Commerzbank German Investment Seminar 2014, New York · 2018. 11. 17. · Seminar . New York, January 13-14, 2014 . BASF Capital Market Story January 2014 2 Cautionary note regarding

We add value as one company

Oil & Gas

Agricultural Solutions

Functional Materials & Solutions

Performance Products

Chemicals

Value

Manfredo Rübens President Finance Commerzbank German Investment Seminar New York, January 13-14, 2014

BASF Capital Market Story January 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.


BASF – Share information

Symbol: BAS

Trading Platform: Deutsche Börse

ISIN: DE000BASF111

IPO: January 30, 1952

Type of shares: Registered shares

Trading lot: none, one share is tradable

Free float (according to Deutsche Börse): 100 %

Number of subscribed shares outstanding (as of 12/31/2013): 918,478,694

Symbol: BASFY

OTC Trading Platform: OTCQX

CUSIP: 055262505

Ratio: 1 ADR : 1 Ordinary Share

Depositary bank: Deutsche Bank Trust Company Americas – Tel: +1 212 250 9100 (New York broker desk)

– Tel: +44 207 547 6500 (London broker desk)

– E-mail: [email protected]

– Website: www.adr.db.com

Depositary bank’s local custodian: Deutsche Bank AG, Frankfurt

Ordinary Share information ADR information


Chemistry as an enabler BASF has superior growth

opportunities: – sustainable innovations – investments – emerging markets

Ambitious financial targets

The #1 chemical company €72.1 billion sales, €6.6

billion EBIT bSI in 2012* #1-3 in >75% of businesses,

present in >200 countries 6 integrated Verbund sites,

production in 60 countries

10 years of strong sales and earnings growth

16% average annual dividend increase, >3% yield in every single year**

~€71 billion market capitalization***

Performance Perspective

** for 2003-2012 ***as of December 30, 2013

Ludwigshafen, Germany

Antwerp, Belgium

Nanjing, China

Kuantan, Malaysia Geismar,

USA Freeport, USA

Verbund site

Positioning

* Restated numbers, reflecting IFRS 10/11 changes

We create chemistry for a sustainable future


Percentage of sales 2012**

** Not depicted here: ~5% of Group sales reported as ‘Other‘ * Restated numbers, reflecting IFRS 10/11 changes, new segment structure effective Jan. 1, 2013

BASF today – a well-balanced portfolio Total sales 2012: €72.1 billion*


Business review

BASF strategy & growth targets

Strategic levers


Robust 3rd quarter 2013 for BASF

Sales development Period Volumes Prices Portfolio Currencies

Q3’13 vs. Q3’12 6% (1%) 1% (5%)

Business performance Q3’13 vs. Q3’12 Q1-Q3’13 vs. Q1-Q3’12

Sales €17.7 billion +1.5% €55.8 billion +3%

EBITDA €2.5 billion +16% €7.8 billion (1%)

EBIT before special items €1.7 billion +15% €5.7 billion +6%

EBIT €1.7 billion +20% €5.6 billion (1%)

Net income €1.1 billion +18% €3.7 billion (4%)

Reported EPS €1.20 +19% €4.03 (4%)

Adjusted EPS €1.28 +10% €4.35 +1%

Operating cash flow €2.0 billion +21% €6.0 billion +19%


0

1

2

3

4

2003 2004 2005 2006 2007 2008 2009** 2010 2011 2012 Q1-Q32013

Strong free cash flow generation

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

Free cash flow* in € billion

2.8 2.6

3.3 3.5

3.2

2.5

3.2

3.9 3.7

2.6 2.9


Delivering attractive shareholder returns

Dividend of €2.60 per share for 2012

2003-2012: Average annual dividend increase of 16%

Attractive dividend yield of 3.7% in 2012**

Dividend yield above 3% in any given year since 2002, total payout almost €17 billion

* Dividend yield based on share price at year-end

Dividend payments

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

Dividend yield* 4.6% 3.1%

2.50

0.70 0.85 1.00

1.50

1.95 1.951.70

2.20

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2.60

3.7%

** Based on BASF share price of €71.15 on Dec. 28, 2012

Dividend per share in €

CAGR 16%


We do not anticipate an acceleration of global economic growth in the 4th quarter of 2013

