Profitable growth Profitable growth loves ups and ......Sales 2009: €2.5 billion Employees 2009: 1,460 BASF admixtures used in the construction of Gotthard Base Tunnel – World’s

1BASF Capital Market Story December 2010

Profitable growth loves ups and downsProfitable growth loves ups and downsDr. Kurt Bock CFO, BASF SE

Chairman and CEO, BASF Corporation

New YorkDecember 2, 2010


Business dynamics remained strong in Q3

1.21.5

2.02.2 2.2

0.0

0.5

1.0

1.5

2.0

2.5

Q3 Q4 Q1 Q2 Q3

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q3’10 vs. Q2’10 (3)%* 0% 0% 0%

Q3’10 vs. Q3’09 5% 10% 0% 8%

1-9 ’10 vs. 1-9 ’09 14% 6% 2% 4%

EBIT before special items (billion €)

20102009

12.8 13.215.5 16.2 15.8

0

4

8

12

16

20

Q3 Q4 Q1 Q2 Q3

Sales (billion €)

* +2% volume growth w/o Agricultural solutions and Oil & Gas

20102009


Construction ChemicalsSTYROLUTION Oil and Gas

Carve-out of Styrenics activities into STYROLUTIONEffective: January 1, 2011Sales 2009: €2.5 billionEmployees 2009: 1,460

BASF admixtures used in the construction of Gotthard Base Tunnel – World’s longest railway tunnelSpecial admixtures for long distance and high temperature

Five North Sea oil discoveries in 2010:

– Norway: Beta and Maria; – UK: Catcher, Blakeney,

CladhanNew discoveries with growth potentialAppraisal phase starts asap

Important operational developments


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

derivatives

Continuous strong cash flow

Cash Flow (billion €)

Cash provided by operating activitiesFree cash flow**

-1

0

1

2

3

4

5

6

7

2001* 2002* 2003* 2004 2005** 2006 2007 2008 2009 2010Q1-Q3

5.3

3.8

***


Average annual dividend increase of 12.8%(2001-2009)

Dividend yield above 3% in any given year since 2001

Attractive dividend yield of 3.9% in 2009*

Consistent, long-term valueJan 2001 – October 2010:Average annual performance of BASF share** of 12.6%

For 2010, we expect to increase the dividend.3.9%

Attractive shareholder returns

Key factsDividend per share (€)

1.70

0.70 0.700.85

1.00

1.50

1.95 1.95

0.65

0.0

0.5

1.0

1.5

2.0

2001 2002 2003 2004 2005 2006 2007 2008 2009

0.5

1.0

1.5

2.0

3.1% 3.9% 3.1%

* Dividend yield based on share price at year-end

3.2% 3.1% 4.1% 3.8% 7.0%Yield*

** With dividends reinvested

1 | Focus on operational excellence

2 | Well positioned for profitable growth

3 | Outlook

6

Earnings

Earnings

Costs


Vertical and horizontal integration of production plants, energy and waste flows, logistics and site infrastructure

Know-how Verbund

Energy Verbund and combined heat and power plants lead to- Savings of ∼2.6 million tons

oil equivalent p.a.- Reduction of CO2 -emissions

of ~6 million tons p.a.

7

Unique ‘Verbund’ concept Cost savings of >€500 million p.a. in Ludwigshafen alone

BASF site Ludwigshafen, Germany Verbund Concept


Since 2001 sales and earnings increased significantly

Fixed costs represent around 30% of total costs

Ciba synergies and NEXT will drive fixed costs down

Synergies from Ciba integration 2010E:€350 million run-rate

Fixed costs indexed EBITDA indexedSales indexed

Tenacious fixed cost management

Key factsBASF Group development 2001-2009

50

100

150

200

250

2001 2003 2005 2007 2009

TrendIndex


> 500 individual projects to simplify processes, structures and production sites in all regions

Project timeline:2008-2011

Annual earnings contribution of €600 million in 2010 expected

Targeted earnings contribution by 2012:≥€1 billion

Completed restructuring programs New efficiency program NEXT

Sustainable improvement of cost base

New EXcellence Targets (NEXT)Annual earnings contribution (million €)

0

500

1,000

1,500

2,000

2,500

2003 2005 2007 2009 20122010E



3 | Outlook

10

Earnings

Earnings

Costs


Leading positions in growth industries

and emerging markets

Ongoing portfolio

optimization

Excellent innovation platform

We strive to outperform global chemical production growth by at least 2 percentage points p.a.

