From Science to Innovation ndash How Chemistry Contributes to Health Solutions

BASF Research Press Conference on March 29 2012

Moving BASF to the next level ndash The importance of innovation

Dr Andreas Kreimeyer BASF SE

Member of the Board of Executive Directors Research Executive Director

BASF today ndash the leading chemical company

3

No 1 ndash 3 market positions in over 75 of businesses

Active management of portfolio towards higher returns and less cyclicality

Focus on innovative products and solutions

Operational excellence with unique Verbund concept

Strong earnings power high cash flow generation and a strong financial profile

Generation of long-term attractive shareholder returns

Demographic challenges set the stage

for the future of the chemical industry

4

60 of chemical production in emerging countries

Sustainability and innovation as main driver

Innovation focus on materials and solutions

Growth of chemical production above GDP

Chemistry as enabler

Nine billion people in 2050 but only one earth

Resources Environment amp Climate

Food amp Nutrition Quality of Life

BASFrsquos ldquoWe create chemistryrdquo Strategy

puts focus on sustainable innovations

5

Expansion of Functionalized Materials amp Solutions

Technology and operational excellence in all businesses and regions

Additional value from industry groups and cross-disciplinary innovation

Internationalization of organization according to market needs

Growth drivers sustainability innovation and investments

Innovation at BASF

RampD 2011 at a Glance

6

10100 RampD employees

Around 2800 projects

Expenditures for RampD circa euro161 billion world leader in chemical industry

Since 2005 increase of RampD expenditures up to 50

Annual sales from product innovations in 2011 euro8 billion

23

26

12

21

9 8Plastics

Functional Solutions

Performance Products

Chemicals

Agricultural Solutions

Oil amp Gas

Corporate Research

ca

euro 161

billion 1

Research for the future with our innovative products and processes

we provide sustainable solutions for global challenges

New or improved products or applications max 5 years on market

BASF has the strongest patent portfolio

in the chemical industry

7

Measures strength of a companyrsquos patent portfolio in global markets

Takes into account relevance of patents (normalized number of citations)

Factors in market size covered by individual inventions (expressed by Gross National Income)

Quelle PatentSight Methode Prof Ernst WHU (Ernst H

Omland N World Patent Information 33 (2011) 34 - 41)