For the full year, BASF confirms its outlook: We strive to exceed the record levels in sales and EBIT before special items in a challenging economic environment

Our focus on growth markets and innovation, in combination with our measures to optimize our portfolio and to improve operational excellence, will contribute to this

We aim to earn a high premium on cost of capital in 2013

Outlook 2013

GDP: +2.0% (unchanged)

Industrial production: +2.7% (unchanged)

Chemical production: +3.1% (unchanged)

US$ / Euro: 1.30 (unchanged)

Oil price (US$ / bbl): 105 (unchanged)

Assumptions 2013

Outlook 2013


Average annual performance with dividends reinvested

0 3 6 9 12 15 18 21

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+9.2%

Last 5 years January 2009 – December 2013

+28.1%

+8.5%

+14.7%

+18.2%

Last 10 years January 2004 – December 2013

BASF

+10.3%

+4.3%

+17.7%

Delivering consistent, long-term value


Business review


Strategic levers


Demographic challenges … set the stage for the future of the chemical industry

Nine billion people in 2050 but only one earth

Resources, Environment & Climate Food & Nutrition Quality of Life

Chemistry as enabler


Grow at least 2 percentage points above chemical production

Earn a premium on cost of capital of at least €2.0 billion on average p.a.

Profitability targets Growth targets

2015

2020

Sales ~€80 billion

Sales ~€110 billion

EBITDA ~€14 billion EPS ~€7.50

EBITDA ~€22 billion

Key financial targets 2015 / 2020 are ambitious


Business review


Strategic levers – Portfolio development

– Market approach – Innovations for a sustainable future – Investments – Acquisitions – Operational excellence


A different look at our current portfolio...

Excellent position and growth opportunities; synergies with chemical businesses

Chemical business based on our production Verbund

Customer-oriented specialties, backward integration in Verbund value chains

Integration of competencies in chemistry: R&D, technology, market knowledge and global access to customer industries

Functionalized Materials & Solutions

Classical Chemicals Customized Products

Oil & Gas

Exploration & production of oil and gas, gas trading activities

Cracker products, plastizicers, acrylic acid, MDI/TDI

PU systems, vitamins, personal care ingredients

Battery materials, water solutions, crop protection agents, engineering plastics


Portfolio development Moving downstream towards customer industries

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

Functionalized Materials & Solutions Customized Products Classical Chemicals

2020 in % of sales**

Chemical Industry First customer industries*


~ 40%

~ 30% ~ 70%


~ 50%

~ 60%

~ 50%


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

BASF core business

Strong partnerships

Gazprom Statoil Monsanto Petronas Shell Sinopec Total

Selected transactions 2001 − today*

Acquisitions

~ €16bn sales ~ €10bn sales**

Divestitures

Pharma Fibers Printing systems Polyolefins Polystyrene Americas Agro generics Vitamins premix Fertilizers Styrenics (transferred into

Styrolution JV on Oct. 1, 2011)

Construction equipment, flooring systems

** Without Styrenics

Portfolio development Towards more market driven and innovative businesses

* Only closed deals have been considered


Monomers

Intermediates

Dispersions & Pigments

Performance Chemicals

Care Chemicals

Paper Chemicals

Coatings

Catalysts

Construction Chemicals

BASF sales by first customer industry*

> 15 %

> 10 %

< 10 %

> 15 %

Consumer goods

Transportation

Construction

Energy & Resources

Market approach Cross-divisional customer industry approach

* Excluding Oil & Gas, Crop Protection and Other

Petro- chemicals

Performance Materials

Bubble Size: BASF divisional sales by first customer industry (2012)*/**

** Nutrition & Health sales predominantly into Health & Nutrition market


E-textiles

Solar roof with transparent organic solar panels and OLED modules

Multifunctional seat

Infrared-reflective coating

Infrared-reflective film

High performance foams

Lightweight tridion cell

All-plastic wheel

Cross-divisional approach: ‘Smartforvision’ Technology competencies combined with customer know-how

