BASF – United States - We add value as one company...BASF Capital Market Story March 2015 2 150...

BASF Capital Market Story March 2015 1

150 years 150 years

We add value as one company

Magdalena Moll Head of Investor Relations Amber Usman Director Investor Relations Asia Pacific Roadshow Australia March 26 & 27, 2015


150 years

Cautionary note regarding forward-looking statements

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.


150 years

Chemistry as an enabler BASF has superior growth

opportunities: – sustainable innovations – investments – emerging markets

The #1 chemical company €74 billion sales, €7.4 billion

EBIT bSI in 2014 #1-3 in ~75% of businesses,

in almost all countries 6 integrated Verbund sites,

production in 60 countries

A track record of strong sales and earnings growth

12% average annual dividend increase, >3% yield in every single year*

~€79 billion market capitalization end of February 2015

Perspective

* For 2004-2014

Ludwigshafen, Germany

Antwerp, Belgium

Nanjing, China

Kuantan, Malaysia Geismar,

USA Freeport, USA

Verbund site

Positioning

We create chemistry for a sustainable future

Performance

20

30

40

50

60

70

80

90

2008 2009 2010 2011 2012 2014 2013 2015

Vorführender

Präsentationsnotizen

Let me start out with a few Facts & Figures on BASF. Our purpose: We Create Chemistry for a Sustainable Future. We make this claim as the #1 chemical company globally, with 74 billion euros in sales and an EBIT bsi of 7.4 billion euros in 2014. We have been continuously transforming and developing BASF. We are a highly innovative company which has moved closer downstream. This resulted in a strong business and share performance over the past 10 years. Our perspectives are bright, as we help with solutions addressing the challenges of the future. In 2050 more than 9 billion people will live on our planet. This triggers huge global challenges, with respect to: resources environment and climate food and nutrition and quality of life. Innovation will play a key role in solving these challenges and chemistry will act as an enabler. This is also reflected in our new company claim: “BASF – We create Chemistry”


150 years

Percentage of sales 2014*

* Not depicted here: ~5% of Group sales reported as ‘Other‘. Paper Chemicals results have been incl. In Performance Products until the end of 2014. Thereafter Paper Chemicals has been dissolved.

BASF today – a well-balanced portfolio Total sales 2014: €74 billion


150 years

Strategy – Our purpose Sustainability is an integral part of our strategy

Vorführender


The purpose of our company is “We create chemistry for a sustainable future “. For BASF this means that the 3 pillars of sustainable development – economic, environmental and social responsibility – have equal status and build the foundation for our strategy.


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


Business review

Growth levers

Vorführender



150 years

BASF with continued earnings growth

Business performance* Q4’14 vs. Q4’13 FY’14 vs. FY’13 Sales €18.0 billion (1%) €74.3 billion 0% EBITDA €2.9 billion +11% €11.0 billion +6% EBIT before special items €1.5 billion +3% €7.4 billion +4% EBIT €1.7 billion +7% €7.6 billion +7% Net income €1.4 billion +26% €5.2 billion +8% Reported EPS €1.54 +25% €5.61 +7% Adjusted EPS €1.04 +4% €5.44 +2% Operating cash flow €2.0 billion +4% €7.0 billion (14%)

Sales development Period Volumes Prices Portfolio Currencies

Q4’14 vs. Q4’13 1% (4%) 0% 2%

FY’14 vs. FY’13 4% (3%) 0% (1%)

* Previous year values restated due to dissolution of disposal group “Natural Gas Trading“


150 years

0

1

2

3

4

2004 2005 2006 2007 2008 2009** 2010 2011 2012 2013 2014

Free cash flow development reflecting increased capex in recent years

* 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

2.6

3.3 3.5

3.2

2.5

3.2

3.9 3.7

2.6

3.2

1.7


150 years

BASF in Asia Pacific

* Some sites are not shown due to scale. Site and office numbers refer to companies of significant size where BASF holds a stake greater than 50% .

