Intermediates Excellence in the Verbund - BASF · BASF Investor Day Chemicals segment – Intermediates, May 22, 2014 16 Innovation power Application innovations: Formic acid . 1960

Sanjeev Gandhi President Intermediates Division Investor Day Chemicals segment May 22, 2014

Intermediates Excellence in the Verbund

BASF Investor Day Chemicals segment – Intermediates, May 22, 2014 2

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.


… is a uniquely positioned, innovation-driven and highly profitable growth business

… is rooted in the BASF Verbund, and a bridge to the market

… is focused on excellence in commodities, and also has solutions business

BASF Intermediates

► … is a robust and long-term value driver for BASF


Functional Materials & Solutions 23%

Performance Products 21%

Agricultural Solutions 7%

Chemicals 23%

Oil & Gas 20% Other

6%

BASF Group third party sales 2013

Intermediates, a small but powerful part of BASF’s balanced portfolio

Intermediates 4% €74

billion


Strongly rooted in the Verbund, and selling mainly to the merchant market

Bridge between Verbund and merchant market

Market

70% raws

BASF Intermediates

Petrochemicals, Monomers

Performance Materials, Crop Protection, Performance Chemicals, Care Chemicals Nutrition & Health

35% 35% products

BASF Verbund

35% 30% raws


Intermediates is uniquely positioned within BASF and versus peers

BASF Investor Day Chemicals segment – Intermediates, May 22, 2014

~ 3,000 > 40 technologies

Broadest portfolio in industry:

~ 700 chemical intermediates

customers

6

CAGR (2004-2013)

consolidated sales

A decade of profitable growth:

~ 5.5%


Amines

Acids &

Specialties

Polyalcohols &

Specialties

Butanediol & Derivatives

Global trends trigger growth of Intermediates demand

* Market growth, CAGR 2007 – 2013


Intermediates holds leading market positions in all its key product lines

Amines

Acids &

Specialties

Polyalcohols &

Specialties

#: Market position in 2013 DCC: Dairen Chemical Corporation FAC: Feicheng Acid Chemicals Co. Ltd.

Butanediol & Derivatives

Formic acid: #1

Propionic acid: #1

Neopentylglycol: #1

Hexanediol: #1 Specialty Amines: #1

Ethanolamines: #2

PolyTHF®: #1

BDO: #1

Main Competitors

Huntsman AkzoNobel

Dow

Evonik

Kemira

Clariant

LG Chem

DuPont

Taminco

Ashland

Invista

Mitsubishi Chemical

Perstorp

Ube Arkema

DCC

FAC

Eastman

Luxi Chemical Corp


Regionally balanced business

Consolidated sales by region in billion €

Rest of world 1%

Asia 21%

Rest of world 3%

N. America 16%

Asia 27%

Europe 54%

Diversified regional sales split, Asia grows strongly

Europe 64%

CAGR ~5.5%

* 2013 adj. to exclude IFRS effect (Nanjing JV and Jilin JV)

2004 ~€2.7 bn

2013* ~€4.3 bn

N. America 14%


Global asset footprint in 2015

.

Production site Verbund site

Ludwigshafen

Nanjing

Zachary

Caojing

Jilin

Kuantan

Chiba

Ulsan

Yeosu

Evans City Geismar

Freeport

Assets close to customers: 18 sites; 7 JVs; 3,000 employees; ~5 million t/a capacity

Nanjing

Korla

Americas: 4 sites

Europe: 4 sites Asia: 10 sites

Barcelona

Antwerp

Schwarzheide


Outgrowing chemicals market

Consolidated sales in million €

* Without Pharma

0

1.000

2.000

3.000

4.000

5.000

2004 2005 2006 2007 2008 2009 2010 2011 2012R 2013 2014E

** R = restated, includes IFRS 10/11 changes, new segment structure (both effective January 1, 2013)

Intermediates has outgrown chemical production*: ~5.5% vs. ~3.7% (CAGR 2004-13)

**


Verbund integration means flexibility and value capture

Merchant

The C1 value chain generated ~€0.5 billion cash flow in 2013

PolyTHF® Natural Gas

Acetylene BDO THF

e.g. Acetylene/BDO value chain Ludwigshafen

Captive

merchant market outlets

GBL

PBT

BDO=1,4-Butanediol; GBL=gamma-Butyrolactone; THF=Tetrahydrofuran; PBT=Polybutylene terephthalat


BASF has cost leading acetylene technology Continuous improvement of

cash costs

New improved Reppe process** gives cost leadership for new plants

Investment economics based on favorable raw material

Process improvements and favorable raw material positions drive economics

1,4-Butanediol (BDO) global cash cost curve* average cash costs 2013 in US$/kg

* Source: BASF ** Reppe technology, first introduced by BASF in 1930’ies

Production capacity

Cas

h co

sts

BAS

F Pl

ant 1

BAS

F Pl

ant 3

BAS

F Pl

ant 4

BAS

F Pl

ant 2


Innovation power Three pillars of innovation

New & improved processes New products New applications

Innovation pipeline Total NPV*: ~€500 million

* Not risk-adjusted, 2013 view


Continuous improvement of cost leading technology by – optimized plant set-up – new catalyst – optimized process

conditions – other minor investments

Innovation power Process innovation: PolyTHF® production

Process innovation is leveraged globally

PolyTHF® site

.

