1BASF Capital Market Story September 2010

Profitable growth loves ups and downsProfitable growth loves ups and downs

2BASF Capital Market Story September 2010

1.1 1.21.5

2.02.2

0.0

0.5

1.0

1.5

2.0

2.5

Q2 Q3 Q4 Q1 Q2

12.5 12.8 13.215.5 16.2

0

4

8

12

16

20

Q2 Q3 Q4 Q1 Q2

Continued sales and earnings growth

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q2’10 vs. Q2’09 14% 9% 1% 6%

Q2’10 vs. Q1’10 (2)%* 2% 0% 5%

EBIT before special items (billion €)

20102009

Sales (billion €)

20102009

* +4% volume growth w/o Oil & Gas

3BASF Capital Market Story September 2010

-1

0

1

2

3

4

5

6

7

2001* 2002* 2003* 2004 2005** 2006 2007 2008 2009 20101HY

* According to German GAAP** Cash provided by operating activities less capex (in 2005 before CTA)

Continuous strong cash flow

Cash Flow (billion €)

Cash provided by operating activitiesFree cash flow**

2.71.8

4BASF Capital Market Story September 2010

1.70

0.70 0.700.85

1.00

1.50

1.95 1.95

0.65

0.0

0.5

1.0

1.5

2.0

2001 2002 2003 2004 2005 2006 2007 2008 2009

Average annual dividend increase of 12.8%(2001-2009)

Dividend yield above 3% in any given year since 2001

Attractive dividend yield of 3.9% in 2009*

Consistent, long-term valueJan 2001 – August 2010:Average annual performance of BASF share** of 10%

3.9%

Attractive shareholder returns

Key factsDividend per share (€)

0.5

1.0

1.5

2.0

3.1% 3.9% 3.1%

* Dividend yield based on share price at year-end

3.2% 3.1% 4.1% 3.8% 7.0%Yield*

** With dividends reinvested

1 | Focus on operational excellence

2 | Well positioned for profitable growth

3 | Outlook

5

Earnings

Earnings

Costs

6BASF Capital Market Story September 2010

Vertical and horizontal integration of production plants, energy and waste flows, logistics and site infrastructure

Know-how Verbund

Energy Verbund and combined heat and power plants lead to- Savings of ∼2.6 million tons

oil equivalent p.a.- Reduction of CO2 -emissions

of ~6 million tons p.a.

6

Unique ‘Verbund’ concept Cost savings of >€500 million p.a. in Ludwigshafen alone

BASF site Ludwigshafen, Germany Verbund Concept

7BASF Capital Market Story September 2010

50

100

150

200

250

2001 2003 2005 2007 2009

Since 2001 sales and earnings increased significantly

Fixed costs represent around 30% of total costs

Ciba synergies and NEXT will drive fixed costs down

Synergies from Ciba integration 2010E:€350 million run-rate

Fixed costs indexed EBITDA indexedSales indexed

Tenacious fixed cost management

Key factsBASF Group development 2001-2009

TrendIndex

8BASF Capital Market Story September 2010

0

500

1,000

1,500

2,000

2,500

2003 2005 2007 2009

> 500 individual projects to simplify processes, structures and production sites in all regions

Project timeline:2008-2011

Annual earnings contribution of €600 million in 2010 expected

Targeted earnings contribution by 2012:≥€1 billion

Completed restructuring programs New efficiency program NEXT

Sustainable improvement of cost base

New EXcellence Targets (NEXT)Annual earnings contribution (million €)

20122010E

1 | Focus on operational excellence

2 | Well positioned for profitable growth

3 | Outlook

9

Earnings

Earnings

Costs

10BASF Capital Market Story September 2010

Leading positions in growth industries

and emerging markets

Ongoing portfolio

optimization

Excellent innovation platform

We strive to outperform global chemical production growth by at least 2 percentage points p.a.

Well positioned for profitable growth

Translate megatrends into business growthContinue expansion in Asia

Continue with active portfolio managementDrive portfolio closer to customers

Product and system innovation as growth driversStrong pipeline of innovations

Growth target:

11BASF Capital Market Story September 2010

Leading positions in growth industries and

emerging markets

11

12BASF Capital Market Story September 2010

Ambitious targets for 2020

Regional sales targets 2020

Outgrow global chemical production growth by 2 percentage points

Earn premium on cost of capital in all regions

* corresponds to sales of €17 billion in 2020, assuming $/€ of 1.40

** oil price assumption of $75/bbl until 2013, thereafter increase to ~$100/bbl up to 2020

Profitable growth to more than €90 billion in sales by 2020

2009 2020

€9bn€20 bn

Asia Pacific

7-8% p.a.2009 2020

€30 bn

€49 bn**

Europe, including Africa, Middle East

4-5% p.a.

