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We add value as one company
Oil & Gas
Agricultural Solutions
Functional Materials & Solutions
Performance Products
Chemicals
Value
Magdalena Moll Amber Usman Investor Relations BASF BofA Merrill Lynch China Conference 2013 Beijing November 8, 2013
BASF Capital Market Story November 2013 2
Cautionary note regarding forward-looking statements
This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. BASF has based these forward-looking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and BASF does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.
BASF Capital Market Story November 2013 3
Chemistry as an enabler BASF has superior growth
opportunities: – sustainable innovations – investments – emerging markets
Ambitious financial targets
The #1 chemical company €72.1 billion sales, €6.6
billion EBIT bSI in 2012* #1-3 in >75% of businesses,
present in >200 countries 6 integrated Verbund sites,
production in 60 countries
10 years of strong sales and earnings growth
19% average annual total shareholder return**
16% average annual dividend increase, >3% yield in every single year***
Performance Perspective
** October 2003 – September 2013 *** for 2003-2012
Ludwigshafen, Germany
Antwerp, Belgium
Nanjing, China
Kuantan, Malaysia Geismar,
USA Freeport, USA
Verbund site
Positioning
* Restated numbers, reflecting IFRS 10/11 changes
We create chemistry for a sustainable future
BASF Capital Market Story November 2013 4
Percentage of sales 2012**
** Not depicted here: ~5% of Group sales reported as ‘Other‘ * Restated numbers, reflecting IFRS 10/11 changes, new segment structure effective Jan. 1, 2013
BASF today – a well-balanced portfolio Total sales 2012: €72.1 billion*
BASF Capital Market Story November 2013 5
Business review
BASF strategy & growth targets
Strategic levers
BASF Capital Market Story November 2013 6
Robust 3rd quarter 2013 for BASF
Sales development Period Volumes Prices Portfolio Currencies
Q3’13 vs. Q3’12 6% (1%) 1% (5%)
Business performance Q3’13 vs. Q3’12 Q1-Q3’13 vs. Q1-Q3’12
Sales €17.7 billion +1.5% €55.8 billion +3%
EBITDA €2.5 billion +16% €7.8 billion (1%)
EBIT before special items €1.7 billion +15% €5.7 billion +6%
EBIT €1.7 billion +20% €5.6 billion (1%)
Net income €1.1 billion +18% €3.7 billion (4%)
Reported EPS €1.20 +19% €4.03 (4%)
Adjusted EPS €1.28 +10% €4.35 +1%
Operating cash flow €2.0 billion +21% €6.0 billion +19%
BASF Capital Market Story November 2013 7
0
1
2
3
4
2003 2004 2005 2006 2007 2008 2009** 2010 2011 2012 Q1-Q32013
Strong free cash flow generation
* Cash provided by operating activities less capex (in 2005 before CTA) ** 2009 adjusted for re-classification of settlement payments for currency derivatives
Free cash flow* in € billion
2.8 2.6
3.3 3.5
3.2
2.5
3.2
3.9 3.7
2.6 2.9
BASF Capital Market Story November 2013 8
Delivering attractive shareholder returns
Dividend of €2.60 per share for 2012
2003-2012: Average annual dividend increase of 16%
Attractive dividend yield of 3.7% in 2012**
Dividend yield above 3% in any given year since 2002, total payout almost €17 billion
* Dividend yield based on share price at year-end
Dividend payments
3.7% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9%
Dividend yield* 4.6% 3.1%
2.50
0.70 0.85 1.00
1.50
1.95 1.951.70
2.20
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2.60
3.7%
** Based on BASF share price of €71.15 on Dec. 28, 2012
Dividend per share in €
CAGR 16%
BASF Capital Market Story November 2013 9
We do not anticipate an acceleration of global economic growth in the 4th quarter of 2013
For the full year, BASF confirms its outlook: We strive to exceed the record levels in sales and EBIT before special items in a challenging economic environment
Our focus on growth markets and innovation, in combination with our measures to optimize our portfolio and to improve operational excellence, will contribute to this
We aim to earn a high premium on cost of capital in 2013
Outlook 2013
GDP: +2.0% (unchanged)
Industrial production: +2.7% (unchanged)
Chemical production: +3.1% (unchanged)
US$ / Euro: 1.30 (unchanged)
Oil price (US$ / bbl): 105 (unchanged)
Assumptions 2013
Outlook 2013
BASF Capital Market Story November 2013 10
Average annual performance with dividends reinvested
0 3 6 9 12 15 18 21
Euro Stoxx 50
DAX 30
MSCI World Chemicals
+10.2%
Last 5 years October 2008 – September 2013
+21.0%
+2.5%
+8.1%
+9.5%
Last 10 years October 2003 – September 2013
BASF
+11.3%
+5.0%
+18.6%
Delivering consistent, long-term value
BASF Capital Market Story November 2013 11
Business review
BASF strategy & growth targets
Strategic levers
BASF Capital Market Story November 2013 12
Grow at least 2 percentage points above chemical production
Earn a premium on cost of capital of at least €2.0 billion on average p.a.
