BASF: Fit for 2012 and beyond...Customer industry growth CAGR 2010-2020 in % p.a. Energy & Resources...
Transcript of BASF: Fit for 2012 and beyond...Customer industry growth CAGR 2010-2020 in % p.a. Energy & Resources...
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BASF Strategy: We
create
chemistry__November
2011 1
BASF: Fit for 2012 and beyond
Capital MarketStory
December 2011
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BASF Strategy: We
create
chemistry__November
2011 2
Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities
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3
Sales
€17.6 billion
+12%
EBITDA
€2.7 billion
(8%)
EBITDA margin
15.4%
18.6%
EBIT before special items (bSI)
€2.0 billion
(11%)
EBIT bSI
adjusted for non-comp. oil taxes
€2.0 billion
(1%)
EBIT
€1.9 billion
(13%)
Net income €1.2 billion (4%)
EPS €1.30 (4%)
Adjusted EPS €1.52
0%
Business performance Q3’11 vs. Q3’10
Further sales growth in chemical activities mainly due to successful price increases
Acquired Cognis
business continues to perform strongly; synergy targets increased
Agricultural Solutions on track for record year in sales and earnings
EBIT before special items amounted to €2 billion. Adjusted for Libya, which contributed €355 million in last year’s quarter, EBIT before special items increased by 6% compared to
Q3 2010.
BASF with good earnings in Q3Highlights Q3 2011
BASF Capital Market Story__December
2011
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4
We expect to generate significantly higher sales
We aim to significantly exceed the 2010 EBIT before special items
adjusted for non-compensable oil taxes
(2010: €7.2 billion)
We will earn a high premium on our cost of capital
Outlook 2011*
Outlook 2011 confirmed
We aim to continuously increase the annual dividend, or at least
maintain it at the
level of the previous year.
Dividend policy
* Published
on October
27, 2011; 3rd Quarter
2011 ReportingBASF Capital Market Story__December
2011
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BASF Strategy: We
create
chemistry__November
2011 5
Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities
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BASF Capital Market Story__December
2011 6
Outperformed global chemical production by 4 percentage points p.a.
Sales to third parties in billion €
BASF total growth 7.8% p.a.
BASF volumes + M&A 6.6% p.a.
BASF volumes 4.1% p.a.
Global chemical production 3.0% p.a.
30
60
20
50
40
Prices
12
33
Volumes
14
64
M&A
11
Currencies
–6
70
2001 2010
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7
€9bn(Sales excl. planned
measures)
Portfolio development towards more market driven and innovative businesses
Acquisitions
Crop protection
Engineering plastics
Electronic chemicals
Custom synthesis
Catalysts
Construction chemicals
Water-based coatings
Pigments
Plastic additives
Oil & Gas
Personal care & food
€15bn(Sales)
BASF core business
Strong partnerships
Gazprom
Monsanto
Petronas
Shell
Sinopec
Total
Divestitures
Pharma
Fibers
Printing systems
Polyolefins
Polystyrene Americas
Agro generics
Vitamins premix
Fertilizers (planned)
Styrolution
(planned)
Selected transactions 2001 −
today
BASF Capital Market Story__December
2011
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Strong and profitable growth in emerging markets
0
20
40
60
2001
CAGR 5.4%28%
34%CAGR 13%
2010
53
28
Developed markets*Emerging markets * BASF definition: Developed
markets
include
EU15, Norway,
Switzerland, North America, Japan, Australia, New Zealand
22%
0
2
4
6
8
10
2001
CAGR 12%
34%
CAGR 18%
2010
8.2
2.5
25%
Sales BASF Group excluding Oil & Gas in billion €
by location of customerEBITDA BASF Group excluding Oil & Gas
in billion €
by location of customer
BASF Capital Market Story__December
2011
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Strong focus on operational excellence
BASF Group 2001–2010 Index
50
100
150
200
250
300
