LBBW Unternehmensforum Stuttgart€¦ · LBBW Unternehmensforum 150 years Stuttgart BASF Credit...
Transcript of LBBW Unternehmensforum Stuttgart€¦ · LBBW Unternehmensforum 150 years Stuttgart BASF Credit...
BASF Credit Story January 2015 1
150 years We add value as one company
150 years LBBW Unternehmensforum Stuttgart BASF Credit Story January 29, 2015
BASF Credit Story January 2015 2
150 years
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.
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BASF at a glance
Growth levers
Financing highlights
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150 years
Chemistry as an enabler BASF has superior growth
opportunities: – sustainable innovations – investments – emerging markets
The #1 chemical company €74 billion sales, €7.2 billion
EBIT bSI in 2013 #1-3 in >75% of businesses,
present in >200 countries 6 integrated Verbund sites,
production in 60 countries
A track record of strong sales and earnings growth
14% average annual dividend increase, >3% yield in every single year*
~€64 billion market capitalization end of December 2014
Performance Perspective
* For 2004-2013
Ludwigshafen, Germany
Antwerp, Belgium
Nanjing, China
Kuantan, Malaysia Geismar,
USA Freeport, USA
Verbund site
Positioning
We create chemistry for a sustainable future
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Percentage of sales 2013*
* Not depicted here: ~6% of Group sales reported as ‘Other‘
BASF today – a well-balanced portfolio Total sales 2013: €74 billion
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Global reduction in carbon emissions of 6.1 million metric tons/a. and reduction of waste
Example Ludwigshafen: 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
Verbund generates >€1 billion p.a. global cost savings*, supports sustainability
* Savings include only tangible synergies. Additional (intangible) benefits and retained profits are not included.
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Recent transaction with Statoil
Acquisition of participations in oil & gas fields in Norway
Purchase price amounts to US$1.25 billion
Increase of production to ~60,000 boepd in Norway
Additional reserves and resources of ~170 million boe
Transaction closed December 1st, 2014
Restructuring of Performance Products
Strengthening of R&D platforms
Important corporate developments
BASF to sell textile chemicals business to Archroma
Paper Chemicals division to be dissolved, product lines moved to other divisions
Strategic options for parts of kaolin business in evaluation
Total earnings improvement of ~€500 million by 2017
Future set up of global research platforms:
- Process Research & Chemical Engineering, led out of Europe
- Bioscience Research, led out of North America (from 2015)
- Advanced Materials & Systems Research, led out of Asia (from 2016)
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We aim to:
increase our sales volumes excluding the effects of acquisitions and divestitures
slightly increase EBIT bSi compared with 2013
Outlook 2014
GDP: 2.3% (previous: 2.5%)
Industrial production: 3.4% (previous: 3.7%)
Chemical production: 4.0% (previous: 4.4%)
US$ / Euro: 1.35 (unchanged)
Oil price (US$ / bbl): 105 (previous: 110)
Assumptions 2014
Outlook 2014
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BASF at a glance
Growth levers
Financing highlights
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BASF outperformed global chemical production by ~3 percentage points p.a. Sales to third parties billion €
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Portfolio development Moving downstream towards customer industries
* Agriculture, Construction, Consumer Goods, Health & Nutrition, Electronics, Energy & Resources, Transportation ** Sales excluding Oil & Gas. Targets were published on November 29, 2011.
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Catalysts Construction chemicals Water-based resins Pigments, plastic additives Oil & Gas Personal care & food Battery materials Functional crop care Omega-3 fatty acids Enzymes …
BASF core business
Strong partnerships
Gazprom Monsanto Petronas Shell Sinopec Statoil Total
Selected transactions 2005 − today
Acquisitions
~ €14 billion sales
Divestitures
Agro generics Vitamin premixes Styrenics Fertilizers Construction equipment,
flooring and wall systems Textile chemicals …
~ €7 billion sales
Portfolio development Towards more market driven and innovative businesses
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Strong commitment to innovation Innovations for a sustainable future
1.4 1.5
1.6 1.7
1.8
0.0
0.5
1.0
1.5
2.0
2009 2010 2011 2012 2013
€1.8 billion R&D expenditure in 2013, further increase of R&D spending planned in 2014
~10,650 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 younger 5 years
R&D expenditures in € billion
Chemicals 10%
Performance Products 20%
Functional Mat. & Sol. 20%
Agricultural Solutions 26%
Oil & Gas 3%
Corporate Research 21%
Key facts
2.0
1.5
1.0
0.5
0
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Chemistry-based innovations Growth and technology fields
Growth fields
Resources, Environment & Climate
Food & Nutrition
Quality of Life White Biotechnology
Materials, Systems & Nanotechnology
Raw Material Change
Key customer industries
Health & Nutrition
Consumer Goods
Transportation
Energy & Resources
Electronics
Agriculture
Construction
Technology fields Global needs
...
