We add value as one company - PDF Free Download

Kurt Bock CEO of BASF SE New York, November 15, 2012 We add value as one company

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. 2

BASF today The Chemical Company Facts & figures The leading chemical company worldwide - Sales 2011: 73.5 billion - EBIT before special items 2011: 8.4 billion - ~111,000 employees Customers in >200 countries and in virtually all industries # 1-3 market position in over 75% of businesses Unique Verbund concept for integrated production - Six Verbund sites in all major regions - Production sites in 41 countries International, interdisciplinary R&D network - More than 10,000 employees in R&D Highly experienced management team - Senior executives from 36 countries 3

BASF today a well-balanced portfolio Total sales 2011: 73.5 billion Percentage of sales 2011* Chemicals Inorganics Petrochemicals Intermediates Plastics Performance Polymers Polyurethanes Performance Products Dispersions & Pigments Performance Chemicals Care Chemicals Nutrition & Health Paper Chemicals Agricultural Solutions Crop Protection Functional Solutions Catalysts Construction Chemicals Coatings Oil & Gas Exploration & Production and Natural Gas Trading * Not depicted here: 9% of Group sales reported as Other 4

Business review BASF Today Trends Business review Purpose and strategic principles Targets BASF strategy & growth targets Strategic Strategic levers levers BASF Tomorrow Board priorities Fit for 2020 BASF BASF Capital Strategy: Market We Story November create chemistry November 2012 2011

BASF maintains good business performance in Q3 2012 Business performance Q3 12 vs. Q3 11 Sales 19.0 billion +8% EBITDA 2.8 billion +4% EBIT before special items 2.1 billion +5% EBIT 2.0 billion +6% Net income 0.9 billion (21%) EPS 1.03 (21%) Adjusted EPS 1.19 (22%) Sales development Period Volumes Prices Portfolio Currencies Q3 12 vs. Q3 11 7% (4%) (1)% 6% Favorable business development in Agricultural Solutions and Oil & Gas Earnings in chemical activities did not match the previous year s level 6

Ongoing portfolio optimization Becker Underwood Restructuring of Construction Chemicals Asset swap with Statoil BASF to acquire Becker Underwood $1.02 billion ( 785 million) purchase price Strengthens global crop protection business Leading global provider of technologies for biological seed treatment 2012 (E) Sales $240 million ( 185 million) Merger control approvals pending BASF is strengthening competitiveness of Construction Chemicals in Europe Measures include: - Adjusting business to declining markets in Southern Europe and Great Britain - Enhancing overall efficiency and customer focus About 400 positions in Europe are affected Photo: Statoil Acquisition of equity in 3 producing fields in Norway: Brage (32.7%), Gjøa (15%), Vega (30%) 2P reserves of ~100 million boe Rise in daily production in Norway from 3,000 to 40,000 boepd Statoil to receive - 15% in development field Edvard Grieg - $1.35 billion - up to additional $100 million depending on success of Vega 7

Moving downstream towards customer industries Product focus Classical Chemicals Industry focus Customized Products Functionalized Materials & Solutions Operational and technology excellence Scale, integration and raw material conditions Reliable, low cost logistics Complexity reduction Deep understanding of customer value chain and multi-disciplinary know-how enable constant innovation Customized services and solutions supported by industry and application experts Tailored offerings for markets and industries Customer proximity and application know-how 8

New organization of divisional activities Classical Chemicals Functionalized Materials & Solutions Petrochemicals Inorganics today e.g. Amines e.g. TDI Intermediates Polyurethanes e.g. Epoxy Systems e.g. PU Systems e.g. Monomers Performance Polymers e.g. Ultramid January 2013 Intermediates Monomers Petrochemicals Performance Materials 9

New segment structure As of January 1, 2013 Chemicals Performance Products Functional Materials& Solutions Agricultural Solutions Oil & Gas Intermediates Dispersions & Pigments Catalysts Crop Protection Oil & Gas Monomers Care Chemicals Construction Chemicals Petrochemicals Nutrition & Health Coatings Paper Chemicals Performance Materials Performance Chemicals 10

