BASF: Fit for 2012 and beyond · BASF Strategy: We create chemistry__November 2011. 1. BASF: Fit for 2012 and beyond. Dr. Stefan Marcinowski. Member of the Board of Executive Directors.

BASF Strategy: We

create

chemistry__November

2011 1

BASF: Fit for 2012 and beyond

Dr. Stefan MarcinowskiMember of the Board

of Executive Directors

Paris

December 08, 2011

2

Business review BASF Today Trends Targets Strategic levers BASF Tomorrow – Board priorities

3

Sales €17.6 billion +12%EBITDA €2.7 billion (8%)EBITDA margin 15.4% 18.6%EBIT before special items (bSI) €2.0 billion (11%)EBIT bSI adjusted for non-comp. oil taxes €2.0 billion (1%)EBIT €1.9 billion (13%)Net income €1.2 billion (4%)EPS €1.30 (4%)Adjusted EPS €1.52 0%

Business performance Q3’11 vs. Q3’10

Further sales growth in chemical activities mainly due to successful price increasesAcquired Cognis business continues to perform strongly; synergy targets increasedAgricultural Solutions on track for record year in sales and earningsEBIT before special items amounted to €2 billion. Adjusted for Libya, which contributed €355 million in last year’s quarter, EBIT before special items increased by 6% compared to Q3 2010.

BASF with good earnings in Q3Highlights Q3 2011

4

We expect to generate significantly higher salesWe aim to significantly exceed the 2010 EBIT before special itemsadjusted for non-compensable oil taxes (2010: €7.2 billion)We will earn a high premium on our cost of capital

Outlook 2011

Outlook 2011 confirmed

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

Dividend policy

5


6

Outperformed global chemical production by 4 percentage points p.a.

Sales to third parties in billion €

BASF total growth 7.8% p.a.

BASF volumes + M&A 6.6% p.a.

BASF volumes 4.1% p.a.

Global chemical production 3.0% p.a.

30

60

20

50

40

Prices

12

33

Volumes

14

64

M&A

11

Currencies

–6

70

2001 2010

7

€9bn(Sales excl. planned

measures)

Portfolio development towards more market driven and innovative businesses

Acquisitions

Crop protectionEngineering plastics Electronic chemicalsCustom synthesisCatalystsConstruction chemicalsWater-based coatingsPigmentsPlastic additivesOil & Gas Personal care & food

€15bn(Sales)

BASF core business

Strong partnerships

GazpromMonsantoPetronasShellSinopecTotal

Divestitures

PharmaFibersPrinting systems PolyolefinsPolystyrene Americas Agro generics Vitamins premixFertilizers (planned)Styrolution (planned)

Selected transactions 2001 −

today

0

2

4

6

8

10

0

20

40

60

8

Strong and profitable growth in emerging markets

2001

CAGR 5.4%28%

34%CAGR 13%

2010

53

28

Developed markets*Emerging markets * BASF definition: Developed

markets

include

EU15, Norway,

Switzerland, North America, Japan, Australia, New Zealand

22%

2001

CAGR 12%

34%

CAGR 18%

2010

8.2

2.5

25%

Sales BASF Group excluding Oil & Gas in billion €

by location of customerEBITDA BASF Group excluding Oil & Gas

in billion €

by location of customer

9

Strong focus on operational excellence

BASF Group 2001–2010 Index

2001 2004 2007 2010

CAGR

12 %

8 %

EBITDA

Sales

Fixed costs2 %

50

100

150

200

250

300

1010

*

Cash provided by operating activities less capex

(in 2005 before CTA)** 2009 adjusted for re-classification of settlement payments for currency derivatives

Continuous strong free cash flow generation

Free cash flow in billion €

-0.5

2.8 2.6

3.3 3.5 3.22.5

-0.1

3.23.9

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

-1 2 5 8 11 14

11BASF Strategy: We

create

chemistry__November

2011 11

Delivering consistent, long-term value – Last 10 years

Long-term performance December 2001 – November 2011 (average annual performance with dividends reinvested)

