We add value as one company - BASF USA - Home add value as one company Hartwig Michels President...

BASF Capital Market Story March 2015 1

150 years 150 years

We add value as one company

Hartwig Michels President Region Europe Nomura Global Chemical Industry Leaders Conference London March 26, 2015


150 years

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.


150 years

Chemistry as an enabler BASF has superior growth

opportunities: – sustainable innovations – investments – emerging markets

The #1 chemical company €74 billion sales, €7.4 billion

EBIT bSI in 2014 #1-3 in ~75% of businesses,

in almost all countries 6 integrated Verbund sites,

production in 60 countries

A track record of strong sales and earnings growth

12% average annual dividend increase, >3% yield in every single year*

~€79 billion market capitalization end of February 2015

Perspective

* For 2004-2014

Ludwigshafen, Germany

Antwerp, Belgium

Nanjing, China

Kuantan, Malaysia Geismar,

USA Freeport, USA

Verbund site

Positioning

We create chemistry for a sustainable future

Performance

20

30

40

50

60

70

80

90

2008 2009 2010 2011 2012 2014 2013 2015


150 years

Percentage of sales 2014*

* Not depicted here: ~5% of Group sales reported as ‘Other‘. Paper Chemicals results have been incl. in Performance Products until the end of 2014. Thereafter Paper Chemicals has been dissolved.

BASF today – a well-balanced portfolio Total sales 2014: €74 billion


150 years

Strategy – Our purpose Sustainability is an integral part of our strategy


150 years

Global reduction in carbon emissions of 6 million metric tons/a. and reduction of waste

Example Ludwigshafen site: avoidance of 7 million metric tons of freight/a. = 280,000 fewer truckloads

Shared use of on-site facilities: fire department, security, waste water treatment and analytics

Verbund: Unique competitive advantage

* Savings include only tangible synergies. Additional (intangible) benefits and retained profits are not included.

Verbund generates >€1 billion p.a. global cost savings* & supports sustainability


Business review

Growth levers

Vorführender

Präsentationsnotizen


150 years

BASF with continued earnings growth

Business performance* Q4’14 vs. Q4’13 FY’14 vs. FY’13 Sales €18.0 billion (1%) €74.3 billion 0% EBITDA €2.9 billion +11% €11.0 billion +6% EBIT before special items €1.5 billion +3% €7.4 billion +4% EBIT €1.7 billion +7% €7.6 billion +7% Net income €1.4 billion +26% €5.2 billion +8% Reported EPS €1.54 +25% €5.61 +7% Adjusted EPS €1.04 +4% €5.44 +2% Operating cash flow €2.0 billion +4% €7.0 billion (14%)

Sales development Period Volumes Prices Portfolio Currencies

Q4’14 vs. Q4’13 1% (4%) 0% 2%

FY’14 vs. FY’13 4% (3%) 0% (1%)

* Previous year values restated due to dissolution of disposal group “Natural Gas Trading“


150 years

0

1

2

3

4

2004 2005 2006 2007 2008 2009** 2010 2011 2012 2013 2014

Free cash flow development reflecting increased capex in recent years

* 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

2.6

3.3 3.5

3.2

2.5

3.2

3.9 3.7

2.6

3.2

1.7


150 years

We want to grow or at least maintain our dividend

Dividend proposal of €2.80 per share, an increase of 3.7%

Average annual dividend increase of approx. 12% (2005-2014)

Attractive dividend yield of 4.0% in 2014**

Dividend yield above 3% in any given year since 2005

3.7%

Attractive shareholder return

Key facts

Dividend per share (€)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

2005 2008 2011 2014

0.50

1.00

1.50

2.00

* Dividend yield based on share price at year-end

3.1% 4.1% 3.8% 7.0% 3.9% Yield*

** Based on BASF share price of €69.88 on Dec 30, 2014

Proposal:

