We create chemistry for a sustainable future...EBIT after cost of capital Considerableincrease...

We create chemistry for a sustainable futureSanjeev Gandhi Member of the Board of Executive Directors, BASF S.E.Hong Kong January 2018

January 20182 | BASF Capital Market Story

Cautionary note regarding forward-looking statements

This presentation contains forward-looking statements. These forward-looking statementsare based on current estimates and projections of the Board of Executive Directors and oncurrently available information. These forward-looking statements are not guarantees of thefuture developments and results outlined therein. Rather, they depend on a number offactors, involve various risks and uncertainties, and are based on assumptions that may notprove to be accurate. Such risk factors particularly include those discussed on pages 111 to118 of the BASF Report 2016. The BASF Report is available online at basf.com/report.BASF does not assume any obligation to update the forward-looking statements containedin this presentation.


Agenda

At a glance1

Strategic levers2

Asia Pacific3

Segments4


BASF shares – an attractive investment

Growth above chemical industry average – driven by innovative and sustainable products and solutions

Unique Verbund concept – competitive advantage based on integrated sites, operational excellence and best-in-class technologies

Broad and resilient portfolio – with global market access and strong customer relationships

Earnings growth and strong cash flow generation – based on operational and financial strength

Long-term value creation with progressive dividend policy – grow or at least maintain dividend at the previous year’s level


Chemicals – a growth industryGlobal annual growth rate of ~3.6%*

…more food needed by 2050

…more primary energy consumption by 2050

…of the world population will live in cities by 2050

Agriculture Health & Nutrition

Energy & Resources

TransportationConstruction & Housing

Consumer Goods

…people by 2050

Electrical & Electronics

Chemistry as enabler to meet current and future needs

70% 50%~10 bn 30%

* Forecast average annual real change 2017 – 2019; BASF Report 2016, p. 121


Broad and resilient portfolio2016: Sales of €57.6 billion; EBITDA of €10.5 billion

* Not depicted here: ‘Other’ 3% of Group sales and EBITDA €(1.0) billion

Percentage of sales 2016*


Global market access through regional presence

Kuantan

Hong KongNanjing

Freeport

Florham Park

Geismar

LudwigshafenAntwerp

São Paulo

Regional centersSelected sitesVerbund sitesSelected research and development sites

Asia Pacific

South America, Africa, Middle East

North AmericaSales €14,042 millionEBIT €1,113 millionEmployees 17,583

Sales €12,165 millionEBIT €1,098 millionEmployees 18,156

Sales €5,304 millionEBIT €432 millionEmployees 7,307

2016: Sales by location of customer; EBIT by location of company

EuropeSales €26,039 millionEBIT €3,632 millionEmployees 70,784


Verbund – unique competitive advantageActively managed in line with market requirements

Annual cost savings of more than €1 billion through integrated production Verbund concept supports sustainability, reduces waste and avoids CO2 emissions of 6 million tons p.a.

Energy savings >€300 million p.a.

Logistics savings >€600 million p.a.

Infrastructure savings>€100 million p.a.

People, Customers, Technology, Production


BASF Group Q3 2017Considerably higher sales and earnings

Financial figures Q3 2017 Q3 2016 Change€ € %

Sales 15.3 billion 14.0 billion 9EBITDA before special items 2.8 billion 2.5 billion 12EBITDA 3.0 billion 2.4 billion 23EBIT before special items 1.8 billion 1.5 billion 16EBIT 2.0 billion 1.5 billion 34Net income 1.3 billion 0.9 billion 50Reported EPS 1.45 0.97 49Adjusted EPS 1.40 1.10 27Operating cash flow 3.8 billion 2.5 billion 52

Sales development Volumes Prices Portfolio CurrenciesQ3 2017 vs. Q3 2016 4% 7% 1% (3%)


3.7

4.7 4.6

7.0 7.2

8.4 8.9

7.76.5

9.9

11.2

10.0 10.411.0 10.6 10.5

9.7

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1-Q32017

0.7

2.2 2.2

4.5 4.85.5

6.0

4.6

2.8

6.7

8.06.7 7.2

7.6

6.2 6.3 6.6

Stepwise increase of earnings level

EBIT EBITDA Avg. EBITDA level in depicted years

EBIT and EBITDA*billion €, 2001–2016 CAGR

EBITDA

7%CAGREBIT16%

9.7

* 2010, 2011 indicative, adjusted for IFRS 10 & 11; 2001–2009 as reported, without non-compensable foreign income taxes on oil production