2001 2004 2007 2010
CAGR
12 %
8 %
2 %
EBITDA
Sales
Fixed costs
BASF Capital Market Story__December
2011
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Decade of outperformance in sector margins
EBITDA margin in %
0
5
10
15
20
25
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
BASF Group EBITDA margin
European chemical sector Ø*
US chemical sector Ø**
Asian chemical sector Ø***
* AkzoNobel, Arkema, Clariant, DSM,
Evonik
(Degussa), Lanxess, Solvay** Celanese, Dow, DuPont, Huntsman, PPG
*** Formosa Plastics, Mitsubishi Chemicals, Mitsui Chemicals, Sinopec Chemicals, Sumitomo Chemicals
Source: Company reports, Thomson One, Reuters
BASF Capital Market Story__December
2011
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11
*
Cash provided by operating activities less capex
(in 2005 before CTA)** 2009 adjusted for re-classification of settlement payments for currency derivatives
Continuous strong free cash flow generation
–0.5
2.8 2.6
3.33.5
3.2
2.5
–0.1
3.2
3.9
BASF Capital Market Story__December
2011
Free cash flow in billion €
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12
–2.6–0.6
1.82.4
2.1
2.9
1.6
–0.6–0.2**
3.5
BASF Capital Market Story__December
2011
Solid track record of earning a premium on cost of capital
Target first established
20102001 2002 2003 2004 2005 2006 2007 2008 2009
EBIT after cost of capital* in billion €
* Cost of capital rate varied from 9% to 13%
** Including Ciba integration costs of €0.8 billion
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Delivering consistent, long-term value – Last 10 years
Long-term performance December 2001 – November 2011 (average annual performance with dividends reinvested)
-1 2 5 8 11 14
BASF
Euro Stoxx 50
DAX 30
MSCI World Chemicals
+2.0%
+13.8%
Last 5 years
+7.1%
–1.7%
13.9%
–7.2%
–0.7%
3.5%
BASF Capital Market Story__December
2011
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BASF Strategy: We
create
chemistry__November
2011 14
Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities
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15
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
BASF Capital Market Story__December
2011
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Key trends for the chemical industry
Integrated chemical companies remain cornerstone
Emerging markets players grow quickly
Raw material players invest further downstream
Competitive landscape will change
Use opportunities from sustainability
Increase resource efficiency
Renewables
as raw materials
Stakeholder dialog
Sustainability as strategic driver
Chemistry as enabler
Chemical products replace traditional materials
Create innovative sustainable solutions
Innovation gains in importance
Growth will accelerate
Industrial production > GDP
Chemical
production > GDP
Emerging markets will outgrow developed markets
Chemical industry remains an attractive growth industry
BASF Capital Market Story__December
2011
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17
Chemicals to outgrow key customer industries
Transportation
100
142
138219
23
127
0
1
2
3
4
5
6
7
8
9
10
0 1 2 3 4 5 6 7 8 9 10
in %
ConstructionAgriculture
Customer industry growth CAGR 2010-2020 in % p.a.
Energy & Resources
Electronics
Health & Nutrition
Consumer Goods
Che
mic
al p
rodu
ctio
n gr
owth
C
AGR
201
0-20
20 in
% p
.a.
= Market of 2020
in bn
€
(real, 2008)
148
Chemicals growth above customer industries
Chemicals growth below customer industries
Chemicals growth =
customer industrie
s growth
Source: BASF
BASF Capital Market Story__December
2011
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BASF Strategy: We
create
chemistry__November
2011 18
Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities
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19
Our strategic principles
We add value as one company.
We innovate to make our customers more successful.
We drive sustainable solutions.
We form the best team.