Strong free cash flow generation Free cash flow* in billion 2.8 2.6 3.3 3.5 3.2 2.5 3.2 3.9 3.7 2.4-0.1 2002 2003 2004 2005 2006 2007 2008 2009** 2010 2011 Q1-Q3 2012 * Cash provided by operating activities less capex (in 2005 before CTA) ** 2009 adjusted for re-classification of settlement payments for currency derivatives 11

Delivering attractive shareholder returns Dividend per share in 0.70 0.70 Dividend yield* 3.9% 3.1% 0.85 1.00 * Dividend yield based on share price at year-end 1.50 1.95 1.95 1.70 3.2% 3.1% 4.1% 3.8% 7.0% 3.9% 2.20 3.7% 2.50 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 4.6% Dividend payments 2.50 dividend per share for 2011, dividend yield 4.6%* 15% average annual dividend increase for 2002-2011 period Dividend yield above 3% in any given year since 2002, total payout 14.5 billion Share buy-backs Between 1999 and 2008, BASF bought back ~29% of shares outstanding for 9.9 bn AGM 2012 approved new share buy-back program: up to 10% of shares within 5-year period 12

Delivering consistent, long-term value Average annual performance with dividends reinvested Last 10 years October 2002 September 2012 Last 5 years October 2007 September 2012 +18.3% BASF + 11.0% +4.1% Euro Stoxx 50-7.8% +10.0% DAX 30-1.7% +10.6% MSCI World Chemicals +1.4% 0 5 10 15 20 13

Outlook 2012 confirmed Outlook 2012 For the FY 2012, BASF aims to exceed the record levels of sales and EBIT before special items achieved in 2011 BASF will strive again to earn a high premium on cost of capital Chemical activities - We do not expect demand to pick up in the fourth quarter 2012 - Therefore, 2012 EBIT before special items of chemical activities will come in below the level of the previous year. Assumptions 2012 GDP: +2.2% (before: 2.3%) Industrial production: +2.8% (before: 3.4%) Chemical production: +2.9% (before: 3.5%) US$/Euro: 1.30 (unchanged) Oil price (US$/bbl): 110 (unchanged) 14

Demographic challenges set the stage for the future of the chemical industry Nine billion people in 2050 but only one earth Resources, Environment & Climate Food & Nutrition Quality of Life Chemistry as enabler 16

Key trends for the chemical industry Growth will accelerate Innovation gains in importance Sustainability as strategic driver Competitive landscape will change Industrial production > GDP Chemical production > GDP Emerging markets will outgrow developed markets Chemistry as enabler Chemical products replace traditional materials Create innovative sustainable solutions Use opportunities from sustainability Increase resource efficiency Renewables as raw materials Stakeholder dialog Integrated chemical companies remain cornerstone Emerging markets players grow quickly Raw material players invest further downstream Chemical industry remains an attractive growth industry 17

Striving for strong profitable growth Medium- and long-term sales target* Sales** in billion Acquisitions ~115 Innovations Investments 64 Investments Innovations Acquisitions ~85 2010 Target Target 2015 2020 We aim to grow 6 percent p.a.; 2 percentage points above chemical production outperform chemical production by * Published on November 29, 2011 ** Potential impact of IFRS changes not included 18

Striving for strong profitable growth All regions will deliver profitable growth Regional sales targets 2020* (by location of customers) in billion North America ~5.5% p.a. 20%** 13 ~22 2010 2020 South America, Africa, Middle East ~8% p.a. 8%** * Published on November 29, 2011 ** Percentage of total sales 19%** 5 ~11 2010 2020 10%** Europe ~4.5% p.a. 52%** 33 ~53 2010 2020 46%** Asia Pacific ~8% p.a. ~29 13 20%** 2010 2020 25%** 19

Striving for strong profitable growth Sales share of emerging markets to keep growing Sales BASF Group excluding Oil & Gas in billion by location of customer 45% 61 34% Emerging markets Developed markets* 28 22% * BASF definition: Developed markets include EU15, Norway, Switzerland, North America, Japan, Australia, New Zealand Target 2020: ~45% sales share of Emerging Markets 20

