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BASF Creditor Story June 2020

BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

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Page 1: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

BASF Creditor StoryJune 2020

Page 2: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

2 June 2020 | BASF Creditor Story

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 Opportunities and Risks on pages 139 to 147 of the BASF Report 2019. BASF does not

assume any obligation to update the forward-looking statements contained in this presentation above

and beyond the legal requirements.

Page 3: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

3 June 2020 | BASF Creditor Story

Agenda

1At a glance

4Battery materials driving

electromobility and future

growth

4Battery materials driving electromobility and future growth

5Pushing the transition to a sustainable economy

2Strategy implementation in full swing

6Reporting and financing highlights

3Unique position to capture growth in Asia

Page 4: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

4 June 2020 | BASF Creditor Story

What is driving BASF’s future growth?

Global trends provide tremendous opportunities for growth in the chemical industry

+100%2020 to 2050

Demographic change:

Share of population aged 60

and over worldwide

+25%2020 to 2050

Population growth:

Driven by the emerging

markets

~50%by 2030

China the largest market:

Share of global

chemical market

456zettabytes in 2030

Digitalization:

Rapid growth in

volume of data

–70%by 2050

Climate change:

Required reduction of greenhouse gas

emissions to achieve the 2°C goal

+20–25%per year

Electromobility:

Growing demand for battery

materials until 2030

Sources: UN, IEA, UBS Foresight, BASF

Page 5: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

5 June 2020 | BASF Creditor Story

Unique Verbund

concept

Industry-leading

innovation platform

Strong and expanding

local presence in fast

growing Asian market

Creating value to society

and contributing to a

sustainable development

Progressive

dividend policy

▪ 6 Verbund sites

globally

▪ 361 additional production

sites worldwide

▪ 6.4 million metric tons

of CO2 prevented

globally in 2019

▪ €2.2 billion R&D

expenditures in 2019

▪ ~11,000 employees

in R&D

▪ Sales of ~€10 billion

in 2019 with products

launched during last

5 years

▪ 2 Verbund sites

already

▪ >100 production

sites

▪ ~€14.2 billion1 sales

in 2019

▪ Strong volume and

earnings development

of BASF in Greater China

▪ Target CO2-neutral growth

until 2030

▪ Carbon management

bundles measures to

reduce greenhouse

gas emissions

▪ Achieve €22 billion in

Accelerator sales by 2025

(2019: €15.0 billion)

▪ Aim to increase the dividend

per share every year

▪ Dividend proposal of

€3.30 per share for 2019

Unique position to deliver long-term value

1 Sales by location of customer. Only includes sales from BASF entities fully consolidated according to IFRS 10/11

Page 6: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

6 June 2020 | BASF Creditor Story

Our ambitious corporate targets – financial and nonfinancial targets

1 Return on capital employed (ROCE) is a measure of the profitability of our operations.

We calculate this indicator as the EBIT generated by the segments as a percentage of the average cost of capital basis

Increase the dividend per share every year based on a strong free cash flow

Achieve a return on capital employed (ROCE)1 considerably above the cost of capital percentage every year

Increase EBITDA before special items by 3% to 5% per year

Grow sales volumes faster than global chemical production every year

2 Accelerator products are products that make a substantial sustainability contribution in the value chain.

Grow CO2-neutrally until 2030 (compared with baseline 2018) Achieve €22 billion in Accelerator sales2 by 2025

Page 7: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

7 June 2020 | BASF Creditor Story

Further nonfinancial targets

1 We understand relevant spend as procurement volumes with relevant suppliers.

Introduce sustainable water management at all productionsites in water stress areas and at all Verbund sites by 2030

Reduce the worldwide lost-time injury rate per 200,000working hours to ≤ 0.1 by 2025

Reduce worldwide process safety incidents per 200,000working hours to ≤ 0.1 by 2025

More than 80% of our employees feel that at BASF, they can thrive and perform at their best

Increase the proportion of women in leadership positions with disciplinary responsibility to 30% by 2030

Cover 90% of our relevant spend1 with sustainability evaluations by 2025

Have 80% of our suppliers improve their sustainability performance upon re-evaluation

Page 8: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

8 June 2020 | BASF Creditor Story

BASF’s diversified portfolio with market-oriented segment structure

provides resilience and supports customer orientation

Surface Technologies

Chemicals

Materials

Nutrition & Care

AgriculturalSolutions

Industrial Solutions

Other1

Petrochemicals,

Intermediates

Performance

Materials, Monomers

Catalysts, Coatings

Care Chemicals,

Nutrition & Health

Agricultural Solutions

Dispersions & Pigments,

Performance Chemicals

Service units (e.g., business services, procurement, engineering)

Regions and countries

Corporate center (governance units)

Verbund

1 Since the signing of a divestment agreement, Construction Chemicals is reported as a discontinued operation and

the respective assets are reported under Other

Page 9: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

9 June 2020 | BASF Creditor Story

Each segment has a clear and compelling path forward

Chemicals Materials Industrial

Solutions

Surface

Technologies

Nutrition

& Care

Agricultural

Solutions

% of sales 20191 16% 19% 14% 22% 10% 13%

EBIT bsi 20191 €0.8 billion €1.0 billion €0.8 billion €0.7 billion €0.8 billion €1.1 billion

Core theme VerbundAdvanced

materials

Additives

platform

Surface modification

platform

Consumer

ingredients

Integrated offering

of crop protection,

seeds & traits,

digital

Innovation focusImproved or

new processes

Applications,

biomaterialsFormulations

Battery materials,

surface effects

Biotechnology,

formulations

Crop protection,

seeds & traits,

digital farming

Capex relevance

M&A relevance

Sustainability ChemCyclingTM Bio-based

materials

More

from less

Low-emission

mobility

Bio-based and

natural, traceability

Better

with less

1 Other (sales 2019: €2.9 billion, EBIT bsi 2019: €(581) million) not depicted on this slide

Page 10: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

10 June 2020 | BASF Creditor Story

Our unique Verbund concept is one of BASF’s greatest assets

with multiple benefits strengthening the portfolio

Technologies

Production

Value Chains

Markets

Digitalization

▪ 6 integrated Verbund sites

worldwide

▪ 6.4 million metric tons of CO2

emissions prevented globally

in 2019

▪ Ensure competitive supply

of key raw materials and

products to all segments

▪ Leverage technological advantages

and innovation across all segments

▪ Create customer relevance

through size and broad portfolio

▪ Harvest the advantages offered

by digitalization across BASF

Verbund

Page 11: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

11 June 2020 | BASF Creditor Story

We operate close to our customers in all regions worldwide

Sales 2019 by location of customer; EBIT 2019 by location of company. The 2019 EBIT figures have been restated to reflect the

reclassification of income from non-integral companies accounted for using the equity method to net income from shareholdings.

