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1Nomura German Conference ___November 2010
Profitable growth loves ups and downsProfitable growth loves ups and downsDr. Albert HeuserPresidentMarket and Business Development Asia Pacific
Nomura ConferenceNovember 15, 2010
2Nomura German Conference ___November 2010
Forward-looking statements
This presentation includes 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. This presentation contains a number of forward-looking statements including, 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 with respect to future events and financial performance. Actual financial performance of the entities described herein 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.
Forward-looking statements represent estimates and assumptions only as of the date that they were made. 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.
3Nomura German Conference ___November 2010
1 | Overview BASF Group 2010
2 | Well positioned for profitable growth
3 | Outlook 2010
3
4Nomura German Conference ___November 2010
* Styrenics reported under ‘Other’
Percentage of sales BASF Group 2009
Chemicals
15%
Plastics*
14%
FunctionalSolutions14%
Performance Products18%
AgriculturalSolutions7%
Oil & Gas
22%
ConstructionChemicals
Inorganics
Petrochemicals
Intermediates
PerformanceChemicals
Coatings
Dispersions &Pigments
PerformancePolymers
Polyurethanes
CropProtection
Exploration & ProductionandNatural Gas Trading
Care Chemicals
Catalysts
Paper Chemicals
BASF today – a well-balanced portfolioTotal sales 2009: €50.7 billion
Nutrition & Health
5Nomura German Conference ___November 2010
Sales €15.8 billion - 3% +23%EBITDA €2.9 billion +2% +47%EBITDA margin 18.6% 17.7% 15.6%EBIT before special items €2.2 billion - +77%EBIT €2.16 billion +4% +122%Net income €1.25 billion +5% +425%Adjusted EPS €1.52 +1% +149%
Q3 2010 performance vs. Q2’10 vs. Q3’09
Third quarter 2010 highlightsStrong business dynamics in all segments
Q3 2010 business development
Volume growth in Chemical ActivitiesAgricultural Solutions started successfully into the season in South AmericaOil & Gas earnings were above previous year due to higher oil priceVery strong operating cash flow of €5.3 billion in the first three quarters
6Nomura German Conference ___November 2010
* According to German GAAP** Cash provided by operating activities less capex (in 2005 before CTA)*** 2009 adjusted for re-classification of settlement payments for currency
derivatives
Continuous strong cash flow
Cash Flow (billion €)
Cash provided by operating activitiesFree cash flow**
-1
0
1
2
3
4
5
6
7
2001* 2002* 2003* 2004 2005** 2006 2007 2008 2009 2010Q1-Q3
5.3
3.8
***
7Nomura German Conference ___November 2010
Average annual dividend increase of 12.8%(2001-2009)
Dividend yield above 3% in any given year since 2001
Attractive dividend yield of 3.9% in 2009*
Consistent, long-term valueJan 2001 – September 2010:Average annual performanceof BASF share** of 11%
For 2010, we expect to increase the dividend.3.9%
Attractive shareholder returns
Key factsDividend per share (€)
1.70
0.70 0.700.85
1.00
1.50
1.95 1.95
0.65
0.0
0.5
1.0
1.5
2.0
2001 2002 2003 2004 2005 2006 2007 2008 2009
0.5
1.0
1.5
2.0
3.1% 3.9% 3.1%
* Dividend yield based on share price at year-end
3.2% 3.1% 4.1% 3.8% 7.0%Yield*
** With dividends reinvested
8Nomura German Conference ___November 2010
1 | Overview BASF Group 20102 | Well positioned for profitable growth3 | Outlook 2010
8
9Nomura German Conference ___November 2010
Regional sales targets 2020
Outgrow global chemical production growth by 2 percentage points
Earn premium on cost of capital in all regions
* corresponds to sales of €17 billion in 2020, assuming $/€ of 1.40
** oil price assumption of $75/bbl until 2013, thereafter increase to ~$100/bbl up to 2020
Ambitious targets for the regionsBASF Group
Profitable growth to more than €90 billion in sales by 2020
2009 2020
€9bn€20 bn
Asia Pacific
7-8% p.a.2009 2020
€30bn
€49bn**
Europe, including Africa, Middle East
4-5% p.a.
2009 2020
South America
€3 bn €6 bn~8% p.a.
2009 2020
North America
€9 bn€17 bn*
5-6% p.a.
