We add value as one company - BASF · We add value as one company. Ingo Rose. Director ... readers...

BASF Capital Market Story March 2016 1

We add value as one company

Ingo Rose

DirectorInvestor Relations

Deutsche Bank ADR Virtual Investor Conference

March 17, 2016


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

BASF Share information

Symbol: BAS

Trading Platform: Deutsche Brse

ISIN: DE000BASF111

IPO: January 30, 1952

Type of shares: Registered shares

Trading lot: none, one share is tradable

Free float (according to Deutsche Brse):100 %

Number of subscribed shares outstanding (as of 12/31/2015):918,478,694

Symbol: BASFY

OTC Trading Platform: OTCQX

CUSIP: 055262505

Ratio: 1 ADR : 1 Ordinary Share

Depositary bank: Deutsche Bank Trust Company Americas Tel: +1 212 250 9100 (New York broker desk) Tel: +44 207 547 6500 (London broker desk) E-mail: [email protected] Website: www.adr.db.com

Depositary banks local custodian: Deutsche Bank AG, Frankfurt

Ordinary Share information ADR information


150 years

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,

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

~54 billion market capitalization Feb. 2016

PerspectiveLudwigshafen,Germany

Antwerp,Belgium

Nanjing,China

Kuantan,MalaysiaGeismar,

USAFreeport,USA

Verbund site

Positioning

We create chemistry for a sustainable future

20

30

40

50

60

70

80

90

2008 2009 2010 2011 2012 20142013 2015

Performance


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


150 years

Percentage of sales 2015*

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

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


150 years

0

1

2

3

4

5

2006 2007 2008 2009** 2010 2011 2012 2013 2014 2015

Strong free cash development 2015

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

Free cash flow*(in billion )

3.53.2

2.5

3.2

3.9 3.7

2.6

3.2

1.7

3.6

Diagramm1

3.529

3.245

2.502

3.186

3.912

3.695

2.587

3.21

1.7

3.6

Free Cash Flow

Sheet1

2006200720082009**201020112012201320142015

Free Cash Flow3.5293.2452.5023.1863.9123.6952.5873.2101.73.6


150 years

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2006 2009 2012 2015

2.90

We want to grow or at least maintain our dividend

Dividend proposal of 2.90per share, an increase of 3.6%

Dividend yield of 4.1% in 2015

Dividend yield above 3.5%in any given year since 2006

4.6%

Key facts 2015

0.50

1.00

1.50

2.00

* Dividend yield based on share price at year-end

4.1% 3.8% 7.0% 3.9% 3.7%Yield*

Proposal:

3.7%

2.50

3.5%

3.00

4.0% 4.1%

1.50

1.95 1.951.70

2.202.50 2.60

2.70

Dividend policy

2.80

Dividend per share(in )

Attractive shareholder return


150 years

Average annual performance with dividends reinvested

0 3 6 9 12

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+5.1%

Last 5 yearsMarch 2011 February 2016

+3.4%

+2.6%

+5.5%

+4.9%

Last 10 yearsMarch 2006 February 2016

BASF

+6.2%

+0.6%

+10.7%

Delivering consistent, long-term value

Diagramm1

6.2

5.1

0.6

10.7

Ost

9.1%

12.0%

8.1%

Sheet1

MSCI WorldDAXEuro StoxxBASF

Ost6.25.100.610.7


Path forward: Our priorities 2016 & beyond


150 years

Outlook 2016Expectations for the global economy

2015 (actual)

GDP 2.4%

Chemicals (excl. pharma) 3.6%

Industrial production 2.0%

US$ / Euro 1.11

Oil price: Brent (US$ / bbl) 52

Forecast 2016

2.3%

3.4%

2.0%

1.10

40


150 years

Outlook 2016BASF Group

Sales will be considerably below prior year, due to the divestiture of the Natural Gas Trading and Storage activities and the lower oil & gas prices.

