We create chemistry for a sustainable future Stefan Koch, Investor Relations MainFirst Corporate Conference, Copenhagen March 22, 2018
Cautionary note regarding forward-looking statements This presentation contains forward-looking statements. These statements are based on current estimates and projections of the Board of Executive Directors and currently available information. Forward-looking statements are not guarantees of the future developments and results outlined therein. These are dependent on a number of factors; they involve various risks and uncertainties; and they are based on assumptions that may not prove to be accurate. Such risk factors include those discussed in the Opportunities and Risks Report from pages 111 to 118 of the BASF Report 2017. BASF does not assume any obligation to update the forward-looking statements contained in this presentation above and beyond the legal requirements. 2 March 2018 BASF Capital Market Story
Agenda 1 At a glance 2 Strategic levers 3 Segments 3 March 2018 BASF Capital Market Story
BASF shares an attractive investment Growth above chemical industry average driven by innovative and sustainable products and solutions Broad and resilient portfolio with global market access and strong customer relationships Unique Verbund concept competitive advantage based on integrated sites, operational excellence and best-in-class technologies Earnings growth and strong cash flow generation based on operational and financial strength Long-term value creation with progressive dividend policy grow or at least maintain dividend at the previous year s level 4 March 2018 BASF Capital Market Story
Chemicals a growth industry Global annual growth rate of ~3.4%* Agriculture Health & Nutrition Energy & Resources Construction & Housing Consumer Goods Transportation Electrical & Electronics Chemistry as enabler to meet current and future needs ~10 bn 70% 50% 30% people by 2050 of the world population will live in cities by 2050 more primary energy consumption by 2050 more food needed by 2050 5 March 2018 BASF Capital Market Story * Forecast average annual real change 2018 2020; BASF Report 2017, p. 121
Broad and resilient portfolio 2017: Sales of 64.5 billion; EBITDA of 12.7 billion Percentage of sales 2017* 25% 25% 9% 5% Chemicals Performance Products Functional Materials & Solutions Agricultural Solutions Oil & Gas EBITDA 5.4 billion Petrochemicals Monomers Intermediates EBITDA 2.4 billion Dispersions & Pigments Care Chemicals Nutrition & Health Performance Chemicals EBITDA 2.3 billion Catalysts Construction Chemicals Coatings Performance Materials EBITDA 1.3 billion Crop Protection EBITDA 2.1 billion Exploration & Production; Natural Gas Transport 6 March 2018 BASF Capital Market Story * Not depicted here: Other 4% of BASF Group sales and EBITDA of (679) million
Global market access through regional presence North America Sales 15,357 million EBIT 1,236 million Employees 18,295 Antwerp Ludwigshafen Florham Park Europe Sales 29,214 million EBIT 4,742 million Employees 71,653 Asia Pacific Sales 14,343 million EBIT 2,209 million Employees 18,256 Freeport South America, Africa, Middle East Sales 5,561 million EBIT 335 million Employees 7,286 Geismar São Paulo Kuantan Regional centers Selected sites Verbund sites Selected research and development sites Nanjing Hong Kong 7 March 2018 BASF Capital Market Story 2017: Sales by location of customer; EBIT by location of company
Verbund unique competitive advantage Actively managed in line with market requirements People, Customers, Technology, Production Energy savings > 300 million p.a. Logistics savings > 600 million p.a. Infrastructure savings > 100 million p.a. Annual cost savings of more than 1 billion through integrated production Verbund concept supports sustainability, reduces waste and avoids CO 2 emissions of 6 million tons p.a. 8 March 2018 BASF Capital Market Story
