BASF Q3 Report Speech at Analyst Conference

BASF 3rd Quarter 2013 Analyst Conference Call October 25, 2013, 11:00 a.m. (CEST)

Ludwigshafen

Analyst Conference Call Script (long Version)

Kurt Bock Hans-Ulrich Engel

The spoken word applies.

BASF 3rd Quarter 2013 Analyst Conference Call October 25, 2013

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.

2BASF Q3 2013 Analyst Conference Call October 25, 2013

Robust 3rd quarter 2013 for BASF

Sales developmentPeriod 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%


Kurt Bock Ladies and Gentlemen, good morning and thank you for joining us.

[Chart 3: Robust 3rd quarter 2013 for BASF]

The global economic environment in the third quarter continued to

be challenging showing only moderate growth. Economies in the

Eurozone developed at different speeds with Southern Europe

still declining, Western and Eastern Europe showing slight growth.

North American GDP grew moderately. Growth in China picked

up in the third quarter. The ASEAN countries saw a slowdown in

growth. The major Latin American economies continued to face

headwinds with weaker than expected but improving GDP growth.

Despite these trends, BASF’s performance remained robust.

Sales increased by 1.5 percent to 17.7 billion euros. This growth

was mainly attributable to Oil & Gas, as well as to a good

performance in the Agricultural Solutions and Functional Materials

& Solutions segments. It was partly offset by a weaker

development in Chemicals. Moreover, all segments experienced

significant negative currency effects.

EBITDA came in 16.5 percent higher at 2.5 billion euros.

EBIT before special items increased by 15 percent to 1.7 billion

euros. Functional Materials & Solutions contributed significantly,

and earnings in Performance Products advanced.


EBIT before special items in Other improved considerably.

Amongst others, a main contributor to this improvement was a

lower provision for our long-term incentive program in Q3 2013.

BASF recognized special items in EBIT of minus 10 million euros.

A one time gain in the amount of 164 million euros resulted from

the sale of an oil & gas asset to Statoil. This was offset by

restructuring measures, impairment charges as well as integration

costs related to Pronova BioPharma and Becker Underwood.

EBIT amounted to 1.7 billion euros, an increase of 20 percent

versus prior year.

The tax rate was at 23.1 percent. In the third quarter 2012, the tax

rate was at 20.8 percent.

Net income strengthened by 18.5 percent to 1.1 billion euros.

Adjusted earnings per share increased to 1.28 euros in Q3 2013

after 1.16 euros in Q3 2012.

Operating cash flow reached again 2 billion euros, surpassing the

previous year’s level by more than 300 million euros mainly driven

by improvements in net working capital.

Free cash flow increased to almost 800 million euros in Q3,

totaling 2.9 billion euros in the first nine months.


Cash offer of 4 US dollarsper share,

Offer expires on October31, 2013

Enterprise value~62 million US dollars

Acquisition will strengthenBASF‘s footprint in theenzyme growth market

Optimization of global production network

Reduction of 650 positionsworldwide

Investment of €250 millionin production and R&D

Transaction completed July 31, 2013

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

Compensation payment of781 million US dollars*

Important corporate developments

4

Transaction with Statoil completed

Restructuring in Pigments business

Cash offer for Vereniumenzyme biotechnology

BASF Q3 2013 Analyst Conference Call October 25, 2013

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


[Chart 4: Important corporate developments]

On October 23, 2013 we announced the implementation of

several measures to reduce capacities and to strengthen

competitiveness of our pigments business. Plans include the

closure of the Paisley plant in Scotland and the restructuring of

the Huningue plant in France. In addition, we are examining

strategic options for the site in Maastricht, the Netherlands. We

plan to reduce around 650 positions globally by 2017. At the

same time, we will invest 250 million euros in the next four years

in our production network as well as in research and

development.

On October 18, 2013 BASF and Yara announced the evaluation

of a joint investment into a world scale ammonia plant at the US

Gulf Coast. With this investment we intend to take advantage of

the very competitive natural gas prices in the US, while further

increasing our backward integration.

On September 20, 2013 BASF announced a cash offer to acquire

Verenium, a US-based enzyme biotechnology company, for 4 US

dollars per share. Based on all outstanding shares and including

all net financial liabilities, the enterprise value would be

approximately 62 million US dollars. The offer period is scheduled

to expire on October 31, 2013. This acquisition will strengthen

BASF’s footprint in the enzyme growth market.


