Value - BASF€¦ · BASF Capital Market Story July 2013 . Key financial targets 2015 / 2020 Grow...
Transcript of Value - BASF€¦ · BASF Capital Market Story July 2013 . Key financial targets 2015 / 2020 Grow...
We add value as one company
Oil & Gas
Agricultural Solutions
Functional Materials
& Solutions
Performance Products
Chemicals
Value
Andreas Kreimeyer Member of the Board of Executive Directors Roadshow Switzerland July 4, 2013
BASF Capital Market Story July 2013
Cautionary note regarding forward-looking statements
2
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.
BASF Capital Market Story July 2013
Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities
BASF Strategy: We create chemistry__November 2011
Overview BASF
Business review
BASF strategy & growth targets
Strategic levers
BASF Capital Market Story July 2013 4
Facts & figures
Customers in more than 200 countries and in virtually all industries
No 1-3 market position in over 75% of our businesses
Unique Verbund concept for integrated production - Six Verbund sites in all major regions - Production sites in 60 countries
High-quality management team - Senior executives from 37 countries
International, interdisciplinary R&D network
BASF – The Chemical Company
BASF Capital Market Story July 2013
Chemistry as an enabler BASF has superior growth
opportunities: - sustainable innovations - investments - emerging markets
Ambitious financial targets
The #1 chemical company €72.1 billion sales, €6.6
billion EBIT bSI in 2012* #1-3 in >75% of businesses,
present in >200 countries 6 integrated Verbund sites,
production in 60 countries
10 years of strong sales and earnings growth
18% average annual total shareholder return**
16% average annual dividend increase, >3% yield in every single year***
Performance
We create chemistry for a sustainable future
Perspective
** July 2003 – June 2013 *** for 2003-2012
Ludwigshafen, Germany
Antwerp, Belgium
Nanjing, China
Kuantan, Malaysia Geismar,
USA Freeport, USA
Verbund site
Positioning
5
* restated numbers, reflecting IFRS 10/11 changes
BASF Capital Market Story July 2013
BASF today – a well-balanced portfolio Total sales 2012: €72.1 billion*
Percentage of sales 2012**
** Not depicted here: ~5% of Group sales reported as ‘Other‘ * Restated numbers, reflecting IFRS 10/11 changes, new segment structure effective Jan. 1, 2013
6
BASF – The Chemical Company Total sales 2012: €72.1 billion*
* Sales by location of customer
Sales by region*
1
2
3
4
1 Europe 58%
2 Asia Pacific 16%
3 North America 20%
4 South America, Africa, Middle East 6%
7
BASF Capital Market Story July 2013
Vertical and horizontal integration of production plants, energy and waste flows, logistics and site infrastructure
Know-how Verbund
Energy Verbund and combined heat and power plants lead to: - Savings of ∼1.5 million tons
oil equivalent p.a. - Reduction of CO2-emissions
of ~3.4 million tons p.a.
8
Unique ‘Verbund’ concept Cost savings of >€500 million p.a. in Ludwigshafen alone
BASF site Ludwigshafen, Germany Verbund Concept
8
BASF Capital Market Story July 2013
* Other industries: approximately 10-15% of total sales
10 – 15 %
5 – 10 %
< 5 %
> 15% Chemicals and plastics Energy and resources
Transportation Consumer goods
Construction Agriculture
Health and nutrition Electronics
Sales by customer industry (direct customers, in percent of sales)
9
BASF Capital Market Story July 2013
Delivering attractive shareholder returns
Dividend of €2.60 per share for 2012
2003-2012: Average annual dividend increase of 16%
Attractive dividend yield of 3.7% in 2012**
Dividend yield above 3% in any given year since 2002, total payout almost €17 billion
* Dividend yield based on share price at year-end
Dividend payments
3.7% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9%
Dividend yield* 4.6% 3.1%
2.50
0.70 0.85 1.00
1.50
1.95 1.951.70
2.20
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
10
2.60
Dividend per share (in €)
3.7%
** Based on BASF share price of €71.15 on Dec. 28, 2012
BASF Capital Market Story July 2013
Delivering consistent, long-term value
Average annual performance with dividends reinvested
0 3 6 9 12 15 18 21
Euro Stoxx 50
DAX 30
MSCI World Chemicals
+9.5%
Last 5 years July 2008 – June 2013