Ludwigshafen

Caojing

Ulsan

Geismar

Korla

► 2009 to 2013: +100 kt/a capacity addition at low cost to 290 kt/a


Innovation power Application innovations: Formic acid

1960 2010 2011 2013 2012 2014 2009 2008 2007 2006

Sugar cane plant cleaning: Settmill®

Animal feed: Amasil®

Formic acid in textile treatment

Rubber coagulent

Water treatment / membrane cleaning

Flue gas desulfurization

Formic acid in bee-hive stripes

Life-cycle management and market expansion via new applications

Industrial & homecare cleaners: Protectol FM®,

Luvipur®


Renewable butanediol

Competitive bio-based process using renewable raw materials and CO2

Proprietary bacteria strain from BASF JV with Corbion Purac

Bio-based succinic acid JV

Fermentation process, licensed from genomatica Sugar as renewable feedstock First to market with commercial volumes

Open innovation approach for production of bio-based intermediates

Innovation power Product innovation: Bio-based chemicals

+

Bio-based polymers


Intermediates is an innovation driver within BASF

BASF growth fields

Resources, Environment

& Climate

Food & Nutrition

Quality of Life

Intermediates Global needs

...

Batteries for Mobility

Enzymes

Heat Management for Construction

Organic Electronics

Functional Crop Care

Plant Biotechnology

E-Power Management

Wind Energy

Lightweight Composites

Water Solutions

Intermediates contributes to 7 of 10 BASF growth fields


Intermediates: Incubator for innovation 2 businesses transferred to other divisions (Jan. 2013)

Transferred to Catalysts

Developed electrolytes for LiB* – until 2012

Today: internal supplier of high-quality carbonates

Transferred to Performance Materials

Developed epoxy systems – until 2012

Today: internal supplier of high-quality amines

One-company approach

* LiB = Lithium-ion Batteries


2009 2010 2011 2012 2013

Business growth drives investments Track record of investments into new plants (2009 – 2013)

Amines Cluster Nanjing

Cyclododecanone Ludwigshafen

Methylamines Geismar

Globally balanced expansion of asset footprint

Tert-Butylamine Nanjing

Amines Ludwigshafen

Novolyte acquisition Zachary


2014 2015 2016 2017

Business growth drives investments Significant investments into new plants (2014 – 2018)

Formic acid Geismar

Continued investments in all regions

Bio-based succinic acid Montmeló

Korla Site Pic tba

2018

Pic BSNJ

Pic Ground Break LU Pic BYC

BDO expansion Geismar

Specialty amines Ludwigshafen

BDO/PolyTHF® Korla

NPG Nanjing

DMAPA / PEA Nanjing

HDO Ludwigshafen & Freeport


Key differentiators for profitable growth

Rooted in the Verbund

Global asset & product portfolio

Innovation power & unique

technology portfolio

Effective business models

22


Effective upstream business model to manage complexity

Solutions business Lean & reliable lower volumes global assets

Lean & reliable larger volumes regional assets

‚Lean & reliable‘ amines supplier, with customized solutions business

Po

rtfo

lio o

f > 3

00 d

iffer

ent a

min

es


… is a uniquely positioned, innovation-driven and highly profitable growth business

… is rooted in the BASF Verbund, and a bridge to the market

… is focused on excellence in commodities, and also has solutions business

BASF Intermediates

► … is a robust and long-term value driver for BASF


Intermediates: Growth business with efficient steering

IFRS 10/11 effect on sales

– JV Nanjing and JV Jilin, both in China

– As of 2012 only accounted for at-equity

CAGR 2004 – 2013

– Sales: ~5.5%

– Fixed cost: ~1.5%

Consolidated sales vs. fixed costs Indexed

Key facts:

50

100

150

200

2004 2005 2006 2007 2008 2009 2010 2011 2012R 2013

Sales Fixed costs

* R = restated

*


Intermediates: Growth business with ambitious targets

Intermediates will continue to

– Invest in assets close to markets

– Invest in innovation

– Optimize assets / products and business models

– Grow top and bottom line

Deliver consistent and stable EBITDA growth

Consolidated sales in billion €

Targets:

0

1

2

3

4

5

6

2004 2012R 2013 2015E 2020E

* R = restated

*


Documents

Intermediates Excellence in the Verbund - BASF · BASF Investor Day Chemicals segment – Intermediates, May 22, 2014 16 Innovation power Application innovations: Formic acid . 1960