Well positioned for profitable growth

Translate megatrends into business growthContinue expansion in Asia

Continue with active portfolio managementDrive portfolio closer to end-user

Product and system innovation as growth driversStrong pipeline of innovations

Growth target:


Leading positions in growth industries and

emerging markets

12

13BASF Capital Market Story September 2010

Ambitious targets for 2020

Regional sales targets 2020

Outgrow global chemical production growth by 2 percentage points

Earn premium on cost of capital in all regions

* corresponds to sales of €17 billion in 2020, assuming $/€ of 1.40

** oil price assumption of $75/bbl until 2013, thereafter increase to ~$100/bbl up to 2020

Profitable growth to more than €90 billion in sales by 2020

2009 2020

€9bn€20 bn

Asia Pacific

7-8% p.a.2009 2020

€30 bn

€49 bn**

Europe, including Africa, Middle East

4-5% p.a.

2009 2020

South America

€3 bn €6 bn~8% p.a.

2009 2020

North America

€9 bn€17 bn*

5-6% p.a.

14BASF Capital Market Story September 2010

Growth in emerging markets Outgrowing Asian Pacific chemical market by 2 percentage points p.a.

New Zealand

Australia

China

Pakistan

Bangladesh

India Thailand

Singapore

Indonesia

Taiwan

JapanS. Korea

Malaysia

VietnamHong Kong

Asia Pacific service center

Regional headquarters

Verbund site

Chemical production site *

R&D center *

Strengthen market focus through industry and customer target groupsDevelop and market innovations in Asia for AsiaInvest in Asia to generate 70% of sales through local production

– €2 billion investments planned for 2009-2013

• Expansion of Verbund site Nanjing, China

• New MDI plant in Chongqing, China* Some sites not shown due to scale

BASF expects to double sales to €20 billion in Asia Pacific by 2020:


Ongoing portfolio optimization

15


BASFcore

businesses

Powerful partnerships

Major acquisitions Major divestitures

Pharmaceuticals

Fertilizers

Refineries

Fibers

Printing systems

Polyolefins (Basell)

Polystyrene North America

Agchem generics

Premix

Crop protectionSuperabsorbentsOil & Gas (Revus)Engineering Plastics Electronic ChemicalsCustom synthesisCatalysts (Engelhard)Construction Chem.Water-based resinsPigments (Ciba)Plastic additives (Ciba)

16 billion Euro*(Sales)

10 billion Euro**

(Sales)

GazpromMonsantoPetronasShellSinopecTotal

** not including Styrenics business

Selected transactions 1999 to date

Styrenics (STYROLUTION)(to be divested)

Pro-active portfolio management

Cognis(acquisition announced)

* not including Cognis


Active portfolio management pays off

Chemical activities

Agricultural Solutions

Oil & Gas, including non-deductible oil taxes

EBITDA by activity (in billion €, without Other)

0

2

4

6

8

10

2001* 2003* 2005 2007** 2009

Recent acquisitions reshaped portfolio- Closer to customers- Innovation-driven- Profitable growth above

industry average

BASF’s EBITDA (excluding Other) was €9 billion in 1-9/2010

EBITDA margin 1-9/2010:17.8%

* Based on German GAAP** As of 2007 according to new segment structure

(excl. Styrenics and corporate costs)

Our diversified portfolio is a key strength

2010Q1-Q3


Specific solutions based on renewable resources formining, synthetic lubricants, coatings and crop protection industries

Sales 2009: €786 millionEBITDA margin 2009: 11.2%

Functional Products

Products and formulations forthe personal and home caremarkets

Sales 2009: €1,457 millionEBITDA margin 2009: 13.2%

Care Chemicals

Products, formulations and concepts for functional food, beverage, dietary supplements and pharma

Sales 2009: €325 millionEBITDA margin 2009: 13.2%

Nutrition & Health

Cognis A global leader in value-added products


Integration into Performance Products segment with the following objectives

Growing >2% points faster than the relevant market

Achieve 20% EBITDA margin in the Performance Products segment by 2012

Acquisition accretive as of 2012

Integration costs of €200-250 million until end of 2012

Cost synergies of at least 5% of 2009 net sales fully achieved by 2013

BASF + Cognis Clear targets


Styrolution – At a glance

Global No.1 in Styrenics

Sales of about €5 billion

Thereof*– 48% Europe, 32% Americas and 20% Asia Pacific– 34% SM, 34% PS, 21% ABS and 11% Copolymer Specialties

Customers in more than 110 countries

29 production facilities across 11 countries

Over 3,000 employees

Headquartered in Frankfurt/Main, Germany

* Pro-forma figures, based on BASF‘s and INEOS‘ sales in 2009


1.