** Sales by location of customer

Regional headquarters

Verbund sites

Selected production sites

R&D/Technical centers

Asia Pacific service center

Singapore

Hong Kong

Kuala Lumpur

Nanjing

Kuantan

Customers from 16 markets

Around 100 production sites*

More than 130 sales offices*

17,060 employees, thereof approx. 750 R&D staff

Sales in 2014: ~€12.3 billion**

EBIT before special items in 2014: ~€614 million

Vorführender


This is a snapshot of where we are in the region. BASF is very well established in Asia Pacific with respect to our customer base, our people, and our manufacturing footprint. We have an excellent team of more than 16,000 employees, who are working in more than 100 production sites and nearly 130 sales offices in the region. In Asia Pacific, our overall performance in 2014 remained below expectations. We achieved sales (by location of customer) of €12.27 billion, a decrease of 1 percent compared to an already disappointing year 2013 (€12.4 billion). Due to lower top line, continuous price pressure and higher fixed cost including start up costs for new plants EBIT before special items in Asia Pacific declined to €614 million (in 2013 €842 million).


150 years

Functional Materials &

Solutions 26%

Sales* by segment

Chemicals 29%

Other 9%

Performance Products 32% Greater

China 45%

Australia, New Zealand (ANZ)

4%

South Asia 10%

Japan 12%

South Korea 9%

ASEAN 20%

€12.3 billion

€12.3 billion

Sales by sub-region

Agricultural Solutions 4%

Sales Asia Pacific 2014

South Asia: India, Pakistan, Bangladesh, Sri Lanka ASEAN: Singapore, Philippines, Vietnam,

Thailand, Indonesia, Malaysia

*Sales to third parties by location of customers

Vorführender


Let’s have a closer look at the sales of 12.27 billion euros that we have achieved in 2014: In the course of 2014, we saw a loss of momentum in industrial production all across Asia Pacific, with a strong demand from the automotive industry being the only bright spot. While the first three quarters generally saw volume increases, the fourth quarter was characterized by customers destocking their inventories in expectation of a further decreasing oil price in the upcoming year. Overall, this resulted in a slight decrease in volumes for 2014, with the notable exceptions of India and Malaysia. In our business segments, Chemicals was strongly affected by stiff competition and price pressure throughout the year, with prices declining further due to the falling oil price in the fourth quarter. In addition, the segment suffered from the Force Majeure situation at BASF’s ELLBA Eastern joint venture with Shell – a business that BASF exited in December. The positive developments in our automotive businesses as well as in Electronic Materials, Performance Chemicals and Nutrition & Health were not able to compensate this.


150 years

We want to grow or at least maintain our dividend

Dividend proposal of €2.80 per share, an increase of 3.7%

Average annual dividend increase of approx. 12% (2005-2014)

Attractive dividend yield of 4.0% in 2014**

Dividend yield above 3% in any given year since 2005

3.7%

Attractive shareholder return

Key facts

Dividend per share (€)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

2005 2008 2011 2014

0.50

1.00

1.50

2.00

* Dividend yield based on share price at year-end

3.1% 4.1% 3.8% 7.0% 3.9% Yield*

** Based on BASF share price of €69.88 on Dec 30, 2014

Proposal:

4.6%

2.50

3.7%

3.00

3.5% 4.0%

1.00

1.50

1.95 1.95 1.70

2.20 2.50 2.60 2.70 2.80

Dividend policy


150 years

Average annual performance with dividends reinvested

0 3 6 9 12 15 18

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+10.1%

Last 5 years March 2010 – February 2015

+19.9%

+9.1%

+15.3%

+14.7%

Last 10 years March 2005 – February 2015

BASF

+10.0%

+4.8%

+16.1%

Delivering consistent, long-term value


150 years

Outlook 2015 Expectations for the global economy

2014 (actual)

GDP 2.5%

Chemicals (excl. pharma) 4.0%

Industrial production 3.4%

US$ / Euro 1.33

Oil price: Brent (US$ / bbl) 99

Forecast 2015

2.8%

4.2%

3.6%

1.20

60-70


150 years

Outlook BASF Group 2015

We aim to increase volumes and sales excluding the effects of acquisitions and divestitures.

