Creditor Relations Deutsche Bundesbank, Frankfurt · 2018-11-17 · The #1 chemical company €70.4 billion sales, €6.7 billion EBIT bSI in 2015 #1-3 in ~70% of businesses, present

BASF Credit Story August 2016 1

We add value as one company

BASF Creditor Relations

Deutsche Bundesbank

FrankfurtAugust 16, 2016


150 years

Cautionary note regarding forward-looking statements

This presentation may contain forward-looking statements that are subject to risks anduncertainties, including those pertaining to the anticipated benefits to be realized from theproposals described herein. Forward-looking statements may include, in particular, statementsabout 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 financialperformance. Actual financial performance could differ materially from that projected in theforward-looking statements due to the inherent uncertainty of estimates, forecasts andprojections, and financial performance may be better or worse than anticipated. Given theseuncertainties, readers should not put undue reliance on any forward-looking statements. Theinformation contained in this presentation is subject to change without notice and BASF doesnot undertake any duty to update the forward-looking statements, and the estimates andassumptions associated with them, except to the extent required by applicable laws andregulations.


BASF at a glance

Business review & outlook

Path forward

Financing highlights


150 years

Chemistry as an enabler BASF has superior growth

opportunities: – sustainable innovations– investments– emerging markets

The #1 chemical company €70.4 billion sales, €6.7

billion EBIT bSI in 2015 #1-3 in ~70% of businesses,

present in almost all countries

6 integrated Verbund sites, production in 60 countries

A track record of strong sales and earnings growth

>3.5% dividend yield in every single year from 2006-2015

~€65 billion market capitalization on August 9, 2016

PerspectiveLudwigshafen,Germany

Antwerp,Belgium

Nanjing,China

Kuantan,MalaysiaGeismar,

LouisianaFreeport,Texas

Verbund site

Positioning

We create chemistry for a sustainable future

Performance


150 years

BASF today – a well-balanced portfolioTotal sales 2015: €70.4 billion

Percentage of sales 2015*

* Not depicted here: ~4% of Group sales reported as ‘Other‘ ** Natural Gas Trading has been divested on Sep. 30, 2015.


150 years

Verbund: Unique competitive advantage

Global reduction in carbon emissions of 6 million metric tons p.a. and reduction of waste

Example Ludwigshafen site:avoidance of 7 million metric tons of freight p.a.= 280,000 fewer truckloads

Shared use of on-site facilities: fire department, security, waste water treatment and analytics

* Savings include only tangible synergies. Additional (intangible) benefits and retained profits are not included.

Verbund generates >€1 billion p.a. global cost savings* & supports sustainability


BASF at a glance


Path forward



150 years

Steady earnings growth

* 2010, 2011 indicative, adjusted for IFRS 10 & 11; 2001 – 2009 as reported, without non-compensable foreign income taxes on oil production

EBIT and EBITDA*(in billion €, 2001 - 2015)

3,7

4,7 4,6

7,0 7,2

8,48,9

7,7

6,5

9,9

11,2

10,010,4

11,010,6

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015EBITEBITDA

0,7

2,2 2,2

4,5 4,85,5 6,0

4,6

2,8

6,7

8,06,7 7,2

7,6

6,2

CAGREBITDA

7.9%CAGREBIT

16.6%


150 years

Q2 2016: Financial figures for BASF Group

Financial figures Q2 2016 Q2 2015 Change

Sales €14.5 billion €19.1 billion (24%)

EBITDA €2.8 billion €3.0 billion (7%)

EBIT before special items €1.7 billion €2.0 billion (16%)

EBIT €1.7 billion €2.0 billion (16%)

Net income €1.1 billion €1.3 billion (14%)

Reported EPS €1.19 €1.38 (14%)

Adjusted EPS €1.30 €1.49 (13%)

Operating cash flow €2.3 billion €2.8 billion (17%)

Sales development Volumes Prices Portfolio Currencies

Q2 2016 vs. Q2 2015 2% (7%) (16%) (3%)


150 years

Outlook 2016 for BASF Group confirmed

Outlook 2016 Sales will be considerably below prior year due to the divestiture of the natural gas trading

and storage activities and the lower oil and gas prices. We expect EBIT before special items to be slightly below the previous year level due to

significantly lower earnings in Oil & Gas.

