Investor Visit BASF Coatings · BASF –Coatings division, September 2016 5 Performance Catalysts...

Markus Kamieth President

Coatings division

Exane BNP Paribas

Investor field trip

CoatingsWell positioned in attractive segments

Münster

September 7, 2016

BASF – Coatings division, September 2016 2

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.


Agenda

Functional Materials & Solutions at a glance1

Coatings division- Overview

- Acquisition of Chemetall

- Path forward

2


BASF today – a well-balanced portfolio

Total sales 2015: €70.4 billion

Percentage of sales 2015*

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


PerformanceMaterialsCatalysts

Sales 2015:

€6.3 billion

Mobile emissions

catalysts

Process catalysts

Battery materials

Precious metals

trading

Sales 2015:

€3.2 billion

Sales 2015:

€6.7 billion

Automotive OEM &

refinish coatings

Industrial coatings*

Decorative paint

solutions

Polyurethane systems

Engineering plastics

Biodegradable

plastics

Foams

Epoxy systems

Downstream solutions supporting

sustainability via innovation

Coatings

Sales 2015:

€2.3 billion

Concrete admixtures

Systems for

residential and

commercial

construction

Construction Chemicals

* BASF to sell its global industrial coatings business to AkzoNobel.


Functional Materials & Solutions delivers

profitable growth, high earnings resilience

14.2

10.9

15.0

17.3 17.0 17.3 17.718.5

50

100

150

200

250

0

4

8

12

16

20

2008 2009 2010 2011 2012 2013 2014 2015

Sales*

billion €

EBITDA bSI

indexed

* Figures shown as reported; with “Precious / Base Metal Services” which include the

precious metals trading activities (EBITDA margin ~1%. Sales in 2015: €2,388 million).


Sales 2015

billion €

We approach the market with a strong

industry orientation

Consumer

Goods

Construction

Automotive

€18.5

billion

Chemicals/

Industrials


Strong customer relationships turn our

innovation power into business success

Numerous formats drive collaboration with our customers

>7,000 BASF experts in customer facing functions* help developing ideas into products

* Sales, marketing, technical experts, customer service; total number of employees >25,000


Automotive is a growth business

for BASF

BASF sales to Automotive vs. global vehicle production

(indexed)

* Excl. precious metals, coatings refinish business

50%

75%

100%

125%

150%

175%

2007 2008 2009 2010 2011 2012 2013 2014 2015

BASF sales

to AutomotiveCAGR

6.7%

Global vehicle

production

CAGR

2.8%


Agenda

Functional Materials & Solutions at a glance1

2 Coatings division- Overview

- Acquisition of Chemetall

- Path forward


What are coatings used for?

Protection Color


Coatings – smart combination of different

functional layers

ClearcoatTransparent protection

BasecoatColor, metallic effect

Primer Finish quality, stone chip resistance

E-coatCorrosion protection

Pre-treatment

BodySteel, aluminum

Example: Automotive OEM coatings


More than 75% of Coatings’ sales related

to Automotive markets

Decorative

Paints

Industrial

Coatings**

Automotive

Refinish Coatings

Automotive

OEM Coatings

Coatings

Technology approvals

Efficient and robust

processes

Customer proximity

Well established

premium brands

Distribution network

Value added services

Innovative products

and processes

Flexible production

systems

Best known and most

desired decorative

paint brand in Brazil

Distribution network

Success factors Success factors Success factors Success factors

* Percent of total sales in 2015

** BASF to sell its global industrial coatings business to AkzoNobel.

https://www.google.com/imgres?imgurl&imgrefurl=http://www.lackguru.de/de/contacts/unsere-partner.html&h=0&w=0&tbnid=U6BFnPaAV1624M&zoom=1&tbnh=225&tbnw=225&docid=-DG8SjTwj_L-eM&tbm=isch&ei=zh4oVLTkAsPmas2CgagB&ved=0CAoQsCUoAg

https://www.google.com/imgres?imgurl&imgrefurl=http://www.lackguru.de/de/contacts/unsere-partner.html&h=0&w=0&tbnid=U6BFnPaAV1624M&zoom=1&tbnh=225&tbnw=225&docid=-DG8SjTwj_L-eM&tbm=isch&ei=zh4oVLTkAsPmas2CgagB&ved=0CAoQsCUoAg


BASF Coatings with strong positions

serving attractive markets

Decorative

Paints

Industrial

Coatings*

Automotive

Refinish Coatings

Automotive

OEM Coatings

5% 3% 4%4%

Expected CAGR of strategic relevant markets 2015 – 2025

#2 globally Coil #3 Europe#3 globally #1 Brazil

Coatings

** BASF to sell its global industrial coatings business to AkzoNobel.


Strong partnerships, high-value brands

Leading market position based on technology strength, innovative business models

Technology

Innovative integrated coatings processes

Design

competencies

Color development

Technical know-how & support

Manufacturing

Two outstanding premium brands in Refinish globally

Strong OEM partnerships High brand value

One of the strongest end-consumer brands in Brazil


Regionally balanced portfolio – about

50% of sales in emerging markets

Europe

Strong position in Automotive

OEM and Automotive Refinish

Coatings business

North America

Strengthened market position

with Automotive OEM

Coatings, and well-established

Refinish premium brands

Asia Pacific

#1 player in Automotive OEM

Coatings market in China

South America

Market leader position with

Suvinil® for premium

Decorative Paints in Brazil

Asia Pacific

728 (23%)

South America,

Africa, Middle East

602 (19%)Europe

1,266 (40%)

North America

570 (18%)

Sales by region* 2015

in million €

€3,166million

* By location of customer


.

