BASF in excellent shape, optimistic for 2011

Transcription

1 Dr. René Lochtman Deputy Head of IR Juliane Schöningh IR Manager BASF in excellent shape, optimistic for 2011 Bankhaus Lampe Kapitalmarktkonferenz Baden-Baden, Germany April 1, 2011

2 1 Record year Focus on operational excellence 3 Well positioned for profitable growth 4 Outlook 2

3 Record year 2010 Business performance 2010 vs Sales 63.9 billion +26% EBITDA 11.1 billion +51% EBITDA margin 17.4% 14.6% EBIT before special items 8.1 billion +68% EBIT 7.8 billion +111% Net income 4.6 billion +223% Adjusted EPS % Record sales and record EBIT before special items Chemical businesses take advantage of strong economic recovery Consistent long term value generation 3

4 Excellent segment performance 2010 Segment million Sales Δ vs EBITDA EBITDA margin EBIT before SI Δ vs Chemicals 11, % 3, % 2, % Plastics 9, % 1, % 1, % Performance Products Functional Solutions Agricultural Solutions 12, % 2, % 1, % 9, % % % 4, % % 749 (4%) Oil & Gas 10,791 (5%) 2, %* 2,430 +6% * Excluding non-compensable oil taxes: 18.5% 4

5 Continuous strong cash flow Cash Flow (billion ) Cash provided by operating activities Free cash flow* * Cash provided by operating activities less capex (in 2005 before CTA) ** 2009 adjusted for re-classification of settlement payments for currency derivatives ** 5

6 Attractive shareholder returns Record dividend Dividend per share ( ) Key facts Proposal: 2.20 Average annual dividend increase of 14.5% ( ) Dividend yield above 3% in any given year since 2001 Attractive dividend yield of 3.7% in 2010* Yield* 3.1% 3.9% 3.1% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9% 3.7% * Dividend yield based on share price at year-end 6

7 Delivering consistent, long-term value Long-term performance January 2001 December 2010 (average annual performance with dividends reinvested) +13.9% BASF -2.7% Euro Stoxx % DAX % MSCI World Chemicals

8 1 Record year Focus on operational excellence 3 Well positioned for profitable growth 4 Outlook 8

9 Unique Verbund concept Cost savings of > 500 million p.a. in Ludwigshafen alone BASF site Ludwigshafen, Germany Verbund Concept Vertical and horizontal integration of production plants, energy and waste flows, logistics and site infrastructure Know-how Verbund Energy Verbund and combined heat and power plants lead to - Savings of 2.6 million tons oil equivalent p.a. - Reduction of CO 2 -emissions of ~6 million tons p.a. 9 9

10 Stringent fixed cost management BASF Group development Index Δ ~270% ~200% ~20% Fixed costs indexed Sales indexed EBITDA indexed Key facts Fixed costs represent around 30% of total costs Only slightly higher fixed costs, despite major acquisitions (Engelhard, Degussa Construction Chemicals, Ciba and Cognis) Ciba and Cognis synergies as well as NEXT program will drive fixed costs down Cost synergies Ciba: > 450 million by 2012 Cost synergies Cognis: 140 million by

11 Sustainable improvement of cost base Efficiency program NEXT on track Annual earnings contribution (million ) 2,500 2,000 1,500 1, New EXcellence Targets (NEXT) > 500 individual projects to simplify processes, structures and production sites in all regions Project timeline: Annual earnings contribution of 600 million in 2010 achieved Targeted earnings contribution by 2012: 1 billion New efficiency program NEXT Completed restructuring programs 11

12 1 Record year Focus on operational excellence 3 Well positioned for profitable growth 4 Outlook 12

13 Well positioned for profitable growth Leading positions in growth industries and emerging markets Continue expansion in emerging markets, especially Asia Translate megatrends into business growth Ongoing portfolio optimization Continue with active portfolio management Drive portfolio closer to end customer Excellent innovation platform Product and system innovation as growth drivers Megatrend innovations for long-term growth Growth target: We strive to outperform global chemical production growth by at least 2 percentage points p.a. 13