2009 2020

South America

€3 bn €6 bn~8% p.a.

2009 2020

North America

€9 bn€17 bn*

5-6% p.a.

13BASF Capital Market Story September 2010

Growth in emerging markets Outgrowing Asian Pacific chemical market by 2 percentage points p.a.

New Zealand

Australia

China

Pakistan

Bangladesh

India Thailand

Singapore

Indonesia

Taiwan

JapanS. Korea

Malaysia

VietnamHong Kong

Asia Pacific service center

Regional headquarters

Verbund site

Chemical production site *

R&D center *

Strengthen market focus through industry and customer target groupsDevelop and market innovations in Asia for AsiaInvest in Asia to generate 70% of sales through local production

– €2 billion investments planned for 2009-2013

* Some sites not shown due to scale

BASF expects to double sales to €20 billion in Asia Pacific by 2020:

14BASF Capital Market Story September 2010

Ongoing portfolio optimization

14

15BASF Capital Market Story September 2010

BASFcore

businesses

Powerful partnerships

Major acquisitions Major divestitures

Pharmaceuticals

Fertilizers

Refineries

Fibers

Printing systems

Polyolefins (Basell)

Polystyrene North America

Agchem generics

Premix

Crop protectionSuperabsorbentsOil & Gas (Revus)Engineering Plastics Electronic ChemicalsCustom synthesisCatalysts (Engelhard)Construction Chem.Water-based resinsPigments (Ciba)Plastic additives (Ciba)

16 billion Euro*(Sales)

10 billion Euro**

(Sales)

GazpromMonsantoPetronasShellSinopecTotal

** not including Styrenics business

Selected transactions 1999 to date

Styrenics(to be divested)

Pro-active portfolio management

Cognis(acquisition announced)

* not including Cognis

16BASF Capital Market Story September 2010

0

2

4

6

8

10

2001* 2003* 2005 2007** 2009

Active portfolio management pays off

Chemical activities

Agricultural Solutions

Oil & Gas, including non-deductible oil taxes

EBITDA by activity (in billion €, without Other)

Recent acquisitions reshaped portfolio- Closer to customers- Innovation-driven- Solution provider

BASF Group EBITDA considerably higher in 2009 compared to last trough 2001, supported by all activities

* Based on German GAAP** As of 2007 according to new segment structure

(excl. Styrenics and corporate costs)

Our diversified portfolio is a key strength

17BASF Capital Market Story September 2010

Specific solutions based on renewable resources formining, synthetic lubricants, coatings and crop protection industries

Sales 2009: €786 millionEBITDA margin 2009: 11.2%

Functional Products

Products and formulations forthe personal and home caremarkets

Sales 2009: €1,457 millionEBITDA margin 2009: 13.2%

Care Chemicals

Products, formulations and concepts for functional food, beverage, dietary supplements and pharma

Sales 2009: €325 millionEBITDA margin 2009: 13.2%

Nutrition & Health

Cognis A global leader in value-added products

18BASF Capital Market Story September 2010

Integration into Performance Products segment with the following objectives

Growing >2% points faster than the relevant market

Achieve 20% EBITDA margin in the Performance Products segment by 2012

Acquisition accretive as of 2012

Integration costs of €200-250 million until end of 2012

Cost synergies of at least 5% of 2009 net sales fully achieved by 2013

BASF + Cognis Clear targets

19BASF Capital Market Story September 2010

Excellent innovation platform

19

20BASF Capital Market Story September 2010

R&D spending in 2010 planned on similar level

Innovation will spur further growth

Total R&D expenditures 2009 (billion €)R&D investments: 3.5% of sales*More than 9,300 employees involved in R&DAround 1,900 partnerships with universities, startup companies and industry partners Five Growth Clusters:- Nanotechnology- Energy Management- Plant Biotechnology- Industrial Biotechnology- Raw Material ChangeBudget for Growth Clusters (2009-2011): up to €1 billion