BASF with considerable sales and earnings increase in the fourth quarter and the full year 2017 Financial figures Q4 2017 Change Q4 2016 FY 2017 Change FY 2016 billion % billion % Sales 16.1 8 64.5 12 EBITDA before special items 2.9 27 12.5 21 EBITDA 3.0 20 12.7 21 EBIT before special items 1.9 58 8.3 32 EBIT 1.9 57 8.5 36 Net income 1.5 123 6.1 50 Operating cash flow 1.2 (37) 8.8 14 Reported EPS ( ) 1.68 124 6.62 50 Adjusted EPS ( ) 1.29 63 6.44 33 Sales development Volumes Prices Portfolio Currencies Q4 2017 vs. Q4 2016 4% 9% 0% (5)% FY 2017 vs. FY 2016 4% 8% 1% (1)% 9 March 2018 BASF Capital Market Story
Stepwise increase of earnings level EBIT and EBITDA* billion, 2001 2017 14 12 CAGR EBIT 17% CAGR EBITDA 8% 12.7 12.7 10 8 6 4 2 3.7 4.7 4.6 2.2 2.2 7.0 7.2 4.5 4.8 8.4 5.5 8.9 6.0 7.7 4.6 6.5 2.8 9.9 6.7 11.2 8.0 10.0 10.4 6.7 7.2 11.0 10.6 10.5 7.6 6.2 6.3 8.5 0 0.7 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 EBIT EBITDA Avg. EBITDA level in depicted years 10 March 2018 BASF Capital Market Story * 2010, 2011 indicative, adjusted for IFRS 10/11; 2001 2009 as reported, without non-compensable foreign income taxes on oil production
Strong cash flow development Operating cash flow and free cash flow billion, 2001 2017 10 8 6 4 2 0 9.4 8.8 8.1 7.7 7.1 7.0 6.5 6.6 5.9 5.8 5.7 5.3 4.9 5.0 4.6 4.8 2.3 2.3 3.9 3.7 3.3 3.5 3.2 2.8 3.2 3.2 3.6 3.6 2.6 2.5 2.6 1.7-0.5-0.1 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Operating cash flow Free cash flow 11 March 2018 BASF Capital Market Story
Attractive dividend Dividend per share 3 2 1.50 1.95 1.95 1.70 2.20 2.50 2.60 2.70 2.80 2.90 3.00 Proposal 3.10 Dividend policy We want to grow or at least maintain our dividend at previous year s level Key facts 1 0.65 0.70 0.70 0.85 1.00 Dividend proposal of 3.10 per share, an increase of 10 cents Dividend yield of 3.4% in 2017 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yield* 3.1% 3.9% 3.1% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9% 3.7% 4.6% 3.7% 3.5% 4.0% 4.1% 3.4% 3.4% 12 March 2018 BASF Capital Market Story * Dividend yield based on share price at year-end
Delivering consistent, long-term value Current market capitalization: 79 billion* Average annual performance with dividends reinvested Last 10 years March 2008 February 2018 Last 3 years March 2015 February 2018 +11.8% BASF +3.9% +2.3% Euro Stoxx 50 +1.1% +6.3% DAX 30 +2.9% +7.3% 0 2 4 6 8 10 12 14 MSCI World Chemicals +6.7% 0 2 4 6 8 10 12 14 13 March 2018 BASF Capital Market Story * As of February 28, 2018
Financial targets for the coming years Sales growth slightly faster than global chemical production EBITDA growth well above global chemical production Deliver attractive returns earn a significant premium on cost of capital Remain a strong cash provider continuously generate high levels of free cash flow Progressive dividend policy grow or at least maintain dividend at the previous year s level 14 March 2018 BASF Capital Market Story
Our priorities We aim to grow sales and earnings faster than global chemical production in the coming years, driven by Innovations for a sustainable future Investments in organic growth M&A opportunities and portfolio pruning measures Operational excellence and cost discipline 15 March 2018 BASF Capital Market Story
Outlook 2018 for BASF Group* We anticipate slightly higher sales in 2018. EBIT before special items is expected to be up slightly on the 2017 level. EBIT is forecast to decline slightly in 2018. We aim to once again earn a significant premium on our cost of capital in 2018. However, EBIT after cost of capital will decrease considerably. * With respect to EBIT before special items, slight means a change of 1-10%, while considerable is used for changes of 11% and higher. At prior-year level indicates no change (+/-0%). This outlook takes into account the agreed transactions with Bayer and Solvay. The intended merger of our oil and gas activities with the business of DEA Deutsche Erdoel AG and its subsidiaries is not taken into account in this outlook. 16 March 2018 BASF Capital Market Story