Sablona

North America

Sales (million €) 15,948

EBIT (million €) 692

Employees 19,355

Europe

Sales (million €) 23,827

EBIT (million €) 2,125

Employees 72,153

Asia Pacific

Sales (million €) 14,203

EBIT (million €) 1,082

Employees 18,634

South America, Africa, Middle East

Sales (million €) 5,338

EBIT (million €) 302

Employees 7,486

1 In each case

Regional centers

Selected sites

Verbund sites

Selected research and

development sites

Planned Verbund site

BASF sales by industry 2019

Direct

customers

> 20% Chemicals and plastics

10–20%1 Agriculture | Consumer goods | Transportation

< 10%1 Construction | Electronics | Energy and resources | Health and nutrition

Page 12: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

12 June 2020 | BASF Creditor Story

Guidance on the use of cash – clear priorities

Organic

growth

Progressive

dividend

Portfolio

upgrading

Share

buybacks

▪ ~€23.6 billion capex

budget 2020-2024

▪ Around €2.1 billion R&D

expenditures annually

▪ Aim to increase dividend

per share every year

▪ Strong balance sheet

supports dividend policy in

times of slower free cash

flow generation driven by

weak macro environment

▪ Strengthen portfolio by

selective M&A opportunities

while maintaining price

discipline

▪ Focus the portfolio through

continued pruning

measures

▪ Share buybacks are

part of our toolbox but

are currently not being

considered

Page 13: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

13 June 2020 | BASF Creditor Story

0%

25%

50%

75%

100%

By segment By region By type of investment

Investments in organic growth

– planned capex for 2020 reduced from €3.4 billion to €2.8 billion

Capex budget 2020–2024: €23.6 billion

22% Other (Infrastructure, R&D)

5% Agricultural Solutions

9% Nutrition & Care

12% Surface Technologies

5% Industrial Solutions

13% Materials

34% Chemicals

5% Other1

1% South America, AfricaMiddle East

19% North America

41% Asia Pacific

34% Europe

35% Growth projects in

Asia Pacific2 and

battery materials

65% Investments

in ongoing business

1 Alternative sites currently being investigated2 Verbund site Guangdong, China; chemical production complex Mundra, India

Page 14: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

14 June 2020 | BASF Creditor Story

Industry-leading innovation platform

1 Accelerator products are products that make a substantial sustainability contribution in the value chain.

Key facts

▪ €2.2 billion R&D expenditures in 2019

▪ R&D expense to sales ratio ~4%

▪ ~11,000 employees in R&D

▪ ~1,000 new patents filed in 2019

▪ Research Verbund: Our 8 Academic Research

Alliances are complemented by cooperations with

~300 universities and research institutes

▪ 2019: Sales of ~€10 billion with products launched

during last 5 years

▪ Achieve €22 billion in Accelerator sales1 by 2025

▪ Peak sales potential of BASF’s Agricultural

Solutions innovation pipeline of >€7.5 billion

between 2019 and 2029

R&D expenditures 2019

Agricultural

Solutions

41%

Materials

9%

Nutrition & Care

7%

Corporate research

19%

Chemicals

5%

Industrial Solutions

9%

Surface Technologies

10%

€2,158 million

Page 15: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

15 June 2020 | BASF Creditor Story

Agenda

1At a glance

4Battery materials driving

electromobility and future

growth

4Battery materials driving electromobility and future growth

5Pushing the transition to a sustainable economy

2Strategy implementation in full swing

6Reporting and financing highlights

3Unique position to capture growth in Asia

Page 16: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

16 June 2020 | BASF Creditor Story

We create chemistry for a sustainable future

and aspire to be the leading chemical company for our customers

Our customers

will experience

a new BASF

Innovation – with impact

Sustainability – live our purpose

Operations – be the leader

Digitalization – leverage across the company

Portfolio – businesses with customer relevance

People – drive high performance

Page 17: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

17 June 2020 | BASF Creditor Story

Transforming into an agile and customer-focused organization

Embedding to bring services closer to customers

Streamlined headquarters and services

Regions with sharpened roles to increase

customer focus

Simplification of process landscape

People working in an entrepreneurial

performance culture

Action fields Progress report

On October 1, 2019, we completed the

embedding of around 20,000 employees

Since January 1, 2020, the lean corporate center with ~1,000

employees is operating. In addition, the Global Business

Services unit with ~8,800 employees was established

Regions with strengthened customer focus,

supporting and enabling the businesses locally

Simplification measures on track: currently

>140 projects ongoing, thereof >50 implemented

Empowering and incentivizing employees to take

ownership in their area of expertise

Page 18: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

18 June 2020 | BASF Creditor Story

We have consistently refocused our portfolio towards innovative

growth businesses1

~€8.8 billion sales in emerging

and innovation-driven businesses

▪ Functional crop care

▪ Personal care and food ingredients

▪ Omega-3 fatty acids

▪ Enzymes

▪ Battery materials

▪ Specialty plastics

▪ Refinish coatings

▪ Surface treatment

▪ Seeds and crop protection

▪ Polyamide business

Divestitures

~€26.0 billion sales in businesses with

decreased differentiation potential

▪ Styrenics

▪ Fertilizers

▪ Natural gas trading and storage

▪ Custom synthesis business

▪ Textile chemicals

▪ Polyolefin catalysts

▪ Industrial coatings

▪ Leather chemicals

▪ Water and paper chemicals

▪ Oil & gas

Acquisitions

1 Selected, closed transactions 2010–today

Selected transactions

2010−today

BASF

core business

Page 19: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

19 June 2020 | BASF Creditor Story

Active portfolio management

▪ Sales 2018: ~€1 billion

▪ BASF acquired the global, non-European

PA6.6 business from Solvay including its

50% share in Butachimie’s adipodinitrile

(ADN) production

▪ Purchase price of €1.3 billion1

▪ Closing took place on January 31, 2020

▪ Sales 2019: ~€2.6 billion

▪ BASF and Lone Star Funds signed

agreement for the acquisition of BASF’s

construction chemicals business

▪ Purchase price of €3.17 billion1

▪ Closing is expected in Q3 20202

Lone Star Funds to acquire BASF’s

construction chemicals business

BASF closed acquisition of

polyamide business from Solvay

1 On a cash and debt-free basis; 2 Subject to the approval of the relevant competition authorities

▪ Sales 2018: ~€1 billion

▪ BASF and DIC reached an

agreement on the acquisition of

BASF’s global pigments business

▪ Purchase price of €1.15 billion1

▪ Closing is expected in Q4 20202

DIC to acquire BASF’s

global pigments business

Page 20: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

20 June 2020 | BASF Creditor Story

Merger of Wintershall Dea completed, integration on track

▪ On April 30, 2019, BASF and LetterOne completed the merger

of Wintershall and DEA creating Europe’s leading independent

E&P company

▪ BASF holds 67% and LetterOne 33% of Wintershall Dea’s

ordinary shares; BASF holds additional preference shares

resulting in a total BASF shareholding of 72.7%

(LetterOne: 27.3%)

