BASF Capital Market Story 05/2012

May 2012

We add value as one company
BASF Capital Market Story__May 2012

Forward-looking statements
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.

BASF Capital Market Story__May 2012 2

BASF today – a well-balanced portfolio
Total sales 2011: €73.5 billion
Percentage of sales 2011*

Chemicals Plastics
 Inorganics  Performance Polymers
 Petrochemicals  Polyurethanes
 Intermediates

Performance Products Functional Solutions
 Dispersions & Pigments  Catalysts
 Performance Chemicals  Construction Chemicals
 Care Chemicals  Coatings
 Nutrition & Health
 Paper Chemicals
Agricultural Solutions Oil & Gas
 Crop Protection  Exploration & Production and
Natural Gas Trading

BASF Capital Market Story__May 2012 * not depicted here: 9% of Group sales reported as ‚Other‘ 3

Business review
BASF Today
Trends
Business review
Purpose and strategic principles
Targetsgrowth targets
BASF
Strategic levers
Strategic levers
BASF Tomorrow – Board priorities
Fit for 2020

BASF Strategy: We create chemistry__November 2011
4

BASF with solid start to 2012
First quarter highlights

Business performance Q1’12 vs. Q1’11

 Sales €20.6 billion +6%
 EBITDA €3.9 billion +16%
 EBIT before special items €2.5 billion (7%)
 EBIT €3.1 billion +22%
 Net income €1.7 billion (28%)
 EPS €1.88 (28%)
 Adjusted EPS €1.57 (19%)

 Sales increase primarily driven by higher prices, volumes stable
 Demand in chemical activities did not match the exceptionally strong level of Q1 2011
 Agricultural Solutions and Oil & Gas with strong start into the year
 Divestiture of fertilizer activities completed, ~€650 million disposal gain booked as special item

Continuous strong free cash flow
generation

Free cash flow*
in billion €

3.9 3.7
3.3 3.5 3.2 3.2
2.8
2.6 2.5

0.9

-0.1

2002 2003 2004 2005 2006 2007 2008 2009** 2010 2011 Q1
2012

* Cash provided by operating activities less capex (in 2005 before CTA)
** 2009 adjusted for re-classification of settlement payments for currency derivatives

Delivering attractive shareholder returns

Dividend per share Dividend payments
in €  €2.50 dividend per share for
2.50
2011, dividend yield 4.6%*
2.20  15% average annual dividend
1.95 1.95 increase for 2002-2011 period
1.70
1.50  Dividend yield above 3% in
any given year since 2002,
1.00 total payout €14.5 billion
0.85
0.70 0.70
Share buy-backs
 Between 1999 & 2008, BASF
bought back 28.65% of shares
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 outstanding, spent €9.9 billion
Dividend yield*
 AGM 2012 approved new
share buy-back program;
3.9% 3.1% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9% 3.7% 4.6%
up to 10% of shares, 5 years
* Dividend yield based on share price at year-end


Outlook 2012 confirmed
Outlook 2012
 BASF aims to exceed the record levels of sales and EBIT before SI
achieved in 2011
 In H1 2012, BASF will most likely not achieve the exceptionally high results of the
comparable period in 2011. However, we aim to outperform H2 2011.
 In 2012, BASF will strive again to earn a high premium on cost of capital

Assumptions 2012
 GDP: +2.7%
 Industrial production: +4.1%
 Chemical production: +4.1%
 US$ / Euro: 1.30
 Oil price (US$ / bbl): 110


Business review
BASF Today
Trends
Business review
BASF
Strategic levers
Strategic levers
Fit for 2020

9

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

Nine billion people in 2050 but only one earth

Resources, Environment
Food & Nutrition Quality of Life
& Climate

Chemistry as enabler


Key trends for the chemical industry

Growth Innovation gains Sustainability Competitive
will accelerate in importance as strategic driver landscape will change

 Industrial  Chemistry as  Use opportunities  Integrated chemical
production > GDP enabler from sustainability companies remain
cornerstone
 Chemical  Chemical  Increase resource
production > GDP products replace efficiency  Emerging markets
traditional players grow quickly
 Emerging markets materials  Renewables as
will outgrow raw materials  Raw material players
developed  Create innovative invest further
markets sustainable  Stakeholder dialog downstream
solutions

Chemical industry remains an attractive growth industry


Striving for strong profitable growth
Medium- and long-term sales target

Sales*
in billion €
Acquisitions ~115
Innovations
Investments
Acquisitions ~85
Innovations
64 Investments

2010 Target Target
2015 2020

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

All regions will deliver profitable growth

Regional sales targets 2020 (by location of customers)
in billion €
Europe
North America
~4.5% p.a. ~53
~5.5% p.a.
~22 33
13
20%* 19%*
2010 2020 52%* 46%* Asia Pacific
2010 2020 ~8% p.a.
South America,
Africa, Middle East
~29
~8% p.a. 13
~11
5 20%* 25%*
8%* 10%*
2010 2020
2010 2020

