We create chemistry for a sustainable futureSanjeev Gandhi Member of the Board of Executive DirectorsHong Kong, August 30, 2018
August 20182 | BASF Capital Market Story
Cautionary note regarding forward-looking statements
This presentation contains forward-looking statements. These statements are based on currentestimates and projections of the Board of Executive Directors and currently available information.Forward-looking statements are not guarantees of the future developments and results outlined therein.These are dependent on a number of factors; they involve various risks and uncertainties; and they arebased on assumptions that may not prove to be accurate. Such risk factors include those discussed inthe Opportunities and Risks Report from page 111 to 118 of the BASF Report 2017. BASF does notassume any obligation to update the forward-looking statements contained in this presentation aboveand beyond the legal requirements.
August 20183 | BASF Capital Market Story
Agenda
At a glance1
Strategic levers2
Segments3
Asia Pacific4
August 20184 | BASF Capital Market Story
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
August 20185 | BASF Capital Market Story
Chemicals – a growth industryGlobal annual growth rate of ~3.4%*
…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 2018–2020; BASF Report 2017, p. 121
August 20186 | BASF Capital Market Story
Broad and resilient portfolio2017: Sales of €64.5 billion; EBITDA of €12.7 billion
* Not depicted here: ‘Other’ 4% of BASF Group sales and EBITDA of €(679) million
Percentage of sales 2017*
Dispersions & Pigments Care Chemicals Nutrition & Health Performance Chemicals
Functional Materials & Solutions
Catalysts Construction Chemicals Coatings Performance Materials
EBITDA €5.4 billion Petrochemicals Monomers Intermediates
25%
Performance Products
25%
Oil & Gas
Oil & Gas
5%
Agricultural Solutions
Agricultural Solutions
9%
Chemicals
EBITDA €1.3 billionEBITDA €2.4 billion EBITDA €2.1 billionEBITDA €2.3 billion
August 20187 | BASF Capital Market Story
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 €15,357 millionEBIT €1,236 millionEmployees 18,295
Sales €14,343 millionEBIT €2,209 millionEmployees 18,256
Sales €5,561 millionEBIT €335 millionEmployees 7,286
2017: Sales by location of customer; EBIT by location of company
EuropeSales €29,214 millionEBIT €4,742 millionEmployees 71,653
.
August 20188 | BASF Capital Market Story
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
August 20189 | BASF Capital Market Story
BASF Group increases sales and earnings slightly – solid volume growth in Q2, prices raised, currency headwinds persistedFinancial figures Q2 2018 Q2 2017 Change
€ € %Sales 16,782 million 16,264 million 3EBITDA before special items 3,295 million 3,291 million 0EBITDA 3,232 million 3,233 million 0EBIT before special items 2,356 million 2,251 million 5EBIT 2,291 million 2,181 million 5Net income 1,480 million 1,496 million (1)Reported EPS 1.61 1.63 (1)Adjusted EPS 1.77 1.78 (1)Cash flows from operating activities 2,224 million 2,969 million (25)
Sales development Volumes Prices Portfolio CurrenciesQ2 2018 vs. Q2 2017 3% 6% 0% (6%)
August 201810 | BASF Capital Market Story
3.74.7 4.6
7.0 7.28.4 8.9
7.76.5
9.9
11.2
10.0 10.411.0 10.6 10.5
12.7
0
2
4
6
8
10
12
14
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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
8.5
Stepwise increase of earnings level
EBIT EBITDA Avg. EBITDA level in depicted years
EBIT and EBITDA*billion €, 2001–2017
CAGREBITDA
8%CAGREBIT17%
12.7
* 2010, 2011 indicative, adjusted for IFRS 10/11; 2001–2009 as reported, without non-compensable foreign income taxes on oil production
August 201811 | BASF Capital Market Story
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
8.8
0
2
4
6
8
10
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
-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
4.8
Free cash flowsCash flows from operating activities
Strong cash flow development
Cash flows from operating activities and free cash flowsbillion €, 2001–2017
August 201812 | BASF Capital Market Story
Attractive dividend