4.6%

2.50

3.7%

3.00

3.5% 4.0%

1.00

1.50

1.95 1.95 1.70

2.20 2.50 2.60 2.70 2.80

Dividend policy


150 years

Average annual performance with dividends reinvested

0 3 6 9 12 15 18

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+10.1%

Last 5 years March 2010 – February 2015

+19.9%

+9.1%

+15.3%

+14.7%

Last 10 years March 2005 – February 2015

BASF

+10.0%

+4.8%

+16.1%

Delivering consistent, long-term value


150 years

Outlook 2015 Expectations for the global economy

2014 (actual)

GDP 2.5%

Chemicals (excl. pharma) 4.0%

Industrial production 3.4%

US$ / Euro 1.33

Oil price: Brent (US$ / bbl) 99

Forecast 2015

2.8%

4.2%

3.6%

1.20

60-70


150 years

Outlook BASF Group 2015

We aim to increase volumes and sales excluding the effects of acquisitions and divestitures.

Sales are likely to be slightly higher than in 2014, driven by higher sales in the Performance Products and Functional Materials & Solutions segments.

We expect EBIT before special items to be on the level of 2014. Higher earnings in our chemicals business and in the Agricultural Solutions segment are anticipated to compensate for considerably lower earnings in Oil & Gas.

We aim to earn again a substantial premium on our cost of capital, but on a lower level than in 2014.


150 years

Western European gas prices predominantly market-driven

Gas markets outside of Europe partially regulated (e.g. Russia, Argentina)

Annual oil price sensitivity for O&G segment: ±€20 million EBIT per ±$1 per bbl. (Brent)

Oil & Gas: Impact of the current oil price and measures

Key Facts Production split* 2014

Operational excellence

Cost optimization

CAPEX optimization

Active portfolio management

Measures

Liquids ~25%

~136 million

boe

Natural Gas ~75%

*Exploration & Production

Oil price vs. Western European gas price (2010 = 100)

80

130

180

230

2010 2011 2012 2013 2014

Natural Gas TTF Netherlands Oil price Brent


150 years

EBIT before special items

Million € 2014 Forecast 2015

Chemicals 2,367 slight decrease Performance Products 1,455 considerable increase Functional Materials & Solutions 1,197 considerable increase Agricultural Solutions 1,109 considerable increase Oil & Gas 1,795 considerable decrease Other (566) slight decrease

BASF Group 7,357 at prior-year level

Outlook 2015-Forecast by segment

With respect to EBIT before special items, “slight” means a change of 1-10%, while “considerable” is used for changes greater than 11%. “At prior-year level” indicates no change (+/-0%). For sales, “slight” means a change of 1-5%, while “considerable” is used for changes of 6% and higher. “At prior-year level” indicates no change (+/-0%).


Business review

Growth levers – Portfolio development

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

Vorführender



150 years

Portfolio development Moving downstream towards customer industries

Functionalized Materials & Solutions Customized Products Classical Chemicals

2014 in % of sales**

Chemical Industry First customer industries*


~ 40%

~ 35% ~ 65%


~ 50%

~ 60%

~ 50%


~ 30% ~ 70%

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


150 years

Catalysts Construction chemicals Water-based resins Pigments, plastic additives Personal care & food Omega-3 fatty acids Functional crop care Enzymes Oil & Gas Battery materials Specialty plastics …

BASF core business

Strong partnerships

Gazprom Monsanto Petronas Shell Sinopec Statoil Total

Selected transactions 2005 − today

Acquisitions

~ €14 billion sales

Divestitures

Agro generics Vitamin premixes Fertilizers Construction equipment,

flooring and wall systems Styrenics Styrene monomer Textile chemicals …

~ €7 billion sales

Portfolio development Towards more market driven and innovative businesses


150 years

Monomers

Intermediates

Dispersions & Pigments

Performance Chemicals

Care Chemicals

Paper Chemicals

Coatings

Catalysts

Construction Chemicals

BASF sales by first customer industry*

> 15 %

> 10 %

< 10 %

> 15 %

Consumer goods

Transportation

Construction

Energy & Resources

Market approach Cross-divisional customer industry approach

* Excluding Oil & Gas, Crop Protection and Other. 2013 numbers

Petro- chemicals

Performance Materials

Bubble Size: BASF divisional sales by first customer industry*/**

** Nutrition & Health sales predominantly into Health & Nutrition market


150 years

Further increase of R&D spending in 2015

~10,700 employees in R&D

~3,000 projects

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

Target 2015:

– €10 billion in sales from innovations launched within the last 5 years

Strong commitment to innovation Innovations for a sustainable future

Key facts

1.5 1.6

1.7 1.8 1.9

0,0

0,5

1,0

1,5

2,0

2010 2011 2012 2013 2014

R&D expenditures (€ billion)

Chemicals 10%

Performance Products 19%

Functional Mat. & Sol. 20%

Agricultural Solutions 27%

Oil & Gas 3%

Corporate Research 21%

2.0

1.5

1.0

0.5

0


150 years

0

50

100

150

BASF Competitors

FWC™ Combines functionality of a 3-way conversion catalyst with integrated filter on a ceramic substrate

Reduces gaseous emissions Precious metal-based catalytic coating removes exhaust gases from engine emissions**

Removes particulates Filters & combusts particulates

Complies with emissions limits Helps automakers meet new Euro 6c regulatory standards

FWC™ introduced in 2013 Sustains BASF’s leading technology position

Leading position: Global mobile emissions catalysts patents*

* 2009 – 2013 ** Hydrocarbons, carbon monoxide, nitrogen oxides *** https://www.basf.com/en/company/news-and-media/science-around-us/catalytic-converter.html

FWC™ reduces emission of gaseous pollutants and particulates

HC

CO

NOx

N2

H2O

CO2

Particulates

Innovation: Four-Way Conversion Catalyst (FWC™)


150 years

Innovation: Green Sense® Concrete for sustainable construction

Envi

ronm

enta

l Im

pact

H

iigh

Reference Concrete

High Low

Low

Total Cost of Ownership

BASF’s Green Sense® Concrete system consists of:

1) Innovative admixture products

2) Concrete mix services

3) Eco-efficiency analysis

Replaces up to 70% of cement with recycled materials

Superior eco-efficiency

Applied in the construction of landmark projects, e.g. One World Trade Center, NYC


150 years

Innovation: Trilon® M Chelating agent for more sustainable detergents and cleaners

Trilon® M: Phospate free dish washing solution

Trilon® M – Alternative to phosphate for automatic dish washing

High sustainability performance: Bio-degradable and eco-friendly

Fast growing global market demand driven by regulatory changes and consumer demand for environmentally-friendly products

2010: Capacity expansion to 120,000 tons

2014: Announcement to build a new Trilon® M world scale plant in Alabama, USA

Compared with alternative chelating agents Trilon® M

Is readily biodegradable

Meets eco-label requirements

Has better eco-toxicology profile

Shows high performance


150 years

Innovation: SAVIVA™ Highly efficient Superabsorbent Polymers (SAP)

SAVIVA™ – Based on a pioneering SAP technology platform

SAVIVA™ the next generation of SAP Round-shaped particles with micro-pores initiates

innovative liquid distribution mechanism Compared to other SAPs SAVIVA™ leads to:

Efficiency gains: SAP reduction Fluff reduction Reduction of storage, packaging and

transportation costs

Improved sustainability: Better carbon footprint due to SAP and weight

reduction Enabler for future diaper designs offering a new

level of comfort and dryness

SAVIVA™ round shaped particle


150 years

Lower production cost than industry average

Efficiency gains:

run-time extension

higher throughput

lower energy consumption

Proprietary technology, new process protected by 280 active patent families

3 out of 6 production sites already equipped: Ludwigs-hafen, Antwerp and Nanjing; Camaҫari (Brazil) is currently starting-up

Innovation: New acrylic acid technology BASF with best-in-class acrylic acid process

80

85

90

95

100

BASFnew process

BASFclassic process

Industry average

Acrylic acid production technology benchmark Industry average costs = 100; normalized

Key facts

Source: BASF estimate


150 years

Growth fields for innovation

Growth fields

White Biotechnology

Materials, Systems & Nanotechnology

Raw Material Change

Key customer industries

Health & Nutrition

Consumer Goods

Transportation

Energy & Resources

Electronics

Agriculture

Construction

Technology fields

...