BASF Capital Market Story__December
2011
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We add value as one company
Hedging
Operational excellence
Financialstrength
Global reach
People Verbund
Customer Verbund
Production Verbund
Technology Verbund
Value chains
Construction
Electronics
Energy &Resources
Consumer GoodsTransportation
Agriculture
Health & Nutrition
BASF Capital Market Story__December
2011
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BASF Strategy: We
create
chemistry__November
2011 21
Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities
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22
Striving for strong profitable growth
Sales* in billion €
64
2010 Target 2020
Target 2015
Investments
Acquisitions
CAGR ~6%
Innovations
Investments
AcquisitionsInnovations
~85
~115
We will outperform chemical production by 2 percentage points p.a.* Potential impact of IFRS changes not included
BASF Capital Market Story__December
2011
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23
All regions will deliver profitable growth
Regional sales targets 2020 (by location of customers)
in billion €
North America
2010 2020
13
~5.5% p.a.~22
South America, Africa, Middle
East
~8% p.a.
5 ~11
Europe
~4.5% p.a.
33
~53
Asia Pacific
~8% p.a.
13~29
2010 2020
2010 20202010 2020
19%*20%*46%*52%*
25%*20%*10%*8%*
* Percentage of total salesBASF Capital Market Story__December
2011
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24
Doubling EBITDA by 2020
EBITDA* in billion €
2010 Target 2020
Target 2015
11.1
CAGR ~7.5%~23
~15Op. Excellence
Growth
Acquisitions
Op. Excellence
Growth
Acquisitions
* Assumptions 2010-2020: Exchange rate $/€
Ø
1.40, Oil price Ø
$110/bblBASF Capital Market Story__December
2011
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BASF Strategy: We
create
chemistry__November
2011 25
Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities
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BASF Strategy: We
create
chemistry__November
2011 26
Business review BASF Today
Trends Purpose and strategic principles
Targets Strategic levers
– Portfolio development–
Market approach
–
Innovations for a sustainable future–
Investments
–
Acquisitions–
Operational excellence
BASF Tomorrow –
Board priorities
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Successfully managing an integrated company
Performance
Mar
ket a
ttrac
tiven
ess hi
ghlo
w
low highCircle size: Strategic Business Unit sales
= €1bn
Divested businesses: - Fertilizers (planned)- Styrenics (planned)- Polyolefins- Printing inks- Fibers
76 Strategic Business Units
Majority of businesses in attractive markets due to active portfolio management
Performance is a weighted score based on operating profitability and competitive position (e.g. market share)
Market attractiveness is a weighted score based on market growth and market size, innovation opportunities and competitive environment
BASF Capital Market Story__December
2011
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28
Oil & Gas business provides significant advantages for BASF
Oil & Gas
Strong contributor to BASF’sprofitable
growth
Significant cash flow
and long-term
profitability
Hydrocarbonhedge
Technologicalsynergies through BASF
Verbund
BASF Capital Market Story__December
2011
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29
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 ...
BASF Capital Market Story__December
2011
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Moving downstream towards customer industries
* Agriculture, Construction, Consumer Goods, Health & Nutrition, Electronics, Energy & Resources, Transportation
** Sales excluding Oil & Gas
Functionalized Materials & SolutionsCustomized ProductsClassical Chemicals
2020in % of sales**
Chemical Industry First customer industries*
2010 in % of sales**
~ 40%
~30% ~ 70%
2001 in % of sales**
~ 50%
~ 60%
~ 50%
BASF Capital Market Story__December
2011
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BASF Strategy: We
create
chemistry__November
2011 31
Business review BASF Today
Trends Purpose and strategic principles
Targets Strategic levers
–
Portfolio development– Market approach–
Innovations for a sustainable future
–
Investments–
Acquisitions
–
Operational excellence
BASF Tomorrow –
Board priorities
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32
Building on our cross-divisional customer industry approach
BASF sales by first customer industry*
Bubble Size: BASF divisional sales by first customer industry (2010)**
* Excluding
Oil & Gas and Other
** Excluding Agricultural Solutions, Health & Nutrition, Oil & Gas and Other
> 15 %
< 10 %
< 10 %
> 15 %