BASF

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+2.0%

+13.8%

Last 5 years

+7.1%

–1.7%

+13.9%

–7.2%

–0.7%

+3.5%

12


13

Demographic challenges set the stage for the future of the chemical industry

Nine billion people in 2050 but only one earth

Resources, Environment & Climate

Food & Nutrition Quality of life

Chemistry as enabler

14

Key trends for the chemical industry

Integrated chemical companies remain cornerstone

Emerging markets players grow quickly

Raw material players invest further downstream

Competitive landscape will change

Use opportunities from sustainability

Increase resource efficiency

Renewables as raw materials

Stakeholder dialogue

Sustainability as strategic driver

Chemistry as enabler

Chemical products replace traditional materials

Create innovative sustainable solutions

Innovation gains importance

Growth will accelerate

Industrial production > GDP

Chemicalproduction > GDP

Emerging markets will outgrow developed markets

Chemical industry remains an attractive growth industry

100

142

138219

23

127

0

1

2

3

4

5

6

7

8

9

10

0 1 2 3 4 5 6 7 8 9 10

15

Chemicals to outgrow key customer industries

Transportation

in %

ConstructionAgriculture

Customer industry growth CAGR 2010-2020 in % p.a.

Energy & Resources

Electronics

Health & Nutrition

Consumer Goods

Che

mic

al p

rodu

ctio

n gr

owth

C

AGR

201

0-20

20 in

% p

.a.

= Market of 2020

in bn

€

(real, 2008)

148

Chemicals growth above customer industries

Chemicals growth below customer industries

Chemicals growth =

customer industrie

s growth

Source: BASF

16


17

Striving for strong profitable growth

Sales* in billion €

64

2010 Target 2020

Target 2015

Investments

Acquisitions

CAGR ~6%

Innovations

Investments

AcquisitionsInnovations

~85

~115

We will outperform chemical production by 2 percentage points p.a.* Potential impact of IFRS changes not included

18

All regions will deliver profitable growth

Regional sales targets 2020 (by location of customers)

in billion €

North America

2010 2020

13

~5.5% p.a.~22

South America, Africa, Middle

East

~8% p.a.

5 ~11

Europe

~4.5% p.a.

33

~53

Asia Pacific

~8% p.a.

13~29

2010 2020

2010 20202010 2020

19%*20%*46%*52%*

25%*20%*10%*8%*

* Percentage of total sales

19

Doubling EBITDA by 2020

EBITDA* in billion €

2010 Target 2020

Target 2015

11.1

CAGR ~7.5%~23

~15Op. Excellence

Growth

Acquisitions

Op. Excellence

Growth

Acquisitions

* Assumptions 2010-2020: Exchange rate $/€

Ø

1.40, Oil price Ø

$110/bbl

20

Business review BASF Today Trends Targets Strategic levers

–

Portfolio development–

Market approach

–

Innovations for a sustainable future–

Investments

–

Operational excellence

BASF Tomorrow – Board priorities

21

Portfolio Development We expand from chemicals to chemistry

Chemistry as key enabler for functionalized materials & solutionsDeep understanding of customer value chains required

New molecules

Improved applications

Functionalized materials & solutions

1960 1970 1980 1990 2000 2010 2020

Batteries, membranes ...

22BASF Strategy: We

create

chemistry__November

2011 22

Portfolio Development A different look at our current portfolio...

Excellent position and growth opportunities; synergies with chemical businesses

Chemical business based on our production Verbund

Customer-oriented specialties, backward integration in Verbund

value chains

Integration of competencies in chemistry: R&D, technology, market knowledge and global access to customer industries

Functionalized Materials & Solutions

Classical Chemicals Customized Products

Oil & Gas

Exploration & production

of oil

and gas, gas trading

activities

Cracker products, plastizicers, acrylic acid, MDI/TDI

PU systems, vitamins, personal care

ingredients

Battery materials, water solutions, crop protection agents, engineering plastics

23

Oil & Gas

Strong contributor to BASF’sprofitable

growth

Significant cash flow

and long-term

profitability

Hydrocarbonhedge

Technologicalsynergies through BASF

Verbund

Portfolio Development Oil & Gas: significant advantages for BASF

24

Portfolio Development Moving downstream towards customer industries

* Agriculture, Construction, Consumer Goods, Health & Nutrition, Electronics, Energy & Resources, Transportation