Sales are likely to be slightly higher than in 2014, driven by higher sales in the Performance Products and Functional Materials & Solutions segments.

We expect EBIT before special items to be on the level of 2014. Higher earnings in our chemicals business and in the Agricultural Solutions segment are anticipated to compensate for considerably lower earnings in Oil & Gas.

We aim to earn again a substantial premium on our cost of capital, but on a lower level than in 2014.


150 years

Western European gas prices predominantly market-driven

Gas markets outside of Europe partially regulated (e.g. Russia, Argentina)

Annual oil price sensitivity for O&G segment: ±€20 million EBIT per ±$1 per bbl. (Brent)

Oil & Gas: Impact of the current oil price and measures

Key Facts Production split* 2014

Operational excellence

Cost optimization

CAPEX optimization

Active portfolio management

Measures

Liquids ~25%

~136 million

boe

Natural Gas ~75%

*Exploration & Production

Oil price vs. Western European gas price (2010 = 100)

80

130

180

230

2010 2011 2012 2013 2014

Natural Gas TTF Netherlands Oil price Brent


150 years

EBIT before special items

Million € 2014 Forecast 2015

Chemicals 2,367 slight decrease Performance Products 1,455 considerable increase Functional Materials & Solutions 1,197 considerable increase Agricultural Solutions 1,109 considerable increase Oil & Gas 1,795 considerable decrease Other (566) slight decrease

BASF Group 7,357 at prior-year level

Outlook 2015-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%). For sales, “slight” means a change of 1-5%, while “considerable” is used for changes of 6% and higher. “At prior-year level” indicates no change (+/-0%).

Vorführender


Against this background we provide the following guidance for our 5 business segments. In Chemicals, EBIT before special items is expected to be slightly below the 2014 level due to startup costs for new plants of around 150 to 200 million euros in 2015. We anticipate EBIT before special items in Performance Products to be considerably higher than in 2014, as a result of higher sales volumes, our restructuring efforts and continued cost discipline. In 2015, we expect a stronger demand for our innovative systems and solutions, especially from the automotive and construction industries. Therefore, we aim to considerably increase earnings in Functional Materials & Solutions. In Agricultural Solutions, we expect a considerable increase in EBIT before special items driven by our innovative products and solutions. More favorable exchange rates should provide some tailwind in a volatile market environment. In Oil & Gas, we will not be able to offset oil price related lower earnings with higher production volumes in Norway and Russia as well as higher expected earnings in the gas trading business. Therefore, EBIT before special items in our Oil & Gas segment will be considerably lower. In Other, we expect a slight decrease in EBIT before special items due to the divestiture of our participations in Styrolution and ELLBA Eastern.


Business review

Growth levers – Portfolio development

– Market approach – Innovations for a sustainable future – Investments – Acquisitions – Operational excellence

Vorführender



150 years

Portfolio development Moving downstream towards customer industries

Functionalized Materials & Solutions Customized Products Classical Chemicals

2014 in % of sales**

Chemical Industry First customer industries*


~ 40%

~ 35% ~ 65%


~ 50%

~ 60%

~ 50%


~ 30% ~ 70%

* Agriculture, Construction, Consumer Goods, Health & Nutrition, Electronics, Energy & Resources, Transportation ** Sales excluding Oil & Gas. Targets were published on November 29, 2011.

Vorführender


We are on track to move our portfolio more downstream and closer to key customer industries. By 2020, we want to achieve 70% of our sales from customized products and functionalized materials and solutions. In 2014, customized products as well as functionalized materials & solutions reached 65% of our portfolio size, a significant improvement vs. 2010.