10Nomura German Conference ___November 2010
Leading positions in growth industries
and emerging markets
Ongoing portfolio
optimization
Excellent innovation platform
We strive to outperform global chemical production growth by at least 2 percentage points
Well positioned for profitable growthBASF Group
Translate megatrends into business growthContinue expansion in Asia
Continue with active portfolio managementDrive portfolio closer to customers
Product and system innovation as growth driversStrong pipeline of innovations
Growth target:
11Nomura German Conference ___November 2010
457612
700846
764
935
12271,204
0
200
400
600
800
1,000
1,200
1,400
2003
2004
2005
2006
2007
2008
2009
1-9 20
10
8.7 9.29.39.6
8.1
6.55.3
4.5
0
2
4
6
8
10
12
2003
2004
2005
2006
2007
2008
2009
1-9 '1
0
+ 11.6% p.a.
Sales and profitability of BASF’s business in Asia Pacific
Sales by location of customers EBITDAin billion € in million €
12Nomura German Conference ___November 2010
Growth in emerging marketsOutgrowing Asian Pacific chemical market by 2 percentage points p.a.
New Zealand
Australia
China
Pakistan
Bangladesh
India Thailand
Singapore
Indonesia
Taiwan
JapanS. Korea
Malaysia
VietnamHong Kong
Asia Pacific service center
Regional headquarters
Verbund site
Chemical production site *
R&D center * * Some sites not shown due to scale
BASF expects to double sales to €20 billion in Asia Pacific by 2020:
Strengthen market focus through industry and customer target groupsDevelop and market innovations in Asia for AsiaInvest in Asia to generate 70% of sales through local production
– €2 billion investments planned for 2009-2013
• Expansion of Verbund site Nanjing, China
• New MDI plant in Chongqing, China
13Nomura German Conference ___November 2010
BASFcore
businesses
Powerful partnerships
Major acquisitions Major divestitures
Pharmaceuticals
Fertilizers
Refineries
Fibers
Printing systems
Polyolefins (Basell)
Polystyrene North America
Agchem generics
Premix
Crop protectionSuperabsorbentsOil & Gas (Revus)Engineering Plastics Electronic ChemicalsCustom synthesisCatalysts (Engelhard)Construction Chem.Water-based resinsPigments (Ciba)Plastic additives (Ciba)
16 billion Euro*(Sales)
10 billion Euro**
(Sales)
GazpromMonsantoPetronasShellSinopecTotal
** not including Styrenics business
Selected transactions 1999 to date
Styrenics(to be divested)
Pro-active portfolio management
Cognis(acquisition announced)
* not including Cognis
14Nomura German Conference ___November 2010
Specific solutions based on renewable resources formining, synthetic lubricants,coatings and crop protection industries
Sales 2009: €786 millionEBITDA margin 2009: 11.2%
Functional Products
Products and formulations forthe personal and home caremarkets
Sales 2009: €1,457 millionEBITDA margin 2009: 13.2%
Care Chemicals
Products, formulations and concepts for functional food, beverage, dietary supplements and pharma
Sales 2009: €325 millionEBITDA margin 2009: 13.2%
Nutrition & Health
Cognis A global leader in value-added products
15Nomura German Conference ___November 2010
Integration into Performance Products segment with the following objectives
Growing >2% points faster than the relevant market
Achieve 20% EBITDA margin in the Performance Products segment by 2012
Acquisition accretive as of 2012
Integration costs of €200-250 million until end of 2012
Cost synergies of at least 5% of 2009 net sales fully achieved by 2013
BASF + Cognis Clear targets
16Nomura German Conference ___November 2010
Active portfolio management pays off
Chemical activities
Agricultural Solutions
Oil & Gas, including non-deductible oil taxes
EBITDA by activity (in billion €, without Other)
0
2
4
6
8
10
2001* 2003* 2005 2007** 2009
Recent acquisitions reshaped portfolio- Closer to customers- Innovation-driven- Profitable growth above
industry average
BASF’s EBITDA (excluding Other) was €9 billion in 1-9/2009
* Based on German GAAP** As of 2007 according to new segment structure
(excl. Styrenics and corporate costs)
Our diversified portfolio is a key strength
2010Q1-Q3
17Nomura German Conference ___November 2010
R&D spending in 2010 planned on similar level
Innovation will spur further growth
Total R&D expenditures 2009 (billion €)R&D investments: 3.5% of sales*More than 9,300 employees involved in R&DAround 1,900 partnerships with universities, startup companies and industry partners Five Growth Clusters:- Nanotechnology- Energy Management- Plant Biotechnology- Industrial Biotechnology- Raw Material ChangeBudget for Growth Clusters (2009-2011): up to €1 billion
Strong commitment to R&D
* Excluding Oil & Gas
24%
1%
Corporate Research23%
Agricultural Solutions
25%
FunctionalSolutions12%
PerformanceProducts20%
Chemicals9%
Plastics9%
€1.4billion
Other2%
18Nomura German Conference ___November 2010
Meeting our customer’s needs BASF supplies Tata for the “Nano”
BASF products help the Nano to be safe,
energy efficientand affordable
for a broad consumer class!