Striving for strong profitable growth Doubling EBITDA by 2020* EBITDA** in billion 11.1 Growth Op. Excellence Acquisitions ~15 Growth Op. Excellence Acquisitions ~23 2010 Target Target 2015 2020 * Published on November 29, 2011 ** Assumptions 2010-2020: Exchange rate $/ Ø 1.40, Oil price Ø $110/bbl 21

Business review BASF Business Today review Trends BASF strategy & growth targets Purpose and strategic principles Targets Strategic levers Strategic Portfolio levers development Market approach BASF Tomorrow Board priorities Innovations for a sustainable future Investments Acquisitions Operational excellence Fit for 2020 BASF BASF Capital Strategy: Market We Story November create chemistry November 2012 2011

Portfolio development We expand from chemicals to chemistry 1960 1970 1980 1990 2000 2010 2020 New molecules Chemistry as key enabler for functionalized materials & solutions Improved applications Functionalized materials & solutions Deep understanding of customer value chains required Batteries, membranes... 23

Portfolio development Towards more market driven and innovative businesses Acquisitions Crop protection Engineering plastics Electronic chemicals Custom synthesis Catalysts Construction chemicals Water-based resins Pigments Plastic additives Oil & Gas Personal care & food Battery materials BASF core business Selected transactions 2001 today Strong partnerships Gazprom Monsanto Petronas Shell Sinopec Total Pharma Fibers Divestitures Printing systems Polyolefins Polystyrene Americas Agro generics Vitamins premix Fertilizers Styrenics (transferred into Styrolution JV on Oct. 1, 2011) ~ 15bn sales ~ 10bn sales* * Without Styrenics 24

Portfolio development Moving downstream towards customer industries Classical Chemicals Customized Products Functionalized Materials & Solutions 2001 in % of sales** Chemical Industry ~ 50% First customer industries* ~ 50% 2010 in % of sales** ~ 40% ~ 60% 2020 in % of sales** ~ 30% ~ 70% * Agriculture, Construction, Consumer Goods, Health & Nutrition, Electronics, Energy & Resources, Transportation ** Sales excluding Oil & Gas 25

Market approach Cross-divisional customer industry approach BASF sales by first customer industry* Bubble Size: BASF divisional sales by first customer industry (2010)** Consumer goods > 15 % Transportation > 15 % Construction < 10 % Energy & Resources < 10 % Inorganics Catalysts Petrochemicals Construction Chemicals Intermediates Coatings Dispersions & Pigments Care Chemicals Performance Chemicals Paper Chemicals Polyurethanes Performance Polymers * Excluding Oil & Gas and Other ** Excluding Agricultural Solutions, Health & Nutrition, Oil & Gas and Other 26

Cross-divisional approach: Smartforvision Technology competencies combined with customer know-how Lightweight tridion cell High performance foams Solar roof with transparent organic solar panels and OLED modules E-textiles Infrared-reflective film Infrared-reflective coating Multifunctional seat All-plastic wheel Daimler & BASF concept car Smartforvison 27

Cross-divisional approach Biopolymer for enhanced oil recovery Potential Increased incremental oil recovery of up to 10% on waterflooding. Sales potential to be defined after completion of trials Schizophyllum commune Approach Leverage BASF s Verbund knowhow in white biotechnology for Oil & Gas production Proprietary biopolymer from Schizophyllum fungus allows for enhanced oil recovery due to its high viscosifying efficiency Biopolymer is stable in high temperature and high salinity reservoirs Schizophyllan biopolymer Current activities Schizophyllan biopolymer to be produced at BASF Ludwigshafen via fermentation. First trial in mature Wintershall oil field starting in 2012 (Bockstedt, Germany) 28

Cross-divisional approach ecovio biodegradable plastic in paper applications Business potential 2020 Market size: opportunity to substitute > 200 kt of various products Sales potential for BASF: ~ 40 million (ecovio FS Paper for extrusion coating) Additional business opportunities in wet-end applications under evaluation Concept Leverage BASF know-how on biodegradable plastics and paper chemicals to offer sustainable solutions for packaging and foodservice ware Current activities ecovio FS Paper launched in various markets since 2010 Business Model for sustainable Closed System throughout whole value chain (incl. waste management) R&D-projects for additional applications and solutions 29