Excluding the effects of acquisitions and divestitures, we expect higher volumes in all segments.

We expect EBIT before special items to be slightly below the previous yeardriven by drastically lower earnings of Oil & Gas. We plan higher earnings in our chemicals business and in the Agricultural Solutions segment.

EBIT after cost of capital is expected to be significantly below prior year. However, we still expect to earn a premium on our cost of capital.

In the volatile and challenging macroeconomic environment, we regard our targets for 2016 as ambitious. Achieving them will depend on the development of the oil price.


150 years

EBIT before special items

Million 2015 Forecast 2016

Chemicals 2,156 considerable decreasePerformance Products 1,366 slight increaseFunctional Materials & Solutions 1,649 slight increaseAgricultural Solutions 1,090 slight increaseOil & Gas 1,366 considerable decreaseOther (888) considerable increase

BASF Group 6,739 slight decrease

Outlook 2016 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%).


150 years

Priorities 2016

Focus on capex discipline:

Reduce capital expenditures to 4.2 billion in 2016 Cost control and operational excellence:

DrivE targeting ~1 billion earnings contribution by 2018 Portfolio optimization ongoing:

E.g. agreement to sell industrial coatings business to AkzoNobel Strong commitment to innovation:

Maintain R&D spending at ~1.95 billion in 2016


150 years

CapexInvestments for organic growth

Performance Products16%

Oil & Gas24%

19.5billion

FunctionalMaterials &Solutions12%

Capex budget 2016-2020

Other14%

Chemicals30%

Capex budget 2016-2020

Asia Pacific18%

19.5billion

South America*9%

North America26%

Europe46%

AgriculturalSolutions4%

Other1%

by segment by region

* Including Africa and Middle East


150 years

0

1,000

2,000

3,000

4,000

2015 2018

Annual earnings contribution(in million )

Targeted annual earnings contribution of 1 billion by end of 2018

Optimization of processes and structures in all regions, e.g. manufacturing incremental capacities productivity increase

Project timeline: 20162018

DrivE program

Operational excellenceDrivE with ~1 bn earnings contribution

NEXT 2008-2011 DrivE 2016-2018

STEP 2012-2015

Diagramm1

2015100013002015

2018100013001000

Sheet1!#REF!

NEXT

STEP

NewPro

Sheet1

201420152018

NEXT100010001000

STEP100013001300

NewPro1000


150 years

50

100

150

200

250

300

350

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Operational excellence Strong track record

EBITDA

Sales

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

BASF Group* 20012015(Index; CAGR 20012015)

Fixed Costs

CAGREBITDA

9%

CAGRSales

6%

CAGRFixed Costs3%


150 years

Functional crop care Personal care & food Omega-3 fatty acids Enzymes Battery materials Specialty plastics Selected assets in

Oil & Gas

BASFcore business

Strong partnerships

Gazprom Monsanto Petronas Shell Sinopec Statoil Total Yara

Selected transactions 2010 until today

Acquisitions

~ 4.5 billion salesin emerging and innovation-driven

businesses

Divestitures

Styrenics Fertilizers Construction equipment,

flooring and wall systems Decorative paints in Europe Selected assets in Oil &

Gas Natural gas trading and

storage Custom synthesis business

~ 20 billion sales*in businesses with

limited fit and differentiation

potential

Portfolio development towards more market-driven and innovative businesses

* Includes sales of non-consolidated businesses (Styrenics, VNG participation)


150 years

1.95 billion R&D expenditurein 2015; to be maintained in 2016

~10,000 employees in R&D

~3,000 projects

Ranked No.1 in thePatent Asset Index

~1,000 new patents in 2015

Research Verbund: Cooperations with more than 600 excellent partners from universities, start-upsand industry

InnovationInnovations for a sustainable future

1.61.7

1.8 1.9 1.95

0.0

0.5

1.0

1.5

2.0

2011 2012 2013 2014 2015

R&D expenditures (in billion )

