Robert Blackburn “Evolving Supply Chain Requirements”

Supply Chain Requirements

in a “VUCA” world - volatility, uncertainty, complexity, ambiguity -

Robert Blackburn President Information Services & Supply Chain Operations 10 October 2013

BASF @ inSIGHT

§ Chemistry as an enabler § BASF has superior growth

opportunities: – sustainable innovations – Investments – emerging markets § Ambitious financial targets

§ The #1 chemical company § €72.1 billion sales, €6.6

billion EBIT bSI in 2012* § #1-3 in >75% of businesses,

present in >200 countries § 6 integrated Verbund sites,

production in 60 countries

§ 10 years of strong sales and earnings growth § 16.5% average annual total

shareholder return**

§ 16% average annual dividend increase, >3% yield in every single year***

Performance Perspective

** August 2003 – July 2013 *** for 2003-2012

Ludwigshafen, Germany

Antwerp, Belgium

Nanjing, China

Kuantan, Malaysia Geismar,

USA Freeport, USA

Verbund site

Positioning

* Restated numbers, reflecting IFRS 10/11 changes

We create chemistry for a sustainable future

BASF @ inSIGHT 10 October 2013 2

Segment structure of BASF group

Crop Protection

Performance Products

Dispersions & Pigments Care Chemicals

Functional Materials & Solutions

Agricultural Solutions

Performance Chemicals

Nutrition & Health Paper Chemicals

Oil & Gas

Oil & Gas

Chemicals

Monomers

Intermediates

Petrochemicals

Functional Materials & Solutions

Construction Chemicals

Coatings

Catalysts

Performance Materials


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.


Portfolio development Moving downstream towards customer industries

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

Functionalized Materials & Solutions Customized Products Classical Chemicals

2020 in % of sales**

Chemical Industry First customer industries*


~ 40%

~ 30% ~ 70%


~ 50%

~ 60%

~ 50%


Growth with increasing share from emerging markets

*BASF definition: Developed markets include EU15, Norway, Switzerland, North America, Japan, Australia, New Zealand

** Sales excluding Oil & Gas


2010 in % of sales

(€53bn**)

2001 in % of sales

(€28 bn**)

Emerging markets Developed markets*

~ 66%

~55% ~ 45%

~ 78%

~ 34%

~ 22%


BASF Group – Information Services & Supply Chain Operations

7 BASF @ inSIGHT

n Restructured organization effective July 1, 2013

n Employees (as of June 28, 2013): ~ 13,000

n Supporting BASF Group strategy as fully globally integrated IT, Supply Chain and Logistics Operations Unit

n Delighting our customers through on-time delivery of our products supported by state of the art information technology

On time every time!

10 October 2013

Simplicity in operating model builds the foundation for excellence in execution

8 BASF @ inSIGHT

Our new GS operating model defines the way we work and builds the foundation for the GS vision

Operate services

Develop services Strategy

Interface to internal and external service providers

Business Relationship Management1

Divisional Support G

S

Customers

Internal and external service providers

§ One face to the customers

§ Capture business needs and translate into requirements

§ Clear separation of business requirements capturing, strategy, development and ongoing operations

§ Empowers leaders and employees to take entrepreneurial action

1) including all Information Managers which are functionally managed by Information Services & Supply Chain Operations

10 October 2013

The chemicals industry experiences significant changes to known patterns and also to “traditional growth believes”

9 BASF @ inSIGHT 10 October 2013

■ Chemicals flow patterns change with regard to volume and direction

■ Trend for towards more specialty chemicals will drive differentiation and complexity in supply chains

■ Wild card regions will make rate of volume growth harder to predict

■ Intensified competition due to new capacity additions drive volatility

■ Growing transportation distances multiply effects of volatile volume development

■ Already constraint capacity on certain routes and regions will put supply chain performance at risk

… have impact on chemical supply chains

Market trends in chemicals…

Source: A.T. Kearny study

Effectiveness and customer orientation at competitive costs is the key differentiator for successful Supply Chains


Differentiated services and quality

Enhanced alignment and transparency

Competitive cost and increased efficiency

New and innovative services

Increased effectiveness and speed

Closer cooperation with our customers

State-of-the art technologies help Supply Chains to become more effective and efficient


Business Analytics: Statistical Decision Tools

Visibility Tools

Process automation and collaboration

Track & Trace

Technologies enabling

effective and efficient Supply Chains

Increasing importance of Supply Chain: What are the requirements of BASF?

BASF evaluation competency

BASF safety requirements

BASF Partner

Joint development of new markets

Further Development of Good Practices

…

Strategic Dialogue / conceptual exchange


Which questions do you have?


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BASF @ inSIGHT

Robert Blackburn “Evolving Supply Chain Requirements”

Technology

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