▪ Wintershall Dea has a regionally balanced footprint with

superior growth opportunities

▪ Integration of Wintershall Dea is well on track and expected to

be completed in December 2020

▪ Synergies of at least €200 million p.a. expected by 2022

Page 21: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

21 June 2020 | BASF Creditor Story

Acquisition of assets and businesses from Bayer

– a successful move

▪ BASF’s Agricultural Solutions segment

transformed from a crop protection company

into a provider of agricultural solutions

▪ BASF provides connected offer of crop protection

products, seeds and digital solutions

▪ EBITDA margin before special items 2019: 23%

(2018: 18%)

▪ Until 2025, target to achieve a mid-triple-digit

million-euro amount in additional sales from the

acquisition

5,696

1,300

6,156

1,128

7,814

1,809

0

2,000

4,000

6,000

8,000

2017 2018 20192017 2018 2019

million €

Sales legacy business

Sales acquired business

EBITDA before special items legacy business

EBITDA before special items acquired business

Page 22: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

22 June 2020 | BASF Creditor Story

Clear acquisition criteria

Strategic acquisition criteria Financial acquisition criteria

We want to acquire businesses which …

▪ create more value as part of BASF’s Verbund

▪ help achieve relevant market positions

▪ drive innovation or technological differentiation

▪ enable new and sustainable business models

We want to acquire businesses which …

▪ provide a return on capital employed above the

WACC after full integration into BASF Group

▪ are EPS accretive by year three at the latest

▪ contribute to growth of EBITDA before special items

Page 23: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

23 June 2020 | BASF Creditor Story

Excellence Program 2019 – 2021

1 Run rate; 2 One-time costs in the respective year

2019 actual 2020 2021

Annual EBITDA

contribution1 €0.6 billion €1.3 – €1.5 billion €2.0 billion

One-time costs2 €0.5 billion €0.3 – €0.4 billion €0.05 – €0.15 billion

Category EBITDA contribution by category

Operational

excellence

Measures focused on production,

logistics and planning

Leaner structuresPersonnel cost savings; reduction of 6,000

positions targeted globally by end of 2020

InnovationR&D cost reduction via focusing

budgets

SimplificationIncreased process efficiency,

e.g., in procurement

Innovation

Operational excellenceLeaner structures

Simplification

€2.0 billion

Page 24: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

24 June 2020 | BASF Creditor Story

Agenda

1At a glance

4Battery materials driving

electromobility and future

growth

4Battery materials driving electromobility and future growth

5Pushing the transition to a sustainable economy

2Strategy implementation in full swing

6Reporting and financing highlights

3Unique position to capture growth in Asia

Page 25: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

25 June 2020 | BASF Creditor Story

Asia Pacific is the growth region for global chemical production

with China as the major driver

Real chemical production excluding pharmaceuticals

billion US$

Greater

China

43%

Rest of Asia Pacific

15%

Middle East, Africa

4%

Europe

17%

South America

3%

North America

16%

Global GDP CAGR +2.6%

CAGR1 +2.8%

Greater China

~50% (CAGR +4%)2019: ~4,000

Rest of Asia Pacific

16% (CAGR +2%)

North America

14% (CAGR +2%)

South America

2% (CAGR +2%)

Europe

15% (CAGR +1%)

Middle East, Africa

4% (CAGR +3%)

2030: ~5,500

Source: BASF 1 Real chemical production excluding pharmaceuticals

Page 26: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

26 June 2020 | BASF Creditor Story

BASF is active in Asia Pacific since 1885 and has a unique position

to capture growth in the region

Nanjing

Hong Kong

Kuala Lumpur

Kuantan

Zhanjiang1

Regional center

Verbund sites

Selected sites

R&D/Technical centers

Shared Services Center

1 BASF investigates establishment of a second Verbund site in China

2 Only selected sites and offices are depicted on this chart. Site and office numbers

refer to companies of significant size where BASF holds a stake greater than 50%

3 As of December 31, 2019

4 Sales by location of customer. Only includes sales from BASF entities fully

consolidated according to IFRS 10/11

BASF Group in Asia Pacific (2019)

▪ BASF is present in 18 markets

▪ >100 production sites1

▪ ~125 sales offices2

▪ 18,634 employees3

▪ ~€14.2 billion sales4

▪ ~€1.1 billion EBIT

Page 27: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

27 June 2020 | BASF Creditor Story

BASF in Asia Pacific – a balanced portfolio

1 Sales to third parties by location of customer; figures do not include sales of joint ventures consolidated at equity such as BASF-YPC Ltd., Nanjing, China

ASEAN: Singapore, Philippines, Vietnam, Thailand, Indonesia, Malaysia, Myanmar, Cambodia, Laos

South Asia: India, Pakistan, Bangladesh, Sri Lanka, Nepal

South Korea: Includes Mongolia

0%

25%

50%

75%

100%

2019

5% Other

5% Agricultural Solutions

11% Nutrition & Care

25% Surface Technologies

17% Industrial Solutions

25% Materials

12% Chemicals

2% Australia, New Zealand

9% South Korea

11% South Asia

13% Japan

13% ASEAN

52% Greater China

0%

25%

50%

75%

100%

2019

Sales1 by sub-region in 2019: €14.2 billionSales1 by segment in 2019: €14.2 billion

Page 28: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

28 June 2020 | BASF Creditor Story

Strong earnings development of BASF in Greater China

over the past years

Strong earnings development of BASF

in Greater China

EBITDA before special items

million €

EBITDA margin

before special items%

0

5

10

15

20

0

500

1,000

1,500

2,000

2015 2016 2017 2018 2019

0

2

4

6

8

Global chemicalproduction

Chemicalproduction Greater

China

Sales volumes ofBASF in Greater

China

Real chemical production growth1 (CAGR 2015-2019)

%

1 Source: BASF, real chemical production excluding pharmaceuticals (base year 2015)

BASF’s sales volumes outgrew Greater China’s

chemical production during the last five years

Page 29: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

29 June 2020 | BASF Creditor Story

Guangdong is home of key customers from fast-growing industries

Guangdong

Hong Kong

661

0

200

400

600

800

2019

161

0

50

100

150

200

2019

Strongly growing industrial base1

billion US$ (base year 2015)

Largest automotive production, China

# of motor vehicles built in Guangdong (1,000)

(base year 2015)

Large chemical production2

billion US$ (base year 2015)

Steady increase of private consumption3

billion US$ (base year 2015)

Market characteristics

▪ Around 115 million residents in

Guangdong province (2019)

▪ GDP Guangdong (2019):

~US$1,560 billion (to reach

GDP of South Korea soon)

▪ Current GDP growth: ~6% p.a.

GDP growth until 2035: 5-6% p.a.