2.3 2.3

4.9 4.65.3

5.9 5.85.0

5.76.5

7.16.6

8.1

7.0

9.4

7.7 7.6

0

2

4

6

8

10

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1-Q32017

Free cash flowOperating cash flow

-0.5 -0.1

2.8 2.63.3 3.5 3.2

2.53.2

3.9 3.7

2.63.2

1.7

3.6 3.6

5.0

Strong cash flow development

Operating cash flow and free cash flowbillion €, 2001–2016


Attractive dividendWe want to grow or at least maintain dividend at the previous year’s level

* Dividend yield based on share price at year-end

0.65 0.70 0.700.85

1.00

1.50

1.95 1.951.70

2.202.50 2.60 2.70 2.80 2.90

0

1

2

3

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Yield* 3.1% 3.9% 3.1% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9% 3.7% 4.6% 3.7% 3.5% 4.0% 4.1% 3.4%

3.00

Dividend per share€


Average annual performance with dividends reinvested

0 2 4 6 8 10 12 14

+4.8%

+6.8%

+0.8%

+10.3%

Last 10 years January 2008 – December 2017

0 2 4 6 8 10 12 14

Last 3 years January 2015 – December 2017

+13.4%

+6.4%

+9.6%

+11.0%

Delivering consistent, long-term valueCurrent market capitalization: €84 billion*

* As of December 31, 2017

Euro Stoxx 50

DAX 30

MSCI World Chemicals

BASF


Sales growth – slightly faster than global chemical production

Deliver attractive returns – earn a significant premium on cost of capital

EBITDA growth – well above global chemical production

Remain a strong cash provider – continuously generate high levels of free cash flow

Progressive dividend policy – grow or at least maintain dividend at previous year’s level

Financial targets for the coming years


Innovations for a sustainable future

Investments in organic growth

M&A opportunities and portfolio pruning measures

Operational excellence and cost discipline

We aim to grow sales and earnings faster than global chemical productionin the coming years, driven by

Our priorities


Outlook 2017 for BASF Group

* Excluding pharma

Outlook 2017 Now PreviousSales Considerable increase Considerable increase

EBIT before special items and EBIT Considerable increase Considerable increase

EBIT after cost of capital Considerable increase Slight increase

Assumptions 2017 Now PreviousGDP growth +2.8% +2.5%

Growth in industrial production +3.1% +2.5%

Growth in chemical production* +3.4% +3.4%

Exchange rate US$1.10 per euro US$1.10 per euro

Oil price (Brent) US$50 per barrel US$50 per barrel


Agenda

At a glance1

Strategic levers2► Portfolio development► Investments► Innovation► Sustainability► Operational excellence


Continuous global portfolio development –maintaining a balanced portfolio

target(in % of sales*)~50% ~50%

Divestment of businesses,e.g., due to loss of differentiation

Divestment of businesses,

e.g., due to lower market attractiveness

Commoditization leads to restructuring

Growth fields

Innovation pipeline

Acquisitions

Specialties and solutions Differentiated commodities

Attractive markets Differentiation by process

technologies and integration

Attractive markets Differentiation by customer

proximity and innovations

* Excluding Oil & Gas sales


Portfolio development towards more market-driven and innovative businesses

Strong Partnerships Gazprom PETRONAS Sinopec Total

Selected transactions 2010−today

BASFcore business

~€5.5 billion salesin emerging and innovation-driven businesses

Acquisitions Functional crop care Personal care & food Omega-3 fatty acids Enzymes Battery materials Specialty plastics Selected assets in Oil & Gas Refinish coatings Surface treatment

Divestitures

~€21.0 billion salesin businesses with limited fit and differentiation potential

Styrenics Fertilizers Selected assets in Oil & Gas Natural gas trading & storage Custom synthesis business Textile chemicals Polyolefin catalysts Industrial coatings Leather chemicals


