Value - BASF€¦ · BASF Capital Market Story July 2013 . Key financial targets 2015 / 2020 Grow...

We add value as one company

Oil & Gas

Agricultural Solutions

Functional Materials

& Solutions

Performance Products

Chemicals

Value

Andreas Kreimeyer Member of the Board of Executive Directors Roadshow Switzerland July 4, 2013

BASF Capital Market Story July 2013

Cautionary note regarding forward-looking statements

2

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.


Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities

BASF Strategy: We create chemistry__November 2011

Overview BASF

Business review

BASF strategy & growth targets

Strategic levers

BASF Capital Market Story July 2013 4

Facts & figures

Customers in more than 200 countries and in virtually all industries

No 1-3 market position in over 75% of our businesses

Unique Verbund concept for integrated production - Six Verbund sites in all major regions - Production sites in 60 countries

High-quality management team - Senior executives from 37 countries

International, interdisciplinary R&D network

BASF – The Chemical Company


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

18% average annual total shareholder return**

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

Performance

We create chemistry for a sustainable future

Perspective

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

Ludwigshafen, Germany

Antwerp, Belgium

Nanjing, China

Kuantan, Malaysia Geismar,

USA Freeport, USA

Verbund site

Positioning

5

* restated numbers, reflecting IFRS 10/11 changes


BASF today – a well-balanced portfolio Total sales 2012: €72.1 billion*

Percentage of sales 2012**

** Not depicted here: ~5% of Group sales reported as ‘Other‘ * Restated numbers, reflecting IFRS 10/11 changes, new segment structure effective Jan. 1, 2013

6

BASF – The Chemical Company Total sales 2012: €72.1 billion*

* Sales by location of customer

Sales by region*

1

2

3

4

1 Europe 58%

2 Asia Pacific 16%

3 North America 20%

4 South America, Africa, Middle East 6%

7


Vertical and horizontal integration of production plants, energy and waste flows, logistics and site infrastructure

Know-how Verbund

Energy Verbund and combined heat and power plants lead to: - Savings of ∼1.5 million tons

oil equivalent p.a. - Reduction of CO2-emissions

of ~3.4 million tons p.a.

8

Unique ‘Verbund’ concept Cost savings of >€500 million p.a. in Ludwigshafen alone

BASF site Ludwigshafen, Germany Verbund Concept

8


* Other industries: approximately 10-15% of total sales

10 – 15 %

5 – 10 %

< 5 %

> 15% Chemicals and plastics Energy and resources

Transportation Consumer goods

Construction Agriculture

Health and nutrition Electronics

Sales by customer industry (direct customers, in percent of sales)

9


Delivering attractive shareholder returns

Dividend of €2.60 per share for 2012

2003-2012: Average annual dividend increase of 16%

Attractive dividend yield of 3.7% in 2012**

Dividend yield above 3% in any given year since 2002, total payout almost €17 billion

* Dividend yield based on share price at year-end

Dividend payments

3.7% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9%

Dividend yield* 4.6% 3.1%

2.50

0.70 0.85 1.00

1.50

1.95 1.951.70

2.20

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

10

2.60

Dividend per share (in €)

3.7%

** Based on BASF share price of €71.15 on Dec. 28, 2012


Delivering consistent, long-term value

Average annual performance with dividends reinvested

0 3 6 9 12 15 18 21

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+9.5%

Last 5 years July 2008 – June 2013

+14.1%

-1.6%

+4.4%

+2.5%

Last 10 years July 2003 – June 2013

BASF

+11.2%

+3.8%

+18.4%

11


BASF Today The leading chemical company

Track record of outperforming global chemical production growth

Active management of portfolio towards higher returns and less cyclicality

Strong and profitable growth in emerging markets

Focus on innovative products and solutions

Benchmark in operational excellence with unique Verbund concept

Strong earnings power, high cash flow generation and a strong financial profile

Generation of long-term attractive shareholder returns

12




Overview BASF

Business review


Strategic levers


Economic development

GDP development* Real chemical production excl. Pharma*

2012 Forecast 2013 2012 Forecast 2013

Europe -0.3% +0.3% -1.3% +0.3%

North America +2.3% +1.9% +2.3% +2.0%

Asia Pacific +4.3% +4.5% +5.6% +6.7%

South America World

+2.4%

+2.4%

+3.7%

+2.4%

+1.9%

+3.4%

+3.7%

+3.6%

*As published on April 26, 2013

14


BASF with a solid start to 2013

Business performance Q1’13 vs. Q1’12 Sales €19.7 billion +5% EBITDA €2.9 billion (14%) EBIT before special items €2.2 billion +10% EBIT €2.2 billion (17%) Net income €1.4 billion (15%) Reported EPS €1.57 (15%) Adjusted EPS €1.67 +8% Operating cash flow €2.0 billion +33%

