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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
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BASF Capital Market Story March 2016 2
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.
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BASF Capital Market Story March 2016 3
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: adr@db.com Website: www.adr.db.com
Depositary banks local custodian: Deutsche Bank AG, Frankfurt
Ordinary Share information ADR information
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BASF Capital Market Story March 2016 4
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
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BASF Capital Market Story March 2016 5
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
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BASF Capital Market Story March 2016 6
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
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BASF Capital Market Story March 2016 7
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
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BASF Capital Market Story March 2016 8
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
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BASF Capital Market Story March 2016 9
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
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BASF Capital Market Story March 2016 10
Path forward: Our priorities 2016 & beyond
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BASF Capital Market Story March 2016 11
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
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BASF Capital Market Story March 2016 12
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.
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BASF Capital Market Story March 2016 13
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%).
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BASF Capital Market Story March 2016 14
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
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BASF Capital Market Story March 2016 15
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
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BASF Capital Market Story March 2016 16
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
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BASF Capital Market Story March 2016 17
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%
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BASF Capital Market Story March 2016 18
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)
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BASF Capital Market Story March 2016 19
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
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BASF Capital Market Story March 2016 20
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
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BASF Capital Market Story March 2016 21
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
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BASF Capital Market Story March 2016 22
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
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BASF Capital Market Story March 2016 23
Appendix: 4Q & FY 2015 Reporting
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BASF Capital Market Story March 2016 24
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%
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BASF Capital Market Story March 2016 25
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
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BASF Capital Market Story March 2016 26
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
Sales development Period Volumes Prices Portfolio Currencies
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%)
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BASF Capital Market Story March 2016 27
150 years
Functional Materials & SolutionsStrong operating performance drives earnings up
Catalysts1,545(2%)
ConstructionChemicals
562+10%
Coatings809+5%
4,506+1%
Q415 segment sales (million ) vs. Q414
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
Sales development Period Volumes Prices Portfolio Currencies
Q415 vs. Q414 3% (7%) 0% 5%
FY15 vs. FY14 0% (4%) 0% 9%
EBIT before special items (million )
Performance Materials1,5900%
+77% +38%
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BASF Capital Market Story March 2016 28
150 years
1,1671,109
0
200
400
600
800
1,000
1,200
Q4 Q4
Agricultural SolutionsStrong finish despite tough market environment
Q415 segment sales (million ) vs. Q414
20152014
123
144
0
40
80
120
160
Q4'14 Q4'15
Sales development Period Volumes Prices Portfolio Currencies
Q415 vs. Q414 3% 6% 0% (4%)
FY15 vs. FY14 1% 5% 0% 1%
EBIT before special items (million )
1,0901,109
0
400
800
1,200
FY'14 FY'15
+17% (2%)
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BASF Capital Market Story March 2016 29
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
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BASF Capital Market Story March 2016 30
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)
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BASF Capital Market Story March 2016 31
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
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BASF Capital Market Story March 2016 32
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
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BASF Capital Market Story March 2016 33
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
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