* 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
2.20
2.50 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 2017
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% 3.4%
3.00
Dividend per share€
Dividend policy We want to grow or at least maintain
our dividend at previous year’s level
Key facts Dividend of €3.10 per share,
an increase of 10 cents
Dividend yield of 3.4% in 2017
3.10
August 201813 | BASF Capital Market Story
Average annual performance with dividends reinvested
0 2 4 6 8 10 12 14
+7.0%
+7.3%
+3.6%
+11.5%
Last 10 years August 2008 – July 2018
0 2 4 6 8 10 12 14
Last 3 years August 2015 – July 2018
+5.3%
+2.0%
+4.2%
+9.5%
Delivering consistent, long-term valueCurrent market capitalization: €75 billion*
* As of July 31, 2018
Euro Stoxx 50
DAX 30
MSCI World Chemicals
BASF
August 201814 | BASF Capital Market Story
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 the previous year’s level
Financial targets for the coming years
August 201815 | BASF Capital Market Story
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
August 201816 | BASF Capital Market Story
Outlook 2018* for BASF Group confirmed Slight sales growth
Slight increase in EBIT before special items
Slight decline in EBIT
Significant premium on cost of capital with considerable decline in EBIT after cost of capital
Underlying economic assumptions for 2018 GDP growth: +3.0% (unchanged) Growth in global industrial production: +3.2% (unchanged) Growth in global chemical production: +3.4% (unchanged) Exchange rate: US$1.20 per € (unchanged) Oil price (Brent): US$70 per barrel (previous assumption: US$65 per barrel)
* For sales, “slight” represents a change of 1–5%, while “considerable” applies to changes of 6% and higher. For earnings, “slight” means a change of 1–10%, while “considerable” is used for changes of 11% and higher. This outlook takes into account the transactions with Bayer and Solvay. The intended merger of our oil and gas activities with the business of DEA Deutsche Erdoel AG and its subsidiaries is not taken into account in this outlook.
August 201817 | BASF Capital Market Story
Agenda
At a glance1
Segments3
Asia Pacific4
Strategic levers2► Portfolio development► Investments► Innovation► Sustainability► Operational excellence
August 201818 | BASF Capital Market Story
Continuous global portfolio development to maintain 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
August 201819 | BASF Capital Market Story
Portfolio development towards more market-driven and innovative businesses
Strong Partnerships Gazprom PETRONAS Sinopec Total
Selected transactions 2010−today
BASFcore business
~€7.7 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 Seeds and crop protection
Divestitures
~€21.1 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
August 201820 | BASF Capital Market Story
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
August 201821 | BASF Capital Market Story
BASF acquired agricultural solutions businesses and assets from Bayer
All-cash purchase price
€7.6 billion (subject to certain adjustments at closing, asset and share deal)
Sales 2017Sales 2016
~€2.2 billion~€2.0 billion
Sales by region
~60% North America~15% South America~15% Europe, Middle East, Africa ~10% Asia Pacific
EBITDA 2016* ~€550 million
R&D expenses 2016 ~€350 million
Sites 5 chemical production and formulation sites 17 R&D sites Regional seed production and breeding facilities
BASF to become an even better partner for farmersby strengthening its crop protection portfolio and entering the seeds business in key agricultural markets
Cash EPS accretive in the first full fiscal year, EPS accretive by 2020
Financing through a combination of cash on hand, commercial papers and bonds
Closing took place in August 2018
Combined figures of transactions with Bayer Facts about transactions with Bayer
* On a pro-forma adjusted basis
August 201822 | BASF Capital Market Story
Non-selective herbicides with strong market presence, ideal extension of our herbicide portfolio
Attractive seed treatment business Promising seed and trait research,
e.g., hybrid wheat and further R&D projects Highly innovative digital Ag activities
.
.