Inorganics Petro-chemicals
Construction Chemicals
Dispersions & Pigments
Catalysts Intermediates Coatings Care Chemicals
Performance Polymers
Poly- urethanes
Performance Chemicals
Paper Chemicals
Consumer goods
Transportation
Construction
Energy & Resources
BASF Capital Market Story__December
2011
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33
Combining cross-divisional technology competencies with customer know-how
Smart forvision – joint concept car of Daimler and BASF
E-textiles
Solar roof with transparent
organic solar panels and
OLED modules
Multifunctional seat
Infrared-reflective coating
Infrared-reflective film
High performance foams
Lightweight tridion
cell
All-plastic wheel
BASF Capital Market Story__December
2011
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34
Significant opportunities in wind energy
Epoxy systems and Adhesives (Intermediates)
Paint (Coatings)
Core foams (Plastics)
Sales potential by 2020:~ €300 million
Blades
Grouts and admixtures (Construction Chemicals)
Paint (Coatings)
Tower and base
Hydraulic fluids and gear oils (Performance Chemicals)
Nacelle
Tower and base
Blades
Nacelle
BASF Capital Market Story__December
2011
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BASF Strategy: We
create
chemistry__November
2011 35
Business review BASF Today
Trends Purpose and strategic principles
Targets Strategic levers
–
Portfolio development–
Market approach
– Innovations for a sustainable future–
Investments
–
Acquisitions–
Operational excellence
BASF Tomorrow –
Board priorities
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36
Sustainability will become even more important
SUPPLY DEMAND
1976 2010
Annual regenerative capacity of the planet
Human beings now demand more from the Earth than can be regenerated
Earth’s resources
Consumption of Earth’s resources
+
BASF Capital Market Story__December
2011
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37
Chemistry as an enabler for many customer industries
Sustainability in customer industries will drive our innovative growth fields
Health & Nutrition
Consumer GoodsConstructionTransportation Electronics Energy &
ResourcesAgriculture
Customerindustries
Energy management
Water solutions
Wind energy
Rare earth metals
recycling
Heat management
Enzymes Plant biotechnology
Batteries for mobility
Lightweight composites
Heat management
Functional crop care
Medical OrganicElectronics
GrowthFields*
* Including growth fields still under evaluation
Ongoing inflow of new growth fields
BASF Capital Market Story__December
2011
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38
Growth field: Batteries for electromobility
Market size: > €20 billion
Sales potential for BASF: > €500 million
Business potential 2020
Chemicals & materials for lithium-ion batteries
Work on battery concepts for Generation IV
Intensive collaboration with universities & industry partners
Existing activities
Position BASF as a system supplier for cell manufacturers
Utilize technology and business synergies
Expand electrolyte activities
Targets
BASF Capital Market Story__December
2011
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39
Growth field: Water Solutions
Market size: €20 billion
BASF sales potential: > €800 million
Business potential 2020
High-performance flocculants, desalination and antifouling chemicals & polymers used in membranes (BASF & Ciba)
Acquired know-how on membrane technologies and module systems (inge
watertechnologies)
Position BASF as the leading supplier of innovative chemical solutions worldwide
Forward integration into membrane technologies
Leverage synergies to develop improved additives, flocculants and polymers
Targets
Existing activities
BASF Capital Market Story__December
2011
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40
Global trait value in 2020: ~€11 billion
Expected gross trait sales potential of plant biotech pipeline before partner share in 2020: €1.9 billion
Business potential
Yield & Stress collaboration with Monsanto
(corn, soy, cotton, canola and wheat)
Further collaborations with Bayer, Cargill, CTC, Embrapa
and KWS
Position BASF as “The Trait Technology Partner”
Achieve more efficient agriculture and healthier nutrition
Implement a Plant Biotechnology operating division within the Agricultural Solutions segment
Targets
Existing activities
Growth field: Plant biotechnology
BASF Capital Market Story__December
2011
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41
BASF’s global R&D footprint todayNorth America: 1,330 employees in R&D
Europe: 7,500 employees in R&D
Major R&D site
Asia 550 employees in R&D
South America: 220 employees in R&D
BASF Capital Market Story__December
