150 years
150 years
We add value
as one company
Hartwig Michels
President Region
Europe
Nomura Global
Chemical Industry
Leaders Conference
London
March 26, 2015
BASF Capital Market Story March 2015
1
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 forwardlooking statements, and the estimates and assumptions associated with them, except to the
extent required by applicable laws and regulations.
BASF Capital Market Story March 2015
2
150 years
We create chemistry for a sustainable
future
Positioning
Ludwigshafen,
Germany
Antwerp,
Belgium
Perspective
Performance
90
Nanjing,
China
80
70
60
Geismar,
USA
Freeport,
USA
Kuantan,
Malaysia
50
40
30
20
2008
2009
2010
2011
2012
2013
2014
2015
Verbund site
 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
BASF Capital Market Story March 2015
* For 2004-2014
 A track record of strong
sales and earnings growth
 12% average annual
dividend increase, >3%
yield in every single year*
 ~€79 billion market
capitalization end
of February 2015
 Chemistry as an enabler
 BASF has superior growth
opportunities:
– sustainable innovations
– investments
– emerging markets
3
150 years
BASF today – a well-balanced portfolio
Total sales 2014: €74 billion
Percentage of sales 2014*
BASF Capital Market Story March 2015
* 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.
4
150 years
Strategy – Our purpose
Sustainability is an integral part of our strategy
BASF Capital Market Story March 2015
5
150 years
Verbund: Unique competitive advantage
Verbund generates >€1 billion p.a. global cost savings* & supports sustainability
Global reduction in carbon
emissions of 6 million metric
tons/a. and reduction of waste
BASF Capital Market Story March 2015
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
* Savings include only tangible synergies. Additional (intangible) benefits and retained profits are not included.
6
Business review
Growth levers
BASF Capital Market Story March 2015
7
150 years
BASF with continued earnings growth
Business performance*








Sales
Q4’14
vs. Q4’13
FY’14
vs. FY’13
€18.0 billion
(1%)
€74.3 billion
0%
EBITDA
€2.9 billion
+11%
€11.0 billion
+6%
EBIT before special items
€1.5 billion
+3%
€7.4 billion
+4%
EBIT
€1.7 billion
+7%
€7.6 billion
+7%
Net income
€1.4 billion
+26%
€5.2 billion
+8%
Reported EPS
€1.54
+25%
€5.61
+7%
Adjusted EPS
€1.04
+4%
€5.44
+2%
Operating cash flow
€2.0 billion
+4%
€7.0 billion
* Previous year values restated due to dissolution of disposal group “Natural Gas Trading“
Sales development
 1%
FY’14 vs. FY’13
 4%
BASF Capital Market Story March 2015
Portfolio
Currencies
(4%)
0%
 2%

