BASF Capital Market Story, May 2016 1
Ingo Rose
DirectorInvestor Relations
OTCQX Virtual Investor Conference for Dividend Paying Companies
May 5, 2016
We add value as one company
BASF Capital Market Story, May 2016 2
150 years
Cautionary note regarding forward-looking statements
This presentation may contain forward-looking statements that are subject to risks anduncertainties, including those pertaining to the anticipated benefits to be realized from theproposals described herein. Forward-looking statements may include, in particular, statementsabout 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 financialperformance. Actual financial performance could differ materially from that projected in theforward-looking statements due to the inherent uncertainty of estimates, forecasts andprojections, and financial performance may be better or worse than anticipated. Given theseuncertainties, readers should not put undue reliance on any forward-looking statements. Theinformation contained in this presentation is subject to change without notice and BASF doesnot undertake any duty to update the forward-looking statements, and the estimates andassumptions associated with them, except to the extent required by applicable laws andregulations.
BASF Capital Market Story, May 2016 3
150 years
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 12/31/2015):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
BASF Capital Market Story, May 2016 4
150 years
Chemistry as an enabler BASF has superior growth
opportunities: – sustainable innovations– investments– emerging markets
The #1 chemical company €70.4 billion sales, €6.7
billion EBIT bSI in 2015 #1-3 in ~70% of businesses,
present in almost all countries
6 integrated Verbund sites, production in 60 countries
A track record of strong sales and earnings growth
>3.5% dividend yield in every single year from 2006-2015
~€66 billion market capitalization on April 29, 2016
PerspectivePerspectiveLudwigshafen,Germany
Antwerp,Belgium
Nanjing,China
Kuantan,MalaysiaGeismar,
LouisianaFreeport,Texas
Verbund site
PositioningPositioning
We create chemistry for a sustainable future
PerformancePerformance
20
30
40
50
60
70
80
90
2008 2009 2010 2011 2012 20142013 2015
BASF Capital Market Story, May 2016 5
150 years
Global reduction in carbon emissions of 6 million metric tons/a. and reduction of waste
Example Ludwigshafen site:avoidance of 7 million metric tons of freight/a.= 280,000 fewer truckloads
Shared use of on-site facilities: fire department, security, waste water treatment and analytics
Verbund: Unique competitive advantage
* Savings include only tangible synergies. Additional (intangible) benefits and retained profits are not included.
Verbund generates >€1 billion p.a. global cost savings* & supports sustainability
BASF Capital Market Story, May 2016 6
150 years
Percentage of sales 2015*
BASF today – a well-balanced portfolioTotal sales 2015: €70.4 billion
* Not depicted here: ~4% of Group sales reported as ‘Other‘ ** Natural Gas Trading has been divested on Sep. 30, 2015.
BASF Capital Market Story, May 2016 7
150 years
50
100
150
200
250
300
350
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Operational excellence Strong track record
EBITDA
Sales
* Excl. companies with major IFRS 10/11 restatements, i.e. BASF YPC Nanjing, Libya onshore, other Oil & Gas and Catalysts companies
BASF Group* 2001–2015(Index; CAGR 2001–2015)
Fixed Costs
CAGREBITDA
9%
CAGRSales
6%
CAGRFixed Costs3%
BASF Capital Market Story, May 2016 8
150 years
0
1
2
3
4
5
2006 2007 2008 2009** 2010 2011 2012 2013 2014 2015
Strong free cash flow
* Cash provided by operating activities less capex ** 2009 adjusted for re-classification of settlement payments for currency derivatives
Free cash flow*(in billion €)
3.53.2
2.5
3.2
3.9 3.7
2.6
3.2
1.7
3.6
BASF Capital Market Story, May 2016 9
150 years
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2006 2009 2012 2015
