BASF Analyst Conference Q1 2011

1BASF 1st Quarter 2011 Analyst Conference Call

Powerful start to 2011BASF remains on growth track

First Quarter 2011 Financial highlightsMay 6, 2011


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


Sales €19.4 billion +25%EBITDA €3.4 billion +28%EBITDA margin 17.4% 17.0%EBIT before special items €2.7 billion +40%EBIT €2.6 billion +39%

Net income €2.4 billion +134%EPS €2.62 +134% Adjusted EPS €1.94 +47%

Business performance Q1’11 vs. Q1’10

Powerful start to 2011 First quarter highlights

Excellent sales and earnings growth in the chemical activitiesCognis contributed significantly to the good results in Performance ProductsAgricultural Solutions started with strong sales and earningsHigher sales and earnings in Oil & Gas despite lower volumes from Libya


Important milestones in Q1 2011

Gas for Europe StrategyMDI project in Chongqing Fertilizer activities

Project approvedConstruction already startedCompletion in 2014World-scale capacity of 400,000 metric tons Total investment~€860 million

Two Memoranda of Understanding signed with Gazprom

– Development of two additional sites of Achimov deposits in Russia

– Acquisition of 15% stake in South Stream

10.3% stake in K+S sold– Capital gain before taxes

€887 millionPlan to sell major part of the fertilizer assets:

– Sales: Mid three-digit million– Capacity: 2.5 million tons


Chemicals Record earnings

Intermediates709+22%

Inorganics353

+25%

Petrochemicals2,214+28%

€3,276+27%

461

687617

537

765

0

200

400

600

800

Q1 Q2 Q3 Q4 Q1

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q1’11 vs. Q1’10 4% 21% 0% 2%

Q1’11 segment sales (million €) vs. Q1’10 EBIT before special items (million €)

20112010


Plastics Strong volumes and prices lifted sales and earnings

Polyurethanes1,479+21%

Performance Polymers

1,309+34%

€2,788 +27%

279

349 371

285

393

0

200

400

Q1 Q2 Q3 Q4 Q1

Sales development Period Volumes Prices Portfolio Currencies

Q1’11 vs. Q1’10 14% 11% 0% 2%


20112010



Q1’11 vs. Q1’10 3% 5% 29% 2%

Performance Products Acquisitions are paying off

419471

370294

554

0

100

200

300

400

500

600

Q1 Q2 Q3 Q4 Q1

PerformanceChemicals

895+23%

Care Chemicals1,376+117%

€3,982+39%

Paper Chemicals393- 6%


Nutrition & Health469+27%

Dispersions & Pigments

849+17% 20112010


Cognis – integration objectives

TargetsAchieve 20% EBITDA margin in the Performance Products segment by 2012Acquisition accretive as of 2012

CostsOne-time integration costs of €290 million until end of 2013 Inventory step-up of €120 millionCosts already incurred:−

2010: €80 million (thereof €60 million inventory step-up)

−

Q1/2011: €158 million (thereof €60 million inventory step-up)

SynergiesGenerate €275 million of additional EBIT− €135 million growth synergies by the end of 2015− €140 million cost synergies by the end of 2013



Q1’11 vs. Q1’10 18% 13% 1% 3%

Functional Solutions Strong automotive demand drove sales and earnings

Catalysts1,677+58%

Construction Chemicals

469+9%

Coatings672

+13%

€2,818+35%

111

165 158

33

142

0

50

100

150

Q1 Q2 Q3 Q4 Q1


20112010


Agricultural Solutions Strong sales and earnings growth

321 343

0

100

200

300

400

Q1 Q1


20112010

0200400600800

1,0001,2001,400

Q1 Q120112010

+7% +7%


Q1’11 vs. Q1’10 8% (2)% 0% 1%

1,1451,230


273 306

0

200

400

600

800

Q1 Q1

Oil & Gas Higher oil and gas prices compensated for lower volumes

Exploration & Production1,068+4%

Natural Gas Trading

2,387+9%

€3,455 +7%

Sales developmentPeriod Volumes Prices/Currencies Portfolio

Q1’11 vs. Q1’10 (13)% 20% 0%

118

EBIT bSI Natural Gas TradingEBIT bSI Exploration & Production

Net income

Q1’11 segment sales (million €) vs. Q1’10 EBIT before special items / Net income (million €)