Q4’14 vs. Q4’13
Prices
(3%)
0%

Volumes

Period
(14%)
(1%)
8
150 years
Free cash flow development reflecting
increased capex in recent years
Free cash flow*
in € billion
3.9
4
3.5
3.3
3.2
3.7
3.2
3.2
3
2.6
2.6
2.5
2
1.7
1
0
2004
2005
BASF Capital Market Story March 2015
2006
2007
2008
2009**
2010
2011
* Cash provided by operating activities less capex (in 2005 before CTA)
** 2009 adjusted for re-classification of settlement payments for currency derivatives
2012
2013
2014
9
150 years
Attractive shareholder return
Dividend policy
Dividend per share (€)
 We want to grow or at least
maintain our dividend
Proposal:
3,0
3.00
2.50
2,5
2.50
2.70
2.80
Key facts
2.20
1.95
2,0
2.00
1.95
 Dividend proposal of €2.80
per share, an increase of 3.7%
1.70
1.50
1,5
1.50
1,0
1.00
2.60
1.00
 Average annual dividend
increase of approx. 12%
(2005-2014)
0,5
0.50
0,0
2005
2008
2011
2014
Yield* 3.1% 4.1% 3.8% 7.0% 3.9% 3.7% 4.6% 3.7% 3.5% 4.0%
* Dividend yield based on share price at year-end
 Attractive dividend yield of
4.0% in 2014**
 Dividend yield above 3%
in any given year since 2005
** Based on BASF share price of €69.88 on
Dec 30, 2014
BASF Capital Market Story March 2015
10
150 years
Delivering consistent, long-term value
Average annual performance
with dividends reinvested
Last 10 years
Last 5 years
March 2005 – February 2015
March 2010 – February 2015
+16.1% BASF
+4.8% Euro Stoxx 50
0
3
BASF Capital Market Story March 2015
6
+19.9%
+9.1%
+10.1% DAX 30
+15.3%
+10.0% MSCI World Chemicals
+14.7%
9
12
15
18
11
150 years
Outlook 2015
Expectations for the global economy
Forecast 2015
2014 (actual)
GDP
2.8%
2.5%
Chemicals (excl. pharma)
4.2%
4.0%
Industrial production
3.6%
3.4%
US$ / Euro
1.20
1.33
60-70
99
Oil price: Brent (US$ / bbl)
BASF Capital Market Story March 2015
12
150 years
Outlook BASF Group 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 & 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.
BASF Capital Market Story March 2015
13
150 years
Oil & Gas: Impact of the current oil price
and measures
Production split* 2014
Key Facts
Liquids
~25%
Natural Gas
~75%
~136
million
boe
 Western European gas prices
predominantly market-driven
 Gas markets outside of Europe
partially regulated (e.g. Russia,
Argentina)
 Annual oil price sensitivity for
O&G segment: ±€20 million
EBIT per ±$1 per bbl. (Brent)
Oil price vs. Western European gas price
(2010 = 100)
230
Measures
 Operational excellence
180
 Cost optimization
130
 CAPEX optimization
80
2010
2011
2012
2013
Natural Gas TTF Netherlands
BASF Capital Market Story March 2015
2014
 Active portfolio management
Oil price Brent
*Exploration & Production
14
150 years
Outlook 2015-Forecast by segment
EBIT before special items
Million €
2014
Forecast 2015
Chemicals
2,367
slight decrease
Performance Products
Functional Materials & Solutions
Agricultural Solutions
Oil & Gas
Other
1,455
1,197
1,109
1,795
(566)
considerable increase
considerable increase
considerable increase
considerable decrease
slight decrease
BASF Group
7,357
at prior-year level
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%).
For sales, “slight” means a change of 1-5%, while “considerable” is used for changes of 6% and higher. “At prior-year level” indicates no change (+/-0%).
BASF Capital Market Story March 2015
15
Business review
Growth levers
– Portfolio development
– Market approach
– Innovations for a sustainable future
– Acquisitions
– Investments
– Operational excellence
BASF Capital Market Story March 2015
16
150 years
Portfolio development
Moving downstream towards customer industries
Classical Chemicals
Chemical Industry
2001
in % of
sales**
2010
in % of
sales**
2014
in % of
sales**
2020
in % of
sales**
Customized Products
Functionalized Materials
& Solutions
First customer industries*
~ 50%
~ 50%
~ 40%
~ 60%
~ 35%
~ 65%
~ 30%
~ 70%
BASF Capital Market Story March 2015
* Agriculture, Construction, Consumer Goods, Health & Nutrition, Electronics, Energy & Resources, Transportation
** Sales excluding Oil & Gas. Targets were published on November 29, 2011.
17
150 years
Portfolio development
Towards more market driven and innovative businesses
Acquisitions
 Catalysts
 Construction chemicals
Divestitures
BASF
core business