Underlying assumptions for outlook 2018 Economic environment 2018 2017 GDP growth +3.0% +3.1% Growth in industrial production +3.2% +3.3% Growth in chemical production* +3.4% +3.5% Exchange rate US$1.20 per euro US$1.13 per euro Oil price (Brent) US$65 per barrel US$54 per barrel Transactions Consideration in the 2018 outlook Expected closing Acquisition of Solvay s global polyamide business included Q3 2018 Acquisition of significant parts of Bayer s seed and non-selective herbicide businesses included H1 2018 Financial impact No material effect on sales and earnings in 2018 expected Likely to have a positive impact on sales and a negative impact on earnings for the Agricultural Solutions segment and BASF Group in 2018 Merger of BASF s and LetterOne s oil and gas activities into Wintershall DEA not included H2 2018 Deconsolidation only after signing of definitive transaction agreements 17 March 2018 BASF Capital Market Story * Excluding pharma
Outlook 2018 by segment EBIT before special items Forecast 2018* 2017 million Chemicals Considerable decline 4,233 Performance Products Considerable increase 1,416 Functional Materials & Solutions Considerable increase 1,617 Agricultural Solutions Slight decline** 1,033 Oil & Gas Considerable increase 793 Other Slight increase (764) BASF Group Slight increase 8,328 * With respect to EBIT before special items, slight means a change of 1-10%, while considerable is used for changes of 11% and higher. At prior-year level indicates no change (+/-0%). ** Excluding the agreed transaction with Bayer, we expect a slight increase in EBIT before special items in the Agricultural Solutions segment. 18 March 2018 BASF Capital Market Story
Agenda 1 2 3 At a glance Strategic levers Portfolio development Investments Innovation Sustainability Operational excellence Segments 19 March 2018 BASF Capital Market Story
Continuous global portfolio development to maintain a balanced portfolio Growth fields Specialties and solutions Attractive markets Differentiation by customer proximity and innovations Differentiated commodities Attractive markets Differentiation by process technologies and integration Innovation pipeline ~50% ~50% target (in % of sales*) Acquisitions Divestment of businesses, e.g., due to lower market attractiveness Commoditization leads to restructuring Divestment of businesses, e.g., due to loss of differentiation 20 March 2018 BASF Capital Market Story * Excluding Oil & Gas sales
Portfolio development towards more market-driven and innovative businesses Acquisitions Functional crop care Personal care & food Omega-3 fatty acids Enzymes Battery materials Specialty plastics Selected assets in Oil & Gas Refinish coatings Surface treatment ~ 5.5 billion sales in emerging and innovation-driven businesses BASF core business Selected transactions 2010 today Strong Partnerships Gazprom PETRONAS Sinopec Total Divestitures Styrenics Fertilizers Selected assets in Oil & Gas Natural gas trading & storage Custom synthesis business Textile chemicals Polyolefin catalysts Industrial coatings Leather chemicals ~ 21.0 billion sales in businesses with limited fit and differentiation potential 21 March 2018 BASF Capital Market Story
Clear acquisition criteria Strategic acquisition criteria We want to acquire businesses which generate profitable growth above the industry average are innovation-driven offer a special value proposition to customers reduce earnings cyclicality Acquisition criteria Financial acquisition criteria We want to acquire businesses which provide a return on investment above the WACC are EPS accretive by year three at the latest 22 March 2018 BASF Capital Market Story
