SRI Roadshow Paris...BASF has based these forward-looking statements on its views and assumptions...
Transcript of SRI Roadshow Paris...BASF has based these forward-looking statements on its views and assumptions...
150 years
150 years
Margret SuckaleMember of the Board
of Executive Directors
SRI Roadshow
Paris
May 13, 2015
150 years
BASF SRI Story May 2015
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.
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150 years
BASF SRI Story May 2015
1 | BASF – We create Chemistry
2 | Sustainability – an integral part of our strategy
3 | Sustainability organization and issue management
4 | Our strategic goals
5 | Innovation for a sustainable future
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BASF SRI Story May 2015
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*
~€82 billion market
capitalization end
of April 2015
Perspective
* For 2004-2014
Ludwigshafen,
Germany
Antwerp,
Belgium
Nanjing,
China
Kuantan,
MalaysiaGeismar,
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 20142013 2015
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BASF SRI Story May 2015
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 portfolioTotal sales 2014: €74 billion
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BASF SRI Story May 2015
BASF with good quarterly results
in the chemicals and crop protection
businesses
Sales development
Period Volumes Prices Portfolio Currencies
Q1´15 vs. Q1´14 5% (8%) (1%) 7%
Business performance Q1’15 Q1’14 vs. Q1’14
Sales €20.1 billion €19.5 billion +3%
EBITDA €2.9 billion €3.0 billion (2%)
EBIT before special items €2.1 billion €2.1 billion (2%)
EBIT €2.0 billion €2.2 billion (10%)
Net income €1.2 billion €1.5 billion (20%)
Reported EPS €1.28 €1.59 (19%)
Adjusted EPS €1.43 €1.63 (12%)
Operating cash flow €2.4 billion €1.7 billion +37%
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BASF SRI Story May 2015
0
1
2
3
4
2005 2006 2007 2008 2009** 2010 2011 2012 2013 2014 Q12015
Strong free cash development in Q1 2015
* 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 €)
3.33.5
3.2
2.5
3.2
3.93.7
2.6
3.2
1.7
1.1
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BASF SRI Story May 2015
We want to grow or at least
maintain our dividend
Dividend paid out per share
€2.80, 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 20053.7%
Key facts
Dividend per share
(in €)
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
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 2.702.80
Dividend policy
Attractive shareholder return
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BASF SRI Story May 2015
Average annual performance with dividends reinvested
0 3 6 9 12 15 18 21 24
Euro Stoxx 50
DAX 30
MSCI World Chemicals
+10.6%
Last 5 yearsMay 2010 – April 2015
+19.4%
+8.6%
+13.3%
+12.9%
Last 10 yearsMay 2005 – April 2015
BASF
+10.5%
+5.3%
+22.6%
Delivering consistent, long-term value
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BASF SRI Story May 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 and 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.
Outlook 2015
GDP: +2.8%
Industrial production: +3.6%
Chemical production: +4.2%
US$ / Euro: 1.20
Oil price (US$ / bbl): 60-70
Assumptions 2015
Outlook 2015 confirmed
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BASF SRI Story May 2015
1 | BASF – We create Chemistry
2 | Sustainability – an integral part of our strategy
3 | Sustainability organization and issue management
4 | Our strategic goals
5 | Innovation for a sustainable future
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BASF SRI Story May 2015
SUPPLY DEMAND
1976 2010
Annual
regenerative
capacity
of the planet
Human beings now
demand more
from the earth than
can be regenerated
Earth’s
resources
Consumption of Earth’s resources
+
Nine billion people in 2050 but only one earth
Sustainability will become even more
important
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BASF SRI Story May 2015 13
Strategy – Our purposeSustainability is an integral part of our strategy
150 years
BASF SRI Story May 2015
1 | BASF – We create Chemistry
2 | Sustainability – an integral part of our strategy
3 | Sustainability organization and issue management
4 | Our strategic goals
5 | Innovation for a sustainable future
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BASF SRI Story May 2015
Corporate Sustainability Board
(CSB)
Cross-functional steering
committee
Monitors the implementation of the
sustainability strategy and decides
on cross-divisional initiatives
Defines sustainability goals
Sustainability Core Team
Supports the CSB to drive the
implementation of CSB decisions
Stakeholder Advisory Council
Consists of BASF experts and
stakeholders
Exchange of ideas and develop
BASF’s sustainability approach
further
We integrate sustainability in our management
systems
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Board of Executive Directors of BASF SE
Corporate Sustainability Board
Chair: Member of the Board
Chair: Sustainability Strategy
Sustainability Core Team
Internal External
Stakeholder Advisory Council
Chair: CEO
Strategy and managementSustainability – a board member responsibility since
2002
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BASF SRI Story May 2015
Our Materiality Assessment helps to identify relevant sustainability topics for BASF as
well as opportunities and risks related to sustainability
~350 external stakeholders and ~90 BASF experts and managers from various functions
within BASF, provided information on 38 topics potentially relevant for BASF
Eight material aspects have been identified for BASF based on the results of the
stakeholder survey and internal workshops:
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Energy and Climate Water
Products and Solutions
Food
Responsible production
Resources and
Ecosystems
Employment and
EmployabilityPartnering
Strategic issue managementMateriality Assessment
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BASF SRI Story May 2015
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
Responsible productionVerbund: 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
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BASF SRI Story May 2015 18
Combined heat and power plants
Combined heat and power plants are plants that use
natural gas to produce electricity and steam
Benefit for climate protection:
Compared with separate methods of generating
steam and electricity, we saved around 11.8 million
MWh of fossil fuels and prevented 2.4 million metric
tons of carbon emissions in 2014
Utilization rate of natural gas as a fuel can reach up
to 90% – nearly all the heat is converted into energy.
Conventional power plants are only around half as
efficient.
~70% of our electricity demand worldwide is covered by
gas-based combined heat and power plants
Energy and climateCombined heat and power plants increase energy
efficiency
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BASF SRI Story May 2015
Global analysis of production sites conducted
~ 22% of our production sites are located in regions
with high water stress
These sites account for around 6.5% of BASF’s total
water demand and seawater accounted for 85.2% of
the water demand in water stress areas
Water use and discharge
86% of our water use is for cooling purposes and
89.4% of our water discharge is uncontaminated
European Water Stewardship (EWS) certificate
In 2013, BASF was the first chemical company to
achieve gold-level certification according to the EWS
standard for its production site in Tarragona, Spain
In 2014, the Ludwigshafen site has also been awarded
gold level certification
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WaterResponsible use of water resources is key priority
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BASF SRI Story May 2015
Products and solutionsSustainable solution steering – Supports our customers
to meet their sustainability needs
23% - Accelerator
Substantial sustainability
contribution in the value
chain
74.1% - Performer
Meets basic sustainability
standards in the market
2.6% - Transitioner
Specific sustainability
issue which is actively
addressed
0.3% - Challenged
Significant sustainability
concern identified and
action plan in development
Active portfolio steering
1. Analyze sustainability needs
and trends of value chains
2. Check product sustainability
performance in the market
3. Develop action plans for
strategies, R&D and market
approach
By the end of 2014
98.3% of the relevant portfolio
analyzed
Relevant portfolio accounted
for €66.3 billion in sales in
2014
More than 60,000 product
solutions assessed
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BASF SRI Story May 2015
Products and solutions23% of our solutions are “Accelerators”
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“Accelerators“ contribute in the following areas:
(Double nomination possible)
0% 10%
Cost savings downstream
Biodiversity and renewables
Climate change and energy
Emission reduction
Resource efficiency
Water
Health and safety
UN Millennium Development goals
23%
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BASF SRI Story May 2015
Example: Paper coating
1. Identification of “Challenged”:
Polyfluorinated substances as coatings for paper
packaging (environmental concern)
2. Development of action plan:
Start of research project
3. Launch of “Accelerator”:
Recyclable Epotal® SP-101 D and biodegradable
ecovio® paper coating
Renewables
Resource efficiency
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Products and solutionsSustainable solution steering supports the launch of new
“Accelerator”
150 years
BASF SRI Story May 2015
1 | BASF – We create Chemistry
2 | Sustainability – an integral part of our strategy
3 | Sustainability organization and issue management
4 | Our strategic goals
5 | Innovation for a sustainable future
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BASF SRI Story May 2015
Status
2014
Target
2020
Energy & climate protection
Greenhouse gases* -33.9% -40%
Energy efficiency *+19.0% +35%
Emissions to air & water
Air pollutants* -63.2% -70%
Organic substances* -79.5% -80%
Nitrogen* -85.4% -80%
Heavy metals* -64.8% -60%
Water
Drinking water for production -26.3% -50%
Sustainable water management
in water stress areas 29.7% 100%
Status
2014
Target
2020
Safety, health and security
Lost-time injuries -54.5% -80%
Transport accidents -64.3% -70%
“Safety check” of products 61.4% >99%
Health Performance Index** 0.91 >0.9
Employees
Increase the number of:
Female executives 19.1%
Non-German senior executives 34.3%
Senior executives with
international experience 83.0% >80%
Establishment of personnel
development45,000 --
*excluding oil and gas production ** Highest possible score 1.0 24
Ecology & social responsibility Targets overview
150 years
BASF SRI Story May 2015
1 | BASF – We create Chemistry
2 | Sustainability – an integral part of our strategy
3 | Sustainability organization and issue management
4 | Our strategic goals
5 | Innovation for a sustainable future
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BASF SRI Story May 2015
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
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BASF SRI Story May 2015
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 innovationInnovations for a sustainable future
Key factsR&D expenditures
(€ billion)
Chemicals
10%
Performance Products
19%
Functional Mat. & Sol.
