BASF – We create chemistry · €70.4 billion sales, €6.7 billion EBIT bSI in 2015 #1-3 in ~70%...

2. Frankfurter Tischgespräch, 21. November 2016 1

Stefan KochInvestor Relations

Deutsche Schutzgemeinschaft für Wertpapierbesitz

2. FrankfurterTischgespräch

21. November 2016

BASF – We create chemistry


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.

32. Frankfurter Tischgespräch, 21. November 2016

Facts and Figures

BASF Strategy “We create chemistry”

Attractive Shareholder Return


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

~€73.6 billion market capitalization on October 31, 2016

PerspectiveLudwigshafen,Germany

Antwerp,Belgium

Nanjing,China

Kuantan,MalaysiaGeismar,

LouisianaFreeport,Texas

Verbund site

Positioning

We create chemistry for a sustainable future

Performance


150 years

Percentage of sales 2015*

* Not depicted here: ~4% of Group sales reported as ‘Other‘ ** Natural Gas Trading has been divested on Sep. 30, 2015.

BASF today – a well-balanced portfolioTotal sales 2015: €70.4 billion


150 years

Global reduction in carbon emissions of 6 million metric tons p.a. and reduction of waste

Example Ludwigshafen site:avoidance of 7 million metric tons of freight p.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* and supports sustainability


150 years

Q3 2016: Financial figures for BASF Group

Financial figures Q3 2016 Q3 2015 Change

Sales €14.0 billion €17.4 billion (20%)

EBITDA €2.4 billion €2.9 billion (15%)

EBIT before special items €1.5 billion €1.6 billion (5%)

EBIT €1.5 billion €1.9 billion (22%)

Net income €0.9 billion €1.2 billion (27%)

Reported EPS €0.97 €1.31 (26%)

Adjusted EPS €1.10 €1.07 +3%

Operating cash flow €2.5 billion €3.4 billion (25%)

Sales development Volumes Prices Portfolio Currencies

Q3 2016 vs. Q3 2015 4% (5%) (18%) (1%)


150 years

0

1

2

3

4

5

2007 2008 2009** 2010 2011 2012 2013 2014 2015 Q1-Q32016

Free cash flow development

* Cash provided by operating activities less capex ** 2009 adjusted for re-classification of settlement payments for currency derivatives

Free cash flow*(in billion €)

3.2

2.5

3.2

3.9 3.7

2.6

3.2

1.7

3.6

2.9

Diagramm1

2007

2008

2009**

2010

2011

2012

2013

2014

2015

Q1-Q3 2016

Free Cash Flow

3.245

2.502

3.186

3.912

3.695

2.587

3.21

1.7

3.6

2.9

Sheet1

200720082009**201020112012201320142015Q1-Q3 2016

Free Cash Flow3.2452.5023.1863.9123.6952.5873.2101.73.62.9


150 years

Outlook 2016 for BASF Group confirmed

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. We expect EBIT before special items to be slightly below the previous year level due to

significantly lower earnings in Oil & Gas.

Assumptions 2016 GDP growth: +2.3% Growth in industrial production: +2.0% Growth in chemical production*: +3.4% Exchange rate: $1.10 per euro Oil price (Brent): $45 per barrel (previous forecast: $40 per barrel)

* Excluding pharma


Facts and Figures




150 years

Chemicals remains a growth industry

… more food needed by 2050

… more primary energy consumption by 2050

… of the world population will live in cities by 2050

Agriculture Health & nutrition

Energy & resources

Transportation Construction & housing

Consumer goods

… people by 2050

70% 50%~10bn

Electrical & electronics

30%

Chemistry as enabler for current and future needs

11


150 years

Continuous portfolio development

Specialties and solutions

Differentiated commodities

target(in % of sales*)

