Cautionary note regarding - BASF · Investor Relations Asia Pacific Roadshow Singapore March 15, 2017. BASF Capital Market Story, March 2017 2 Cautionary note regarding ... startups

We create chemistry for a sustainable future

Nirath PerakathInvestor Relations Asia Pacific

Roadshow Singapore March 15, 2017

2BASF Capital Market Story, March 2017

Cautionary note regarding forward-looking statements

This presentation contains forward-looking statements. These statements are based on currentestimates and projections of BASF management and currently available information. Futurestatements are not guarantees of the future developments and results outlined therein. These aredependent on a number of factors; they involve various risks and uncertainties; and they are basedon assumptions that may not prove to be accurate. Such factors include those discussed in theOpportunities and Risks Report from pages 111 to 118 of the BASF Report 2016. We do not assumeany obligation to update the forward-looking statements contained in this presentation.


Agenda

At a glance1

Strategic levers2

Asia Pacific3

Outlook4

Appendix5


Growth above chemical industry average – driven by innovative and sustainable products and solutions

Unique Verbund concept – competitive advantage based on integrated sites, operational excellence and best-in-class technologies

Broad and resilient portfolio – with global market access and strong customer relationships

Earnings growth and strong cash flow generation – based on operational and financialstrength

Long-term value creation with progressive dividend policy – grow or at least maintain dividend at the previous year’s level

BASF shares – an attractive investment


Chemicals – a growth industryGlobal annual growth rate of ~3.6%*

…more food needed by 2050

…more primary energy consumption by 2050

…of the world population will live in cities by 2050

Agriculture Health & Nutrition

Energy & Resources

Automotive &Transport

Construction &Housing

Consumer products

…people by 2050

Electric & Electronics

Chemistry as enabler to meet current and future needs70% 50%~10 bn 30%

* Forecast average annual real change 2017-2019; BASF Report 2016, p.121


Broad and resilient portfolio2016: Sales of €57.6 billion; EBITDA of €10.5 billion

Percentage of sales 2016*

* Not depicted here: ‘Other’ 3% of Group sales and EBITDA €(1.0) billion


Verbund – unique competitive advantageActively managed in line with market requirements

Annual cost savings of more than €1 billion through integrated production Verbund concept supports sustainability, reduces waste and avoids CO2 emissions of 6 million tons p.a.

Energy savings >€300 million p.a.

People, Customers, Technology, Production


Global market access through regional presence

Kuantan

Hong KongNanjing

Freeport

Florham Park

Geismar

LudwigshafenAntwerp

São Paulo

Regional centersSelected sitesVerbund sitesSelected research and development sites

Asia Pacific

Europe

South America

North AmericaSales €14,042 millionEBIT €1,113 millionEmployees 17,583

Sales €26,039 millionEBIT €3,632 millionEmployees 70,784

Sales €12,165 millionEBIT €1,098 millionEmployees 18,156

Sales €5,304 millionEBIT €432 millionEmployees 7,307

Sales by location of customer; EBIT by location of company


Stepwise increase of earnings levelEBIT and EBITDA*billion €, 2001 - 2016

3.74.7 4.6

7.0 7.2

8.48.9

7.7

6.5

9.9

11.2

10.0 10.411.0 10.6 10.5

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EBIT EBITDA

0.7

2.2 2.2

4.5 4.85.5

6.0

4.6

2.8

6.7

8.06.7 7.2

7.6

6.2 6.3

CAGREBITDA

7%CAGREBIT16%

* 2010, 2011 indicative, adjusted for IFRS 10 & 11; 2001 – 2009 as reported, without non-compensable foreign income taxes on oil production

Avg. EBITDA level in depicted years


Strong track record in operational excellence

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

50

100

150

200

250

300

350

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EBITDA

Sales

Fixed Costs

CAGREBITDA

8%

CAGRSales

4%

3%

CAGRFixed Costs

BASF Group* 2001–2016 indexed; CAGR 2001–2016


billion €, 2001 - 2016

2.3 2.3

4.9 4.65.3

5.9 5.85.0

5.76.5

7.16.6

8.1

7.0

9.4

7.7

0

1

2

3

4

5

6

7

8

9

10

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Free cash flowOperating cash flow

-0.5 -0.1

2.8 2.63.3 3.5 3.2

2.53.2

3.9 3.7

2.63.2

1.7

3.6 3.6

6.3%

Strong cash flow development


Attractive dividendWe want to grow or at least maintain dividend at the previous year’s level