Fungicides
Insecticides
R&Dprojects
Seeds
Existing BASF Agricultural Solutions portfolio
New businesses and assets from Bayer
Complementary additions to portfolio
Functional Crop Care*
Acquisition adds excellent businesses and assets from Bayer and enhances our innovation potential in Agricultural Solutions
Digital Ag activities
Herbicides
Trait research
* Including seed treatment
Significant seed businesses for key row crops,such as canola/oilseed rape, cotton and soybeans
Global vegetable seeds business
New parts of portfolio
August 201823 | BASF Capital Market Story
Pro-forma 2017 figures of future Agricultural Solutions segment
Sales by business areabillion €
Sales by regionbillion €
R&D expensesbillion €
EBITDA billion €
~7.9~7.9
~1.8
Acquired businesses
~0.9
* Reported under Other
South America, Africa, Middle East
Asia Pacific Europe
North America
BASF Crop Protection and Plant Biotech*
Acquired businesses
BASF Crop Protection
Acquired businesses
Seeds
Crop Protection
Acquired businesses
BASF Crop Protection
August 201824 | BASF Capital Market Story
Update on further recently announced M&A activities
BASF and LetterOne intend to mergetheir oil and gas subsidiaries
BASF and Solenis to join forces by combining paper and water chemicals
Pro-forma sales 2017: ~€2.4 billion BASF to hold a 49% share of the
combined entity; funds managed by Clayton, Dubilier & Rice to hold 51%
Closing is anticipated for the end of 2018 at the earliest
Pro-forma sales 2017: ~€4.7 billion Pro-forma EBITDA 2017: ~€2.8 billion BASF and LetterOne conducted
a confirmatory due diligence and are negotiating transaction agreements
Closing could be expected in Q1 2019
BASF to acquire Solvayʼs integrated global polyamide business
Purchase price: ~€1.6 billion Sales 2016: ~€1.3 billion EBITDA 2016: ~€200 million On June 26, 2018 the EU Commission
opened an in-depth investigation and will likely take a decision in Q4 2018
August 201825 | BASF Capital Market Story
Agricultural Solutions4%
Investments in organic growthInvestments of ~€4.0 billion planned for 2018
Performance Products
16%Oil & Gas*18%
€19.0 billion
Capex budget 2018–2022 by segment
Other18%
Chemicals25%
Capex budget 2018–2022 by region
Asia Pacific14%
North America19%
Other**5%
Functional Materials& Solutions
19%
€19.0 billion
South America***8%
Europe 54%
* If the merger of BASF’s oil and gas activities with DEA is consummated as intended, these capital expenditures will no longer be reported as investments by the BASF Group. ** Alternative sites currently being investigated; *** Including Africa and Middle East
August 201826 | BASF Capital Market Story
57%19%
17%
7%
2015
7%74%
5%
6%
7%
1%
Asia and China continue to dominate global chemical production
Real chemical production (excl. pharma)(trillion US$, base year 2015)
2015CAGR3.4%
2025
World
CAGR4.4%2.0 3.1
Asia Pacific
2025
Source: BASF
3.6 5.0
Greater China
South KoreaJapan
South Asia
Australia, New Zealand
South East AsiaAsia Pacific
OthersEurope
North America
62%
16%
15%7% 5%
78%
5%
5%6%
1%
August 201827 | BASF Capital Market Story
BASF investigates establishment of second Verbund site in China
Parameters 100% BASF-owned and operated Potential investment of up to
US$10 billion until around 2030 Investment to evolve in phases Startup of first plants in 2026
at the latest Most advanced Verbund site with
smart manufacturing concept Environment, health and safety
concept according to BASF’s global standards and local laws and regulations
Next step: Pre-feasibility study
Tibet
Qinghai
Sichuan
Yunnan
Hainan
Hebei
Heilongjiang
Liaoning
Shanxi
BeijingTianjin
Shandong
Henan Jiangsu
Zhejiang
ShanghaiAnhui
Jiangxi
Guizhou
Chongqing
Fujian
Hubei
Hunan
GuangdongGuangxi
Inner Mongolia
Gansu
Ningxia
Shaanxi
Xinjiang
Jilin
Nanjing
Hong Kong
Asia Pacific headquartersVerbund siteGreater China headquarters
Legend
August 201828 | BASF Capital Market Story
Oil & Gas2%
Innovation will drive future growth
Agricultural Solutions27%
Chemicals7%
Performance Products21%
Corporate Research20%
Key facts
€1.9 billion R&D expenditures in 2017
R&D expense to sales ratio ~3%
~10,000 employees in R&D
~3,000 projects
~800 new patents in 2017
Research Verbund: Cooperations with more than 600 excellent partners from universities, startups and industry
In 2017, sales of >€9 billion from innovations launched on the market in the past five years
R&D expenditures 2017
€1.9 billion
Functional Materials & Solutions
23%
August 201829 | BASF Capital Market Story
Selected key technology capabilities reflect where BASF requires continued effort and resources to safeguard today’s and tomorrow’s excellence in innovation.
