March 2020 | BASF Capital Market Story€¦ · Industry-leading innovation platform ... March 2020 | BASF Capital Market Story. Global market access through regional presence. Sales

| BASF Capital Market StoryMarch 2020

BASF Capital Market StoryMarch 2020

2 March 2020 | BASF Capital Market Story

Cautionary note regarding forward-looking statements

This presentation contains forward-looking statements. These statements are based on currentestimates and projections of the Board of Executive Directors and currently available information.Forward-looking statements are not guarantees of the future developments and results outlinedtherein. These are dependent on a number of factors; they involve various risks and uncertainties; andthey are based on assumptions that may not prove to be accurate. Such risk factors include thosediscussed in Opportunities and Risks on pages 139 to 147 of the BASF Report 2019. BASF does notassume any obligation to update the forward-looking statements contained in this presentation aboveand beyond the legal requirements.


At a glance

Q4 and Full-Year 2019 Reporting

123

Implementing BASF’s Corporate Strategy


BASF shares – an attractive investment

Strategy focused on participating in fast growing Asian markets– driven by strong and expanding local presence

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

Industry-leading innovation platform– covering a broad range of technologies and providing solutions for a multitude of customers

Earnings growth and strong cash flow generation targeted, clear return criteria – based on operational excellence and financial strength

Long-term value creation with progressive dividend policy – aim to increase the dividend per share every year

2030 target: CO2-neutral growth– creating value to society and contributing to a sustainable development

5 March 2020 | BASF Capital Market Story 1 Excluding Oil & Gas and Construction Chemicals

EBITDA before special items EBIT before special items

6.97.4 7.7 7.9

8.4

10.5

9.3

8.2

4.75.1 5.5

5.25.6

7.6

6.3

4.5

0

2

4

6

8

10

12

2012 2013 2014 2015 2016 2017 2018 2019

EBIT before special items1 and EBITDA before special items1

billion €, 2012–2019

Proven ability to achieve long-term earnings growth even in difficult market conditions


Return on capital employed above cost of capital, recently impacted by weak upstream profitability and expanded asset base

Cost of capital rateROCE

Return on capital employed1

%, 2012–2019

ROCE 12.5% 12.3% 13.2% 12.3% 13.8% 15.4% 12.0% 7.7%

0%

5%

10%

15%

2012 2013 2014 2015 2016 2017 2018 2019

1 ROCE: EBIT generated by the segments as a percentage of the average cost of capital basis, excluding Oil & Gas and Construction Chemicals


Strong free cash flow development

Cash flows from operating activities and free cash flow1

billion €, 2012–2019

Free cash flow Capital expenditures

6.6

8.1

7.0

9.4

7.7

8.87.9

7.5

2.63.2

1.7

3.63.6

4.84.0

3.7

0

2

4

6

8

10

2012 2013 2014 2015 2016 2017 2018 2019

Cash flows from operating activities

1 Including Oil & Gas and Construction Chemicals, as reported


Attractive shareholder return– clear commitment to progressive dividend policyDividend per share €

Proposal

Dividend policy Increase the dividend per share every year

Key facts 2020 Dividend proposal of €3.30 per share,

an increase of 10 cents

In total, we would pay out €3.0 billion, which is fully covered by our free cashflow of €3.7 billion

Dividend yield of 4.9% based on the share price of €67.35 at year end 2019

Yield1 3.7% 4.6% 3.7% 3.5% 4.0% 4.1% 3.4% 3.4% 5.3% 4.9%

2.202.50 2.60 2.70 2.80 2.90 3.00 3.10 3.20 3.30

0

1

2

3

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

1 Dividend yield based on share price at year end


China is the major growth driver for global chemical production

15%

3%

14%

14%

50%

4%

Real chemical production excluding pharmaceuticalsbillion US$

Global GDP CAGR +2.7%

Greater China

Rest of Asia Pacific

Middle East, Africa

Europe

South America

North America

CAGR1 +2.8%

Greater ChinaCAGR +4%

Rest of Asia PacificCAGR +2%

Middle East, AfricaCAGR +3%

EuropeCAGR +1%

South AmericaCAGR +2%

North AmericaCAGR +2%

2030:~5,500

17%

3%

16%

15%

45%

4%

2019:~4,000

Source: BASF 1 Real chemical production excluding pharmaceuticals


Global market access through regional presence

Sales 2019 by location of customer; EBIT 2019 by location of company

South America, Africa, Middle EastSales €5,338 millionEBIT €302 millionEmployees 7,486