Profitability targets Growth targets
2015
2020
Sales ~€80 billion
Sales ~€110 billion
EBITDA ~€14 billion EPS ~€7.50
EBITDA ~€22 billion
Key financial targets 2015 / 2020 are ambitious
BASF Capital Market Story November 2013 13
Innovation ~3,500 R&D staff
Market €25 billion sales
Portfolio >€2 billion sales from
new biz and acquisitions
People ~9,000 new jobs
Investment 75% OMP ratio
Excellence €1 billion cost savings
We create chemistry in Asia Pacific: 2020 targets
BASF Capital Market Story November 2013 14
Business review
BASF strategy & growth targets
Strategic levers – Portfolio development
– Market approach – Innovations for a sustainable future – Investments – Acquisitions – Operational excellence
BASF Capital Market Story November 2013 15
Portfolio development Moving downstream towards customer industries
* Agriculture, Construction, Consumer Goods, Health & Nutrition, Electronics, Energy & Resources, Transportation ** Sales excluding Oil & Gas. Targets were published on November 29, 2011.
Functionalized Materials & Solutions Customized Products Classical Chemicals
2020 in % of sales**
Chemical Industry First customer industries*
2010 in % of sales**
~ 40%
~ 30% ~ 70%
2001 in % of sales**
~ 50%
~ 60%
~ 50%
BASF Capital Market Story November 2013 16
Engineering plastics Electronic chemicals Catalysts Construction chemicals Water-based resins Pigments Plastic additives Oil & Gas Personal care & food Battery materials Functional crop care Omega-3 fatty acids
BASF core business
Strong partnerships
Gazprom Statoil Monsanto Petronas Shell Sinopec Total
Selected transactions 2001 − today*
Acquisitions
~ €16bn sales ~ €10bn sales**
Divestitures
Pharma Fibers Printing systems Polyolefins Polystyrene Americas Agro generics Vitamins premix Fertilizers Styrenics (transferred into
Styrolution JV on Oct. 1, 2011)
Construction equipment, flooring systems
** Without Styrenics
Portfolio development Towards more market driven and innovative businesses
* Only closed deals have been considered
BASF Capital Market Story November 2013 17
Portfolio development Asia Pacific Towards more market driven and innovative businesses
* only closed deals have been considered
~€3 billion sales in Asia Pacific
Acquisitions
Plastic additives, Pigments (Ciba)
Mining Safety Solutions (Hock)
Catalysts (Engelhard) Care Chemicals (Cognis) Construction Chemicals
(Degussa) Electronic Chemicals
(Merck, Novolyte) Health & Nutrition
(Takeda, Pronova) Crop Protection
(Becker Underwood)
BASF Core Business
Strong Partnerships
Petronas Sinopec Shell Hua Yi Heesung Sumitomo Metal Mining Huntsman
Selected Transactions 2001 − Today*
Divestitures
~€0.5 billion sales** in Asia Pacific
Pharma (Knoll) Printing systems Polyamide fibers
(Honeywell) Animal nutrition premix
business Styrenics (transferred into
Styrolution JV on Oct 1, 2011)
Selected transactions with relevant impact in Asia Pacific*
** without Styrenics
BASF Capital Market Story November 2013 18
Monomers
Intermediates
Dispersions & Pigments
Performance Chemicals
Care Chemicals
Paper Chemicals
Coatings
Catalysts
Construction Chemicals
BASF sales by first customer industry*
> 15 %
> 10 %
< 10 %
> 15 %
Consumer goods
Transportation
Construction