2.90
We want to grow or at least maintain our dividend at the previous year’s level
Dividend of €2.90 per share, an increase of 3.6%
Dividend yield of 4.1% in 2015
Dividend yield above 3.5%in any given year since 2006
4.6%
Attractive shareholder return
Key facts 2015
Dividend per share (€)
0.50
1.00
1.50
2.00
* Dividend yield based on share price at year-end
4.1% 3.8% 7.0% 3.9% 3.7%Yield* 3.7%
2.50
3.5%
3.00
4.0% 4.1%
1.50
1.95 1.951.70
2.202.50 2.60 2.70
Dividend policy
2.80
BASF Capital Market Story, May 2016 10
150 years
Average annual performance (with dividends reinvested)
0 3 6 9 12 15
Euro Stoxx 50
DAX 30
MSCI World Chemicals
+5.3%
Last 5 yearsMay 2011 – April 2016
+4.3%
+3.3%
+6.0%
+5.9%
Last 10 yearsMay 2006 – April 2016
BASF
+6.6%
+0.7%
+12.0%
Delivering consistent, long-term value
BASF Capital Market Story, May 2016 11
150 years
Priorities 2016
Focus on capex discipline:
─ Reduce capital expenditures to €4.2 billion in 2016
Cost control and operational excellence:
─ DrivE targeting ~€1 billion annual earnings contributionfrom end of 2018 on
Portfolio optimization ongoing:
─ E.g. agreement to sell industrial coatings business to AkzoNobel
Strong commitment to innovation:
─ Maintain R&D spending at ~€1.95 billion in 2016
BASF Capital Market Story, May 2016 12
150 years
Investments for organic growth
Performance Products16%
Oil & Gas24%
€19.5billion
FunctionalMaterials &Solutions12%
Capex budget 2016-2020
Other14%
Chemicals30%
Capex budget 2016-2020
Asia Pacific18%
€19.5billion
South America*9%
North America26%
Europe46%
AgriculturalSolutions4%
Other1%
by segment by region
* Including Africa and Middle East
BASF Capital Market Story, May 2016 13
150 years
0
1,000
2,000
3,000
4,000
2015 2018
Annual earnings contribution(in million €)
Targeted annual earnings contribution of €1 billion from end of 2018 on
Optimization of processes and structures in all regions, e.g.– manufacturing– incremental capacities– productivity increase
Project timeline: 2016–2018
DrivE program
Operational excellenceDrivE with ~€1 bn earnings contribution
NEXT 2008-2011 DrivE 2016-2018
STEP 2012-2015
BASF Capital Market Story, May 2016 14
150 years
Functional crop care Personal care & food Omega-3 fatty acids Enzymes Battery materials Specialty plastics Selected assets in
Oil & Gas
BASFcore business
Strong partnerships
Gazprom Monsanto Petronas Shell Sinopec Statoil Total Yara
Selected transactions 2010 − until today
Acquisitions
~ €4.5 billion salesin emerging and innovation-driven
businesses
Divestitures
Styrenics Fertilizers Selected assets in Oil & Gas Natural gas trading & storage Custom synthesis business Industrial coatings Textile chemicals PP/PE catalysts
~ €20 billion sales*in businesses with
limited fit and differentiation
potential
Portfolio development towards more market-driven and innovative businesses
* Includes sales of non-consolidated businesses (Styrenics, VNG participation)
BASF Capital Market Story, May 2016 15
150 years
€1.95 billion R&D expendituresin 2015; to be maintained in 2016
~10,000 employees in R&D
~3,000 projects
Ranked No.1 in thePatent Asset Index™
~1,000 new patents in 2015
Research Verbund: Cooperations with more than 600 excellent partners from universities, start-upsand industry
Strong commitment to innovationInnovations for a sustainable future
1.61.7
1.8 1.9 1.95
0.0
0.5
1.0
1.5
2.0
2011 2012 2013 2014 2015
R&D expenditures (billion €)
Chemicals11%
Performance Products20%
Functional Mat. & Sol.20%
Agricultural Solutions26%
Oil & Gas2%
Corporate Research21%
2.0
1.5
1.0
0.5
0
Key facts
BASF Capital Market Story, May 2016 16
150 years
Lower production cost than industry average
Efficiency gains:
run-time extension higher throughput lower energy consumption
Proprietary technology,new process protected by280 active patent families
4 out of 6 production sites already equipped: Ludwigs-hafen, Antwerp, Nanjing and Camaҫari (Brazil)