Strong commitment to R&D

* Excluding Oil & Gas

24%

1%

Corporate Research23%

Agricultural Solutions

25%

Functional Solutions12%

Performance Products20%

Chemicals9%

Plastics9%

€1.4 billion

Other2%

21BASF Capital Market Story September 2010

New technologyNew product

Kaurit®

LightLight-weight wood-based panels30% less weight than conventional chipboard while offering the same strengthPotential to revolutionize furniture market

CypoSol®

Contact free and eco-friendly printing of solar cells with metallization inksLead-free and solvent free formulationsIncreased process yield due to reduction of cracking rates

Strong innovation pipeline

Natugrain®

TSFeed additive for cost-efficient and more sustainable animal nutrition ("more from less")An enzyme used in poultry feed improving energy utilizationWhite biotechnology based production process

New product

22BASF Capital Market Story September 2010

Innovation pipeline worth €19 billion

* New or improved products or new applications, max. 5 years on market, including Growth Clusters

Net present value by segments (billion €)

Net Present Value (NPV) represents discounted earnings after tax from R&D projects after deduction of R&D expenditures

Major contribution from Agricultural Solutions and Performance Products

History of high success rate due to consequent R&D controlling and Phasegateprocess, including life cycle management

R&D contributes significantly to earnings growth

4.53.50

5

10

15

20 €19 billion

17% Performance Products7% Plastics4% Chemicals

9% Functional Solutions

45% Agricultural Solutions

3% Oil & Gas15% Corporate Research

1 | Focus on operational excellence

2 | Well positioned for profitable growth

3 | Outlook

23

Earnings

Earnings

Costs

24BASF Capital Market Story September 2010

Outlook 2010 Expectations for global economy

Previous Forecast New Forecast

GDP 2.7%

Chemicals (excl. Pharma) 5.3%

Industrial production 4.9%

US$ / EURO 1.40

Oil price (US$ / bbl) 75

3% - 4%

7% - 8%

7% - 8%

1.30

75

25BASF Capital Market Story September 2010

Outlook

We aim to continuously increase the annual dividend, or at least maintain it at the level of the previous year.

We aim to grow sales on average by two percentage points per year above chemical market growth.

We strive for an EBITDA margin of 18% until 2012.

We expect that in Q3 BASF will again perform significantly better then expected.

We expect sales to outpace global chemical production growth.

We expect to substantially increase sales and to significantly improve EBIT before special items.

We expect to earn a sizable premium on our cost of capital.

We expect to increase the dividend.

Short-term targets 2010

Medium-term targets

Dividend policy

26BASF Capital Market Story September 2010

This presentation includes 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. This presentation contains a number of forward-looking statements including, 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 with respect to future events and financial performance. Actual financial performance of the entities described herein 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.

Forward-looking statements represent estimates and assumptions only as of the date that they were made. 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.

Forward-looking statements

27BASF Capital Market Story September 2010

28BASF Capital Market Story September 2010

* Styrenics reported under ‘Other’

Percentage of sales 2009

Chemicals

15%

Plastics*

14%

Functional Solutions14%

Performance Products18%

Agricultural Solutions7%

Oil & Gas

22%

Construction Chemicals

Inorganics

Petrochemicals

Intermediates

Performance Chemicals

Coatings

Dispersions & Pigments

Performance Polymers

Polyurethanes

Crop Protection

Exploration & Production and Natural Gas Trading

Care Chemicals

Catalysts

Paper Chemicals

BASF today – a well-balanced portfolio Total sales 2009: €50.7 billion

29BASF Capital Market Story September 2010

5.1%

-0.9%

-3.5%

10%

-5 0 5 10 15

Delivering consistent, long-term value

Long-term performance January 2001 – August 2010 (average annual performance with dividends reinvested)

BASF total return well above benchmark levels

Average annual dividend increase of 12.8%(2001-2009)

Attractive dividend yield of 3.9% in 2009, based on share price at year-end

Aim to increase dividend each year, or at least maintain it at the previous year‘s level

Committed to shareholder value

MSCI World Chemicals

DAX 30

Euro Stoxx 50

BASF

30BASF Capital Market Story September 2010

258364

315

461

687

0

200

400

600

Q2 Q3 Q4 Q1 Q2

Chemicals Strong demand and better margins boost earnings

Intermediates648+11%

Inorganics325

+15%

Petrochemicals1,997+16%

€2,970 +15%

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q2’10 vs. Q2’09 21% 36% 0% 7%

