redburn ceo conference 2013 - basf€¦ · this presentation may contain forward-looking statements...

We add value as one company

Oil & Gas

Agricultural Solutions

Functional Materials & Solutions

Performance Products

Chemicals

Value

Kurt Bock Chairman of the Board of Executive Directors Redburn 2013 CEO Conference London, December 03, 2013

BASF Capital Market Story December 2013 2

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.


Percentage of sales 2012**

** Not depicted here: ~5% of Group sales reported as ‘Other‘ * Restated numbers, reflecting IFRS 10/11 changes, new segment structure effective Jan. 1, 2013

BASF today – a well-balanced portfolio Total sales 2012: €72.1 billion*

BASF Capital Market Story October 2013 4

Business review

BASF strategy & strategic levers


Enterprise value ~62 million US dollars

Acquisition successfully completed (October 31, 2013)

Verenium strengthens BASF‘s footprint in the enzyme growth market

Optimization of global production network

Reduction of 650 positions worldwide

Investment of €250 million in production and R&D

Transaction completed July 31, 2013

Increased production from 3,000 to ~40,000 boe per day in Norway

Compensation payment of ~781 million US dollars*

Important corporate developments

Transaction with Statoil completed

Restructuring in Pigments business

Acquisition of Verenium enzyme biotechnology

* Euro/dollar exchange rate July 31, 2013: €1 = $1.3275


Robust 3rd quarter 2013 for BASF

Sales development Period Volumes Prices Portfolio Currencies

Q3’13 vs. Q3’12 6% (1%) 1% (5%)

Business performance Q3’13 vs. Q3’12 Q1-Q3’13 vs. Q1-Q3’12

Sales €17.7 billion +1.5% €55.8 billion +3%

EBITDA €2.5 billion +16% €7.8 billion (1%)

EBIT before special items €1.7 billion +15% €5.7 billion +6%

EBIT €1.7 billion +20% €5.6 billion (1%)

Net income €1.1 billion +18% €3.7 billion (4%)

Reported EPS €1.20 +19% €4.03 (4%)

Adjusted EPS €1.28 +10% €4.35 +1%

Operating cash flow €2.0 billion +21% €6.0 billion +19%


0

1

2

3

4

2003 2004 2005 2006 2007 2008 2009** 2010 2011 2012 Q1-Q32013

Strong free cash flow generation

* 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

2.8 2.6

3.3 3.5

3.2

2.5

3.2

3.9 3.7

2.6 2.9


Delivering attractive shareholder returns

Dividend of €2.60 per share for 2012

2003-2012: Average annual dividend increase of 16%

Attractive dividend yield of 3.7% in 2012**

Dividend yield above 3% in any given year since 2002, total payout almost €17 billion

* Dividend yield based on share price at year-end

Dividend payments

3.7% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9%

Dividend yield* 4.6% 3.1%

2.50

0.70 0.85 1.00

1.50

1.95 1.951.70

2.20

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2.60

3.7%

** Based on BASF share price of €71.15 on Dec. 28, 2012

Dividend per share in €

CAGR 16%


We do not anticipate an acceleration of global economic growth in the 4th quarter of 2013

For the full year, BASF confirms its outlook: We strive to exceed the record levels in sales and EBIT before special items in a challenging economic environment

Our focus on growth markets and innovation, in combination with our measures to optimize our portfolio and to improve operational excellence, will contribute to this

We aim to earn a high premium on cost of capital in 2013

Outlook 2013

GDP: +2.0% (unchanged)

Industrial production: +2.7% (unchanged)

Chemical production: +3.1% (unchanged)

US$ / Euro: 1.30 (unchanged)

Oil price (US$ / bbl): 105 (unchanged)

Assumptions 2013

Outlook 2013


Business review

BASF strategy & strategic levers


Grow at least 2 percentage points above chemical production

Earn a premium on cost of capital of at least €2.0 billion on average p.a.