Asia Pacific Sales €14,203 millionEBIT €1,082 millionEmployees 18,634

EuropeSales €23,827 millionEBIT €1,976 millionEmployees 72,153

North AmericaSales €15,948 millionEBIT €692 millionEmployees 19,355

Sablona

Regional centersSelected sitesVerbund sites

Selected research anddevelopment sites

Planned Verbund site


Technologies

Production

Value Chains

Markets

DigitalizationVerbund

Confirmed annual cost savings of more than €1 billion through integrated production worldwide

6.4 million tons of CO2prevented 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 offeredby digitalization across BASF

Our unique Verbund concept is one of BASF’s greatest assetswith multiple benefits strengthening the portfolio


New segment structure strengthens performance- and market-orientation and provides more transparency

Surface Technologies

Chemicals

Materials

Nutrition & Care

AgriculturalSolutions

Industrial Solutions

Other1

Verbund

Petrochemicals, Intermediates

Performance Materials, Monomers

Catalysts,Coatings

Care Chemicals, Nutrition & Health

Agricultural Solutions

Oil & Gas, others

Dispersions & Pigments, Performance Chemicals

1 Since the signing of a divestment agreement, Construction Chemicals is reported as discontinued operation and the respective assets are reported under Other


Each new segment has a clear and compelling path forward

Chemicals Materials Industrial Solutions


Nutrition & Care


% 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 Verbund Advanced materials

Additives platform

Surface modification platform

Consumer ingredients

Integrated offering of crop protection, seeds & traits, digital

Innovation focus Improved or new processes

Applications,biomaterials Formulations Battery materials,

surface effectsBiotechnology, 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: €(688) million) not depicted on this slide


Our ambitious financial targets

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

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

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


Our ambitious nonfinancial targets

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

Achieve €22 billion in Accelerator sales1

by 2025

1 Accelerator products are products that make a substantial sustainability contribution in the value chain.2 We understand relevant spend as procurement volumes with relevant suppliers.

Grow CO2-neutrally until 2030 (compared with baseline 2018)

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 spend2 with sustainability evaluations by 2025 Have 80% of our suppliers improve their sustainability performance upon re-evaluation


2019 was a challenging year for BASF with several one-offs Significant macroeconomic headwinds

− Negative impacts from ongoing trade and geopolitical conflicts − Slowdown in global GDP, industrial and chemical production

Factors weighing on BASF’s Chemicals and Materials segments− Oversupplied cracker markets− Planned cracker turnarounds− Margins for isocyanates declined below long-term averages

Factors weighing on BASF’s Agricultural Solutions segment− Volumes in North America negatively impacted by extreme weather

conditions and distributor destocking− Trade conflicts dampened demand in North America

Strategy implementation in full swing− Transformation into an agile and customer-focused organization ongoing− Active portfolio management towards higher value and more focus− Accelerated implementation of the Excellence Program


BASF Group full year 2019 – Overview

EBIT before special items1 by segment 2019 vs. 2018million €

Sales1 bridge 2019 vs. 2018million €

Sales development

2019 vs. 2018 (3%) (3%) 2% 2%

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

Materials (58%)

Chemicals (50%)

4,536

6,281

Other (49%)2018 2019

Industrial Solutions 23%

Surface Technologies 17%

Nutrition & Care 8%

Agricultural Solutions 49%

60,22059,316

(1,656)(1,500)

1,0691,183

40,000

50,000

60,000

2018 Volumes Prices Portfolio Currencies 2019

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


Outlook 2020 for BASF GroupOutlook 2020 for BASF Group

Outlook 2020Sales €60 billion – €63 billionEBIT before special items €4.2 billion – €4.8 billionROCE 6.7% – 7.7%

Underlying assumptions (prior year figures in parentheses) GDP growth: +2.0% (2.6%) Growth in industrial production: +1.2% (1.5%) Growth in chemical production: +1.2% (1.8%) Exchange rate: US$1.15 per euro (US$1.12 per euro) Oil price (Brent): US$60 per barrel (US$64 per barrel)


Outlook 2020 by segment1

Sales EBIT before special items ROCEmillion € 2019 Forecast 2020 2019 Forecast 2020 2019 Forecast 2020

