150 years. as one company. LBBW Unternehmensforum Stuttgart. BASF Credit Story. January 29, BASF Credit Story January

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1 We add 150 value years as one company LBBW Unternehmensforum Stuttgart 150 years BASF Credit Story January 29, 2015 BASF Credit Story January

2 Cautionary note regarding forward-looking statements 150 years 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 forwardlooking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations. BASF Credit Story January

3 BASF at a glance Growth levers Financing highlights BASF Credit Story January

4 We create chemistry for a sustainable future 150 years Positioning Performance Perspective Geismar, USA Freeport, USA Ludwigshafen, Germany Antwerp, Belgium Nanjing, China Kuantan, Malaysia Verbund site 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 Chemistry as an enabler BASF has superior growth opportunities: sustainable innovations investments emerging markets BASF Credit Story January 2015 * For

5 BASF today a well-balanced portfolio Total sales 2013: 74 billion Percentage of sales 2013* BASF Credit Story January 2015 * Not depicted here: ~6% of Group sales reported as Other 5

6 Verbund generates > 1 billion p.a. global cost savings*, supports sustainability 150 years 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 BASF Credit Story January 2015 * Savings include only tangible synergies. Additional (intangible) benefits and retained profits are not included. 6

7 Important corporate developments 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 1 st, 2014 Strengthening of R&D platforms 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) Restructuring of Performance Products 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 BASF Credit Story January

8 Outlook 2014 Outlook 2014 We aim to: increase our sales volumes excluding the effects of acquisitions and divestitures slightly increase EBIT bsi compared with 2013 Assumptions 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) BASF Credit Story January

9 BASF at a glance Growth levers Financing highlights BASF Credit Story January

10 BASF outperformed global chemical production by ~3 percentage points p.a. 150 years Sales to third parties billion BASF Credit Story January

11 Portfolio development Moving downstream towards customer industries * Agriculture, Construction, Consumer Goods, Health & Nutrition, Electronics, Energy & Resources, Transportation BASF Credit Story January 2015 ** Sales excluding Oil & Gas. Targets were published on November 29,

12 Portfolio development Towards more market driven and innovative businesses Acquisitions Catalysts Construction chemicals Water-based resins Pigments, plastic additives Oil & Gas Personal care & food Battery materials Functional crop care Omega-3 fatty acids Enzymes ~ 14 billion sales BASF core business Selected transactions 2005 today Strong partnerships Gazprom Monsanto Petronas Shell Sinopec Statoil Total Divestitures Agro generics Vitamin premixes Styrenics Fertilizers Construction equipment, flooring and wall systems Textile chemicals ~ 7 billion sales BASF Credit Story January

13 Strong commitment to innovation Innovations for a sustainable future R&D expenditures in billion Corporate Research 21% Oil & Gas 3% Agricultural Solutions 26% Functional Mat. & Sol. 20% Performance Products 20% Chemicals 10% Key facts 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 BASF Credit Story January

14 Chemistry-based innovations Growth and technology fields Global needs Key customer industries Growth fields Technology fields Batteries for Mobility Resources, Environment & Climate Transportation Agriculture Enzymes E-Power Management Functional Crop Care Materials, Systems & Nanotechnology Food & Nutrition Construction Energy & Resources Heat Management for Construction Lightweight Composites Raw Material Change Organic Electronics Quality of Life Consumer Goods Electronics Plant Biotechnology Water Solutions White Biotechnology Wind Energy Health & Nutrition... BASF Credit Story January

15 Investments Capex budget by segment and region* Capex budget by segment Capex budget by region Performance Products 15% Functional Materials & Solutions 12% Agricultural Solutions 7% Other 13% 20 billion Chemicals 33% Oil & Gas 20% Asia Pacific 18% South America 4% Other 4% North America 25% 20 billion Europe 49% BASF Credit Story January 2015 * Source: BASF Report