Complementary acquisitions to strengthen the portfolio of BASF Group Significant parts of Bayerʼs seed and non-selective herbicide businesses Purchase price: ~ 5.9 billion Sales 2016: ~ 1.3 billion EBITDA 2016: ~ 385 million Sales CAGR: ~15% (2014 2016) Closing expected in the first half 2018 Solvayʼs integrated global polyamide business Purchase price: ~ 1.6 billion Sales 2016: ~ 1.3 billion EBITDA 2016: ~ 200 million Market CAGR: >3.5% Closing expected in Q3 2018 Chemetall Surface treatment business Purchase price: ~US$3.1 billion Sales 2015: ~US$845 million EBITDA 2015: ~US$200 million Sales CAGR: ~7% (2007 2015) Closed in December 2016 23 March 2018 BASF Capital Market Story
BASF signed agreement to acquire significant parts of Bayer s seed and non-selective herbicide businesses Fully enabled seed and trait businesses Attractive and sizeable seed portfolio for canola/oilseed rape, soybean and cotton in the Americas and Europe Excellent trait research for canola, soybean and cotton LibertyLink technology for herbicide tolerance and related trademarks Complementary crop protection business Global glufosinate-ammonium-based non-selective herbicide business State-of-the-art production facilities in the U.S., Canada and Germany 24 March 2018 BASF Capital Market Story
BASF to acquire Solvay s global polyamide business Broader global scope Enhanced presence, especially in Asia and South America Stronger capabilities to serve global and regional customers Wider range of engineering plastics Technyl, Ultramid, Ultradur, Ultraform, Ultracom Broadening technical skills and innovation capabilities* Heat-resistant and high-voltage electrical and electronic parts Tailor-made solutions for components in automotive Mechanically strong and thermally stable consumer goods Improved reliability of supply Backward integration into all key raw materials for polyamide 6.6 Fully integrated engineering plastics value chain 25 March 2018 BASF Capital Market Story * Application examples
BASF and LetterOne signed letter of intent to merge their oil and gas subsidiaries Wintershall and DEA Combined business with pro-forma 2016 sales of 4.3 billion, EBITDA of 2.2 billion and net income of 326 million Creation of one of the largest independent European exploration and production companies with significant growth potential, optimization of the portfolio footprint of the combined business and realization of synergies BASF to initially hold 67% and LetterOne 33% in Wintershall DEA; value of Wintershall s gas transportation business to be reflected through the issuance of a mandatory convertible bond to BASF* BASF and LetterOne are currently conducting a confirmatory due diligence and are negotiating definitive transaction agreements; closing could be expected in the second half of 2018, subject to customary regulatory approvals Initial Public Offering (IPO) envisaged in the medium term * No later than 36 months after closing, this bond will be converted into new shares in Wintershall DEA, resulting in a higher shareholding ratio for BASF 26 March 2018 BASF Capital Market Story
Investments in organic growth Investments of ~ 4.0 billion planned for 2018 Capex budget 2018 2022 by segment Capex budget 2018 2022 by region Other 18% Chemicals 25% Other** 5% South America*** 8% Europe 54% Oil & Gas* 18% 19.0 billion Performance Products 16% Asia Pacific 14% 19.0 billion Agricultural Solutions 4% Functional Materials & Solutions 19% North America 19% * If the merger of BASF s oil and gas activities with DEA is consummated as intended, these capital expenditures will no longer be reported as investments by the BASF Group. ** Alternative sites currently being investigated; *** Including Africa and Middle East 27 March 2018 BASF Capital Market Story