Dividend per share*€

0.65 0.70 0.700.85

1.00

1.50

1.95 1.951.70

2.20

2.50 2.60 2.70 2.80 2.90 3.00

0

1

2

3

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

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%

Proposal:

* Adjusted for two-for-one stock split conducted in 2008 ** Dividend yield based on share price at year-end


Delivering consistent, long-term valueCurrent market capitalization: €81 billion*

Average annual performance (with dividends reinvested)

0 2 4 6 8 10 12 14

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+5.8%

BASF

+7.2%

+1.0%

+12.9%

Last 10 years March 2007 – February 2017

0 2 4 6 8 10 12 14

Last 5 years March 2012 – February 2017

+9.7%

+8.9%

+11.5%

+10.1%

* As of February 28, 2017


Sales growth – slightly faster than global chemical production

Deliver attractive returns – earn a significant premium on cost of capital

EBITDA growth – well above global chemical production

Remain a strong cash provider – continuously generate high levels of free cash flow

Progressive dividend policy – grow or at least maintain dividend at previous year’s level

Financial targets for the coming years


Innovations for a sustainable future

Investments in organic growth

M&A opportunities and portfolio pruning measures

Our priorities

Cost discipline and operational excellence

We aim to grow sales and earnings faster than global chemical productionin the coming years, driven by


Agenda

At a glance1

Strategic levers2► Portfolio development► Investments► Innovation► Sustainability► Operational excellence


Continuous global portfolio development

target(in % of sales*)~50% ~50%

Maintaining a balanced portfolio

Divestment of businesses,e.g., due to loss of differentiation

Divestment of businesses,

e.g., due to lower market attractiveness

Commoditization leads to restructuring

Growth fields

Innovation pipeline

Acquisitions

Specialties and solutions Differentiated commodities

Attractive markets Differentiation by process

technologies and integration

Attractive markets Differentiation by customer

proximity and innovations

* Excluding Oil & Gas sales


Portfolio development towards more market-driven and innovative businesses

Strong Partnerships Gazprom PETRONAS Sinopec Total

Selected transactions 2010 − today

BASFcore business

~€5.4 billion salesin emerging and innovation-driven 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

Divestitures

~€20.7 billion salesin businesses with limited fit and differentiation potential

Styrenics Fertilizers Selected assets in Oil & Gas Natural gas trading & storage Custom synthesis business Textile chemicals Polyolefin catalysts Industrial coatings


Clear 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

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

Acquisitioncriteria

Strategic acquisition criteria Financial acquisition criteria


Investments in organic growthInvestments of ~€3.9 billion planned for 2017

Performance Products

21%

Oil & Gas23% €19.0 billion

Capex budget 2017-2021 (by segment)

Other13%

Chemicals24%

Capex budget 2017-2021 (by region)

Asia Pacific16%

North America22%

Agricultural Solutions4%

Other**3%

Functional Materials& Solutions

15%

€19.0 billion

South America*10%

* Including Africa and Middle East, ** Alternative sites currently being investigated

Europe 49%

Oil & Gas Europe


Selected recent investments in Asia Pacific

Total investments >€500 million

Startup planned for 2017

Second coatingsplant within 3 years

Startup planned for second half of 2017

Capacity: 50,000 metric tons

Startup planned for second half of 2017

BASF’s first facility in Asia Pacific to produce process catalysts

Startup planned for first half of 2017

New site to produce light-duty and motor-cycle emissions catalysts

Startup planned for first half of 2017

Aroma ingredients complex

Kuantan, Malaysia

Automotive coatings

Caojing, China

Highly reactive polyisobutene

Kuantan, Malaysia

Chemical catalysts

Caojing, China

Mobile emissions catalysts

Rayong, Thailand


Oil & Gas2%

Innovation will drive future growth

AgriculturalSolutions26%

Chemicals10%

Performance Products20%

Corporate Research21%

Key facts

€1.86 billion R&D expenditures in 2016

R&D expense to sales ratio ~3%

~10,000 employees in R&D

~3,000 projects

~850 new patents in 2016

Research Verbund: Cooperations with more than 600 excellent partners from universities, startups and industry

In 2016, sales of >€10 billion with products launched during last 5 years

R&D expenditures 2016

€1.86 billion

Functional Materials & Solutions

21%


Innovation Campus Asia Pacific in Shanghai supporting growth industries

Phase II opened in Q4 2015 Focus on research on advanced

materials and polymers Integrated into global R&D network Global HQ for Advanced Materials