Ultramid air intake manifold
Coatings
Seating foamSpecial catalytic converter
19Nomura German Conference ___November 2010
Innovation pipeline worth €19 billion
* New or improved products or new applications, max. 5 years on market, including Growth Clusters
Net present value by segments (billion €)
Net Present Value (NPV) represents discounted earnings after tax from R&D projects after deduction of R&D expenditures
Major contribution from Agricultural Solutions and Performance Products
History of high success rate due to consequent R&D controlling and Phasegateprocess, including life cycle management
R&D contributes significantly to earnings growth
4.53.50
5
10
15
20 €19 billion
17% Performance Products7% Plastics4% Chemicals
9% Functional Solutions
45% Agricultural Solutions
3% Oil & Gas15% Corporate Research
20Nomura German Conference ___November 2010
1 | Overview BASF Group 2010 2 | Well positioned for profitable growth3 | Outlook 2010
20
21Nomura German Conference ___November 2010
We aim to grow sales on average by two percentage points per year above chemical market growth.We strive to grow our earnings further year by year and to achieve an EBITDA margin of 18% until 2012.
We expect:- the good business development to continue in the fourth quarter of 2010 - sales of ~€ 63 billion and EBIT before special items of more than € 8 billion in 2010- to earn a high premium on our cost of capital- to increase the dividend
Targets 2010
Medium-term targets
We aim to continuously increase the annual dividend, or at least maintain it at the level of the previous year.
Dividend policy
Outlook: record year 2010
22
23Nomura German Conference ___November 2010
Delivering consistent, long-term value
Long-term performance January 2001 – September 2010 (average annual performance with dividends reinvested)
BASF total return well above benchmark levels
Average annual dividend increase of 12.8%(2001-2009)
Attractive dividend yield of 3.9% in 2009, based on share price at year-end
Aim to increase dividend each year, or at least maintain it at the previous year‘s level
Committed to shareholder value
MSCI World Chemicals
DAX 30
Euro Stoxx 50
BASF
5.7%
-0.3%
-3.0%
11.3%
-5 0 5 10 15
24Nomura German Conference ___November 2010
Business dynamics remained strong in Q3
1.21.5
2.02.2 2.2
0.0
0.5
1.0
1.5
2.0
2.5
Q3 Q4 Q1 Q2 Q3
0%0%0%(3)%*Q3’10 vs. Q2’10
Sales development
4%2%6% 14%1-9 ’10 vs. 1-9 ’09
8%0%10%5%Q3’10 vs. Q3’09
CurrenciesPortfolioPricesVolumesPeriod
EBIT before special items (billion €)
20102009
12.8 13.215.5 16.2 15.8
0
4
8
12
16
20
Q3 Q4 Q1 Q2 Q3
Sales (billion €)
* +2% volume growth w/o Agricultural solutions and Oil & Gas
20102009
25Nomura German Conference ___November 2010
ChemicalsContinued strong demand
Intermediates643(1)%
Inorganics322
(1)%
Petrochemicals1,909(4)%
€2,874(3)%
364315
461
687617
0
200
400
600
Q3 Q4 Q1 Q2 Q3
(1)%0%(2)%0%Q3’10 vs. Q2’10
Sales development
4%0%31%22%1-9 ’10 vs. 1-9 ’09
9%0%25%10%Q3’10 vs. Q3’09
CurrenciesPortfolioPricesVolumesPeriod
Q3’10 segment sales (million €) vs. Q2’10 EBIT before special items (million €)
20102009
26Nomura German Conference ___November 2010
PlasticsEarnings up thanks to high capacity utilization
Polyurethanes1,458+4%
PerformancePolymers
1,140(4)%
€2,598+1%
216251
279
349 371
0
200
400
Q3 Q4 Q1 Q2 Q3
0%0%0%1%Q3’10 vs. Q2’10
Sales development
5%0%10%27%1-9 ’10 vs. 1-9 ’09
11%0%7%14%Q3’10 vs. Q3’09
CurrenciesPortfolioPricesVolumesPeriod