2011
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42
Strengthening our R&D platform in Asia Pacific to accelerate growth
Innovation in Asia for Asia
8 R&D sites plus technical centers
in Asia Pacific
R&D experts to increase from 550 to more than 800 by 2020
€55 million investment includes innovation campus and Greater China head office
Leverage global R&D capabilities with Competence Centers in Singapore, India and China
Co-operations with ~100 institutes and universities BASF‘s new innovation campus in Shanghai
BASF Capital Market Story__December
2011
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43
Targeted €7 billion of EBITDA from innovations in 2020
Sales and EBITDA from innovations in billion €
2015 2020
~10
~30
Targeted spending of ~3% of sales (excluding Oil & Gas) p.a. on R&D
Sales from innovations launched within last 5 years
Sales from innovations launched within last 10 years
~2.5
~7EBITDA from innovations launched within last 5 years
EBITDA from innovations launched within last
10 years
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2011
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BASF Strategy: We
create
chemistry__November
2011 44
Business review BASF Today
Trends Purpose and strategic principles
Targets Strategic levers
–
Portfolio development–
Market approach
–
Innovations for a sustainable future–
Investments
–
Acquisitions–
Operational excellence
BASF Tomorrow –
Board priorities
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45
Investments will boost future organic growth
Future investments in €
billlion
Thereof investments in emerging markets
Total investments
35-45%
15-20
30-40%
~15
2006 –
2010 2011 –
2015 2016 –
2020
10.9
~20%
BASF Capital Market Story__December
2011
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46
MDI plant Chongqing, China Expansion Verbund
site Nanjing*
Expansion Verbund
site Kuantan*
Acrylic acid complex, Brazil Expanding gas production, Russia* 15% Stake in South Stream* Memoranda of Understanding signedBASF Capital Market Story__December
2011
Emerging markets Recently announced major projects
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Growth above market with increasing share from emerging markets
* BASF definition: Developed markets include EU15, Norway,
Switzerland, North America, Japan, Australia, New Zealand
** Sales excluding Oil & Gas
2020in % of sales**
2010 in % of sales
(€53bn**)
2001 in % of sales
(€28 bn**)
Emerging marketsDeveloped markets*
~ 66%
~55% ~ 45%
~ 78%
~ 34%
~ 22%
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2011
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BASF Strategy: We
create
chemistry__November
2011 48
Business review BASF Today
Trends Purpose and strategic principles
Targets Strategic levers
–
Portfolio development–
Market approach
–
Innovations for a sustainable future–
Investments
– Acquisitions–
Operational excellence
BASF Tomorrow –
Board priorities
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49
Acquisitions will contribute to profitable growth in the future
Are EPS accretive by year three at the latest
Provide a minimum return on investment of 8% after tax
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…
BASF Capital Market Story__December
2011
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BASF Strategy: We
create
chemistry__November
2011 50
Business review BASF Today
Trends Purpose and strategic principles
Targets Strategic levers
–
Portfolio development–
Market approach
–
Innovations for a sustainable future–
Investments
–
Acquisitions– Operational excellence
BASF Tomorrow –
Board priorities
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51
New operational excellence program STEP: Earnings contribution ~€1 billion
Annual earnings contribution in €
million
Optimization of processes, structures and production sites in all regions
Measures:–
Fixed cost savings–
Margin improvement–
Capacity increase–
Better sourcing
Project timeline: 2012 -
2015
Targeted earnings contribution of about €1 billion by end of 2015
NEXT Program
0
1,000
2,000
3,000
2012 2015
Former cost saving programs NEXT STEP
BASF Capital Market Story__December
2011
STEPSTrategic
Excellence
Program
Annual earnings contribution of more than €1 billion will be achieved in 2012
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BASF Strategy: We
create
chemistry__November
2011 52
Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities
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53
Key financial targets 2015 / 2020
Grow at least 2 percentage points above chemical production
Earn a premium on cost of capital of at least €2.5 billion on average p.a.