Chemicals11%

Performance Products20%

Functional Mat. & Sol.20%

Agricultural Solutions26%

Oil & Gas2%

Corporate Research21%

2.0

1.5

1.0

0.5

0

Key facts


150 years

Lower production cost than industry average

Efficiency gains:

run-time extension higher throughput lower energy consumption

Proprietary technology,new process protected by280 active patent families

4 out of 6 production sites already equipped: Ludwigs-hafen, Antwerp, Nanjing, Camaari

Innovation 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

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

Profitability of BASF will grow faster than global chemical production

Sales growth*Slightly faster than the global chemical production

EBITDA growthWell above global chemical production

Remain a strong cash providerContinuously generate high levels of free cash flow

Financial targets for next years

Deliver attractive returnsEarn a significant premium on cost of capital

* Without considering Natural Gas Trading and Storage business

Progressive dividend policy We want to grow or at least maintain our dividend


Appendix: 4Q & FY 2015 Reporting


150 years

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q415 vs. Q414 4% (11%) (19%) 3%

FY15 vs. FY14 3% (9%) (5%) 6%

BASF with lower sales and earnings in difficult economic environment

Business performance Q415 vs. Q414 FY15 vs. FY14

Sales 13.9 billion (23%) 70.4 billion (5%) EBITDA 1.9 billion (34%) 10.6 billion (4%) EBIT before special items 1.0 billion (30%) 6.7 billion (8%) EBIT 0.3 billion (81%) 6.2 billion (18%) Net income 0.3 billion (76%) 4.0 billion (23%) Reported EPS 0.37 (76%) 4.34 (23%) Adjusted EPS 1.01 (3%) 5.00 (8%) Operating cash flow 1.0 billion (53%) 9.4 billion +36%


150 years

ChemicalsSignificant earnings decline due to lower cracker margins

Intermediates671(2%)

Monomers1,396(12%)

Petrochemicals1,122(38%)

3,189(22%)

580

249

0

200

400

600

Q4'14 Q4'15

Q415 segment sales (million ) vs. Q414 EBIT before special items (million )

Sales development Period Volumes Prices Portfolio Currencies

Q415 vs. Q414 (5%) (19%) (2%) 4%

FY15 vs. FY14 (2%) (17%) (2%) 7%

0

1,000

2,000

3,000

FY'14 FY'15

(57%) (9%)

2,3672,156


150 years

Performance ProductsSlightly higher earnings on improved margins

Performance Chemicals987(4%)

CareChemicals

1,1680%

3,627(2%)

Q415 segment sales (million ) vs. Q414

Nutrition & Health429(13%)

Dispersions& Pigments

1,043+1%

217 228

0

100

200

300

Q4'14 Q4'15


Q415 vs. Q414 0% (4%) (2%) 4%

FY15 vs. FY14 (1%) (4%) (1%) 7%

EBIT before special items (million )

1,3661,455

0

500

1,000

1,500

FY'14 FY'15

+5% (6%)


150 years

Functional Materials & SolutionsStrong operating performance drives earnings up

Catalysts1,545(2%)

ConstructionChemicals

562+10%

Coatings809+5%

4,506+1%


220

389

0

100

200

300

400

Q4'14 Q4'15

1,197

1,649

0

400

800

1,200

1,600

FY'14 FY'15


Q415 vs. Q414 3% (7%) 0% 5%

FY15 vs. FY14 0% (4%) 0% 9%


Performance Materials1,5900%

+77% +38%


150 years

1,1671,109

0

200

400

600

800

1,000

1,200

Q4 Q4

Agricultural SolutionsStrong finish despite tough market environment


20152014

123

144

0

40

80

120

160

Q4'14 Q4'15


Q415 vs. Q414 3% 6% 0% (4%)

FY15 vs. FY14 1% 5% 0% 1%


1,0901,109

0

400

800

1,200

FY'14 FY'15

+17% (2%)