16 Investments Major projects Ammonia and gas-to-propylene in USA* MDI plant Chongqing, China Acrylic acid complex Camacari, Brazil TDI plant Ludwigshafen, Germany Aroma Ingredients Kuantan, Malaysia Expansion oil & gas activities BASF Credit Story January 2015 * Under evaluation 16

17 Operational excellence Strong track record BASF Group* Index CAGR % 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 BASF Credit Story January

18 BASF at a glance Growth levers Financing highlights BASF Credit Story January

19 Strong free cash flow generation Free cash flow* in billion ** Q1-Q * Cash provided by operating activities less capex (in 2005 before CTA) BASF Credit Story January 2015 ** 2009 adjusted for re-classification of settlement payments for currency derivatives 19

20 Financing strategy Diversified Debt Financing Instruments As of September 30, 2014 Bank Loans 18% 15.8 billion Commercial Papers 7% Other Bonds 15% EUR-denominated Bonds 60% Funding Strategy Highlights 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) Our target: Keep a solid A rating (current ratings* S&P A+ / Moody s A1) * Last Confirmation Moody s: October 31, 2014 Last Confirmation S&P: December 11, 2014 BASF Credit Story January

21 Well balanced bond maturity profile Profile as of September 30, 2014 (billion )* >2024 * Nominal values, excluding industrial revenue and pollution control bonds from BASF Corporation Group. BASF Credit Story January

22 Highlights of BASF s credit 1. Strong track record, outperforming chemical production by 3% p.a. ( ) Well positioned for profitable growth Excellent innovation platform Leading Positions in growth industries and emerging markets Ongoing portfolio optimization Focus on operational excellence Advantageous cost position due to unique Verbund concept Focus on cost management 4. Strong free cash flow in every single year over the last decade 5. Diversified financing strategy with a strong commitment to keep a solid A rating 6. Combining economic success with social commitment and environmental protection BASF Credit Story January

23 Appendix BASF Credit Story January

24 Q3 2014: BASF with higher sales and earnings despite declining demand 150 years 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%) % Adjusted EPS 1.27 (1%) % Sales development Period Volumes Prices Portfolio Currencies Q3 14 vs. Q3 13 7% (4%) 0% 0% Q1-Q vs. Q1-Q % (3%) 0% (2%) BASF Credit Story January

25 Market approach Cross-divisional customer industry approach BASF sales by first customer industry* Bubble Size: BASF divisional sales by first customer industry* / ** Consumer goods > 15 % Transportation > 15 % Construction > 10 % Energy & Resources < 10 % Monomers Dispersions & Pigments Care Chemicals Coatings Construction Chemicals Petrochemicals Intermediates Performance Chemicals Paper Chemicals Catalysts Performance Materials BASF Credit Story January 2015 * Excluding Oil & Gas, Crop Protection and Other numbers ** Nutrition & Health sales predominantly into Health & Nutrition market 25

26 Cross-divisional approach BASF s technology Verbund combined with customer know-how Lightweight tridion cell High performance foams Solar roof with transparent organic solar panels and OLED modules E-textiles Infrared-reflective film Infrared-reflective coating Multifunctional seat All-plastic wheel Daimler & BASF concept car Smartforvision BASF Credit Story January

27 Customer Verbund - adidas and BASF Working together for disruptive innovation: Infinergy BASF Credit Story January

28 Acquisitions will contribute to profitable growth in the future We want to acquire businesses which Generate profitable growth above the industry average Are innovation-driven Offer a special value proposition to customers Provide a minimum return on investment of 8% p.a. after tax Are EPS accretive by year three at the latest Reduce earnings cyclicality Strategic acquisition criteria Financial acquisition criteria BASF Credit Story January

29 Operational excellence programs ~ 1.3 billion earnings contribution from STEP by 2015 Annual earnings contribution in million 4,000 3,000 2,000 1,000 0 Former cost saving programs NEXT STEP STEP program 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: Between 0.9 and 1 billion by the end of 2014 expected One-time cost : ~ 1 billion BASF Credit Story January