Batteries for Mobility
Enzymes
Heat Management for Construction
Organic Electronics
Functional Crop Care
Plant Biotechnology
E-Power Management
Wind Energy
Lightweight Composites
Water Solutions
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Performance Products 15%
Oil & Gas 20%
€20 billion
Functional Materials & Solutions 12%
Capex budget 2014-2018
Other 13%
Chemicals 33%
Capex budget 2014-2018
Asia Pacific 18%
€20 billion
South America 4%
North America 25%
Europe 49%
Agricultural Solutions 7%
Other 4%
by segment by region
Investments Capex budget 2014-2018 by segment and region*
* Source: BASF Report 2013
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Expansion oil & gas activities
Aroma Ingredients Kuantan, Malaysia
Investments Major projects
Ammonia and gas-to-propylene in USA*
MDI plant Chongqing, China
Acrylic acid complex Camacari, Brazil
TDI plant Ludwigshafen, Germany
* Under evaluation
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Operational excellence Strong track record
BASF Group* 2001–2013 Index
50
100
150
200
250
300
350
2001 2006 2009 2012
CAGR 2001 – 2013
10 %
8 %
3 %
EBITDA
Sales
Fixed costs
* Excl. companies with major IFRS 10/11 restatements, i.e. BASF YPC Nanjing, Libya onshore, other Oil & Gas and Catalysts companies
2013
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BASF at a glance
Growth levers
Financing highlights
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0
1
2
3
4
2004 2005 2006 2007 2008 2009** 2010 2011 2012 2013 Q1-Q32014
Strong free cash flow generation
* 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
2.6
3.3 3.5
3.2
2.5
3.2
3.9 3.7
2.6
3.2
1.3
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Diversified Debt Financing Instruments As of September 30, 2014
EUR 20 billion debt issuance program (for long-term debt financing)
USD 12.5 billion commercial paper program (for short-term debt financing)
Two broadly syndicated backup-lines of EUR 3 billion each (maturing in 2018 and 2019, respectively)
Funding Strategy Highlights
Commercial Papers 7%
Bank Loans
18%
EUR-denominated Bonds
60%
€15.8 billion
Financing strategy
Keep a solid A rating (current ratings* S&P A+ / Moody’s A1) Our target:
* Last Confirmation Moody’s: October 31, 2014 Last Confirmation S&P: December 11, 2014
Other Bonds 15%
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2.2
1.1 1.1
1.8
0.8
0.3
0.71.0
0.5
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0.0
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1.0
1.5
2.0
2.5
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 >2024
* Nominal values, excluding industrial revenue and pollution control bonds from BASF Corporation Group.
Profile as of September 30, 2014 (billion €)*
Well balanced bond maturity profile
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Highlights of BASF’s credit
1. Strong track record, outperforming chemical production by 3% p.a. (2001-2013)
6. Combining economic success with social commitment and environmental protection
Diversified financing strategy with a strong commitment to keep a solid A rating
Focus on operational excellence
Advantageous cost position due to unique Verbund concept Focus on cost management
2. Well positioned for profitable growth
Excellent innovation platform Leading Positions in growth industries and emerging markets Ongoing portfolio optimization
5.
3.