** Sales excluding Oil & Gas

Functionalized Materials & SolutionsCustomized ProductsClassical Chemicals

2020in % of sales**

Chemical Industry First customer industries*

2010 in % of sales**

~ 40%

~30% ~ 70%

2001 in % of sales**

~ 50%

~ 60%

~ 50%

25

Market Approach Cross-divisional customer industry approach

BASF sales by first customer industry*

Bubble Size: BASF divisional sales by first customer industry (2010)**

* Excluding

Oil & Gas and Other

** Excluding Agricultural Solutions, Health & Nutrition, Oil & Gas and Other

> 15 %

< 10 %

< 10 %

> 15 %

Inorganics Petro-Chemicals

Construction Chemicals

Dispersions & Pigments

Catalysts Intermediates Coatings Care Chemicals

Performance Polymers

Poly- urethanes

Performance Chemicals

Paper Chemicals

Consumer goods

Transportation

Construction

Energy & Resources

26

Innovations for a sustainable future Combining cross-divisional technology competencies with customer know-how

Smart forvision – joint concept car of Daimler and BASF

E-textiles

Solar roof with transparent

organic solar panels and

OLED modules

Multifunctional seat

Infrared-reflective coating

Infrared-reflective film

High performance foams

Lightweight tridion

cell

All-plastic wheel

27BASF Strategy: We

create

chemistry__November

2011 27

Innovations for a sustainable future Strengthening our R&D platform in Asia Pacific

Innovation in Asia for Asia

8 R&D sites plus technical centersin Asia PacificR&D experts to increase from 550 to more than 800 by 2020€55 million investment includes innovation campus and Greater China head officeLeverage global R&D capabilities with Competence Centers in Singapore, India and ChinaCo-operations with ~100 institutes and universities

BASF‘s new innovation campus in Shanghai

28

Innovations for a sustainable future Target EBITDA from innovations: €7 billion in 2020

Sales and EBITDA from innovations in billion €

2015 2020

~10

~30

Targeted spending of ~3% of sales (w/o Oil & Gas) p.a. on R&D

Sales from innovations launched within last 5 years

Sales from innovations launched within last 10 years

~2.5

~7EBITDA from innovations launched within last 5 years

EBITDA from innovations launched within last

10 years

29

Investments Investments will boost future organic growth

Future investments in €

billlion

Thereof investments in emerging markets

Total investments

35-45%

15-20

30-40%

~15

2006 –

2010 2011 –

2015 2016 –

2020

10.9

~20%

30

MDI plant Chongqing, China Expansion Verbund

site Nanjing*

Expansion Verbund

site Kuantan*

Acrylic acid complex, Brazil Expanding gas production, Russia* 15% Stake in South Stream

* Memoranda of Understanding signedEmerging market sales target 2020: 45 %

Investments Major projects in emerging markets

31

Operational Excellence New program “STEP”: Earnings contribution ~€1 billion

31

Annual earnings contribution in €

million

Optimization of processes, structures and production sites in all regionsMeasures:–

Fixed cost savings–

Margin improvement–

Capacity increase–

Better sourcingProject timeline: 2012 - 2015Targeted earnings contribution of about €1 billion by end of 2015

NEXT Program

Former cost saving programs NEXT STEP

STEPSTrategic

Excellence

Program

Annual earnings contribution of more than €1 billion will be achieved in 2012

0

1,000

2,000

3,000

2012 2015

32

Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities

33

Key financial targets 2015 / 2020

Grow at least 2 percentage points above chemical production

Earn a premium on cost of capital of at least €2.5 billion on average p.a.

Profitability targetsGrowth targets

2015

2020

Sales ~€85 billion

Sales ~€115 billion

EBITDA ~€15 billion

Double EBITDA to ~€23 billion (compared with 2010)

Our strategy will create shareholder value

Earnings per share* in €

Business

growth1.30

4.96

2002 2010

0.5

0.9

0.8

1.5 Margin

Tax rate

Share buy-back

Target 2015

~7.5

„STEP“

Share buy-back

Growth

CAGR ~9%

* Reported EPS; adjusted for 2:1 stock split in 2008

35

BASF Tomorrow Roadmap to 2020

We add value as “One company”