Selected transactions
2005 − today
 Agro generics
 Vitamin premixes
 Water-based resins
 Fertilizers
 Pigments, plastic additives
 Construction equipment,
flooring and wall systems
 Personal care & food
 Omega-3 fatty acids
 Functional crop care
 Enzymes
 Oil & Gas
 Battery materials
 Specialty plastics
 …
~ €14 billion sales
BASF Capital Market Story March 2015
Strong partnerships
 Styrenics
 Gazprom
 Styrene monomer
 Monsanto
 Textile chemicals
 Petronas
 …
 Shell
 Sinopec
 Statoil
 Total
~ €7 billion sales
18
150 years
Market approach
Cross-divisional customer industry approach
BASF sales by
first customer industry*
Bubble Size: BASF divisional sales by first customer industry*/**
Consumer goods
> 15 %
Transportation
> 15 %
Construction
> 10 %
Energy & Resources
< 10 %
Monomers
Petrochemicals
BASF Capital Market Story March 2015
Dispersions &
Pigments
Intermediates
Care
Chemicals
Performance
Chemicals
* Excluding Oil & Gas, Crop Protection and Other. 2013 numbers
Coatings
Paper
Chemicals
Construction
Chemicals
Catalysts
Performance
Materials
** Nutrition & Health sales predominantly into Health & Nutrition market
19
150 years
Strong commitment to innovation
Innovations for a sustainable future
R&D expenditures
(€ billion)
Key facts
 Further increase of R&D
spending in 2015
2.0
2,0
1.8
1.9
1.7
1.6
1.5
1,5
Corporate Research
21%
Oil & Gas
3%
1.5
Agricultural Solutions
27%
1,0
1.0
Functional Mat. & Sol.
20%
Performance Products
19%
0,5
0.5
Chemicals
10%
0,00
2010
2011
BASF Capital Market Story March 2015
2012
2013
2014
 ~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
20
150 years
Innovation: Four-Way Conversion
Catalyst (FWC™)
FWC™ reduces emission of gaseous pollutants and particulates
HC
CO
NOx
Particulates
N2
CO2
H2O
Leading position: Global mobile emissions catalysts patents*
150
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
100
50
0
BASF
BASF Capital Market Story March 2015
Competitors
FWC™ introduced in 2013
Sustains BASF’s leading
technology position
* 2009 – 2013 ** Hydrocarbons, carbon monoxide, nitrogen oxides
*** https://www.basf.com/en/company/news-and-media/science-around-us/catalytic-converter.html
21
150 years
Innovation: Green Sense®
Concrete for sustainable construction
BASF’s Green Sense® Concrete
system consists of:
Low
1) Innovative admixture
products
2) Concrete mix services
Hiigh
Environmental Impact
3) Eco-efficiency analysis
 Replaces up to 70% of cement
with recycled materials
 Superior eco-efficiency
 Applied in the construction of
landmark projects, e.g. One
World Trade Center, NYC
Reference
Concrete
High
BASF Capital Market Story March 2015
Total Cost of Ownership
Low
22
150 years
Innovation: 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
Trilon® M: Phospate free dish washing solution
BASF Capital Market Story March 2015
23
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
BASF Capital Market Story March 2015
24
150 years
Innovation: New acrylic acid technology
BASF with best-in-class acrylic acid process
Acrylic acid production technology benchmark
Industry average costs = 100; normalized
Key facts
 Lower production cost than
industry average
 Efficiency gains:
100
 run-time extension
 higher throughput
95
 lower energy consumption
90
 Proprietary technology,
new process protected by
280 active patent families
85
80
BASF
new process
BASF Capital Market Story March 2015
BASF
classic process
Source: BASF estimate
Industry average
 3 out of 6 production sites
already equipped: Ludwigshafen, Antwerp and Nanjing;
Camaҫari (Brazil) is currently
starting-up
25
150 years
Growth fields for innovation
Key customer industries
Growth fields
Technology fields
Batteries for Mobility
Enzymes
Transportation
Agriculture
E-Power Management
Materials,
Systems &
Nanotechnology
Functional Crop Care
Construction
Energy & Resources
Heat Management
for Construction
Lightweight Composites
Raw Material
Change
Organic Electronics
Consumer Goods Electronics
Plant Biotechnology
Water Solutions
White
Biotechnology
Wind Energy
Health & Nutrition
BASF Capital Market Story March 2015
...
26
150 years
Acquisitions
… will contribute to profitable growth in the future
We want to acquire businesses which …