Chemicals 9,532 slight increase 791 considerable decline 6.8% slight increase

Materials 11,466 considerable increase 1,003 considerable decline 10.7% considerable decline

Industrial Solutions 8,389 slight increase 820 considerable increase 12.5% considerable decline

Surface Technologies 13,142 slight increase 722 slight increase 5.7% at prior-year level

Nutrition & Care 6,075 considerable increase 793 slight increase 10.0% considerable increase

Agricultural Solutions 7,814 considerable increase 1,095 slight increase 5.3% slight increase

Other 2,898 at prior-year level (688) considerable increase - -

BASF Group 59,316 €60 – €63 billion 4,536 €4.2 – €4.8 billion 7.7% 6.7% – 7.7%

1 For sales, “slight” represents a change of 1–5%, while “considerable” applies to changes of 6% and higher. “At prior-year level” indicates no change (+/–0 %). For earnings, “slight” means a change of 1–10%, while “considerable” is used for changes of 11% and higher. “At prior-year level” indicates no change (+/–0 %).At a cost of capital percentage of 9% for 2020, we define a change in ROCE of 0.1 to 1.0 percentage points as “slight,” a change of more than 1.0 percentage points as “considerable” and no change (+/–0 percentage points) as “at prior-year level.”


At a glance


1234



Implementing our strategy– priorities 2020

1 Implementation of the corporate strategy and transformation into a more agile and customer-focused company

Actively drive sustainability and innovation with focus of R&D resources on customer needs

Execution of portfolio measures: closing of the announced transactions and integration of acquired businesses

Strict capital discipline, focus on cost control and operational excellence by implementing our Excellence Program

2

3

4

Push positioning in growth markets in Asia and battery materials

5



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







2

3

4


5


24 March 2020 | BASF Capital Market Story 1 Based on 22 million tons of CO2e emissions in 2018

28.9% of BASF portfolio classified as Accelerator products with substantial sustainability contribution in the value chain

Accelerator products− 2019: €15 billion sales− 2025 target: €22 billion sales− On average margins ~6% points

above the rest of assessed portfolio

BASF is founding member of the cross-industry value balancing alliance established in August 2019

Aim to standardize approaches to make societal impact results comparable across companies

Value-to-society program to make monetary impact assessment of economic, social and environmental contribution

Since 1990: production volumes doubled and greenhouse gas emissions cut in halves

Target: CO2-neutral growth until 20301

Measures: CO2-neutral power, operational excellence and new technologies for basic chemicals

2019: emissions decreased by −8.2%to 20.1 million tons, mainly due to turnarounds of large petrochemicals plants

Emissions for 2020 expected to increase to the 2018 level due to a lower number of planned turnarounds and the acquisition of Solvay’s polyamide business

Greenhouse gas emissions Accelerator products Value balancing alliance

Creating value to society and contributing to sustainable development


Since 1990, we have doubled our production volumes and nevertheless cut our greenhouse gas emissions in half

BASF uses carbon raw materials responsibly: 75% of carbon converted to products, 25% consumed for process energy and converted to CO2

20 million tons of CO2 emissions by BASF worldwide in 2019 compared to 10–30 million tons per year for one coal-fired power plant

European emissions trading benchmarks show that our chemical plants operate at above-average energy efficiency

We support the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)

CO2-neutral growth until 2030: Creating value to societyand contributing to a sustainable development

1990 1995 2000 2005 2010 2015 2020 2025 2030

Global GHG emissionsAssumed policy shift 2°C scenario

BASF business as usual

2030 target:No increase of

GHG emissions

Absolute greenhouse gas (GHG) emissions indexed (1990 = 100)

BASF GHG emissions

World 1990 36.4 billion tons

BASF 1990 40.1 million tons

BASF CarbonManagement

26 March 2020 | BASF Capital Market Story1 Greenhouse gas emissions of BASF portfolio 2018, including the discontinued oil and gas business2 Accounting for more than half of the CO2 emissions of the chemical industry in Europe

Shift to CO₂-neutral power

Operationalexcellence

Newtechnologies

Carbon intensity to be reduced by 30%

To achieve this, we establish a global carbon management that involves– further improvements of energy and

process efficiency– continued operational excellence

measures – shifting our energy mix towards

renewable energies– portfolio development– a research program to develop

breakthrough technologies for those basic chemicals which are most energy consuming2