150 years

Catalysts Construction chemicals Water-based resins Pigments, plastic additives Personal care & food Omega-3 fatty acids Functional crop care Enzymes Oil & Gas Battery materials Specialty plastics …

BASF core business

Strong partnerships

Gazprom Monsanto Petronas Shell Sinopec Statoil Total

Selected transactions 2005 − today

Acquisitions

~ €14 billion sales

Divestitures

Agro generics Vitamin premixes Fertilizers Construction equipment,

flooring and wall systems Styrenics Styrene monomer Textile chemicals …

~ €7 billion sales

Portfolio development Towards more market driven and innovative businesses


150 years

Monomers

Intermediates

Dispersions & Pigments

Performance Chemicals

Care Chemicals

Paper Chemicals

Coatings

Catalysts

Construction Chemicals

BASF sales by first customer industry*

> 15 %

> 10 %

< 10 %

> 15 %

Consumer goods

Transportation

Construction

Energy & Resources

Market approach Cross-divisional customer industry approach

* Excluding Oil & Gas, Crop Protection and Other. 2013 numbers

Petro- chemicals

Performance Materials

Bubble Size: BASF divisional sales by first customer industry*/**

** Nutrition & Health sales predominantly into Health & Nutrition market

Vorführender


The enhanced cross-divisional approach is a core element of our growth strategy and will take us to the next level of competitiveness. We have identified several key growth industries such as consumer goods, transportation, construction and energy & resources. As you can see, for most of these industries we already have a broad portfolio and we want to further strengthen our footprint through a comprehensive cross-divisional approach. Our 2013 sales to these industries accounted already for more than 40% of total sales, excluding Oil & Gas, agrochemicals and Other. We share industry knowledge between divisions and systematically build on our industry expertise. With this new structure, we can respond more quickly to market changes. Even more importantly, it brings us much closer to our customers and allows us to tailor solutions that better help them in their industries. All in all, we expect significant additional sales and earnings contributions via this cross-divisional market approach.


150 years

Further increase of R&D spending in 2015

~10,700 employees in R&D

~3,000 projects

Research Verbund: Cooperations with ~600 excellent partners from universities, start-ups and industry

Target 2015: – €10 billion in sales from

innovations launched within the last 5 years

Strong commitment to innovation Innovations for a sustainable future

Key facts

1.5 1.6

1.7 1.8 1.9

0,0

0,5

1,0

1,5

2,0

2010 2011 2012 2013 2014

R&D expenditures (€ billion)

Chemicals 10%

Performance Products 19%

Functional Mat. & Sol. 20%


Oil & Gas 3%

Corporate Research 21%

2.0

1.5

1.0

0.5

0


150 years

0

50

100

150

BASF Competitors

FWC™ Combines functionality of a 3-way conversion catalyst with integrated filter on a ceramic substrate

Reduces gaseous emissions Precious metal-based catalytic coating removes exhaust gases from engine emissions**

Removes particulates Filters & combusts particulates

Complies with emissions limits Helps automakers meet new Euro 6c regulatory standards

FWC™ introduced in 2013 Sustains BASF’s leading technology position

Leading position: Global mobile emissions catalysts patents*

* 2009 – 2013 ** Hydrocarbons, carbon monoxide, nitrogen oxides *** https://www.basf.com/en/company/news-and-media/science-around-us/catalytic-converter.html

FWC™ reduces emission of gaseous pollutants and particulates

HC

CO

NOx

N2

H2O

CO2

Particulates

Innovation: Four-Way Conversion Catalyst (FWC™)


150 years

Innovation: Green Sense® Concrete for sustainable construction

Envi

ronm

enta

l Im

pact

H

iigh

Reference Concrete

High Low

Low

Total Cost of Ownership

BASF’s Green Sense® Concrete system consists of:

1) Innovative admixture products

2) Concrete mix services

3) Eco-efficiency analysis

Replaces up to 70% of cement with recycled materials

Superior eco-efficiency

Applied in the construction of landmark projects, e.g. One World Trade Center, NYC