Daimler & BASF concept car ‘Smartforvision’


Strong commitment to innovation Innovations for a sustainable future

1.4 1.4 1.5

1.6 1.7

0,0

0,5

1,0

1,5

2,0

2008 2009 2010 2011 2012

R&D expenditures in € billion

Chemicals 10%

Performance Products 20%

Functional Mat. & Sol. 20%

Agricultural Solutions 25%

Oil & Gas 2%

Corporate Research 23%

Key facts

2.0

1.5

1.0

0.5

0

€1.7 bn R&D expenditures in 2012, further increase planned for 2013

~10,500 employees in R&D

~3,000 projects

Research Verbund: About 600 cooperation partners with universities, start-ups and industry

Target 2015 and 2020: – €10 bn in sales, €2.5 bn

EBITDA from innovations younger 5 years

– €30 bn in sales, €7 bn EBITDA from innovations younger 10 years


Joint development with adidas, illustrating our customer focus

New cushioning material, provides highest energy return in the running industry

Solid granular material* is ‘blown up’, turned into 1000’s of small energy capsules

With their unique cell structure, these energy capsules store and unleash energy more efficiently in every stride

New shoe is available in stores since February, 2013

Key facts

Photo: adidas

* TPU (Thermoplastic polyurethane)

Innovation with adidas: Infinergy™ Technology competencies combined with customer know-how


BASF growth fields focus on enabling technologies

Health & Nutrition

Consumer Goods Construction Transportation Electronics Energy &

Resources Agriculture

Customer industries

Water solutions

Heat management

Enzymes Plant biotechnology

Batteries for mobility

Lightweight composites

Functional crop care

Medical Organic electronics

Growth Fields*

E-Power management

Wind energy

Resources, Environment & Climate Food & Nutrition Quality of life

Chemistry as enabler

* Including growth fields still under evaluation

Materials Systems & Nanotechnology

Raw Material Change

White Biotechnology

Techno-logy

fields


Enabling technology: Battery Materials Driving the future of electromobility

* Driving range (km) of an electric car (with a 100kg battery)

0 100 200 300 400

Li-S**

HE/HV

Li-ion

Generation 2: Current Generation 3: 2017 Generation 4: 2022+

BASF‘s technology roadmap- Battery materials for today and tomorrow

Li-ion HE/HV Li-ion Li-S

Driving range (km)*

Technology

From Li-ion to Lithium-sulfur

Business potential 2020 Strategic relevant market: >€5 billion globally

(~€4 billion in Asia Pacific)

Sales potential BASF: >€500 million globally (~€350 million in Asia Pacific)

BASF activities Start of business unit „Battery Materials“ in 2012

Several technology-driven acquisitions undertaken

Three-digit million euro invest for R&D and production

R&D network with universities / industrial partners


Index Revenue (2001 = 1) Ratio capex / depreciation

Capex as percentage of sales

Investments: Capex for organic growth* develops in line with business growth

Ratio capex/ depreciation

Revenue

Capex as % of sales

* Without acquisitions


Thereof investments in emerging markets Total investments

35-45%

15-20

30-40%

~15

2006 – 2010 2011 – 2015 2016 – 2020

10.9

~20%

Investments … will boost future organic growth

Future investments in € billion


* Memorandum of Understanding signed

TDI plant Ludwigshafen, Germany

Expansion oil & gas activities

Aroma Ingredients Kuantan, Malaysia

Investments Major projects

Expansion Verbund site Nanjing, China*

MDI plant Chongqing, China

Acrylic acid complex Camacari, Brazil


BASF aims to further increase its sales share from emerging markets

*BASF definition: Developed markets include EU15, Norway, Switzerland, North America, Japan, Australia, New Zealand

** Sales excluding Oil & Gas


2012 in % of sales

(€62bn**)

2001 in % of sales

(€28 bn**)