Q2’10 vs. Q1’10 2% 8% 0% 5%

Q2’10 segment sales (million €) vs. Q1’10 EBIT before special items (million €)

20102009

31BASF Capital Market Story September 2010

138

216251

279

349

0

200

400

Q2 Q3 Q4 Q1 Q2

Plastics Positive volume momentum

Polyurethanes1,400+15%

Performance Polymers

1,184+21%

€2,584 +18%

Sales development Period Volumes Prices Portfolio Currencies

Q2’10 vs. Q2’09 27% 14% 0% 7%

Q2’10 vs. Q1’10 8% 4% 0% 6%

Q2’10 segment sales (million €) vs. Q1’10 EBIT before special items (million €)

20102009

32BASF Capital Market Story September 2010

80

286

209

419471

0

100

200

300

400

500

Q2 Q3 Q4 Q1 Q2

Performance Products Earnings further up, additional synergies realized

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q2’10 vs. Q2’09 16% 4% 4% 5%

Q2’10 vs. Q1’10 4% 2% 0% 4%

Dispersions & Pigments

857+19%

Performance Chemicals806

+11%

Paper Chemicals440+5%

€3,151 +10%

Care Chemicals1,048+4%

Q2’10 segment sales (million €) vs. Q1’10 EBIT before special items (million €)

20102009

33BASF Capital Market Story September 2010

48

106 101 111

165

0

50

100

150

Q2 Q3 Q4 Q1 Q2

Functional Solutions Demand from automotive industry recovers

Catalysts1,225+15%

Construction Chemicals576

+33%

Coatings652

+10%

€2,453 +17%

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q2’10 vs. Q2’09 19% 11% 1% 9%

Q2’10 vs. Q1’10 8% 2% 1% 6%

Q2’10 segment sales (million €) vs. Q1’10 EBIT before special items (million €)

20102009

34BASF Capital Market Story September 2010

711641

0

200

400

600

800

1HY 1HY

2,3562,320

0

500

1,000

1,500

2,000

2,500

1HY 1HY

Agricultural Solutions Strong herbicide but weaker fungicide business

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q2’10 vs. Q2’09 1% (4)% 0% 6%

Q2’10 vs. Q1’10 2% (1)% 0% 5%

1HY’10 vs. 1HY’09 1% (2)% 0% 3%

1HY’10 segment sales (million €) vs. 1HY’09 EBIT before special items (million €)

2010200920102009

+2%-10%

35BASF Capital Market Story September 2010

181 1480

200

400

600

800

Q2 Q2

Oil & Gas Higher gas trading volumes positively impact sales

Exploration & Production854(10)%

Natural Gas Trading

1,520+1%

€2,374 (3)%

Sales developmentPeriod Volumes Prices/Currencies Portfolio

Q2’10 vs. Q2’09 4% (7)% 0%

Q2’10 vs. Q1’10 (27)% 1% 0%

37 95

EBIT bSI Natural Gas TradingEBIT bSI Exploration & Production

Net income

Q2’10 segment sales (million €) vs. Q2’09 EBIT before special items / Net income (million €)

20102009

469420

506 515

36BASF Capital Market Story September 2010

Purchase price equity: €700 million

LTM*-EBITDA, reported: €386 million

LTM*-EBITDA, adjusted: €422 million (before special items)

Enterprise value: €3.1billion– Represents a multiple of 7.3 x LTM*-EBITDA adjusted

100% cash consideration, no financing conditions

Expected closing in November 2010

*LTM = last twelve months

Acquisition of Cognis Transaction highlights

37BASF Capital Market Story September 2010

0

100

200

300

400

500

2009 2010 2011/2012 SteadyState

130

350

Integration costs2009: €785 million2010: ~€200 million2011/2012: ~€100 million

Net reduction of positions- Target: 3,800

Ciba non-production sites- To be consolidated: 58

23 Ciba production sites under strategic review- Planned exit: 14*

Ciba integration: synergies exceed targets Structural integration of Ciba completed

Expected synergy run rate (million €) Impact of Ciba acquisition

450 >450Synergy Target

Synergy run rate Effective in 2009

* On two sites exit of production activities only