Polymer technologies
Biotechnology
Production processes Materials
Catalysis
Biodegradable and bio-based
materialsEnabling methods
Corporate Research: BASF’s key technology capabilities are bundled in seven focus areas
BASF’s key technology
capabilities
August 201830 | BASF Capital Market Story
BASF – capturing the fast-growing battery materials market
Market projections for 2025: 8-15 million electric vehicles* built per year 600-900 kt of CAM in e-mobility€18-24 billion CAM market size
Unparalleled access and commitment to the automotive industry Strategic global supply, technology and production partnerships
Rapid expansion to global, cost-competitive asset footprint
Well-established position in key CAM technologies (NCA & NCM)** Industry leading position in NCA capacity
E-mobility drives battery materials growth
Chemistry of cathode active materials (CAM) is key to
address e-mobility challenges
**NCA: nickel cobalt aluminum oxide; NCM: nickel cobalt manganese
BASF enables electromobility
*Electric vehicles: BEV, HEV and PHEV
20252017
~15-20% p.a.
Li-ion batterymarket
August 201831 | BASF Capital Market Story
Key supplier in battery materials, well-positioned for further growth
Shanghai, ChinaR&D, Application Technology Center
Onoda/Kitakyushu, JapanBASF TODA Battery Materials
Beachwood, OhioR&D, ApplicationTechnology Center
Elyria, OhioBASF TODA America
Europe, planned production
Amagasaki, JapanR&D, Application Technology Center
Battle Creek, MichiganBASF TODA America
Shanghai, China BASF Battery Materials Headquarters
Production siteTechnology center
Ludwigshafen, GermanyR&D, ApplicationTechnology Center
Innovation in battery materials Leading technology portfolio and core patents ~€250 million total R&D spent so far ~150 scientists at four R&D centers across all regions Highest energy density CAM commercialized for EV application
Market presence Triple-digit-million euro battery material sales Supplier to world’s largest cell producers Already supplying leading OEMs’ platforms Under qualification for future key platforms
August 201832 | BASF Capital Market Story
Sustainable Solution Steering®
Goal: Increase the share of Accelerators from 23% in 2014 to 28% by 2020
4.3% 0.1%
>60,000 product applications analyzed
27.3% 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
27.3%
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 concernidentified and action plan developed
SustainableSolutionSteering
Percentage of sales 2017
August 201833 | BASF Capital Market Story
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
August 201834 | BASF Capital Market Story
Resource efficiencyResponsible use of carbon sources
* BASF carbon mass balance calculation (2017, non-audited) ** Based on the chemical industry standard of the International Council of Chemical Associations (ICCA) and the World Business Council for Sustainable Development (WBCSD)
We are committed to resource efficiency and climate protection
BASF uses carbon raw materials responsibly: 82% of carbon converted to products, 17% consumed for process energy and converted to CO2, 1% waste*
Comparisons with European emissions trading benchmarks show that our chemical plants operate at above-average energy efficiency
23 million tons of CO2 emissions by BASF worldwide in 2017 compared to 10–30 million tons p.a. for one coal-fired power plant
Customers’ use of BASF’s climate protection products sold in 2017 avoided 570 million tons of CO2 equivalents (thereof 6% attributable to BASF)**
In 2017, BASF achieved CDP leadership status once again
August 201835 | BASF Capital Market Story
0
0,.001
2016 2017 2018 Total
DrivE program
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 from end of 2018 onwards
500
€500million
€150million
August 201836 | BASF Capital Market Story
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 2017
EBITDA
Sales
Fixed Costs
CAGREBITDA
8%
CAGRSales 5%
BASF Group* 2001–2017 indexed; CAGR 2001–2017
3%
CAGRFixed Costs
August 201837 | BASF Capital Market Story
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
August 201838 | BASF Capital Market Story
Agenda
Strategic levers2
Segments3► Chemicals► Performance Products► Functional Materials & Solutions► Agricultural Solutions► Oil & Gas
Asia Pacific4
At a glance1
