1

Tackling the challenges ahead

Sep 2009

Kurt Bock, CFOUBS Best of Germany Conference

New York, September 17, 2009

2

1 | Robust performance in difficult environment

2 | Managing the downturn

3 | Clear priorities for use of cash

3

Robust performance in challenging business environment

•

Cash generation remained strong; cost containment efforts show effects•

Earnings of chemical activities down; continued strong performance of Agricultural Solutions

•

High special charges of €300 million due to Ciba integration

Business development Q2 2009

Key figures Q2 2009 vs. Q2 2008•

Sales:

€12.5 billion (-23%)

•

EBIT before special items:

€1.1 billion (-53%)•

Net income:

€343 million (-74%)

•

Earnings per share:

€0.37 (-73%) Adjusted EPS: €0.79 (-49%)

•

Operating cash flow H1 2009:

€3.6 billion (+39%)

4

BASF today – a well-balanced portfolio Total sales 2008: €62.3 billion

* Styrenics

are reported under ‘Other’

following the transfer of the Specialty Plastics and Foams business units to the Performance Polymers division as of January 1, 2008

** Performance Products segment as of April 1, 2009 (not including Ciba)

Percentage of sales 2008

Chemicals

18%

Plastics*

15%

Functional Solutions15%

Performance Products**13%

Agricultural Solutions5%

Oil & Gas

23%

Construction

Chemicals

Inorganics

Petrochemicals

Intermediates

Performance

Chemicals

Coatings

Dispersions &

Pigments

Performance

Polymers

Polyurethanes

Crop

Protection

Exploration & Production

and

Natural Gas Trading

Care

Chemicals

Catalysts

Paper Chemicals

5

EBIT* before special items by activity in billion €without non-compensable foreign taxes on oil production

Oil & Gas and Agro businesses providing a stable earnings basis

* Without ‘Other’

** 2007 and 2008 according to new segment structure (excl. Styrenics

and corporate costs)

*** Based on German GAAP

0

1

2

3

4

5

6

7

2001*** 2002*** 2003*** 2004 2005 2006 2007** 2008**

Oil & GasAgroChemical activities

6

0

1

2

3

4

5

6

7

2004 2005 2006 2007** 2008**0

10

20

30

40

2004 2005 2006 2007** 2008**

Increasing share of specialty chemicals Development of sales and EBITDA

* Excluding Precious & Base Metal Services, Oil&Gas

and ‘Other’

** Excluding Styrenics

commodity business

Specialties Commodities

Sales in billion € * EBITDA in billion € *

48

52

49

51

49

51

49

51

53

47

52

48

53

47

55

45

63

37

62

38

7

50

100

150

200

250

2001 2002 2003 2004 2005 2006 2007 2008

Index

Fixed costs indexed

•

Absolute level of fixed costs stable compared to last trough, while business increased significantly

•

Acquisitions in 2006 pushed up fixed costs slightly

•

Fixed costs represent around 30% of total costs

EBITDA indexedSales indexed

Relentless fixed cost management

8

1 | Robust performance in difficult environment

2 | Managing the downturn

3 | Clear priorities for use of cash

9

•

Temporary shut-down or reduction of capacity of around 200 plants worldwide, reducing global capacity temporarily to slightly above 60%

•

Implementation of short-time work

•

Strict management of inventories and accounts receivable

Short-term measures

Longer-term measures

•

Continuous consolidation of production base

•

Synergies from efficient integration of acquisitions

•

Reduced capex

spending

•

Restructuring and efficiency program NEXT

Acting swiftly with focus on cost and cash

10

0

500

1,000

1,500

2,000

2,500

Annual earnings contribution in € million

Completed

restructuring

programs

NEXT

2003 2004 2006 2008

Sustainable improvement of cost base

2010 2012

NEXT

•

Project timeline:

2008 –

2011

•

Potential earnings contribution:

>€1 billion by 2012

•

Non-recurring costs: €300 million

•

Investment:

€700 million

•

Personnel reduction:

>1,000 employees

11

4 6 % *

Solid financing as a key advantage in turbulent times

100%BondsBonds •

Bonds for a total €4.0 billion and GBP400 million issued in 2009

•

Balanced bond maturity profile

•

Bonds for a total €4.0 billion and GBP400 million issued in 2009

•

Balanced bond maturity profile

CommercialPaperCommercialPaper

•

No difficulties in issuing commercial paper

•

Commercial paper program of $12.5 billion ($3.15 billion drawn by end of Q2 2009)