Patent Asset IndexTM

Competitive Impact

Market Coverage

Technology Relevance

Number of worldwide citations of a patent

in other patents

Extent of patent protection in

global markets

Contribution to competitive

advantage

Portfolio Size

Number of worldwide active patent families

100

75 65 63

30

BASF Bayer DuPont DowChemical

Evonik

Xemiumreg Ultradurreg B4520 PRO

Ecovioreg FS Paper Cetiolreg RLF PeroXealtrade

iGlossreg

MEYCOreg Minefill Natuphosreg Combi Tinuvinreg

New BASF products

8

BASF Interdisciplinary Know-How-Verbund

Examples from our cooperation network

9

Working with the best partners in science amp industry

Jonas Strasbourg

Freiburg Zurich unicat Berlin smart forvision

Innovate in multi-materials

and systems

BASFrsquos and Daimlerrsquos ideas

for holistic electric mobility

New catalytic processes

for raw material change

Moving BASF to the next level ndash The importance of innovation

Dr Andreas Kreimeyer BASF SE

Member of the Board of Executive Directors Research Executive Director

BASF today ndash the leading chemical company

3

No 1 ndash 3 market positions in over 75 of businesses

Active management of portfolio towards higher returns and less cyclicality

Focus on innovative products and solutions

Operational excellence with unique Verbund concept

Strong earnings power high cash flow generation and a strong financial profile

Generation of long-term attractive shareholder returns

Demographic challenges set the stage

for the future of the chemical industry

4

60 of chemical production in emerging countries

Sustainability and innovation as main driver

Innovation focus on materials and solutions

Growth of chemical production above GDP

Chemistry as enabler

Nine billion people in 2050 but only one earth

Resources Environment amp Climate

Food amp Nutrition Quality of Life

BASFrsquos ldquoWe create chemistryrdquo Strategy

puts focus on sustainable innovations

5

Expansion of Functionalized Materials amp Solutions

Technology and operational excellence in all businesses and regions

Additional value from industry groups and cross-disciplinary innovation

Internationalization of organization according to market needs

Growth drivers sustainability innovation and investments

Innovation at BASF

RampD 2011 at a Glance

6

10100 RampD employees

Around 2800 projects

Expenditures for RampD circa euro161 billion world leader in chemical industry

Since 2005 increase of RampD expenditures up to 50

Annual sales from product innovations in 2011 euro8 billion

23

26

12

21

9 8Plastics

Functional Solutions

Performance Products

Chemicals

Agricultural Solutions

Oil amp Gas

Corporate Research

ca

euro 161

billion 1

Research for the future with our innovative products and processes

we provide sustainable solutions for global challenges

New or improved products or applications max 5 years on market

BASF has the strongest patent portfolio

in the chemical industry

7

Measures strength of a companyrsquos patent portfolio in global markets

Takes into account relevance of patents (normalized number of citations)

Factors in market size covered by individual inventions (expressed by Gross National Income)

Quelle PatentSight Methode Prof Ernst WHU (Ernst H

Omland N World Patent Information 33 (2011) 34 - 41)

Patent Asset IndexTM

Competitive Impact

Market Coverage

Technology Relevance

Number of worldwide citations of a patent

in other patents

Extent of patent protection in

global markets

Contribution to competitive

advantage

Portfolio Size

Number of worldwide active patent families

100

75 65 63

30

BASF Bayer DuPont DowChemical

Evonik

Xemiumreg Ultradurreg B4520 PRO

Ecovioreg FS Paper Cetiolreg RLF PeroXealtrade

iGlossreg

MEYCOreg Minefill Natuphosreg Combi Tinuvinreg

New BASF products

8

BASF Interdisciplinary Know-How-Verbund

Examples from our cooperation network

9

Working with the best partners in science amp industry

Jonas Strasbourg

Freiburg Zurich unicat Berlin smart forvision

Innovate in multi-materials

and systems

BASFrsquos and Daimlerrsquos ideas

for holistic electric mobility

New catalytic processes

for raw material change

BASF today ndash the leading chemical company

3

No 1 ndash 3 market positions in over 75 of businesses

Active management of portfolio towards higher returns and less cyclicality

Focus on innovative products and solutions

Operational excellence with unique Verbund concept

Strong earnings power high cash flow generation and a strong financial profile

Generation of long-term attractive shareholder returns

Demographic challenges set the stage

for the future of the chemical industry

4

60 of chemical production in emerging countries

Sustainability and innovation as main driver

Innovation focus on materials and solutions

Growth of chemical production above GDP

Chemistry as enabler

Nine billion people in 2050 but only one earth

Resources Environment amp Climate

Food amp Nutrition Quality of Life

BASFrsquos ldquoWe create chemistryrdquo Strategy

puts focus on sustainable innovations

5

Expansion of Functionalized Materials amp Solutions

Technology and operational excellence in all businesses and regions

Additional value from industry groups and cross-disciplinary innovation

Internationalization of organization according to market needs

Growth drivers sustainability innovation and investments

Innovation at BASF

RampD 2011 at a Glance

6

10100 RampD employees

Around 2800 projects

Expenditures for RampD circa euro161 billion world leader in chemical industry

Since 2005 increase of RampD expenditures up to 50

Annual sales from product innovations in 2011 euro8 billion

23

26

12

21

9 8Plastics

Functional Solutions

Performance Products

Chemicals

Agricultural Solutions

Oil amp Gas

Corporate Research

ca

euro 161

billion 1

Research for the future with our innovative products and processes

we provide sustainable solutions for global challenges

New or improved products or applications max 5 years on market

BASF has the strongest patent portfolio

in the chemical industry

7

Measures strength of a companyrsquos patent portfolio in global markets

Takes into account relevance of patents (normalized number of citations)

Factors in market size covered by individual inventions (expressed by Gross National Income)

Quelle PatentSight Methode Prof Ernst WHU (Ernst H

Omland N World Patent Information 33 (2011) 34 - 41)