Sales development Period Volumes Prices Portfolio Currencies

Q1’13 vs. Q1’12 5% 1% 0% (1%)

15


Regional Business Development Q1 2013

* Sales by location of customer

Sales by region* Q1’13 vs. Q1’12 Europe €12.2 billion +8%

thereof Germany €8.9 billion +10% North America €3.7 billion (2%) Asia Pacific €2.8 billion +4% South America, Africa, €1.0 billion (-6%)

Middle East Total €19.7 billion +5%

16


2.8 2.6

3.3 3.5 3.2

2.5

3.2

2.6

1.2

2003 2004 2005 2006 2007 2008 2009** 2010 2011 2012 Q12013

Strong free cash flow generation

* 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 €

3.9 3.7

17


Excluding the effects of acquisitions and divestitures, we strive to increase our sales volumes in 2013

We aim to exceed the 2012 restated levels in sales and EBIT before special items

The expected increase in demand, together with our measures to improve operational excellence and raise efficiency, will contribute to this

We aim to earn a high premium on cost of capital once again in 2013

Outlook 2013

GDP: +2.4%

Industrial production: +3.4%

Chemical production: +3.6%

US$ / Euro: 1.30

Oil price (US$ / bbl): 110

Assumptions 2013

Outlook 2013 confirmed

18




Overview BASF

Business review


Strategic levers


Key financial targets 2015 / 2020

Grow at least 2 percentage points above chemical production

Earn a premium on cost of capital of at least €2.0 billion on average p.a.

Profitability targets Growth targets

2015

2020

Sales ~€80 billion

Sales ~€110 billion

EBITDA ~€14 billion EPS ~€7.50

EBITDA ~€22 billion

20


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

21




Overview BASF

Business review


Strategic levers – Portfolio development

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


Portfolio development 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 ...

23


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%

24


Engineering plastics Electronic chemicals Catalysts Construction chemicals Water-based resins Pigments Plastic additives Oil & Gas Personal care & food Battery materials Functional crop care Omega-3 fatty acids

BASF core business

Strong partnerships

Gazprom Monsanto Petronas Shell Sinopec Total

Selected transactions 2001 − today*

Acquisitions

~ €15bn sales ~ €10bn sales**

Divestitures

Pharma Fibers Printing systems Polyolefins Polystyrene Americas Agro generics Vitamins premix Fertilizers Styrenics (transferred into

Styrolution JV on Oct. 1, 2011)

** without Styrenics

Portfolio development Towards more market driven and innovative businesses

* only closed deals have been considered 25


Ongoing portfolio development

Acquisition of Pronova BioPharma

Aroma Ingredients Investment, Kuantan

Transactions with Statoil and Gazprom

Restructuring in Performance Products

26


BASF sales by first customer industry*

Bubble Size: BASF divisional sales by first customer industry (2010)**

> 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

Market approach Cross-divisional customer industry approach

* Excluding Oil & Gas and Other ** Excluding Agricultural Solutions, Health & Nutrition, Oil & Gas and Other

27


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

Cross-divisional approach: ‘Smartforvision’ Technology competencies combined with customer know-how

Daimler & BASF concept car ‘Smartforvison’

28


Joint development with adidas, illustrating our customer focus

New energy BOOST™ cushioning material, provides highest energy return in the running industry

Solid granular material* is ‘blown up’, turned into 1000’s of small energy capsules

With their unique cell structure, these energy capsules store and unleash energy more efficiently in every stride

New shoe is available in stores since February, 2013

Innovation with adidas: BOOST™ Technology competencies combined with customer know-how