Vorführender


Cement is the most expensive and highest environmental burden ingredient in concrete and it is a truly global construction product. Green Sense Concrete utilizes state-of-the art concrete mix design optimization expertise in combination with BASF’s chemical admixtures to replace up to 70% of the cement with recycled materials (e.g. fly ash). It meets or exceeds design and engineering requirements, supports contractors’ needs for improved constructability, e.g. easy to pump, and delivers a solution with a lower environmental footprint. Through our technical and site support services, we work to anticipate and overcome challenges before they occur by selecting the appropriate customized product solution for increased production efficiency and speed of construction. Green Sense® Concrete is: innovative, environmentally-preferable, cost effective, recycled materials are used with innovative BASF admixture products to meet or exceed concrete performance targets. Hard to copy. Lighthouse projects include the One World Trade Center. The building is 541 meter tall. It has 104 levels. By using Green Sense in this building around 15,800 tons of CO2 equivalents and ~25,400 megawatt hours of energy in construction could be avoided. [Background information: sales 2014 €35 million; EBIT ~2.5 million; Plan 2020 sales €50 million; EBIT ~€4 million]


150 years

Innovation: Trilon® M Chelating agent for more sustainable detergents and cleaners

Trilon® M: Phospate free dish washing solution

Trilon® M – Alternative to phosphate for automatic dish washing

High sustainability performance: Bio-degradable and eco-friendly

Fast growing global market demand driven by regulatory changes and consumer demand for environmentally-friendly products

2010: Capacity expansion to 120,000 tons

2014: Announcement to build a new Trilon® M world scale plant in Alabama, USA

Compared with alternative chelating agents Trilon® M

Is readily biodegradable

Meets eco-label requirements

Has better eco-toxicology profile

Shows high performance

Vorführender


Trilon® M is an innovative chelating agent that is readily biodegradable and improves the cleaning effect of detergents and cleaners in home care and industrial cleaning applications. Chelating agents increase the cleaning action of detergent and dishwasher products, by reducing the concentration of metal ions in aqueous solutions. At the same time, they convert poorly soluble compounds into ones that are readily soluble in water. In January 2014, BASF announced to build a new chelating agent plant in Theodore, Alabama (USD 90 million investment). This investment will free up capacity in Ludwigshafen to serve the increasing European demand triggered by the phosphate regulation for consumer automatic dishwashing detergents which is expected in 2017. Trilon M is available worldwide in liquid and various solid forms. Criticizm on phosphates: Phosphates have a poor reputation on ecological terms. This is because phosphate is also an important plant nutrient. In the 1960s and 1970s, it was mainly the large amounts of phosphates contained in waste water from washing machines that led to algae growth; these consumed the oxygen in the water, disrupting the ecological balance of lakes and rivers.


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

Vorführender


Superabsorbent polymers can absorb and retain extremely large amounts of liquid relative to their own mass. They are used as a main component in baby diapers, incontinence and feminine hygiene products. Starting end of 2016, BASF will launch a new generation of highly innovative superabsorbent polymers under the trademark SAVIVATM Based on its round-shaped particles with micro-pores, SAVIVATM has an innovative liquid distribution mechanism, making it a highly efficient superabsorbent polymer in a diaper core. It has been tested comprehensively in laboratories, in diaper prototypes and with end consumers in home-use tests, confirming its outstanding properties and its performance in diapers. With its unique properties and efficiency SAVIVATM is making a contribution to sustainability in terms of weight reduction of diapers and also addresses the needs of a changing social environment. Background information (public) Costs to extend and revamp existing plants to new technology: Up to €500 million ($625 million) over the next 2 to 3 years Strategy: BASF has developed a revamp strategy. In order to keep time-to-market as short as possible, BASF will extend and modify already existing production sites,” The first wave of revamping existing plants will be kicked off in Europe, closely followed by plants in Asia and the Americas. This underlines the business approach BASF is taking, investing close to its customers and providing a global footprint for a reliable, global supply. [Background informaton: Sales 2014 € 0; Launch 2016; Goal 2020 €~650million or 320 kt]