Patent Asset IndexTM

Competitive Impact

Market Coverage

Technology Relevance

Number of worldwide citations of a patent

in other patents

Extent of patent protection in

global markets

Contribution to competitive

advantage

Portfolio Size

Number of worldwide active patent families

100

75 65 63

30

BASF Bayer DuPont DowChemical

Evonik

Xemiumreg Ultradurreg B4520 PRO

Ecovioreg FS Paper Cetiolreg RLF PeroXealtrade

iGlossreg

MEYCOreg Minefill Natuphosreg Combi Tinuvinreg

New BASF products

8

BASF Interdisciplinary Know-How-Verbund

Examples from our cooperation network

9

Working with the best partners in science amp industry

Jonas Strasbourg

Freiburg Zurich unicat Berlin smart forvision

Innovate in multi-materials

and systems

BASFrsquos and Daimlerrsquos ideas

for holistic electric mobility

New catalytic processes

for raw material change

Demographic challenges set the stage

for the future of the chemical industry

4

60 of chemical production in emerging countries

Sustainability and innovation as main driver

Innovation focus on materials and solutions

Growth of chemical production above GDP

Chemistry as enabler

Nine billion people in 2050 but only one earth

Resources Environment amp Climate

Food amp Nutrition Quality of Life

BASFrsquos ldquoWe create chemistryrdquo Strategy

puts focus on sustainable innovations

5

Expansion of Functionalized Materials amp Solutions

Technology and operational excellence in all businesses and regions

Additional value from industry groups and cross-disciplinary innovation

Internationalization of organization according to market needs

Growth drivers sustainability innovation and investments

Innovation at BASF

RampD 2011 at a Glance

6

10100 RampD employees

Around 2800 projects

Expenditures for RampD circa euro161 billion world leader in chemical industry

Since 2005 increase of RampD expenditures up to 50

Annual sales from product innovations in 2011 euro8 billion

23

26

12

21

9 8Plastics

Functional Solutions

Performance Products

Chemicals

Agricultural Solutions

Oil amp Gas

Corporate Research

ca

euro 161

billion 1

Research for the future with our innovative products and processes

we provide sustainable solutions for global challenges

New or improved products or applications max 5 years on market

BASF has the strongest patent portfolio

in the chemical industry

7

Measures strength of a companyrsquos patent portfolio in global markets

Takes into account relevance of patents (normalized number of citations)

Factors in market size covered by individual inventions (expressed by Gross National Income)

Quelle PatentSight Methode Prof Ernst WHU (Ernst H

Omland N World Patent Information 33 (2011) 34 - 41)

Patent Asset IndexTM

Competitive Impact

Market Coverage

Technology Relevance

Number of worldwide citations of a patent

in other patents

Extent of patent protection in

global markets

Contribution to competitive

advantage

Portfolio Size

Number of worldwide active patent families

100

75 65 63

30

BASF Bayer DuPont DowChemical

Evonik

Xemiumreg Ultradurreg B4520 PRO

Ecovioreg FS Paper Cetiolreg RLF PeroXealtrade

iGlossreg

MEYCOreg Minefill Natuphosreg Combi Tinuvinreg

New BASF products

8

BASF Interdisciplinary Know-How-Verbund

Examples from our cooperation network

9

Working with the best partners in science amp industry

Jonas Strasbourg

Freiburg Zurich unicat Berlin smart forvision

Innovate in multi-materials

and systems

BASFrsquos and Daimlerrsquos ideas

for holistic electric mobility

New catalytic processes

for raw material change

BASFrsquos ldquoWe create chemistryrdquo Strategy

puts focus on sustainable innovations

5

Expansion of Functionalized Materials amp Solutions

Technology and operational excellence in all businesses and regions

Additional value from industry groups and cross-disciplinary innovation

Internationalization of organization according to market needs

Growth drivers sustainability innovation and investments

Innovation at BASF

RampD 2011 at a Glance

6

10100 RampD employees

Around 2800 projects

Expenditures for RampD circa euro161 billion world leader in chemical industry

Since 2005 increase of RampD expenditures up to 50

Annual sales from product innovations in 2011 euro8 billion

23

26

12

21

9 8Plastics

Functional Solutions

Performance Products

Chemicals

Agricultural Solutions

Oil amp Gas

Corporate Research

ca

euro 161

billion 1

Research for the future with our innovative products and processes

we provide sustainable solutions for global challenges

New or improved products or applications max 5 years on market

BASF has the strongest patent portfolio

in the chemical industry

7

Measures strength of a companyrsquos patent portfolio in global markets

Takes into account relevance of patents (normalized number of citations)