▪ Key customer industries:

transportation, consumer goods,

home and personal care,

electronics

▪ Chemical products are generally

undersupplied from local production

1 Real value added, manufacturing Guangdong

3 Real private consumption Guangdong; 2018 and 2019 IHS forecast

2 Real chemical production Guangdong; inferred by gross output/value added ratio for China

3,120

0

1,000

2,000

3,000

4,000

2019

560

0

150

300

450

600

2019

~6.2%

CAGR

~3.9%

CAGR

~5.4%

CAGR~6.8%

CAGR

Page 30: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

30 June 2020 | BASF Creditor Story

BASF intends to build a world-class Verbund site in South China

to serve fast-growing customer industries in the region

Key facts

▪ Wholly owned and operated by BASF

▪ Project is currently in the

feasibility phase

▪ First plants expected to be

operational in 2022

▪ US$10 billion capital expenditures

to be implemented in phases until 2030

▪ Most advanced Verbund site with smart

manufacturing concepts

Page 31: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

31 June 2020 | BASF Creditor Story

India is a fast growing economy with domestic undersupply

of chemicals

Market characteristics

▪ Population: >1.3 billion;

5th largest economy

▪ Key customer industries:

transportation, consumer goods,

home and personal care

▪ Indian chemical industry will grow

much faster than the global

chemical industry

▪ India will remain a net importer of

chemicals for the mid to long term

1 Real chemical production, excluding pharmaceuticals. Base year 2015, BASF estimates

Strong demand for chemicals1

million US$

(base year 2015)

Strong GDP growth

billion US$

(base year 2015)

2,772

0

1,000

2,000

3,000

2019

Growing Industrial base

billion US$

(base year 2015)

704

0

200

400

600

800

2019

126

0

50

100

150

2019

~6.6%

CAGR

~4.8%

CAGR~7.3%

CAGR

Page 32: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

32 June 2020 | BASF Creditor Story

BASF’s project scope – building the C3 industry value chain

▪ Envisaged as a partnership based

investment by BASF, Adani, ADNOC1

and Borealis in chemical production

complex

▪ PDH unit to be established as basis for

acrylics value chain and polypropylene

production

▪ Project is currently in the feasibility

phase

▪ Production intended to commence in

2024/25

▪ First CO2-neutral site worldwide to be

100% powered by renewable energy

Project scope

Produced by third-parties

PropaneDehydrogenation

(PDH)

Polypropylene

Polyurethane

Toluene

Propylene

Polyols

Propylene Oxide

Cumene

Oxy-C4 Alcohols

Acrylic Acid

Acetone

Butyl Acrylate

Phenol

Polyester

Solvents

Polycarbonate

Propylene Glycol

Acrylonitrile

CO2

neutral

Mundra Port, Gujarat – designated site for

the world’s first green chemical complex

1 Abu Dhabi National Oil Company

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33 June 2020 | BASF Creditor Story

Agenda

1At a glance

4Battery materials driving

electromobility and future

growth

4Battery materials driving electromobility and future growth

5Pushing the transition to a sustainable economy

2Strategy implementation in full swing

6Reporting and financing highlights

3Unique position to capture growth in Asia

Page 34: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

34 June 2020 | BASF Creditor Story

Rise of e-mobility is net positive for chemicals demand per car

Catalysts

Internal Combustion

Engine (ICE)

Cathode Active Material (CAM)

Battery Electric

Vehicle (BEV)

Emissions control

and power generation

Higher demand:

Growth in battery materials more than

compensates some catalyst replacement

Engineering plastics

Coolants

Coatings

Battery

Higher demand:

Growth drivers: Flame retardant plastics,

battery housings and cable sheathing

Comparable demand:

Growth areas: E-coolants and specialty fluids

for e-mobility and autonomous driving

Comparable demand:

Growth areas: coatings for battery housings and

passive vehicle-temperature management

+

+

=

=

Engine

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35 June 2020 | BASF Creditor Story

BASF addresses the needs of the fast-growing e-mobility market

1 CAM = Cathode Active Materials

The electric motor and power electronics

are core components of an electric vehicle.

BASF materials help customers to reduce

weight, increase design flexibility and enable

components and functions to be integrated safely.

Electric powertrain

The battery pack is the heart of an electric car. To support

next-generation battery technology, BASF is continuously

improving its portfolio with new solutions.

Battery

Heat management

Effective heat management can increase the range

of electric cars, as it reduces the energy drawn

from the battery to heat and cool the vehicle.

Components BASF materials

Battery cells CAM1 (HED™ product family),

N-methylpyrrolidone (NMP), Ethylene carbonate

Battery housing Oxsilan®, CathoGuard®, Ultramid®

Battery bearings Cellasto®

Battery cooling Glysantin®, Ultramid®

High-voltage plugs Ultradur® HR, Ultramid®

Components BASF materials

Chassis coatings Chromacool®

Components BASF materials

Electric motor Cellasto®

Power electronics Ultramid®, Ultradur®

Charging infrastructure

Safe and easy-to-use charging devices are vital

if electromobility is to become widespread.

Components BASF materials

Charging stations Ultramid®, Ultradur®

Charging cables Elastollan®

Charging plugs Ultramid®

Charging inlet Ultramid®

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36 June 2020 | BASF Creditor Story

0

20

40

60

80

100

120

2019 2020 2025

BEVs and hybrids create superior growth opportunities

in battery materials

BEV: Battery Electric Vehicles Hybrids: ICE + Battery ICE only

1 Data source: LMCA

Global vehicle production by engine type

million units

Electromobility drives

battery materials growth

20302019

~20-25% p.a.

Market projections for 2030:

▪ ~25 million electric vehicles built per year

▪ 1,500-2,500 kt of CAM in electromobility

▪ €45-60 billion CAM market size 29%1

CAGR

30%1

CAGR

0.2%1

CAGR

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37 June 2020 | BASF Creditor Story

BASF is well-positioned in the value chain with strategic

partnerships to secure high-purity raw materials

The chemistry of cathode active materials is key

to addressing electromobility challenges.

Metal oremining and upgrading

Cells

batteriesMetal salt

solution and castCAM and precursors

Mining Systems and applicationsMetal refinery BASF Battery Materials

OEMs

Recycling

Page 38: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

38 June 2020 | BASF Creditor Story

BASF is a leading supplier for high energy density cathode active

materials to the automotive industry

CAM drive battery performance

▪ HED™ Nickel Cobalt Manganese

Oxide (NCM) & Nickel Cobalt

Aluminum Oxide (NCA)

▪ Own precursor and cathode active

materials manufacturing

▪ Global footprint, R&D, technology

centers and production sites

▪ Comprehensive IP portfolio and

close relationship with automotive

industry

BASF’s targets and approach

▪ Double the range of a midsize car

to 600 km

▪ Double the battery lifetime

▪ Halve the size of the battery

▪ Reduce the charging time

to 15 minutes

▪ Balance chemical composition

▪ Optimize production process

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39 June 2020 | BASF Creditor Story