In Oil & Gas, we completed the transaction with Statoil on July 31,

2013. With the transfer of shares in the Brage, Vega and Gjøa

fields, Wintershall’s daily production in Norway has risen from

approximately 3,000 BOE to nearly 40,000 BOE. As part of the

transaction, Statoil received from Wintershall a 15 percent share

in the Edvard Grieg development project as well as a financial

consideration in the amount of 1.35 billion US dollars (1.02 billion

euros). The transaction was concluded with retroactive

commercial effect as of January 1, 2013. Taking into account our

earnings from shares in the production of the Brage, Vega and

Gjøa fields, as well as investments made in the fields affected by

the swap since January 1, 2013, this resulted in a net cash

outflow of 781 million US dollars (588 million euros).


ChemicalsPressure on volumes and margins

Intermediates700

(7%)

Monomers 1,599

(11%)

Petrochemicals1,925

(6%)

€4,224(8%)

Q3’13 segment sales (million €) vs. Q3’12

Sales development Period Volumes Prices Portfolio Currencies

Q3’13 vs. Q3’12 (2%) (3%) 0% (3%)

5

EBIT before special items (million €)

569445

650

495 527

0

200

400

600

800

Q3 Q4 Q1 Q2 Q3

20132012



[Chart 5: Chemicals – Pressure on volumes and margins]

Sales in the Chemicals segment declined caused by a combination

of lower volumes, prices and negative currency effects. EBIT before

special items came in lower as the higher contributions of olefins

could not fully compensate for lower earnings in other areas. We

booked special items of 85 million euros due to impairment charges

on a production plant.

In Petrochemicals sales decreased due to lower volumes and

prices. In North America, cracker margins improved strongly as a

result of the optimization of our Port Arthur cracker towards lighter

feed. Cracker margins in Asia Pacific continued to be under

pressure due to weaker market demand. EBIT before special

items increased significantly.

Sales in Monomers declined mainly because of lower prices.

Margins for isocyanates in Asia Pacific as well as for ammonia

were down as price decreases could not be offset by lower raw

material costs. Caprolactam margins remained stable at low

levels versus prior year. Overall, EBIT before special items

decreased substantially.

In Intermediates sales decreased due to a more pronounced

seasonal summer dip primarily in Europe. Our business with

butanediol and its derivates improved, but we experienced lower

demand for amines. Thus, EBIT before special items came in

lower.


Performance ProductsGrowth in volumes and earnings

PerformanceChemicals

896

(3%)

Care Chemicals1,209

(1%)

€3,939(1%)

Paper Chemicals365

(8%)


Nutrition & Health540

+10% Dispersions& Pigments

929

(2%)



Q3’13 vs. Q3’12 6% (3%) 1% (5%)

344

183

379 394 376

0

200

400

600

Q3 Q4 Q1 Q2 Q3


20132012


[Chart 6: Performance Products - Growth in volumes and earnings]

Sales in the Performance Products segment were almost stable

despite adverse currency effects. Volumes were up. Prices

decreased as we partly passed on lower raw material costs. EBIT

before special items came in higher, driven by Care Chemicals and

Dispersions & Pigments. Our fixed cost management contributed as

well. We incurred special items of 54 million euros related to our

ongoing restructuring program.

In Dispersions & Pigments sales decreased slightly. We saw

volume growth, especially in dispersions, pigments and

formulation additives. Prices decreased slightly. Strict cost

containment measures contributed to a substantial increase in

EBIT before special items.

Sales in Care Chemicals were stable. Volumes increased, with

strong contributions from personal care specialties, home care

and hygiene. Prices decreased. EBIT before special items

increased significantly because of higher volumes and successful

fixed cost management.

In our Nutrition & Health division, sales were up due to the

consolidation of Pronova BioPharma. Volumes grew in pharma,

human nutrition and aroma chemicals. Volumes in animal nutrition

were down given weak demand. We experienced continued

competitive pressure on vitamin E prices. EBIT before special

items came in slightly higher.


Sales in Paper Chemicals decreased in a declining market.

Demand for graphical paper applications declined, especially in

Europe and North America, while volumes for packaging

remained stable. Demand for paper chemicals in Asia Pacific was

weaker than expected. Prices declined in all regions, as we had to

pass on lower raw material costs. EBIT before special items came

in significantly below the level of last year.

In Performance Chemicals sales were slightly below prior year.

Increased volumes, particularly in fuel and lubricant solutions,

plastic additives as well as in water, oilfield and mining,

compensated for lower prices. Negative currency effects reduced

sales. Cost containment measures were consistently

implemented. EBIT before special items decreased slightly.