Generate profitable growth
above the industry average

Provide a minimum return on
investment of 8% p.a. after tax

Are innovation-driven


Offer a special value proposition
to customers
Are EPS accretive by year three
at the latest

Reduce earnings cyclicality
Strategic acquisition criteria
BASF Capital Market Story March 2015
Financial acquisition criteria
27
150 years
Major investment project start-ups in 2015
Major capex projects for start-up in 2015
Nanjing
Ludwigshafen
Neopentylglycol
+40,000 mt
Specialty amines*
Ethylene oxide*
TDI complex
+300,000 mt
Specialty amines*
Crop protection products*
Theodore
Chelating agents*
Shanghai
Geismar
Formic acid
+50,000 mt
Polyurethane systems
Cinderford
Chongqing
Precious metals
recycling*
MDI
+400,000 mt
Coating resins*
Automotive catalysts*
Polyamides
+100,000 mt
Yesan
Camaҫari
Chennai
Acrylic acid
+160,000 mt
SAP
+60,000 mt
.
Specialty plastics*
Automotive
catalysts*
Upstream businesses
Guaratingueta
Pasir Gudang
Crop protection
formulations*
Polymer dispersions*
Maoming
Isononanol*
Downstream businesses
BASF Capital Market Story March 2015
* Capacity not published
28
150 years
Investments for organic growth
Capex budget 2015-2019
by region
Capex budget 2015-2019
by segment
Performance
Products
15%
Functional
Materials &
Solutions
13%
Agricultural
Solutions
6%
€19.5
billion
Other
12%
Chemicals
33%
Asia Pacific
18%
South
America*
8%
Other
2%
Oil & Gas
21%
€19.5
billion
Europe
45%
North America
27%
* Includes also regions Africa and Middle East
BASF Capital Market Story March 2015
29
150 years
Operational excellence programs
~€1.3 billion earnings contribution by 2015
Annual earnings contribution
in € million
STEP program
 Targeted annual earnings
contribution increased
from €1 billion to ~€1.3 billion
by end of 2015
4,000
3,000
 €1 billion achieved by the end
of 2014
2,000
 Optimization of processes and
structures in all regions, e.g.
1,000
 manufacturing, maintenance
 supply chain
0
2014
Former cost
saving programs
pre- 2008
BASF Capital Market Story March 2015
2015
NEXT
2008-2011
STEP
2012-2015
 engineering, best-cost country
sourcing
 Project timeline: 2012–2015
 One-time cost : ~€1 billion
30
150 years
Restructuring measures in Performance
Products strengthening competitiveness
 Reduction of ~2,400 positions
until end of 2017
 Annual earnings contribution
of ~€500 million from 2017 onwards
 Run rate of €250 million by end of 2015
 One-time costs in the magnitude of
~€250-300 million
 Future investments
- Innovations and R&D
- Organic growth incl. capital
expenditures
- Selected acquisitions in
growth fields
BASF Capital Market Story March 2015
31
150 years
Operational excellence
Strong track record
BASF Group* 2001–2014
Fixes cost management
(Index; CAGR 2001–2014)
350
 Cost discipline and self-help
remain key priorities
CAGR 2001 – 2014
10 %
300
250
 Restructuring of Performance
Products on-track to achieve
€500 million earnings
contribution by 2017 (run rate
~€250 million by the end of in
2015)
EBITDA
7%
Sales
3%
Fixed costs
200
 STEP program: Targeted
annual earnings contribution
increased from €1 billion to
~€1.3 billion by end of 2015
150
100
50
2001
2003
BASF Capital Market Story March 2015
2005
2007
2009
2011
2013 2014
* Excl. companies with major IFRS 10/11 restatements, i.e. BASF YPC Nanjing, Libya onshore, other Oil & Gas and Catalysts companies 32
150 years
BASF…
• … is the #1 chemical company
• … has a strong track record of profitable growth
• … relentlessly focuses on Operational Excellence
• … targets promising growth opportunities
• … is committed to delivering high shareholder returns
also in the future.
BASF Capital Market Story March 2015
33
Appendix I – Q 4 2014 results
BASF Capital Market Story March 2015
34
150 years
Chemicals
Petrochemicals drive earnings growth
Q4’14 segment sales (million €) vs. Q4’13
Intermediates
686
(3%)
€4,071
(3%)
Petrochemicals
1,803
(10%)
EBIT before special items (million €)
600
580
510
2,500
2,367
2,182
2,000
400
1,500
1,000
200
Monomers
1,582
+6%
500
0
Q4'13
Q4'14
+14%
FY'13
FY'14
+8%
Sales development
Q4’14 vs. Q4’13