BASF combines battery-materials production and recycling with the

goal of closing the loop in the circular economy

Key facts

▪ Regulation drives demand for recycling

▪ OEMs will need recycling partners to

establish closed loop approaches

▪ Recycling provides sustainable and

cost-efficient access to metals

▪ BASF has proprietary and

differentiating technology along

with expertise in recycling

Battery materials circular economy

Metal mining

& refiningCathode active

material

Battery

cell

Metal

extraction

Electric

car

Collection & dismantling

end-of-life battery packs

Lithium-ion

battery

Page 40: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

40 June 2020 | BASF Creditor Story-

BASF is a leading battery materials supplier with global production

CAM precursor

production planned

in Harjavalta,

Finland

First CAM production

facility in Elyria, Ohio

Second CAM production

facility in Battle Creek,

Michigan; merged with

Elyria, Ohio into BASF

TODA America (BTA)

Targeted

position In

China

2012

2018

2022

CAM production

planned in

Schwarzheide,

Germany

2022

Tripled capacity at

BTBM in Onoda,

Japan

2017

Foundation of BASF

TODA Battery Materials

(BTBM), Japan

2015

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41 June 2020 | BASF Creditor Story

BASF is active and investing in battery materials

▪ BASF’s announced precursor plant will be

constructed in Harjavalta, Finland enabling

secure supply of locally-sourced nickel and

cobalt

▪ The new plant will utilize locally generated

renewable energy sources, including hydro,

wind and biomass

▪ Start-up planned for 2022

BASF and Nornickel join forces to

supply the battery materials market

▪ Schwarzheide, Germany as location for CAM

production in Europe enabling the supply of

~400,000 electric vehicles per year

▪ Production plant to use industry-leading

energy mix lowering CO2 footprint

▪ Part of BASF’s plans to establish a global

presence with battery materials supply

▪ Start-up planned for 2022

BASF further invests in Europe to

strengthen position in battery

materials for electric vehicles

February 2020October 2018

▪ BASF intends to use recycled materials

from processes developed by the

cooperating companies in its planned

Harjavalta, Finland facility

▪ The parties will foster production and use

of responsibly produced recycled raw

materials in the battery market

Fortum, BASF, and Nornickel sign

cooperation agreement on battery

recycling

March 2020

Page 42: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

42 June 2020 | BASF Creditor Story

BASF Battery Materials in pole position

Broadest high energy density CAM portfolio

Tailored solutions to strong customer base

Established manufacturing know-how

Strong innovation and growth pipeline

Global presence and secure supply chain

Long-standing strategic partnerships

Leading raw material and sustainability position

Page 43: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

43 June 2020 | BASF Creditor Story

Agenda

1At a glance

4Battery materials driving

electromobility and future

growth

4Battery materials driving electromobility and future growth

5Pushing the transition to a sustainable economy

2Strategy implementation in full swing

6Reporting and financing highlights

3Unique position to capture growth in Asia

Page 44: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

44 June 2020 | BASF Creditor Story

Resource efficiency – BASF’s Verbund is ideal for

CO2 emission reduction

▪ Combined heat and power plants and integrated energy Verbund

prevented 6.4 million metric tons of CO2e emissions in 2019

▪ Synergies in logistics and infrastructure, minimization of waste

▪ BASF uses fossil raw materials responsibly: 75% of carbon

converted to products, 25% consumed for process energy

and converted to CO2 equivalents1

▪ European emissions trading benchmarks show that BASF’s

chemical plants operate at above-average energy efficiency

1 BASF carbon mass balance calculation (2019, non-audited, without oil and gas business)

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45 June 2020 | BASF Creditor Story

1 BASF operations excluding the discontinued oil and gas business; includes other greenhouse gases according to

the Greenhouse Gas Protocol, which are converted into CO2 equivalents

0

20

40

60

80

100

120

140

160

1990 1995 2000 2005 2010 2015 2020 2025 2030

Global GHG emissions

BASF business

growth

2030 target

No increase of

GHG emissions

Absolute greenhouse gas (GHG) emissions

Indexed (1990 = 100)

BASF GHG emissions

Paris climate agreement

BASF has a strong track record of CO2 emission reduction

– our goal: CO2-neutral growth until 2030

▪ Since 1990, we have doubled our production volumes

and cut our GHG emissions in halves; the emission intensity

thus decreased by 75%, from 2.2 tons of CO2e per ton of

product to 0.6 tons of CO2e

▪ 20 million tons of CO2e emissions by BASF Group in 2019

▪ Low-hanging fruits have been harvested; fundamentally new

technologies are needed to reduce emissions on a large scale

▪ We will grow our production volumes without adding further

CO2e emissions1 until 2030 (intensity to be reduced by 30%)

▪ BASF is committed to the Paris agreement for climate protection

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46 June 2020 | BASF Creditor Story

BASF’s Carbon Management – our focus to reduce emissions

Costs and risks

Potential CO2 reduction

Further improve process

and energy efficiency

Shift power supply

towards renewable energies

Develop

breakthrough

technologies

▪ We have established a carbon management that involves

– a research program to develop CO2-reduced

breakthrough technologies

– shifting our energy mix towards renewable energies

– continued operational excellence measures

▪ BASF co-founded the World Economic Forum’s initiative

on Collaborative Innovation for Low-Carbon Emitting

Technologies in the Chemical Industry

▪ BASF further enhances transparency: We support the

recommendations of the Task Force for Climate-related

Financial Disclosure and participated in the “TCFD

Preparer Forum for Chemicals” in 2019

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47 June 2020 | BASF Creditor Story

BASF’s CO2 reduction efforts are focused on main emitters

Example: Verbund site Ludwigshafen

Emissions 2019 in million tons CO2e

▪ Carbon management research program:

– breakthrough technologies for the most energy

consuming basic chemicals (accounting for

approximately 70% of the CO2 emissions of the

chemical industry in Europe)

– electrification and fundamentally new

synthesis pathways

– moving towards low-carbon chemical value

chains

Upstream

Verbund

steam cracker

ammonia

hydrogen

+14 other plants

Power / Steam

Downstream

Verbund~190 plants

incineration,

sewage plant

3.3 0.3

0.5

3.9

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48 June 2020 | BASF Creditor Story

Increasing importance of renewable energy

▪ In 2019, internally generated power in the BASF Group had a carbon footprint of

around 0.26 tons of CO2 per MWh of electricity and was below the national grid factor

at most BASF Group locations (purchased electricity: around 0.46 tons of CO2 per MWh)

▪ In 2019, 23 BASF sites were partially or fully powered by emission-free electricity

▪ Demand for electricity from renewable sources will increase sharply with new, low-carbon

electricity-based production processes

▪ At the Ludwigshafen site in Germany, we would need to roughly triple or quadruple our

current electricity use (2019: 6.2 TWh) to fully implement the new production processes

▪ Availability and price of renewable power as critical success factors

▪ BASF is investigating different options for renewable power supply

Page 49: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

49 June 2020 | BASF Creditor Story

From a linear to a more circular economy

– BASF contribution: ChemCyclingTM

Incineration LitteringLandfill

Close the loop

Linear economy

Mechanicalrecycling

ChemCyclingTM

+ can handle mixed plastic waste

+ produces virgin-likeraw materials

+ replaces virgin fossil resources

Plastic waste is converted into liquid feedstock and fed into BASF’s value chains