Continued top and bottom line growth with key focus on emerging markets

Expansion of portfolio downstream towards functionalized materials and solutions

Strong focus on sustainability and innovation

Commitment to deliver long-term shareholder value

36

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

We create chemistry

38BASF Strategy: We

create

chemistry__November

2011 3838

BackupBASF track record 2001-2010

0

5

10

15

20

25

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

39BASF Strategy: We

create

chemistry__November

2011 39

Decade of outperformance in sector margins

EBITDA margin in %

BASF Group EBITDA margin

European chemical sector Ø*

US chemical sector Ø**

Asian chemical sector Ø***

* AkzoNobel, Arkema, Clariant, DSM,

Evonik

(Degussa), Lanxess, Solvay** Celanese, Dow, DuPont, Huntsman, PPG

*** Formosa Plastics, Mitsubishi Chemicals, Mitsui Chemicals, Sinopec Chemicals, Sumitomo Chemicals

Source: Company reports, Thomson One, Reuters

4040

Generating high EBITDA

4.15.1

7.7 8.29.7 10.2

9.6

5.1

7.4

11.1

EBITDA in billion €

CAGR (2001-2010) 12%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

41BASF Strategy: We

create

chemistry__November

2011 41

Generating strong EPS growth

-0.10**0.81

1.83

2.87 3.19

4.16

3.13

1.30 1.54

4.96

Earnings per share* in €

CAGR (2002-2010) 18%

* Reported EPS; adjusted for 2:1 stock split in 2008

** Excluding extraordinary income

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

4242

Delivering attractive shareholder returns

From 2001 to 2010, BASF paid dividends in the amount of ~€13 billion

Dividend per share in €

* Dividend yield based on share price at year-end

CAGR 14.5%

Dividend payments

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

From 2001 to 2010, BASF bought back shares in the amount of €8.9 billion This equaled ~25% of total shares outstanding

Share buy-backs

0.65 0.70 0.700.85

1.00

1.50

1.95 1.951.70

2.20

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

43BASF Strategy: We

create

chemistry__November

2011 43

Solid track record of earning a premium on cost of capital

EBIT after cost of capital* in billion €

20102001 2002 2003 2004 2005 2006 2007 2008 2009

–0.2**

1.6

2.92.12.4

1.8

–0.6–0.6

–2.6

3.5

Target first established

* Cost of capital rate varied from 9% to 13%

** Including Ciba integration costs of €0.8 billion

44BASF Strategy: We

create

chemistry__November

2011 44

Best-in-class asset profitability – Capital turnover improved by 2% p.a.*

EBITDA on total assets in %

2001

DuPont

DSM

Dow

Celanese

Bayer

AkzoNobel

25%

20%

15%

10%

5%

0%806040200

BASFSABIC

Degussa

Sales in billion

€

2010

806040200

BASF

SABICLanxess

EvonikDuPontDSM

DowCelanese

Bayer

AkzoNobel

= EBIT* Capital turnover = sales over total assets

45

Strong sales and earnings increase in all segmentsChemicals

2001 2010

5.0

11.4

2001 2010

0.90

3.0

Plastics

2001 2010

5.49.8

2001 2010

0.531.7

7% p.a.10% p.a.14% p.a.

14% p.a.

Performance Products

2001 2010

7.4

12.3

2001 2010

0.522.2

6% p.a.

17% p.a.

Functional Solutions

2001 2010

2.3

9.7

2001 2010

0.160.86

17% p.a.20% p.a.

Agricultural Solutions

2001 2010

3.5 4.0

2001 2010

0.51 0.94

Oil & Gas

2001 2010

4.5

10.8

2001 2010

1.63.0

10% p.a.1.5% p.a. 7% p.a.

7% p.a.

Sales in billion € EBITDA in billion € Growth rate p.a.

46BASF Strategy: We

create

chemistry__November

2011 4646

BackupMacro-economic assumptions

47

Assumptions 2010 – 2020

Growth 2001 - 2010

Global GDP 2.5% p.a.

Chemical production (excl. Pharma) 3.0% p.a.

Industrial production 2.4% p.a.

Growth 2010 – 2020 (Forecast*)

3.0% p.a.

4.0% p.a.

3.8% p.a.