FY’14 vs. FY’13
 3%
BASF Capital Market Story March 2015
(3%)
Prices
Portfolio
Currencies
(4%)
0%
 4%

Volumes

Period
(3%)
0%
0%
35
150 years
Performance Products
Sales slightly up and earnings on prior year level
Q4’14 segment sales (million €) vs. Q4’13
EBIT before special items (million €)
Performance
Chemicals
840
+5%
Paper
Chemicals
341
(1%)
Nutrition
& Health
492
(4%)
Dispersions
& Pigments
881
+1%
300
Care
Chemicals
1,164
+1%
100
€3,718
+1%
216
217
Q4'13
Q4'14
200
1,600
1,400
1,200
1,000
800
600
400
200
1,455
1,365
0
0%
FY'13
FY'14
+7%
Sales development
Period
Volumes
Q4’14 vs. Q4’13

FY’14 vs. FY’13
Portfolio
(2%)
0%
0%
 3%
 1%
0%
0%

BASF Capital Market Story March 2015
Prices
Currencies
(2%)
36
150 years
Functional Materials & Solutions
Continued robust demand from automotive
Q4’14 segment sales (million €) vs. Q4’13
Performance
Materials
1,585
+2%
EBIT before special items (million €)
250
238
220
Catalysts
1,577 200
+19%
€4,444
+8%
1,200
1,070
1,197
FY'13
FY'14
1,000
800
150
600
Construction
Chemicals
511
+3%
Coatings
771
+3%
100
400
50
200
0
Q4'13
Q4'14
(8%)
+12%
Sales development
Period
Volumes
Q4’14 vs. Q4’13
FY’14 vs. FY’13
Portfolio
 4%
0%
0%
 4%
 5%
0%
0%

BASF Capital Market Story March 2015
Prices
Currencies
(2%)
37
150 years
Agricultural Solutions
Strong finish to the year
Q4’14 segment sales (million €) vs. Q4’13
EBIT before special items (million €)
1,109
1,000
140
890
800
123
1,400
120
1,200
100
1,000
600
80
400
60
600
40
400
20
200
200
0
1,222
1,109
800
67
0
Q4
2013
Q4'13
Q4
2014
Q4'14
+84%
FY'13
FY'14
(9%)
Sales development
Volumes
Q4’14 vs. Q4’13
 22%

FY’14 vs. FY’13
 5%
 2%
BASF Capital Market Story March 2015
Prices
(3%)
Portfolio
Currencies
0%
 6%
0%

Period
(3%)
38
150 years
Oil & Gas
Lower oil and gas prices impacted earnings
Q4’14 segment sales (million €) vs. Q4’13
Natural Gas
Trading
3,277
0%
Exploration &
Production
728
(15%)
€4,005
(3%)
EBIT before special items / Net income (million €)*
800
2,000 1,856
1,795
1,450
1,412
600 502
400
361
347
1,000
1,730
288
637
200
141
59
0
Q4 '13
1,464
446
Q4 '14
Exploration & Production
406
383
0
FY '14
FY '13
Natural Gas Trading
Net income
* Pevious year values restated due to dissolution of disposal group “Natural Gas Trading“
Sales development
 10%
FY’14 vs. FY’13
 14%
BASF Capital Market Story March 2015
Portfolio
(12%)