+14.1%
-1.6%
+4.4%
+2.5%
Last 10 years July 2003 – June 2013
BASF
+11.2%
+3.8%
+18.4%
11
BASF Capital Market Story July 2013
BASF Today The leading chemical company
Track record of outperforming global chemical production growth
Active management of portfolio towards higher returns and less cyclicality
Strong and profitable growth in emerging markets
Focus on innovative products and solutions
Benchmark in 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
12
BASF Capital Market Story July 2013
Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities
BASF Strategy: We create chemistry__November 2011
Overview BASF
Business review
BASF strategy & growth targets
Strategic levers
BASF Capital Market Story July 2013
Economic development
GDP development* Real chemical production excl. Pharma*
2012 Forecast 2013 2012 Forecast 2013
Europe -0.3% +0.3% -1.3% +0.3%
North America +2.3% +1.9% +2.3% +2.0%
Asia Pacific +4.3% +4.5% +5.6% +6.7%
South America World
+2.4%
+2.4%
+3.7%
+2.4%
+1.9%
+3.4%
+3.7%
+3.6%
*As published on April 26, 2013
14
BASF Capital Market Story July 2013
BASF with a solid start to 2013
Business performance Q1’13 vs. Q1’12 Sales €19.7 billion +5% EBITDA €2.9 billion (14%) EBIT before special items €2.2 billion +10% EBIT €2.2 billion (17%) Net income €1.4 billion (15%) Reported EPS €1.57 (15%) Adjusted EPS €1.67 +8% Operating cash flow €2.0 billion +33%
Sales development Period Volumes Prices Portfolio Currencies
Q1’13 vs. Q1’12 5% 1% 0% (1%)
15
BASF Capital Market Story July 2013
Regional Business Development Q1 2013
* Sales by location of customer
Sales by region* Q1’13 vs. Q1’12 Europe €12.2 billion +8%
thereof Germany €8.9 billion +10% North America €3.7 billion (2%) Asia Pacific €2.8 billion +4% South America, Africa, €1.0 billion (-6%)
Middle East Total €19.7 billion +5%
16
BASF Capital Market Story July 2013
2.8 2.6
3.3 3.5 3.2
2.5
3.2
2.6
1.2
2003 2004 2005 2006 2007 2008 2009** 2010 2011 2012 Q12013
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 €
3.9 3.7
17
BASF Capital Market Story July 2013
Excluding the effects of acquisitions and divestitures, we strive to increase our sales volumes in 2013
We aim to exceed the 2012 restated levels in sales and EBIT before special items
The expected increase in demand, together with our measures to improve operational excellence and raise efficiency, will contribute to this
We aim to earn a high premium on cost of capital once again in 2013
Outlook 2013
GDP: +2.4%
Industrial production: +3.4%
Chemical production: +3.6%
US$ / Euro: 1.30
Oil price (US$ / bbl): 110
Assumptions 2013
Outlook 2013 confirmed
18
BASF Capital Market Story July 2013
Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities
BASF Strategy: We create chemistry__November 2011
Overview BASF
Business review
BASF strategy & growth targets
Strategic levers
BASF Capital Market Story July 2013
Key financial targets 2015 / 2020
Grow at least 2 percentage points above chemical production
Earn a premium on cost of capital of at least €2.0 billion on average p.a.
Profitability targets Growth targets
2015
2020
Sales ~€80 billion
Sales ~€110 billion
EBITDA ~€14 billion EPS ~€7.50
EBITDA ~€22 billion
20
BASF Capital Market Story July 2013
Demographic challenges … set the stage for the future of the chemical industry
Nine billion people in 2050 but only one earth
Resources, Environment & Climate Food & Nutrition Quality of Life
Chemistry as enabler
21
BASF Capital Market Story July 2013
Business review BASF Today Trends Purpose and strategic principles Targets Strategic levers BASF Tomorrow – Board priorities
BASF Strategy: We create chemistry__November 2011
Overview BASF
Business review
BASF strategy & growth targets
Strategic levers – Portfolio development
– Market approach – Innovations for a sustainable future – Investments – Acquisitions – Operational excellence
BASF Capital Market Story July 2013
Portfolio development We expand from chemicals to chemistry
Chemistry as key enabler for functionalized materials & solutions
Deep understanding of customer value chains required
New molecules
Improved applications
Functionalized materials & solutions
1960 1970 1980 1990 2000 2010 2020
Batteries, membranes ...