GHG emissions (million tons CO2 equivalents), scope 1 and 2

22million tons1

BASF 2018/2030

Verbund siteSouth China

OrganicGrowth

Key measures to implement CO2-neutral growthGlobal carbon management


BASF Verbund site Ludwigshafen – 80% of CO2 emissions from power and steam production and basic chemicals production

Upstream Verbundsteam cracker

ammoniahydrogen

+14 other plants

Power/steam

3.3

Raw material purchase

Power and steam demand

3.9

Product portfolio

Downstream Verbund~190 plants

0.3

Residues incineration, sewage sludge incineration, sewage plant 0.5

in million metric tons CO2e


9.1% 0.1%

61.9%

Substantial sustainability contribution in the value chain

Meets basic sustainability standards on the market

Specific sustainability issues which are being actively addressed

Significant sustainability concernidentified and action plan developed

SustainableSolutionSteering

Percentage of sales 2019

28.9%

>50,000 product applications analyzed by 2019(€51.9 billion in sales, 96.3% of relevant portfolio)

28.9% Accelerators with substantial sustainability contribution

On average margins ~6 percentage points above the rest of assessed portfolio

Goal: €22 billion of sales with Accelerator products by 2025; status 2019: €15.0 billion (2018: €14.3 billion)

Stronger integration in R&D pipeline, business strategies and M&A projects

We will stop selling all Challenged products within maximum five years after classification

Leverage BASF’s innovation power to achieve €22 billionin Accelerator sales by 2025 (1)


Leverage BASF’s innovation power to achieve €22 billionin Accelerator sales by 2025 (2)Percentage of sales 2019

SustainableSolutionSteering

27.7%

4.3% 0.1%

68.3% Acronal® MB – from biomass to dispersions

ecovio® – compostable cling film for fresh-food packaging

SLENTITE® – superior insulation material

Examples

28.9%

68.3%


Circular economyChemical recycling represents a missing link for sustainable growth

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







2

3

4


5



Strong earnings development of BASF in Greater Chinaover the past yearsStrong earnings development of BASF in Greater Chinaover the past years

Strong earnings development of BASF in Greater China

EBITDA before special items2

million €EBITDA margin

before special items%

0

5

10

15

20

0

500

1,000

1,500

2,000

2015 2016 2017 2018 20190

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)2 Restated figures due to reporting of construction chemicals as discontinued operation

BASF’s sales volumes outgrew Greater China’s chemical production during the last five years

2


Guangdong

Hong Kong

Guangdong is home of key customers from fast-growing industries

0

200

400

600

800

20190

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)

Largest electronics production, China2


Steady increase of private consumption3


Market characteristics

Around 113 million residents in Guangdong province (2018)

GDP Guangdong (2018): ~US$1,470 billion (to reachGDP 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 forecast2 Real value added, electronic equipment Guangdong; 2019 forecast based on YTD Nov. growth

0

1,000

2,000

3,000

4,000

20190

200

400

600

2019

~6.2% CAGR ~7.9%

CAGR

~6.8% CAGR

~5.4% CAGR

661 140

3,120 560


E-Mobility is a growth driver for BASF

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 powertrainThe 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 Charging system

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.

Safe and easy-to-use charging devices are vital if electromobility is to become widespread.

Components BASF materialsBattery 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 materialsChassis coatings Chromacool®

Components BASF materialsElectric motor Cellasto®

Power electronics Ultramid®, Ultradur®

Components BASF materialsCharging stations Ultramid®, Ultradur®

Charging cables Elastollan®

Charging plugs Ultramid®

Charging inlet Ultramid®

1 CAM = Cathode Active Materials


Fast-paced buildup of global cathode active materials footprint

-

CAM precursor production in Harjavalta, Finland planned

Europe planned

greenfield production

First CAM production facility in Elyria, Ohio

Foundation of BASF TODA Battery Materials (BTBM), Japan

Tripled capacity at BTBM in Onoda, Japan

Second CAM production facility in Battle Creek, Michigan; merged with Elyria, Ohio into BASF TODA America (BTA)

China planned

production

2012

2018

2022

2017

2015

Market projections for 2025: 10-15 million electric vehicles built per year 700-1,000 kt of CAM in electromobility€25-30 billion CAM market size

