Global Agriculture Conference Miami - United States · 2018-11-17 · BofA Merrill Lynch Global...

70
Stefan Marcinowski Member of the Board of Executive Directors BofA / Merrill Lynch Global Agriculture Conference Miami February 29, 2012 Agricultural Solutions Sustainable growth through market-driven innovations

Transcript of Global Agriculture Conference Miami - United States · 2018-11-17 · BofA Merrill Lynch Global...

Page 1: Global Agriculture Conference Miami - United States · 2018-11-17 · BofA Merrill Lynch Global Agriculture Conference, Miami, February 29, 2012 Disclaimer This presentation includes

Stefan MarcinowskiMember of the Boardof Executive Directors

BofA / Merrill Lynch Global Agriculture Conference

Miami

February 29, 2012

Agricultural Solutions Sustainable growth through market-driven innovations

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Disclaimer

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.

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1 | Introduction: BASF Group Results FY2011

2 | BASF Strategy ‘We create chemistry’

3 | Agricultural Solutions Strategy 2020

4 | BASF Crop Protection

5 | BASF Plant Science

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Record Year 2011

Business performance FY’11 vs. FY’10

Sales developmentPeriod Volumes Prices Portfolio Currencies

FY’11 vs. FY’10 0% 12% 5% (2%)

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 4

Sales €73.5 billion +15%EBITDA €12.0 billion +8%EBIT before special items €8.4 billion +4%EBIT €8.6 billion +11%Net income €6.2 billion +36%Reported EPS €6.74 +36%Adjusted EPS €6.26 +9%Operating cash flow €7.1 billion +10%

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0

2

4

6

8

10

2009 2010 2011

Agro: Reliable earnings contribution to BASF Group

EBIT before special itemsin billion €

Agricultural SolutionsOil & GasChemical businesses and Others

Steadily increased earnings, new record in 2011: €810 million EBIT bSIAgro not coupled to chemical cycleSubstantial contribution to BASF Group earnings even in 2009 trough

Agro has delivered

BASF Group ResultsA closer look on EBIT before Special Items

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 5

4.9

8.1 8.48.1

4.9

2009 2010

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Outlook BASF Group 2012

6Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 6

BASF Group aims to exceed the record levels of sales and EBIT before special items achieved in 2011.

In H1 2012, BASF will most likely not achieve the exceptionally high results of the comparable period in 2011. However, we aim to outperform H2 2011.

More specifically, we plan to increase sales and earnings in all our business segments with the exception of the segment Chemicals.

In 2012, BASF will strive to earn again a high premium on cost of capital.

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1 | Introduction: BASF Group Results FY2011

2 | BASF Strategy ‘We create chemistry’

3 | Agricultural Solutions Strategy 2020

4 | BASF Crop Protection

5 | BASF Plant Science

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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 with sustainable innovations

Chemical production to outgrow GDP

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 8

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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)

We Create Chemistry: Key financial targets* 2015 / 2020

* As announced on November 29, 2011

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 9

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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 Crop Protection BASF Plant Science

The Agricultural Solutions segment will contributeto reaching our goals

We Create Chemistry: Roadmap to 2020

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 10

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1 | Introduction: BASF Group Results FY2011

2 | BASF Strategy ‘We create chemistry’

3 | Agricultural Solutions Strategy 2020

4 | BASF Crop Protection

5 | BASF Plant Science

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Crop Protection is the core of our solution offer

We invest in innovation beyond Crop Protection

Traits & seed solutions pursued with seed partnersAgricultural

SolutionsInnovation beyond Crop

Protection

Traits & seed partnerships

Chemical Crop Protection

BASF’s integrated solution offer…

Agricultural Solutions Strategy 2020

People Farmer Focus

Business Excellence Sustainability

Improve profitability and sustainability

of farming

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 12

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1 | Introduction: BASF Group Results FY2011

2 | BASF Strategy ‘We create chemistry’

3 | Agricultural Solutions Strategy 2020

4 | BASF Crop Protection

5 | BASF Plant Science

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BASF Crop ProtectionFinancial results FY 2011