23
BASF Capital Market Story July 2013
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.
Functionalized Materials & Solutions Customized Products Classical Chemicals
2020 in % of sales**
Chemical Industry First customer industries*
2010 in % of sales**
~ 40%
~ 30% ~ 70%
2001 in % of sales**
~ 50%
~ 60%
~ 50%
24
BASF Capital Market Story July 2013
Engineering plastics Electronic chemicals Catalysts Construction chemicals Water-based resins Pigments Plastic additives Oil & Gas Personal care & food Battery materials Functional crop care Omega-3 fatty acids
BASF core business
Strong partnerships
Gazprom Monsanto Petronas Shell Sinopec Total
Selected transactions 2001 − today*
Acquisitions
~ €15bn sales ~ €10bn sales**
Divestitures
Pharma Fibers Printing systems Polyolefins Polystyrene Americas Agro generics Vitamins premix Fertilizers Styrenics (transferred into
Styrolution JV on Oct. 1, 2011)
** without Styrenics
Portfolio development Towards more market driven and innovative businesses
* only closed deals have been considered 25
BASF Capital Market Story July 2013
Ongoing portfolio development
Acquisition of Pronova BioPharma
Aroma Ingredients Investment, Kuantan
Transactions with Statoil and Gazprom
Restructuring in Performance Products
26
BASF Capital Market Story July 2013
BASF sales by first customer industry*
Bubble Size: BASF divisional sales by first customer industry (2010)**
> 15 %
< 10 %
< 10 %
> 15 %
Inorganics Petro- chemicals
Construction Chemicals
Dispersions & Pigments
Catalysts Intermediates Coatings Care Chemicals
Performance Polymers
Poly- urethanes
Performance Chemicals
Paper Chemicals
Consumer goods
Transportation
Construction
Energy & Resources
Market approach Cross-divisional customer industry approach
* Excluding Oil & Gas and Other ** Excluding Agricultural Solutions, Health & Nutrition, Oil & Gas and Other
27
BASF Capital Market Story July 2013
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: ‘Smartforvision’ Technology competencies combined with customer know-how
Daimler & BASF concept car ‘Smartforvison’
28
BASF Capital Market Story July 2013
Joint development with adidas, illustrating our customer focus
New energy BOOST™ cushioning material, provides highest energy return in the running industry
Solid granular material* is ‘blown up’, turned into 1000’s of small energy capsules
With their unique cell structure, these energy capsules store and unleash energy more efficiently in every stride
New shoe is available in stores since February, 2013
Innovation with adidas: BOOST™ Technology competencies combined with customer know-how
Key facts
Photo: adidas * TPU (Thermoplastic polyurethane) 29
BASF Capital Market Story July 2013
1.4 1.4 1.5
1.6 1.7
0,0
0,5
1,0
1,5
2,0
2008 2009 2010 2011 2012
€1.7 billion R&D expenditures in 2012, further increase planned for 2013
~10,500 employees in R&D
~3,000 projects
Research Verbund: Cooperations with 600 excellent partners from universities, start-ups and industry
Sales targets 2015 and 2020: - €10 billion from innovations introduced since 2011 - €30 billion from innovations introduced since 2011
Strong commitment to R&D Innovations for a sustainable future
Key facts R&D expenditures (billion €)
Chemicals 10%
Performance Products 20%
Functional Mat. & Sol. 20%
Agricultural Solutions 25%
Oil & Gas 2%
Corporate Research 23%
30
BASF Capital Market Story July 2013
Health & Nutrition
Consumer Goods Construction Transportation Electronics Energy &
Resources Agriculture
Customer industries
Water solutions
Heat management
Enzymes Plant biotechnology
Batteries for mobility
Lightweight composites
Functional crop care
Medical Organic electronics
Growth Fields*
E-Power management
Wind energy
Chemistry as an enabler: Growth Fields Innovations for a sustainable future
Resources, Environment & Climate Food & Nutrition Quality of life
Chemistry as enabler
* including growth fields still under evaluation
Materials Systems & Nanotechnology
Raw Material Change
White Biotechnology
Techno-logy
fields
31
BASF Capital Market Story July 2013
Battery materials will play a key role in advancing electromobility of the future Focus and target Focus: Advanced cathodes and electrolytes development for lithium-ion
batteries, as well as next-generation battery systems Target: Position BASF as a leading global solution provider for battery
and cell manufacturers
Business potential 2020 Overall market size: >€20 billion globally (~€16 billion in Asia Pacific) SRM size: >€5 billion globally (~€4 billion in Asia Pacific) BASF sales potential: >€500 million globally (~€350 million in Asia Pacif.)