Factors in market size covered by individual inventions (expressed by Gross National Income)

Quelle PatentSight Methode Prof Ernst WHU (Ernst H

Omland N World Patent Information 33 (2011) 34 - 41)

Patent Asset IndexTM

Competitive Impact

Market Coverage

Technology Relevance

Number of worldwide citations of a patent

in other patents

Extent of patent protection in

global markets

Contribution to competitive

advantage

Portfolio Size

Number of worldwide active patent families

100

75 65 63

30

BASF Bayer DuPont DowChemical

Evonik

Xemiumreg Ultradurreg B4520 PRO

Ecovioreg FS Paper Cetiolreg RLF PeroXealtrade

iGlossreg

MEYCOreg Minefill Natuphosreg Combi Tinuvinreg

New BASF products

8

BASF Interdisciplinary Know-How-Verbund

Examples from our cooperation network

9

Working with the best partners in science amp industry

Jonas Strasbourg

Freiburg Zurich unicat Berlin smart forvision

Innovate in multi-materials

and systems

BASFrsquos and Daimlerrsquos ideas

for holistic electric mobility

New catalytic processes

for raw material change

Innovation at BASF

RampD 2011 at a Glance

6

10100 RampD employees

Around 2800 projects

Expenditures for RampD circa euro161 billion world leader in chemical industry

Since 2005 increase of RampD expenditures up to 50

Annual sales from product innovations in 2011 euro8 billion

23

26

12

21

9 8Plastics

Functional Solutions

Performance Products

Chemicals

Agricultural Solutions

Oil amp Gas

Corporate Research

ca

euro 161

billion 1

Research for the future with our innovative products and processes

we provide sustainable solutions for global challenges

New or improved products or applications max 5 years on market

BASF has the strongest patent portfolio

in the chemical industry

7

Measures strength of a companyrsquos patent portfolio in global markets

Takes into account relevance of patents (normalized number of citations)

Factors in market size covered by individual inventions (expressed by Gross National Income)

Quelle PatentSight Methode Prof Ernst WHU (Ernst H

Omland N World Patent Information 33 (2011) 34 - 41)

Patent Asset IndexTM

Competitive Impact

Market Coverage

Technology Relevance

Number of worldwide citations of a patent

in other patents

Extent of patent protection in

global markets

Contribution to competitive

advantage

Portfolio Size

Number of worldwide active patent families

100

75 65 63

30

BASF Bayer DuPont DowChemical

Evonik

Xemiumreg Ultradurreg B4520 PRO

Ecovioreg FS Paper Cetiolreg RLF PeroXealtrade

iGlossreg

MEYCOreg Minefill Natuphosreg Combi Tinuvinreg

New BASF products

8

BASF Interdisciplinary Know-How-Verbund

Examples from our cooperation network

9

Working with the best partners in science amp industry

Jonas Strasbourg

Freiburg Zurich unicat Berlin smart forvision

Innovate in multi-materials

and systems

BASFrsquos and Daimlerrsquos ideas

for holistic electric mobility

New catalytic processes

for raw material change

BASF has the strongest patent portfolio

in the chemical industry

7

Measures strength of a companyrsquos patent portfolio in global markets

Takes into account relevance of patents (normalized number of citations)

Factors in market size covered by individual inventions (expressed by Gross National Income)

Quelle PatentSight Methode Prof Ernst WHU (Ernst H

Omland N World Patent Information 33 (2011) 34 - 41)

