BASF Capital Market Story nbsp;· BASF Capital Market Story January 12015 We add value 150 years as one company ... Divestiture of textile chemicals Water, oilfield and mining chemicals

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  • BASF Capital Market Story January 2015 1

    150 years We add value as one company

    150 years Tobias Hld & Dr. Lars Budde Investor Relations BASF m Dom Maklerski/Commerzbank Chemical Event Warsaw January 22, 2015

  • BASF Capital Market Story January 2015 2

    150 years

    Cautionary note regarding forward-looking statements

    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 forward-looking 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 Capital Market Story January 2015 3

    150 years

    Chemistry as an enabler BASF has superior growth

    opportunities: sustainable innovations investments emerging markets

    The #1 chemical company 74 billion sales, 7.2 billion

    EBIT bSI in 2013 #1-3 in >75% of businesses,

    present in >200 countries 6 integrated Verbund sites,

    production in 60 countries

    A track record of strong sales and earnings growth

    14% average annual dividend increase, >3% yield in every single year*

    ~64 billion market capitalization end of December 2014

    Performance Perspective

    * For 2004-2013

    Ludwigshafen, Germany

    Antwerp, Belgium

    Nanjing, China

    Kuantan, Malaysia Geismar,

    USA Freeport, USA

    Verbund site

    Positioning

    We create chemistry for a sustainable future

  • BASF Capital Market Story January 2015 4

    150 years

    Percentage of sales 2013*

    * Not depicted here: ~6% of Group sales reported as Other

    BASF today a well-balanced portfolio Total sales 2013: 74 billion

  • BASF Capital Market Story January 2015 5

    150 years

    BASF today a well-balanced portfolio EBIT before special items 2013: 7.2 billion

    EBIT before special items by segment* (%)

    28%

    17% 14%

    16%

    25%

    Chemicals

    Performance Products

    Functional Materials & Solutions

    Agricultural Solutions

    Oil & Gas

    * Without Other of -0.618 billion

  • BASF Capital Market Story January 2015 6

    150 years

    BASF today sales & EBIT before special items by region 2013

    * By location of costumer

  • BASF Capital Market Story January 2015 7

    150 years

    Unique Verbund concept a competitive advantage for BASF

  • BASF Capital Market Story January 2015 8

    150 years

    Global reduction in carbon emissions of 6.1 million metric tons/a. and reduction of waste

    Example Ludwigshafen: avoidance of 7 million metric tons of freight/a. = 280,000 fewer truckloads

    Shared use of on-site facilities: fire department, security, waste water treatment and analytics

    Verbund generates >1 billion p.a. global cost savings*, supports sustainability

    * Savings include only tangible synergies. Additional (intangible) benefits and retained profits are not included.

  • BASF Capital Market Story January 2015 9

    150 years

    Operational excellence Strong track record

    BASF Group* 20012013 Index

    50

    100

    150

    200

    250

    300

    350

    2001 2006 2009 2012

    CAGR 2001 2013

    10 %

    8 %

    3 %

    EBITDA

    Sales

    Fixed costs

    * Excl. companies with major IFRS 10/11 restatements, i.e. BASF YPC Nanjing, Libya onshore, other Oil & Gas and Catalysts companies

    2013

  • BASF Capital Market Story January 2015 10

    Business review

    Growth Levers

  • BASF Capital Market Story January 2015 11

    150 years

    0

    1

    2

    3

    4

    2004 2005 2006 2007 2008 2009** 2010 2011 2012 2013 Q1-Q32014

    Strong free cash flow generation

    * Cash provided by operating activities less capex (in 2005 before CTA) ** 2009 adjusted for re-classification of settlement payments for currency derivatives

    Free cash flow* in billion

    2.6

    3.3 3.5

    3.2

    2.5

    3.2

    3.9 3.7

    2.6

    3.2

    1.3

  • BASF Capital Market Story January 2015 12

    150 years

    0.851.00

    1.50

    1.95 1.951.70

    2.202.50

    2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

    Growing dividend with attractive yield

    * Dividend yield based on share price at year-end

    Dividend payments

    3.7% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9%

    Dividend yield* 4.6%

    2.60 2.70

    3.7%

    ** Based on BASF share price of 77.49 on Dec. 30, 2013

    Dividend per share ()

