sri roadshow paris - basf€¦ · ebit €2.0 billion €2.2 billion (10%) net income €1.2...

150 years

150 years

Margret SuckaleMember of the Board

of Executive Directors

SRI Roadshow

Paris

May 13, 2015

150 years

BASF SRI Story May 2015

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.

2

150 years


Chemistry as an enabler

BASF has superior growth

opportunities:

– sustainable innovations

– investments

– emerging markets

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

A track record of strong

sales and earnings growth

12% average annual

dividend increase, >3%

yield in every single year*

~€82 billion market

capitalization end

of April 2015

Perspective

* For 2004-2014

Ludwigshafen,

Germany

Antwerp,

Belgium

Nanjing,

China

Kuantan,

MalaysiaGeismar,

USA

Freeport,

USA

Verbund site

Positioning

We create chemistry for a sustainable

future

Performance

20

30

40

50

60

70

80

90

2008 2009 2010 2011 2012 20142013 2015

4

150 years


Percentage of sales 2014*

* 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.

BASF today – a well-balanced portfolioTotal sales 2014: €74 billion

5

150 years


BASF with good quarterly results

in the chemicals and crop protection

businesses

Sales development

Period Volumes Prices Portfolio Currencies

Q1´15 vs. Q1´14 5% (8%) (1%) 7%

Business performance Q1’15 Q1’14 vs. Q1’14

Sales €20.1 billion €19.5 billion +3%

EBITDA €2.9 billion €3.0 billion (2%)

EBIT before special items €2.1 billion €2.1 billion (2%)

EBIT €2.0 billion €2.2 billion (10%)

Net income €1.2 billion €1.5 billion (20%)

Reported EPS €1.28 €1.59 (19%)

Adjusted EPS €1.43 €1.63 (12%)

Operating cash flow €2.4 billion €1.7 billion +37%

6

150 years


0

1

2

3

4

2005 2006 2007 2008 2009** 2010 2011 2012 2013 2014 Q12015

Strong free cash development in Q1 2015

* 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 €)

3.33.5

3.2

2.5

3.2

3.93.7

2.6

3.2

1.7

1.1

7

150 years


We want to grow or at least

maintain our dividend

Dividend paid out per share

€2.80, an increase of 3.7%

Average annual dividend

increase of approx. 12%

(2005-2014)

Attractive dividend yield

of 4.0% in 2014**

Dividend yield above 3%

in any given year since 20053.7%

Key facts

Dividend per share

(in €)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2005 2008 2011 2014

0.50

1.00

1.50

2.00

* Dividend yield based on share price at year-end

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

** Based on BASF share price of €69.88 on Dec 30, 2014

4.6%

2.50

3.7%

3.00

3.5% 4.0%

1.00

1.50

1.95 1.95

1.70

2.20

2.50 2.60 2.702.80

Dividend policy

Attractive shareholder return

8

150 years


Average annual performance with dividends reinvested

0 3 6 9 12 15 18 21 24

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+10.6%

Last 5 yearsMay 2010 – April 2015

+19.4%

+8.6%

+13.3%

+12.9%

Last 10 yearsMay 2005 – April 2015

BASF

+10.5%

+5.3%

+22.6%

Delivering consistent, long-term value

9

150 years


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 and 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.

Outlook 2015

GDP: +2.8%

Industrial production: +3.6%

Chemical production: +4.2%

US$ / Euro: 1.20

Oil price (US$ / bbl): 60-70

Assumptions 2015

Outlook 2015 confirmed

10

150 years







11

150 years


SUPPLY DEMAND

1976 2010

Annual

regenerative

capacity

of the planet

Human beings now

demand more

from the earth than

can be regenerated

Earth’s

resources

Consumption of Earth’s resources

+

Nine billion people in 2050 but only one earth

Sustainability will become even more

important

12

150 years

BASF SRI Story May 2015 13

Strategy – Our purposeSustainability is an integral part of our strategy

150 years







14

150 years


Corporate Sustainability Board

(CSB)