Energy & Resources
Market approach Cross-divisional customer industry approach
* Excluding Oil & Gas, Crop Protection and Other
Petro- chemicals
Performance Materials
Bubble Size: BASF divisional sales by first customer industry (2012)*/**
** Nutrition & Health sales predominantly into Health & Nutrition market
BASF Capital Market Story November 2013 19
Strong partnership with Hyundai.Kia success of our cross-divisional approach
Suspension: Jounce bumper,
Top mount, Coil Spring isolator
Lubricants, engine coolants
Spoiler, lower bumper stiffener
Headrests Roof module
Carpet, Floor mats
Seats, handrests, armrests
Steering wheel
ABS cable
Door side part
Dashboard
Headliner
Hatrack
Air-filter housing
Window encapsulation
Coatings, Pigments
Fuel additives
Leather and textile chemicals
Brake fluids
Engine encapsulation
Battery materials
Catalysts
Cross beam
Air intake manifold, charge-air lines
Oil pan
Wheel rim
BASF Capital Market Story November 2013 20
Strong commitment to innovation Innovations for a sustainable future
1.4 1.4 1.5
1.6 1.7
0,0
0,5
1,0
1,5
2,0
2008 2009 2010 2011 2012
€1.7 billion R&D expenditures in 2012, further increase planned for 2013
~10,500 employees in R&D
~3,000 projects
Research Verbund: About 1,950 partnerships with universities, start-ups and industry partners
Target 2015 and 2020:
– €10 billion in sales from innovations younger 5 years;
– €30 billion in sales from innovations younger 10 years
R&D expenditures in € billion
Chemicals 10%
Performance Products 20%
Functional Mat. & Sol. 20%
Agricultural Solutions 25%
Oil & Gas 2%
Corporate Research 23%
Key facts
2.0
1.5
1.0
0.5
0
BASF Capital Market Story November 2013 21
Expand research capabilities in Asia Pacific with new R&D centers
R&D Center Korea (2013) Focus: electronics
R&D Center Singapore (2007) Focus: water, membrane, oilfield
R&D Center Australia (2012) Focus: mining
Innovation Campus Asia Pacific, Shanghai (2012) Focus: polymers & materials
Innovation Campus Asia Pacific, India (in planning) Focus: life science, agro
R&D Center Japan (2013) Focus: battery materials
BASF Capital Market Story November 2013 22
BASF growth fields focus on enabling technologies
Health & Nutrition
Consumer Goods Construction Transportation Electronics Energy &
Resources Agriculture
Customer industries
Water solutions
Heat management
Enzymes Plant biotechnology
Batteries for mobility
Lightweight composites
Functional crop care
Medical Organic electronics
Growth Fields*
E-Power management
Wind energy
Resources, Environment & Climate Food & Nutrition Quality of life
Chemistry as enabler
* Including growth fields still under evaluation
Materials Systems & Nanotechnology
Raw Material Change
White Biotechnology
Techno-logy
fields
BASF Capital Market Story November 2013 23
Battery materials will play a key role in advancing electromobility of the future Focus Advanced cathodes and electrolytes development for lithium-ion batteries, as well as next-generation battery systems
Business potential 2020 Overall market size: >€20 billion globally (~€16 billion in Asia Pacific) SRM size: >€5 billion globally (~€4 billion in Asia Pacific) BASF sales potential: >€500 million globally (~€350 million in Asia Pacif.)