▪ In 2019, BASF invested €20 million in Quantafuel

(pyrolysis of mixed plastic waste and purification of the

resulting oil)

▪ BASF providing technical support in the startup of

Quantafuel’s commercial plant in Skive, Denmark

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50 June 2020 | BASF Creditor Story

▪ Founded in 2019, BASF is a founding member of the AEPW

▪ 46 members from entire plastics value chain

▪ Commitment to spend US$1.5 billion over five years for

infrastructure development, innovation, education, engagement

and clean-up

▪ Example: collaboration with non-profit initiative RenewOceans

in Varanasi, India (Ganges river)

– ReFence technology to collect plastic from waterways

– Waste management strategy for university campus

– Strategy for scaling and franchising of the existing model

Alliance to End Plastic Waste (AEPW)

– take action, develop solutions and catalyze investment

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51 June 2020 | BASF Creditor Story

Around 30% of BASF Group sales from sustainable solutions

– leveraging our innovation power

▪ Portfolio segmentation: >50,000 specific product

applications analyzed by 2019 (€51.9 billion in sales,

96.3% of relevant portfolio1)

▪ >12,000 Accelerators across all business segments

▪ Accelerator margins on average ~6 percentage

points above the rest of assessed portfolio

▪ Goal: €22 billion of sales with Accelerator products

by 2025 (2019: €15.0 billion)

▪ Stronger integration in R&D pipeline, business

strategies and M&A projects

▪ We will stop selling Challenged products within

maximum five years after classification

1 The product portfolio acquired from Bayer has been partially assessed

9.1% 0.1%

61.9%

Substantial sustainability

contribution in the value chain

Meets basic sustainability

standards on the market

Specific sustainability issues,

actively addressed

Significant sustainability concern

identified and action plan developed

Sustainable

Solution

Steering

Percentage of sales 2019

28.9%

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52 June 2020 | BASF Creditor Story

Accelerator examples

Synative® ES TMP – biodegradable

marine lubricants

Acronal® MB – from biomass

to dispersions

Formic acid – ecoefficient runway

and road deicing

SLENTITE® – high-performance

insulation material

ecovio® – compostable cling film

for fresh-food packaging

Inscalis® – insecticide with

unique mode of action

Page 53: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

53 June 2020 | BASF Creditor Story

Value balancing alliance – consistent assessment in monetary terms

of the impact of business activities on the well-being of people

Stakeholders Companies

Member

companies

Policy advisors

Pro-bono consultants

Support from politics,

financial markets,

academia, business,

standard setters,

civil society

▪ Founded in June 2019, BASF is a founding member

of the value balancing alliance

▪ From traditional reporting of input and output

(e.g., raw materials, CO2 emissions) to impact

valuation (e.g., climate change mitigation costs)

▪ Holistic view along the entire value chain

▪ Increase transparency by

– standardizing calculations for comparable results

– piloting in management accounting

– making outcomes publicly available

▪ Ambition: transform business from

maximizing profits to optimizing value creation

Page 54: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

54 June 2020 | BASF Creditor Story

Agenda

1At a glance

4Battery materials driving

electromobility and future

growth

4Battery materials driving electromobility and future growth

5Pushing the transition to a sustainable economy

2Strategy implementation in full swing

6Reporting and financing highlights

3Unique position to capture growth in Asia

Page 55: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

55 June 2020 | BASF Creditor Story

How does the pandemic impact global chemical customer

industries?

Not or only slightly affected,

partly higher demand

Majority negatively impacted by

lockdowns, cautious buying

behavior and supply chain

interruptions

▪ Health and nutrition

▪ Agriculture

▪ Construction

▪ Electronics

▪ Consumer goods

▪ Energy and resources

▪ Rubber and plastics

▪ Transportation incl. automotive

▪ Other industries and services

Chemical customer industries Impact of lockdowns

No general statement possible

BASF segments

▪ Nutrition & Care

▪ Agricultural Solutions

▪ Industrial Solutions

▪ Surface Technologies

▪ Materials

▪ Chemicals

Page 56: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

56 June 2020 | BASF Creditor Story

BASF Group Q1 2020: Volume growth in all downstream segments

Volume development by segment

Q1 2020 vs. Q1 2019

absolute (million €) terms

Chemicals Materials

Industrial

Solutions

Nutrition &

CareSurface

Technologies

Agricultural

Solutions

OtherOverall

volume

638

relative (%) terms

0% (1%) 2% 7% 4% 7% 19%

4%

6 (28)56

212

72

184

136

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57 June 2020 | BASF Creditor Story

Dedicated safety measures in place

▪ Early activation of BASF’s global crisis management

▪ Divisions, regions and sites have activated crisis

plans, which are adjusted as the situation changes

▪ Measures in production are coordinated from a site

perspective (local regulation, infrastructure) in close

alignment with global production steering

▪ Shifts are divided into smaller teams with minimum

contact during daily operations

▪ Temporary switch to different shift system with more

work hours

▪ Strict hygiene regulations and consistent tracing of

infection chains

▪ Wherever possible employees work remotely

(more than 40,000 worldwide)

How we operate safely in the COVID-19 environment

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58 June 2020 | BASF Creditor Story

Key measures to lead BASF through the COVID-19 crisis

▪ The customer is at the center of all our

activities

▪ We are committed to ensure the supply

of our customers

▪ Close interaction to immediately

recognize changes in the demand pattern

Global steering of BASF’s

production network Customer focus Focus on safeguarding cash

▪ Strong focus on liquidity management

▪ Strict working capital management

▪ Elevated cost discipline and implementation

of BASF’s Excellence Program

▪ Review of investment projects

▪ Adapting utilization rates according to

market demand using proprietary

Verbund simulator

▪ Securing supply of key raw materials

and distribution of products to our

customers

Page 59: BASF Creditor Story...Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions % of sales 20191 16% 19% 14% 22% 10% 13% EBIT bsi 20191

59 June 2020 | BASF Creditor Story

Million € 2019

Sales revenue 59,316

Gross profit on sales 16,255

Income from integral companies accounted at equity 265

Income from operations (EBIT) 4,201

Income from non-integral companies accounted at equity (149)

Net income from shareholdings (194)

Financial result (705)

Income before income taxes 3,302

Income taxes (756)

Income after taxes from continuing operations 2,546

Income after taxes from discontinued operations 5,945

Noncontrolling interests (70)

Net income 8,421

Million € 2019

Sales revenue 59,316

Gross profit on sales 16,255

Income from companies accounted at equity 116

Income from operations (EBIT) 4,052

Net income from shareholdings (45)

Financial result (750)

Income before income taxes 3,302

Income taxes (756)

Income after taxes from continuing operations 2,546

Income after taxes from discontinued operations _ 5,945

Noncontrolling interests (70)

Net income 8,421

Change in reporting of “non-integral” shareholdings as of Q1 2020

At equity consolidation

(share of net income shown in EBIT)

Statement of income BASF Group 2019 (restated)

1 These include in particular shares in Wintershall Dea and Solenis

Statement of income BASF Group 2019 (reported)

▪ BASF’s share in net

income from all at equity

consolidated companies

(integral and non-integral)

were reported in EBIT.