Activities Acquisition of Novolyte Technologies, Merck’s electrolyte business,
Ovonic, equity position in Sion Power Sites in US, Europe, China. New electrode materials plant in Elyria, Ohio New electrolytes R&D laboratory and Application Technology Center for
Battery Materials starting up in Amagasaki, Japan, 2013 Ongoing collaboration with leading universities, institutes and industry
partners, as well as battery producers and OEMs
32
BASF Capital Market Story July 2013
Future investments (€ billlion)
Thereof investments in emerging markets
Total investments
35-45%
15-20
30-40%
~15
2006 – 2010 2011 – 2015 2016 – 2020
10.9
~20%
Investments … will boost future organic growth
33
BASF Capital Market Story July 2013
Expansion Verbund site Nanjing, China*
MDI plant Chongqing, China
* Memorandum of Understanding signed
TDI plant Ludwigshafen, Germany
Investments Major projects
Expansion oil & gas activities
Aroma Ingredients Kuantan, Malaysia
Acrylic acid complex Camacari, Brazil
34
BASF Capital Market Story July 2013
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 …
35
BASF Capital Market Story July 2013
Operational excellence STEP program on track: ~€1 billion earnings contribution by 2015
Annual earnings contribution (€ million)
0
1,000
2,000
3,000
2012 2015
Former cost saving programs NEXT STEP
Targeted annual earnings contribution of ~€1 billion by end of 2015
Project timeline: 2012–2015 Program is on track Measures to optimize processes and
structures in all regions, e.g. − manufacturing, maintenance − supply chain − engineering, best-cost country sourcing
One-time costs & investments: ~€1 billion
NEXT Program
STrategic Excellence Program ‘STEP’
NEXT program successfully completed Annual earnings contribution of
~€1 billion achieved in 2012
36
BASF Capital Market Story July 2013
Appendix
Business development Q1 2013
BASF Capital Market Story July 2013
Chemicals Earnings increase due to higher margins
Intermediates 700 +4%
Monomers 1,680 +4%
Petrochemicals 2,016 (9%)
€4,396 -3%
556 601 569445
650
0
200
400
600
800
Q1 Q2 Q3 Q4 Q1
EBIT before special items (million €)
2013 2012
Q1’13 segment sales (million €) vs. Q1’12
Sales development Period Volumes Prices Portfolio Currencies
Q1’13 vs. Q1’12 (2%) 1% (1%) (1%)
38
BASF Capital Market Story July 2013
Performance Products Stable volumes but lower earnings
Performance Chemicals
891 0%
Care Chemicals 1,275 0%
€3,880-2%
Paper Chemicals 362 (8%)
Q1’13 segment sales (million €) vs. Q1’12
Nutrition & Health 493 +4% Dispersions
& Pigments 859
(7%)
452 442
344
183
379
0
200
400
600
Q1 Q2 Q3 Q4 Q1
EBIT before special items (million €)
2013 2012
Sales development Period Volumes Prices Portfolio Currencies
Q1’13 vs. Q1’12 0% (2%) 1% (1%)
39
BASF Capital Market Story July 2013
Functional Materials & Solutions Increased demand in Performance Materials
Catalysts 1,453 (1%)
Construction Chemicals
458 (9%)
Coatings 698
(2%)
€4,181+0%
Q1’13 segment sales (million €) vs. Q1’12
257216 231 228 239
0
50
100
150
200
250
300
Q1 Q2 Q3 Q4 Q1
EBIT before special items (million €)
2013 2012
Sales development Period Volumes Prices Portfolio Currencies
Q1’13 vs. Q1’12 2% 0% 0% (2%)
Performance Materials 1,572 +6%
40
BASF Capital Market Story July 2013
Agricultural Solutions Excellent start into the year, record sales and earnings
Q1’13 segment sales (million €) vs. Q1’12 EBIT before special items (million €)
2013 2012
0
200
400
Q1 Q1
2013 2012
0
500
1.000
1.500
Q1 Q1
1,556 498 419 1,327
Sales development Period Volumes Prices Portfolio Currencies
Q1’13 vs. Q1’12 13% 1% 4% (1%)
41
BASF Capital Market Story July 2013
Oil & Gas Sales growth due to higher production
Exploration & Production
789 +14%
Natural Gas Trading 3,871 +21% €4,660
+20%
Q1’13 segment sales (million €) vs. Q1’12 EBIT bSI/Net income (million €)