August 201839 | BASF Capital Market Story
ChemicalsEarnings slightly down due to higher fixed costs and lower cracker margins, but still on a high level
Sales Q2 2018 vs. Q2 2017million €
EBIT before special items million €
Intermediates808+7%
Monomers1,731+1%
Petrochemicals1,593+1%
€4,132+2%
Sales development Volumes Prices Portfolio CurrenciesQ2 2018 vs. Q2 2017 1% 5% 0% (4%)
1,120 1,102 1,053 1,134 1,074
0
400
800
1,200
Q2 Q3 Q4 Q1 Q22017 2018
August 201840 | BASF Capital Market Story
Performance ProductsSlightly higher earnings driven by higher margins
Performance Chemicals974(1%)
Nutrition & Health391(16%)
Care Chemicals1,188(6%)
Dispersions & Pigments1,396(3%)
€3,949(5%)
EBIT before special items million €
Sales development Volumes Prices Portfolio CurrenciesQ2 2018 vs. Q2 2017 (2%) 2% (1%) (4%)
Sales Q2 2018 vs. Q2 2017million €
405 385
111
470409
0
200
400
600
Q2 Q3 Q4 Q1 Q2
2017 2018
August 201841 | BASF Capital Market Story
Functional Materials & Solutions Sales growth on higher prices and volumes, earnings decline due to higher fixed and raw material costs
Coatings9950%
Catalysts1,884+13%
ConstructionChemicals
664+3%
Performance Materials1,997+3%
€5,540+5%
EBIT before special items million €
Sales development Volumes Prices Portfolio CurrenciesQ2 2018 vs. Q2 2017 4% 6% 0% (5%)
422 397
267333 338
0
200
400
600
Q2 Q3 Q4 Q1 Q2
Sales Q2 2018 vs. Q2 2017million €
2017 2018
August 201842 | BASF Capital Market Story
Agricultural SolutionsEarnings increased slightly due to a more favorable product mix
EBIT before special items million €
1,526 1,501
0
1,000
2,000
Q2 2017 Q2 2018
272 278
0
200
400
Q2 2017 Q2 2018
(2%)
+2%
Sales Q2 2018 vs. Q2 2017million €
Sales development Volumes Prices Portfolio CurrenciesQ2 2018 vs. Q2 2017 4% 1% 0% (7%)
August 201843 | BASF Capital Market Story
Oil & GasConsiderably higher sales and earnings
EBIT before special items million €
814
998
0
200
400
600
800
1,000
1,200
Q2 2017 Q2 2018
Sales development Volumes Prices/Currencies PortfolioQ2 2018 vs. Q2 2017 5% 18% 0%
+23%
Sales Q2 2018 vs. Q2 2017million €
183
391
0
100
200
300
400
500
Q2 2017 Q2 2018
Net income million €
122151
0
50
100
150
200
250
Q2 2017 Q2 2018
August 201844 | BASF Capital Market Story
Review of “Other”
Financial figures Q2 2018 Q2 2017million € million €
Sales 662 476
EBIT before special items (134) (151)
Thereof Costs of corporate research (90) (93)
Costs of corporate headquarters (66) (58)
Foreign currency results, hedging and other measurement effects 31 142
Other businesses 17 (12)
Special items (17) (30)
EBIT (151) (181)
August 201845 | BASF Capital Market Story
Cash flow development 1st half 2018
Cash flow development H1 2018 H1 2017million € million €
Cash flows from operating activities 3,455 3,802Thereof Changes in net working capital (1,221) (1,684)
Miscellaneous items (351) 178
Cash flows from investing activities (1,735) (2,365)Thereof Payments made for tangible / intangible assets (1,449) (1,642)
Acquisitions / divestitures 64 (65)
Cash flows from financing activities (518) (886)Thereof Changes in financial liabilities 2,526 1,932
Dividends (3,044) (2,837)
Free cash flow 2,006 2,160
August 201846 | BASF Capital Market Story
Balance sheet remains strong
Balance sheet June 30, 2018 vs. December 31, 2017billion €
Total assets increased by €3.1 billion, mainly due to higher accounts receivable, trade as well as cash and cash equivalents
Net debt increased by €1.1 billionto €12.6 billion
Equity ratio at 43.1% as of June 30, 2018
Liquid funds
Accountsreceivable
Long-termassets
Inventories
Other assetsOtherliabilities
Financialdebt
Equity
26.3 26.0
20.3 18.0
35.334.8
Jun 30, 2018 Dec 31, 20170.57.7 6.5
4.3 3.2
11.411.2
10.710.3
47.347.6
Jun 30, 2018 Dec 31, 2017
81.9 78.8 81.9 78.8
Disposal group
August 201847 | BASF Capital Market Story
Agenda
At a glance1
Strategic levers2
Segments3
Asia Pacific4
August 201848 | BASF Capital Market Story
BASF is present in 18 markets
~100 production sites*
~125 sales offices*
18,256 employees**
~€14.3 billion sales***
~€2.2 billion EBIT
BASF in Asia Pacific 2017
Nanjing
Hong Kong
Kuala Lumpur
Kuantan
* Only selected sites and offices are depicted on this chart. Site and office numbers refer to companies of significant size where BASF holds a stake greater than 50%.