Sales and earnings despite currency headwinds. Q4 2011 prices +2%

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 14

In million € FY 2011 FY 2010 Δ% Δ% CERSales* 4,165 4,033 3% 6%

EBITDA** 983 938 5% 11%

EBITDA margin** 23.6% 23.3% - -

EBIT** 810 749 8% 16%

EBIT margin** 19.4% 18.6% - -

Assets (as of Dec. 31) 5,350 5,063 6% 6%

Research and development expenses 412 393 5% 6%* sales drivers 2011: volumes 6%, prices 0%, currencies -3%** before special items

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BASF Crop ProtectionSales by indication FY 2011

Total sales 2011 to third partiesFungicides:Global volume gains supported by high demand in emerging markets, Plant Health business. Xemium launch started in EUHerbicides:Higher emerging markets demand overcompensates lower sales in North America Insecticides:Continued growth in most product lines (e.g. Seed Solutions®), portfolio optimization

Key facts

In brackets growth at constant exchange rates in % vs. prior year

Sales growth particularly driven by fungicides

in million €

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 15

Fungicides1,904 (+12%)

Herbicides1,401 (+2%)

Insecticides/Other860 (+1%)

€4,165(+6%)

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BASF Crop ProtectionSales by region FY 2011

Total sales 2011 to third parties Key factsEurope:Strong growth contribution from herbicides, Eastern EuropeNorth America: High demand for Plant Health products. Herbicide business affected by acreage reductions, competition in imidazolinonesSouth America, Africa, ME:Intense use of Fipronil-based insecticides, AgCelence®

thrived Asia Pacific:Significantly increased demand for fungicides and herbicides in emerging markets

In brackets growth at constant exchange rates in % vs. prior year

in million €

Regionally balanced businessGlobal volume growth, especially in emerging markets

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 16

Asia Pacific487 (+12%)

Europe1,659 (+7%)

South America,Africa, Middle East

1,054 (+7%)

North America965 (+1%)

€4,165(+6%)

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2007 2011 2020E

BASF Crop ProtectionStrong expansion in emerging markets

Emerging marketsCAGR +14% 2007-20112011: 43% of sales in emerging markets (2007: 35%)Sales from emerging marketsexpected to top 50% by 2015Proven track-record of tailored business models as basis for further expansion, e.g.– Samruddhi (India)– AgCelence (e.g. Brazil)– Barter tradingOngoing increase of resources and R&D investments

1.8

1.1

Sales development in emerging markets* (third parties) in billion €

CAGR +14%**

3.0

2.5

2.0

1.5

1.0

0.5

0.0

BASF well-positioned to tap future growth potential

3.3

* Asia (without Japan, Australia, New Zealand), Eastern Europe, LatAm, Africa** CAGR 2007-2011

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 17

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Commitment to R&D pays offR&D expenses on stable level (9-10% of sales; 2011: €412 M)F500 franchise keeps growing, peak sales potential increased again (>€1 bn.)Strong pipeline of early projects – 3 new active ingredients– Functional Crop Care unit to

extract additional value

BASF Crop ProtectionGrowth of R&D pipeline peak sales potential

Total peak sales potential in billion €

1.82.1 2.2

2.4

2.8

0,0

0,5

1,0

1,5

2,0

2,5

3,0

2008 2009 2010 2011 2012

Pipeline value increased by >50% since 2008

+56%3.0

2.5

2.0

1.5

1.0

0.5

0.0

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 18

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0

2

4

6

8

10

12

2010 2015 2020

for all segments

Projected global fungicide market* in billion €

Xemium® can be applied in all market segments

Xemium® key factsNext-generation carboxamideBASF is carboxamide pioneer, Xemium® strengthens leadOur 1st carboxamide fungicide for all market segments1st launch in France Nov. 2011 Goal: >50 countries, >100 cropsGlobal peak sales potential: >€200 million