Electromobility drives battery

materials growth

Chemistry of cathode active materials is key to

address electromobility challenges

CAM production planned in Schwarzheide, Germany

2022







2

3

4


5



We have refocused our portfolio towards innovativegrowth 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

BASFcore business


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


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


Closing is expected in Q4 20202

DIC to acquire BASF’sglobal pigments business


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


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 2019

Sales legacy business

Sales acquired business

EBITDA before special items legacy business

EBITDA before special items acquired business

2017 2018 2019

million €


Clear acquisition criteria

We want to acquire businesses which … provide a return on capital employed

above the WACC after full integrationinto BASF Group

are EPS accretive by year three at the latest

contribute to growth of EBITDA before special items

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

Strategic acquisition criteria Financial acquisition criteria







2

3

4


5



Organic growth

~€23.6 billion capex budget 2020-2024 Around €2.1 billion R&D

expenditures annually

Progressive dividend

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

Share buybacks

We will also consider share buybacks, e.g., to return disposal proceeds to shareholders

Portfolio upgrading

Strengthen portfolio by selective M&A opportunities while maintaining price discipline Focus the portfolio

through continued pruning measures

Guidance on the use of cash


0%

25%

50%

75%

100%

13% Materials

22% Other (Infrastructure, R&D)

5% Industrial Solutions

12% Surface Technologies

9% Nutrition & Care 5% Agricultural Solutions

Investments in organic growthInvestments of €3.4 billion planned for 2020

by region

Capex budget 2020–2024: €23.6 billion

34% Chemicals

1 Alternative sites currently being investigated

0%

25%

50%

75%

100%

34% Europe

5% Other1

19% North America

1% South America, Africa, Middle East

41% Asia Pacific

by type of investment

0%

25%

50%

75%

100%

35% Growth projects in Asia Pacific2 and battery materials

65% Investmentsin ongoing business

2 Verbund site Guangdong, China; chemical production complex Mundra, India

by segment


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

R&D expenditures 2019

Agricultural Solutions41%

Materials9%

Nutrition & Care7%

€2,158million

Corporate Research19%

Chemicals5%

Industrial Solutions9%

Surface Technologies10%

BASF’s R&D is highly competitive, ensures long-term growth and generates a net benefit to earnings every year


Update on Excellence Program 2019 – 2021

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

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

Operational excellence Measures focused on production, logistics and planning

Leaner structures Personnel cost savings; reduction of 6,000 positions targeted globally by end of 2020

Innovation R&D cost reduction via focusing budgets

Simplification Increased process efficiency, e.g., in procurement

Category

Innovation

Operational excellenceLeaner structures

Simplification

€2.0 billion

EBITDA contribution by category


At a glance


1234



BASF Group Q4 and full year 2019

Sales development Volumes Prices Portfolio CurrenciesQ4 2019 vs. Q4 2018 (1%) (1%) (1%) 1%FY 2019 vs. FY 2018 (3%) (3%) 2% 2%

Financial figures1 Q4 2019 Change vs. Q4 2018 FY 2019 Change vs. FY 2018€ % € %

Sales 14,686 million (2) 59,316 million (2)EBITDA before special items 1,740 million 20 8,217 million (11)EBITDA 1,491 million 14 8,036 million (10)EBIT before special items 765 million 23 4,536 million (28)EBIT 460 million (2) 4,052 million (32)Net income 150 million (57) 8,421 million 79Reported EPS 0.16 (57) 9.17 79Adjusted EPS 0.63 (13) 4.00 (32)Cash flows from operating activities 3,157 million 103 7,474 million (6)

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


Cash flow development in 20192019 2018

million € million €

Cash flows from operating activities 7,474 7,939

Thereof Changes in net working capital 1,410 (530)

Miscellaneous items (6,575) 12

Cash flows from investing activities (1,190) (11,804)

Thereof Payments made for intangible and tangible assets (3,824) (3,894)

Acquisitions / divestitures 2,361 (7,255)

Cash flows from financing activities (6,405) (52)

Thereof Changes in financial and similar liabilities (3,342) 2,966

Dividends (3,064) (3,021)

Free cash flow 3,650 4,045


Balance sheet remains strong

Balance sheet 2019 vs. 2018billion € Total assets almost stable at €87.0 billion

Noncurrent assets increased by€12.6 billion, mainly due to the recognition of our participating interestsin Wintershall Dea and Solenis