Key facts

Photo: adidas * TPU (Thermoplastic polyurethane) 29


1.4 1.4 1.5

1.6 1.7

0,0

0,5

1,0

1,5

2,0

2008 2009 2010 2011 2012

€1.7 billion R&D expenditures in 2012, further increase planned for 2013

~10,500 employees in R&D

~3,000 projects

Research Verbund: Cooperations with 600 excellent partners from universities, start-ups and industry

Sales targets 2015 and 2020: - €10 billion from innovations introduced since 2011 - €30 billion from innovations introduced since 2011

Strong commitment to R&D Innovations for a sustainable future

Key facts R&D expenditures (billion €)

Chemicals 10%

Performance Products 20%

Functional Mat. & Sol. 20%

Agricultural Solutions 25%

Oil & Gas 2%

Corporate Research 23%

30


Health & Nutrition

Consumer Goods Construction Transportation Electronics Energy &

Resources Agriculture

Customer industries

Water solutions

Heat management

Enzymes Plant biotechnology

Batteries for mobility

Lightweight composites

Functional crop care

Medical Organic electronics

Growth Fields*

E-Power management

Wind energy

Chemistry as an enabler: Growth Fields Innovations for a sustainable future

Resources, Environment & Climate Food & Nutrition Quality of life

Chemistry as enabler

* including growth fields still under evaluation

Materials Systems & Nanotechnology

Raw Material Change

White Biotechnology

Techno-logy

fields

31


Battery materials will play a key role in advancing electromobility of the future Focus and target Focus: Advanced cathodes and electrolytes development for lithium-ion

batteries, as well as next-generation battery systems Target: Position BASF as a leading global solution provider for battery

and cell manufacturers

Business potential 2020 Overall market size: >€20 billion globally (~€16 billion in Asia Pacific) SRM size: >€5 billion globally (~€4 billion in Asia Pacific) BASF sales potential: >€500 million globally (~€350 million in Asia Pacif.)

Activities Acquisition of Novolyte Technologies, Merck’s electrolyte business,

Ovonic, equity position in Sion Power Sites in US, Europe, China. New electrode materials plant in Elyria, Ohio New electrolytes R&D laboratory and Application Technology Center for

Battery Materials starting up in Amagasaki, Japan, 2013 Ongoing collaboration with leading universities, institutes and industry

partners, as well as battery producers and OEMs

32


Future investments (€ billlion)

Thereof investments in emerging markets

Total investments

35-45%

15-20

30-40%

~15

2006 – 2010 2011 – 2015 2016 – 2020

10.9

~20%

Investments … will boost future organic growth

33


Expansion Verbund site Nanjing, China*

MDI plant Chongqing, China

* Memorandum of Understanding signed

TDI plant Ludwigshafen, Germany

Investments Major projects

Expansion oil & gas activities

Aroma Ingredients Kuantan, Malaysia

Acrylic acid complex Camacari, Brazil

34


Acquisitions … will contribute to profitable growth in the future

Provide a minimum return on investment of 8% p.a. 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 …

35


Operational excellence STEP program on track: ~€1 billion earnings contribution by 2015

Annual earnings contribution (€ million)

0

1,000

2,000

3,000

2012 2015

Former cost saving programs NEXT STEP

Targeted annual earnings contribution of ~€1 billion by end of 2015

Project timeline: 2012–2015 Program is on track Measures to optimize processes and

structures in all regions, e.g. − manufacturing, maintenance − supply chain − engineering, best-cost country sourcing

One-time costs & investments: ~€1 billion

NEXT Program

STrategic Excellence Program ‘STEP’

NEXT program successfully completed Annual earnings contribution of

~€1 billion achieved in 2012

36


Appendix

Business development Q1 2013


Chemicals Earnings increase due to higher margins

Intermediates 700 +4%

Monomers 1,680 +4%

Petrochemicals 2,016 (9%)

€4,396 -3%

556 601 569445

650

0

200

400

600

800

Q1 Q2 Q3 Q4 Q1

EBIT before special items (million €)

2013 2012

Q1’13 segment sales (million €) vs. Q1’12


Q1’13 vs. Q1’12 (2%) 1% (1%) (1%)

38


Performance Products Stable volumes but lower earnings

Performance Chemicals

891 0%

Care Chemicals 1,275 0%

€3,880-2%

Paper Chemicals 362 (8%)