Functional Materials & SolutionsSound overall demand, especially in automotive

Catalysts1,466

+12%

ConstructionChemicals

576

(9%)

Coatings728

(5%)

€4,439+3%



Q3’13 vs. Q3’12 8% 2% (1%) (6%)

Performance Materials 1,669

+5%

231 228 239293 300

0

200

400

600

Q3 Q4 Q1 Q2 Q3

7



20132012


[Chart 7: Functional Materials & Solutions – Sound overall demand, especially in automotive]

In our Functional Materials & Solutions segment, sales were up,

mainly supported by continued good overall demand from the

automotive industry. We were able to increase volumes and prices

in all four divisions, which was partially offset by negative currency

effects. EBIT before special items increased substantially.

Sales in the Catalysts division rose significantly. Demand for

mobile emission catalysts in North America, Europe and Asia

Pacific was up. Refinery catalyst volumes rose as well. In

chemical catalysts, demand was below the high level of Q3 2012,

especially for custom catalysts. Revenues from precious metal

trading grew to 657 million euros versus 512 million euros a year

ago. EBIT before special items more than doubled due to the

good performance of mobile emission catalysts and lower raw

material costs.

Sales in Construction Chemicals declined. European sales

suffered from ongoing weak demand in Southern Europe.

Emerging markets such as Middle East and Russia experienced

excellent growth. Higher volumes especially in the admixture

systems business lifted sales in North America. In Asia Pacific

weaker demand as well as portfolio optimization measures

reduced sales. EBIT before special items increased due to margin

improvements and fixed cost reductions.


Despite higher volumes and slightly increased prices, sales in

Coatings decreased due to negative currency effects. Demand

for automotive OEM coatings grew in all regions. Refinish

coatings showed good growth in Asia Pacific, while volumes in

Europe and North America declined. Volumes and prices in our

Brazilian decorative paints business remained almost stable.

EBIT before special items decreased slightly, mainly due to

adverse currency effects.

Sales in the Performance Materials division were up. In

engineering plastics and PU systems sales grew due to higher

demand in the transportation industry. Demand for appliances as

well as electronic equipment was slightly up. EBIT before special

items increased strongly as a result of higher volumes.


Agricultural SolutionsSales growth despite pronounced currency headwinds



Q3’13 vs. Q3’12 8% 4% 3% (10%)

0

100

200

Q3 Q30

300

600

900

1.200

Q3 Q3

1,054 1721711,008

8


20132012


20132012


[Chart 8: Agricultural Solutions – Sales growth despite pronounced currency headwinds]

Our Agricultural Solutions segment delivered a good performance

in the seasonally slow third quarter. High demand led to a strong

volume increase across all indications, at higher prices. We were

able to increase sales by five percent, despite significant negative

currency effects. The consolidation of the former Becker Underwood

business led to a positive structural effect.

Sales in South America increased, driven by high demand for

fungicides and herbicides. The recent launch of our herbicide

Kixor has already significantly contributed, and we just received

registration for the fungicide Xemium, which we will start selling

before the end of the year.

North America delivered a positive finish to a very successful

season. We saw continued high demand especially for plant

health products. The seed treatment business of the former

Becker Underwood contributed as well.

Business in Europe remained on a high level, particularly

supported by high herbicide demand in the Western European

markets as well as a good specialty fungicide business in

Southern Europe. Prices were also up.

In Asia Pacific sales declined. This was mainly caused by

significant currency headwinds. Wet weather conditions in India

also had a negative impact.

Despite pronounced negative currency effects we were able to

keep EBIT before special items on the high level of the prior third

quarter.


For the full year 2013 we expect to again achieve new sales and

earnings records.


103

318

62

451

0

100

200

300

400

500

Q3/2012 Net Income Q3/2013 Net Income

Oil & GasSubstantially higher net income

Exploration &Production

754

+15%

Natural GasTrading 2,376

+29% €3,130+25%

Q3’13 segment sales (million €) vs. Q3’12 EBIT bSI/Net income (million €)

Natural Gas Trading

Exploration & Production

Net income

Sales development Period Volumes Prices/Currencies Portfolio

Q3’13 vs. Q3’12 22% (2%) 5%

499

396 360

422



[Chart 9: Oil & Gas – Substantially higher net income]

In the Oil & Gas segment, sales grew significantly. This was due to

the transfer of shares in the Brage, Vega and Gjøa fields as well as

higher volumes in natural gas trading. EBIT before special items

came in lower, primarily related to lower margins in natural gas

trading, higher costs for the abandonment of an oil platform as well

as a lower contribution from Libya. We recognized a one time gain

of 164 million euros from the sale of a 15 percent stake in the

Edvard Grieg field in the North Sea. Since this disposal gain was

tax-free, net income increased significantly to 451 million euros.