Activities Acquisition of Novolyte Technologies (April 2012), including production
facility, Application Technology Center in Suzhou, China New electrolytes R&D laboratory and Application Technology Center for
Battery Materials starting up in Amagasaki, Japan, 2013 Ongoing collaboration with leading universities, institutes and industry
partners, as well as battery producers and OEMs
Target Position BASF as a leading global solution provider for battery and cell
manufacturers
BASF Capital Market Story November 2013 24
Thereof investments in emerging markets Total investments
35-45%
15-20
30-40%
~15
2006 – 2010 2011 – 2015 2016 – 2020
10.9
~20%
Investments … will boost future organic growth
Future investments in € billion
BASF Capital Market Story November 2013 25
Major investment projects Asia Pacific MDI plant Location: Chongqing, China Planned start-up: 2014 Investment: ~€860 million
Isononanol (INA) plant Location: Maoming, China Planned start-up: 2015
Aroma ingredients complex Location: Kuantan, Malaysia Planned start-up: 2016 Investment: US$500 million (100%)
Expansion of Verbund site Location: Nanjing, China Feasibility studies ongoing Investment: up to US$1 billion (100%)
Polyurethanes, Surfactants & Dispersions Location: Dahej, India Planned start-up: 2014 Investment: €150 million
BASF Capital Market Story November 2013 26
Korla
Tibet
Qinghai
Inner Mongolia
Heilongjiang
Shandong
Liaoning
Hebei
Sichuan
Henan
Anhui
Nanjing
Jilin
Gansu
Ningxia
Shaanxi
Shanxi
Hubei
Hunan
Zhejiang
Fujian
Jiangxi
Guangxi Yunnan
Guizhou
Taiwan
Hainan
Beijing Tianjin
Shanghai
Maoming
Current investment projects Since 1992 BASF and partners invested ~€5 billion in China
Until 2020 BASF and partners will invest €4 - 5 billion in China
Major current projects:
– Nanjing: Acrylic acid (BASF-YPC) SAP
– Chongqing: MDI – Korla: Butanediol,
PolyTHF – Shanghai: Coatings – Shanghai: Catalysts – Maoming: Isononanol – Kaohsiung: Catamold® – Rudong: Agrochemicals Production clusters
Selected production sites
Implement €4 - 5 billion investment plan to move closer to the customers
Chongqing
Rudong
Kaohsiung
BASF Capital Market Story November 2013 27
BASF aims to further increase its sales share from emerging markets
*BASF definition: Developed markets include EU15, Norway, Switzerland, North America, Japan, Australia, New Zealand
** Sales excluding Oil & Gas
2020 in % of sales**
2012 in % of sales
(€62bn**)
2001 in % of sales
(€28 bn**)
Emerging markets Developed markets*
~ 65%
~ 55% ~ 45%
~ 78%
~ 35%
~ 22%
BASF Capital Market Story November 2013 28
Acquisitions … will contribute to profitable growth in the future
Provide a minimum return on investment of 8% p.a. after tax
Are EPS accretive by year three at the latest
Financial acquisition criteria
Generate profitable growth above the industry average
Are innovation-driven
Offer a special value proposition to customers
Reduce earnings cyclicality
Strategic acquisition criteria
We want to acquire businesses which …
BASF Capital Market Story November 2013 29
0
1.000
2.000
3.000
2012 2015
Former cost saving programs NEXT STEP
Operational excellence programs STEP program on track: ~€1 billion earnings contribution by 2015
Annual earnings contribution in € million
Targeted annual earnings contri-bution of ~€1 billion by end of 2015
Project timeline: 2012–2015 Program is on track Measures to optimize processes
and structures in all regions, e.g. – manufacturing, maintenance – supply chain – engineering, best-cost country
sourcing One-time costs & investments:
~€1 billion
NEXT Program
STrategic Excellence Program ‘STEP’
NEXT program successfully completed
Annual earnings contribution of ~€1 billion achieved in 2012
BASF Capital Market Story November 2013 30
€1 billion cost savings by 2020
Shared services (Finance, IS/IT, etc.)