Q3’10 segment sales (million €) vs. Q2’10 EBIT before special items (million €)
20102009
27Nomura German Conference ___November 2010
Performance ProductsSolid earnings despite one-off costs
286209
419471
370
0
100
200
300
400
500
Q3 Q4 Q1 Q2 Q3
0%0%1%1%Q3’10 vs. Q2’10
Sales development
4%13%3%15%1-9 ’10 vs. 1-9 ’09
7%0%7%7%Q3’10 vs. Q3’09
CurrenciesPortfolioPricesVolumesPeriod
Dispersions &Pigments
887+4%
Performance Chemicals
832+3%
Care Chemicals682+1%
€3,206+2%
Paper Chemicals448+2%
Q3’10 segment sales (million €) vs. Q2’10 EBIT before special items (million €)
Nutrition & Health357(4)%
20102009
*
* Reduction in EBIT before special items due to one-time charges
28Nomura German Conference ___November 2010
Functional SolutionsIncreased volumes drive topline growth
Catalysts1,347+10%
Construction Chemicals599
+4%
Coatings645
(1)%
€2,591+6%
106 101 111
165 158
0
50
100
150
Q3 Q4 Q1 Q2 Q3
0%0%(1)%7%Q3’10 vs. Q2’10
Sales development
7%1%11%18%1-9 ’10 vs. 1-9 ’09
12%1%9%15%Q3’10 vs. Q3’09
CurrenciesPortfolioPricesVolumesPeriod
Q3’10 segment sales (million €) vs. Q2’10 EBIT before special items (million €)
20102009
29Nomura German Conference ___November 2010
Agricultural SolutionsSuccessful start to new season in South America
21
66
0
40
80
Q3 Q3
1%0%(1)%(31)%Q3’10 vs. Q2’10
11%0%(6)% 29%Q3 ’10 vs. Q3 ’09
Sales development
4%0%(3)% 7%1-9 ’10 vs. 1-9 ’09
CurrenciesPortfolioPricesVolumesPeriod
Q3’10 segment sales (million €) vs. Q3’09 EBIT before special items (million €)
20102009
832
623
0
200
400
600
800
1,000
Q3 Q320102009
+34%
+214%
30Nomura German Conference ___November 2010
Oil & GasImproved earnings despite lower volumes
186 272
0
200
400
600
800
Q3 Q3
Exploration &Production881(1)%
Natural GasTrading
1,347(10)%
€2,228(7)%
0%6%(12)%Q3’10 vs. Q2’10
Sales development
0%(13)%3%1-9 ’10 vs. 1-9 ’09
0%16%(23)%Q3’10 vs. Q3’09
PortfolioPrices/CurrenciesVolumesPeriod
83 70
EBIT bSI Natural Gas TradingEBIT bSI Exploration & Production
Net income
Q3’10 segment sales (million €) vs. Q3’09 EBIT before special items / Net income (million €)
20102009
467503
550 573
31Nomura German Conference ___November 2010
Construction ChemicalsSTYROLUTION Oil and Gas
Carve-out of Styrenics activities into STYROLUTIONEffective: January 1, 2011Sales 2009: €2.5 billionEmployees 2009: 1,460
BASF admixtures used in the construction of Gotthard Base Tunnel – World’s longest railway tunnelSpecial admixtures for long distance and high temperature
Five North Sea oil discoveries in 2010:
– Norway: Beta and Maria; – UK: Catcher, Blakeney,
CladhanNew discoveries with growth potentialAppraisal phase starts asap
Important operational developments
32Nomura German Conference ___November 2010
CO2 scrubbing NaphthaMax® III
High-efficiency capture of carbon dioxide (CO2) from combustion gases in coal-fired power plantsDevelopment of new processes and solvents
Catalyst for Fluid Catalytic Cracking (FCC) unitsIncreased zeolite activity and coke selectivity as well as improved hydrothermal stabilityIncreased gasoline yield from the FCC unitTranslating to higher refinery margins
Standak® Top
SeedSolutions® innovation for soybean growers in BrazilReady-to-use insecticidal and fungicidal seed protection with Plant Health characteristicsAttractive and fast growing market driven by high value seed
Introducing the next leading technologies
33Nomura German Conference ___November 2010
0
100
200
300
400
500
2009 2010 2011/2012 SteadyState
130
350
Integration costs2009: €785 million2010: ~€170 million2011/2012: ~€100 million