Innovation: New acrylic acid technologyBASF with best-in-class acrylic acid process
80
85
90
95
100
BASFnew process
BASFclassic process
Industry average
Acrylic acid production technology benchmark(Industry average costs = 100; normalized)
Source: BASF estimate
Key facts
BASF Capital Market Story, May 2016 17
150 years
Innovation: SAVIVA™ Highly efficient Superabsorbent Polymers (SAP)
SAVIVA™ – based on a pioneering SAP technology platform SAVIVA™ the next generation of SAP Round-shaped particles with micro-pores initiates
innovative liquid distribution mechanism
Compared to other SAPs SAVIVA™ leads to: Efficiency gains:
– SAP reduction– Fluff reduction– Reduction of storage, packaging and transportation
costs
Improved sustainability: – Better carbon footprint due to SAP and weight
reduction– Enabler for future diaper designs offering a new
level of comfort and dryness
SAVIVA™ round shaped particle
BASF Capital Market Story, May 2016 18
150 years
InnovationAutomotive is a growth business for BASF
* Excl. precious metals, coatings refinish business;
BASF sales to Automotive vs. global vehicle production(indexed)
50%
75%
100%
125%
150%
175%
2007 2008 2009 2010 2011 2012 2013 2014 2015
BASF salesto Automotive
CAGR
6.7%
Global vehicleproduction
CAGR shown for 2007 – 2015
CAGR
2.8%
BASF Capital Market Story, May 2016 19
150 years
Profitability of BASF will grow faster than global chemical production
Sales growthSlightly faster than the global chemical production
EBITDA growthWell above global chemical production
Remain a strong cash providerContinuously generate high levels of free cash flow
Financial targets for next years
Deliver attractive returnsEarn a significant premium on cost of capital
Progressive dividend policy We want to grow or at least maintain our dividend
BASF Capital Market Story May 2016 20
Appendix
BASF Capital Market Story, May 2016 21
150 years
Sales development Volumes Prices Portfolio Currencies
Q1 2016 vs. Q1 2015 0% (6%) (22%) (1%)
Q1 2016: BASF with slightly lower earnings compared to strong prior-year quarter
Financial figures Q1 2016 Q1 2015 Change
Sales €14.2 billion €20.1 billion (29%)
EBITDA €2.8 billion €2.9 billion (3%)
EBIT before special items €1.9 billion €2.1 billion (8%)
EBIT €1.9 billion €2.0 billion (6%)
Net income €1.4 billion €1.2 billion +18%
Reported EPS €1.51 €1.28 +18%
Adjusted EPS €1.64 €1.43 +15%
Operating cash flow €1.0 billion €2.4 billion (56%)
BASF Capital Market Story, May 2016 22
150 years
Outlook 2016 Sales will be considerably below prior year, due to the divestiture of the natural gas trading
and storage activities and the lower oil and gas prices. Excluding the effects of acquisitions and divestitures, we expect higher volumes in all segments. We expect EBIT before special items to be slightly below the previous year driven by
drastically lower earnings of Oil & Gas. We plan higher earnings in our chemicals business and in the Agricultural Solutions segment. EBIT after cost of capital is expected to be significantly below prior year. However, we still
expect to earn a premium on our cost of capital.
Assumptions 2016 GDP growth: +2.3% Growth in industrial production: +2.0% Growth in chemical production (excl. pharma): +3.4% Exchange rate: $1.10 per euro Oil price (Brent): $40 per barrel
Outlook 2016 confirmed
BASF Capital Market Story, May 2016 23
150 years
EBIT before special items
Million € 2015 Forecast 2016
Chemicals 2,156 considerable decreasePerformance Products 1,366 slight increaseFunctional Materials & Solutions 1,649 slight increaseAgricultural Solutions 1,090 slight increaseOil & Gas 1,366 considerable decreaseOther (888) considerable increase
BASF Group 6,739 slight decrease
Outlook 2016 Forecast by segment
With respect to EBIT before special items, “slight” means a change of 1-10%, while “considerable” is used for changes greater than 11%. “At prior-year level” indicates no change (+/-0%).
BASF Capital Market Story, May 2016 24
150 years