14 Leading positions in growth industries and emerging markets 14

15 Planned capital expenditures By segment By region Oil & Gas* 35% Agricultural Solutions 4% Other 12% 12.6 billion Chemicals 15% Plastics 14% Performance Products 14% Functional Solutions 6% Asia Pacific 17% North America 14% South America, Africa, Middle East 4% 12.6 billion Europe** 63% Alternative sites under review 2% * Excluding investments in Nord Stream ** Thereof ~ 4.4 billion for Oil & Gas 15

16 Emerging markets Significant sales growth in emerging markets BASF Group (w/o Oil & Gas) Net sales in billion % CAGR 13% CAGR 7% 27% Emerging Markets Sales 2010 in emerging markets: 14.5 billion (27%) Investments in emerging markets : 3 billion Ongoing increase of -sales force - regional R&D Emerging markets definition, according to Dow Jones: 35 countries * Emerging Markets (Dow Jones definition) Developed Markets * Bahrain, Brazil, Bulgaria, Chile, China, Colombia, Czech Republic, Egypt, Estonia, Hungary, India, Indonesia, Jordan, Latvia, Kuwait, Lithuania, Malaysia, Mauritius, Mexico, Morocco, Oman, Pakistan, Peru, Philippines, Poland, Qatar, Romania, Russia, Slovakia, Sri Lanka, South Africa, South Korea, Taiwan, Thailand, Turkey, United Arab Emirates 16

17 Emerging markets Recently announced major investment projects Location Product group Start up Chongqing, China MDI plant with world-scale capacity of 400,000 metric tons investment of 860 million Commercial operation expected in 2014 Nanjing, China Malaysia MoU signed with SINOPEC to explore expansion of the Verbund site potential investment of approx. $1 billion MoU signed with Petronas to build world-scale specialty chemical facility potential investment of approx. 1 billion Feasibility studies to be completed by 2012 Feasibility studies to be completed in 2011 Brazil World-scale acrylic acid, butyle acrylate and superabsorbant polymers (SAP) plant Feasibility study to be completed in 2011 Russia MoU signed with Gazprom to further develop Achimov deposits in Siberia Negotiation to be conducted in

18 BASF s profitable growth path in Asia Pacific Sales by location of customers (in billion ) Achievements % p.a * 2020 Sales growth 14% p.a. (vs. Asian market growth 10.5% p.a.) Record EBITDA of 1.8 billion in 2010, resulting in an EBITDA margin of 14% Target Well on track to double sales by 2020 (based on sales of 9 bn in 2008) Outgrowing Asian Pacific chemical market by 2 percentage points p.a. through Innovations out of Asia Investments : 2.3 billion Generating 70% of sales based on local manufacturing Strengthening market focus through industry and customer target groups * excluding Cognis 18

19 Ongoing portfolio optimization 19

20 Pro-active portfolio management Major acquisitions Crop protection Oil & Gas (Revus) Engineering Plastics Electronic Chemicals Custom synthesis Catalysts (Engelhard) Construction Chem. Water-based resins Pigments (Ciba) Plastic additives (Ciba) Care Chem. (Cognis) Nutrition & Health (Cognis) 15 billion Euro (Sales) Selected transactions 2001 to date BASF core businesses Powerful partnerships Gazprom Monsanto Petronas Shell Sinopec Total Major divestitures Pharmaceuticals Fibers Printing systems Polyolefins (Basell) Polystyrene North America Agchem generics Premix Styrenics (Styrolution) (LoI for JV announced) 9 billion Euro * (Sales) Sale of shares in K+S (Proceeds for BASF ~ 1 billion) * Not including Styrenics business 20

21 Cognis integrating a global leader in value-added products Pro forma business performance FY 2010 Sales: ~ 3 billion EBITDA: ~ 550 million EBITDA margin: ~18% Closing on December 9, 2010 Integration objectives Achieve 20% EBITDA margin in the Performance Products segment by 2012 Acquisition accretive as of 2012 Integration costs of 290 million until end of 2012 Inventory step-up of 120 million in 2010/2011 In 2010, total integration costs of 80 million incurred thereof 75% inventory step-up. Synergies to generate 275 million of additional EBIT - Cost synergies: 140 million by Growth synergies: 135 million by