* Assumptions 2010-2020: US$/€

Ø

1.40. oil price Ø

US$110/bbl

48BASF Strategy: We

create

chemistry__November

2011 4848

BackupAcquisition Criteria

4949

Acquisitions will contribute to profitable growth in the future

Are EPS accretive by year three at the latest

Provide a minimum return on investment of 8% after tax

Financial acquisition criteria

Generate profitable growth above the industry average

Are innovation-driven

Offer a special value proposition to customers

Reduce earnings cyclicality

Strategic acquisition criteria

We want to acquire businesses which…

50BASF Strategy: We

create

chemistry__November

2011 5050

BackupEmerging Markets

51

Growth above market with increasing share from emerging markets

*BASF definition: Developed markets include EU15, Norway,

Switzerland, North America, Japan, Australia, New Zealand

** Sales without Oil & Gas

2020in % of sales**

2010 in % of sales

(€53bn**)

2001 in % of sales

(€28 bn**)

Emerging marketsDeveloped markets*

~ 66%

~55% ~ 45%

~ 78%

~ 34%

~ 22%

52BASF Strategy: We

create

chemistry__November

2011 5252

BackupInnovation

53

Innovations for a sustainable future Chemistry as an enabler

Sustainability in customer industries will drive our innovative growth fields

Health & Nutrition

Consumer GoodsConstructionTransportation Electronics Energy &

ResourcesAgriculture

Customerindustries

Energy management

Water solutions

Wind energy

Rare earth metals

recycling

Heat management

Enzymes Plant biotechnology

Batteries for mobility

Lightweight composites

Heat management

Functional crop care

Medical OrganicElectronics

GrowthFields*

*including growth fields still under evaluation

Ongoing inflow of new growth fields

54BASF Strategy: We

create

chemistry__November

2011 54

BASF’s global R&D footprint todayNorth America: 1,330 employees in R&D

Europe: 7,500 employees in R&D

Major R&D site

Asia 550 employees in R&D

South America: 220 employees in R&D

55BASF Strategy: We

create

chemistry__November

2011 5555

BackupBusiness development Q3 2011

617537

765674

621

0

200

400

600

800

Q3 Q4 Q1 Q2 Q3

56

Chemicals Significant sales growth driven by strong price increases

Intermediates671+4%

Inorganics356

+11%

Petrochemicals2,141+12%

€3,168+10%

Sales development

Period Volumes Prices Portfolio Currencies

Q3’11 vs. Q3’10 (3)% 18% 0% (5)%

Q3’11 segment sales (million €) vs. Q3’10 EBIT before special items (million €)

2010 2011

371

285

393 383

317

0

200

400

Q3 Q4 Q1 Q2 Q3

57

Plastics Sales up mainly due to a strong Performance Polymers business

Polyurethanes1,480+2%

Performance Polymers

1,321+16%

€2,801 +8%

Sales development Period Volumes Prices Portfolio Currencies

Q3’11 vs. Q3’10 2% 10% 0% (4)%


2010 2011

370294

554513

440

0

100

200

300

400

500

600

Q3 Q4 Q1 Q2 Q3

58

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q3’11 vs. Q3’10 (2%) 7% 23% (4)%

Performance Products Strong contributions from acquired Cognis businesses

PerformanceChemicals

904+9%

Care Chemicals1,265+85%

€3,991+24%

Paper Chemicals423-6%


Nutrition & Health471+32% Dispersions

& Pigments 928

+5% 2010 2011

158142

167 162

0

50

100

150

Q3 Q4 Q1 Q2 Q3

33

59


Q3’11 vs. Q3’10 4% 11% 3% (6)%

Functional Solutions Strong performance of Catalysts

Catalysts1,608+19%

ConstructionChemicals

5990%

Coatings700

+9%

€2,907+12%


2010 2011

66

95

0

50

100

150

Q3 Q3

0

200

400

600

800

1.000

Q3 Q3

60

Agricultural Solutions On track for record year in sales and earnings


2011201020112010

+9%

+44%


Q3’11 vs. Q3’10 12% 3% 0% (6)%

832908

272 225

0

200

400

600

Q3 Q3

61

Exploration & Production534-39%

Natural Gas Trading

1,661+23%

€2,195 -1%

Sales developmentPeriod Volumes Prices/Currencies Portfolio

Q3’11 vs. Q3’10 (25)% 24% 0%

EBIT bSI

Natural Gas TradingEBIT bSI

Exploration & Production Net income

Q3’11 segment sales (million €) vs. Q3’10 EBIT before

special

items/ Net income

(million

€)

20112010

503227

573

350Non-compensable

oil

taxes

224

70 123

Oil & Gas EBIT before SI on last year’s level (adjusted for non-compensable oil taxes)

BASF: Fit for 2012 and beyond · BASF Strategy: We create chemistry__November 2011. 1. BASF: Fit for 2012 and beyond. Dr. Stefan Marcinowski. Member of the Board of Executive Directors.

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