Batteries for Mobility

Enzymes

Heat Management for Construction

Organic Electronics

Functional Crop Care

Plant Biotechnology

E-Power Management

Wind Energy

Lightweight Composites

Water Solutions


150 years

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 …


150 years

.

Major investment project start-ups in 2015

Pasir Gudang

Theodore

Polymer dispersions*

Chelating agents*

Coating resins*

Shanghai

Upstream businesses Downstream businesses

Major capex projects for start-up in 2015

Camaҫari Acrylic acid +160,000 mt SAP +60,000 mt

Chongqing

Nanjing

Geismar

Maoming

Neopentylglycol +40,000 mt

Specialty amines* Ethylene oxide*

MDI +400,000 mt

Isononanol*

TDI complex +300,000 mt Specialty amines* Crop protection products*

Formic acid +50,000 mt Polyurethane systems

Polyamides +100,000 mt

Ludwigshafen

* Capacity not published

Yesan Specialty plastics*

Precious metals recycling*

Cinderford

Guaratingueta Crop protection

formulations*

Automotive catalysts*

Automotive catalysts*

Chennai


150 years

Investments for organic growth

Performance Products 15%

Oil & Gas 21%

€19.5 billion

Functional Materials & Solutions 13%

Capex budget 2015-2019

Other 12%

Chemicals 33%

Capex budget 2015-2019

Asia Pacific 18%

€19.5 billion

South America* 8%

North America 27%

Europe 45%

Agricultural Solutions 6%

Other 2%

by segment by region

* Includes also regions Africa and Middle East


150 years

Operational excellence programs ~€1.3 billion earnings contribution by 2015

0

1,000

2,000

3,000

4,000

2014 2015

Former cost saving programs

pre- 2008 NEXT

2008-2011 STEP

2012-2015

Annual earnings contribution in € million

Targeted annual earnings contribution increased from €1 billion to ~€1.3 billion by end of 2015

€1 billion achieved by the end of 2014

Optimization of processes and structures in all regions, e.g. manufacturing, maintenance

supply chain

engineering, best-cost country sourcing

Project timeline: 2012–2015

One-time cost : ~€1 billion

STEP program


150 years

Restructuring measures in Performance Products strengthening competitiveness

Reduction of ~2,400 positions until end of 2017

Annual earnings contribution of ~€500 million from 2017 onwards

Run rate of €250 million by end of 2015

One-time costs in the magnitude of ~€250-300 million

Future investments - Innovations and R&D - Organic growth incl. capital expenditures - Selected acquisitions in growth fields


150 years

Operational excellence Strong track record

BASF Group* 2001–2014 (Index; CAGR 2001–2014)

50

100

150

200

250

300

350

2001 2003 2005 2007 2009 2011 2013

10 %

7 %

3 %

EBITDA

Sales

Fixed costs

* Excl. companies with major IFRS 10/11 restatements, i.e. BASF YPC Nanjing, Libya onshore, other Oil & Gas and Catalysts companies

Cost discipline and self-help remain key priorities

Restructuring of Performance Products on-track to achieve €500 million earnings contribution by 2017 (run rate ~€250 million by the end of in 2015)

STEP program: Targeted annual earnings contribution increased from €1 billion to ~€1.3 billion by end of 2015

CAGR 2001 – 2014

2014

Fixes cost management


150 years

• … is the #1 chemical company

• … has a strong track record of profitable growth

• … relentlessly focuses on Operational Excellence

• … targets promising growth opportunities

• … is committed to delivering high shareholder returns also in the future.