22 BASF + Cognis Improved market positions Previous BASF position Future BASF position Personal care ingredients 3 1 Home care ingredients 1 1 Mining chemicals 3 2 Functional nutrition ingredients 6 3 Coating additives 7 3 Heavy-duty driveline lubricants >

23 Styrolution Planning a 50/50 joint venture with INEOS Scope Global No.1 in styrenics Sales of about 5 billion*, thereof 48% Europe, 32% Americas, 20% Asia Pacific 34% SM, 34% PS, 21% ABS, 11% Copolymer Specialties Customers in more than 110 countries 29 production facilities across 11 countries More than 3,000 employees Milestones Nov 29, 2010: LoI signed by BASF and INEOS Jan 1, 2011: Carve-out of BASF s Styrenics activities into separate legal entities Second half of 2011: Start of planned JV Styrolution Value creating divestiture process Styrolux T/S shrink film * Pro-forma figures, based on BASF s and INEOS sales in

24 Active portfolio management pays off EBITDA by activity (in billion, excluding Other) * ** 2010 Our diversified portfolio is a key strength Recent acquisitions reshaped portfolio Closer to end customers Innovation-driven Profitable growth above industry average BASF s EBITDA in 2010 (excluding Other) amounted to 11.7 billion Chemical activities Agricultural Solutions Oil & Gas, including non-deductible oil taxes * Based on German GAAP ** As of 2007 according to new segment structure (excl. Styrenics and corporate costs) 24

25 Excellent innovation platform 25

26 Natugrain TS X-SEED PCI Geofug Ecovio CypoSol NaphthaMax III Kaurit Light Elastopave Xemium 26

27 Xemium BASF s next-generation fungicide for broad use Key facts Xemium complements BASF s outstanding fungicide portfolio Our 1 st carboxamide fungicide for all market segments BASF is carboxamide pioneer, Xemium strengthens lead Launch planned in >50 countries and >100 crops World-wide data submission process underway Untreated Market launch from 2012 onwards Xemium global peak sales potential: > 200 million * Source: Philips McDougall, own estimation 27

28 Innovation pipeline worth 21 billion Net present value by segments (billion ) R&D contributes significantly to earnings growth bn 21 bn 3% Chemicals 7% Plastics 14% Performance Products 8% Functional Solutions The pipeline NPV of 21 billion is a bottom-up aggregation of all R&D projects High success rate due to stringent R&D controlling via Phasegate process % Agricultural Solutions 2% Oil & Gas 20% Corporate Research 0, ,0 Expected Commercial Value: ~50% of NPV (probabilityweighted) In 2010, sales of new products (5 years or younger) exceeded the target of 6 billion Target 2015: up to 8 billion sales with new products * New or improved products or new applications, max. 5 years on market, including Growth Clusters 28

29 Innovation will spur further growth Total R&D expenditures 2010 (billion ) Strong commitment to R&D Chemicals Corporate Research 1.5 bn R&D expenditures in 2010 (vs. 1.4 bn in 2009) 9% Plastics 10% Performance Products 19% Functional Solutions 1.5 billion 24% 1% 22% Other 2% Agricultural Solutions ~ 9,600 employees in R&D ~ 3,000 projects and topics Research Verbund: About 1,900 partnerships with universities, start-ups and industry partners 12% 26% Further increase in R&D spending planned for

30 1 Record year Focus on operational excellence 3 Well positioned for profitable growth 4 Outlook 30

31 Outlook BASF Group 2011 Expectations for global economy 2010 Forecast 2011 GDP 3.9% 3.3% Chemical production (excl. Pharma) 9.3% 5.2% Industrial production 8.9% 5.0% US$ / Euro Oil price (US$ / bbl)

32 Outlook 2011 by region Industrial production Chemical production (excl. Pharma) World 8.9% 5.0% 9.3% 5.2% EU % 3.0% 10.1% 2.9% USA 5.7% 3.9% 5.0% 3.3% Asia (excl. Japan) 14.5% 10.0% 13.0% 9.6% Japan 15.8% 2.3% 8.8% 1.9% South America 6.2% 4.6% 6.4% 4.3% 32