Nutrition & Health 493 +4% Dispersions

& Pigments 859

(7%)

452 442

344

183

379

0

200

400

600

Q1 Q2 Q3 Q4 Q1


2013 2012


Q1’13 vs. Q1’12 0% (2%) 1% (1%)

39


Functional Materials & Solutions Increased demand in Performance Materials

Catalysts 1,453 (1%)

Construction Chemicals

458 (9%)

Coatings 698

(2%)

€4,181+0%


257216 231 228 239

0

50

100

150

200

250

300

Q1 Q2 Q3 Q4 Q1


2013 2012


Q1’13 vs. Q1’12 2% 0% 0% (2%)

Performance Materials 1,572 +6%

40


Agricultural Solutions Excellent start into the year, record sales and earnings

Q1’13 segment sales (million €) vs. Q1’12 EBIT before special items (million €)

2013 2012

0

200

400

Q1 Q1

2013 2012

0

500

1.000

1.500

Q1 Q1

1,556 498 419 1,327


Q1’13 vs. Q1’12 13% 1% 4% (1%)

41


Oil & Gas Sales growth due to higher production

Exploration & Production

789 +14%

Natural Gas Trading 3,871 +21% €4,660

+20%

Q1’13 segment sales (million €) vs. Q1’12 EBIT bSI/Net income (million €)

201415

162397

0

200

400

600

800

Q1/2012 Net Income Q1/2013 Net Income

Natural Gas Trading

Exploration & Production

Net income

640

Sales development Period Volumes Prices/Currencies Portfolio

Q1’13 vs. Q1’12 19% 1% 0%

439 468

630

42


Review of “Other”

Million € Q1’13 Q1’12 Sales 1,065 976 EBIT before special items (182) (314) thereof Corporate research Group corporate costs Currency results, hedges and other valuation effects Styrenics, fertilizers, other businesses

(97) (56)

56

59

(97) (58)

(206)

145

Special items (28) 578

EBIT (210) 264

43


Balance sheet remains strong

Balance sheet March 31, 2013 vs. Dec. 31, 2012 (billion €)

Liquid funds

Accounts receivable

Long-term assets

27.7

13.3

23.2

35.3

9.5

1.6

Other liabilities

Financial debt

Stockholders’ equity

Dec 31 2012

Dec 31 2012

March 31 2013

March 31 2013

62.7

25.6

12.8

22.3

Inventories

Other assets

9.6

3.4

62.7

Highlights March 31, 2013 Long term assets increased

mainly due to consolidation of former Pronova BioPharma business

Short term assets up due to increase in accounts receivable

Increase in financial debt due to issuance of long-term bonds

Net debt: €10.9 billion Equity ratio: 41%

36.5

11.1

2.4

9.9

3.7

66.7

3.1

66.7

Disposal group

2.5

Disposal group

3.3 2.0

44


Appendix

Impact of IFRS 10 & 11 changes on medium- and long-term sales & earnings targets of BASF Group


Key financial targets 2015 / 2020 Impact of new IFRS 10/11 regulations

Sales (billion €)

* communicated during ‚We Create Chemistry‘ Investor Day on November 29, 2011

∆ = IFRS 10/11 impact

EBITDA (billion €)

~79 ~85

~115

~72 ~80

~110

0

20

40

60

80

100

120

∆ -7 ∆ -5

∆ -5

2012 2012 restated

2015* 2015 adjusted

2020* 2020 adjusted

~12.5

~15

~23

~10

~14

~22

0

5

10

15

20

25

2012 2012 restated

2015* 2015 adjusted

2020* 2020 adjusted

∆ -2.5

∆ -1

∆ -1 ∆ = IFRS 10/11 impact

The 2015 EPS target of €7.50 is unchanged

46


Appendix

Additional information from Investor Day Asia Pacific

(June 5-6, 2013)