Procurement Supply chain Functional efficiency
initiatives
Functional Excellence
Savings in investment costs and depreciation
Investment Process Excellence
Raw material savings through yield increases
Energy and utilities Production efficiency
gains
Operational Excellence Structural Excellence
BU efficiency targets (e.g. sales efficiency)
Structural Excellence Program
Regional excellence initiative will drive Asia Pacific’s profitable growth
BASF Capital Market Story November 2013 31
Appendix 1:
Q3 2013 Reporting
BASF Capital Market Story November 2013 32
Cash offer of 4 US dollars per share
Offer expires on October 31, 2013
Enterprise value ~62 million US dollars
Acquisition will strengthen BASF‘s footprint in the enzyme growth market
Optimization of global production network
Reduction of 650 positions worldwide
Investment of €250 million in production and R&D
Transaction completed July 31, 2013
Increased production from 3,000 to ~40,000 boe per day in Norway
Compensation payment of ~781 million US dollars*
Important corporate developments
Transaction with Statoil completed
Restructuring in Pigments business
Cash offer for Verenium enzyme biotechnology
* Euro/dollar exchange rate July 31, 2013: €1 = $1.3275
BASF Capital Market Story November 2013 33
Chemicals Pressure on volumes and margins
Intermediates 700 (7%)
Monomers 1,599 (11%)
Petrochemicals 1,925 (6%)
€4,224 (8%)
Q3’13 segment sales (million €) vs. Q3’12
Sales development Period Volumes Prices Portfolio Currencies
Q3’13 vs. Q3’12 (2%) (3%) 0% (3%)
EBIT before special items (million €)
569445
650
495 527
0
200
400
600
800
Q3 Q4 Q1 Q2 Q3
2013 2012
BASF Capital Market Story November 2013 34
Performance Products Growth in volumes and earnings
Performance Chemicals
896 (3%)
Care Chemicals 1,209 (1%)
€3,939(1%)
Paper Chemicals 365 (8%)
Q3’13 segment sales (million €) vs. Q3’12
Nutrition & Health 540 +10% Dispersions
& Pigments 929
(2%)
EBIT before special items (million €)
Sales development Period Volumes Prices Portfolio Currencies
Q3’13 vs. Q3’12 6% (3%) 1% (5%)
344
183
379 394 376
0
200
400
600
Q3 Q4 Q1 Q2 Q3
2013 2012
BASF Capital Market Story November 2013 35
Functional Materials & Solutions Sound overall demand, especially in automotive
Catalysts 1,466 +12%
Construction Chemicals
576 (9%)
Coatings 728
(5%)
€4,439+3%
Q3’13 segment sales (million €) vs. Q3’12
Sales development Period Volumes Prices Portfolio Currencies
Q3’13 vs. Q3’12 8% 2% (1%) (6%)
Performance Materials 1,669 +5%
231 228 239293 300
0
200
400
600
Q3 Q4 Q1 Q2 Q3
EBIT before special items (million €)
2013 2012
BASF Capital Market Story November 2013 36
Agricultural Solutions Sales growth despite pronounced currency headwinds
Q3’13 segment sales (million €) vs. Q3’12
Sales development Period Volumes Prices Portfolio Currencies
Q3’13 vs. Q3’12 8% 4% 3% (10%)
0
100
200
Q3 Q30
300
600
900
1.200
Q3 Q3
1,054 172 171 1,008
EBIT before special items (million €)
2013 2012 2013 2012
BASF Capital Market Story November 2013 37
103
318
62
451
0
100
200
300
400
500
Q3/2012 Net Income Q3/2013 Net Income
Oil & Gas Substantially higher net income
Exploration & Production
754 +15%
Natural Gas Trading 2,376 +29%
€3,130 +25%
Q3’13 segment sales (million €) vs. Q3’12 EBIT bSI/Net income (million €)
Natural Gas Trading
Exploration & Production
Net income
Sales development Period Volumes Prices/Currencies Portfolio
Q3’13 vs. Q3’12 22% (2%) 5%
499
396 360
422
BASF Capital Market Story November 2013 38
Appendix 2:
Asia Pacific Business Review
39
BASF Capital Market Story November 2013
Customers from 17 countries
More than 100 production sites
148 sales offices*
~16,400 employees, thereof 800 R&D staff
Sales in 2012: ~€12.5 billion**
EBITDA in 2012: €1.2 billion***
BASF in Asia Pacific
* Some sites are not shown due to scale. Site and office numbers refer to companies of significant size where BASF holds a stake greater than 50% .
