BASF: Earnings and volumes increase in chemicals business Analyst Conference Call Q3 October 27,
Cautionary note regarding forward-looking statements 150 years This presentation may contain 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. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. BASF has based these forwardlooking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance 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. 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. BASF Q3 Analyst Conference Call, October 27, 2
150 years Q3 : Financial figures for BASF Group Financial figures Q3 Q3 Change Sales 14.0 billion 17.4 billion (20%) EBITDA 2.4 billion 2.9 billion (15%) EBIT before special items 1.5 billion 1.6 billion (5%) EBIT 1.5 billion 1.9 billion (22%) Net income 0.9 billion 1.2 billion (27%) Reported EPS 0.97 1.31 (26%) Adjusted EPS 1.10 1.07 +3% Operating cash flow 2.5 billion 3.4 billion (25%) Sales development Volumes Prices Portfolio Currencies Q3 vs. Q3 4% (5%) (18%) (1%) BASF Q3 Analyst Conference Call, October 27, 3
150 years Milestones Investments and collaborations Negotiations with TODA KOGYO CORP. to collaborate in cathode active materials in North America Commissioning of PVP production facility in Shanghai, China Construction of a world-scale plant for vitamin A in Ludwigshafen planned Replacement of acetylene plant in Ludwigshafen announced Structural measures and operational excellence Realignment of caprolactam production in Europe Optimization of R&D network BASF Q3 Analyst Conference Call, October 27, 4
Hyundai Motor and BASF showcase joint development of RN30 concept car 150 years Body coating: Color Pro IC waterborne basecoat and igloss clearcoat Fender and spoiler: Elastolit rigid foam and reaction injection molding systems Seat cover and steering wheel: unique surface technology valure Electronics and electric: Ultramid advanced plastics for sophisticated components BASF Q3 Analyst Conference Call, October 27, 5
Chemicals Higher volumes, but margin pressure in Petrochemicals and Intermediates 150 years Sales Q3 vs. Q3 EBIT before special items Intermediates 662 (6%) Monomers 1,405 (8%) 3,377 (7%) Petrochemicals 1,310 (7%) 800 600 400 200 0 633 465 467 497 249 Q3 Q4 Q1 Q2 Q3 Sales development Volumes Prices Portfolio Currencies Q3 vs. Q3 5% (12%) 0% 0% BASF Q3 Analyst Conference Call, October 27, 6
Performance Products Significant increase in earnings driven by higher volumes, improved margins and lower fixed costs 150 years Sales Q3 vs. Q3 EBIT before special items Performance Chemicals 945 (6%) Nutrition & Health 504 +2% 3,771 (3%) Dispersions & Pigments 1,147 (2%) Care Chemicals 1,175 (4%) 600 400 200 0 547 503 464 319 228 Q3 Q4 Q1 Q2 Q3 Sales development Volumes Prices Portfolio Currencies Q3 vs. Q3 2% (3%) (2%) 0% BASF Q3 Analyst Conference Call, October 27, 7
Functional Materials & Solutions Significantly higher earnings on continued good demand in automotive and construction as well as lower fixed costs 150 years Sales Q3 vs. Q3 EBIT before special items Performance Materials 1,712 +2% Coatings 790 +5% 4,660 3% Catalysts 1,552 +5% Construction Chemicals 606 (1%) 600 400 200 0 535 456 497 371 389 Q3 Q4 Q1 Q2 Q3 Sales development Volumes Prices Portfolio Currencies Q3 vs. Q3 8% (3%) (1%) (1%) BASF Q3 Analyst Conference Call, October 27, 8
Agricultural Solutions Significantly higher earnings due to improved margins and lower fixed costs 150 years Sales Q3 vs. Q3 1,200 1,000 800 600 400 200 0 1,077 1,049 (3%) Q3 Q3 EBIT before special items 125 100 75 50 25 0 7 Q3 90 million 97 Q3 Sales development Volumes Prices Portfolio Currencies Q3 vs. Q3 (4%) 0% 0% 1% BASF Q3 Analyst Conference Call, October 27, 9
Oil & Gas Considerably lower sales and earnings due to disposal of gas trading business as well as lower prices 150 years Sales Q3 vs. Q3 EBIT before special items, net income 5,000 4,000 3,606 600 625 3,000 667 (83%) 400 371 2,000 1,000 0 2,939 Q3 618* Q3 200 0 292 194* 33 79 Q3 Q3 Q3 Q3 * Including transportation business * Including transportation business Exploration & Production Exploration & Production Natural Gas Trading Natural Gas Trading Net income Sales development Volumes Prices/Currencies Portfolio Q3 vs. Q3 3% (3%) (83%) BASF Q3 Analyst Conference Call, October 27, 10
150 years Review of Other Q3 Q3 Sales 538 685 EBIT before special items (233) (98) Thereof Corporate research costs (77) (104) Costs of corporate headquarters (54) (53) Foreign currency results, hedging and other valuation effects (101) 22 Other businesses 15 30 Special items (23) 26 EBIT (256) (72) BASF Q3 Analyst Conference Call, October 27, 11
150 years Cash flow Q1 Q3 Q1 Q3 Q1 Q3 Cash provided by operating activities 5,840 8,494 Thereof changes in net working capital (393) 2,500 miscellaneous items (172) (497) Cash used in investing activities (2,776) (4,955) Thereof payments related to tangible / intangible assets (2,915) (4,387) acquisitions / divestitures 212 227 Cash used in financing activities (1,898) (3,504) Thereof changes in financial liabilities 837 (649) dividends (2,753) (2,900) BASF Q3 Analyst Conference Call, October 27, 12
150 years Strong balance sheet Balance sheet September 30, vs. December 31, billion Long-term assets Inventories Accounts receivable Other assets Liquid funds 70.8 46.3 9.7 9.5 9.8 9.8 3.1 3.5 2.2 3.5 Dec 31 73.1 46.5 Sep 30 70.8 31.5 15.2 24.1 Dec 31 73.1 29.7 15.8 27.6 Sep 30 Equity Financial debt Other liabilities Total assets increased by 2.3 billion, mainly due to higher liquid funds Inventories were stable Provisions for pensions and similar obligations increased by 3.6 billion Net debt declined by around 600 million to 12.3 billion Equity ratio: 41% BASF Q3 Analyst Conference Call, October 27, 13
150 years Outlook for BASF Group confirmed Assumptions GDP growth: +2.3% Growth in industrial production: +2.0% Growth in chemical production*: +3.4% Exchange rate: $1.10 per euro Oil price (Brent): $45 per barrel (previous forecast: $40 per barrel) Outlook 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. * Excluding pharma BASF Q3 Analyst Conference Call, October 27, 14
150 years BASF Q3 Analyst Conference Call, October 27, 15