Innovation ~3,500 R&D staff

Market €25 billion sales

Portfolio >€2 billion sales from

new biz and acquisitions

People ~9,000 new jobs

Investment 75% OMP ratio

Excellence €1 billion cost savings

We create chemistry in Asia Pacific: 2020 targets

48


2020 2012 restated

New Business & Acquisitions

Organic Growth

Sales contributions € billion

Asia Pacific Organic growth drives top line growth

2012 restated = adjusted to changes in IFRS 10 & 11

New Sales Target: €25 billion

€12.5 billion

CAGR ~9%

>€2 billion >€10 billion

49


Address specific R&D areas for BASF in Asia Pacific

Electronics Agro

Catalysts Polymers & Materials

Mining Water

50


Expand research capabilities in Asia Pacific with new R&D centers

R&D Center Korea (2013) Focus: electronics

R&D Center Singapore (2007) Focus: water, membrane, oilfield

R&D Center Australia (2012) Focus: mining

Innovation Campus Asia Pacific, Shanghai (2012) Focus: polymers & materials

Innovation Campus Asia Pacific, India (in planning) Focus: life science, agro

R&D Center Japan (2013) Focus: battery materials

51


Appendix

Additional information on transactions in Oil&Gas


Wintershall and Gazprom agree on asset swap relating to the Blocks IV and V in the Achimov formation of the Urengoi natural gas and condensate field

Wintershall to receive: − 25% plus one share in the Blocks IV and V in the Achimov formation

with the option to increase the share in the two deposits.

Gazprom to receive: − 50% share in Wintershall Noordzee, which is active in the exploration

and production of oil and gas in the southern North Sea (Netherlands, UK, Denmark)

− 50% shares (thus taking over 100%) in the gas trading companies WINGAS, WIEH and WIEE, including shares in the natural gas storage facilities in Rehden and Jemgum, Germany, as well as Haidach, Austria, and the gas storage operator astora

Closing expected by the end of 2013; effective date April 1, 2013. Transaction is subject to approval by the relevant authorities

Ownership of gas transportation business unaffected

Asset swap with Gazprom

53


Asset swap with Gazprom Strategic rationale

BASF invests in markets/products with unique selling

propositions - especially by applying advanced technologies

The Natural Gas Trading business became a commodity market with increasing pressure on margins and limited possibilities to add value

Focuses BASF’s Oil & Gas business on highly profitable upstream exploration and production activities and delivering medium-term earnings uplift

Provides access to attractive, condensate-rich Achimov assets

Significantly increases Wintershall’s resource base

Further strengthens the strategic partnership with Gazprom and Wintershall’s focus on Russia as a core region for Oil & Gas

54


Key field data: − Target field depth: ~3,600 meters − Total resources Blocks IV and V: 2.4 billion boe

− 274 billion m³* of natural gas − 74 million tons of condensate

BASF share (600 million boe) equivalent to approx. 20% of total BASF hydrocarbon resource base as at Dec 31, 2012

Plateau production potential of >8 billion m³* p.a. in total for the two additional blocks

Synergies through regional and technological expertise of both partners

Start of production is planned for 2016

* Russian Standard Conditions (RSC)

Asset swap with Gazprom Achimov Blocks IV and V – Next step for further growth

55


Transaction with Statoil

Wintershall enters into a cooperation with Statoil − Memorandum of Understanding signed in October 2012

Wintershall substantially expands production and reserves of oil and gas in the North Sea

Wintershall acquires equity in three producing fields from Statoil − Brage (32.7%), Gjøa (15%) and Vega (30%) − production of about 36,000 boepd − 100 million boe 2P reserves net to Wintershall (50% liquids; 50% gas)

Statoil receives − 15% share in the development project Edvard Grieg (Wintershall share today 30%) − $1.35 billion financial compensation. Plus up to $100 million contingent payment in case of successful future

development of Vega, depending on additional volumes

Closing expected by mid 2013; effective as of 1st January 2013

Joint research into innovative techniques for EOR and possible application of the biopolymer Schizophyllan, developed by Wintershall and BASF

Joint research into unconventional hydrocarbon resources (shale gas/oil) starting with Statoil’s 49% farm-in to the Wintershall “Rheinland” and “Ruhr” concessions in Germany. Intention to expand these joint activities in other countries

56


Transaction with Statoil Strategic rationale

Strengthen Wintershall’s position in Norway by accessing three producing oil and gas fields

Accelerate near-term oil production of Wintershall Norge from currently around 3,000 boepd to ~40,000 boepd