150 years

Innovation: New acrylic acid technology BASF 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

Key facts Lower production cost than

industry average

Efficiency gains: run-time extension higher throughput lower energy consumption

Proprietary technology,

new process protected by 280 active patent families

3 out of 6 production sites already equipped: Ludwigs-hafen, Antwerp and Nanjing; Camaҫari (Brazil) is currently starting-up

Source: BASF estimate

Vorführender


After some product innovations, let me now come to a process-related innovation example for acrylic acid, an important key raw material for our downstream units (e.g. superabsorbent polymers, acrylates, dispersions). Our continuous R&D work leads us to a best-in-class-technology with a superior cost position. We are able to realize significant efficiency gains: run time extensions, higher throughputs, lower energy consumption�are advantages – just to name a few of them. The gained knowledge is a BASF-proprietary technology and thoroughly protected by approximately 280 patent families. And we do not stand still … The continuous R&D efforts are of utmost importance for us in order to safeguard this important competitive edge. As the largest producer of acrylic acid worldwide, we are rolling-out this process in our sites: 3 (Ludwigshafen, Antwerp and Nanjing) out 6 production sites are already equipped. Camaҫari (Brazil) is currently starting-up.


150 years

Growth fields for innovation

Growth fields

White Biotechnology

Materials, Systems & Nanotechnology

Raw Material Change

Key customer industries

Health & Nutrition

Consumer Goods

Transportation

Energy & Resources

Electronics

Agriculture

Construction

Technology fields

...

Batteries for Mobility

Enzymes

Heat Management for Construction

Organic Electronics

Functional Crop Care

Plant Biotechnology

E-Power Management

Wind Energy

Lightweight Composites

Water Solutions

Vorführender


We work on a dynamic portfolio of ten growth fields, which will deliver innovative, sustainable solutions for seven key customer industries. Examples of growth fields in which we already offer solutions are batteries for electro-mobility, functional crop care, water treatment and enzymes. Progress is propelled by cross-fertilization on technology level.


150 years

Acquisitions … will contribute to profitable growth in the future

Provide a minimum return on investment of 8% p.a. after tax

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 …

Vorführender


Acquisitions will contribute to our profitable growth as well. What are our acquisition criteria? With respect to future acquisitions, we want to acquire businesses which... generate profitable growth above the industry average are innovation driven offer a special value proposition to customers and reduce earnings cyclicality for the BASF Group. Additionally, any future acquisition has to fulfill our strict financial criteria it should be EPS accretive by year three at the latest and it should yield a minimum return on investment after tax of 8% per year. The minimum hurdle rate will increase if the acquisition is made in a country which belongs to a higher risk category.


150 years

.

Major investment project start-ups in 2015

Pasir Gudang

Theodore

Polymer dispersions*

Chelating agents*

Coating resins*

Shanghai

Upstream businesses Downstream businesses

Major capex projects for start-up in 2015

Camaҫari Acrylic acid +160,000 mt SAP +60,000 mt

Chongqing

Nanjing

Geismar

Maoming

Neopentylglycol +40,000 mt

Specialty amines* Ethylene oxide*

MDI +400,000 mt

Isononanol*

TDI complex +300,000 mt Specialty amines* Crop protection products*

Formic acid +50,000 mt Polyurethane systems

Polyamides +100,000 mt

Ludwigshafen

* Capacity not published

Yesan Specialty plastics*

Precious metals recycling*

Cinderford

Guaratingueta Crop protection

formulations*

Automotive catalysts*

Automotive catalysts*

Chennai


150 years

Investments for organic growth

Performance Products 15%

Oil & Gas 21%

€19.5 billion

Functional Materials & Solutions 13%

Capex budget 2015-2019

Other 12%

Chemicals 33%

Capex budget 2015-2019

Asia Pacific 18%

€19.5 billion

South America* 8%

North America 27%

Europe 45%


Other 2%

by segment by region

* Includes also regions Africa and Middle East


150 years

Operational excellence programs ~€1.3 billion earnings contribution by 2015

0

1,000

2,000

3,000

4,000

2014 2015

Former cost saving programs

pre- 2008 NEXT

2008-2011 STEP

2012-2015

Annual earnings contribution in € million Targeted annual earnings

contribution increased from €1 billion to ~€1.3 billion by end of 2015

€1 billion achieved by the end of 2014

Optimization of processes and structures in all regions, e.g. manufacturing, maintenance