~ 50% ~ 50%

Maintaining a balanced portfolio

Divestment of businesses, e.g., due to loss of differentiation

Divestment of businesses, e.g., due to

lower market attractiveness

Commoditization leads to restructuring

Growth fields

Innovation pipeline

Acquisitions

* Excluding Oil & Gas sales

Attractive markets Differentiation by process

technologies and integration

Attractive markets Differentiation by customer

proximity and innovations


150 years

Functional crop care Personal care & food Omega-3 fatty acids Enzymes Battery materials Specialty plastics Selected assets in Oil & Gas Refinish coatings Surface treatment*

BASFcore business

Strong partnerships

Gazprom Monsanto Petronas Shell Sinopec Statoil Total Yara

Selected transactions 2010 − until today

Acquisitions

~ €5.2 billion salesin emerging and innovation-driven

businesses

Divestitures

Styrenics Fertilizers Selected assets in Oil & Gas Natural gas trading & storage Custom synthesis business Textile chemicals Polyolefin catalysts Industrial coatings*

~ €20 billion salesin businesses with

limited fit and differentiation

potential

Portfolio development towards more market-driven and innovative businesses

* Closing expected in 2016


150 years

Provide a return on investment above the WACC

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 …

Acquisitions


150 years

50

100

150

200

250

300

350

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Strong track record in operational excellence

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(indexed; CAGR 2001–2015)

Fixed Costs

CAGREBITDA

9%

CAGRSales

6%

CAGRFixed Costs3%


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 billion earnings contribution

NEXT 2008-2011 DrivE 2016-2018

STEP 2012-2015

Diagramm1

2015201520152015

2018201820182018

Sheet1!#REF!

NEXT

STEP

NewPro

1000

1300

1000

1300

1000

Sheet1

201420152018

NEXT100010001000

STEP100013001300

NewPro1000


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


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

Key facts

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


150 years

Four-Way Conversion Catalyst removes particulates

Trilon M® high-performance phosphate alternative

SLENTITE® high-performance insulation material

ecovio® biodegradable polymer solution

Green Sense® resource efficient concrete production

Innovations for a sustainable future

Acronal® MB – from biomass to dispersions


Business development




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


150 years

Delivering consistent, long-term value

Average annual performance with dividends reinvested

0 3 6 9 12 15

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+5.5%

Last 5 yearsNovember 2011 – October 2016

+12.5%

+8.3%

+11.7%

+9.9%

Last 10 yearsNovember 2006 – October 2016

BASF

+6.9%

+0.4%

+13.1%

Diagramm1

MSCI World

DAX

Euro Stoxx

BASF

Ost

9.1%

12.0%

8.1%

6.9

5.5

0.4

13.1

Sheet1

MSCI WorldDAXEuro StoxxBASF

Ost6.95.500.413.1


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 the coming years

Deliver attractive returnsEarn a significant premium on cost of capital

Progressive dividend policy We want to grow or at least maintain our dividend


150 years

Thank you for your attention

BASF Investor Relations

Telefon: 0621 60-48230

E-Mail: [email protected]

Website: www.basf.com/aktie

Twitter: @BASF_IR


150 years

Foliennummer 1Cautionary note regarding �forward-looking statements Foliennummer 3We create chemistry �for a sustainable futureBASF today – a well-balanced portfolio�Total sales 2015: €70.4 billionVerbund: Unique competitive advantageQ3 2016: Financial figures for BASF GroupFree cash flow developmentFoliennummer 9Foliennummer 10Chemicals remains a growth industryContinuous portfolio development Portfolio development towards more market-driven and innovative businesses�Acquisitions Strong track record in operational excellence Operational excellence�DrivE with ~€1 billion earnings contributionInvestments for organic growthFoliennummer 18Innovations for a sustainable future�Foliennummer 20Foliennummer 21Foliennummer 22Profitability of BASF will grow faster than global chemical productionThank you for your attentionFoliennummer 25

BASF – We create chemistry · €70.4 billion sales, €6.7 billion EBIT bSI in 2015 #1-3 in ~70%...

Documents

Transcript of BASF – We create chemistry · €70.4 billion sales, €6.7 billion EBIT bSI in 2015 #1-3 in ~70%...