Q4’14 vs. Q4’13
Price/Currencies

Volumes

Period
(13%)
 1%
(1%)
39
150 years
Review of ’Other’
Million €
Q4 2014
Q4 2013
2014
2013
Sales
700
1,106
3,609
4,190
EBIT before special items
(28)
(114)
(566)
(618)
Thereof corporate research costs
group corporate costs
currency results, hedges and other
valuation effects
other businesses
(98)
(59)
110
(102)
(66)
(109)
(389)
(218)
(2)
(386)
(237)
(190)
23
99
133
254
Special items
473
3
433
(46)
EBIT
445
(111)
(133)
(664)
BASF Capital Market Story March 2015
40
150 years
Operating cash flow development in 2014
Million €
2014
2013*
Cash provided by operating activities
6,958
8,100
Thereof changes in net working capital
miscellaneous items
(699)
(953)
714
(720)
Cash provided by investing activities
(4,496)
(5,994)
Thereof payments related to tangible / intangible assets
(5,296)
(4,873)
373
(1,093)
Cash used in financing activities
(2,478)
(1,874)
Thereof changes in financial liabilities
dividends
288
(2,766)
828
(2,702)
acquisitions / divestitures
* Previous year values restated due to dissolution of disposal group “Natural Gas Trading“
2014
 Free cash flow decreased to €1.7 billion; reduction due to a swing in net working capital
and higher capex
 Payments related to tangible/intangible assets amounted to €5.3 billion (+€423 million)
 Continued high dividend payout in 2014: ~€2.8 billion
BASF Capital Market Story March 2015
41
150 years
Balance sheet remains strong
Balance sheet 2014 vs. 2013
(billion €)
Highlights 2014
71.4
64.2
64.2
Long-term
assets
38.3
71.4
28.2
Stockholders’
Equity
15.4
Financial
debt
22.1
27.8
Other
liabilities
Dec 31,
2013
Dec 31,
2014
44.0
27.7
14.4
Inventories
Accounts
receivable
Other assets
Liquid funds
9.6
10.2
9.6
11.3
10.2
10.4
3.7
1.8
4.0
1.7
Dec 31,
2013
Dec 31,
2014
 Increase in long-term assets
by €5.7 billion, due to capex
and acquisitions
 Increase of pension provisions
by €3.6 billion due to continued
decline of discount rates
 Financial debt increased
by €1.0 billion reflecting
issuance of bonds
 Net debt: €13.7 billion
 Net debt/EBITDA ratio: 1.2
 Equity ratio: 40%
(Previous year values restated due to dissolution of disposal group “Natural Gas Trading“)
BASF Capital Market Story March 2015
42
150 years
BASF Europe –
Setting course for higher growth
BASF in Europe: Focused on stronger growth
► Leverage #1 position in BASF’s core market, outgrow markets
► Seize growth opportunities
– Enhance sales & marketing to increase customer proximity
– Introduce innovative products and solutions
– Focused investments on fast growing markets
– Exploit opportunities in Eastern Europe, Middle East, Africa
► Maintain highly efficient production sites, accelerate
operational excellence
BASF Equity Story – Region Europe, March 2015
44
Business environment in Europe
BASF in Region Europe
Growth at different speeds
BASF Equity Story – Region Europe, March 2015
45
150 years
Europe is a significant and growing
chemicals market
Chemical production (excl. pharma) in Europe
(billion US$)
+1.6% p.a.
320
230
Macroeconomic Situation

Population of >2 bn people

GDP and industrial production
growth of ~2% expected

Chemical market at US$910 bn in
2014

Western Europe:
265
– Moderate growth resuming
640
645
695
– Southern Europe starting to see
improvement