& Systems Research Total investment (phase I & II):

~€145 million Close cooperation with customers,

materials scientists, technical and business experts

First regional design consultation center in Asia Pacific, assisting designers in various phases ofproduct development


Innovation Campus Asia Pacific in Mumbai An important hub for BASF’s global

R&D network

Startup of 20,000 m2 facility in March 2017

By 2020, around 300 scientists will collaborate globally and regionally

Target industries: crop protection, performance chemicals, resins and coatings, personal care

The BASF Innovation Campus Mumbai is part of a 100% BASF-owned entity.


Sustainable Solution Steering®Novel methodology to screen and steer our portfolio

4.2% 0.3%

>60,000 product applications analyzed (€53.2 billion sales, 95.9% of BASF’s portfolio)

27.2% Accelerators

– outgrow their markets

– deliver margins above the average

– represent majority of BASF’s R&D pipeline

68.3% Performers

<1% Challenged products

Increase the share of Accelerators from 23% in 2014 to 28% by 2020

27.2%

68.3%

Substantial sustainability contribution in the value chain

Meets basic sustainability standards on the market

Specific sustainability issues which are being actively addressed

Significant sustainability concern,action plan developed

SustainableSolutionSteering

Percentage of sales 2016


0

1.000

Earnings contribution 2016 2017-2018 Total

Operational excellenceDrivE with ~€1 billion targeted earnings contribution

DrivE program

Targeted annual earnings contribution of €1 billion from end of 2018 on

Optimization of processes and structures in all regions, including

– manufacturing

– incremental capacities

– productivity increase

Project timeline: 2016–2018

€350 million

€650 million

Goal €1 billion

Annual earnings contribution DrivEmillion €

1,000


Digitalization will support BASF’s growth and efficiencyDigital Business Models

Smart Innovation

Smart Supply Chain

Smart Manu-facturing

Growth

Digital business models Customer connectivity Digitalization of R&D

New revenue streams Increased supply share Higher innovation output

Predictive maintenance Augmented reality in production Smart supply chain

Increased capacity Increased work efficiency Reduced working capital

Efficiency


Agenda

At a glance1

Strategic levers2

Asia Pacific3

Outlook4

Appendix5


Asia and China continue to dominate global chemical productionReal chemical production (excl. pharma)(trillion US$)

2012CAGR3.7%2012 2020

World

CAGR5.6%1.6 2.5

Asia Pacific

2020

Source: BASF

3.2 4.3

50%

23%

18%9%

58%

18%

16%

8%

12%65%

6%

9%

7%

1%

9%

73%

5%

6%6%

1%

Greater China

South KoreaJapan

South Asia

ANZ

South East AsiaAsia Pacific

OthersEurope

North America


BASF in Asia Pacific 2016

Nanjing

Hong Kong

Kuala Lumpur

Kuantan

* Only selected sites and offices are depicted in this chart. Site and office numbers refer to companies of significant size where BASF holds a stake greater than 50%.

** As of December 31, 2016.

*** Sales by location of customer.

BASF is present in 17 countries

Customers from 38 markets

~100 production sites*

>120 sales offices*

18,156 employees**

~€12.2 billion sales***

~€1.1 billion EBITRegional centerVerbund sitesSelected sitesR&D/Technical centersShared Services Center


BASF’s performance in Asia Pacific

0.0

0.5

1.0

1.5

2012 2013 2014 2015 2016

0

5

10

15

2012 2013 2014 2015 2016

12.212.5 12.4 12.3 12.3

Strong volume growth despite challenging environment Increased share of products produced

in Asia R&D platform set up Cost discipline

Negative top-line impact due to portfolio pruning Overcapacities and low oil price

impact prices

EBIT (billion €)

0.90.8 0.7

0.4

Sales* (billion €)

* By location of customer

1.1

Development in 2016


BASF in Asia Pacific: Balanced portfolioSales* by segment in 2016(billion €)

Sales* by sub-region in 2016(billion €)

Functional Materials & Solutions37%

Performance Products 29%

Other3%

Chemicals27%

Agricultural Solutions4%

€12.2 billion

South East Asia15%

Greater China49%

Australia, New Zealand3%

South Asia11%

Japan13%

South Korea9%

€12.2 billion

* Sales to third parties by location of customer


Balanced asset base in Asia Pacific: Investments for profitable growth

Planned investments 2017–2021: ~€3 billion (16% of BASF Group)