BASF…


Appendix I – Q 4 2014 results

Vorführender



150 years

Chemicals Petrochemicals drive earnings growth

Intermediates 686 (3%)

Monomers 1,582 +6%

Petrochemicals 1,803 (10%)

€4,071 (3%)

510580

0

200

400

600

Q4'13 Q4'14

Q4’14 segment sales (million €) vs. Q4’13 EBIT before special items (million €)


Q4’14 vs. Q4’13 (3%) (4%) 0% 4%

FY’14 vs. FY’13 3% (3%) 0% 0%

FY'13 FY'14

1,000

2,000

1,500

500

2,500 2,182 2,367

+14% +8%


150 years

Performance Products Sales slightly up and earnings on prior year level

Performance Chemicals 840 +5%

Care Chemicals

1,164 +1%

€3,718 +1%

Paper Chemicals 341 (1%)

Q4’14 segment sales (million €) vs. Q4’13

Nutrition & Health 492 (4%)

Dispersions & Pigments

881 +1%

216 217

0

100

200

300

Q4'13 Q4'14


Q4’14 vs. Q4’13 (2%) 0% 0% 3%

FY’14 vs. FY’13 1% 0% 0% (2%)

EBIT before special items (million €)

FY'13 FY'14

1,000

200

1,200

400 600 800

1,400 1,600 1,455

1,365

0% +7%


150 years

Functional Materials & Solutions Continued robust demand from automotive

Catalysts 1,577

+19%


511 +3%

Coatings 771 +3%

€4,444+8%


238220

0

50

100

150

200

250

Q4'13 Q4'14 FY'13 FY'14


Q4’14 vs. Q4’13 4% 0% 0% 4%

FY’14 vs. FY’13 5% 0% 0% (2%)


Performance Materials 1,585 +2%

1,000

600

400

200

800

1,200 1,197 1,070

(8%) +12%


150 years

Agricultural Solutions Strong finish to the year


0

200

400

600

800

1,000

Q4 Q42014 2013

890 1,109

020406080

100120140

Q4'13 Q4'14


Q4’14 vs. Q4’13 22% (3%) 0% 6%

FY’14 vs. FY’13 5% 2% 0% (3%)


FY'13 FY'14

1,000 1,200

600 800

400 200

1,400 1,222 1,109

67

123

+84% (9%)


150 years

406 383

1,450 1,412

Oil & Gas Lower oil and gas prices impacted earnings

Exploration & Production

728 (15%)

Natural Gas Trading 3,277 0%

€4,005 (3%)

Q4’14 segment sales (million €) vs. Q4’13 EBIT before special items / Net income (million €)*

FY '13 FY '14

Sales development Period Volumes Price/Currencies Portfolio

Q4’14 vs. Q4’13 10% (12%) (1%)

FY’14 vs. FY’13 14% (13%) 1%

Natural Gas Trading Exploration & Production Net income

0

1,000

2,000 1,856 1,795

141 59

361

288 637 446

Q4 '13 Q4 '14

502

347

0

200

400

800

1,730 1,464

* Pevious year values restated due to dissolution of disposal group “Natural Gas Trading“

600


150 years

Review of ’Other’

Million € Q4 2014 Q4 2013 2014 2013

Sales 700 1,106 3,609 4,190 EBIT before special items (28) (114) (566) (618) Thereof corporate research costs group corporate costs currency results, hedges and other valuation effects other businesses

(98) (59) 110

23

(102) (66)

(109)

99

(389) (218)

(2)

133

(386) (237) (190)

254

Special items 473 3 433 (46)

EBIT 445 (111) (133) (664)


150 years

Million € 2014 2013* Cash provided by operating activities 6,958 8,100 Thereof changes in net working capital miscellaneous items

(699) (953)

714 (720)

Cash provided by investing activities (4,496) (5,994) Thereof payments related to tangible / intangible assets (5,296) (4,873) acquisitions / divestitures 373 (1,093) Cash used in financing activities (2,478) (1,874) Thereof changes in financial liabilities dividends

288 (2,766)

828 (2,702)

Free cash flow decreased to €1.7 billion; reduction due to a swing in net working capital and higher capex

Payments related to tangible/intangible assets amounted to €5.3 billion (+€423 million) Continued high dividend payout in 2014: ~€2.8 billion

2014

Operating cash flow development in 2014

* Previous year values restated due to dissolution of disposal group “Natural Gas Trading“


150 years

Balance sheet remains strong Balance sheet 2014 vs. 2013 (billion €)