Net reduction of positions- Target: 3,800- Status Q3 2010: >2,400
Ciba non-production sites- To be consolidated: 58- Status Q3 2010: 47 exited
23 Ciba production sites under strategic review- Planned exit: 15*(thereof 11 implemented)
Ciba integration: synergies exceed targetsStructural integration of Ciba completed
Expected synergy run rate (million €) Impact of Ciba acquisition
450 >450SynergyTarget
Synergy run rateEffective in 2009
* On two sites exit of production activities only
34Nomura German Conference ___November 2010
2.0
2.92.9
1.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1994-1998 1999-2003 2004-2009 2010-2014
Continuous investments underline our long-term commitment to Asia
Investments Major investment projectsin billion €
Year Verbund Location2001 Verbund site Kuantan2005 Verbund site Nanjing2006 MDI/TDI Caojing2009 –2011
Expansion of Verbund site
Nanjing
2014 MDI* Chongqing* feasibility study, commercial operation estimate
35Nomura German Conference ___November 2010
Naphtha
Propylene
CO/H2
CO
CO/H2
CO
NH3 MeOH
CrackerExpansion to 750 kt/a
Polyethylene
EthyleneOxide
Oxo-alcohols
Acrylic Acid
Syngas
Acrylates
PropionicAcid
FormicAcid
DimethylFormamide
MethylAmines
Ethylene
Natural Gas
EthyleneGlycol
Oxygen
Crude C4
SAP
Non ionic surfactants
Butadiene Isobutene
2-Propylheptanol
Polyisobutene
Styrene Monomer
PS
EPS
EA/EOA/DMEOA
WCP
Extension of value chains in Nanjing
Aromatics
36Nomura German Conference ___November 2010
Acetylene
Chlorine
H2
Acetylene
Methanol HyCO
AcetyleneOff Gas
Tail Gas
MeOH
Butandiols
Formaldehyde
MeOH
FA
BDO
Acetylene
PVC
ChlorineCO
Natural Gas
Oxygen
Nitric Acid
Cl2
HCl
Others
Acetylene
Benzene
Salt
PVC
MDIH2
H2
NH3
MDI Verbund Chongqing based on natural gas
Partners
Aniline
MNB
MDI
Aniline
MNB
MDI
FA
MNB
Aniline
BASF
37Nomura German Conference ___November 2010
Industry Target Groups Asia PacificFocus on five most important industries
Inorganics
Catalysts
Petro-chemicals
Intermediates
ConstructionChemicals
Coatings
Dispersion& Pigments
CareChemicals
PerformanceChemicals
PerformancePolymers
Polyurethanes
7% p.a.
7% p.a.
7% p.a.
5% p.a.
4% p.a.
~6% p.a.
Bubble Size: BASF Net Sales to 3rd partiesTargeted BASF Industry Sales
Growth*
BASF Group Sales by
Industry in A/P
Construction
Pharma
Coatings
Packaging
Automotive
* 2009-2020 p.a.
10%
2%
8%
8%
14%
38Nomura German Conference ___November 2010
Selected portfolio changes since start of 2008, driven by:
Actively managing business portfolio in Asia Pacific
Anticipation of market developments
Focusing on proximity to customers
New technologies
Economies of scale
Synergies
Strengthening Verbund
• BDO / THF, Korea• Process catalysts, China• Marine coatings tolling,
Japan• Styrene monomer, Korea• Agrochem, India• Admixture business, Korea• Admixture, Suzhou (China)• Coatings+admixture, Japan• Specialty plastics, Pakistan• Automotive OEM coatings,
Australia + Philippines• TCM (electronic chemicals),
Singapore + Malaysia• Effect pigments, China
Closure/sale ofexisting capacities
• Verbund site, China*• Construction chemicals, China,
South Asia• Coatings, Thailand• Automotive catalysts, Thailand• PU system house, Australia• Care Chemicals, China• Coatings, Korea• Dispersions, China• Pharma apps lab, India• Intermediates lab, China• Research lab, India• Catalysts R&D lab, China• Dispersions & pigments,
China*, Indonesia• Cellasto plant, China*• PU System House, China*• MDI Plant; China*
Start-up and planned new capacities
*planned