Assumptions 2016 GDP growth: +2.3% Growth in industrial production: +2.0% Growth in chemical production (excl. pharma): +3.4% Exchange rate: $1.10 per euro Oil price (Brent): $40 per barrel


BASF at a glance


Path forward



150 years

Grow sales and earnings faster than global chemical production, driven by

– Continued focus on innovations

– Capital expenditures

– Acquisitions

– Operational excellence and Verbund advantages

Focus on cash generation/conversion

Focus on pruning our portfolio

Maintain industry-leading position in sustainability

The way forward: Our priorities


150 years

€1.95 billion R&D expendituresin 2015; to be maintained in 2016

~10,000 employees in R&D

~3,000 projects

Ranked No.1 in thePatent Asset Index™

~1,000 new patents in 2015

Research Verbund: Cooperations with more than 600 excellent partners from universities, start-upsand industry

Key facts

1.61.7

1.8 1.9 1.95

0,0

0,5

1,0

1,5

2,0

2011 2012 2013 2014 2015

R&D expenditures (in billion €)

Chemicals11%

Performance Products20%

Functional Mat. & Sol.20%

Agricultural Solutions26%

Oil & Gas2%

Corporate Research21%

2.0

1.5

1.0

0.5

0

Strategic lever: Innovations


150 years

Performance Products16%

Oil & Gas24%

€19.5billion

FunctionalMaterials &Solutions12%

Capex budget 2016-2020

Other14%

Chemicals30%

Capex budget 2016-2020

Asia Pacific18%

€19.5billion

South America*9%

North America26%

Europe46%

AgriculturalSolutions4%

Other1%

by segment by region

* Including Africa and Middle East

Strategic lever:Capital expenditures


150 years

Strategic lever: Acquisitions

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 …


150 years

BASF to acquire ChemetallTransaction highlights

Purchase price of US$3.2 billion (debt free)

All-cash offer, financing secured

Expected closing of transaction by the end of 2016

Synergies on industry-typical level

EPS accretive in year 1 excluding integration costs, in year 2 including integration costs

Transaction will significantly enhance BASF Coatings’ position as complete solutions provider

Chemetall – a global technology and innovation leader in metals surface treatment


150 years

Chemetall – a global leader in surface treatment products and services

FiguresFacts

Sales2015: US$845 million 2016E*: US$851 million2017E*: US$895 million

EBITDA2015: US$202 million2016E*: US$217 million2017E*: US$231 million

EBITDA margin2015: 24%2016E*: 25%2017E*: 26%

CAGR sales(2007 – 2015) ~7% (at constant exchange rates)

Key customer industries

Automotive, aerospace, coil,metal forming

Regional sales~50% Western Europe~30% North America~20% Emerging markets, mainly Asia

Employees ~2,500 (~50% sales professionals)

Sites 21 production sites in all regions10 R&D sites

One of the strongest globally managed brands in the sector

Proprietary manufacturing technologies, rigorous product quality and performance standards

Leading market positions in the automotive, aerospace and cold forming segments

Long-standing, service-intensive customer relationships

Significant global presence and record of accelerated expansion in emerging markets

Track record of strong growth and high profitability

* average analysts’ estimates


150 years

Strategic lever: Operational excellenceDrivE with ~€1 bn earnings contribution

0

1,000

2,000

3,000

4,000

2015 2018

Annual earnings contribution(in million €)

Targeted annual earnings contribution of €1 billion from end of 2018 on

Optimization of processes and structures in all regions, e.g.– manufacturing– incremental capacities– productivity increase

Project timeline: 2016–2018

DrivE program

NEXT 2008-2011 DrivE 2016-2018

STEP 2012-2015


150 years

50

100

150

200

250

300

350

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Strategic lever: Operational excellence

EBITDA

Sales

* Excl. companies with major IFRS 10/11 restatements, i.e. BASF YPC Nanjing, Libya onshore, other Oil & Gas and Catalysts companies

BASF Group* 2001–2015(indexed; CAGR 2001–2015)

Fixed Costs

CAGREBITDA

9%

CAGRSales

6%

CAGRFixed Costs3%


150 years

Strategic lever: Strong free cash flow generation

* Cash provided by operating activities less capex ** 2009 adjusted for re-classification of settlement payments for currency derivatives

0

1

2

3

4

5

2007 2008 2009** 2010 2011 2012 2013 2014 2015 1HY2016

Free cash flow*(in billion €)

3.2

2.5

3.2

3.9 3.7

2.6

3.2

1.7

3.6

1.4


150 years

Strategic lever: Continuous portfolio development

Specialties and solutions

Differentiated commodities

target(in % of sales*)

~ 50% ~ 50%

Maintaining a balanced portfolio

Divestment of businesses, e.g., due to loss of differentiation

Divestment of businesses, e.g., due to

lower market attractiveness

Commoditization leads to restructuring

Growth fields

Innovation pipeline

Acquisitions

* Excluding Oil & Gas sales

Attractive markets Differentiation by process

technologies and integration

Attractive markets Differentiation by customer

proximity and innovations


150 years

Functional crop care Personal care & food Omega-3 fatty acids Enzymes Battery materials Specialty plastics Selected assets in Oil & Gas Refinish coatings Surface treatment*