supply chain

engineering, best-cost country sourcing

Project timeline: 2012–2015

One-time cost : ~€1 billion

STEP program


150 years

Restructuring measures in Performance Products strengthening competitiveness

Reduction of ~2,400 positions until end of 2017

Annual earnings contribution of ~€500 million from 2017 onwards

Run rate of €250 million by end of 2015

One-time costs in the magnitude of ~€250-300 million

Future investments - Innovations and R&D - Organic growth incl. capital expenditures - Selected acquisitions in growth fields


150 years

Operational excellence Strong track record

BASF Group* 2001–2014 (Index; CAGR 2001–2014)

50

100

150

200

250

300

350

2001 2003 2005 2007 2009 2011 2013

10 %

7 %

3 %

EBITDA

Sales

Fixed costs

* Excl. companies with major IFRS 10/11 restatements, i.e. BASF YPC Nanjing, Libya onshore, other Oil & Gas and Catalysts companies

Fixed cost management Cost discipline and self-help

remain key priorities Restructuring of Performance

Products on-track to achieve €500 million earnings contribution by 2017 (run rate ~€250 million by the end of in 2015)

STEP program: Targeted annual earnings contribution increased from €1 billion to ~€1.3 billion by end of 2015

CAGR 2001 – 2014

2014

Vorführender


We grew our business strongly but focused on operational excellence. Since 2001, we have increased our EBITDA by 10%, our sales by 7% and our fixed costs only by 3% per annum. – despite major acquisitions since 2006. This is what we call operational excellence: Focus on efficiency, fixed cost management, restructuring and synergy generation. And we will continue to further improve our cost base, for example through cost efficiency programs. In order to make it comparable, we have eliminated the largest IFRS restatement impacts from all prior years here. � *Total cost = EBIT bSI


150 years

• … is the #1 chemical company

• … has a strong track record of profitable growth

• … relentlessly focuses on Operational Excellence

• … targets promising growth opportunities

• … is committed to delivering high shareholder returns also in the future.

BASF…


Appendix I – Q 4 2014 results

Vorführender



150 years

Chemicals Petrochemicals drive earnings growth

Intermediates 686 (3%)

Monomers 1,582 +6%

Petrochemicals 1,803 (10%)

€4,071 (3%)

510580

0

200

400

600

Q4'13 Q4'14

Q4’14 segment sales (million €) vs. Q4’13 EBIT before special items (million €)


Q4’14 vs. Q4’13 (3%) (4%) 0% 4%

FY’14 vs. FY’13 3% (3%) 0% 0%

FY'13 FY'14

1,000

2,000

1,500

500

2,500 2,182 2,367

+14% +8%


150 years

Performance Products Sales slightly up and earnings on prior year level

Performance Chemicals 840 +5%

Care Chemicals

1,164 +1%

€3,718 +1%

Paper Chemicals 341 (1%)

Q4’14 segment sales (million €) vs. Q4’13

Nutrition & Health 492 (4%)

Dispersions & Pigments

881 +1%

216 217

0

100

200

300

Q4'13 Q4'14


Q4’14 vs. Q4’13 (2%) 0% 0% 3%

FY’14 vs. FY’13 1% 0% 0% (2%)

EBIT before special items (million €)

FY'13 FY'14

1,000

200

1,200

400 600 800

1,400 1,600 1,455

1,365

0% +7%


150 years

Functional Materials & Solutions Continued robust demand from automotive

Catalysts 1,577

+19%

Construction Chemicals

511 +3%

Coatings 771 +3%

€4,444+8%


238220

0

50

100

150

200

250

Q4'13 Q4'14 FY'13 FY'14


Q4’14 vs. Q4’13 4% 0% 0% 4%

FY’14 vs. FY’13 5% 0% 0% (2%)