33 Outlook 2011 for our key customer industries* Key customer industries of BASF 2009 (World) 2010 (World) Growth forecast 2011 (World) Industries total (8.1) Construction (5.8) (1.3) 3.6 Automotive (per-unit-base) (11.3) Electronics (11.1) Information & Communications (11.9) Textiles (8.7) Paper (3.3) Nutrition (0.7) Agriculture * Growth Production Index in % p.a.; change compared with previous year 33

34 Outlook 2011 by segments Segments EBIT before special items 2011 Chemicals Plastics Performance Products Functional Solutions Agricultural Solutions Oil & Gas BASF Group (incl. Other) 34

35 Outlook 2011 Targets 2011 We expect to achieve in 2011: - Significant increase in sales and EBIT before special items. - A high premium on our cost of capital. - Significantly higher sales and earnings in the 1 st quarter 2011 vs. previous year s quarter. Medium-term targets We aim to grow sales on average by two percentage points per year faster than chemical production growth. We strive to grow our earnings further year by year, and to achieve an EBITDA margin of 18% by Dividend policy We aim to continuously increase the annual dividend, or at least maintain it at the level of the previous year. 35

36 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. 36

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38 BASF Group Q Record sales and strong earnings increase vs. PYQ Sales (billion ) EBIT before special items (billion ) Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q Sales development Period Volumes Prices Portfolio Currencies Q4 10 vs. Q4 09 4%* 13% 2% 6% FY 10 vs. FY 09 11% 8% 2% 5% * Volumes +8% (without Oil & Gas) 38

39 Chemicals Strong earnings improvement vs. PYQ due to higher demand Q4 10 segment sales (million ) vs. Q4 09 EBIT before special items (million ) Intermediates % 2, % Inorganics % Petrochemicals 1, % 0 Q4 Q1 Q2 Q3 Q Sales development Period Volumes Prices Portfolio Currencies Q4 10 vs. Q4 09 9% 20% 0% 8% FY 10 vs. FY 09 18% 28% 0% 5% 39

40 Plastics High demand and price increases lifted sales significantly Q4 10 segment sales (million ) vs. Q4 09 EBIT before special items (million ) Polyurethanes 1, % 2, % Performance Polymers 1, % 0 Q4 Q1 Q2 Q3 Q Sales development Period Volumes Prices Portfolio Currencies Q4 10 vs. Q % 9% 0% 7% FY 10 vs. FY 09 22% 10% 0% 6% 40

41 Performance Products Earnings significantly up vs. previous year despite one-off costs Q4 10 segment sales (million ) vs. Q4 09 EBIT before special items (million ) Care Chemicals % Nutrition & Health % 3, % Performance Chemicals % Paper Chemicals % Dispersions & Pigments % 0 Q4 Q1 Q2 Q3 Q Sales development Period Volumes Prices Portfolio Currencies Q4 10 vs. Q4 09 3% 4% 6% 5% FY 10 vs. FY 09 12% 4% 11% 4% 41

42 Functional Solutions Earnings declined considerably due to one-time operating costs Q4 10 segment sales (million ) vs. Q4 09 EBIT before special items (million ) Catalysts 1, % 2, % Construction Chemicals % Coatings % 0 Q4 Q1 Q2 Q3 Q Sales development Period Volumes Prices Portfolio Currencies Q4 10 vs. Q % 10% 1% 9% FY 10 vs. FY 09 17% 10% 1% 8% 42

43 Agricultural Solutions South America drove strong sales growth Q4 10 segment sales (million ) vs. Q4 09 EBIT before special items (million ) 1, % (5)% Q Q Q Q Sales development Period Volumes Prices Portfolio Currencies Q4 10 vs. Q % (4)% 0% 6% FY 10 vs. FY 09 9% (3)% 0% 5% 43