BASFcore business

Strong partnerships

Gazprom Monsanto Petronas Shell Sinopec Statoil Total Yara

Selected transactions 2010 − until today

Acquisitions

~ €5.2 billion salesin emerging and innovation-driven

businesses

Divestitures

Styrenics Fertilizers Selected assets in Oil & Gas Natural gas trading & storage Custom synthesis business Textile chemicals Polyolefin catalysts Industrial coatings*

~ €20 billion sales*in businesses with

limited fit and differentiation

potential* Closing expected in 2016

Strategic lever: Continuous portfolio development


BASF at a glance


Path forward



150 years

Financing strategy

Diversified Debt Financing Instrumentsas of June 30, 2016

€20 billion debt issuance program (for long-term debt financing)

US$12.5 billion commercial paper program (for short-term debt financing)

Two broadly syndicated backup-lines of €3 billion each (maturing in 2020 and 2021, respectively)

Funding Strategy Highlights

Commercial Papers15%

Bank Loans21%

€-denominated Bonds

48%

€15.9billion

Keep a solid A rating (current ratings* S&P A / Moody’s A1)Our target:

* Last confirmation Moody’s: June 23, 2016. Last confirmation S&P: March 14, 2016.

Other Bonds16%


150 years

0.4

1.4

1.8

0.8

0.3

1.01.3

0.5 0.4

1.9

0.0

0.5

1.0

1.5

2.0

2.5

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 >2026

* Nominal values, excluding industrial revenue and pollution control bonds from BASF Corporation.

Profile as of June 30, 2016 (in billion €)*

Well-balanced bond maturity profile


150 years

Overview of bonds (1/2) as of June 30, 2016

Bond Term Issuer Volume ISIN Code1.5% Euro Bond 2016/2031 BASF SE €200 million XS1374994280

1.375% GBP Bond 2014/2017 BASF SE GBP250 million XS1144218804

EUR Floating Rate Note 2014/2017 BASF SE €300 million XS1043167433

2.5% Euro Bond 2014/2024 BASF SE €500 million XS1017833242

1.375% Euro Bond 2014/2019 BASF SE €750 million XS1017828911

3.89% USPP Series A 2013/2025 BASF SE USD250 million N/A

4.09% USPP Series B 2013/2028 BASF SE USD700 million N/A

4.43% USPP Series C 2013/2034 BASF SE USD300 million N/A


3.675% NOK Bond 2013/2025 BASF SE NOK1.45 billion XS0932079717


2.875% EUR Bond 2013/2033 BASF SE €200 million XS0932307100



3% EUR Bond 2013/2033 BASF SE €500 million XS0885399583


150 years

Overview of bonds (2/2) as of June 30, 2016

Bond Term Issuer Volume ISIN Code1.875% EUR Bond 2013/2021 BASF SE €1.0 billion XS0883560715

2.0% EUR Bond 2012/2022 BASF SE €1.25 billion DE000A1R0XG3

1.5% EUR Bond 2012/2018 BASF SE €1.0 billion XS0836260975



5.875% GBP Bond 2009/2017 BASF SE GBP400 million XS0420401779

4.875% EUR Bond 2003/2018 Ciba Specialty Chemicals Finance Luxembourg S.A. €500 million XS0170386998


150 years

Highlights of BASF’s credit

Strong track record of sales and earnings growth

Combining economic success with social commitment and environmental protection

Diversified financing strategy with a strong commitment to keep a solid A rating

Focus on operational excellence- Advantageous cost position due to unique Verbund concept

- Disciplined cost management

Well positioned for profitable growth- Excellent innovation platform- Leading positions in growth industries and emerging markets- Ongoing portfolio optimization

Strong free cash flow over the last decade


150 years

BASF Creditor Relations TeamFrank WilhelmiHead of Capital Market Financing

Dr. Lars BuddeSenior IR ManagerCreditor Relations

Contact Details:Email: [email protected]: +49 621 60 91386Websites: www.basf.com/bonds

www.basf.com/anleihen

Lüthje BrandtCapital Market Financing

Thomas LangguthCapital Market Financing


150 years

Documents

Creditor Relations Deutsche Bundesbank, Frankfurt · 2018-11-17 · The #1 chemical company €70.4 billion sales, €6.7 billion EBIT bSI in 2015 #1-3 in ~70% of businesses, present