Increasing focus on investments where BASF: − is technologically leading − has a competitive advantage − expects strong profitable market

growth

Target remains: ~75% own manufactured products by 2020(today: ~59%)

** Without China

Selected major capex projects*

Care chemicals Polyurethane specialties

Specialty plasticsEngineering plasticsPolymer dispersions2-Ethylhexanoic acid

AminesSurfactants

Acrylic acid & SAPResins

Specialty plasticsCrop protection products

MDI (Chongqing)Innovation Campus (Shanghai)

PolyamidesNeopentylglycol

IsononanolCoating resins

Automotive coatingsButanediol/PolyTHF®

Specialty amines Ethylene oxide

Polyvinylpyrrolidone

Startup 2012–2016

Startup planned for 2017-2021

China

Asia Pacific**

Process catalystsEmollients and waxesMDI (Caojing)Automotive coatingsPlastic additives

Aroma chemicalsAutomotive catalystsHighly reactive polyisobuteneInnovation Campus (Mumbai)Automotive coatingsSpecialty plasticsPlastic additives

* Investments in property, plant and equipment (excluding acquisitions)


Agenda

At a glance1

Strategic levers2

Asia Pacific3

Outlook4

Appendix5


Economic environment 2017

2017 (forecast) 2016 (actual)

GDP (%) 2.3 2.3

Chemical production excl. pharma (%) 3.4 3.4

Industrial production (%) 2.3 1.9

US$/Euro 1.05 1.11

Oil price: Brent (US$/bbl) 55 44


Outlook 2017 by segmentEBIT before special items million € Forecast 2017* 2016

Chemicals** at prior-year level 2,032

Performance Products** slight increase 1,777

Functional Materials & Solutions slight increase 1,946

Agricultural Solutions slight increase 1,087

Oil & Gas considerable increase 517

Other considerable increase (1,050)

BASF Group slight increase 6,309

* With respect to EBIT before special items, “slight” means a change of 1-10%, while “considerable” is used for changes greater than 11%. “At prior-year level” indicates no change (+/-0%).** Effective January 1, 2017, the Chemicals and Performance Products segments’ activities for the electronics industry were merged and allocated to the Performance Products segment

as the Electronic Materials global business unit. To facilitate comparability, the 2016 figures for both segments have been adjusted accordingly.


Outlook 2017 for BASF Group

We want to slightly raise EBIT before special items compared with 2016.

We expect BASF Group sales to grow considerably in the 2017 business year.

BASF Group EBIT is also expected to grow slightly in 2017.

We are likely to once again earn a significant premium on our cost of capital in 2017.


Agenda

At a glance1

Strategic levers2

Asia Pacific3

Outlook4

Appendix5


Fourth quarter sales and earnings significantly above prior-year quarter

Financial figures Q4 2016 Change Q4 2015 FY 2016 Change FY 2015

Sales €14.8 billion 7% €57.6 billion (18)%

EBITDA €2.5 billion 31% €10.5 billion (1)%

EBIT before special items €1.2 billion 15% €6.3 billion (6)%

EBIT €1.2 billion 278% €6.3 billion 0%

Net income €0.7 billion 103% €4.1 billion 2%

Reported EPS €0.75 103% €4.42 2%

Adjusted EPS €0.79 (22)% €4.83 (3)%

Operating cash flow €1.9 billion 97% €7.7 billion (18)%

Sales development Volumes Prices Portfolio CurrenciesQ4 2016 vs. Q4 2015 6% 1% 0% 0%FY 2016 vs. FY 2015 2% (4)% (15)% (1)%


ChemicalsSignificantly higher earnings driven by strong volume growth and increased prices

Intermediates693+3%

Monomers1,662+19%

Petrochemicals1,207+8%

€3,562+12%

Sales Q4 2016 vs. Q4 2015million €

Sales development Volumes Prices Portfolio CurrenciesQ4 2016 vs. Q4 2015 6% 6% 0% 0%FY 2016 vs. FY 2015 3% (11)% 0% 0%

EBIT before special items million €

249

635

0

250

500

750

Q4 2015 Q4 2016

+155%

2,156 2,064

0

1,000

2,000

3,000

FY 2015 FY 2016

(4%)