Clear acquisition criteria

We want to acquire businesses which …

provide a return on investment above the WACC

are EPS accretive by year three at the latest

We want to acquire businesses which …

generate profitable growth above the industry average

are innovation-driven

offer a special value proposition to customers

reduce earnings cyclicality

Acquisitioncriteria

Strategic acquisition criteria Financial acquisition criteria


Complementary acquisitions to strengthen the portfolio of BASF Group

Solvayʼs integrated global polyamide business

Purchase price: ~€1.6 billion Sales 2016: ~€1.3 billion EBITDA 2016: ~€200 million Market CAGR: >3.5% Closing expected in Q3 2018

Significant parts of Bayerʼs seed and non-selective herbicide businesses

Purchase price: ~€5.9 billion Sales 2016: ~€1.3 billion EBITDA 2016: ~€385 million Sales CAGR: ~15% (2014–2016) Closing expected in Q1 2018

ChemetallSurface treatment business

Purchase price: ~US$3.1 billion Sales 2015: ~US$845 million EBITDA 2015: ~US$200 million Sales CAGR: ~7% (2007–2015) Closed in December 2016


BASF signed agreement to acquire significant parts of Bayer’s seed and non-selective herbicide businesses

Fully enabled seed and trait businesses Attractive and sizeable seed portfolio for canola/oilseed

rape, soybean and cotton in the Americas and Europe

Excellent trait research for canola, soybean and cotton

LibertyLink® technology for herbicide tolerance and related trademarks

Complementary crop protection business Global glufosinate-ammonium-based non-selective herbicide

business

State-of-the-art production facilities in the U.S., Canada and Germany

January 201823 | BASF Capital Market Story * Application examples

Broader global scope Enhanced presence, especially in Asia and South America Stronger capabilities to serve global and regional

customers

Wider range of engineering plastics Technyl®, Ultramid®, Ultradur®, Ultraform®, Ultracom®

Broadening technical skills and innovation capabilities* Heat-resistant and high-voltage electrical and electronic parts Tailor-made solutions for components in automotive Mechanically strong and thermally stable consumer goods

Improved reliability of supply Backward integration into all key raw materials for polyamide 6.6 Fully integrated engineering plastics value chain

BASF to acquire Solvay’s global polyamide business


Combined business with pro-forma 2016 sales of €4.3 billion, EBITDA of €2.2 billion and net income of €326 million

Creation of one of the largest independent European exploration and production companies with significant growth potential, optimization of the portfolio footprint of the combined business and realization of synergies

BASF to initially hold 67% and LetterOne 33% in Wintershall DEA; value of Wintershall’s gas transportation business to be reflected through the issuanceof a mandatory convertible bond to BASF*

In the coming months, BASF and LetterOne will conduct a confirmatory due diligence and negotiate definitive transaction agreements; closing could be expected in the second half of 2018, subject to customary regulatory approvals

Initial Public Offering (IPO) envisaged in the medium term

* No later than 36 months after closing, this bond will be converted into new shares in Wintershall DEA,resulting in a higher shareholding ratio for BASF

BASF and LetterOne sign letter of intent to merge their oil and gas subsidiaries Wintershall and DEA


Investments in organic growthInvestments of ~€3.9 billion planned for 2017

Performance Products

21%Oil & Gas23% €19.0 billion

Capex budget 2017–2021 by segment

Other13%

Chemicals24%

Capex budget 2017–2021 by region

Asia Pacific16%

North America22%

Agricultural Solutions4%

Other**3%

Functional Materials& Solutions

15%

€19.0 billion

South America*10%

* Including Africa and Middle East ** Alternative sites currently being investigated