201415
162397
0
200
400
600
800
Q1/2012 Net Income Q1/2013 Net Income
Natural Gas Trading
Exploration & Production
Net income
640
Sales development Period Volumes Prices/Currencies Portfolio
Q1’13 vs. Q1’12 19% 1% 0%
439 468
630
42
BASF Capital Market Story July 2013
Review of “Other”
Million € Q1’13 Q1’12 Sales 1,065 976 EBIT before special items (182) (314) thereof Corporate research Group corporate costs Currency results, hedges and other valuation effects Styrenics, fertilizers, other businesses
(97) (56)
56
59
(97) (58)
(206)
145
Special items (28) 578
EBIT (210) 264
43
BASF Capital Market Story July 2013
Balance sheet remains strong
Balance sheet March 31, 2013 vs. Dec. 31, 2012 (billion €)
Liquid funds
Accounts receivable
Long-term assets
27.7
13.3
23.2
35.3
9.5
1.6
Other liabilities
Financial debt
Stockholders’ equity
Dec 31 2012
Dec 31 2012
March 31 2013
March 31 2013
62.7
25.6
12.8
22.3
Inventories
Other assets
9.6
3.4
62.7
Highlights March 31, 2013 Long term assets increased
mainly due to consolidation of former Pronova BioPharma business
Short term assets up due to increase in accounts receivable
Increase in financial debt due to issuance of long-term bonds
Net debt: €10.9 billion Equity ratio: 41%
36.5
11.1
2.4
9.9
3.7
66.7
3.1
66.7
Disposal group
2.5
Disposal group
3.3 2.0
44
BASF Capital Market Story July 2013
Appendix
Impact of IFRS 10 & 11 changes on medium- and long-term sales & earnings targets of BASF Group
BASF Capital Market Story July 2013
Key financial targets 2015 / 2020 Impact of new IFRS 10/11 regulations
Sales (billion €)
* communicated during ‚We Create Chemistry‘ Investor Day on November 29, 2011
∆ = IFRS 10/11 impact
EBITDA (billion €)
~79 ~85
~115
~72 ~80
~110
0
20
40
60
80
100
120
∆ -7 ∆ -5
∆ -5
2012 2012 restated
2015* 2015 adjusted
2020* 2020 adjusted
~12.5
~15
~23
~10
~14
~22
0
5
10
15
20
25
2012 2012 restated
2015* 2015 adjusted
2020* 2020 adjusted
∆ -2.5
∆ -1
∆ -1 ∆ = IFRS 10/11 impact
The 2015 EPS target of €7.50 is unchanged
46
BASF Capital Market Story July 2013
Appendix
Additional information from Investor Day Asia Pacific
(June 5-6, 2013)
BASF Capital Market Story July 2013
Innovation ~3,500 R&D staff
Market €25 billion sales
Portfolio >€2 billion sales from
new biz and acquisitions
People ~9,000 new jobs
Investment 75% OMP ratio
Excellence €1 billion cost savings
We create chemistry in Asia Pacific: 2020 targets
48
BASF Capital Market Story July 2013
2020 2012 restated
New Business & Acquisitions
Organic Growth
Sales contributions € billion
Asia Pacific Organic growth drives top line growth
2012 restated = adjusted to changes in IFRS 10 & 11
New Sales Target: €25 billion
€12.5 billion
CAGR ~9%
>€2 billion >€10 billion
49
BASF Capital Market Story July 2013
Address specific R&D areas for BASF in Asia Pacific
Electronics Agro
Catalysts Polymers & Materials
Mining Water
50
BASF Capital Market Story July 2013
Expand research capabilities in Asia Pacific with new R&D centers
R&D Center Korea (2013) Focus: electronics
R&D Center Singapore (2007) Focus: water, membrane, oilfield
R&D Center Australia (2012) Focus: mining
Innovation Campus Asia Pacific, Shanghai (2012) Focus: polymers & materials
Innovation Campus Asia Pacific, India (in planning) Focus: life science, agro
R&D Center Japan (2013) Focus: battery materials
51
BASF Capital Market Story July 2013
Appendix
Additional information on transactions in Oil&Gas
BASF Capital Market Story July 2013
Wintershall and Gazprom agree on asset swap relating to the Blocks IV and V in the Achimov formation of the Urengoi natural gas and condensate field
Wintershall to receive: − 25% plus one share in the Blocks IV and V in the Achimov formation
with the option to increase the share in the two deposits.