Liquid funds

Accounts receivable

Long-term assets 28.2

15.4

27.8

38.3

10.2

1.8

Other liabilities

Financial debt

Stockholders’ Equity

Dec 31, 2013

Dec 31, 2013

Dec 31, 2014

Dec 31, 2014

64.2

27.7

14.4

22.1

Inventories

Other assets

9.6

3.7

64.2

Highlights 2014 Increase in long-term assets

by €5.7 billion, due to capex and acquisitions

Increase of pension provisions by €3.6 billion due to continued decline of discount rates

Financial debt increased by €1.0 billion reflecting issuance of bonds

Net debt: €13.7 billion Net debt/EBITDA ratio: 1.2 Equity ratio: 40%

44.0

10.4

1.7

9.6

4.0

71.4 71.4

10.2 11.3

(Previous year values restated due to dissolution of disposal group “Natural Gas Trading“)

150 years

BASF Europe – Setting course for higher growth

150 years

44

BASF Equity Story – Region Europe, March 2015

BASF in Europe: Focused on stronger growth ► Leverage #1 position in BASF’s core market, outgrow markets

► Seize growth opportunities

– Enhance sales & marketing to increase customer proximity

– Introduce innovative products and solutions

– Focused investments on fast growing markets

– Exploit opportunities in Eastern Europe, Middle East, Africa

► Maintain highly efficient production sites, accelerate operational excellence

45


Business environment in Europe

BASF in Region Europe

Growth at different speeds

150 years

46


640 645 695

230 265 320

2010 2014 2020

Europe is a significant and growing chemicals market

Population of >2 bn people

GDP and industrial production growth of ~2% expected

Chemical market at US$910 bn in 2014

Western Europe:

– Moderate growth resuming

– Southern Europe starting to see improvement

Emerging Europe:

– Growing ~3x faster than Western Europe

Chemical production (excl. pharma) in Europe (billion US$)

Macroeconomic Situation

Source: BASF Economic Intelligence

Western Europe

+1.6% p.a.

Emerging Europe (Central & Eastern Europa, Middle East, Africa)

150 years

BASF Equity Story – Region Europe, March 2015 47

Development of key customer industries* in Europe

Agricultural Solutions Long-term fundamentals remain strong

Growth above chemical market

Construction Strong markets in Turkey and Saudi Arabia Growing confidence in the construction sector

in Western Europe.

Automotive Demand recovery in Western Europe – first

increase of new car registrations since 2009 Strongly growing CEE production

Chemicals Chemical production grew in EU28 in 2014 Strong growth in specialties and consumer

chemicals

* Without Oil & Gas

48





150 years


.

55%

8% 17%

20%

Europe is largest sales and profit contributing region of BASF Group

North America

South America,

Africa, Middle East

Asia Pacific

Europe

* By location of customer

Sales* BASF Group

74,326

Sales*; EBIT before special items (million €)

65%

6% 8%

21%

North America

Asia Pacific

Europe

EBIT before SI

BASF Group 7,357

South America,

Africa, Middle East

150 years


Antwerp

Ludwigshafen (regional headquarter)

~71,500

Verbund site

Selected production site / sales offices

Business center hub

Regional organization close to customers

South Africa 132 Production sites >125 Countries

served

Sales offices 96

Employees

R&D sites 28

51





Western Europe Central Europe Emerging Europe

150 years

52


Sales development chemicals business and crop protection in Europe (billion €)

0

5

10

15

20

25

30

35

2011 2012 2013 2014

Stable business in past years, focus in the future on accelerated organic growth

Lean, centralized setup for commodity businesses

Setup closer to customers in downstream businesses

Dedicated responsibilities for growth in emerging markets

Continuously drive cost efficiency

Program started in February 2015

Structural Excellence Program Europe – Accelerate organic business growth in Europe

Volume CAGR 1.2%

Volume growth in line with market; slight sales decline due to lower oil price and lower commodity margins

150 years

53


Ludwigshafen

Western Europe: Core market of BASF Western Europe Population: 415 million Real GDP: US$16.9 trillion Chemical production:

US$645 billion Core market of BASF Strong production set-up with

two Verbund sites More than 20 global key

accounts steered from Western Europe Expected chemical production

growth: ~1% p.a.