Emerging markets Developed markets*

~ 65%

~ 55% ~ 45%

~ 78%

~ 35%

~ 22%


Acquisitions … will contribute to profitable growth in the future

Provide a minimum return on investment of 8% p.a. after tax

Are EPS accretive by year three at the latest

Financial acquisition criteria

Generate profitable growth above the industry average

Are innovation-driven

Offer a special value proposition to customers

Reduce earnings cyclicality

Strategic acquisition criteria

We want to acquire businesses which …


0

1,000

2,000

3,000

2012 2015

Former cost saving programs NEXT STEP

Operational excellence programs STEP program on track: ~€1 billion earnings contribution by 2015

Annual earnings contribution in € million

Targeted annual earnings contri-bution of ~€1 billion by end of 2015

Project timeline: 2012–2015 Program is on track Measures to optimize processes

and structures in all regions, e.g. – manufacturing, maintenance – supply chain – engineering, best-cost country

sourcing One-time costs & investments:

~€1 billion

NEXT Program

STrategic Excellence Program ‘STEP’

NEXT program successfully completed

Annual earnings contribution of ~€1 billion achieved in 2012


Appendix 1:

Q3 2013 Reporting


Enterprise value ~62 million US dollars

Acquisition successfully completed (October 31, 2013)

Verenium strengthens BASF‘s footprint in the enzyme growth market

Optimization of global production network

Reduction of 650 positions worldwide

Investment of €250 million in production and R&D

Transaction completed July 31, 2013

Increased production from 3,000 to ~40,000 boe per day in Norway

Compensation payment of ~781 million US dollars*

Important corporate developments

Transaction with Statoil completed

Restructuring in Pigments business

Acquisition of Verenium enzyme biotechnology

* Euro/dollar exchange rate July 31, 2013: €1 = $1.3275


Chemicals Pressure on volumes and margins

Intermediates 700 (7%)

Monomers 1,599 (11%)

Petrochemicals 1,925 (6%)

€4,224 (8%)

Q3’13 segment sales (million €) vs. Q3’12


Q3’13 vs. Q3’12 (2%) (3%) 0% (3%)

EBIT before special items (million €)

569445

650

495 527

0

200

400

600

800

Q3 Q4 Q1 Q2 Q3

2013 2012


Performance Products Growth in volumes and earnings

Performance Chemicals

896 (3%)

Care Chemicals 1,209 (1%)

€3,939(1%)

Paper Chemicals 365 (8%)


Nutrition & Health 540 +10% Dispersions

& Pigments 929

(2%)



Q3’13 vs. Q3’12 6% (3%) 1% (5%)

344

183

379 394 376

0

200

400

600

Q3 Q4 Q1 Q2 Q3

2013 2012


Functional Materials & Solutions Sound overall demand, especially in automotive

Catalysts 1,466 +12%

Construction Chemicals

576 (9%)

Coatings 728

(5%)

€4,439+3%



Q3’13 vs. Q3’12 8% 2% (1%) (6%)

Performance Materials 1,669 +5%

231 228 239293 300

0

200

400

600

Q3 Q4 Q1 Q2 Q3


2013 2012


Agricultural Solutions Sales growth despite pronounced currency headwinds



Q3’13 vs. Q3’12 8% 4% 3% (10%)

0

100

200

Q3 Q30

300

600

900

1.200

Q3 Q3

1,054 172 171 1,008


2013 2012 2013 2012


103

318

62

451

0

100

200

300

400

500

Q3/2012 Net Income Q3/2013 Net Income

Oil & Gas Substantially higher net income

Exploration & Production

754 +15%

Natural Gas Trading 2,376 +29%

€3,130 +25%

Q3’13 segment sales (million €) vs. Q3’12 EBIT bSI/Net income (million €)

Natural Gas Trading

Exploration & Production

Net income

Sales development Period Volumes Prices/Currencies Portfolio

Q3’13 vs. Q3’12 22% (2%) 5%

499

396 360

422


Appendix 2:

Charts from Roundtable Oil & Gas (London, September 13, 2013)


433 480 601

857 789 951

712

923 1.064

1.201

677

0

300

600

900

1.200

1.500

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20131HY

Net income Oil & Gas (million €)

Oil & Gas – Strong earnings contribution to BASF Group


Oil & Gas – Strong free cash flow contribution to BASF Group Cash flow Oil & Gas* (million €)