Gazprom to receive: − 50% share in Wintershall Noordzee, which is active in the exploration
and production of oil and gas in the southern North Sea (Netherlands, UK, Denmark)
− 50% shares (thus taking over 100%) in the gas trading companies WINGAS, WIEH and WIEE, including shares in the natural gas storage facilities in Rehden and Jemgum, Germany, as well as Haidach, Austria, and the gas storage operator astora
Closing expected by the end of 2013; effective date April 1, 2013. Transaction is subject to approval by the relevant authorities
Ownership of gas transportation business unaffected
Asset swap with Gazprom
53
BASF Capital Market Story July 2013
Asset swap with Gazprom Strategic rationale
BASF invests in markets/products with unique selling
propositions - especially by applying advanced technologies
The Natural Gas Trading business became a commodity market with increasing pressure on margins and limited possibilities to add value
Focuses BASF’s Oil & Gas business on highly profitable upstream exploration and production activities and delivering medium-term earnings uplift
Provides access to attractive, condensate-rich Achimov assets
Significantly increases Wintershall’s resource base
Further strengthens the strategic partnership with Gazprom and Wintershall’s focus on Russia as a core region for Oil & Gas
54
BASF Capital Market Story July 2013
Key field data: − Target field depth: ~3,600 meters − Total resources Blocks IV and V: 2.4 billion boe
− 274 billion m³* of natural gas − 74 million tons of condensate
BASF share (600 million boe) equivalent to approx. 20% of total BASF hydrocarbon resource base as at Dec 31, 2012
Plateau production potential of >8 billion m³* p.a. in total for the two additional blocks
Synergies through regional and technological expertise of both partners
Start of production is planned for 2016
* Russian Standard Conditions (RSC)
Asset swap with Gazprom Achimov Blocks IV and V – Next step for further growth
55
BASF Capital Market Story July 2013
Transaction with Statoil
Wintershall enters into a cooperation with Statoil − Memorandum of Understanding signed in October 2012
Wintershall substantially expands production and reserves of oil and gas in the North Sea
Wintershall acquires equity in three producing fields from Statoil − Brage (32.7%), Gjøa (15%) and Vega (30%) − production of about 36,000 boepd − 100 million boe 2P reserves net to Wintershall (50% liquids; 50% gas)
Statoil receives − 15% share in the development project Edvard Grieg (Wintershall share today 30%) − $1.35 billion financial compensation. Plus up to $100 million contingent payment in case of successful future
development of Vega, depending on additional volumes
Closing expected by mid 2013; effective as of 1st January 2013
Joint research into innovative techniques for EOR and possible application of the biopolymer Schizophyllan, developed by Wintershall and BASF
Joint research into unconventional hydrocarbon resources (shale gas/oil) starting with Statoil’s 49% farm-in to the Wintershall “Rheinland” and “Ruhr” concessions in Germany. Intention to expand these joint activities in other countries
56
BASF Capital Market Story July 2013
Transaction with Statoil Strategic rationale
Strengthen Wintershall’s position in Norway by accessing three producing oil and gas fields
Accelerate near-term oil production of Wintershall Norge from currently around 3,000 boepd to ~40,000 boepd
By taking over operatorship of Brage field, Wintershall gets first own-operated producing field in Norway
Asset swap significantly increases Wintershall’s operating cashflow and EBIT in Norway
Wintershall reduces near-term investment requirements through divestment of 15% stake in Edvard Grieg field
Statoil’s and Wintershall’s combined knowledge on EOR and unconventional hydrocarbons could lead to new business opportunities
57
BASF Capital Market Story July 2013
Transaction with Statoil Impact on portfolio of major fields
Catcher 20% share Premier*