Selected investment projects Replacement of BASF s acetylene plant in Ludwigshafen Expansion of BASF s mobile emissions catalysts site in Poland New ibuprofen plant in Ludwigshafen; capacity expansion in the U.S. New plastic additives plant in Shanghai, China ~20 production facilities on the site use acetylene as a raw material 90,000 tons per year World s most efficient production process Startup end of 2019 BASF s largest emissions catalysts production site in Europe New production lines and additional infrastructure Best-in-class technology to meet tightening NOx and particulate emissions standards for diesel or gasoline engines First world-scale ibuprofen plant in Europe Additional capacity expansion of ibuprofen plant in Bishop, Texas Investments: ~ 200 million for both projects Startup in 2021 Production of antioxidants, related forms and blends 42,000 tons per year Commercial production to start by 2020 28 March 2018 BASF Capital Market Story
Innovation will drive future growth R&D expenditures 2017 Key facts 1.9 billion R&D expenditures in 2017 Corporate Research 20% Chemicals 7% R&D expense to sales ratio ~3% ~10,000 employees in R&D Oil & Gas 2% Agricultural Solutions 27% 1.9 billion Performance Products 21% Functional Materials & Solutions 23% ~3,000 projects ~800 new patents in 2017 Research Verbund: Cooperations with more than 600 excellent partners from universities, startups and industry In 2017, sales of > 9 billion from innovations launched on the market in the past five years 29 March 2018 BASF Capital Market Story
BASF capturing the fast-growing battery materials market E-mobility drives battery materials growth Chemistry of cathode active materials (CAM) is key to address e-mobility challenges ~15-20% p.a. 2017 Li-ion 2025 battery market Market projections for 2025: 8-15 million electric vehicles * built per year 600-900 kt of CAM in e-mobility 18-24 billion CAM market size BASF enables electromobility Unparalleled access and commitment to the automotive industry Strategic global supply, technology and production partnerships Well-established position in key CAM technologies (NCA & NCM)** Rapid expansion to global, cost-competitive asset Industry leading position in NCA capacity footprint 30 March 2018 BASF Capital Market Story *Electric vehicles: BEV, HEV and PHEV **NCA: nickel cobalt aluminum oxide; NCM: nickel cobalt manganese
Key supplier in battery materials, well-positioned for further growth Elyria, Ohio BASF TODA America Europe, planned production Onoda/Kitakyushu, Japan BASF TODA Battery Materials Battle Creek, Michigan BASF TODA America* Amagasaki, Japan R&D, Application Technology Center Beachwood, Ohio R&D, Application Technology Center Production site Technology center Ludwigshafen, Germany R&D, Application Technology Center Shanghai, China R&D, Application Technology Center Shanghai, China BASF Battery Materials Headquarters Innovation in battery materials Leading technology portfolio and core patents ~ 250 million total R&D spent so far ~150 scientists at four R&D centers across all regions Highest energy density CAM commercialized for EV application Market presence Triple-digit-million euro battery material sales Supplier to world s largest cell producers Already supplying leading OEMs platforms Under qualification for future key platforms 31 March 2018 BASF Capital Market Story * BASF TODA America: pending closing
Corporate Research: BASF s key technology capabilities are bundled in seven focus areas Selected key technology capabilities reflect where BASF requires continued effort and resources to safeguard today s and tomorrow s excellence in innovation. BASF s key technology capabilities Biotechnology Catalysis Production processes Materials Polymer technologies Biodegradable & bio-based materials Enabling methods 32 March 2018 BASF Capital Market Story
Sustainable Solution Steering Goal: Increase the share of Accelerators from 23% in 2014 to 28% by 2020 Percentage of sales 2017 27.3% Substantial sustainability contribution in the value chain >60,000 product applications analyzed 27.3% Accelerators strong growth in their markets 68.3% Sustainable Solution Steering Meets basic sustainability standards on the market Specific sustainability issues which are being actively addressed deliver margins above the average represent majority of BASF s R&D pipeline 68.3% Performers <1% Challenged products 4.3% 0.1% Significant sustainability concern identified and action plan developed 33 March 2018 BASF Capital Market Story