4. Strong free cash flow in every single year over the last decade
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Appendix
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Q3 2014: BASF with higher sales and earnings despite declining demand
Sales development Period Volumes Prices Portfolio Currencies
Q3’14 vs. Q3’13 7% (4%) 0% 0%
Q1-Q3 2014 vs. Q1-Q3 2013 6% (3%) 0% (2%)
Business performance Q3’14 vs. Q3’13 Q1-Q3’14 vs. Q1-Q3’13
Sales €18.3 billion +3% €56.3 billion +1%
EBITDA €2.5 billion +1% €8.2 billion +4%
EBIT before special items €1.8 billion +9% €6.0 billion +5%
EBIT €1.8 billion +8% €6.1 billion +8%
Net income €1.0 billion (5%) €3.8 billion +3%
Reported EPS €1.14 (5%) €4.16 +3%
Adjusted EPS €1.27 (1%) €4.45 +2%
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Monomers
Intermediates
Dispersions & Pigments
Performance Chemicals
Care Chemicals
Paper Chemicals
Coatings
Catalysts
Construction Chemicals
BASF sales by first customer industry*
> 15 %
> 10 %
< 10 %
> 15 %
Consumer goods
Transportation
Construction
Energy & Resources
Market approach Cross-divisional customer industry approach
* Excluding Oil & Gas, Crop Protection and Other. 2012 numbers
Petro- chemicals
Performance Materials
Bubble Size: BASF divisional sales by first customer industry*/**
** Nutrition & Health sales predominantly into Health & Nutrition market
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E-textiles
Solar roof with transparent organic solar panels and OLED modules
Multifunctional seat
Infrared-reflective coating
Infrared-reflective film
High performance foams
Lightweight tridion cell
All-plastic wheel
Cross-divisional approach BASF’s technology Verbund combined with customer know-how
Daimler & BASF concept car ‘Smartforvision’
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Customer Verbund - adidas and BASF Working together for disruptive innovation: Infinergy™
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Acquisitions … will contribute to profitable growth in the future
Provide a minimum return on investment of 8% p.a. after tax
Are EPS accretive by year three at the latest
Financial acquisition criteria
Generate profitable growth above the industry average
Are innovation-driven
Offer a special value proposition to customers
Reduce earnings cyclicality
Strategic acquisition criteria
We want to acquire businesses which …
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0
1,000
2,000
3,000
4,000
2013 2015
Former cost saving programs NEXT STEP
Operational excellence programs ~€1.3 billion earnings contribution from STEP by 2015
Annual earnings contribution in € million Targeted annual earnings
contribution increased from €1 billion to ~€1.3 billion by end of 2015
Optimization of processes and structures in all regions, e.g. manufacturing, maintenance supply chain engineering, best-cost country
sourcing
Project timeline: 2012–2015
Between €0.9 and €1 billion by the end of 2014 expected
One-time cost : ~€1 billion
STEP program
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Restructuring in Performance Products Announced measures to strengthen competitiveness
Measures
Leather and textile chemicals (March 18, 2013 & October 16, 2014)
Establishment of global innovation center in China Divestiture of textile chemicals
Water, oilfield and mining chemicals (March 27, 2013)
Establishment of global business unit to realize synergies Divestment of industrial water management business
Plastic additives and pigments (April 23, 2013)
Adjustments at sites in the Basel area to adapt to changed market conditions
Downsizing of R&D activities
Pigments (October 23, 2013)
Optimization of global production network Closure, restructuring and evaluation of strategic options for
production assets
Paper Chemicals (January 23, 2014 & September 24, 2014)
Latex plant in EU shut down. Kaolin: Strategic options under evaluation
From Jan. 1, 2015: Division dissolved, new set-up follows value chains
Nutrition & Health (April 25, 2014)
Adaption of product portfolio and organizational processes to market realities
Care Chemicals (June 5, 2014)
Set of measures to adapt to changed customer needs and market conditions within its Home Care, Industrial & Institutional Cleaning and Formulation Technologies businesses
Further measures Ongoing
Reduction of >2,400 positions until end of 2017
Annual earnings contribution of ~€500 Million from 2017 onwards
One-time costs in the magnitude of ~€250-300 Million
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2009
2013
Cumulative capex** 2009-2013 (billion €)
BASF Group w/o Oil & Gas
7.4 (76%)
BASF Group w/o Oil & Gas
14.5 (69%)
Oil & Gas 2.3 (24%)
Oil & Gas 6.4 (31%)
2009
2013 -
-
Average EBITDA* 2009-2013 (billion € p.a.)