Cladhan 33.5% share Sterling*
Edvard Grieg 30% share -15% out Lundin*
Astero 25% share Statoil*
Knarr 20% share BG*
Beta 15% share Suncore Energy*
Crathes/ Scolty 50% share EnQuest*
Maria 50% share Wintershall*
Skarfjell 35% share Wintershall*
Grosbeak 45% share Wintershall*
Vega 30% share Statoil*
Brage 32.7% share Wintershall to be operator
Gjøa 15% share GDF Suez*
Bergen
Assets In
Asset Out
Main Existing Assets
Broom 29% share EnQuest*
* Operator 58
BASF Capital Market Story July 2013
Appendix
Additional information on acquisition of Becker Underwood (closing in November 2012)
BASF Capital Market Story July 2013
Acquisition of Becker Underwood Transaction - at a glance
BASF acquires US-based Becker Underwood (BU) for a purchase price of $1.02 billion (€785 million) from Norwest Equity Partners. 100% cash consideration, no financing conditions.
BU is a global market leader in biological seed treatment and biological foliar crop protection. BU sales 2012E* $240 million (€185 million)
Closing is expected by year-end 2012, pending approval by the relevant merger control authorities.
The transaction strengthens BASF’s position as solution provider in Agro.
BU adds further momentum to BASF’s strongly growing Seed Solutions business and it complements BASF’s portfolio with biological crop protection solutions. BASF’s strong sales channels ensure broad market reach.
BASF’s Seed Solutions business will benefit from BU’s R&D platform and expertise.
* Becker-Underwood’s fiscal year ends September 30
1. Cornerstones
2. Rationale
60
BASF Capital Market Story July 2013
1.
One of the strongest growing, most attractive markets in Crop Protection.
BASF’s Seed Solutions business has outgrown the market. Sales 2011: €248 million. 2007-2011: +24 % CAGR, average market growth 2007-2011: +11 % CAGR*
The transaction will further strengthen BASF’s Seed Solutions business. BASF will be able to provide innovative solutions covering seed protection as well as offerings beyond (e.g. inoculants or polymer coatings). Thus BASF will establish multiple touch points with key seed companies.
2.
Biological crop protection compounds become more important, especially in high value crops, such as fruits or vegetables.
BU‘s portfolio of biological fungicides and insecticides complements BASF‘s offering of chemical crop protection products. BASF will develop innovative combined solutions of chemical and biological crop protection.
Acquisition of Becker Underwood A good fit to BASF
* BASF estimate
Seed Treatment
Biological Crop Protection
61
BASF Capital Market Story July 2013
Appendix
Additional information on acquisition of Pronova Biopharma (closing in January 2013)
BASF Capital Market Story July 2013
Pioneer and leading company in highly concentrated omega-3 fatty acids.
Sales of €214 million and an EBITDA of ~€90 million in 2011.
Sales in more than 50 countries with one blockbuster product, mainly sold as Omacor® by Abbott in Europe and as Lovaza™ by GSK in the US.
Excellent cost position due to two state of the art production sites in Norway and Denmark (total capacity: 2,500 tons p.a.).
Strong R&D know-how to develop the next generation of omega-3 solutions – a platform for pharmaceuticals, dietary supplements and clinical nutrition.
Pronova ̶ at a glance
63
BASF Capital Market Story July 2013
Acquisition of Pronova Biopharma ASA completed by January 31st 2013
BASF now market leader in the profitable, growing markets of high concentrated fatty acids
Pronova completes our Verbund concept for fatty acids consisting of former Cognis and Equateq Sites: - Cost-effective use of side streams and intermediates between sites - Strong technology and cost position - Market access to both Pharma and Human Nutrition customers
Untapped market space for higher concentrated omega-3-fatty acids in the attractive Dietary Supplement segment
Pharma
Human Nutrition
Lampertheim
Sandefjord Callanish
Ballerup
Lysaker
Kalundborg
Brattvaag
64
BASF Capital Market Story July 2013 65