basf fy2010 results

BASF in excellent shape, optimistic for 2011

4Q/FY’2010 Conference Ludwigshafen, February 24, 2011

2BASF 4Q/FY’2010 Conference | February 24th, 2011

This presentation includes 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. This presentation contains a number of forward-looking statements including, 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 with respect to future events and financial performance. Actual financial performance of the entities described herein 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.

Forward-looking statements represent estimates and assumptions only as of the date that they were made. 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.

Forward-looking statements


Sales €63.9 billion +26%EBITDA €11.1 billion +51%EBITDA margin 17.4% 14.6%EBIT before special items €8.1 billion +68%EBIT €7.8 billion +111%Net income €4.6 billion +223%Adjusted EPS €5.73 +90%

Business performance 2010 vs. 2009

Full year results 2010

Record sales and record EBIT before special itemsChemical businesses take advantage of strong economic recoveryConsistent long term value generation


Sales €16.4 billion +25%EBITDA €2.7 billion +21%EBITDA margin 16.5% 16.9%EBIT before special items €1.8 billion +19%EBIT €1.7 billion +68%Net income €1.1 billion +142%Adjusted EPS €1.39 +31%

Business performance Q4’10 vs. Q4’09

Fourth quarter 2010 highlights

Record sales boosted by ongoing strong demandStrong earnings growth despite significant one-off costs not recurring in 2011Highest net income ever in a fourth quarter


Average annual dividend increase of 14.5%(2001-2010)

Dividend yield above 3% in any given year since 2001

Attractive dividend yield of 3.7% in 2010**

3.9%

Attractive shareholder returns

Key factsDividend per share (€)

2.20

0.65 0.70 0.700.85

1.00

1.50

1.95 1.951.70

0.0

0.5

1.0

1.5

2.0

2.5

2001 2004 2007 2010

0.50

1.00

1.50

2.00

3.1%

* Dividend yield based on share price at year-end

3.2% 3.1% 4.1% 3.8% 7.0%Yield*

** With dividends reinvested

Proposal:

3.7%

2.50

3.1% 3.9%


Delivering consistent, long-term value

Long-term performance January 2001 – December 2010 (average annual performance with dividends reinvested)

+13.9%

-2.7%

+7.1%

-3 0 3 6 9 12 15

BASF

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+0.7%


Successful value creating strategy

7


Leading positions in growth industries

and emerging markets

Ongoing portfolio

optimization

Excellent innovation platform

We strive to outperform global chemical production growth by at least 2 percentage points p.a.

Well positioned for profitable growth

Continue expansion in emerging markets, especially AsiaTranslate megatrends into business growth

Continue with active portfolio managementDrive portfolio closer to end customer

Product and system innovation as growth driversMegatrend innovations for long-term growth

Growth target:


Leading positions in growth industries and

emerging markets

9


Emerging markets Significant sales growth in emerging markets

Sales 2010 in emerging markets: €14.5 billion (27%)

Investments in emerging markets 2005-2010:€3 billion

Ongoing increase of - sales force- regional R&D

Emerging markets definition, according to Dow Jones:35 countries *

* Bahrain, Brazil, Bulgaria, Chile, China, Colombia, Czech Republic, Egypt, Estonia, Hungary, India, Indonesia, Jordan, Latvia, Kuwait, Lithuania, Malaysia, Mauritius, Mexico, Morocco, Oman, Pakistan, Peru, Philippines, Poland, Qatar, Romania, Russia, Slovakia, Sri Lanka, South Africa, South Korea, Taiwan, Thailand, Turkey, United Arab Emirates

Emerging MarketsNet sales in billion €BASF Group (w/o Oil & Gas)

0

10

20

30

40

50

60

2005 2010

CAGR 7%22%

27%CAGR 13%

Emerging Markets (Dow Jones definition) Developed Markets


6.5

12.5

20

0

5

10

15

20

2005 2010* 2020

BASF’s profitable growth path in Asia Pacific

Sales by location of customers (in billion €)

* excluding Cognis

14%

p.a.

Achievements 2005-2010

Sales growth 14% p.a.(vs. Asian market growth 10.5% p.a.)Record EBITDA of €1.8 billion in 2010, resulting in an EBITDA margin of 14%

Target 2011-2020

Well on track to double sales by 2020(based on sales of €9 bn in 2008)Outgrowing Asian Pacific chemical market by 2 percentage points p.a. through

– Innovations out of Asia– Investments 2011-2015: €2.3 billion– Generating 70% of sales based on

local manufacturing – Strengthening market focus through

industry and customer target groups


Ongoing portfolio optimization

12


Cognis – integrating a global leader in value-added products

Pro forma business performance FY’2010

Sales: ~ €3 billionEBITDA: ~ €550 millionEBITDA margin: ~18%Closing on December 9, 2010

Integration objectives

Growing >2% points faster than the relevant market

Achieve 20% EBITDA margin in the Performance Products segment by 2012

Acquisition accretive as of 2012

Integration costs of €200-250 million until end of 2012

Annual cost synergies of at least 5% of 2009 net sales (i.e. ~€130 million) fully achieved by 2013 and substantial top line synergies


BASF + Cognis Improved market positions

CurrentBASF position

FutureBASF position

Personal care ingredients 3 1Home care ingredients 1 1

Functional nutritioningredients 6 3

Coating additives 7 3Heavy-duty driveline lubricants > 10 3

Mining chemicals 3 2


Styrolution Planning a 50/50 joint venture with INEOS

ScopeGlobal No.1 in styrenicsSales of about €5 billion*, thereof

– 48% Europe, 32% Americas, 20% Asia Pacific– 34% SM, 34% PS, 21% ABS, 11% Copolymer Specialties