Operating cash flow Oil & Gas Free cash flow** Oil & Gas

∼45% of operating cash flow delivered to BASF Group (Avg. 2003-2012) * Wintershall cash flow, not BASF Group consolidated view ** Free cash flow: Operating cash flow less payments related to property, plant and equipment and intangible assets


2008

2012

2008-2012: – Oil & Gas: Solid profit

contributor to BASF Group

– Oil & Gas accounted for 30% of BASF Group capex

EBITDA share of Oil & Gas in BASF‘s portfolio expected to remain in the same order of magnitude in the upcoming years

Capex share of Oil & Gas business in BASF portfolio will slightly decline

Key facts

* Excluding non-deductible oil taxes **Fixed assets, tangible assets from acquisitions, activated exploration expenditures

Average EBITDA* 2008-2012 (€ billion)

Cumulative capex (plant, property, equipment) (€ billion)

BASF Group w/o Oil & Gas

7.0 (76%)

BASF Group w/o Oil & Gas

12.3 (70%)

Oil & Gas 2.2 (24%)

Oil & Gas 5.2** (30%)

2008

2012 _

Share of Oil & Gas in BASF portfolio

_


Oil & Gas provides earnings stability

01.0002.0003.0004.0005.0006.0007.0008.000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

EBIT before special items BASF Group* (million €) Excluding non-compensable taxes on oil production

EBIT bSI* Oil & Gas EBIT bSI BASF Group w/o Oil & Gas

2012(restated)

* Excluding non-compensable taxes on oil production


Natural Gas

Focus Oil & Gas business on attractive E&P activities 1 Exit natural gas

storage and trading business

3

Active portfolio management – Focus on profitable upstream activities

2 Harvest gas transport business

Exploration / Development / Production Upstream Natural Gas

Storage / Trading Transport


Core region Development region

Operating company / production

Representative office

Current activities

Current activities in development region

South America

North Africa

Europe Russia

Caspian Sea Region

Middle East

.

Clear regional focus: Four core regions and two development regions


2015 target maintained despite restatement (Effect: -18 million boe in 2012)

Continue to significantly invest in core and development regions

E&P Capex 2013-2015 ~€2.0 billion**

– Russia/Caspian Sea ~€0.5 billion

– Europe ~€1.2 billion

– South America and Middle East ~€0.3 billion

Oil & Gas – Excellent further growth opportunities Production volumes (million boe)*

>160

126

Russia

South America

North Africa/Middle East Europe

Key Facts

* Restated, figures for 2012 adjusted to changes in IFRS; 2012 reported: 144 million boe ** Without capex in financial participations


2012 restated 2013

Financial performance

Sales to 3rd parties: €12.7 billion EBIT before special items: €1.9 billion Net income: €1.2 billion

E&P: In 2013, we expect an increase in sales and earnings due to higher production volumes. Natural Gas Trading: Decrease in earnings due to margin pressure.

Production volumes Total production: 126 million boe Overall higher production expected due to the further field development of Achimgaz and our transaction with Statoil in Norway.

Sales volumes Natural gas sales: 47 billion m³ Natural gas sales expected on similar level.

Investments*/ Expenditures

Investments 2008-2012 (IFRS old):~€5.2 billion thereof E&P: ~€3.1 billion thereof Natural Gas Trading: ~€2.1 billion

Investments** 2013-2015: ~ €2.4 billion thereof E&P: ~ €2.0 billion thereof Natural Gas Trading: ~ €0.4 billion

Macroeconomic assumptions

Average oil price (brent): $112 per barrel Average exchange rate: $1.28 per €

Forecast 2013: $105 per barrel $1.30 per €

Oil & Gas – Outlook 2013

* Incl. tangible assets from acquisitions, activated exploration expenditures, without capex in financial participations

** Without tangible assets from acquisitions and activated exploration expenditures


47

Documents

Commerzbank German Investment Seminar 2014, New York · 2018. 11. 17. · Seminar . New York, January 13-14, 2014 . BASF Capital Market Story January 2014 2 Cautionary note regarding