Performance Materials 1,585 +2%

1,000

600

400

200

800

1,200 1,197 1,070

(8%) +12%


150 years

Agricultural Solutions Strong finish to the year


0

200

400

600

800

1,000

Q4 Q42014 2013

890 1,109

020406080

100120140

Q4'13 Q4'14


Q4’14 vs. Q4’13 22% (3%) 0% 6%

FY’14 vs. FY’13 5% 2% 0% (3%)


FY'13 FY'14

1,000 1,200

600 800

400 200

1,400 1,222 1,109

67

123

+84% (9%)


150 years

406 383

1,450 1,412

Oil & Gas Lower oil and gas prices impacted earnings

Exploration & Production

728 (15%)

Natural Gas Trading 3,277 0%

€4,005 (3%)

Q4’14 segment sales (million €) vs. Q4’13 EBIT before special items / Net income (million €)*

FY '13 FY '14

Sales development Period Volumes Price/Currencies Portfolio

Q4’14 vs. Q4’13 10% (12%) (1%)

FY’14 vs. FY’13 14% (13%) 1%

Natural Gas Trading Exploration & Production Net income

0

1,000

2,000 1,856 1,795

141 59

361

288 637 446

Q4 '13 Q4 '14

502

347

0

200

400

800

1,730 1,464

* Pevious year values restated due to dissolution of disposal group “Natural Gas Trading“

600


150 years

Review of ’Other’

Million € Q4 2014 Q4 2013 2014 2013

Sales 700 1,106 3,609 4,190 EBIT before special items (28) (114) (566) (618) Thereof corporate research costs group corporate costs currency results, hedges and other valuation effects other businesses

(98) (59) 110

23

(102) (66)

(109)

99

(389) (218)

(2)

133

(386) (237) (190)

254

Special items 473 3 433 (46)

EBIT 445 (111) (133) (664)


150 years

Million € 2014 2013* Cash provided by operating activities 6,958 8,100 Thereof changes in net working capital miscellaneous items

(699) (953)

714 (720)

Cash provided by investing activities (4,496) (5,994) Thereof payments related to tangible / intangible assets (5,296) (4,873) acquisitions / divestitures 373 (1,093) Cash used in financing activities (2,478) (1,874) Thereof changes in financial liabilities dividends

288 (2,766)

828 (2,702)

Free cash flow decreased to €1.7 billion; reduction due to a swing in net working capital and higher capex

Payments related to tangible/intangible assets amounted to €5.3 billion (+€423 million) Continued high dividend payout in 2014: ~€2.8 billion

2014

Operating cash flow development in 2014

* Previous year values restated due to dissolution of disposal group “Natural Gas Trading“


150 years

Balance sheet remains strong Balance sheet 2014 vs. 2013 (billion €)

Liquid funds

Accounts receivable

Long-term assets 28.2

15.4

27.8

38.3

10.2

1.8

Other liabilities

Financial debt

Stockholders’ Equity

Dec 31, 2013

Dec 31, 2013

Dec 31, 2014

Dec 31, 2014

64.2

27.7

14.4

22.1

Inventories

Other assets

9.6

3.7

64.2

Highlights 2014 Increase in long-term assets

by €5.7 billion, due to capex and acquisitions

Increase of pension provisions by €3.6 billion due to continued decline of discount rates

Financial debt increased by €1.0 billion reflecting issuance of bonds

Net debt: €13.7 billion Net debt/EBITDA ratio: 1.2 Equity ratio: 40%

44.0

10.4

1.7

9.6

4.0

71.4 71.4

10.2 11.3

(Previous year values restated due to dissolution of disposal group “Natural Gas Trading“)


150 years

150 years

BASF – United States - We add value as one company...BASF Capital Market Story March 2015 2 150...

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