▪ Some of BASF’s at equity

consolidated shareholdings1

are not an integral part of the

company.

▪ Integral shareholdings will

remain part of the at equity

consolidation in EBIT.

▪ As of January 1, 2020, non-

integral shareholdings are

reported under “net income

from shareholdings,” which is

a new subtotal of income

before taxes.

▪ The prior-year figures are

restated.

BASF’s share in net income from non-integral

shareholdings are shown in net income from

shareholdings. At equity consolidated integral

shareholdings remain part of EBIT.

Until December 31, 2019 As of January 1, 2020

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60 June 2020 | BASF Creditor Story

BASF Group Q1 2020: EBIT before special items down due to

considerably lower earnings in Chemicals, Materials and Other

EBIT before special items1 by segment Q1 2020 vs. Q1 2019

million €

Sales bridge Q1 2020 vs. Q1 2019

million €

Sales development

Q1 2020 vs. Q1 2019 4% 1% 1% 1%

-500

0

500

1,000

1,500

2,000

Chemicals (43%)

1,6401,750

Other (17%)

Q1 2019 Q1 2020

Industrial Solutions 3%

Surface Technologies 46%

Nutrition & Care 14%

Agricultural Solutions 9%

15,59616,753

638 286108 125

0

10,000

20,000

Q1 2019 Volumes Prices Portfolio Currencies Q1 2020

1 The 2019 figures have been restated to reflect the reclassification of income from non-integral

companies accounted for using the equity method to net income from shareholdings.

Materials (35%)

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61 June 2020 | BASF Creditor Story

Q1 2020: BASF Group shows resilience amid corona crisis

with diversified portfolio and financial solidity

Financial figures Q1 2020 Q1 2019 Change

€ € %

Sales 16,753 million 15,596 million 7

EBITDA before special items1 2,579 million 2,642 million (2)

EBITDA1 2,428 million 2,770 million (12)

EBIT before special items1 1,640 million 1,750 million (6)

EBIT1 1,456 million 1,779 million (18)

Net income 885 million 1,406 million (37)

Reported EPS 0.96 1.53 (37)

Adjusted EPS 1.36 1.70 (20)

Cash flows from operating activities (1,030) million 373 million .

Sales development Volumes Prices Portfolio Currencies

Q1 2020 vs. Q1 2019 4% 1% 1% 1%

1 The 2019 figures have been restated to reflect the reclassification of income from non-integral

companies accounted for using the equity method to net income from shareholdings.

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62 June 2020 | BASF Creditor Story

Cash flow development Q1 2020

Q1 2020 Q1 2019

million € million €

Cash flows from operating activities (1,030) 373

Thereof Changes in net working capital (3,000) (1,758)

Miscellaneous items 86 (306)

Cash flows from investing activities (1,820) (837)

Thereof Payments made for intangible and tangible assets (569) (741)

Acquisitions / divestitures (1,245) 118

Cash flows from financing activities 4,294 620

Thereof Changes in financial and similar liabilities 4,329 620

Dividends (36) 0

Free cash flow (1,599) (368)

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63 June 2020 | BASF Creditor Story

Balance sheet remains strong

Balance sheet March 31, 2020 vs. December 31, 2019

billion €

Liquid funds

Accountsreceivable

Noncurrentassets

Inventories

Other assetsOtherliabilities

Financialdebt

Equity

24.9 25.2

1.0

23.018.4

43.4

42.4

March 31, 2020 Dec. 31, 2019

1.1

4.2 2.94.0

5.13.8

11.49.1

11.2

11.2

56.3

56.0

March 31, 2020 Dec. 31, 2019

87.0

92.4

87.0

92.4

Liabilities of disposal groups

Disposalgroups1

1 BASF’s global pigments business and construction chemicals business

4.2 Disposalgroups1

▪ Total assets increased by €5.4 billion

to €92.4 billion

▪ Current assets up by €5 billion, due to

higher accounts receivable, increased

cash and cash equivalents and other

receivables

▪ Net debt increased by €3.3 billion to

€18.8 billion

▪ Equity ratio on March 31, 2020: 47.0%

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64 June 2020 | BASF Creditor Story

Well-balanced financing instruments with strong focus on liquidity

1 Including marketable securities; 2 Moody’s: June 25, 2020, S&P: March 25, 2020

BASF’s liquidity position

€4.2 billion cash and cash equivalents1

(on March 31, 2020)

BASF’s financing facilities

US$12.5 billion commercial paper program

(for short-term debt financing)

€3 billion short-term revolving credit facility

(maturing in 2021)

€20 billion debt issuance program

(for long-term debt financing)

€6 billion broadly syndicated backup line

(maturing in 2025)

BASF’s rating target: solid A rating

Current ratings2: S&P A/A-1/CreditWatch negative, Moody’s A3/P-2/outlook stable

as of March 31, 2020

€23.0 billion

Bank loans

18%

Other bonds

20%

€-denominated bonds

42%

Commercial paper

20%

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65 June 2020 | BASF Creditor Story

Well-balanced bond and corporate loan maturity profile

Profile as of March 31, 2020 billion €1

0.6

1.4

1.2

0.8

1.6

2.2

0.0

0.2

0.4

1.8

1.0

2.0

1.3

2025

0.5

2032

2.0

2020 20302022 2023 2024 2026

1.3

2027 2028 2029 2031 >2032

1.0

1.2

1.9

1.2

1.4

0.6

0.40.3

0.9

2.0

2021

Bonds / loans outstanding March 31, 2020

1 Nominal values, excluding industrial revenue and pollution control bonds of BASF Corporation

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66 June 2020 | BASF Creditor Story

Overview of bonds (1/3) as of May 31, 2020

Bond Term Issuer Volume ISIN Code

0.101% EUR Bond 2020/2023 BASF SE EUR1.000 billion DE000A289DB1

0.250% EUR Bond 2020/2027 BASF SE EUR1.000 billion DE000A289DC9

0.875% EUR Bond 2019/2029 BASF SE EUR250 million XS1960277934

4.000% AUD Bond 2018/2033 BASF SE AUD160 million XS1864074585

1.025% JPY Bond 2018/2048 BASF SE JPY10 billion XS1864163925

1.375% GBP Bond 2018/2022 BASF SE GBP250 million XS1841745612

0.875% EUR Bond

1.500% EUR Bond

2018/2025

2018/2030

BASF SE

BASF SE

EUR750 million

EUR500 million

XS1823502650

XS1823502577

0.875% EUR Bond 2017/2027 BASF SE EUR1.00 billion XS1718418103

1.625% EUR Bond 2017/2037 BASF SE EUR750 million XS1718417717

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67 June 2020 | BASF Creditor Story

