BASF Capital Market Story August 2013

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The BASF Capital Market Story gives you an overview on BASF's historic performance and our portfolio, highlighting our strength in operational excellence.

Text of BASF Capital Market Story August 2013

  • We add value as one company Oil & Gas Agricultural Solutions Functional Materials & Solutions Performance Products Chemicals Value Capital Market Story August 2013
  • BASF Capital Market Story August 2013 Cautionary note regarding forward-looking statements 2 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 Capital Market Story August 2013 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 16.5% average annual total shareholder return** 16% average annual dividend increase, >3% yield in every single year*** Performance We create chemistry for a sustainable future Perspective ** August 2003 July 2013 *** for 2003-2012 Ludwigshafen, Germany Antwerp, Belgium Nanjing, China Kuantan, MalaysiaGeismar, USA Freeport, USA Verbund site Positioning 3 * restated numbers, reflecting IFRS 10/11 changes
  • BASF Capital Market Story August 2013 BASF today a well-balanced portfolio Total sales 2012: 72.1 billion* 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 4
  • BASF Capital Market Story August 2013 Ongoing portfolio development Recent examples Crop protection investments (China, BR) Aroma ingredients investment, Kuantan Transactions with Statoil and Gazprom* Restructuring in Performance Products Photo: yvind Hagen 5* Gazprom deal not closed yet.
  • BASF Capital Market Story August 2013 Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow Board priorities BASF Strategy: We create chemistry__November 2011 Business review BASF strategy & growth targets Strategic levers
  • BASF Capital Market Story August 2013 Q2 2013: BASF maneuvers well through challenging environment Business performance Q213 Q212 vs. Q212 Sales 18.4 billion 17.8 billion +3% EBITDA 2.5 billion 2.5 billion (1%) EBIT before special items 1.8 billion 1.9 billion (5%) EBIT 1.8 billion 1.7 billion +6% Net income 1.2 billion 1.2 billion (4%) Reported EPS 1.26 1.32 (4%) Adjusted EPS 1.40 1.59 (12%) Operating cash flow 2.0 billion 1.9 billion +6% Sales development Period Volumes Prices Portfolio Currencies Q213 vs. Q212 5% 0% 0% (2%) 7
  • BASF Capital Market Story August 2013 2003 2004 2005 2006 2007 2008 2009** 2010 2011 2012 H1 2013 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 2.1 8
  • BASF Capital Market Story August 2013 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 1.95 1.70 2.20 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 9 2.60 Dividend per share (in ) 3.7% ** Based on BASF share price of 71.15 on Dec. 28, 2012
  • BASF Capital Market Story August 2013 Delivering consistent, long-term value Average annual performance with dividends reinvested 0 3 6 9 12 15 18 Euro Stoxx 50 DAX 30 MSCI World Chemicals +9.0% Last 5 years August 2008 July 2013 +15.1% -0.5% +5.0% +3.8% Last 10 years August 2003 July 2013 BASF +10.4% +4.0% +16.5% 10
  • BASF Capital Market Story August 2013 We do not expect that global economic growth will accelerate in the second half of 2013 Nevertheless, BASF is targeting for 2013 to exceed the 2012 levels in sales and EBIT before special items in a volatile economic environment Our focus on growth markets and innovation, in combination with our measures to improve operational excellence and raise efficiency, will contribute to this We aim to earn a high premium on cost of capital in 2013 Outlook 2013 GDP: +2.0% (reduced from 2.4%) Industrial production: +2.7% (reduced from 3.4%) Chemical production: +3.1% (reduced from 3.6%) US$ / Euro: 1.30 (unchanged) Oil price (US$ / bbl): 105 (reduced from 110) Assumptions 2013 Outlook 2013 11
  • BASF Capital Market Story August 2013 Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow Board priorities BASF Strategy: We create chemistry__November 2011 Business review BASF strategy & growth targets Strategic levers
  • BASF Capital Market Story August 2013 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 13
  • BASF Capital Market Story August 2013 Key financial targets 2015 / 2020 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 targetsGrowth targets 2015 2020 Sales ~80 billion Sales ~110 billion EBITDA ~14 billion EPS ~7.50 EBITDA ~22 billion 14
  • BASF Capital Market Story August 2013 Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow Board priorities BASF Strategy: We create chemistry__November 2011 Business review BASF strategy & growth targets Strategic levers Portfolio development Market approach Innovations for a sustainable future Investments Acquisitions Operational excellence
  • BASF Capital Market Story August 2013 Portfolio development We expand from chemicals to chemistry Chemistry as key enabler for functionalized materials & solutions Deep understanding of customer value chains required New molecules Improved applications Functionalized materials & solutions 1960 1970 1980 1990 2000 2010 2020 Batteries, membranes ... 16
  • BASF Capital Market Story August 2013 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 ProductsClassical Chemicals 2020 in % of sales** Chemical Industry First customer industries* 2010 in % of sales** ~ 40% ~ 30% ~ 70% 2001 in % of sales** ~ 50% ~ 60% ~ 50% 17
  • BASF Capital Market Story August 2013 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 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 18