Fieldcrops

Specialtycrops

* Source: Philips McDougall, own estimation

SeedTreatment

BASF Crop ProtectionXemium®, a future fungicide blockbuster

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 19

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Goals Focus Areas

Plant Health

Nitrogen management

Water management

Support growers to increase marketable yields sustainably

Reach higher profitability

BASF broadening its view & offering solutions beyond Crop ProtectionLeverage on Verbund products & technologiesDedicated resources and structure are being establishedProfitable contributionfrom 2015 onwards

Approach

Functional Crop Care: Innovations beyond Crop Protection

BASF Crop ProtectionFunctional Crop Care

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 20

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3.137

xxxx

6.000

0

1000

2000

3000

4000

5000

6000

7000

2007 2011 2020 E

BASF Crop ProtectionFinancial Targets 2020

Sales Crop Protection divisionin billion €

Crop Protection Targets 2020Grow on average 1-2% above market (market growth 2.5%)Reach €6 billion of net sales in 2020Invest on average 9% of turnover in R&DTarget on average an EBITDA margin of 25% under optimal market conditions

7.000

6.000

5.000

4.000

3.000

2.000

1.000

0.0

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 21

4.165

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1 | Introduction: BASF Group Results FY2011

2 | BASF Strategy ‘We create chemistry’

3 | Agricultural Solutions Strategy 2020

4 | BASF Crop Protection

5 | BASF Plant Science

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BASF Plant ScienceFounded in 1998750+ employees in a global R&D landscapeAnnual R&D spending ~€150 million

Our PurposeIncrease crop yield through Plant Biotechnology

Our StrategyDevelop the leading technology platform to deliver the best traits for the best seed. Focus: yield traits for major cropsPartnerships with leading seed companies

Trait Technology Partner strategy

BASF Plant ScienceThe Trait Technology Partner

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 23

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Yield Traits Total Crop Area (mio ha) Partner Market ShareSugar beet KWS

Sugar cane CTC

Canola Monsanto

Cotton Monsanto

Soybean Monsanto

Corn Monsanto

Rice Bayer CropScience

Wheat Monsanto *

SpecialtiesCanola EPA/DHA Ω3-fatty acids Cargill

Input TraitsSoybean herbicide-tolerance Embrapa

Soybean nematode-resistance Monsanto24

228.8

153.7

161.8

102.4

33.3

31.7

23.8

4.7

BASF Plant ScienceThe Trait Technology Partner

* Very fragmented global marketSources: FAO, USDA

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 24

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BofA Merrill Lynch Global Agriculture Conference, Miami, February 29, 2012Partners: *Monsanto **CTC ***KWS ****Bayer *****Cargill ******Embrapa

‡ Before partner share. €1=USD1.3

Discoverygene identification & proof of concept

Stage Iproof of conceptin target crops

Stage IIearly product development

Stage IIIadvanced product

development

Stage IVpre-launch

Traittotal development time: 10-12 years

Higher-yielding corn*

Higher-yielding canola*

Higher-yielding sugar cane**

Drought-tolerant cotton*

Higher-yielding sugar beet***

Higher-yielding rice****

Improved nitrogen utilization in corn*

Higher-yielding wheat*

Yield & Stresswith Monsanto

Higher-yielding soybean* 2nd Generation 1st Generation

Drought-tolerant corn* 2nd Generation 1st Generation

Improved corn feedFeedSpecialities Healthy fatty acids in canola*****

Input TraitsNematode resistant soybean*

Herbicide-tolerant soybean******Fungal resistant soybean

Yield & Stresswith others

Innovation Yields Results+ Adjusted due to discontinuation of Amylopectin potato projects and fungal-resistant potato project

Plant Biotechnology Pipeline+

Expected gross trait sales 2020: €1.8 bn. ‡

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 25

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Key factsHealth claim: US FDA states EPA/DHA-omega-3 reduces risk of cardiovascular disease

WHO recommends daily intake of EPA/DHA: 500 mg per day, actual: <200 mg per day

EPA/DHA fortified food applications increasing, but EPA/DHA remain expensive and difficult to formulate