30 Restructuring in Performance Products Announced measures to strengthen competitiveness Measures Leather and textile chemicals (March 18, 2013 & October 16, 2014) Water, oilfield and mining chemicals (March 27, 2013) Plastic additives and pigments (April 23, 2013) Pigments (October 23, 2013) Paper Chemicals (January 23, 2014 & September 24, 2014) Nutrition & Health (April 25, 2014) Care Chemicals (June 5, 2014) Further measures Establishment of global innovation center in China Divestiture of textile chemicals Establishment of global business unit to realize synergies Divestment of industrial water management business Adjustments at sites in the Basel area to adapt to changed market conditions Downsizing of R&D activities Optimization of global production network Closure, restructuring and evaluation of strategic options for production assets Latex plant in EU shut down. Kaolin: Strategic options under evaluation From Jan. 1, 2015: Division dissolved, new set-up follows value chains Adaption of product portfolio and organizational processes to market realities Set of measures to adapt to changed customer needs and market conditions within its Home Care, Industrial & Institutional Cleaning and Formulation Technologies businesses 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 ~ Million BASF Credit Story January

31 Share of Oil & Gas in BASF portfolio Average EBITDA* (billion p.a.) Oil & Gas 2.3 (24%) Cumulative capex** (billion ) Oil & Gas 6.4 (31%) BASF Group w/o Oil & Gas 7.4 (76%) BASF Group w/o Oil & Gas 14.5 (69%) Key facts : 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 * 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 BASF Credit Story January 2015 and IT investments; restated figures from 2012 onwards in accordance with changes in IFRS 31

32 Strong earnings contribution from Oil & Gas 150 years Net income Oil & Gas (million ) 2,000 1,780 1,500 1, ,064 1,201 1, * Q1-Q * Positive impact from special income due to the deconsolidation of Gascade Gastransport GmbH and BASF Credit Story January 2015 the disposal of a share in the Edvard Grieg oilfield (BASF Report 2013, pp ) 32

33 Oil & Gas Focus on upstream activities BASF Credit Story January

34 Overview of bonds (1/2) as of December 31, years Bond Term Issuer Volume ISIN Code 1.375% GBP Bond 2014/2017 BASF SE GBP 250 million XS EUR Floating Rate Note 2014/2017 BASF SE 300 million XS % Euro Bond 2014/2024 BASF SE 500 million XS % Euro Bond 2014/2019 BASF SE 750 million XS % 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 XS % NOK Bond 2013/2025 BASF SE NOK 1.45 billion XS EUR Floating Rate Note 2013/2020 BASF SE 300 million XS % EUR Bond 2013/2033 BASF SE 200 million XS EUR Floating Rate Note 2013/2018 BASF SE 300 million XS % EUR Bond 2013/2043 BASF SE 200 million XS % EUR Bond 2013/2033 BASF SE 500 million XS % EUR Bond 2013/2021 BASF SE 700 million XS BASF Credit Story January

35 Overview of bonds (2/2) as of December 31, years 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 XS % EUR Bond 2009/2016 BASF SE 200 million XS % EUR Bond 2009/2017 BASF SE 300 million XS % GBP Bond 2009/2017 BASF SE GBP 400 million XS % EUR Bond 2009/2015 BASF Finance Europe N.V. 1 2 billion XS % CHF Bond 2008/2015 BASF Finance Europe N.V. 1 CHF 200 million CH % EUR Bond 2006/2016 BASF SE 500 million DE 000 A0JRFB % EUR Bond 2003/2018 Ciba Specialty Chemicals Finance Luxembourg S.A. 500 million XS Guaranteed by BASF SE BASF Credit Story January

36 BASF Creditor Relations Team Frank Wilhelmi Head of Capital Market Financing Hannes Koske IR Manager Creditor Relations Juliane Beckmann Senior Specialist Capital Market Financing Contact Details: Hotline: Websites: Lüthje Brandt Specialist Capital Market Financing BASF Credit Story January

37 150 years BASF Credit Story January