Net debt decreased by €2.7 billion to €15.5 billion

The equity ratio increased from 41.7% (Dec. 31, 2018) to 48.7% (Dec. 31, 2019), mainly due to the book gain onthe deconsolidation of Wintershall

Liquid funds

Accountsreceivable

Noncurrentassets

Inventories

Other assetsOtherliabilities

Financialdebt

Equity

25.2 23.9

5.8

18.420.8

42.4 36.1

Dec. 31, 2019 Dec. 31, 2018

1.0

2.9 2.6

14.63.8

3.29.1

10.711.2

12.2

56.043.3

Dec. 31, 2019 Dec. 31, 2018

86.687.0 86.687.0

Liabilities of disposal groups

Disposalgroups1

Disposalgroups2

1 BASF’s global pigments business and the construction chemicals business

4.0

2 BASF’s oil and gas business and the paper and water chemicals business


Chemicals

Sales Q4 2019 vs. Q4 2018million €

Intermediates 702(8%)

Petrochemicals1,673(19%)

€2,375(16%)

Sales development Volumes Prices Portfolio CurrenciesQ4 2019 vs. Q4 2018 (6%) (11%) 0% 1%FY 2019 vs. FY 2018 (11%) (9%) 0% 2%

791

1,587

0

1,000

2,000

FY 2019 FY 2018

115

257

0

150

300

Q4 2019 Q4 2018

EBIT before special items million €

(55%) (50%)


Materials

Sales Q4 2019 vs. Q4 2018million € Performance

Materials1,449(7%)

Monomers1,231(14%) €2,680

(10%)

Sales development Volumes Prices Portfolio CurrenciesQ4 2019 vs. Q4 2018 (2%) (9%) 0% 1%FY 2019 vs. FY 2018 (3%) (12%) 0% 1%


80

155

0

100

200

Q4 2019 Q4 2018

1,003

2,400

0

1,000

2,000

3,000

FY 2019 FY 2018

(48%) (58%)


Industrial Solutions


Performance Chemicals745(23%)

Dispersions & Pigments1,187(4%)

€1,932(12%)

Sales development Volumes Prices Portfolio CurrenciesQ4 2019 vs. Q4 2018 (2%) (3%) (9%) 2%FY 2019 vs. FY 2018 (1%) (1%) (8%) 2%


108

61

0

100

200

Q4 2019 Q4 2018

820

668

0

1,000

FY 2019 FY 2018

+77%

+23%




Catalysts2,662+26%Coatings

9720% €3,634

+18%

Sales development Volumes Prices Portfolio CurrenciesQ4 2019 vs. Q4 2018 1% 15% 0% 2%FY 2019 vs. FY 2018 1% 13% 0% 3%


236200

0

100

200

300

Q4 2019 Q4 2018

722617

0

500

1,000

FY 2019 FY 2018

+18%+17%


Nutrition & Care


Care Chemicals997

(2%)

Nutrition & Health503+12%

€1,500+2%

Sales development Volumes Prices Portfolio CurrenciesQ4 2019 vs. Q4 2018 3% (2%) 0% 1%FY 2019 vs. FY 2018 2% (2%) 0% 2%


126

79

0

100

200

Q4 2019 Q4 2018

793736

0

500

1,000

FY 2019 FY 2018

+59%

+8%



Sales development Volumes Prices Portfolio CurrenciesQ4 2019 vs. Q4 2018 1% 6% 0% 0%FY 2019 vs. FY 2018 (1%) 3% 24% 1%


161

38

0

100

200

Q4 2019 Q4 2018

1,095

734

0

500

1,000

FY 2019 FY 2018

+324%

+49%

Sales 2019 vs. 2018million €

Seed Treatment 639

+38%

Fungicides2,305+1%

Insecticides800

+19%

€7,814+27%

Seeds & Traits1,454+385%

Herbicides2,616+7%


Review of “Other”

Financial figures Q4 2019 Q4 2018 FY 2019 FY 2018million € million € million € million €

Sales 757 734 2,898 2,841

EBIT before special items (61) (169) (688) (461)

Thereof Costs of corporate research (109) (148) (397) (414)

Costs of corporate headquarters (50) (66) (231) (249)

Foreign currency results, hedging and other measurement effects (36) 88 (89) 324

Other businesses (35) (3) 73 25

Special items (81) (1) 21 (45)

EBIT (142) (170) (667) (506)

Documents

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