We add value as one company - BASF€¦ · ~€73.6 billion market capitalization on October 27,...

We add value as one company

Dr. Martin

BrudermüllerVice Chairman

of the Board of

Executive Directors;

Chief Technology Officer

Société Générale

Premium Review

Paris

November 30, 2016

Société Générale Premium Review, November 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

BASF at a glance1

Growth lever: Research & Development2

Strategy update: “We create chemistry in Asia Pacific”3


We create chemistry for a sustainable future

Chemistry as an enabler

BASF has superior growth

opportunities:

– sustainable innovations

– investments

– emerging markets

The #1 chemical company

€70.4 billion sales,

€ 6.7 billion EBIT bSI in 2015

#1-3 in ~70% of businesses,

present in almost all countries

6 integrated Verbund sites,

production in 60 countries

A track record of strong sales

and earnings growth

>3.5% dividend yield in every

single year from 2006-2015

~€73.6 billion market

capitalization on

October 27, 2016

Ludwigshafen,

Germany

Antwerp,

Belgium

Nanjing,

China

Kuantan,

MalaysiaGeismar,

Louisiana

Freeport,

Texas

Verbund site

Positioning Performance Perspective


BASF today – a well-balanced portfolioTotal sales 2015: €70.4 billion

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

Percentage of sales 2015*


Free cash flow development

Free cash flow*

(in billion €)

0

1

2

3

4

5

2007 2008 2009** 2010 2011 2012 2013 2014 2015 Q1-Q3 2016

* Cash provided by operating activities less capex ** 2009 adjusted for re-classification of settlement payments for currency derivatives

3.2

2.5

3.2

3.7

2.6

3.2

1.7

3.6

2.9

3.9


Attractive shareholder return

We want to grow or at least maintain

our dividend at the previous year’s

level

Key facts 2015

Dividend of €2.90 per share,

an increase of 3.6%

Dividend yield of 4.1% in 2015

Dividend yield above 3.5%

in any given year since 2006

Dividend policyDividend per share

(in €)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

2.90

0.50

1.00

1.50

2.00

2.50

3.00

0

1.501.70

2.20

2.502.60 2.70

2.80

* Dividend yield based on share price at year-end

Yield* 4.1% 3.8% 7.0% 3.9% 3.7% 4.6% 3.7% 3.5% 4.0% 4.1%

1.95 1.95


Outlook 2016 for BASF Group confirmed

Outlook 2016

Sales will be considerably below prior year due to the divestiture of the natural gas trading and storage

activities and the lower oil and gas prices.

We expect EBIT before special items to be slightly below the previous year level due to significantly

lower earnings in Oil & Gas.

Assumptions 2016

GDP growth: +2.3%

Growth in industrial production: +2.0%

Growth in chemical production*: +3.4%

Exchange rate: $1.10 per euro

Oil price (Brent): $45 per barrel (previous forecast: $40 per barrel)

* Excluding pharma


The path forward

Grow sales and earnings faster than global chemical production, driven by

– Continued focus on innovations

– Investments in organic growth

– Acquisitions

– Operational excellence and Verbund advantages

Focus on pruning our portfolio

Maintain industry-leading position in sustainability


Profitability of BASF will grow faster than

global chemical production

Slightly faster than the global chemical production

Well above global chemical production

Continuously generate high levels of free cash flow

Earn a significant premium on cost of capital

We want to grow or at least maintain our dividend

Sales growth

EBITDA growth

Deliver attractive returns

Remain a strong cash provider

Progressive dividend policy

Financial targets for the coming years


Agenda

BASF at a glance1




Strong commitment to innovationInnovations for a sustainable future

Key facts

€1.95 billion R&D expenditures in

2015; to be maintained in 2016

~10,000 employees in R&D

~3,000 projects

Ranked No.1 in the

Patent Asset Index™

~1,000 new patents in 2015

Research Verbund:

Cooperations with more than 600

excellent partners from universities,

start-ups and industry

R&D expenditures

(in billion €)

1.6

1.71.8 1.9 1.95

0.0

0.5

1.0

1.5

2.0

2011 2012 2013 2014 2015

Chemicals

11%

Performance Products

20%

Functional Mat. & Sol.

20%

Agricultural Solutions

26%

Oil & Gas

2%

Corporate Research

21%

2.0

1.5

1.0

0.5

0


Managing innovation to optimize R&D spending

Strategic fit

to BASF

Attractive sales

potential

Scouting & Evaluation Incubation Boost

Scouting, BASF New Business, R&D

New business development

Industry groups

Regional market experts

Networks with external partners

…

Ideas & TopicsNew

innovation areas

Areas with

strategic fit

PhaseGate Process


Solutions for a sustainable future

Four-Way Conversion Catalyst

removes particulates

Trilon M® high-performance

phosphate alternative

SLENTITE® high-performance

insulation material

ecovio® biodegradable

polymer solution

Green Sense® resource efficient

concrete production

Acronal® MB – from biomass

to dispersions


Digitalization:

Leveraging scientific computing and modeling

Value chain

Micro Meso MacroNano

Fiber-matrix

Fabric

Parts

Molecules

Integrated computer-

aided engineering

technology for

simulating plastic part

behavior

Reduce development

costs and speed time

to market

Enhance final product

quality and

performance

Example: Ultrasim®


Establishing R&D in key markets

Advanced Materials &

Systems Research

Asia

(Shanghai)

Process Research &

Chemical Engineering

Europe

(Ludwigshafen)

Bioscience

Research

North America

(Raleigh)


R&D close to our customers:

Our facilities across Asia Pacific

R&D Center

Australia

Focus: mining

Innovation Campus

Asia Pacific, Mumbai

Focus: crop protection,

process engineering

R&D Center Japan

Focus: electronics,

battery materials

R&D Center South

Korea

Focus: electronics

Innovation Campus

Asia Pacific Phase II, Shanghai

Focus: polymers & materials,

process engineering, formulations

Advanced Materials &

Systems Research

moves HQ to Shanghai

Innovation Campus

Asia Pacific Phase I, Shanghai

Focus: polymers & materials

20142012 2013 20172015

* As of December 31, 2015

>900 R&D personnel in Asia Pacific*


Agenda

BASF at a glance1




Our strategy

InnovationAccelerate innovation by

utilizing new R&D assets

MarketGrow sales faster than Asian

chemical production

PortfolioContinue to optimize

our portfolio

PeopleAttract, develop and

retain talent

InvestmentSelectively expand our local

production network

ExcellenceDrive profitable growth

through excellence

We create chemistry

in Asia Pacific


Asia and China continue to dominate global chemical

production

Greater China: Mainland China, Taiwan, Hong Kong, Macau

South Asia: India, Pakistan, Bangladesh, Sri Lanka

South East Asia: Singapore, Philippines, Vietnam, Thailand, Indonesia, Malaysia

ANZ: Australia, New ZealandSource: BASF

Real chemical production (excl. pharma)

(in trillion US$)

2012CAGR

3.7%2012 2020

World

CAGR

5.6%1.62.5

Asia Pacific

2020

3.2 4.3

50%

23%

18%

9%

58%

18%

16%

8%

12%

65%

6%

9%

7%

1%

9%

73%

5%

6%

6%

1%

Greater China

South KoreaJapan

South Asia

ANZ

South East AsiaAsia Pacific

OthersEurope

North America


We participate in innovative and growing markets

Electronics

5.7%

2.9%

Agriculture

5.0%3.3%

4.1%

Construction

Transportation

6.6%

Consumer Products

Packaging

Sources: BASF, Smithers Pira (for packaging)

Estimated CAGR 2015–2020 for selected industries, Asia Pacific


BASF in Asia Pacific 2015

Nanjing

Hong Kong

Kuala Lumpur

Kuantan

* Only selected sites and offices are depicted in this chart. Site and office numbers

refer to companies of significant size where BASF holds a stake greater than 50%.

** As of December 31, 2015

*** Sales by location of customer, not including BASF-YPC sales (€2.2 billion)

BASF is active in 16 countries

Customers from 38 markets

Around 100 production sites*

>120 sales offices*

17,562 employees**

~€12.3 billion sales***

~€0.9 billion EBITDA before special itemsRegional center

Verbund sites

Selected sites

R&D/Technical centers

Shared Services Center


Balanced asset base in Asia Pacific:

Investments for profitable growth

Investments 2012–2015:

€3.0 billion (13% of BASF Group)

Increasing focus on investments

where BASF:

− is technologically leading

− has a competitive advantage

− expects strong profitable market

growth

Target remains: ~75% own

manufactured products by 2020

(today: ~55%)

Selected major capex projects*

Care chemicals

Polyurethane specialties

Specialty plastics

Engineering plastics

Polymer dispersions

Amines

Surfactants

Acrylic acid & SAP

Resins

Specialty plastics

Crop protection products

MDI (Chongqing)

Innovation Campus (Shanghai)

Polyamides

Neopentylglycol

Isononanol

Coating resins

Automotive coatings

Butanediol/PolyTHF®

Specialty amines

Ethylene oxide

Startup

2012–H1 2016

Startup

planned for

H2 2016–2018

China

Asia Pacific**

Process catalysts

Emollients and waxes

MDI (Caojing)

Polyvinylpyrrolidone

Automotive coatings

Aroma chemicals

2-Ethylhexanoic acid

Automotive catalysts

Construction chemicals

Highly reactive polyisobutene

Innovation Campus (Mumbai)

Automotive coatings

Specialty plastics

** Without China* Investments in property, plant and equipment (excluding acquisitions)


Key Messages

BASF is well positioned in Asia Pacific and is

quickly adapting to the changing environment.

“We create chemistry in Asia Pacific”

leveraging the growth opportunities in the market.

Asia Pacific is the largest market for the production

and consumption of chemicals.

Société Générale Premium Review, November 2016 25BASF Investor Day 2015 – Keynote speech 25

We add value as one company - BASF€¦ · ~€73.6 billion market capitalization on October 27,...

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