2.

3.

4.

Global market leader- Improved presence globally- Better service to its customers

Styrolution – A perfect fit

Strong innovation & technology platform- Know-how of partners complements one another well- Strong application and market know-how

Clear focus- Clear focus on styrenics business- More entrepreneurial and dynamic organization

Increased competitiveness- Optimization of global manufacturing footprint- Enhanced efficiency and reduced costs


Styrolution – Next steps

Notify anti-trust authorities

Complete carve-out in order to form legally independent entities

Prepare foundation of joint venture

Carve-out of BASF‘sStyrenics activitiesto legally independent entities

Signing of LoI BASF and INEOS to create50/50 joint venture

Establishment of planned joint venture Styrolution

November 29, 2010 January 1, 2011 Mid-2011


Excellent innovation platform

23


R&D spending in 2010 planned on similar level

Innovation will spur further growth

Total R&D expenditures 2009 (billion €)R&D investments: 3.5% of sales*More than 9,300 employees involved in R&DAround 1,900 partnerships with universities, startup companies and industry partners Five Growth Clusters:- Nanotechnology- Energy Management- Plant Biotechnology- Industrial Biotechnology- Raw Material ChangeBudget for Growth Clusters (2009-2011): up to €1 billion

Strong commitment to R&D

* Excluding Oil & Gas

24%

1%

Corporate Research23%

Agricultural Solutions

25%

Functional Solutions12%

Performance Products20%

Chemicals9%

Plastics9%

€1.4 billion

Other2%


CO2 scrubbing NaphthaMax®

III

High-efficiency capture of carbon dioxide (CO2) from combustion gases in coal-fired power plantsDevelopment of new processes and solvents

Catalyst for Fluid Catalytic Cracking (FCC) unitsIncreased zeolite activity and coke selectivity as well as improved hydrothermal stabilityIncreased gasoline yield from the FCC unitTranslating to higher refinery margins

Standak®

Top

SeedSolutions® innovation for soybean growers in BrazilReady-to-use insecticidal and fungicidal seed protection with Plant Health characteristicsAttractive and fast growing market driven by high value seed

Introducing the next leading technologies


Innovation pipeline worth €19 billion

* New or improved products or new applications, max. 5 years on market, including Growth Clusters

Net present value by segments (billion €)

Net Present Value (NPV) represents discounted earnings after tax from R&D projects after deduction of R&D expenditures

Major contribution from Agricultural Solutions and Performance Products

History of high success rate due to consequent R&D controlling and Phasegateprocess, including life cycle management

R&D contributes significantly to earnings growth

4.53.50

5

10

15

20 €19 billion

17% Performance Products7% Plastics4% Chemicals

9% Functional Solutions

45% Agricultural Solutions

3% Oil & Gas15% Corporate Research



3 | Outlook

27

Earnings

Earnings

Costs


GDP

Chemicals (excl. Pharma)

Industrial production

US$ / EURO

Oil price (US$ / bbl)

3% - 4%

7% - 8%

7% - 8%

1.30

75

Assumptions 2010


We aim to grow sales on average by two percentage points per year above chemical market growth.We strive to grow our earnings further year by year and to achieve an EBITDA margin of 18% until 2012.

We expect:- the good business development to continue in the fourth quarter of 2010 - sales of ~€ 63 billion and EBIT before special items of more than € 8 billion in 2010- to earn a high premium on our cost of capital- to increase the dividend

Targets 2010

Medium-term targets

We aim to continuously increase the annual dividend, or at least maintain it at the level of the previous year.

Dividend policy

Outlook: record year 2010


This presentation includes 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. This presentation contains a number of forward-looking statements including, 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 with respect to future events and financial performance. Actual financial performance of the entities described herein 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.

Forward-looking statements represent estimates and assumptions only as of the date that they were made. 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.

Forward-looking statements



* Styrenics reported under ‘Other’

Percentage of sales 2009

Chemicals

15%

Plastics*

14%

Functional Solutions14%

Performance Products18%

Agricultural Solutions7%

Oil & Gas

22%

Construction Chemicals

Inorganics

Petrochemicals

Intermediates

Performance Chemicals

Coatings

Dispersions & Pigments

Performance Polymers

Polyurethanes

Crop Protection

Exploration & Production and Natural Gas Trading

Care Chemicals

Catalysts

Paper Chemicals

BASF today – a well-balanced portfolio Total sales 2009: €50.7 billion


Delivering consistent, long-term value

BASF total return well above benchmark levels

Average annual dividend increase of 12.8%(2001-2009)