Europe 49%

Oil & Gas Europe


Selected investments in Asia Pacificwith start-up in 2017–2018

Total investments >€500 million

Second coatingsplant within 3 years

Capacity: 50,000 metric tons

BASF’s first facility in Asia Pacific to produce process catalysts

New site to produce light-duty and motor-cycle emissions catalysts

Aroma ingredients complex

Kuantan, Malaysia

Automotive coatings

Caojing, China

Highly reactive polyisobutene

Kuantan, Malaysia

Chemical catalysts

Caojing, China

Mobile emissions catalysts

Rayong, Thailand


Oil & Gas2%

Innovation will drive future growth


Chemicals10%

Performance Products20%

Corporate Research21%

Key facts

€1.86 billion R&D expenditures in 2016

R&D expense to sales ratio ~3%

~10,000 employees in R&D

~3,000 projects

~850 new patents in 2016

Research Verbund: Cooperations with more than 600 excellent partners from universities, startups and industry

In 2016, sales of >€10 billion from innovations on the market since 2011

R&D expenditures 2016

€1.86 billion

Functional Materials & Solutions

21%


Innovation in Asia Pacific – for Asia and the world

Innovation Campus Asia Pacific, Mumbai Focus: crop protection, process engineering

R&D Center AustraliaFocus: mining

R&D Center Japan Focus: electronics,

battery materials

R&D Center SouthKoreaFocus: electronics

Innovation Campus Asia Pacific Phase II, Shanghai Focus: polymers & materials, process engineering, formulations

Advanced Materials & Systems Research

global HQ in Shanghai

Innovation Campus Asia Pacific Phase I, Shanghai Focus: polymers & materials

20142012 2013 20172015

* As of December 31, 2016

At a glance Two regional Innovation Campuses >1,100 R&D personnel*


Sustainable Solution Steering®

Increase the share of Accelerators from 23% in 2014 to 28% by 2020

4.2% 0.3%

>60,000 product applications analyzed

27.2% Accelerators

– Strong growth in their markets

– deliver margins above the average

– represent majority of BASF’s R&D pipeline

68.3% Performers

<1% Challenged products

27.2%

68.3%

Substantial sustainability contribution in the value chain

Meets basic sustainability standards on the market

Specific sustainability issues which are being actively addressed

Significant sustainability concern,action plan developed

SustainableSolutionSteering

Percentage of sales 2016


BASF products and solutions in everyday lifeInnovations for a sustainable future

Luquafleece®

Tinosorb®

Infinergy®

Nutrilan®

Sokalan®

Cellasto®

Coatings

Tinuvin®

Superabsorbents

Ultramid®

Trilon® M

ecoflex® / ecovio®

Omega-3


Carbon efficiencyResponsible use of raw materials by the chemical industry

BASF uses raw materials responsibly: ~80% of carbon converted to products, ~20% needed for processes*

Continuous efficiency improvements

22 million tons CO2 emissions by BASF in 2016 compared to 10–30 million tons p.a. for one coal-fired power plant

Chemical industry: only ~10% of global consumption of fossil resources**

Growing world population needs access to energy, housing, healthcare and food

Consumption of resources has to be reduced in order to limit global warming to <2°C

Chemistry as enabler for low-carbon technologies (e.g., lightweight parts, battery materials, insulation, etc.)

* BASF carbon mass balance calculation (2016, non-audited) ** IEA 2015


0

0,.001

Earnings contribution 2016 2017–2018 Total

DrivE program

Targeted annual earnings contribution of€1 billion from end of 2018 on

Optimization of processes and structures in all regions, including

– manufacturing

– incremental capacities

– productivity increase

Project timeline: 2016–2018

€350 million

€650 million

Goal €1 billion

Annual earnings contribution DrivEmillion €

1,000

Operational excellenceDrivE with ~€1 billion targeted earnings contribution


Strong track record in operational excellence

* Excl. companies with major IFRS 10/11 restatements, i.e. BASF YPC Nanjing, Libya onshore,other Oil & Gas and Catalysts companies

50

100

150

200

250

300

350

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EBITDA

Sales

Fixed Costs

CAGREBITDA

8%

CAGRSales 4%

BASF Group* 2001–2016 indexed; CAGR 2001–2016

3%

CAGRFixed Costs


Digitalization will support BASF’s growth and efficiency

Digital Business Models

Smart Innovation

Smart Manu-facturing

Smart Supply Chain

Growth Digital business models Customer connectivity Digitalization in R&D

New revenue streams Increased supply share Higher innovation output

Predictive maintenance Augmented reality in production Smart supply chain

Increased capacity Increased work efficiency Reduced working capital

Efficiency


Agenda

At a glance1

Strategic levers2

Asia Pacific3


Asia and China continue to dominate global chemical productionReal chemical production (excl. pharma)(trillion US$)