•

No difficulties in issuing commercial paper

•

Commercial paper program of $12.5 billion ($3.15 billion drawn by end of Q2 2009)

Syndicated LoansSyndicated Loans

•

Broadly syndicated undrawn long-term back-up lines of $6.0 billion

•

Short-term syndicated credit facility of CHF 3.5 billion

•

Broadly syndicated undrawn long-term back-up lines of $6.0 billion

•

Short-term syndicated credit facility of CHF 3.5 billion

CreditRatingCreditRating

•

Strong investment grade rating:

Moody‘s: A1/P-1 outlook stable; Standard & Poor’s:

A+/A-1 outlook negative

•

Committed to credit ratios that support a single A rating

•

Strong investment grade rating:

Moody‘s: A1/P-1 outlook stable; Standard & Poor’s:

A+/A-1 outlook negative

•

Committed to credit ratios that support a single A rating

12

1 | Robust performance in difficult environment

2 | Managing the downturn

3 | Clear priorities for use of cash

13

-1

0

1

2

3

4

5

6

2001** 2002** 2003** 2004 2005* 2006 2007 2008 H12009

Strong history of cash flow generation

In billion € Cash provided by operating activities Free cash flow*

* Cash provided by operating activities less capex

(in 2005 before CTA)

** According to German GAAP

2009

14

Focus on operating cash flow

R&D Capex Acquisitions Dividend

Stable Reduction of 20%

compared with 2008*Focus on Ciba

integration Increasingly difficult to

maintain dividend at €1.95

Reduction of net working capital by ~ €1 billion

Use of cash adapted to current market conditions

* Not including Ciba and Revus; Capex

2008: €2.5 billion

15

BASF’sposition

pre acquisition

Plastic additives 4 1

Coating effects materials 4 2

Paper chemicals 4 1

BASF has become the leading player in specialty chemicals

Position of combined businesses

16

Integration of Ciba’s business lines into BASF structure

Ciba businesses BASF division

Coatings Effects Dispersions & Pigments~ 1.1

2008 sales in billion €

Plastic AdditivesLubricant Additives

Water Treatment

Performance ChemicalsOilfield & Mining Chemicals

~ 1.6

Home & Personal Care Care Chemicals~ 0.3

Paper Paper Chemicals~ 0.9

Note: Expert Services will remain stand-alone unit

17

Extensive restructuring measures related to Ciba integration

•

Personnel–

Reduction of ~3,700 positions, majority of reductions by end of 2010

•

Production sites–

23 sites currently under strategic review, i.e. closure, divestiture or restructuring possible

–

32 production sites planned to be optimized and/or restructured, e.g. Bradford, Grenzach, Lampertheim and Maastricht

•

Non-production sites–

36 locations planned to be exited by 2010

Production sites under review by region

Headcount reduction by region

Americas4

Europe11

Asia8

Americas26%

Europe58%

Asia16%

18

Cost synergies related to Ciba integration

260

100

400

400

100

200

300

400

500

end 2009 end 2010 2011/2012 Steady State

Synergy ramp-up in million € Synergies in percent of sales (2008: €4.0 billion)

10Target: at least €400 million

Note: Ciba revenues 2008: CHF5,919 million or €3,986 million

≥ 5

0

7.5

2.5

Integration costs•

Total cash costs: ~€550 million (thereof €150 million in 2009)

•

Non-cash costs: ~ €

500 million

(thereof ~€400 million in 2009)

19

0,00

0,50

1,00

1,50

2,00

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Dividend in € per share •

CAGR of dividend (1999-2008): 15%

•

Attractive dividend yield of 6.8% in 2008*

Attractive shareholder return policy

*

Based on the share price of April 30, 2009 (€28.57)

Special dividendDividend

0

€1.95

20

Severe challenges for BASF in 2009

•

Basic assumptions for 2009•

Decline in

global gross domestic product (-3%)global industrial production (-10%)global chemical production excluding pharma

(-8%)

•

Average exchange rate of $1.35 per ۥ

Average oil price of $55/bbl

•

Outlook for 2009•

In view of the current economic environment and the expenses resulting from the Ciba integration, we anticipate a significant

decline in sales and earnings.•

Therefore, BASF is unlikely to earn its cost of capital in 2009.

21

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.

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