20112010

484626

629744

145


Review of “Other”

Million € Q1 2011 Q1 2010Sales 1,812 1,338thereof Styrenics 843 666

EBIT before special items (209) (266)thereof Corporate research

Group corporate costs Currency results, hedges and other valuation effects Styrenics, fertilizers, other businesses

(83) (55) (78)

185

(82) (51)

(136)

101

Special items (35) (34)

EBIT (244) (300)


Excellent operating cash flow in Q1 2011

Million € Q1 2011 Q1 2010Cash provided by operating activities 2,255 1,368thereof Changes in net working capital 260 (680)

Cash provided by investing activities 257 (454)thereof Payments related to tangible / intangible assets (547) (392)

Cash used in financing activities (1,200) (757)thereof Changes in financial liabilities

Dividends (1,073)

(127)(679) (78)

Despite improved business activities net working capital decreased slightly Free cash flow at €1.7 billion Net debt reduced by €2.4 billion to €11.1 billion since December 31, 2010€972 million proceeds from the sale of K+S stake

First quarter 2011


We aim to grow sales on average by two percentage points per year faster than chemical production growthWe strive to grow our earnings further year by year, and to achieve an EBITDA margin of 18% by 2012

We are increasing our Brent oil price forecast from $90/bbl to $100/bblWe are assuming that oil production in Libya will not restart during 2011 →EBIT before special items from our Libyan oil production for the full year 2011

will be about €1 billion lower compared with 2010 (thereof about €700 million of non-compensable oil taxes)

Assumptions

Medium-term targets

Outlook 2011

We expect to generate significantly higher salesWe aim to significantly exceed the 2010 EBIT before special itemsadjusted for non-compensable oil taxes (2010: €7.2 billion)We expect to achieve a high premium on our cost of capital

Targets 2011

16BASF 1st Quarter 2011 Analyst Conference Call 16

Back-Up



Q1’11 vs. Q1’10 5%* 13% 6% 1%

BASF Group Q1 2011

* Volumes +9% (without Oil & Gas)

2.02.2 2.2

1.8

2.7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Q1 Q2 Q3 Q4 Q1

EBIT before special items (billion €)

15.5 16.2 15.8 16.419.4

0

4

8

12

16

20

Q1 Q2 Q3 Q4 Q1

Sales (billion €)

2011201020112010


Financial highlights Strong earnings improvement in Q1

Million € Q1 2011 Q1 2010 Δ% Q4 2010 Δ%Sales

changes due to - volumes - prices - portfolio - currencies

19,361 15,454 +25%

+5% +13%

6% +1%

16,424 +18%

EBITDA 3,365 2,627 +28% 2,703 +25%

EBIT before special items 2,732 1,954 +40% 1,765 +55%

Special items (182) (114) . (78) .

EBIT 2,550 1,840 +39% 1,687 +51%

Net income 2,411 1,029 +134% 1,100 +119%

EPS (€) 2,62 1,12 +134% 1,20 +118%

Adjusted EPS (€) 1,94 1,32 +47% 1,39 +40%


Balance sheet further strengthened

Balance sheet March 31, 2011 vs. end of 2010 (billion €)

Liquid funds

Accounts receivable

Long-term assets

22.7

15.0

21.7

34.5

10.2

1.5

Other liabilities

Financial debt

Stock- holders’ Equity

Mar 31 2011

Mar 31 2011

Dec 31 2010

Dec 31 2010

60.2

32.7

11.1

2.8

60.2

23.5

13.9

22.8

Inventories

Other assets

8.7

4.9

8.7

4.5

59.459.4

Proceeds from the sale of BASF’s stake in K+S were used to reduce debt

Net debt decreased by €2.4 billion to €11.1 billion.

Accounts receivable increased by €0.9 billion due to the expansion of our business

Equity ratio at 39% (up 1 percentage point)


Cognis integration Generating €275 million of growth and cost synergies

Providing joint customer base with access to broader portfolioIncreasing solution capabilitiesExtending innovation capabilitiesLeveraging regional set-up

Cost synergiesRealizing procurement cost savingsConsolidating of administrative structuresImproving production efficiencyConsolidating IT landscape

Synergies (million €)

140

135

0

50

100

150

200

250

300

Growth synergies (by the end 2015) Cost synergies (by the end of 2013)

Growth synergies

BASF Analyst Conference Q1 2011

Economy & Finance

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