2012CAGR3.5%2012 2020

World

CAGR5.4%1.6 2.5

Asia Pacific

2020

Source: BASF

3.3 4.3

58%

19%

15%

8%

12%

66%

5%

9%

7%

1%8%

72%

5%

7%

7%

1%

Greater China

South KoreaJapan

South Asia

ANZ

South East AsiaAsia Pacific

OthersEurope

North America

50%

23%

18%9%


BASF in Asia Pacific 2016

Nanjing

Hong Kong

Kuala Lumpur

Kuantan

* Only selected sites and offices are depicted in this chart. Site and office numbers refer to companies of significant size where BASF holds a stake greater than 50%.

** As of December 31, 2016.

*** Sales by location of customer.

BASF is present in 17 countries

Customers from 38 markets

~100 production sites*

>120 sales offices*

18,156 employees**

~€12.2 billion sales***

~€1.1 billion EBITRegional centerVerbund sitesSelected sitesR&D/Technical centersShared Services Center


BASF’s performance in Asia Pacific

0.0

0.5

1.0

1.5

2.0

2012 2013 2014 2015 2016 Q1-3 2017

1.6

0

5

10

15

2012 2013 2014 2015 2016 Q1-3 2017

12.5 12.4 12.3 12.3

EBIT (billion €)

0.9 0.8 0.70.4

Sales* (billion €)

* By location of customer

1.1

10.612.2

Developments in 2017 Considerable sales growth across all

sub-regions and business segments, driven by higher prices and volumes

Significant increase in earnings in Chemicals and Functional Materials & Solutions; higher earnings in Agricultural Solutions

Underlying demand across most sectors remains strong



BASF in Asia Pacific: Balanced portfolio

Sales* by segment in 2016(billion €)

Sales* by sub-region in 2016(billion €)

Functional Materials & Solutions37%

Performance Products 29%

Other3%

Chemicals27%

€12.2 billion

South East Asia15%

Greater China49%

Australia, New Zealand3%

South Asia11%

Japan13%

South Korea9%

€12.2 billion

* Sales to third parties by location of customer


Balanced asset base in Asia Pacific: Investments for profitable growth

Planned investments 2017–2021: ~€3 billion (16% of BASF Group)

Increasing focus on investments where BASF: − is technologically leading − has a competitive advantage − expects strong profitable market

growth

Target remains: ~75% own manufactured products by 2020(2016: ~59%)

** Without China

Selected major capex projects*

Care chemicals Polyurethane specialties

Specialty plasticsEngineering plasticsPolymer dispersions2-Ethylhexanoic acid

AminesSurfactants

Acrylic acid & SAPResins

Specialty plasticsCrop protection products

MDI (Chongqing)Innovation Campus (Shanghai)

PolyamidesNeopentylglycol

IsononanolCoating resins

Automotive coatingsButanediol/PolyTHF®

Specialty amines Ethylene oxide

Polyvinylpyrrolidone

Startup 2012–2016

Startup planned for 2017–2021

China

Asia Pacific**

Process catalystsEmollients and waxesMDI (Caojing)Automotive coatingsPlastic additives

Aroma chemicalsAutomotive catalystsHighly reactive polyisobuteneInnovation Campus (Mumbai)Automotive coatingsSpecialty plasticsPlastic additives

* Investments in property, plant and equipment (excluding acquisitions)


Agenda

At a glance1

Strategic levers2

Asia Pacific3

Segments4


ChemicalsHigher earnings driven by increased margins and higher volumes

Sales Q3 2017 vs. Q3 2016*million €

* Effective January 1, 2017, the Monomers and Dispersions & Pigments divisions’ activities for the electronics industry were combined into the global Electronic Materials business unit and allocated to the Dispersions & Pigments division in the Performance Products segment. The 2016 figures have been adjusted accordingly.

