BASF results 3Q2011

BASF 3rd Quarter 2011 Analyst Conference Call 1

BASF with good earnings in Q3Third Quarter 2011 Financial highlights October 27, 2011


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


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

BASF with good earnings in Q3 Third quarter 2011 highlights

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.


Major milestones in our active portfolio management achieved

Styrolution JV set on track

Styrolution, 50-50 joint venture between BASF and INEOS, established on October 1, 2011With pro-forma sales of €6.4 billion in 2010* Styrolution is global market leader in its industryBASF received ~€600 million in October as compensation for its contributed business

Divestiture of fertilizer activities

Agreement with EuroChem signed to sell BASF‘s fertilizer assets in Antwerp BASF also plans to sell its 50%-stake in PEC-Rhin JV to EuroChemTotal transaction value ~€700 millionClosing expected by the end of Q1 2012

* unaudited


Important investments to spur further profitable growth

Nanjing expansion on track

Joint investment of USD1.4 billion with Sinopec for first expansion phase of Nanjing Verbund siteSteam cracker expansion, butadiene extraction, non-ionic surfactants plants are now on-stream Majority of remaining plants expected to come on stream around end of 2011

Acrylic acid complex in Brazil

World-scale acrylic acid and SAP* production complex (Camaçari, Bahia)With more than €500 million BASF‘s largest investment in South AmericaRaw material and utilities supply secured via long-term contracts with BraskemConstruction will begin in Q4; start-up planned for 2014

* Superabsorbent polymers


smart forvision –joint concept car by Daimler and BASF

Presented at the International Motor Show in Frankfurt in September 2011BASF solutions are based on three main technology platforms:1. Electrical energy efficiency

- OPVs, OLEDs* support range extension

2. Multifunctional lightweight construction- Composite body parts, wheel rims and car seats

3. Integrated temperature management- Cool pigment coating, temperature reflecting foil

Chemical solutions by BASF are playing a key rolein bringing electromobility quicker to the roads

* OPVs = Organic Photovoltaics, OLEDs = Organic Light Emitting Diodes

Innovations for the mobility of tomorrow


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 grow sales on average by two percentage points per year faster than chemical production growthWe strive to grow our earnings further year by year, and to achieve an EBITDA margin of 18% by 2012

Medium-term targets

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

Dividend policy


Chemicals Significant sales growth driven by strong price increases

Intermediates671+4%

Inorganics356

+11%

Petrochemicals2,141+12%

€3,168+10%

617537

765674

621

0

200

400

600

800

Q3 Q4 Q1 Q2 Q3

Sales developmentPeriod 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


Plastics Sales up mainly due to a strong Performance Polymers business

Polyurethanes1,480+2%

Performance Polymers

1,321+16%

€2,801 +8%

371

285

393 383

317

0

200

400

Q3 Q4 Q1 Q2 Q3

Sales development Period Volumes Prices Portfolio Currencies

Q3’11 vs. Q3’10 2% 10% 0% (4)%


2010 2011



Q3’11 vs. Q3’10 (2%) 7% 23% (4)%

Performance Products Strong contributions from acquired Cognis businesses

370294

554513

440

0

100

200

300

400

500

600

Q3 Q4 Q1 Q2 Q3

PerformanceChemicals

904+9%

Care Chemicals1,265+85%

€3,991+24%

Paper Chemicals423-6%


Nutrition & Health471+32% Dispersions

& Pigments 928

+5% 2010 2011


TargetAcquisition EPS accretive as of 2012

Integration Costs€300 million one-time costs until end of 2013 −

thereof €200 million incurred by the end of Q3 2011

€120 million inventory step-up fully incurred already −

€60 million each incurred in Q4 2010 and Q1 2011

Synergies€290 million of additional annual EBIT targeted− €145 million cost synergies by the end of 2013− €145 million growth synergies by the end of 2015

Cognis integration – Synergy target increased to €290 million



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%

158

33

142167 162

0

50

100

150

Q3 Q4 Q1 Q2 Q3


2010 2011


Agricultural Solutions On track for record year in sales and earnings

66

95

0

50

100

150

Q3 Q3


20112010

0

200

400

600

800

1.000

Q3 Q320112010

+9%

+44%


Q3’11 vs. Q3’10 12% 3% 0% (6)%

832908


272 225

0

200

400

600

Q3 Q3

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)


Review of “Other”

Million € Q3 2011 Q3 2010Sales 1,637 1,452thereof Styrenics* 739 683

EBIT before special items (21) 58thereof Corporate research

Group corporate costs Currency results, hedges and other valuation effects Styrenics, fertilizers, other businesses

(86) (58) 104

82

(67) (54) 104

77

Special items (33) (68)

EBIT (54) (10)

* Since January 1, 2011, Styrenics only includes the carved-out Styrenics businesses; the previous year’s values were adjusted accordingly.


Million € Jan - Sep 2011

Jan - Sep 2010

Cash provided by operating activities 5,028 5,307thereof Changes in net working capital (1,337) (783)

Cash used in investing activities (957) (1,175)thereof Payments related to tangible / intangible assets (2,101) (1,518)

Cash used in financing activities (4,105) (3,814)thereof Changes in financial liabilities

Dividends (1,727) (2,378)

(2,003) (1,811)

Operating cash flow strong at €2.0 billionFree cash flow again high at €1.2 billion Net debt further reduced by ~€650 million to €11.6 billion since end of Q2 2011

Third quarter 2011

Operating cash flow remains strong

BASF 3rd Quarter 2011 Analyst Conference Call

Macro-economic assumptions 2011

Previous forecast

GDP 3%-4%

Chemical production (excl. Pharma)

5%-6%

Industrial production 5%-6%

US$ / Euro 1.40

Oil price (US$ / bbl) 110

New forecast

2.5%-3%

4.5%-5%

4.5%-5%

1.40

110


Financial highlights

Million € Q3 2011 Q3 2010 Δ% Q2 2011 Δ%Sales

changes due to - volumes - prices - portfolio - currencies

17,607 15,781 +12%

(3)% +14% +5% (4)%

18,461 (5)%

EBITDA 2,709 2,934 (8)% 3,015 (10)%

EBIT before special items 1,964 2,213 (11)% 2,237 (12)%

EBIT before special items adjusted for non-compensable oil taxes 1,964 1,989 (1)% 2,237 (12)%

Special items (82) (58) - (20) -

EBIT 1,882 2,155 (13)% 2,217 (15)%

Net income 1,192 1,245 (4)% 1,454 (18)%

EPS (€) 1.30 1.35 (4)% 1.59 (18)%

Adjusted EPS (€) 1.52 1.52 0% 1.75 (13)%

BASF 3rd Quarter 2011 Analyst Conference Call

Cognis integration Generating €290 million of growth and cost synergies

Providing joint customer base with access to broader portfolioIncreasing solution capabilitiesExtending innovation capabilitiesLeveraging regional set-up

Cost synergiesRealizing procurement cost savingsConsolidating of administrative structuresImproving production efficiencyConsolidating IT landscape

Synergies (million €)

145

145

0

50

100

150

200

250

300

350

Cost synergies (by the end of 2013) Growth synergies (by the end of 2015)

Growth synergies

BASF results 3Q2011

Economy & Finance

Transcript of BASF results 3Q2011