** Sales by location of customer
*** EBIT by location of company
All figures for 2012 have been adjusted to changes in IFRS 10 & 11
Regional headquarters
Verbund site
Production site
R&D/Technical center
Asia Pacific service center
Singapore
Hong Kong
Japan South Korea
Mongolia
China
Pakistan
India
Sri Lanka
Bangladesh
Thailand Vietnam Philippines
Indonesia
Taiwan
Malaysia
Australia
New Zealand
40
BASF Capital Market Story November 2013
EBITDA by location of company € billion
0.6 0.7
0.8
1.2
0.8 0.9
1.7 1.6
1.4 1.2*
0
1
2
2004
2005
2006
2007
2008
2009
2010
2011
2012
2012
r
5.3 6.5
8.1 9.6 9.3 8.7
12.5 14.4 14.9
12.5*
0
10
20
2004
2005
2006
2007
2008
2009
2010
2011
2012
2012
r
Sales by location of customer € billion
* 2012r figures restated according to changes in IFRS 10 & 11
Sales and profitability in Asia Pacific
+14% p.a.
+11% p.a.
41
BASF Capital Market Story November 2013
Functional Materials &
Solutions 30%
Sales by segment
Chemicals 31%
Other 8%
Performance Products 27% Greater
China 42%
Australia, New Zealand (ANZ)
4%
South Asia 11%
Japan 13%
South Korea 8%
ASEAN 22%
€12.5 billion
€12.5 billion
Sales by sub-region
Agricultural Solutions 4%
Figures for 2012 adjusted to changes in IFRS and new segment structure as of January 1, 2013.
Sales Asia Pacific 2012
South Asia: India, Pakistan, Bangladesh, Sri Lanka ASEAN: Singapore, Philippines, Vietnam,
Thailand, Indonesia, Malaysia
Sales to third parties by location of customers
42
BASF Capital Market Story November 2013
0
8
16
0 8 16SRM growth 2010-2020 (%)
BAS
F’s
annu
al s
ales
gro
wth
201
0-20
20 (%
)
South Asia
ASEAN
South Korea
Greater China
ANZ
Japan
3rd party net sales in 2010
SRM = Strategic Relevant Market
BASF will generate highest sales growth in Greater China, South Asia and ASEAN
Sales vs. SRM growth by sub-region
43
BASF Capital Market Story November 2013
Task forces will explore untapped markets in Asia Pacific
Mongolia
Myanmar
Laos
Cambodia
GDP (nominal) in 2012
Source: GDP: United Nations; Mongolia sales: WASP; Cambodia, Laos, Myanmar: ASEAN sub-region
Total Population 2012: 72.4 million 2020: 77.8 million
Mongolia (GDP: US$10.2 billion) Natural mineral & mining industry Construction Agriculture
Laos (GDP: US$8.9 billion) Low cost labor Agriculture (livestock & crop)
Myanmar (GDP: US$54.0 billion) Natural resources (e.g. gas) Newly opening attractive market
Cambodia (GDP: US$14.4 billion) Low cost labor Textile industry Agriculture
BASF Capital Market Story November 2013 44
Appendix 3:
others
45
BASF Capital Market Story November 2013
Index Revenue (2001 = 1) Ratio capex / depreciation
Capex as percentage of sales
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
0
0,5
1
1,5
2
2,5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Investments: Capex for organic growth* develops in line with business growth
Ratio capex/ depreciation
Revenue
Capex as % of sales
* Without acquisitions
BASF Capital Market Story November 2013 46
46