New EPA/DHA-omega-3 food product launches

Opportunity for plant-produced EPA/DHA-omega-3 fatty acids

0

250

500

1994 1996 1998 2000 2002 2004 2006 2008

Source: Frost and Sullivan 2009, BASF

EPA/DHA-omega-3 source in food product launchesFish60%

Algae18%

Unknown/Other22%

EPA/DHA-omega-3Market Potential

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 26

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GoalProduction of commercial levels of EPA/DHA-omega-3 content in canola oil:

– Sustainable and efficient production

– Ease of incorporation into broad rangeof food products

Innovative dietary source of EPA/DHA omega-3 canola oil

EPA/DHA-omega-3Fatty acid production in canola

StatusCost leadership position in productionPartnership with market leader Cargill announced in Nov. 2011First product launches by end of decade

Agro Strategy 2020 BASF Crop ProtectionBASF Group Results We Create Chemistry BASF Plant Science 27

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1 | Introduction: BASF Group Results FY2011

2 | BASF Strategy ‘We create chemistry’

3 | Agricultural Solutions Strategy 2020

4 | BASF Crop Protection

5 | BASF Plant Science

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Summary and outlook

Opportunities in Crop Protection and Plant Biotechnology

Differentiating offer through innovation strength and Verbund synergies

BASF is determined to grow Agro:– R&D, in-licensing, selective acquisitions, cooperations

BASF is fully committed to Agricultural Solutions

Targets 2020:– Crop Protection: €6 billion sales – Plant Biotechnology: €1.8 billion gross trait sales

before partner share

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30DD.MM.YYYY INTERNAL

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0%

5%

10%

15%

20%

25%

30%

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

High earnings level Inherent fluctuations due to weather, crop prices, FX ratesBASF Crop Protection has reached reliably high EBITDA margin level during the decadeBASF is committed to sustain the high profitability level ...... while continuing its R&D and sales force investments into a differentiating offering

Crop Protection EBITDA margin target: 25%**

EBITDA margin*

Sales to 3rd parties in billion €

* Before Special Items. 2004 onwards according to IFRS. 2006 onwards excl. corporate cost** Under optimal market conditions

Crop Protection EBITDA margin target: 25%**

BASF Crop ProtectionSales and EBITDA Development

3-y-∅ EBITDA

2006 2011

4.5

EBITDA

30 %

2.0

3.0

4.0

1.0

25 % target

2001

20 %

15 %

10 %

5 %

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BackupBusiness development Q4 2011

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ChemicalsPrice increases could not compensate for lower volumes

Intermediates631-4%

Inorganics355

+9%

Petrochemicals2,136+9%

€3,122+6%

537

381

0

200

400

600

Q4 '10 Q4 '11

Sales development

Period Volumes Prices Portfolio Currencies

Q4’11 vs. Q4’10 (8)% 7% 6% 1%

FY’11 vs. FY’10 (1)% 16% 2% (3)%

Q4’11 segment sales (million €) vs. Q4’10 EBIT before special items (million €)

2,4412,302

0

1,000

2,000

FY '10 FY '11

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PlasticsWeaker demand led to receding margins

Polyurethanes1,395+2%

PerformancePolymers

1,178+8%

€2,573+5%

Sales development

Period Volumes Prices Portfolio Currencies

Q4’11 vs. Q4’10 (3)% 6% 1% 1%

FY’11 vs. FY’10 4% 10% 0% (2)%

Q4’11 segment sales (million €) vs. Q4’10 EBIT before special items (million €)

285

110

0

100

200

300

Q4 '10 Q4 '11

1,2031,284

0

400

800

1.200

FY '10 FY '11

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Sales development

Period Volumes Prices Portfolio Currencies

Q4’11 vs. Q4’10 (6)% 6% 19% 0%

FY’11 vs. FY’10 (1)% 6% 25% (2)%

Performance ProductsEarnings burdened by destocking and integration costs

PerformanceChemicals

822+6%

Care Chemicals1,180+55%

€3,629+19%

Paper Chemicals390-4%

Q4’11 segment sales (million €) vs. Q4’10 EBIT before special items (million €)