Overview of bonds (2/3) as of May 31, 2020

Bond Term Issuer Volume ISIN Code

0.925% USD Bond with Warrant 2017/2023 BASF SE USD850 million

Bond with Warrant

(DE000A2BPEU0)

Bond (DE000A2BPEV8)

Warrant (DE000A2BPEW6)

2.5% USD Bond 2017/2022 BASF SE USD500 million XS1551001768

1.75% GBP Bond 2017/2025 BASF SE GBP300 million XS1548422846

1.45% EUR Bond 2017/2032 BASF SE EUR300 million XS1551001768

2.67% NOK Bond 2017/2029 BASF SE NOK1.60 billion XS1539109790

0.0% EUR Bond 2016/2020 BFE1 EUR1.00 billion DE000A188WV3

0.75% EUR Bond

2.37% HKD Bond

2016/2026

2016/2031

BFE1

BASF SE

EUR500 million

HKD1.30 billion

DE000A188WW1

XS1539109790

0.875% GBP Bond 2016/2023 BASF SE GBP250 million XS1500337990

0.875% EUR Bond 2016/2031 BASF SE EUR500 million DE000A2BPA51

1 BASF Finance Europe N.V.

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68 June 2020 | BASF Creditor Story

Overview of bonds (3/3) as of May 31, 2020

Bond Term Issuer Volume ISIN Code

1.5% EUR Bond 2016/2031 BASF SE EUR200 million XS1374994280

2.5% EUR Bond 2014/2024 BASF SE EUR500 million XS1017833242

3.89% USPP Series A 2013/2025 BASF SE USD250 million N/A

4.09% USPP Series B 2013/2028 BASF SE USD700 million N/A

4.43% USPP Series C 2013/2034 BASF SE USD300 million N/A

3.675% NOK Bond 2013/2025 BASF SE NOK1.45 billion XS0932079717

2.875% EUR Bond 2013/2033 BASF SE EUR200 million XS0932307100

3.25% EUR Bond 2013/2043 BASF SE EUR200 million XS0888667200

3% EUR Bond 2013/2033 BASF SE EUR500 million XS0885399583

1.875% EUR Bond 2013/2021 BASF SE EUR1.0 billion XS0883560715

2.0% EUR Bond 2012/2022 BASF SE EUR1.25 billion DE000A1R0XG3

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69 June 2020 | BASF Creditor Story

Outlook 2020 for BASF GroupOutlook 2020 for BASF Group withdrawn

▪ The sales and earnings forecast for the 2020 business year provided by BASF on

February 28, 2020, cannot be met due to the coronavirus pandemic. We are therefore

withdrawing our outlook for 2020.

▪ It is currently impossible to reliably estimate both the length and the further spread of the

coronavirus pandemic, as well as future measures to contain it. Consequently, concrete

statements on the future development of sales and earnings cannot be made at present.

▪ BASF will quantify its expectations for the future development of sales and earnings as

soon as it is again possible to provide a reliable forecast.

Qualitative statements provided end of April 2020

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70 June 2020 | BASF Creditor Story

BASF Creditor Relations Team

Siegfrid Iro

Head of Financing Group

Dr. Lars Budde

Deputy Head Investor Relations

Creditor Relations

Contact Details:

Email: [email protected]

Phone: +49 621 60 91386

Websites: www.basf.com/bonds

www.basf.com/anleihen

Debora Meiners

Financing Group

Brian Gerard Marren

Financing Group

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71 June 2020 | BASF Creditor Story

Chemicals

Sales Q1 2020 vs. Q1 2019

million €

EBIT before special items

million €

Sales development Volumes Prices Portfolio Currencies

Q1 2020 vs. Q1 2019 0% (9%) 0% 1%

306

119

251

115

174

0

200

400

Q1 Q2 Q3 Q4 Q1

2019 2020

Intermediates

711

(5%)

Petrochemicals

1,639

(9%)

€2,350

(8%)

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72 June 2020 | BASF Creditor Story

Materials

EBIT before special items

million €

Sales development Volumes Prices Portfolio Currencies

Q1 2020 vs. Q1 2019 (1%) (7%) 6% 0%

Sales Q1 2020 vs. Q1 2019

million €

323 334

266

80

209

0

200

400

Q1 Q2 Q3 Q4 Q1

2019 2020

Performance

Materials

1,531

(1%)Monomers

1,343

(3%) €2,874

(2%)

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73 June 2020 | BASF Creditor Story

Industrial Solutions

EBIT before special items

million €

Sales development Volumes Prices Portfolio Currencies

Q1 2020 vs. Q1 2019 2% (3%) (4%) 1%

Sales Q1 2020 vs. Q1 2019

million €

264243

205

108

273

0

100

200

300

Q1 Q2 Q3 Q4 Q1

2019 2020

Performance

Chemicals

797

(8%)

Dispersions & Pigments

1,301

(1%)

€2,098

(4%)

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74 June 2020 | BASF Creditor Story

Surface Technologies

EBIT before special items1

million €

Sales development1 Volumes Prices Portfolio Currencies

Q1 2020 vs. Q1 2019 7% 34% 0% 2%

Sales1 Q1 2020 vs. Q1 2019

million €

151129

206236

220

0

100

200

300

Q1 Q2 Q3 Q4 Q1

2019 2020

Catalysts

3,532

+67%

Coatings

796

(12%)

€4,328

+43%

1 Restated figures due to reporting of construction chemicals as discontinued operation

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75 June 2020 | BASF Creditor Story

Nutrition & Care

EBIT before special items

million €

Sales development Volumes Prices Portfolio Currencies

Q1 2020 vs. Q1 2019 4% (3%) 0% 0%

Sales Q1 2020 vs. Q1 2019

million €

222 220 225

126

254

0

100

200

300

Q1 Q2 Q3 Q4 Q1

2019 2020

Care Chemicals

1,088

(1%)

Nutrition & Health

494

+6%

€1,582

+1%

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76 June 2020 | BASF Creditor Story

Agricultural Solutions

EBIT before special items

million €

Sales development Volumes Prices Portfolio Currencies

Q1 2020 vs. Q1 2019 7% (1%) 0% 0%

Sales Q1 2020 vs. Q1 2019

million €

2,6492,819

0

1,000

2,000

3,000

Q1 2019 Q1 2020

+6% 740809

0

200

400

600

800

Q1 2019 Q1 2020

+9%

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77 June 2020 | BASF Creditor Story

Review of “Other”

Financial figures1 Q1 2020 Q1 2019

million € million €

Sales 702 699

EBIT before special items (299) (256)

Thereof Costs of corporate research (75) (98)

Costs of corporate headquarters (54) (58)

Foreign currency results, hedging and other

measurement effects 52 (25)

Other businesses 27 37

Special items (22) (35)

EBIT (321) (291)

1 The 2019 figures have been restated to reflect the reclassification of income from non-integral

companies accounted for using the equity method to net income from shareholdings.

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