Innovations for a sustainable future Commitment to R&D Total R&D expenditures 2011 in billion Chemicals 8% Plastics 9% Performance Products 21% Functional Solutions 12% 1.6 billion Corporate Research 23% 24% 1% Oil & Gas 1% Agricultural Solutions 26% Strong commitment to R&D 1.6 billion R&D expenditures in 2011 (2010: 1.5 billion) ~10,100 employees in R&D ~2,800 projects Research Verbund: About 1,950 partnerships with universities, start-ups and industry partners Increase of R&D spending to 1.7 billion planned for 2012 Target: 30 billion in sales from innovations younger than 10 years 30

Innovations for a sustainable future Chemistry as an enabler for many customer industries Customer industries Transportation Construction Consumer Goods Health & Nutrition Electronics Agriculture Energy & Resources Batteries for mobility Heat management Enzymes Medical Organic electronics Plant biotechnology Energy management Growth Fields* Lightweight composites Heat management Functional crop care Rare earth metals recycling Wind energy Water solutions Ongoing inflow of new growth fields * Including growth fields still under evaluation Sustainability in customer industries will drive our innovative growth fields 31

Innovations for a sustainable future BASF growth field examples Growth Field examples Batteries for mobility Water solutions Plant biotechnology Business potential 2020* Existing Activities Targets Market size: > 20 billion BASF sales potential: > 500 million * Published on November 29, 2011 New global business unit for battery chemicals & materials Electrode material plant being built in Ohio. Acquired Novolyte, Merck s electrolytes, Ovonik, equity position in Sion Power R&D network with academia Sites in US, China, Europe Become the leading supplier of battery materials Target customers: Battery producers Market size: ~ 20 billion BASF sales potential: > 800 million BASF expertise and portfolio (high-performance flocculants, desalination and antifouling chemicals.) Acquired inge water-technologies; membrane module systems Invested into NanoH2O Leading supplier of innovative water solutions Forward integration into membrane technologies Market size: ~ 11 billion gross trait value BASF sales potential: 1.8 billion gross trait sales before partner share BASF as Trait Technology Partner of leading trait and seed companies Yield & Stress collaboration with Monsanto (corn, soy, cotton, canola and wheat) Contribute to more efficient agriculture, healthier nutrition Make Plant Biotechnology an operating division within the Agricultural Solutions segment 32

Investments will boost future organic growth Future investments in billlion ~15 15-20 10.9 30-40% 35-45% ~20% 2006 2010 2011 2015 2016 2020 Total investments Thereof investments in emerging markets 33

Investments Major projects MDI plant Chongqing, China Expansion Verbund site Nanjing, China* Expansion joint venture activities in Malaysia Acrylic acid complex, Brazil Expansion oil & gas activities TDI plant Ludwigshafen, Germany * Memorandum of Understanding signed 34

Acquisitions will contribute to profitable growth in the future We want to acquire businesses which Generate profitable growth above the industry average Are innovation-driven Offer a special value proposition to customers Provide a minimum return on investment of 8% after tax Are EPS accretive by year three at the latest Reduce earnings cyclicality Strategic acquisition criteria Financial acquisition criteria 35

Operational excellence Strong track record BASF Group 2002 2011 Index CAGR 2002 2011 300 250 200 10 % 10 % 4 % EBITDA Sales Fixed costs 150 100 50 2002 2005 2008 2011 36

Operational excellence New program STEP: Earnings contribution ~ 1 billion Annual earnings contribution in million 3,000 2,000 1,000 0 Former cost saving programs 2012 2015 NEXT STEP NEXT Program Annual earnings contribution of 1 billion will be achieved in 2012 Achieved by end 2011: > 800 million STrategic Excellence Program STEP Project timeline: 2012 2015 Measures to optimize processes and structures in all regions, e.g. manufacturing, maintenance supply chain engineering, best-cost country sourcing Fixed cost savings and margin improvements One-time costs & investments: ~ 1 billion Targeted annual earnings contribution: ~ 1 billion by end of 2015, thereof 100 million in 2012 (run-rate) 37