17

Coatings’ sites are in proximity to 80% of

global Automotive production

North America

3 Production sites

1 R&D center

Europe

8 Production sites

3 R&D centers

Asia Pacific

6 Production sites

4 R&D centers

South America

3 Production sites

1R&D center

Production sites

R&D centers

Africa

1 Production site


BASF Coatings with strong #1 position as

supplier to OEMs in China

BASF Coatings well positioned to

capture future growth in China

A strong base: #1 in the Chinese

OEM segment already today

Strong R&D hub at BASF

Innovation Campus, Shanghai

>30% of our global Coatings R&D

capacity will be in Asia by 2020

Commitment to further grow our

asset footprint in the region

OEM market in China

Growing demand for the latest

OEM Coatings technology

Sustainability and innovative

process solutions become key

A long history in China

Basecoat plant

Caojing

Resins plant

Caojing

Headquarters &

Production Minhang

Automotive coatings

plant Shanghai

BASF Coatings grows faster than Chinese OEM market


BASF to acquire Guangdong Yinfan

Chemistry

Transaction Highlights

Agreement signed in April 2016

Acquisition of state-of-the-art

facilities, technology and

established brands

Complementary product portfolio

and customer base

Local production footprint to

enhance customer proximity

Transaction expected to close in

the second half of 2016

Strengthens BASF position in the fast-growing Chinese automotive aftermarket

Closer proximity to Refinish customers

Jiangmen City

Guangdong Province


Coatings has delivered profitable growth

in recent years

2.5

2.2

2.6

2.83.0 2.9

3.0

3.2

50

100

150

200

250

0

1

2

3

2008 2009 2010 2011 2012 2013 2014 2015

Sales

billion €

EBITDA bSI

indexed


BASF to acquire Chemetall

Transaction highlights

Purchase price of US$3.2 billion (debt free)

All-cash offer, financing secured

Expected closing of transaction by the end of 2016

Synergies on industry-typical level

EPS accretive in year 1 excluding integration costs, in year 2 including integration costs

Transaction will significantly enhance BASF Coatings’ position as complete solutions provider

Chemetall – a global technology and innovation leader in metal surface treatment


Chemetall complements BASF’s portfolio,

adding highly attractive surface treatment

Superior products and processes for BASF customers - also beyond Coatings

Chemetall

Pre-treatment

BASF

Coatings

Offer full solution competence

to customers across wide range

of industries

Benefit from convergence of

pre-treatment and coatings,

offering superior product and

process solutions

Develop superior application

processes leveraging joint

expertise

Complete surface

treatment provider

Excellent customer

access and

approvals especially

in automotive

Well recognized

customer service

offering in coatings

Chemical know-how

and strong R&D

platforms within

BASF Group

In-depth customer

insights across wide

industry range

Recognized

technology leader in

metal surface

treatment

Complete portfolio

beyond pure surface

treatment

+


Chemetall – an excellent strategic fit for

BASF Coatings

Technology

adjacency

Compelling combination of surface treatment and coatings technologies

Creates unmatched “solution competence” for customers

Access to key

growth markets

Superior access to growth industries (e.g. automotive, aerospace)

Global footprint with local production, technical centers in China and India

Downstream

solution business

Complex formulation businesses based on application know-how

Customer centricity, product quality and technical service as differentiators

Enhanced

technology basis

Growth opportunities through combining broad technical and application

competence with BASF’s chemistry and formulation know-how

Strong and

robust financials

Excellent track record of growth above market and attractive margins

“Asset light” business model with strong free cash flow conversion

Industry-leading

expert team

High-quality resources and technical expertise

~1,200 sales professionals with in-depth application and process know-how

BASF – Rating Agency Meeting, March 2016 24

Coatings: Path forward

We aim at continued profitable growth via:

Focusing on Automotive globally and profitable niche

segments

Leveraging our technology leadership and cost

competitiveness

Further strengthening our collaborations with OEMs

Continued expansion of our asset footprint in Emerging

Markets

BASF – Coatings division, September 2016


Chemetall – a global leader in surface

treatment products and services

FiguresFacts

Sales

2015: US$845 million

2016E*: US$851 million


EBITDA

2015: US$202 million



EBITDA margin

2015: 24%

2016E*: 25%

2017E*: 26%

CAGR sales

(2007 – 2015)~7% (at constant exchange rates)

Key customer

industries

Automotive, aerospace, coil,

metal forming

Regional sales

~50% Western Europe

~30% North America

~20% Emerging markets, mainly Asia

Employees ~2,500 (~50% sales professionals)

Sites21 production sites in all regions

10 R&D sites

One of the strongest globally managed

brands in the sector

Proprietary manufacturing technologies,

rigorous product quality and performance

standards

Leading market positions in the automotive,

aerospace and cold forming segments

Long-standing, service-intensive customer

relationships

Significant global presence and record of

accelerated expansion in emerging markets

Track record of strong growth and high

profitability* average analysts’ estimates

Investor Visit BASF Coatings · BASF –Coatings division, September 2016 5 Performance Catalysts...

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