Patent Asset IndexTM

Competitive Impact

Market Coverage

Technology Relevance

Number of worldwide citations of a patent

in other patents

Extent of patent protection in

global markets

Contribution to competitive

advantage

Portfolio Size

Number of worldwide active patent families

100

75 65 63

30

BASF Bayer DuPont DowChemical

Evonik

Xemiumreg Ultradurreg B4520 PRO

Ecovioreg FS Paper Cetiolreg RLF PeroXealtrade

iGlossreg

MEYCOreg Minefill Natuphosreg Combi Tinuvinreg

New BASF products

8

BASF Interdisciplinary Know-How-Verbund

Examples from our cooperation network

9

Working with the best partners in science amp industry

Jonas Strasbourg

Freiburg Zurich unicat Berlin smart forvision

Innovate in multi-materials

and systems

BASFrsquos and Daimlerrsquos ideas

for holistic electric mobility

New catalytic processes

for raw material change

Xemiumreg Ultradurreg B4520 PRO

Ecovioreg FS Paper Cetiolreg RLF PeroXealtrade

iGlossreg

MEYCOreg Minefill Natuphosreg Combi Tinuvinreg

New BASF products

8

BASF Interdisciplinary Know-How-Verbund

Examples from our cooperation network

9

Working with the best partners in science amp industry

Jonas Strasbourg

Freiburg Zurich unicat Berlin smart forvision

Innovate in multi-materials

and systems

BASFrsquos and Daimlerrsquos ideas

for holistic electric mobility

New catalytic processes

for raw material change

BASF Interdisciplinary Know-How-Verbund

Examples from our cooperation network

9

Working with the best partners in science amp industry

Jonas Strasbourg

Freiburg Zurich unicat Berlin smart forvision

Innovate in multi-materials

and systems

BASFrsquos and Daimlerrsquos ideas

for holistic electric mobility

New catalytic processes

for raw material change

Three pillars of our new innovation set-up

to make RampD more effective and efficient

10

From Chemicals

to Chemistry

Solutions

for a sustainable future

Globalization pays off

RampD focus on high future business potential areas for sustainable solutions ndash close to our customers worldwide

From Chemicals to Chemistry

Shift of Innovation Focus

11

Chemistry as key enabler

for functionalized materials

amp solutions

Deep understanding of

customer value chains required

New

molecules

Improved applications

Functionalized materials amp solutions

1960 1970 1980 1990 2000 2010 2020

Batteries membranes

From chemicals to chemistry

BASF Global Know-How-Verbund

12

International and

interdisciplinary

RampD network

4 Technology platforms

External partnerships

with industry and science

RampD Verbund

with 1950 cooperations

Science Relations and Innovation Management

BASF Future Business

BASF Research Verbund

Biological amp Effect Systems

Process Research amp Chem Engineering

Advanced Materials

amp Systems

Plant Science

Universities

Partners in industry

Research institutions

High-tech joint ventures

13

We create chemistry

From Chemicals to Chemistry

Shift of Innovation Focus

11

Chemistry as key enabler

for functionalized materials

amp solutions

Deep understanding of

customer value chains required

New

molecules

Improved applications

Functionalized materials amp solutions

1960 1970 1980 1990 2000 2010 2020

Batteries membranes

From chemicals to chemistry

BASF Global Know-How-Verbund

12

International and

interdisciplinary

RampD network

4 Technology platforms

External partnerships

with industry and science

RampD Verbund

with 1950 cooperations

Science Relations and Innovation Management

BASF Future Business

BASF Research Verbund

Biological amp Effect Systems

Process Research amp Chem Engineering

Advanced Materials

amp Systems

Plant Science

Universities

Partners in industry

Research institutions

High-tech joint ventures

13

We create chemistry

BASF Global Know-How-Verbund

12

International and

interdisciplinary

RampD network

4 Technology platforms

External partnerships

with industry and science

RampD Verbund

with 1950 cooperations

Science Relations and Innovation Management

BASF Future Business

BASF Research Verbund

Biological amp Effect Systems

Process Research amp Chem Engineering

Advanced Materials

amp Systems

Plant Science

Universities

Partners in industry

Research institutions

High-tech joint ventures

13

We create chemistry

13

We create chemistry