44 Oil & Gas Earnings grew substantially y-o-y as a result of higher oil prices Q4 10 segment sales (million ) vs. Q4 09 EBIT before special items / Net income (million ) Exploration & Production 1,059 +9% Sales development 2, % Natural Gas Trading 1, % Period Volumes Prices/Currencies Portfolio Q4 10 vs. Q4 09 (15)% 28% 0% FY 10 vs. FY 09 (2)% (3)% 0% Q EBIT bsi Natural Gas Trading EBIT bsi Exploration & Production Q Net income 44

45 Review of Other Million Q Q Sales 1,590 1,263 5,851 4,577 thereof Styrenics ,401 2,502 EBIT before special items (139) 51 (648) (717) thereof Corporate research Group corporate costs Currency results, hedges and other valuation effects Styrenics, fertilizers, other businesses (96) (66) (229) 142 (79) (45) 9 80 (323) (226) (460) 387 (319) (209) (512) Special items (59) 90 EBIT (707) (627)

46 Excellent operating cash flow in 2010 Full Year 2010 (billion ) (2.5) Capex* on last year s level Net cash-out for purchase of Cognis: 0.6 bn (0.6) (1.9) thereof 1.6 bn dividends to BASF SE shareholders Cash 12/31/09 Operating CF Excellent operating cash flow despite 1.7 bn increase in net working capital (2.3) (1.8) 0.5 Capex* Acquisitions Dividends Debt Other cash repayment inflows 1.5 Cash 12/31/10 * Payments related to intangible assets and property, plant and equipment 46

47 Balance sheet remains strong Balance sheet 2010 vs (billion ) Long-term assets Inventories Accounts receivable Other assets Liquid funds Dec Dec Dec Dec Stockholders Equity Financial debt Other liabilities Impact of Cognis acquisition As of December 31, 2010: Increase in long-term assets by 2.9 billion, thereof Goodwill: 0.6 billion Other intangible assets: 1.3 billion Property, plant and equipment: 0.8 billion Addition of 0.5 billion of inventories 0.4 billion of receivables Financial debt: 2.6 billion (incl. purchase price of 0.7 billion) 47

48 Backup Financial Highlights Agricultural Solutions 48

49 Powerful Crop Protection Pipeline 2011 Value jumps to 2.4 billion Stage I In Development F 500 (F), Boscalid (F), Metrafenone (F), Dimoxystrobin (F) Stage II In Launch Stage III Launched Stage* Market segments Field crops, specialty crops, non-crop Tritosulfuron (H), Chlorfenapyr (I) Oryzastrobin (F), F 500 seed treatment (F) Topramezone (H), Kixor (H) Metaflumizone (I) Field crops, specialty crops, seed treatment Initium (F) Xemium (F) HT Project Cultivance** Field crops, specialty crops, seed treatment HT Project Dicamba 1 Insecticide 700 Million 1,700 Million Peak Sales Potential * Launched: First registration in major market in 2002 (or elder than 5 years to current year), In launch: First registration in major market 1 to 5 years prior to current year In development: First registration in major market in current year or within next 5 years after current year. Points do not refer to exact launch year. ** Herbicide tolerance (HT) project Cultivance also reported in BASF Biotech Pipeline. 49

50 Agricultural Solutions Performance Q4 and FY 2010 Million Q Q Δ% FY 2010 FY 2009 Δ% Sales* ,033 3, EBITDA** (12) (4) EBITDA** margin 10.4% 14.2% % 26.9% - EBIT** (5) (4) EBIT** margin 5.0% 6.3% % 21.3% - Assets (as of Dec. 31) ,063 4,681 8 * Sales increase at constant exchange rates in Q4: +15% (FY: +6%) ** before special items 50

51 Agricultural Solutions Sales by region Million FY 2010 FY 2009 Δ% Δ% (CER)* Europe 1,566 1, North America ** South America 1, ** Asia / Pacific Total 4,033 3, * constant exchange rates ** restated figures due to new definition of regions 51

52 Agricultural Solutions Sales by indication Million FY 2010 FY 2009 Δ% Δ% (CER)* Fungicides 1,739 1, Herbicides 1,410 1, Insecticides / Others Total 4,033 3, * constant exchange rates 52