Key financial targets 2015 / 2020 Growth targets Profitability targets Grow at least 2 percentage points above chemical production Earn a premium on cost of capital of at least 2.5 billion on average p.a. 2015 Sales ~ 85 billion EBITDA ~ 15 billion EPS ~ 7.50 2020 Sales ~ 115 billion Double EBITDA to ~ 23 billion (compared with 2010) 39

BASF Oil & Gas Asset Swap Agreement with Gazprom November 14, 2012

Highlights of asset swap Wintershall and Gazprom agree on asset swap relating to the blocks IV and V in the Achimov formation of the Urengoi natural gas and condensate field based on framework agreement signed in October 2011 Wintershall to receive 25% plus 1 share in the blocks IV and V in the Achimov formation with the option to increase the share in the two deposits to 50% Gazprom to receive: 50% share in Wintershall Noordzee, which is active in the exploration and production of oil and gas in the southern North Sea (Netherlands, UK, Denmark) 50% shares (thus taking over 100%) in the gas trading companies WINGAS, WIEH and WIEE, including shares in the natural gas storage facilities in Rehden and Jemgum, Germany, as well as Haidach, Austria, and the gas storage operator astora Activities to be divested contributed in total 8.6 billion to sales and 350 million to income from operations (EBIT) of BASF Group in 2011 Closing expected by the end of 2013; effective date April 1, 2013. Transaction is subject to approval by the relevant authorities Ownership of gas transportation business unaffected 42

Strategic rationale Focuses BASF s Oil & Gas business on highly profitable upstream exploration and production activities and delivering medium-term earnings uplift Provides access to attractive, condensate-rich Achimov assets Significantly increases Wintershall s resource base Further strengthens the strategic partnership with Gazprom and Wintershall s focus on Russia as a core region for Oil & Gas Through participation in Nord Stream (15.5%) and South Stream (15%) respectively, Wintershall will contribute to reliable transportation of natural gas from Russia to Europe 43

Achimov Blocks IV and V Further growth opportunities Key field data: Targeted field depth: ~3,600 meters Total resources of Blocks IV and V: 2.4 billion boe 274 billion m³* of natural gas 74 million tons of condensate BASF share (600 million boe) equivalent to approx. 20% of total BASF hydrocarbon resource base as at Dec 31, 2011 Plateau production potential of >8 billion m³* p.a. in total for the two additional blocks Synergies through regional and technological expertise of both partners Start of production is planned for 2016 * Russian Standard Conditions (RSC) 44

Appendix Business development Q3 2012

Chemicals Declining margins and plant shutdowns Q3 12 segment sales (million ) vs. Q3 11 EBIT before special items (million ) Intermediates 767 +14% 3,556 +12% Inorganics 485 +36% 800 600 400 621 381 467 436 459 Petrochemicals 2,304 +8% 200 0 Q3 Q4 Q1 Q2 Q3 2011 2012 Sales development Period Volumes Prices Portfolio Currencies Q3 12 vs. Q3 11 4% (9%) 10% 7% 46

Plastics Significantly weaker margins for polyamide precursors Q3 12 segment sales (million ) vs. Q3 11 EBIT before special items (million ) Polyurethanes 1,655 +12% 2,969 +6% 400 200 317 110 219 256 218 Performance Polymers 1,314 (1%) 0 Q3 Q4 Q1 Q2 Q3 2011 2012 Sales development Period Volumes Prices Portfolio Currencies Q3 12 vs. Q3 11 0% (1%) 1% 6% 47

Performance Products Competitive market environment and higher fixed costs Q3 12 segment sales (million ) vs. Q3 11 EBIT before special items (million ) Care Chemicals 1,233 (3%) Nutrition & Health 492 +4% Paper Chemicals 410 (3%) 4,015 +1% Performance Chemicals 933 +3% Dispersions & Pigments 947 +2% 600 400 200 0 440 452 446 347 220 Q3 Q4 Q1 Q2 Q3 2011 2012 Sales development Period Volumes Prices Portfolio Currencies Q3 12 vs. Q3 11 (2%) (2%) 0% 5% 48