Profitability targets Growth targets

2015

2020

Sales ~€80 billion

Sales ~€110 billion

EBITDA ~€14 billion EPS ~€7.50

EBITDA ~€22 billion

Key financial targets 2015 / 2020 are ambitious


Portfolio development Moving downstream towards customer industries

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

Functionalized Materials & Solutions Customized Products Classical Chemicals

2020 in % of sales**

Chemical Industry First customer industries*


~ 40%

~ 30% ~ 70%


~ 50%

~ 60%

~ 50%


Engineering plastics Electronic chemicals Catalysts Construction chemicals Water-based resins Pigments Plastic additives Oil & Gas Personal care & food Battery materials Functional crop care Omega-3 fatty acids Enzymes

BASF core business

Strong partnerships

Gazprom Statoil Monsanto Petronas Shell Sinopec Total

Selected transactions 2001 − today*

Acquisitions

~ €16bn sales ~ €10bn sales**

Divestitures

Pharma Fibers Printing systems Polyolefins Polystyrene Americas Agro generics Vitamins premix Fertilizers Styrenics (transferred into

Styrolution JV on Oct. 1, 2011)

Construction equipment, flooring systems

** Without Styrenics

Portfolio development Towards more market driven and innovative businesses

* Only closed deals have been considered


Strong commitment to innovation Innovations for a sustainable future

Key facts €1.7 bn R&D expenditures in

2012, further increase planned for 2013

~10,500 employees in R&D

~3,000 projects

Research Verbund: About 600 cooperation partners with universities, start-ups and industry

Target 2015 and 2020: – €10 bn in sales, €2.5 bn

EBITDA from innovations younger 5 years

– €30 bn in sales, €7 bn EBITDA from innovations younger 10 years


Joint development with adidas, illustrating our customer focus

New cushioning material, provides highest energy return in the running industry

Solid granular material* is ‘blown up’, turned into 1000’s of small energy capsules

With their unique cell structure, these energy capsules store and unleash energy more efficiently in every stride

New shoe is available in stores since February, 2013

Key facts

Photo: adidas

* TPU (Thermoplastic polyurethane)

Innovation with adidas: Infinergy™ Technology competencies combined with customer know-how


BASF growth fields focus on enabling technologies

Health & Nutrition

Consumer Goods Construction Transportation Electronics Energy &

Resources Agriculture

Customer industries

Water solutions

Heat management

Enzymes Plant biotechnology

Batteries for mobility

Lightweight composites

Functional crop care

Medical Organic electronics

Growth Fields*

E-Power management

Wind energy

Resources, Environment & Climate Food & Nutrition Quality of life

Chemistry as enabler

* Including growth fields still under evaluation

Materials Systems & Nanotechnology

Raw Material Change

White Biotechnology

Techno-logy

fields


Enabling technology: Battery Materials Driving the future of electromobility

* Driving range (km) of an electric car (with a 100kg battery)

0 100 200 300 400

Li-S**

HE/HV

Li-ion

Generation 2: Current Generation 3: 2017 Generation 4: 2022+

BASF‘s technology roadmap- Battery materials for today and tomorrow

Li-ion HE/HV Li-ion Li-S

Driving range (km)*

Technology

From Li-ion to Lithium-sulfur

Business potential 2020 Strategic relevant market: >€5 billion globally

(~€4 billion in Asia Pacific)

Sales potential BASF: >€500 million globally (~€350 million in Asia Pacific)

BASF activities Start of business unit „Battery Materials“ in 2012

Several technology-driven acquisitions undertaken

Three-digit million euro invest for R&D and production

R&D network with universities / industrial partners


Thereof investments in emerging markets Total investments

35-45%

15-20

30-40%

~15

2006 – 2010 2011 – 2015 2016 – 2020

10.9

~20%

Investments … will boost future organic growth

Future investments in € billion


* Memorandum of Understanding signed

TDI plant Ludwigshafen, Germany

Expansion oil & gas activities

Aroma Ingredients Kuantan, Malaysia

Investments Major projects

Expansion Verbund site Nanjing, China*

MDI plant Chongqing, China

Acrylic acid complex Camacari, Brazil


BASF aims to further increase its sales share from emerging markets

*BASF definition: Developed markets include EU15, Norway, Switzerland, North America, Japan, Australia, New Zealand

** Sales excluding Oil & Gas


2012 in % of sales

(€62bn**)

2001 in % of sales

(€28 bn**)

Emerging markets Developed markets*

~ 65%

~ 55% ~ 45%

~ 78%

~ 35%

~ 22%


0

1.000

2.000

3.000

2012 2015

Former cost saving programs NEXT STEP

Operational excellence programs STEP program on track: ~€1 billion earnings contribution by 2015

Annual earnings contribution in € million

Targeted annual earnings contri-bution of ~€1 billion by end of 2015

Project timeline: 2012–2015 Program is on track Measures to optimize processes

and structures in all regions, e.g. – manufacturing, maintenance – supply chain – engineering, best-cost country

sourcing One-time costs & investments:

~€1 billion

NEXT Program

STrategic Excellence Program ‘STEP’

NEXT program successfully completed

Annual earnings contribution of ~€1 billion achieved in 2012


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