Nutrition & Health442+15%

Dispersions& Pigments

795+9%

294

220

0

100

200

300

Q4 '10 Q4 '11

1,7271,554

0

500

1,000

1,500

2,000

FY '10 FY '11

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Sales development

Period Volumes Prices Portfolio Currencies

Q4’11 vs. Q4’10 6% 8% (1)% (1)%

FY’11 vs. FY’10 9% 10% 1% (3)%

Functional SolutionsContinuous strong earnings improvement

Catalysts1,595+17%

Construction Chemicals536

+4%

Coatings739

+8%

€2,870+12%

Q4’11 segment sales (million €) vs. Q4’10 EBIT before special items (million €)

33

88

0

20

40

60

80

100

Q4 '10 Q4 '11

467

559

0

200

400

600

FY '10 FY '11

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749810

0

300

600

900

FY '10 FY '11

42 41

0

10

20

30

40

50

Q4 '10 Q4 '110

200

400

600

800

1,000

Q4 Q4

37

Agricultural SolutionsAnother record year for Crop Protection

Q4’11 segment sales (million €) vs. Q4’10 EBIT before special items (million €)

20112010

-3%

Sales development

Period Volumes Prices Portfolio Currencies

Q4’11 vs. Q4’10 (5)% 2% 0% 0%

FY’11 vs. FY’10 6% 0% 0% (3)%

845 822

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Oil & GasHigher oil prices improved sales and net income

Exploration &Production1,017-4%

Natural GasTrading

2,923+53%

€3,940+33%

Sales development

Period Volumes Prices/Currencies Portfolio

Q4’11 vs. Q4’10 7% 25% 1%

FY’11 vs. FY’10 (11)% 23% 0%

EBIT bSI Natural Gas TradingEBIT bSI Exploration & Production

Net income

Q4’11 segment sales (million €) vs. Q4’10 EBIT before special items / Net income (million €)

564

713 685

230276

0

200

400

600

800

Q4 '10 Q4 '11

2,1112,430

923 1,064

0

500

1,000

1,500

2,000

2,500

FY '10 FY '11

38

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Review of “Other”Million € Q4 2011 Q4 2010 2011 2010

Sales 1,112 1,590 6,275 5,851

thereof Styrenics 714 2,393 2,848

EBIT before special items (11) (139) (404) (648)

thereof Corporate research Group corporate costs Currency results, hedges and other valuation effectsStyrenics, fertilizers, other businesses

(92)(74)

(107)

65

(96)(66)

(229)

142

(348)(246)(199)

408

(323)(226)(460)

387

Special items 623 149 582 (59)

EBIT 612 10 178 (707)

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0

1

2

3

4

5

6

7

8

9

40

1.5

0.5

(3.4)

(1.8)

7.1

(2.5)

2.0

* Payments related to intangible assets and property, plant and equipment

Cash12/31/10

OperatingCF

Capex* Acquisitions& Divestitures

Dividends Other cashinflows

Cash12/31/11

Excellent operating cash flow in 2011

Full Year 2011 (billion €)

Debtreduction

(2.4)1.2

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41

Balance sheet remains strong

Balance sheet 2011 vs. 2010 (billion €)

Liquid funds

Accountsreceivable

Long-termassets

25.4

13.0

22.8

34.1

10.9

2.0

Otherliabilities

Financialdebt

Stock-holders’Equity

Dec 312010

Dec 312010

Dec 312011

Dec 312011

61.2

34.5

10.2

1.5

61.2

22.7

15.0

21.7

Inventories

Other assets

8.7

4.5

10.1

4.1

59.459.4

Highlights 2011Reduction of long-term assets by €0.4 billion, thereof

– €1.1 billion in other financial assets

– €0,5 billion increase of at equity investments

Addition of– €1.4 billion of inventories– €0.7 billion of receivables

Equity ratio of 41.5%

Net debt: €11.0 billion

Net debt EBITDA ratio: 0.9

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42

BackupOutlook 2012

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Outlook 2012Expectations for global economy