Antwerp

Tarragona

Cheadle

Levallois

Cesano Maderno

Verbund site

Selected sites

150 years

54


Western Europe: Accelerate profitable growth

Western Europe Accelerate profitable growth

– Stronger local presence – Deeper customer

interaction, especially in downstream businesses

– Using BASF‘s global network to support globalization of customers

Focus on innovation or sustainability driven industries

Upgrading of regional production base

Managing costs

TDI plant in Ludwigshafen

TDI plant in Ludwigshafen

Sustainable construction

New precious metals recycling plant in Cinderford

Support globalization of customers

BASF VC investment in SmartKem

Innovations for the automotive industry

150 years

55


Central Europe: Attractive market next door

Central Europe Population: 105 million Real GDP: US$1.4 trillion Chemical production:

US$44 billion Economies in transition from

emerging into developed stage Expected chemical production

growth: ~2.5% p.a. Business growth (~10% p.a.)

outpacing chemical production Local presence especially in

downstream businesses and crop protection

Bratislava Warsaw

Zagreb

Ljubljana Belgrade

Bucharest

150 years

56


Central Europe Continuously expand market

position Being close to our customers Strengthen joint innovation

activities Selective investments:

– Serve growing local markets – Capitalize on lower cost

structure for export business (e.g. catalysts in Poland)

Mobile Catalysts Production

in Sroda Slaska

Central Europe: Participate in local growth opportunities

Agro Field Days in Romania

PU system house in Slovakia

Construction systems in Czech Republic

Construction systems

in Romania

150 years


Emerging Markets: Turkey & Middle East – Focus on locally consuming industries

Turkey & Middle East Population: 268 million Real GDP: US$2.9 trillion Chemical production:

US$120 billion Growth drivers: housing, food,

consumer goods, infrastructure Expected chemical production

growth: ~4% p.a. Focus on Turkey and Arabian

peninsula Target industries:

– Energy & resources – Chemicals & plastics – Construction

Dubai

Istanbul

Gebze

Izmir

150 years


Turkey & Middle East Regional hubs: Istanbul, Dubai ~3000 customers Accelerated market penetration

by being close to local industries and markets, e.g.: – Food ingredients for Bakery

and Dessert production – Customer specific plastic

additives blends in Bahrain – Gas treatment solutions for

LNG production – BASF concrete admixture

solutions for Burj Khalifa

Nutrition lab in Istanbul

Emerging Markets: Turkey & Middle East – Focus on locally consuming industries

Plastic Additives in Bahrain

Sustainable construction

Gas treatment solutions

150 years


Africa (target market) Population: 450 million Real GDP: US$1.5 trillion Chemical production:

US$35 billion Large, dynamic but

heterogeneous market Expected chemical production

growth: ~4% p.a. Fastest urbanization rate Improving economic

performance Focus on four regional clusters ►Africa presents a profitable

growth opportunity

BASF South Africa (Pty.) Ltd.

Midrand

BASF Maroc S.A. Casablanca

BASF East Africa Ltd.

Nairobi BASF West Africa Ltd. Lagos

Emerging Markets: Africa – Growth opportunities in a heterogeneous market

Northern Africa

Eastern Africa

Southern Africa

Western Africa

150 years


Setup to capture growth opportunities: Business focused on

– Construction chemicals – Crop protection products – Consumer goods – Energy & resources Strengthened local presence

– 13 legal entities – 9 production sites – Sales >€500 million

Northern Africa

Eastern Africa

Southern Africa

Western Africa


in Kenya

Emerging Markets: Africa – Growth opportunities in a heterogeneous market

Ultra-filtration for drinking water in Ghana

Dispersions in South Africa

New laboratory for the mining industry

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BASF in Europe: Focused on stronger growth ► Leverage #1 position in BASF’s core market, outgrow markets

► Seize growth opportunities

– Enhance sales & marketing to increase customer proximity

– Introduce innovative products and solutions

– Focused investments on fast growing markets

– Exploit opportunities in Eastern Europe, Middle East, Africa

► Maintain highly efficient production sites, accelerate operational excellence

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150 years

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