Functional Solutions Lower volumes and prices in precious metal trading Q3 12 segment sales (million ) vs. Q3 11 EBIT before special items (million ) Catalysts 1,446 (10%) 2,847-2% Construction Chemicals 634 +6% 200 150 100 50 162 88 148 134 138 Coatings 767 +10% 0 Q3 Q4 Q1 Q2 Q3 2011 2012 Sales development Period Volumes Prices Portfolio Currencies Q3 12 vs. Q3 11 (5%) (5%) 2% 6% 49

Agricultural Solutions Successful start of season in South America Q3 12 segment sales (million ) vs. Q3 11 EBIT before special items (million ) 1,000 908 1,008 200 150 171 500 100 95 50 0 Q3 Q3 0 Q3 Q3 2011 2012 2011 2012 Sales development Period Volumes Prices Portfolio Currencies Q3 12 vs. Q3 11 3% 0% 0% 8% 50

Oil & Gas Increased oil production in Libya Q3 12 segment sales (million ) vs. Q3 11 EBIT bsi/net income (million ) Exploration & Production 1,360 +155% 3,372 +54% Natural Gas Trading 2,012 +21% 1,000 800 600 400 200 0 350 227 123 225 1,068 971 97 Q3/2011 Q3/2012 Exploration & Production Non compensable oil taxes (Q3 2011: 0 million; Q3 2012: 492 million) 322 Natural Gas Trading Net income Sales development Period Volumes Prices/Currencies Portfolio Q3 12 vs. Q3 11 60% (5%) (1%) 51

Review of Other Million Q3 2012 Q3 2011 Sales 1,243 1,637 thereof Styrenics - 739 EBIT before special items (331) (21) thereof Corporate research Group corporate costs Currency results, hedges and other valuation effects Styrenics, fertilizers, other businesses (92) (63) (247) 31 (86) (58) 104 Special items (45) (33) EBIT (376) (54) 82 52

Strong operating cash flow of 5.2 billion Million Jan - Sep 2012 Jan - Sep 2011 Cash provided by operating activities 5,156 5,028 thereof Changes in net working capital (667) (1,337) Cash used in investing activities (2,081) (957) thereof Payments related to tangible / intangible assets (2,780) (2,101) thereof Acquisitions / divestitures 411 (22) Cash used in financing activities (3,395) (4,105) thereof Changes in financial liabilities Dividends (797) (2,593) (1,727) (2,378) Free cash flow 2,376 2,927 Third quarter 2012 Operating cash flow: 1.7 billion Free cash flow: 0.6 billion Capex: 1.1 billion Net debt decreased by 0.6 billion to 11.0 billion in comparison to YTD 2011 53

Appendix

Important product groups in the four divisions Intermediates Monomers Petrochemicals Performance Materials Amines Butanediol and derivates (incl. PBT resins) Polyalcohols Organic acids & specialities Methanol & formaldehyde Life science intermediates Gas treating solutions Ammonia & nitric acid Sulfur products Chlorine products Caprolactam & adipic acid Polyamide 6 & 6.6 Isocyanates Melamine, glues & resins Electronic materials Ethylene Ethylene oxide Propylene Propylene oxide Butenes & butadiene Acrylic acid Butylacrylate Butanol Isononanol Plasticizers (incl. Hexamoll DINCH ) PU systems Engineering plastics Thermoplastic PU Cellasto Biopolymers Functional foams POM High temperature polymers Styropor Styrodur Neopor Epoxy systems 55

BASF segment structure until December 31, 2012 Chemicals Plastics Performance Products Functional Solutions Agricultural Solutions Oil & Gas Inorganics Performance Polymers Dispersions & Pigments Catalysts Crop Protection Oil & Gas Petrochemicals Polyurethanes Care Chemicals Construction Chemicals Intermediates Nutrition & Health Coatings Paper Chemicals Performance Chemicals 56