20%
Agricultural Solutions
27%
Oil & Gas
3%
Corporate Research
21%
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1.51.6
1.71.8 1.9
0.0
0.5
1.0
1.5
2.0
2010 2011 2012 2013 2014
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BASF SRI Story May 2015
Products and solutions for a
sustainable future
Four-Way Conversion Catalyst
(FWC™)
Trilon M® for more sustainable
detergents and cleanersSAVIVA™ – The Next
Generation of Superabsorbents
Hexamoll® DINCH® – Non-
phthalate plasticizer 28
Multibore® – Ultrafiltration
Membranes
MDI plant Antwerp
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BASF SRI Story May 2015
Process improvement
program 2000-2013
MDI/Antwerp
Target: Increase production
output by continuous
process improvement via
incremental
steps
Achieved benefits:
– Increased sales
– Production cost* reduction
Process improvements in MDI
1992 – 2001 2009 – 20132002 – 2008
Annual EBIT improvement 2000-2013: ~ €220 million/a
Strong increase of production output in the last
decade
* Production cost = Personnel, maintenance and energy cost (inflation adjusted) 29
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BASF SRI Story May 2015
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*
FWC™ reduces emission of gaseous pollutants and particulates
HC
CO
NOx
N2
H2O
CO2
Particulates
Four-Way Conversion Catalyst (FWC™)
* 2009 – 2013 ** Hydrocarbons, carbon monoxide, nitrogen oxides
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BASF SRI Story May 2015
SAVIVA™ – The Next Generation of
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
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SAVIVA™ round shaped particle
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BASF SRI Story May 2015
Trilon® M – Chelating agent for more
sustainable detergents and cleaners
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
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BASF SRI Story May 2015
Hexamoll® DINCH® - Non-phthalate
plasticizer
Hexamoll® DINCH® is a non-phthalate plasticizer
developed for applications with close human contact
Plasticizers are added to PVC to turn it from being hard
and brittle to soft and flexible
BASF has invested more than €7 million in toxicological
research for Hexamoll® DINCH®
Hexamoll® DINCH® ranked first in a TÜV Rheinland –
certified eco-efficiency analysis for toys in 2011
It can be used in a variety of applications such as toys,
food packaging, medical devices, sport & leisure
articles, consumer goods as well as flooring and wall
covering
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BASF SRI Story May 2015
For turning dirty water into clean water
Multibore® membranes are manufactured from BASF’s
Ultrason® E high-performance resin
Multibore® membranes contain pores 3,000 times
smaller than the diameter of a human hair – suspended
solids, bacteria and viruses cannot pass through them
Example – Drinking Water
inge® technology is used for water purification and also
as a pretreatment stage for sea water desalination
In Ghana for example, where drinking water is a scarce
resource, inge® Ultrafiltration solutions help to produce
clean drinking water in a sea water desalination plant
for half a million people
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inge® Ultrafiltration membrane Multibore®
We create chemistry that helps thirst love the sea
Multibore® – Ultrafiltration Membranes
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BASF SRI Story May 2015
Global ESG Leaders Indices
Worldwide public
recognition for
sustainability and
transparency
35
Worldwide public recognition for
sustainability and transparency