* Excluding non-deductible oil taxes; restated figures from 2012 onwards in accordance with changes in IFRS ** Including additions to property, plant, equipment resulting from acquisitions, capitalized exploration, restoration obligations and IT investments; restated figures from 2012 onwards in accordance with changes in IFRS
2009-2013: – Oil & Gas: Solid profit
contributor to BASF Group – Oil & Gas accounted for ~30%
of BASF Group capex
Oil & Gas will remain a significant contributor to BASF’s total EBITDA
Capex share of Oil & Gas business in BASF’s portfolio will decline
Key facts
Share of Oil & Gas in BASF portfolio
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Strong earnings contribution from Oil & Gas
* Positive impact from special income due to the deconsolidation of Gascade Gastransport GmbH and the disposal of a share in the Edvard Grieg oilfield (BASF Report 2013, pp. 86-87)
480 601
857 789 951
712 923
1,064 1,201
1,780
1,100
0
500
1,000
1,500
2,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013* Q1-Q32014
Net income Oil & Gas (million €)
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Oil & Gas – Focus on upstream activities
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Overview of bonds (1/2) as of December 31, 2014
Bond Term Issuer Volume ISIN Code
1.375% GBP Bond 2014/2017 BASF SE GBP 250 million XS1144218804
EUR Floating Rate Note 2014/2017 BASF SE € 300 million XS1043167433
2.5% Euro Bond 2014/2024 BASF SE € 500 million XS1017833242
1.375% Euro Bond 2014/2019 BASF SE € 750 million XS1017828911
3.89% USPP Series A 2013/2025 BASF SE USD 250 million N/A
4.09% USPP Series B 2013/2028 BASF SE USD 700 million N/A
4.43% USPP Series C 2013/2034 BASF SE USD 300 million N/A
EUR Floating Rate Note 2013/2016 BASF SE € 200 million XS0963402572
3.675% NOK Bond 2013/2025 BASF SE NOK 1.45 billion XS0932079717
EUR Floating Rate Note 2013/2020 BASF SE € 300 million XS0931272776
2.875% EUR Bond 2013/2033 BASF SE € 200 million XS0932307100
EUR Floating Rate Note 2013/2018 BASF SE € 300 million XS0903325206
3.25% EUR Bond 2013/2043 BASF SE € 200 million XS0888667200
3% EUR Bond 2013/2033 BASF SE € 500 million XS0885399583
1.875% EUR Bond 2013/2021 BASF SE € 700 million XS0883560715
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Overview of bonds (2/2) as of December 31, 2014
1 Guaranteed by BASF SE
Bond Term Issuer Volume ISIN Code
2.0% EUR Bond 2012/2022 BASF SE € 1.25 billion DE000A1R0XG3
1.5% EUR Bond 2012/2018 BASF SE € 750 million XS0836260975
4.25% EUR Bond 2009/2016 BASF SE € 200 million XS0439773002
4.625% EUR Bond 2009/2017 BASF SE € 300 million XS0437957086
5.875% GBP Bond 2009/2017 BASF SE GBP 400 million XS0420401779
5.125% EUR Bond 2009/2015 BASF Finance Europe N.V. 1 € 2 billion XS0412154378
3.625% CHF Bond 2008/2015 BASF Finance Europe N.V. 1 CHF 200 million CH0039943292
4.5% EUR Bond 2006/2016 BASF SE € 500 million DE 000 A0JRFB0
4.875% EUR Bond 2003/2018 Ciba Specialty Chemicals Finance Luxembourg S.A. € 500 million XS0170386998
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BASF Creditor Relations Team Frank Wilhelmi Head of Capital Market Financing
Hannes Koske IR Manager Creditor Relations
Contact Details: Email: [email protected] Hotline: +49 621 60 48230 Websites: www.basf.com/bonds www.basf.com/anleihen
Juliane Beckmann Senior Specialist Capital Market Financing
Lüthje Brandt Specialist Capital Market Financing
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