Performance ProductsEarnings slightly up due to improved margins

Performance Chemicals947(4)%

Nutrition & Health443+3%

Dispersions & Pigments1,034(1)%

€3,602(1)%

Sales development Volumes Prices Portfolio CurrenciesQ4 2016 vs. Q4 2015 0% 0% (2)% 1%FY 2016 vs. FY 2015 1% (2)% (2)% (1)%

Care Chemicals1,178+1%

228 231

0

100

200

300

Q4 2015 Q4 2016

+1%



1,3661,745

0

1,000

2,000

FY 2015 FY 2016

+28%


1,6491,946

0

1,000

2,000

FY 2015 FY 2016

Functional Materials & Solutions Profitable growth based on continued strong demand from the automotive industry

Coatings921+14%

Catalysts1,736+12%

Sales development Volumes Prices Portfolio CurrenciesQ4 2016 vs. Q4 2015 11% (1)% 0% 0%FY 2016 vs. FY 2015 7% (5)% 0% (1)%

389

458

0

250

500

Q4 2015 Q4 2016

+18%

ConstructionChemicals

5640%

Performance Materials1,740+9%

€4,961+10%



+18%


1,090 1,087

0

1,000

2,000

FY 2015 FY 2016

Agricultural SolutionsSales grew considerably due to higher volumes; earnings burdened by higher fixed costs

Sales development Volumes Prices Portfolio CurrenciesQ4 2016 vs. Q4 2015 9% (2)% 0% 3%FY 2016 vs. FY 2015 (2)% 0% 0% (2)%

144

79

0

100

200

Q4 2015 Q4 2016

(45)%

+10%



0%

1,1671,281

0

1,000

2,000

Q4 2015 Q4 2016


Oil & GasSales and earnings increased significantly, mainly due to higher volumes

Sales development Volumes Prices / Currencies PortfolioQ4 2016 vs. Q4 2015 23% 3% 0%FY 2016 vs. FY 2015 3% (3)% (79)%

EBIT before special items / Net income million €

731*

922*

0

500

1,000

Q4 2015 Q4 2016

+26%

127* 163*

-184

182

-250

0

250

500

Q4 2015 Q4 2016

Natural Gas TradingExploration & Production Net income

* Including transportation business ** Natural Gas Trading divested to Gazprom end of September 2015 as part of the asset swap


1,000

426**

940517

1,050

362

0

1,000

2,000

FY 2015 FY2016

1,366

*


Review of ‘Other’

million € Q4 2016 Q4 2015 FY 2016 FY 2015

Sales 518 660 2,018 2,790

EBIT before special items (386) (114) (1,050) (888)

Thereof Costs for corporate research (131) (95) (395) (402)

Costs of corporate headquarters (57) (61) (222) (233)

Foreign currency results, hedging and other measurement effects (182) (11) (331) (220)

Other businesses (12) 75 54 170

Special items (57) (21) (41) (97)

EBIT (443) (135) (1,091) (985)


Cash flow development in 2016

million € 2016 2015Cash provided by operating activities 7,717 9,446Thereof Changes in net working capital 104 1,347

Miscellaneous items (734) (336)Cash used in investing activities (6,490) (5,235)Thereof Payments made for tangible / intangible assets (4,145) (5,812)

Acquisitions / divestitures (2,164) 436Cash used in financing activities (2,160) (3,673)Thereof Changes in financial liabilities 579 (933)

Dividends (2,767) (2,806)

Free cash flow 3,572 3,634


Balance sheet remains strong

Total assets increased by €5.7 billion, mainly as a result of the Chemetallacquisition

Equity ratio at 42.6%

Provisions for pensions and similar obligations increased by €1.9 billion

Net debt increased by €1.5 billion to €14.4 billion

Balance sheet 2016 vs. 2015billion €

24.1 27.6

15.216.3

31.532.6

Dec 31, 2015 Dec 31, 20162.3 1.93.0 3.0

9.5 11.0

9.7 10.0

46.350.6

Dec 31, 2015 Dec 31, 2016Liquid funds*

Accountsreceivable

Long-termassets

Inventories

Other assets

70.876.5

70.876.5

Otherliabilities

Financialdebt

Equity

* Including marketable securities

48BASF Capital Market Story, March 2017BASF Investor Day 2015 – Keynote speech 48

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Cautionary note regarding - BASF · Investor Relations Asia Pacific Roadshow Singapore March 15, 2017. BASF Capital Market Story, March 2017 2 Cautionary note regarding ... startups