BASF products and solutions in everyday life Innovations for a sustainable future Nutrilan Superabsorbents Sokalan Omega-3 ecoflex / ecovio Trilon M Tinuvin Ultramid Tinosorb Luquafleece Coatings Cellasto Infinergy 34 March 2018 BASF Capital Market Story
Resource efficiency Responsible use of carbon sources We are committed to resource efficiency and climate protection BASF uses carbon raw materials responsibly: 82% of carbon converted to products, 17% consumed for process energy and converted to CO 2, 1% waste* Comparisons with European emissions trading benchmarks show that our chemical plants operate at above-average energy efficiency 23 million tons of CO 2 emissions by BASF worldwide in 2017 compared to 10 30 million tons p.a. for one coal-fired power plant Customers use of BASF s climate protection products sold in 2017 avoided 570 million tons of CO 2 equivalents (thereof 6% attributable to BASF)** In 2017, BASF achieved CDP leadership status once again * BASF carbon mass balance calculation (2017, non-audited) ** Based on the chemical industry standard of the International Council of Chemical Associations (ICCA) and the World Business Council for Sustainable Development (WBCSD) 35 March 2018 BASF Capital Market Story
Operational excellence DrivE with ~ 1 billion targeted earnings contribution from end of 2018 onwards Annual earnings contribution DrivE million 1,000 0,.001 500 million 150 million Goal 1 billion DrivE program Optimization of processes and structures in all regions, including manufacturing incremental capacities 500 350 million 650 million productivity increase Project timeline: 2016 2018 0 2016 2017 2018 Total 36 March 2018 BASF Capital Market Story
Strong track record in operational excellence BASF Group* 2001 2017 indexed; CAGR 2001 2017 350 300 250 200 CAGR EBITDA 8% CAGR Sales 5% EBITDA Sales 150 100 CAGR Fixed Costs 3% Fixed Costs 50 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 37 March 2018 BASF Capital Market Story * Excl. companies with major IFRS 10/11 restatements, i.e. BASF YPC Nanjing, Libya onshore,other Oil & Gas and Catalysts companies
Digitalization will support BASF s growth and efficiency Digital Business Models Growth Digital business models New revenue streams Smart Innovation Customer connectivity Digitalization in R&D Increased supply share Higher innovation output Smart Supply Chain Efficiency Predictive maintenance Increased capacity Augmented reality in production Increased work efficiency Smart Manufacturing Smart supply chain Reduced working capital 38 March 2018 BASF Capital Market Story
Agenda 1 2 3 At a glance Strategic levers Segments Chemicals Performance Products Functional Materials & Solutions Agricultural Solutions Oil & Gas 39 March 2018 BASF Capital Market Story
Chemicals Higher earnings driven by strong margins and higher volumes Sales Q4 2017 vs. Q4 2016* million EBIT before special items* million Intermediates 742 +7% 4,158 +21% Petrochemicals 1,630 +35% 1,200 800 400 629 +67% 1,053 5,000 4,000 3,000 2,000 +108% 2,032 4,233 Monomers 1,786 +17% 0 Q4 2016 Q4 2017 1,000 0 FY 2016 FY 2017 Sales development Volumes Prices Portfolio Currencies Q4 2017 vs. Q4 2016 6% 21% 0% (6)% FY 2017 vs. FY 2016 5% 23% 0% (1)% * Effective January 1, 2017, the Monomers and Dispersions & Pigments divisions activities for the electronics industry were combined into the global Electronic Materials business unit and allocated to the Dispersions & Pigments division in the Performance Products segment. The 2016 figures have been adjusted accordingly. 40 March 2018 BASF Capital Market Story