2010
Western Europe
BASF Equity Story – Region Europe, March 2015
2014
2020
Emerging Europe
(Central & Eastern Europa, Middle East, Africa)
Source: BASF Economic Intelligence
Emerging Europe:
– Growing ~3x faster than
Western Europe
46
150 years
Development of key customer industries*
in Europe
Agricultural Solutions
 Long-term fundamentals remain strong
 Growth above chemical market
Construction
 Strong markets in Turkey and Saudi Arabia
 Growing confidence in the construction sector
in Western Europe.
Automotive
 Demand recovery in Western Europe – first
increase of new car registrations since 2009
 Strongly growing CEE production
Chemicals
 Chemical production grew in EU28 in 2014
 Strong growth in specialties and consumer
chemicals
BASF Equity Story – Region Europe, March 2015
* Without Oil & Gas
47
Business environment in Europe
BASF in Region Europe
Growth at different speeds
BASF Equity Story – Region Europe, March 2015
48
150 years
Europe is largest sales and profit
contributing region of BASF Group
Sales*; EBIT before special items
(million €)
North
America
Europe
55%
North
America
Europe
65%
20%
Sales*
BASF Group
74,326
17%
Asia Pacific
BASF Equity Story – Region Europe, March 2015
21%
8%
South
America,
Africa,
Middle East
* By location of customer
.
Asia Pacific
EBIT
before SI
BASF Group
7,357
8%
6%
South
America,
Africa,
Middle East
49
150 years
Regional organization close to customers
South Africa
Antwerp
Ludwigshafen
(regional headquarter)
>125
96
Countries
served
Sales
offices
132
28
~71,500
Production
sites
R&D
sites
Employees
Verbund site
Selected production site /
sales offices
Business center hub
BASF Equity Story – Region Europe, March 2015
50
Business environment in Europe
BASF in Region Europe
Growth at different speeds
 Western Europe
 Central Europe
 Emerging Europe
BASF Equity Story – Region Europe, March 2015
51
150 years
Stable business in past years, focus in
the future on accelerated organic growth
Sales development chemicals business and crop
protection in Europe
(billion €)
Volume
CAGR 1.2%
35
Structural Excellence Program
Europe – Accelerate organic
business growth in Europe
 Lean, centralized setup for
commodity businesses
30
25
 Setup closer to customers in
downstream businesses
20
15
 Dedicated responsibilities for
growth in emerging markets
10
 Continuously drive cost
efficiency
5
0
2011
2012
2013
2014
Volume growth in line with market; slight sales decline
due to lower oil price and lower commodity margins
BASF Equity Story – Region Europe, March 2015
 Program started in February
2015
52
150 years
Western Europe: Core market of BASF
Verbund site
Western Europe
Selected sites
 Population: 415 million
 Real GDP: US$16.9 trillion
Cheadle
Ludwigshafen
 Chemical production:
US$645 billion
 Core market of BASF
Antwerp
Cesano Maderno
 Strong production set-up with
two Verbund sites
 More than 20 global key
accounts steered from
Western Europe
Levallois
Tarragona
BASF Equity Story – Region Europe, March 2015
 Expected chemical production
growth: ~1% p.a.
53
150 years
Western Europe: Accelerate profitable
growth
Western Europe
BASF VC
investment in
SmartKem
New precious metals
recycling plant
in Cinderford
 Accelerate profitable growth
– Stronger local presence
– Deeper customer
interaction, especially in
downstream businesses
Innovations for
the automotive
industry
TDI plant in
Ludwigshafen
– Using BASF‘s global
network to support
globalization of customers
 Focus on innovation or
sustainability driven industries
Sustainable
construction
BASF Equity Story – Region Europe, March 2015
 Upgrading of regional
Support
globalization
production base
of customers
TDI plantinManaging costs
Ludwigshafen
54
150 years
Central Europe: Attractive market next
door
Central Europe
Bratislava
Warsaw
 Population: 105 million