Sales in Exploration & Production increased, because of the

transfer of shares in the Brage, Vega and Gjøa fields as well as

increased production volumes from the Achimov reservoir. Sales

from our Libyan offshore concessions came in lower than in the

prior third quarter. The average price for Brent crude oil

decreased by 4 euros to 83 euros per barrel in the third quarter of

2013. EBIT before special items decreased, related to the lower

oil price, an increase of the provision for the abandonment of an

oil platform in the North Sea and lower production volumes in

Libya.

Sales in the Natural Gas Trading business grew considerably

due to higher volumes, especially through intensified trading on

European spot markets. EBIT before special items, however, fell

substantially because of a squeeze in margins.


Review of “Other”

Million € Q3’13 Q3’12Sales 947 1,087EBIT before special items (105) (343)Thereof Corporate research

Group corporate costsCurrency result, hedges and otherValuation effectsOther business

(90)(57)(74)

59

(95)(63)

(249)

30

Special items (24) (44)

EBIT (129) (387)



[Chart 10: Other]

Sales in Other decreased by 140 million euros to 947 million

euros mainly due to lower raw material trading volumes.

EBIT before special items improved from minus 343 million euros

to minus 105 million euros. Amongst others, a main contributor to

this improvement was a lower provision for our long-term

incentive program in Q3 2013.


Cash Flow Excellent cash flow in Q1-Q3 2013

Million € Q1-Q3’13 Q1-Q3’12Cash provided by operating activities 5,982 5,025Thereof Changes in net working capital

Miscellaneous items374

(327)(639)(450)

Cash provided by investing activities (4,629) (2,018)thereof Payments related to tangible / intangible assets (3,038) (2,702)

Acquisitions / divestitures (1,093) 411Cash used in financing activities (1,300) (3,383)thereof Changes in financial liabilities

Dividends 1,304

(2,604)(868)

(2,510)

Net working capital decreased

Increased capex at €3 billion

Strong free cash flow of €2.9 billion against €2.3 billion in 2012

Equity ratio of 41%; net debt increased by €1.8 billion to €13 billion

Q1-Q3 2013



[Chart 11: Excellent Cash Flow in Q1-Q3 2013 ]

Let me turn to our cash flow, which continued to improve in Q3.

Please be reminded, that we will summarize the first nine months of

2013.

At 6 billion euros cash provided by operating activities was

excellent, exceeding the prior year number by almost 1 billion

euros.

Net working capital decreased due to higher accounts payable

and provisions.

Cash used in investing activities amounted to 4.6 billion euros.

Capex increased to 3 billion euros, compared with 2.7 billion

euros in the prior year. For the transaction with Statoil as well as

for the acquisition of Pronova BioPharma we incurred cash

payments of 1.1 billion euros in the first nine months of 2013. In

the prior year we recorded a cash inflow primarily from the

divestiture of the fertilizer business.

Free cash flow amounted to 2.9 billion euros, an increase of

approximately 600 million euros.

Cash inflow resulting from the change in financial liabilities

amounted to 1.3 billion euros. This was mainly the result of the

issuance of several bonds. Overall, financing activities led to a

cash outflow of 1.3 billion euros.

Net debt amounted to 13 billion euros, representing an increase

of 1.8 billion euros in comparison to December 31, 2012. Our

equity ratio remained at 41%.


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



[Chart 12: Outlook 2013]

Coming to the outlook:

Business was robust in the third quarter. However, we do not

anticipate an acceleration of global GDP growth in the fourth quarter

of this year. We assume ongoing economic volatility and uncertainty

in the markets we operate in and we expect continuing negative

currency effects on sales and earnings.

For 2013, we continue to expect global GDP to expand by 2.0

percent. For industrial production we see a 2.7 percent growth.

Chemical production growth is expected to remain at 3.1 percent.

Our projections for the average Brent oil price and the dollar/euro

exchange rate remain unchanged at 105 US dollars per barrel and

at 1.30 US dollars, respectively.

For the full year 2013, BASF confirms its outlook: We strive to

exceed the record levels in sales and EBIT before special items

generated in 2012.

BASF Q3 Report Speech at Analyst Conference

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