2011

GDP 2.7%

Chemicals (excl. Pharma) 4.8%

Industrial production 4.7%

US$ / Euro 1.39

Oil price (US$ / bbl) 111

Forecast 2012

2.7%

4.1%

4.1%

1.30

110

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Outlook 2012 by regionChemical production (excl. pharma)

EU-27

USA

Asia (excl. Japan)

Japan

South America

4.1%

0.8%

2.2%

8.0%

3.4%

3.9%

World 4.8%

1.6%

2.1%

11.1%

-3.1%

4.7%

2011 Forecast 2012

44

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Backup10-Year Performance BASF Group

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Outperformed global chemical production by >3 percentage points p.a.

Sales to third parties in billion €

46

BASF total growth 9.6% p.a.

BASF volumes + M&A 6.8% p.a.

BASF volumes 3.5% p.a.

Global chemical production 3.6% p.a.

2002 Volumes Prices Currencies M&A 2011

32

74

12

22-7

14

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50

100

150

200

250

300

Strong focus on operational excellence

BASF Group 2002–2011Index

47

2002 2005 2008 2011

CAGR

10 %

10 %

4 %

EBITDA

Sales

Fixed costs

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€2.6 billion premium on cost of capital achieved in 2011Premium on cost of capital in billion €

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

4,000

3,000

2,000

1,000

0

-0.6 -0.6

2.02.4

2.1

2.9

1.6

-0.2

3.5

2.6

Target firstestablished

Cost of capital rate: 9% 11%

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2.8 2.6

3.3 3.5 3.2

2.5

3.2

2002 2003 2004 2005 2006 2007 2008 2009** 2010 2011

Continuous strong free cash flow generation

49

* 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 €

3.93.7

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+8.0%

-1.4%

+14.2%

-3 0 3 6 9 12 15

50

Long-term performance February 2002 – January 2012 (average annual performance with dividends reinvested)

BASF

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+2.4%

Last 5 years

+14.5%

-7.4%

-1.0%

+3.3%

Delivering consistent, long-term value

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0.70 0.700.85

1.00

1.50

1.95 1.951.70

2.20

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

51

Average annual dividend increase of 15.2%(2002-2011)

Attractive dividend yield of 4.6% in 2011**

Dividend yield above 3% in any given year since 2002

3.9%

Attractive shareholder returns

Key factsDividend per share (€)

3.1%

* Dividend yield based on share price at year-end

3.2% 3.1% 4.1% 3.8% 7.0%Yield*

** Based on BASF share price of €53.89 on Dec. 30, 2011

Proposal:

3.7%3.9% 4.6%

2.50

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52

BackupWe Create Chemistry: Trends & Targets

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Key trends for the chemical industry

53

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 gainsin importance

Growth will accelerate

Industrial production > GDP

Chemicalproduction > GDP

Emerging markets will outgrow developed markets

Chemical industry remains an attractive growth industry

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Striving for strong profitable growth Medium- and long-term sales target

54

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

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Striving for strong profitable growth All regions will deliver profitable growth

55

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 sales

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Striving for strong profitable growth Doubling EBITDA by 2020

56

EBITDA*in billion €

2010 Target2020

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/bbl

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Earnings per share* in €

Businessgrowth1.30

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

* Reported EPS ** As announced on November 29, 2011

We Create Chemistry: Our strategy will create shareholder value

4.96

5757

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Business reviewBASF TodayTrendsPurpose and strategic principlesTargetsStrategic levers

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

BASF Tomorrow – Board priorities

58BASF Strategy: We create chemistry__November 2011

Backup

We Create Chemistry: Strategic levers– Portfolio development– Market approach– Innovations for a sustainable future– Investments– Acquisitions– Operational excellence

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Portfolio development towards more market driven and innovative businesses

59

Crop protectionEngineering plastics Electronic chemicalsCustom synthesisCatalystsConstruction chemicalsWater-based resinsPigmentsPlastic additivesOil & Gas Personal care & food