Cross-functional steering

committee

Monitors the implementation of the

sustainability strategy and decides

on cross-divisional initiatives

Defines sustainability goals

Sustainability Core Team

Supports the CSB to drive the

implementation of CSB decisions

Stakeholder Advisory Council

Consists of BASF experts and

stakeholders

Exchange of ideas and develop

BASF’s sustainability approach

further

We integrate sustainability in our management

systems

15

Board of Executive Directors of BASF SE

Corporate Sustainability Board

Chair: Member of the Board

Chair: Sustainability Strategy

Sustainability Core Team

Internal External

Stakeholder Advisory Council

Chair: CEO

Strategy and managementSustainability – a board member responsibility since

2002

150 years


Our Materiality Assessment helps to identify relevant sustainability topics for BASF as

well as opportunities and risks related to sustainability

~350 external stakeholders and ~90 BASF experts and managers from various functions

within BASF, provided information on 38 topics potentially relevant for BASF

Eight material aspects have been identified for BASF based on the results of the

stakeholder survey and internal workshops:

16

Energy and Climate Water

Products and Solutions

Food

Responsible production

Resources and

Ecosystems

Employment and

EmployabilityPartnering

Strategic issue managementMateriality Assessment

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

Responsible productionVerbund: 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

17

150 years

BASF SRI Story May 2015 18

Combined heat and power plants

Combined heat and power plants are plants that use

natural gas to produce electricity and steam

Benefit for climate protection:

Compared with separate methods of generating

steam and electricity, we saved around 11.8 million

MWh of fossil fuels and prevented 2.4 million metric

tons of carbon emissions in 2014

Utilization rate of natural gas as a fuel can reach up

to 90% – nearly all the heat is converted into energy.

Conventional power plants are only around half as

efficient.

~70% of our electricity demand worldwide is covered by

gas-based combined heat and power plants

Energy and climateCombined heat and power plants increase energy

efficiency

150 years


Global analysis of production sites conducted

~ 22% of our production sites are located in regions

with high water stress

These sites account for around 6.5% of BASF’s total

water demand and seawater accounted for 85.2% of

the water demand in water stress areas

Water use and discharge

86% of our water use is for cooling purposes and

89.4% of our water discharge is uncontaminated

European Water Stewardship (EWS) certificate

In 2013, BASF was the first chemical company to

achieve gold-level certification according to the EWS

standard for its production site in Tarragona, Spain

In 2014, the Ludwigshafen site has also been awarded

gold level certification

19

WaterResponsible use of water resources is key priority

150 years


Products and solutionsSustainable solution steering – Supports our customers

to meet their sustainability needs

23% - Accelerator

Substantial sustainability

contribution in the value

chain

74.1% - Performer

Meets basic sustainability

standards in the market

2.6% - Transitioner

Specific sustainability

issue which is actively

addressed

0.3% - Challenged

Significant sustainability

concern identified and

action plan in development

Active portfolio steering

1. Analyze sustainability needs

and trends of value chains

2. Check product sustainability

performance in the market

3. Develop action plans for

strategies, R&D and market

approach

By the end of 2014

98.3% of the relevant portfolio

analyzed

Relevant portfolio accounted

for €66.3 billion in sales in

2014

More than 60,000 product

solutions assessed

20

150 years


Products and solutions23% of our solutions are “Accelerators”

21

“Accelerators“ contribute in the following areas:

(Double nomination possible)

0% 10%

Cost savings downstream

Biodiversity and renewables

Climate change and energy

Emission reduction

Resource efficiency

Water

Health and safety

UN Millennium Development goals

23%

150 years


Example: Paper coating

1. Identification of “Challenged”:

Polyfluorinated substances as coatings for paper

packaging (environmental concern)

2. Development of action plan:

Start of research project

3. Launch of “Accelerator”:

Recyclable Epotal® SP-101 D and biodegradable

ecovio® paper coating

Renewables

Resource efficiency

22

Products and solutionsSustainable solution steering supports the launch of new

“Accelerator”

150 years







23

150 years


Status

2014

Target

2020

Energy & climate protection

Greenhouse gases* -33.9% -40%

Energy efficiency *+19.0% +35%

Emissions to air & water

Air pollutants* -63.2% -70%

Organic substances* -79.5% -80%

Nitrogen* -85.4% -80%

Heavy metals* -64.8% -60%

Water

Drinking water for production -26.3% -50%

Sustainable water management

in water stress areas 29.7% 100%

Status

2014

Target

2020

Safety, health and security

Lost-time injuries -54.5% -80%

Transport accidents -64.3% -70%

“Safety check” of products 61.4% >99%

Health Performance Index** 0.91 >0.9

Employees

Increase the number of:

Female executives 19.1%

Non-German senior executives 34.3%

Senior executives with

international experience 83.0% >80%

Establishment of personnel

development45,000 --

*excluding oil and gas production ** Highest possible score 1.0 24

Ecology & social responsibility Targets overview

150 years







25

150 years


Growth fields for innovation

Growth fields

White

Biotechnology

Materials, Systems &

Nanotechnology

Raw Material

Change

Key customer industries

Health & Nutrition

Consumer Goods

Transportation

Energy & Resources

Electronics

Agriculture

Construction

Technology fields

...

Batteries for Mobility

Enzymes

Heat Management for Construction

Organic Electronics

Functional Crop Care

Plant Biotechnology

E-Power Management

Wind Energy

Lightweight Composites

Water Solutions

26

150 years


Further increase of R&D

spending in 2015

~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

Strong commitment to innovationInnovations for a sustainable future

Key factsR&D expenditures

(€ billion)

Chemicals

10%

Performance Products

19%

Functional Mat. & Sol.

20%

Agricultural Solutions

27%

Oil & Gas

3%

Corporate Research

21%

27

1.51.6

1.71.8 1.9

0.0

0.5

1.0

1.5

2.0

2010 2011 2012 2013 2014

150 years


Products and solutions for a

sustainable future

Four-Way Conversion Catalyst

(FWC™)

Trilon M® for more sustainable

detergents and cleanersSAVIVA™ – The Next

Generation of Superabsorbents

Hexamoll® DINCH® – Non-

phthalate plasticizer 28

Multibore® – Ultrafiltration

Membranes

MDI plant Antwerp

150 years


Process improvement

program 2000-2013

MDI/Antwerp

Target: Increase production

output by continuous

process improvement via

incremental

steps

Achieved benefits:

– Increased sales

– Production cost* reduction

Process improvements in MDI

1992 – 2001 2009 – 20132002 – 2008

Annual EBIT improvement 2000-2013: ~ €220 million/a

Strong increase of production output in the last

decade

* Production cost = Personnel, maintenance and energy cost (inflation adjusted) 29

150 years


0

50

100

150

BASF Competitors

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

FWC™ introduced in 2013

Sustains BASF’s leading

technology position

Leading position: Global mobile emissions catalysts patents*

FWC™ reduces emission of gaseous pollutants and particulates

HC

CO

NOx

N2

H2O

CO2

Particulates

Four-Way Conversion Catalyst (FWC™)

* 2009 – 2013 ** Hydrocarbons, carbon monoxide, nitrogen oxides

30

150 years


SAVIVA™ – The Next Generation of

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

31

SAVIVA™ round shaped particle

150 years


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

32

150 years


Hexamoll® DINCH® - Non-phthalate

plasticizer

Hexamoll® DINCH® is a non-phthalate plasticizer

developed for applications with close human contact

Plasticizers are added to PVC to turn it from being hard

and brittle to soft and flexible

BASF has invested more than €7 million in toxicological

research for Hexamoll® DINCH®

Hexamoll® DINCH® ranked first in a TÜV Rheinland –

certified eco-efficiency analysis for toys in 2011

It can be used in a variety of applications such as toys,

food packaging, medical devices, sport & leisure

articles, consumer goods as well as flooring and wall

covering

33

150 years


For turning dirty water into clean water

Multibore® membranes are manufactured from BASF’s

Ultrason® E high-performance resin

Multibore® membranes contain pores 3,000 times

smaller than the diameter of a human hair – suspended

solids, bacteria and viruses cannot pass through them

Example – Drinking Water

inge® technology is used for water purification and also

as a pretreatment stage for sea water desalination

In Ghana for example, where drinking water is a scarce

resource, inge® Ultrafiltration solutions help to produce

clean drinking water in a sea water desalination plant

for half a million people

34

inge® Ultrafiltration membrane Multibore®

We create chemistry that helps thirst love the sea

Multibore® – Ultrafiltration Membranes

150 years


Global ESG Leaders Indices

Worldwide public

recognition for

sustainability and

transparency

35

Worldwide public recognition for

sustainability and transparency

150 years


150 years

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