150 years

59

288

446

-184*-200

0

200

400

600

383 426

940

1,464

1,050

Oil & GasEarnings drop due to significantly lower oil and gas prices

Q415 segment sales (million ) vs. Q414 EBIT before special items / Net income (million )

FY '14 FY '15

Sales development Period Volumes Price/Currencies Portfolio

Q415 vs. Q414 3% (4%) (81%)

FY15 vs. FY14 15% (9%) (20%)

Natural Gas TradingExploration & Production Net income

0

1,000

2,000 1,795

1,366

Q4 '14 Q4 '15

1,412

3,277

728

0

1,000

2,000

3,000

4,000

Q4 Q420152014

347

127*

4,005

731*

* Including transportation business


150 years

Review of Other

Million Q4 2015 Q4 2014 2015 2014

Sales 660 700 2,790 3,609EBIT before special items (114) (28) (888) (566)Thereof corporate research costs

group corporate costs currency results, hedges and other valuation effectsother businesses

(95)(61)(11)

75

(98)(59)110

23

(402)(233)(220)

170

(389)(218)

(2)

133

Special items (21) 473 (97) 433

EBIT (135) 445 (985) (133)


150 years

Million 2015 2014Cash provided by operating activities 9,446 6,958Thereof changes in net working capital

miscellaneous items 1,347(336)

(623)(1,029)

Cash provided by investing activities (5,235) (4,496)Thereof payments related to tangible / intangible assets (5,812) (5,296)

acquisitions / divestitures 436 373Cash used in financing activities (3,673) (2,478)Thereof changes in financial liabilities

dividends (933)

(2,806)288

(2,766)

Record operating cash flow of 9.4 billion Free cash flow more than doubled to 3.6 billion High dividend payout in 2015 of 2.8 billion

2015

Cash flow development in 2015


150 years

Balance sheet remains strongBalance sheet 2015 vs. 2014 (billion )

Liquid funds

Accountsreceivable

Long-termassets 31.5

15.2

24.1

44.0

10.4

1.7

Otherliabilities

Financialdebt

StockholdersEquity

Dec. 31,2014

Dec. 31,2014

Dec. 31,2015

Dec. 31,2015

71.4

28.2

15.4

27.8Inventories

Other assets 4.0

71.4

Highlights 2015

Total assets almost stable Long-term assets up by 2.3

billion as a result of our investment projects

Short-term assets down by 2.9 billion due to strict working capital management and the asset swap

Equity grew by 3.4 billion Provisions for pensions down

by 1.0 billion Net debt decreased to 13.0

billion Net debt/EBITDA ratio: 1.2 Equity ratio: 45%

46.3

9.5

2.2

9.7

3.1

70.8 70.8

11.3


150 years

Slide Number 1Cautionary note regarding forward-looking statements BASF Share informationWe create chemistry for a sustainable futureVerbund: Unique competitive advantageBASF today a well-balanced portfolioTotal sales 2015: 70.4 billionStrong free cash development 2015Attractive shareholder returnSlide Number 9Slide Number 10Slide Number 11Outlook 2016BASF Group Slide Number 13Priorities 2016CapexInvestments for organic growthOperational excellenceDrivE with ~1 bn earnings contributionOperational excellence Strong track recordPortfolio development towards more market-driven and innovative businessesInnovationInnovations for a sustainable futureSlide Number 20Innovation: SAVIVA Highly efficient Superabsorbent Polymers (SAP) Profitability of BASF will grow faster than global chemical productionSlide Number 23BASF with lower sales and earnings in difficult economic environmentChemicalsSignificant earnings decline due to lower cracker margins Performance ProductsSlightly higher earnings on improved marginsFunctional Materials & SolutionsStrong operating performance drives earnings upAgricultural SolutionsStrong finish despite tough market environmentSlide Number 29Review of Other Cash flow development in 2015Balance sheet remains strongSlide Number 33

We add value as one company - BASF · We add value as one company. Ingo Rose. Director ... readers...

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