    3.5%

    Dividend Policy We want to grow or at least

    maintain our dividend

    Dividend of 2.70 per share for 2013, an increase of 3.8%

    2004-2013: Average annual dividend increase of ~14%

    Attractive dividend yield of 3.5% in 2013**

    Dividend yield above 3% in any given year since 2004

  • BASF Capital Market Story January 2015 13

    150 years

    Delivering consistent, long-term value

    Average annual performance with dividends reinvested

    0 3 6 9 12 15 18

    Euro Stoxx 50

    DAX 30

    MSCI World Chemicals

    +8.7%

    Last 5 years January 2010 December 2014

    +13.9%

    +4.5%

    +10.5%

    +11.9%

    Last 10 years January 2005 December 2014

    BASF

    +9.6%

    +3.8%

    +14.5%

  • BASF Capital Market Story January 2015 14

    150 years

    We aim to:

    increase our sales volumes excluding the effects of acquisitions and divestitures

    slightly increase EBIT bSi compared with 2013

    Outlook 2014

    GDP: 2.3% (previous: 2.5%)

    Industrial production: 3.4% (previous: 3.7%)

    Chemical production: 4.0% (previous: 4.4%)

    US$ / Euro: 1.35 (unchanged)

    Oil price (US$ / bbl): 105 (previous: 110)

    Assumptions 2014

    Outlook 2014

  • BASF Capital Market Story January 2015 15

    Business review

    Growth levers Portfolio development

    Market approach Innovations for a sustainable future Investments Acquisitions Operational excellence

  • BASF Capital Market Story January 2015 16

    150 years

    BASF outperformed global chemical production by ~3 percentage points p.a. Sales to third parties billion

    33

    79

    72

    74

    16.6

    20.7 -4.8

    13.7 -6.6

    3.7 -0.5 -2.0 0.6

    20

    40

    60

    80

    2001 2012 2012 restated

    2013

    Volumes

    Prices

    Currencies M&A

    Volumes Prices Currencies M&A

    IFRS Impact

  • BASF Capital Market Story January 2015 17

    150 years

    Portfolio development Moving downstream towards customer industries

    Functionalized Materials & Solutions Customized Products Classical Chemicals

    2020 in % of sales**

    Chemical Industry First customer industries*

    2010 in % of sales**

    ~ 40%

    ~ 30% ~ 70%

    2001 in % of sales**

    ~ 50%

    ~ 60%

    ~ 50%

    * Agriculture, Construction, Consumer Goods, Health & Nutrition, Electronics, Energy & Resources, Transportation ** Sales excluding Oil & Gas. Targets were published on November 29, 2011.

  • BASF Capital Market Story January 2015 18

    150 years

    Catalysts Construction chemicals Water-based resins Pigments, plastic additives Oil & Gas Personal care & food Battery materials Functional crop care Omega-3 fatty acids Enzymes

    BASF core business

    Strong partnerships

    Gazprom Monsanto Petronas Shell Sinopec Statoil Total

    Selected transactions 2005 today

    Acquisitions

    ~ 14 billion sales

    Divestitures

    Agro generics Vitamin premixes Styrenics Fertilizers Construction equipment,

    flooring and wall systems Textile chemicals

    ~ 7 billion sales

    Portfolio development Towards more market driven and innovative businesses

  • BASF Capital Market Story January 2015 19

    150 years

    Restructuring in Performance Products Announced measures to strengthen competitiveness

    Measures

    Leather and textile chemicals (March 18, 2013 & October 16, 2014)

    Establishment of global innovation center in China Divestiture of textile chemicals

    Water, oilfield and mining chemicals (March 27, 2013)

    Establishment of global business unit to realize synergies Divestment of industrial water management business

    Plastic additives and pigments (April 23, 2013)

    Adjustments at sites in the Basel area to adapt to changed market conditions

    Downsizing of R&D