By taking over operatorship of Brage field, Wintershall gets first own-operated producing field in Norway

Asset swap significantly increases Wintershall’s operating cashflow and EBIT in Norway

Wintershall reduces near-term investment requirements through divestment of 15% stake in Edvard Grieg field

Statoil’s and Wintershall’s combined knowledge on EOR and unconventional hydrocarbons could lead to new business opportunities

57


Transaction with Statoil Impact on portfolio of major fields

Catcher 20% share Premier*

Cladhan 33.5% share Sterling*

Edvard Grieg 30% share -15% out Lundin*

Astero 25% share Statoil*

Knarr 20% share BG*

Beta 15% share Suncore Energy*

Crathes/ Scolty 50% share EnQuest*

Maria 50% share Wintershall*

Skarfjell 35% share Wintershall*

Grosbeak 45% share Wintershall*

Vega 30% share Statoil*

Brage 32.7% share Wintershall to be operator

Gjøa 15% share GDF Suez*

Bergen

Assets In

Asset Out

Main Existing Assets

Broom 29% share EnQuest*

* Operator 58


Appendix

Additional information on acquisition of Becker Underwood (closing in November 2012)


Acquisition of Becker Underwood Transaction - at a glance

BASF acquires US-based Becker Underwood (BU) for a purchase price of $1.02 billion (€785 million) from Norwest Equity Partners. 100% cash consideration, no financing conditions.

BU is a global market leader in biological seed treatment and biological foliar crop protection. BU sales 2012E* $240 million (€185 million)

Closing is expected by year-end 2012, pending approval by the relevant merger control authorities.

The transaction strengthens BASF’s position as solution provider in Agro.

BU adds further momentum to BASF’s strongly growing Seed Solutions business and it complements BASF’s portfolio with biological crop protection solutions. BASF’s strong sales channels ensure broad market reach.

BASF’s Seed Solutions business will benefit from BU’s R&D platform and expertise.

* Becker-Underwood’s fiscal year ends September 30

1. Cornerstones

2. Rationale

60


1.

One of the strongest growing, most attractive markets in Crop Protection.

BASF’s Seed Solutions business has outgrown the market. Sales 2011: €248 million. 2007-2011: +24 % CAGR, average market growth 2007-2011: +11 % CAGR*

The transaction will further strengthen BASF’s Seed Solutions business. BASF will be able to provide innovative solutions covering seed protection as well as offerings beyond (e.g. inoculants or polymer coatings). Thus BASF will establish multiple touch points with key seed companies.

2.

Biological crop protection compounds become more important, especially in high value crops, such as fruits or vegetables.

BU‘s portfolio of biological fungicides and insecticides complements BASF‘s offering of chemical crop protection products. BASF will develop innovative combined solutions of chemical and biological crop protection.

Acquisition of Becker Underwood A good fit to BASF

* BASF estimate

Seed Treatment

Biological Crop Protection

61


Appendix

Additional information on acquisition of Pronova Biopharma (closing in January 2013)


Pioneer and leading company in highly concentrated omega-3 fatty acids.

Sales of €214 million and an EBITDA of ~€90 million in 2011.

Sales in more than 50 countries with one blockbuster product, mainly sold as Omacor® by Abbott in Europe and as Lovaza™ by GSK in the US.

Excellent cost position due to two state of the art production sites in Norway and Denmark (total capacity: 2,500 tons p.a.).

Strong R&D know-how to develop the next generation of omega-3 solutions – a platform for pharmaceuticals, dietary supplements and clinical nutrition.

Pronova ̶ at a glance

63


Acquisition of Pronova Biopharma ASA completed by January 31st 2013

BASF now market leader in the profitable, growing markets of high concentrated fatty acids

Pronova completes our Verbund concept for fatty acids consisting of former Cognis and Equateq Sites: - Cost-effective use of side streams and intermediates between sites - Strong technology and cost position - Market access to both Pharma and Human Nutrition customers

Untapped market space for higher concentrated omega-3-fatty acids in the attractive Dietary Supplement segment

Pharma

Human Nutrition

Lampertheim

Sandefjord Callanish

Ballerup

Lysaker

Kalundborg

Brattvaag

64

BASF Capital Market Story July 2013 65

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