sensitivity Analysis

▪ Scenario Analysis
chapter

04 EVTE MA NUA L

VARIABLE ED ITIN G
To edit the values, double-click the cell to edit, fill in the new value and click on “Save”.
chapter
EVTE MANUAL

MANUAL ST RUCT URE

▪ Introduction

▪ How to create a EVTE

▪ Input Variables
▪ Gain – E.g.: Product – Margin
▪ Cost – E.g.: Others Costs

▪ Variable Edition

▪ Execution

▪ EVTE Reports

▪ EVTE Publication

▪ How to Copy Variables from Other EVTE

▪ Sensitivity Analysis

▪ Scenario Analysis
chapter

05 EVTE MA NUA L

EVTE EXECUTION
Access the “3 – Execution” tab and in the Control Panel click on "Calculate EVTE".
chapter

05 EVTE MA NUA L

EVTE EXECUTION
After calculating the EVTE, the indicators will be generated as follows:
chapter
EVTE MANUAL

MANUAL ST RUCT URE

▪ Introduction

▪ How to create a EVTE

▪ Input Variables
▪ Gain – E.g.: Product – Margin
▪ Cost – E.g.: Others Costs

▪ Variable Edition

▪ Execution

▪ EVTE Reports

▪ EVTE Publication

▪ How to Copy Variables from Other EVTE

▪ Sensitivity Analysis

▪ Scenario Analysis
chapter

06 EVTE MA NUA L

EVTE REPORTS
In the “3 – Execution” tab click on "Available" links to see each report.

After click on “Available link” the report will be showed:

Integrated Reports:

▪ Cash flow;
▪ Income Statement;
▪ Fixed Costs;
▪ Working capital.
chapter
EVTE MANUAL

MANUAL ST RUCT URE

▪ Introduction

▪ How to create a EVTE

▪ Input Variables
▪ Gain – E.g.: Product – Margin
▪ Cost – E.g.: Others Costs

▪ Variable Edition

▪ Execution

▪ EVTE Reports

▪ EVTE Publication

▪ How to Copy Variables from Other EVTE

▪ Sensitivity Analysis

▪ Scenario Analysis
chapter

06 EVTE MA NUA L

EVTE PUBLISHING
Access the EVTE Execution tab and in the Control Panel click on "Publish EVTE".

The EVTE data will be published for the project, according to the type indicated in the EVTE (PN or APE).

After the published EVTE, changes will not be allowed. If it is necessary to revise it, the user must
create a new version.
chapter
EVTE MANUAL

MANUAL ST RUCT URE

▪ Introduction

▪ How to create a EVTE

▪ Input Variables
▪ Gain – E.g.: Product – Margin
▪ Cost – E.g.: Others Costs

▪ Variable Edition

▪ Execution

▪ EVTE Reports

▪ EVTE Publication

▪ How to Copy Variables from Other EVTE

▪ Sensitivity Analysis

▪ Scenario Analysis
chapter
EVTE MA NUA L

H O W TO C O P Y V A R I A B L E S F R O M O T H E R E V T E
The user could copy the gains flied on ever EVTE already calculated. For do that, it is necessary goes to “3 – Execution” tab:

2. Fill in the information

1. Click on “EVTE”
of the project that you
want to copy and filter

3. Select the project

and click on “Add”
button

3. And finally click on

“Copy gains” button
chapter
EVTE MANUAL

MANUAL ST RUCT URE

▪ Introduction

▪ How to create a EVTE

▪ Input Variables
▪ Gain – E.g.: Product – Margin
▪ Cost – E.g.: Others Costs

▪ Variable Edition

▪ Execution

▪ EVTE Reports

▪ EVTE Publication

▪ How to Copy Variables from Other EVTE

▪ Sensitivity Analysis

▪ Scenario Analysis
chapter

07 EVTE MA NUA L

S E N S I T I V I T Y A N A LY S I S
the sensitivity graph is automatically generated when the EVTE is calculated. The report can be viewed
through the link “Available” for “Sensibility report”

Through the sensitivity analysis the user can define the

project drive, evaluating the impact of the main
variables.
• Investment;
• Price or margins;
• Other costs;
• Etc..
chapter

07 EVTE MA NUA L

S E N S I T I V I T Y A N A LY S I S
the user can see the sensibility analyses for many indicators calculated.
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08 EVTE MA NUA L

S E N S I T I V I T Y A N A LY S I S
On the Sensibility Analysis Tab the user also can plot the EVTE data on a graphic.
chapter
EVTE MANUAL

MANUAL ST RUCT URE

▪ Introduction

▪ How to create a EVTE

▪ Input Variables
▪ Gain – E.g.: Product – Margin
▪ Cost – E.g.: Others Costs

▪ Variable Edition

▪ Execution

▪ EVTE Reports

▪ EVTE Publication

▪ How to Copy Variables from Other EVTE

▪ Sensitivity Analysis

▪ Scenario Analysis
chapter

08 EVTE MA NUA L

S C E N A R I O A N A LY S I S
the user should click on the "Execute analysis" link, on Scenario Analysis tab, to get the
results for the scenarios: realistic, EVTE Results, optimistic and pessimistic.
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08 EVTE MA NUA L

S C E N A R I O A N A LY S I S
... On Scenario Analysis tab is also available the histogram and the variations on average and standard deviation .
chapter

08 EVTE MA NUA L

S C E N A R I O A N A LY S I S
Click on “Available” link to open the report.

On report it is possible to analyze the

following information:
• Probabilities associated with NPV;
• Mean and deviation of IRR;
• Average and deviation of Payback;
• Mean NPV;
• Nº of interactions, among others.
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08 EVTE MA NUA L

E X P E C T E D R E S U LT S O F T H E T R A I N I N G

▪ Standardization of investment results allowing comparison

without further analysis (inflation rates, comparison of price
curves, etc.).

▪ Transparency in the value of the NPVs of the projects taking

them closer to the reality of Braskem.

▪ Increased commitment of the project sponsors to achieve the

planned benefits.

The DEP team is at the disposal of the project sponsors to assist them in any doubts or questions about
the evaluation of projects.

Contacts:
Tércio Lopes
tercio.souza@braskem.com
Telephone: +55 71 3504 7489