* Percentage of total sales

Doubling EBITDA by 2020

EBITDA*
in billion €

~23
Acquisitions
Op. Excellence
Growth
Acquisitions ~15
Op. Excellence
11.1 Growth

2010 Target Target
2015 2020

* Assumptions 2010-2020: Exchange rate $/€ Ø 1.40, Oil price Ø $110/bbl

Business review
BASF Today
Business review
Trends
BASF growth targets
Targets levers
Strategic
Strategic levers
– Portfolio development
– Market approach
– Innovations for a sustainable future
– Investments
– Acquisitions
– Operational excellence

Fit for 2020

15

We expand from chemicals to chemistry

1960 1970 1980 1990 2000 2010 2020
 Chemistry as key enabler
New for functionalized materials
molecules
& solutions

Improved  Deep understanding of
applications customer value chains
required
Functionalized
materials &
solutions

Batteries, membranes ...


Portfolio development towards more
market driven and innovative businesses

Acquisitions BASF Divestitures
core business
 Crop protection  Pharma
Selected transactions
 Engineering plastics 2001 − today  Fibers
 Electronic chemicals  Printing systems
 Custom synthesis  Polyolefins
 Catalysts Strong partnerships  Polystyrene Americas
 Construction chemicals  Agro generics
 Water-based resins  Gazprom  Vitamins premix
 Pigments  Monsanto  Fertilizers
 Plastic additives  Petronas  Styrenics (transferred into
Styrolution JV on Oct. 1, 2011)
 Oil & Gas  Shell
 Personal care & food  Sinopec
 Total
~ €15bn sales ~ €10bn sales*
* without Styrenics


Moving downstream towards customer
industries

Functionalized Materials
Classical Chemicals Customized Products
& Solutions

First customer
Chemical Industry
industries*
2001
in % of ~ 50% ~ 50%
sales**

2010
in % of ~ 40% ~ 60%
sales**

2020
in % of ~30% ~ 70%
sales**

* Agriculture, Construction, Consumer Goods, Health & Nutrition, Electronics, Energy & Resources, Transportation
** Sales excluding Oil & Gas

Building on our cross-divisional
customer industry approach

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

Consumer goods
> 15 %
Transportation
> 15 %

Construction
< 10 %

Energy & Resources
< 10 %
Inorganics Petro- Construction Dispersions Performance Poly-
chemicals Chemicals & Pigments Chemicals urethanes
Care Paper Performance
Catalysts Intermediates Coatings Chemicals Polymers
Chemicals

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

Combining cross-divisional technology
competencies with customer know-how
Smart forvision – Joint concept car of Daimler and BASF

Lightweight tridion cell Solar roof with transparent
organic solar panels and
OLED modules
High performance foams

E-textiles

Infrared-reflective film
Multifunctional seat
Infrared-reflective
coating All-plastic wheel


Chemistry as an enabler for many
customer industries

Customer
industries
Consumer Health & Energy &
Transportation Construction Electronics Agriculture
Goods Nutrition Resources
Batteries for Heat Enzymes Medical Organic Plant Energy
mobility management Electronics biotechnology management
Lightweight Functional Rare earth
Growth composites crop care metals
Fields* recycling
Heat
management Wind energy

Water
solutions

Ongoing inflow of new growth fields

Sustainability in customer industries will drive our
innovative growth fields
* Including growth fields still under evaluation
21

BASF growth field examples
Batteries for mobility Water solutions Plant biotechnology
Growth
Field
examples

Business  Market size:  Market size:  Market size:
potential >€20 billion ~€20 billion ~€11 billion gross trait value
2020  BASF sales potential:  BASF sales potential:  BASF sales potential: €1.8 billion
>€500 million >€800 million gross trait sales before partner
share
Existing  New global business unit for  BASF expertise and portfolio  BASF as Trait Technology Partner
Activities battery chemicals & materials (high-performance flocculants, of leading trait and seed
 Electrode material plant being desalination and antifouling companies
built in Ohio. Acquired Novolyte, chemicals….)  Yield & Stress collaboration with
Merck’s electrolytes, Ovonik,  Acquired inge water-technologies Monsanto (corn, soy, cotton,
equity position in Sion Power (membranes) to offer module canola and wheat)
 R&D network with academia systems
 Sites in US, China, Europe

Targets  Become the leading supplier of  Leading supplier of innovative  Contribute to more efficient
battery materials water solutions agriculture, healthier nutrition
 Target customers: Battery  Forward integration into  Make Plant Biotechnology an
producers membrane technologies operating division within the
Agricultural Solutions segment

Innovation will spur further growth

Total R&D expenditures 2011 Strong commitment to R&D
in billion €
 €1.6 billion R&D expenditures
Chemicals Corporate Research in 2011 (2010: €1.5 billion)
8% 23%
 ~10,100 employees in R&D
Plastics
 ~2,800 projects
9% 24% Oil & Gas
€1.6  Research Verbund:
Performance 1%
Products billion About 1,950 partnerships with
21%
1% universities, start-ups and
industry partners
Functional Agricultural
Solutions Solutions
12% 26%