Profitability targetsGrowth targets
2015
2020
Sales ~€85 billion
Sales ~€115 billion
EBITDA ~€15 billion
Double EBITDA to ~€23 billion (compared with 2010)
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2011
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54
Our financial policies
Pursue capital discipline
Focus on tight working capital management
Support growth with profitable acquisitions
Grow dividend
Consider share buy-back program
Maintain a solid A credit rating
BASF Capital Market Story__December
2011
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55
Our strategy will create shareholder value
Earnings per share* in €
Business
growth1.30
4.96
2002 2010
0.5
0.9
0.8
1.5 Margin
Tax rate
Share buy-back
Target 2015
~7.5
„STEP“
Share buy-back
Growth
CAGR ~9%
BASF Capital Market Story__December
2011* Reported EPS; adjusted for 2:1 stock split in 2008
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56
BASF tomorrow – Roadmap to 2020
We add value as “One company”
Continued top and bottom line growth with key focus on emerging markets
Expansion of portfolio downstream towards functionalized materials and solutions
Strong focus on sustainability and innovation
Commitment to deliver long-term shareholder value
BASF Capital Market Story__December
2011
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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
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2011
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We create chemistry
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BASF Strategy: We
create
chemistry__November
2011 5959
BackupMacro-economic assumptions
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60
Assumptions 2010 – 2020
Growth 2001 - 2010
Global GDP 2.5% p.a.
Chemical production (excl. Pharma) 3.0% p.a.
Industrial production 2.4% p.a.
Growth 2010 – 2020 (Forecast*)
3.0% p.a.
4.0% p.a.
3.8% p.a.
* Assumptions 2010-2020: US$/€
Ø
1.40. oil price Ø
US$110/bbl
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2011
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BASF Strategy: We
create
chemistry__November
2011 6161
BackupBASF track record 2001-2010
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62
Generating high EBITDA
4.15.1
7.7 8.29.7 10.2
9.6
5.1
7.4
11.1
BASF Capital Market Story__December
2011
EBITDA in billion €
CAGR (2001-2010) 12%
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63
Generating strong EPS growth
-0.10**0.81
1.83
2.87 3.19
4.16
3.13
1.30 1.54
4.96
BASF Capital Market Story__December
2011
Earnings per share* in €
CAGR (2002-2010) 18%
* Reported EPS; adjusted for 2:1 stock split in 2008
** Excluding extraordinary income
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64
From 2001 to 2010, BASF paid dividends in the amount of ~€13 billion
Delivering attractive shareholder returns
Dividend per share in €
* Dividend yield based on share price at year-end
CAGR 14.5%
Dividend payments
3.9%3.1% 3.2% 3.1% 4.1% 3.8% 7.0%Yield* 3.7%3.1% 3.9%
From 2001 to 2010, BASF bought back shares in the amount of €8.9 billion
This equaled ~25% of total shares outstanding
Share buy-backs
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2011
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65
Cash generation enables business growth and shareholder returns
Source of cash (2001-2010) in €
Use of cash (2001-2010) in €
Cash and financing 5%
Earnings after tax 35%
Depreciation44%
Acquisitions19%
Dividend20%
Capex35%
Divestitures15%
Share buy- back13%€68
billion€68
billion
Working capital5%
CTA* % others 8%
Financial investments
& Other 1%
* Contractual Trust Agreement: transfer of pension obligations to external trust
BASF Capital Market Story__December
2011
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66
Investments spur future growth
Capex 2001-2010 in €
R&D spending 2001-2010 in €
FunctionalSolutions
9%
Other 3%
Oil & Gas 1%
Chemicals9%
AgriculturalSolutions26%
Plastics10%
€12 billion Performance
Products22%