BASFcore business

Strong partnerships

GazpromMonsantoPetronasShellSinopecTotal

Selected transactions 2001 − today

Acquisitions

€15bn(Sales)

€9bn(Sales)

excluding fertilizers, styrenics

Divestitures

PharmaFibersPrinting systems PolyolefinsPolystyrene Americas Agro generics Vitamins premixFertilizers (planned)Styrenics (Styrolution JV)

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We expand from chemicals to chemistry

Chemistry as key enabler for functionalized materials & solutions

Deep understanding of customer value chains required

60

New molecules

Improved applications

Functionalized materials & solutions

1960 1970 1980 1990 2000 2010 2020

Batteries, membranes ...

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Moving downstream towards customer industries

61

* 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*

2010in % of sales**

~ 40%

~30% ~ 70%

2001in % of sales**

~ 50%

~ 60%

~ 50%

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Chemistry as an enabler for many customer industries

62

Sustainability in customer industries will drive our innovative growth fields

Health & Nutrition

Consumer GoodsConstructionTransportation Electronics Energy &

ResourcesAgriculture

Customerindustries

Energymanagement

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

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Building on our cross-divisional customer industry approach

63

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

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Combining cross-divisional technology competencies with customer know-how

64

E-textiles

Solar roof with transparentorganic solar panels andOLED modules

Multifunctional seat

Infrared-reflective coating

Infrared-reflective film

High performance foams

Lightweight tridion cell

All-plastic wheel

Smart forvision – joint concept car of Daimler and BASF

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65

Innovation will spur further growth

€1.6 billion R&D expenditures in 2010 (2010: €1.5 billion)

~10,100 employees in R&D

~2,800 projects

Research Verbund: About 1,950 partnerships with universities, start-ups and industry partners

24%

1%

Corporate Research23%

Agricultural Solutions

26%

FunctionalSolutions12%

PerformanceProducts21%

Chemicals8%

Plastics9%

€1.6billion

Oil & Gas1%

Increase R&D spending to €1.7 billion in 2012

Total R&D expenditures 2011in billion €

Strong commitment to shareholder returns

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Product Market Launch 2002 – 2009

Market Launch2010 – 2020

Total peak sales potential

F: F 500 orysastrobin, dimoxystrobin,

F 500 seed treatment, boscalid, metrafenone

H: Tritosulfuron, topramezone

I: Chlorfenapyr, metaflumizone

F: Initium, Xemium, new fungicide

H: Kixor, new herbicide

I: New in-licensed insecticide

HT Systems: for example Dicamba or Cultivance*

Functional Crop Care

Abbreviations: F= fungicide, H= herbicide, I = insecticide, HT = herbicide tolerance* Herbicide tolerance project Cultivance is also reported in the BASF biotech pipeline

€1,600 million

€1,200 million

BASF Crop Protection Innovation PipelineTotal peak sales potential €2.8 billion

66

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€7 billion EBITDA targeted from innovations in 2020

67

Sales and EBITDA from innovationsin billion €

2015 2020

~10

~30

Sales from innovations launched within last 5years

Sales from innovations launched within last 10years

~2.5

~7EBITDA from innovations launched within last 5years

EBITDA from innovations launched within last 10years

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68

* Memoranda of Understanding signed

Major investment projects

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Acquisitions will contribute to profitable growth in the future

69

Provide a minimum return on investment of 8% 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…

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7070

Annual earnings contributionin € million

Former cost saving programs NEXT STEP

Project timeline: 2012–2015Measures to optimize processes and structures in all regions, e.g.− manufacturing, maintenance− supply chain− engineering, best cost country sourcing

(CapEx)Fixed cost savings and margin improvementsOne-time costs & investments: ~€1 billionTargeted annual earnings contribution: ~€1 billion by end of 2015

NEXT Program

STrategic Excellence Program ‘STEP’

Annual earnings contribution of €1 billion will be achieved in 2012Achieved by end 2011: >€ 800 million

New operational excellence program STEP: Earnings contribution ~€1 billion