Increase R&D spending to €1.7 billion in 2012


€7 billion EBITDA targeted from
innovations in 2020

Sales and EBITDA from innovations
in billion € ~30

Sales from innovations Sales from innovations
launched within last 5 launched within last 10
years ~10 years
~7
EBITDA from innovations EBITDA from innovations
launched within last 5 ~2.5 launched within last 10
years years

2015 2020


Investments will boost future organic
growth

Future investments
in € billlion
15-20
~15

10.9

35-45%
30-40%

~20%

2006 – 2010 2011 – 2015 2016 – 2020

Total investments Thereof investments in
emerging markets


Major investment projects

MDI plant Chongqing, Expansion Verbund site Expansion joint venture
China Nanjing, China* activities in Malaysia

Acrylic acid complex, Expansion oil & gas TDI plant Ludwigshafen,
Brazil activities Germany

* Memorandum of Understanding signed

Acquisitions will contribute to profitable
growth in the future

We want to acquire businesses which …

 Generate profitable growth  Provide a minimum return on
above the industry average investment of 8% after tax

 Are innovation-driven  Are EPS accretive by year
three at the latest
 Offer a special value
proposition to customers

 Reduce earnings cyclicality

Strategic acquisition criteria Financial acquisition criteria


Strong focus on operational excellence

BASF Group 2002–2011 CAGR 2002 – 2011
Index

300
10 % EBITDA

10 % Sales
250
4% Fixed costs
200

150

100

50

2002 2005 2008 2011


New operational excellence program
STEP: Earnings contribution ~€1 billion
Annual earnings contribution NEXT Program
in € million  Annual earnings contribution of
€1 billion will be achieved in 2012
 Achieved by end 2011: >€ 800 million
3,000
STrategic Excellence Program ‘STEP’
 Project timeline: 2012–2015
2,000  Measures to optimize processes and
structures in all regions, e.g.
− manufacturing, maintenance
1,000 − supply chain
− engineering, best-cost country sourcing
 Fixed cost savings and margin
0
improvements
2012 2015
 One-time costs & investments: ~€1 billion
Former cost  Targeted annual earnings contribution:
NEXT STEP
saving programs ~€1 billion by end of 2015,
thereof €100 million in 2012 (run-rate)


Business review
BASF Today
Trends
Business review
BASF
Strategic levers
Strategic levers
Fit for 2020

30

Key financial targets 2015 / 2020

Growth targets Profitability targets

 Grow at least 2 percentage  Earn a premium on cost of
points above chemical capital of at least €2.5 billion on
production average p.a.

 Sales ~€85 billion  EBITDA ~€15 billion
2015
 EPS ~€7.50

 Sales ~€115 billion  Double EBITDA to ~€23 billion
2020 (compared with 2010)


Appendix
Business development Q1 2012

32
32

Chemicals
Margins improved over Q4 2011 thanks to higher prices

Q1’12 segment sales (million €) vs. Q1’11 EBIT before special items (million €)

Intermediates Inorganics 354
683 +0%
-4%
€3,484
+6%
Petrochemicals
2,447
+11%
2011 2012

Sales development
Period Volumes Prices Portfolio Currencies
Q1’12 vs. Q1’11

(4%)

(1%)  8%  3%


Plastics
TDI and MDI margins improved on higher prices vs. Q4 2011


Polyurethanes
1,409
-5%
€2,678
-4%
Performance
Polymers
1,269
-3% 2011 2012

Sales development
Q1’12 vs. Q1’11

(9%)  2%  1%  2%


Performance Products
Solid demand but below exceptionally high level of Q1 2011


Care Chemicals Performance
1,283 Chemicals
-7% 900
+1%
Nutrition €3,999
& Health +0%
476
+1% Dispersions
Paper Chemicals & Pigments
410 930
+4% +10% 2011 2012

Sales development
Q1’12 vs. Q1’11

(5%)  3% 0%  2%


Functional Solutions
Good performance driven by high demand from automotive


Catalysts Construction
1,630 Chemicals
-3% 502
+7%
€2,845
+1%

Coatings
713
+6% 2011 2012

Sales development
Q1’12 vs. Q1’11

(4%)

(1%)  4%  2%


Agricultural Solutions
Excellent start into the year


1,327 419
1,230 400
343
1,000

200
500

0 0
Q1 Q1 Q1 Q1

2011 2012 2011 2012

Sales development
Q1’12 vs. Q1’11  3%  3% 0%  2%


Oil & Gas
Higher volumes and prices boosted sales and earnings

Q1’12 segment sales (million €) vs. Q1’11 EBIT bSI/Net income (million €)

Exploration & 1,157
1,200
Production
1,336 1,000
+25% 800 744
€4,975 600
955

+44% 400 626
Natural Gas 200 416
306
Trading 118 202
0
3,639 Q1/2011 Q1/2012
+52%
Exploration & Production
Non compensable oil taxes
(Q1 2011: €280 million; Q1 2012: €451 million)

Natural Gas Trading Net income
Sales development
Period Volumes Prices/Currencies Portfolio
Q1’12 vs. Q1’11  22%  23% 
(1%)


BASF Capital Market Story 05/2012

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