 Real GDP: US$1.4 trillion
 Chemical production:
US$44 billion
Ljubljana
Belgrade
 Economies in transition from
emerging into developed stage
 Expected chemical production
growth: ~2.5% p.a.
Zagreb
Bucharest
 Business growth (~10% p.a.)
outpacing chemical production
 Local presence especially in
downstream businesses and
crop protection
BASF Equity Story – Region Europe, March 2015
55
150 years
Central Europe: Participate in local
growth opportunities
Mobile Catalysts
Production
in Sroda Slaska
Construction
systems in
Czech Republic
Central Europe
 Continuously expand market
position
 Being close to our customers
Agro Field Days
in Romania
 Strengthen joint innovation
activities
 Selective investments:
– Serve growing local markets
PU system
house in
Slovakia
BASF Equity Story – Region Europe, March 2015
Construction
systems
in Romania
– Capitalize on lower cost
structure for export business
(e.g. catalysts in Poland)
56
150 years
Emerging Markets: Turkey & Middle East –
Focus on locally consuming industries
Turkey & Middle East
Gebze
 Population: 268 million
 Real GDP: US$2.9 trillion
 Chemical production:
US$120 billion
Istanbul
 Growth drivers: housing, food,
consumer goods, infrastructure
 Expected chemical production
growth: ~4% p.a.
Izmir
Dubai
 Focus on Turkey and Arabian
peninsula
 Target industries:
– Energy & resources
– Chemicals & plastics
– Construction
BASF Equity Story – Region Europe, March 2015
57
150 years
Emerging Markets: Turkey & Middle East –
Focus on locally consuming industries
Nutrition lab in
Istanbul
Turkey & Middle East
 Regional hubs: Istanbul, Dubai
Sustainable
construction
 ~3000 customers
 Accelerated market penetration
by being close to local
industries and markets, e.g.:
– Food ingredients for Bakery
and Dessert production
– Customer specific plastic
additives blends in Bahrain
Plastic Additives
in Bahrain
Gas treatment
solutions
BASF Equity Story – Region Europe, March 2015
– Gas treatment solutions for
LNG production
– BASF concrete admixture
solutions for Burj Khalifa
58
150 years
Emerging Markets: Africa – Growth
opportunities in a heterogeneous market
BASF Maroc S.A.
Casablanca
Africa (target market)
 Population: 450 million
 Real GDP: US$1.5 trillion
 Chemical production:
US$35 billion
BASF West Africa Ltd.
Lagos
BASF
East Africa Ltd.
Nairobi
 Large, dynamic but
heterogeneous market
 Expected chemical production
growth: ~4% p.a.
 Fastest urbanization rate
Northern Africa
Eastern Africa
Southern Africa
Western Africa
BASF Equity Story – Region Europe, March 2015
BASF
South Africa (Pty.) Ltd.
Midrand
 Improving economic
performance
 Focus on four regional clusters
►Africa presents a profitable
growth opportunity
59
150 years
Emerging Markets: Africa – Growth
opportunities in a heterogeneous market
Setup to capture growth
opportunities:
 Business focused on
Construction
Chemicals
in Kenya
– Construction chemicals
– Crop protection products
– Consumer goods
– Energy & resources
Ultra-filtration
for drinking water
in Ghana
 Strengthened local presence
– 13 legal entities
New laboratory
for the mining
industry
– 9 production sites
Dispersions
in South Africa
– Sales >€500 million
Northern Africa
Eastern Africa
Southern Africa
Western Africa
BASF Equity Story – Region Europe, March 2015
60
BASF in Europe: Focused on stronger growth
► Leverage #1 position in BASF’s core market, outgrow markets
► Seize growth opportunities
– Enhance sales & marketing to increase customer proximity
– Introduce innovative products and solutions
– Focused investments on fast growing markets
– Exploit opportunities in Eastern Europe, Middle East, Africa
► Maintain highly efficient production sites, accelerate
operational excellence
BASF Equity Story – Region Europe, March 2015
61
150 years
BASF Equity Story – Region Europe, March 2015
62