Performance Products Higher volumes and prices could not offset increased raw materials costs; earnings declined Sales Q4 2017 vs. Q4 2016* million EBIT before special items* million Performance Chemicals 923 (3)% 3,832 +2% Dispersions & Pigments 1,225 +4% 300 200 100 237 (53)% 111 2,000 1,000 1,777 (20)% 1,416 Nutrition & Health 443 0% Care Chemicals 1,241 +5% 0 Q4 2016 Q4 2017 0 FY 2016 FY 2017 Sales development Volumes Prices Portfolio Currencies Q4 2017 vs. Q4 2016 7% 1% (1)% (5)% FY 2017 vs. FY 2016 5% 1% (1)% (1)% * Effective January 1, 2017, the Monomers and Dispersions & Pigments divisions activities for the electronics industry were combined into the global Electronic Materials business unit and allocated to the Dispersions & Pigments division in the Performance Products segment. The 2016 figures have been adjusted accordingly. 41 March 2018 BASF Capital Market Story
Functional Materials & Solutions Sales growth on continued good demand; raw material price pressure led to earnings decrease Sales Q4 2017 vs. Q4 2016 million EBIT before special items million Performance Materials 1,913 +10% Coatings 1,021 +11% 5,311 +7% Catalysts 1,789 +3% Construction Chemicals 588 +4% 600 300 0 458 (42)% 267 Q4 2016 Q4 2017 2,000 1,000 0 1,946 (17)% 1,617 FY 2016 FY 2017 Sales development Volumes Prices Portfolio Currencies Q4 2017 vs. Q4 2016 2% 8% 3% (6)% FY 2017 vs. FY 2016 4% 5% 3% (1)% 42 March 2018 BASF Capital Market Story
Agricultural Solutions Earnings increase due to higher volumes and improved margins Sales Q4 2017 vs. Q4 2016 million EBIT before special items million 2,000 1,281 +4% 1,328 200 +162% 207 1,500 1,250 1,000 1,087 (5)% 1,033 1,000 100 79 750 500 250 0 Q4 2016 Q4 2017 0 Q4 2016 Q4 2017 0 FY 2016 FY 2017 Sales development Volumes Prices Portfolio Currencies Q4 2017 vs. Q4 2016 14% (3)% 0% (7)% FY 2017 vs. FY 2016 6% (3)% 0% (1)% 43 March 2018 BASF Capital Market Story
Oil & Gas Higher oil and gas prices led to earnings increase Sales Q4 2017 vs. Q4 2016 million EBIT before special items / net income million 1,000 500 922 (7)% 862 400 300 200 163 260 182 318 1,000 800 600 400 517 793 362 719 100 200 0 Q4 2016 Q4 2017 0 Q4 2016 Q4 2017 Q4 2016 Q4 2017 0 FY 2016 FY 2017 FY 2016 FY 2017 EBIT before special items Net income EBIT before special items Net income Sales development Volumes Prices / Currencies Portfolio Q4 2017 vs. Q4 2016 (18)% 11% 0% FY 2017 vs. FY 2016 4% 13% 0% 44 March 2018 BASF Capital Market Story
Review of Other Financial figures Q4 2017 Q4 2016 FY 2017 FY 2016 million million million million Sales 608 518 2,242 2,018 EBIT before special items (38) (386) (764) (1,050) Thereof Costs of corporate research (112) (131) (379) (395) Costs of corporate headquarters (57) (57) (224) (222) Foreign currency results, hedging and other measurement effects (23) (182) (28) (331) Other businesses 54 (12) 60 54 Special items (7) (57) (35) (41) EBIT (45) (443) (799) (1,091) 45 March 2018 BASF Capital Market Story
Cash flow development in 2017 Cash flow development 2017 2016 million million Cash provided by operating activities 8,785 7,717 Thereof Changes in net working capital (1,167) 104 Miscellaneous items (339) (734) Cash used in investing activities (3,958) (6,490) Thereof Payments made for tangible / intangible assets (3,996) (4,145) Acquisitions / divestitures 27 (2,164) Cash provided by financing activities 394 (2,160) Thereof Changes in financial liabilities 3,248 579 Dividends (2,873) (2,767) Free cash flow 4,789 3,572 46 March 2018 BASF Capital Market Story
Balance sheet remains strong Balance sheet 2017 vs. 2016 billion Non-current assets 78.8 47.6 76.5 50.6 78.8 76.5 34.8 32.6 Equity Total assets increased by 2.3 billion due to higher cash and cash equivalents related to the financing of the announced acquisitions Equity ratio at 44.1% 18.0 16.3 Financial debt Provisions for pensions and similar obligations decreased by 1.9 billion Inventories Accounts receivable Other assets Liquid funds 10.3 10.0 11.2 11.0 3.2 6.5 3.0 1.9 Dec 31, 2017 Dec 31, 2016 26.0 27.6 Dec 31, 2017 Dec 31, 2016 Other liabilities Net debt decreased by 2.9 billion to 11.5 billion 47 March 2018 BASF Capital Market Story