FunctionalSolutions
5%
Other (e.g. Infrastructure)
12%
Oil & Gas 28%
Chemicals21%
AgriculturalSolutions4%
Plastics15%€26
billionPerformance
Products15%
Corporate research20%
BASF Capital Market Story__December
2011
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67
Further increase in R&D spending planned for 2011
Innovation will spur further growth
Total R&D expenditures 2010 (billion €)
€1.5 billion R&D expenditures in 2010 (2009: €1.4 billion)
~€8 billion
R&D expenditures
in the
period
2011-2015
~9,600 employees in R&D
~3,000 projects
and topics
Research Verbund: About 1,900 partnerships with universities, start-ups and industry partners
Strong commitment to R&D
Corporate Research22%
Agricultural Solutions
26%
Functional Solutions12%
Performance Products19%
Chemicals9%
Plastics10%
€1.5 billion
Other2%
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2011
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BASF Strategy: We
create
chemistry__November
2011 6868
BackupBusiness development Q3 2011
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Chemicals Significant sales growth driven by strong price increases
Intermediates671+4%
Inorganics356
+11%
Petrochemicals2,141+12%
€3,168+10%
617537
765674
621
0
200
400
600
800
Q3 Q4 Q1 Q2 Q3
Sales development
Period Volumes Prices Portfolio Currencies
Q3’11 vs. Q3’10 (3)% 18% 0% (5)%
Q3’11 segment sales (million €) vs. Q3’10 EBIT before special items (million €)
2010 2011
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2011
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Plastics Sales up mainly due to a strong Performance Polymers business
Polyurethanes1,480+2%
Performance Polymers
1,321+16%
€2,801 +8%
371
285
393 383
317
0
200
400
Q3 Q4 Q1 Q2 Q3
Sales development Period Volumes Prices Portfolio Currencies
Q3’11 vs. Q3’10 2% 10% 0% (4)%
Q3’11 segment sales (million €) vs. Q3’10 EBIT before special items (million €)
2010 2011
BASF Capital Market Story__December
2011
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Sales developmentPeriod Volumes Prices Portfolio Currencies
Q3’11 vs. Q3’10 (2%) 7% 23% (4)%
Performance Products Strong contributions from acquired Cognis businesses
370294
554513
440
0
100
200
300
400
500
600
Q3 Q4 Q1 Q2 Q3
PerformanceChemicals
904+9%
Care Chemicals1,265+85%
€3,991+24%
Paper Chemicals423-6%
Q3’11 segment sales (million €) vs. Q3’10 EBIT before special items (million €)
Nutrition & Health471+32% Dispersions
& Pigments 928
+5%
2010 2011
BASF Capital Market Story__December
2011
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Sales developmentPeriod Volumes Prices Portfolio Currencies
Q3’11 vs. Q3’10 4% 11% 3% (6)%
Functional Solutions Strong performance of Catalysts
Catalysts1,608+19%
ConstructionChemicals
5990%
Coatings700
+9%
€2,907+12%
158
33
142167 162
0
50
100
150
Q3 Q4 Q1 Q2 Q3
Q3’11 segment sales (million €) vs. Q3’10 EBIT before special items (million €)
2010 2011
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2011
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Agricultural Solutions On track for record year in sales and earnings
66
95
0
50
100
150
Q3 Q3
Q3’11 segment sales (million €) vs. Q3’10 EBIT before special items (million €)
20112010
0
200
400
600
800
1.000
Q3 Q320112010
+9%
+44%
Sales developmentPeriod Volumes Prices Portfolio Currencies
Q3’11 vs. Q3’10 12% 3% 0% (6)%
832908
BASF Capital Market Story__December
2011
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272 225
0
200
400
600
Q3 Q3
Exploration & Production534-39%
Natural Gas Trading
1,661+23%
€2,195 -1%
Sales developmentPeriod Volumes Prices/Currencies Portfolio
Q3’11 vs. Q3’10 (25)% 24% 0%
EBIT bSI
Natural Gas TradingEBIT bSI
Exploration & Production Net income
Q3’11 segment sales (million €) vs. Q3’10 EBIT before special items/ Net income (million
€)
20112010
503227
573
350
Non-compensable
oil
taxes
224
70 123
Oil & Gas EBIT before SI on last year’s level (adj. for non-compensable oil taxes)
BASF Capital Market Story__December
2011