** As of December 31, 2017.
*** Sales by location of customer.
Regional centerVerbund sitesSelected sitesR&D/Technical centersShared Services Center
August 201849 | BASF Capital Market Story
* By location of customer
Asia Pacific continues to deliver strong sales and profit growth for BASF Group
8%
CAGR 2015-17
0.2 0.20.4
0.7
1.01.2
1.1
0
0.5
1
1.5
H1 H2 H1 H2 H1 H2 H1
2016 2017 2018
10 quarters of year-on-year growth
BASF Asia Pacific EBITbillion €
123%
CAGR 2015-17
20152016 20172015 2018H1 H2 H1 H2 H1 H2 H1
6.5
7.5
0
6.0
7.0
8 quarters of year-on-year growth
BASF Asia Pacific net sales*
billion €
6.4
6.05.7
6.5
7.07.3
7.4
August 201850 | BASF Capital Market Story
Functional Materials & Solutions36%
Agricultural Solutions4%
BASF in Asia Pacific: Balanced portfolio
Sales* by segment in 2017(billion €)
Sales* by sub-region in 2017(billion €)
Performance Products 29%
Other3%
Chemicals28%
€14.3 billion
ASEAN15%
Greater China51%
Australia, New Zealand3%
South Asia11%
Japan12%
South Korea8%
€14.3 billion
*Sales to third parties by location of customer; figures do not include sales of joint ventures consolidated at equity such as BASF-YPC Ltd., Nanjing, China
South Asia: India, Pakistan, Bangladesh, Sri Lanka
ASEAN: Singapore, Philippines, Vietnam, Thailand, Indonesia, Malaysia, Myanmar
August 201851 | BASF Capital Market Story
Balanced asset base in Asia Pacific: Investments for profitable growth
Planned investments 2018–2022: ~€2.7 billion (14% of BASF Group)
Increasing focus on investments where BASF: − is technologically leading − has a competitive advantage − expects strong profitable market
growth
Target remains to increase share of sales from own manufactured products (2017: >60%)
Selected major capex projects*
Engineering plasticsPolymer dispersions2-Ethylhexanoic acid
Innovation campus MumbaiAutomotive coatingsAutomotive catalystsElectronic materials
MDI (Chongqing)Innovation Campus (Shanghai)
NeopentylglycolIsononanol
Coating resinsButanediol/PolyTHF®
Specialty amines Ethylene oxide
PolyvinylpyrrolidoneEmollients and waxes
Automotive coatings
Startup 2015–2017
Startup planned for 2018–2022
China
Asia Pacific**
MDI (Caojing)Plastic additivesSpecialty aminesPropionic acidNeopentylglycolAlkyl polyglucosidesAutomotive application center
Aroma chemicalsHighly reactive polyisobuteneSpecialty plasticsPlastic additivesAutomotive catalysts
** Without China* Investments in property, plant and equipment (excluding acquisitions)
August 201852 | BASF Capital Market Story
Innovation in Asia Pacific – for Asia and the world
R&D Center AustraliaFocus: mining
Innovation Campus Asia Pacific Phase I, Shanghai Focus: polymers & materials
2012 2014
R&D Center Japan Focus: electronics,
battery materials
2017
Innovation Campus Asia Pacific, Mumbai Focus: crop protection, process engineering
2015
Innovation Campus Asia Pacific Phase II, Shanghai Focus: polymers & materials, process engineering, formulations
Advanced Materials & Systems Research
global HQ in Shanghai
2013
R&D Center SouthKorea Focus: electronics
* As of December 31, 2017
At a glance Two regional Innovation Campuses >1,100 R&D personnel*
2018
Application Center Shanghai Focus: automotive
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