Attractive dividend yield of 3.9% in 2009, based on share price at year-end

Aim to increase dividend each year, or at least maintain it at the previous year‘s level

Committed to shareholder value

BASF

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+0.3%

+12.6%

-2.7%

+6.3%

-5 0 5 10 15

Long-term performance January 2001 – October 2010 (average annual performance with dividends reinvested)


Chemicals Continued strong demand

Intermediates643(1)%

Inorganics322

(1)%

Petrochemicals1,909(4)%

€2,874 (3)%

364315

461

687617

0

200

400

600

Q3 Q4 Q1 Q2 Q3


Q3’10 vs. Q2’10 0% (2)% 0% (1)%

Q3’10 vs. Q3’09 10% 25% 0% 9%

1-9 ’10 vs. 1-9 ’09 22% 31% 0% 4%

Q3’10 segment sales (million €) vs. Q2’10 EBIT before special items (million €)

20102009


Plastics Earnings up thanks to high capacity utilization

Polyurethanes1,458+4%

Performance Polymers

1,140(4)%

€2,598 +1%

216251

279

349 371

0

200

400

Q3 Q4 Q1 Q2 Q3

Sales development Period Volumes Prices Portfolio Currencies

Q3’10 vs. Q2’10 1% 0% 0% 0%

Q3’10 vs. Q3’09 14% 7% 0% 11%

1-9 ’10 vs. 1-9 ’09 27% 10% 0% 5%


20102009


Performance Products Solid earnings despite one-off costs

286209

419471

370

0

100

200

300

400

500

Q3 Q4 Q1 Q2 Q3


Q3’10 vs. Q2’10 1% 1% 0% 0%

Q3’10 vs. Q3’09 7% 7% 0% 7%

1-9 ’10 vs. 1-9 ’09 15% 3% 13% 4%

Dispersions & Pigments

887+4%

Performance Chemicals

832+3%

Care Chemicals682+1%

€3,206 +2%

Paper Chemicals448+2%


Nutrition & Health357(4)%

20102009

*

* Reduction in EBIT before special items due to one-time charges


Functional Solutions Increased volumes drive topline growth

Catalysts1,347+10%

Construction Chemicals599

+4%

Coatings645

(1)%

€2,591 +6%

106 101 111

165 158

0

50

100

150

Q3 Q4 Q1 Q2 Q3


Q3’10 vs. Q2’10 7% (1)% 0% 0%

Q3’10 vs. Q3’09 15% 9% 1% 12%

1-9 ’10 vs. 1-9 ’09 18% 11% 1% 7%


20102009


Agricultural Solutions Successful start to new season in South America

21

66

0

40

80

Q3 Q3


Q3’10 vs. Q2’10 (31)% (1)% 0% 1%

Q3 ’10 vs. Q3 ’09 29% (6)% 0% 11%

1-9 ’10 vs. 1-9 ’09 7% (3)% 0% 4%


20102009

832

623

0

200

400

600

800

1,000

Q3 Q320102009

+34%

+214%


Oil & Gas Improved earnings despite lower volumes

186 272

0

200

400

600

800

Q3 Q3

Exploration & Production881(1)%

Natural Gas Trading

1,347(10)%

€2,228 (7)%

Sales developmentPeriod Volumes Prices/Currencies Portfolio

Q3’10 vs. Q2’10 (12)% 6% 0%

Q3’10 vs. Q3’09 (23)% 16% 0%

1-9 ’10 vs. 1-9 ’09 3% (13)% 0%

83 70

EBIT bSI Natural Gas TradingEBIT bSI Exploration & Production

Net income

Q3’10 segment sales (million €) vs. Q3’09 EBIT before special items / Net income (million €)

20102009

467503

550 573


0

100

200

300

400

500

2009 2010 2011/2012 SteadyState

130

350

Integration costs2009: €785 million2010: ~€170 million2011/2012: ~€100 million

Net reduction of positions- Target: 3,800- Status Q3 2010: >2,400

Ciba non-production sites- To be consolidated: 58- Status Q3 2010: 47 exited

23 Ciba production sites under strategic review- Planned exit: 15*(thereof 11 implemented)

Ciba integration: synergies exceed targets Structural integration of Ciba completed

Expected synergy run rate (million €) Impact of Ciba acquisition

450 >450Synergy Target

Synergy run rate Effective in 2009

* On two sites exit of production activities only

Documents

Profitable growth Profitable growth loves ups and ......Sales 2009: €2.5 billion Employees 2009: 1,460 BASF admixtures used in the construction of Gotthard Base Tunnel – World’s