EBIT before special items* million €

Intermediates728+10%

Monomers1,770+41%

Petrochemicals1,525+16%

€4,023+25%

488629

9581,120 1,102

0

400

800

1,200

Q3 Q4 Q1 Q2 Q320172016



Performance ProductsEBIT before special items declined, EBIT increased due to special incomefrom transfer of leather chemicals business

Sales Q3 2017 vs. Q3 2016*million €

EBIT before special items* million €

Sales development Volumes Prices Portfolio CurrenciesQ3 2017 vs. Q3 2016 6% 0% (1%) (3%)

Performance Chemicals980+4%

Nutrition & Health451(11%)

Care Chemicals1,213+3%

Dispersions & Pigments1,339+3% 473

237

515405 385

0

200

400

600

800

Q3 Q4 Q1 Q2 Q320172016

* Effective January 1, 2017, the Monomers and Dispersions & Pigments divisions’ activities for the electronics industry were combined into the global Electronic Materials business unit and allocated to the Dispersions & Pigments division in the Performance Products segment. The 2016 figures have been adjusted accordingly.

€3,983+2%


Functional Materials & Solutions Sales increased on good demand from automotive and construction, earnings declined

Sales Q3 2017 vs. Q3 2016million €

EBIT before special items million €


20172016

Coatings951+20%

Catalysts1,506 (3%)

ConstructionChemicals

618+2%

Performance Materials1,900+11%

€4,975+7%

497 458531

422 397

0

200

400

600

800

Q3 Q4 Q1 Q2 Q3


Agricultural SolutionsEarnings decreased, primarily due to the difficult market situation in Brazil


EBIT before special items million €

Sales development Volumes Prices Portfolio CurrenciesQ3 2017 vs. Q3 2016 5% (8%) 0% (3%)

97

21

0

100

200

300

Q3 2016 Q3 2017

(78%)

1,049 987

0

1,000

2,000

Q3 2016 Q3 2017

(6%)


618739

0

500

1,000

Q3 2016 Q3 2017

Oil & GasHigher oil and gas prices and volumes, EBIT before special items lower due to one-time earnings effects in the prior-year quarter


EBIT before special items, net income million €

Sales development Volumes Prices/Currencies PortfolioQ3 2017 vs. Q3 2016 9% 11% 0%

+20%194 180

33

139

0

100

200

300

Q3 2016 Q3 2017

EBIT before special items Net income


Review of “Other” Q3 2017

Financial figures Q3 2017 Q3 2016million € million €

Sales 548 538

EBIT before special items (325) (233)

Thereof Costs of corporate research (93) (77)

Costs of corporate headquarters (57) (54)

Foreign currency results, hedging and other measurement effects (116) (101)

Other businesses 13 15

Special items (5) (23)

EBIT (330) (256)


Cash flow development Q1 – Q3 2017

Cash flow development Q1 – Q3 2017 Q1 – Q3 2016million € million €

Cash provided by operating activities 7,597 5,840Thereof Changes in net working capital 94 (393)

Miscellaneous items (190) (172)

Cash used in investing activities (3,413) (2,776)Thereof Payments made for tangible / intangible assets (2,606) (2,915)

Acquisitions / divestitures (44) 212

Cash used in financing activities (1,546) (1,898)Thereof Changes in financial liabilities 1,276 837

Dividends (2,841) (2,753)

Free cash flow 4,991 2,925


Balance sheet remains strong

Balance sheet September 30, 2017 vs. December 31, 2016billion €

Total assets decreased slightly to €76.0 billion

Provisions for pension obligations decreased by €1.4 billion to €6.8 billion

Net debt at €12.3 billion(December 31, 2016: €14.4 billion)

Equity ratio at 43.9% (December 31, 2016: 42.6%)

* Including marketable securities

Liquid funds*

Accountsreceivable

Long-termassets

Inventories

Other assets

Otherliabilities

Financialdebt

Equity

27.6 26.5

16.3 16.2

32.6 33.3

Dec 31, 2016 Sep 30, 20171.9 3.93.0 3.911.0

10.6

10.0 10.0

50.6 47.6

Dec 31, 2016 Sep 30, 2017

76.5 76.0 76.5 76.0

We create chemistry for a sustainable future...EBIT after cost of capital Considerableincrease...

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