Customers in more than 110 countries29 production facilities across 11 countriesMore than 3,000 employees

MilestonesNov 29, 2010: LoI signed by BASF and INEOSJan 1, 2011: Carve-out of BASF‘s Styrenics activities into separate legal entitiesSecond half of 2011: Start of planned JV Styrolution

* Pro-forma figures, based on BASF‘s and INEOS‘ sales in 2009

Styrolux T/S shrink filmValue creating divestiture process


Active portfolio management pays off

Chemical activities

Agricultural Solutions

Oil & Gas, including non-deductible oil taxes

EBITDA by activity (in billion €, excluding Other)

0

2

4

6

8

10

12

2001* 2004 2007** 2010

Recent acquisitions reshaped portfolio– Closer to end customers– Innovation-driven– Profitable growth above

industry average

BASF’s EBITDA in 2010 (excluding Other) amounted to €11.7 billion

* Based on German GAAP** As of 2007 according to new segment structure

(excl. Styrenics and corporate costs)

Our diversified portfolio is a key strength


Excellent innovation platform

17


NaphthaMax®

III

Xemium®Kaurit®

Light

CypoSol®

Elastopave®

Ecovio®

Natugrain®

TS X-SEED® PCI Geofug®


Xemium®

BASF’s next-generation fungicide for broad use

Key facts

Xemium® complements BASF‘s outstanding fungicide portfolio

Our 1st carboxamide fungicide for all market segments

BASF is carboxamide pioneer,Xemium® strengthens lead

Launch planned in >50 countries and >100 crops

World-wide data submissionprocess underway

Market launch from 2012 onwards

* Source: Philips McDougall, own estimation

Untreated

Xemium® global peak sales potential: >€200 million


0,0 0,00

5

10

15

20

4.53.5

Innovation pipeline worth €21 billion

* New or improved products or new applications, max. 5 years on market, including Growth Clusters

The pipeline NPV of €21 billion is a bottom-up aggregation of all R&D projects

High success rate due to stringent R&D controlling via Phasegate process

Expected Commercial Value:~50% of NPV (probability-weighted)

In 2010, sales of new products (5 years or younger) exceeded the target of €6 billion

Target 2015: up to €8 billion sales with new products

R&D contributes significantly to earnings growth

14% Performance Products7% Plastics3% Chemicals

8% Functional Solutions

46% Agricultural Solutions

2% Oil & Gas20% Corporate Research

2009 2010

€19 bn€21 bn

Net present value by segments (billion €)


Financial highlights Q4 2010

21


Sales developmentPeriod Volumes Prices Portfolio Currencies

Q4’10 vs. Q4’09 4%* 13% 2% 6%

FY’10 vs. FY’09 11% 8% 2% 5%

BASF Group Q4 2010 Record sales and strong earnings increase vs. PYQ

* Volumes +8% (without Oil & Gas)

1.5

2.02.2 2.2

1.8

0.0

0.5

1.0

1.5

2.0

2.5

Q4 Q1 Q2 Q3 Q4

EBIT before special items (billion €)

13.215.5 16.2 15.8 16.4

0

4

8

12

16

20

Q4 Q1 Q2 Q3 Q4

Sales (billion €)

20102009 20102009


Chemicals Strong earnings improvement vs. PYQ due to higher demand

Intermediates655+32%

Inorganics326

+24%

Petrochemicals1,964+41%

€2,945 +37%

315

461

687617

537

0

200

400

600

Q4 Q1 Q2 Q3 Q4


Q4’10 vs. Q4’09 9% 20% 0% 8%

FY’10 vs. FY’09 18% 28% 0% 5%

Q4’10 segment sales (million €) vs. Q4’09 EBIT before special items (million €)

20102009


Plastics High demand and price increases lifted sales significantly

Polyurethanes1,363+20%

Performance Polymers

1,088+34%

€2,451 +26%

251279

349 371

285

0

200

400

Q4 Q1 Q2 Q3 Q4

Sales development Period Volumes Prices Portfolio Currencies

Q4’10 vs. Q4’09 10% 9% 0% 7%

FY’10 vs. FY’09 22% 10% 0% 6%


20102009



Q4’10 vs. Q4’09 3% 4% 6% 5%

FY’10 vs. FY’09 12% 4% 11% 4%

Performance Products Earnings significantly up vs. previous year despite one-off costs

209

419471

370294

0

100

200

300

400

500

Q4 Q1 Q2 Q3 Q4

PerformanceChemicals

778+15%

Care Chemicals763+42%

€3,060 +18%

Paper Chemicals405+2%


Nutrition & Health384+10%

20102009

Dispersions & Pigments

730+17%



Q4’10 vs. Q4’09 15% 10% 1% 9%

FY’10 vs. FY’09 17% 10% 1% 8%

Functional Solutions Earnings declined considerably due to one-time operating costs

Catalysts1,369+62%

Construction Chemicals514

+11%

Coatings686

+15%

€2,569 +35%

101 111

165 158

33

0

50

100

150

Q4 Q1 Q2 Q3 Q4


20102009


Agricultural Solutions South America drove strong sales growth

44 42

0

10

20

30

40

50

Q4 Q4


20102009

0

200

400

600

800

1,000

Q4 Q420102009

+20% (5)%


Q4’10 vs. Q4’09 18% (4)% 0% 6%

FY’10 vs. FY’09 9% (3)% 0% 5%

703845


132230

0

200

400

600

800

Q4 Q4

Oil & Gas Earnings grew substantially y-o-y as a result of higher oil prices

Exploration & Production1,059+9%

Natural Gas Trading

1,905+16%

€2,964 +13%

Sales developmentPeriod Volumes Prices/Currencies Portfolio

Q4’10 vs. Q4’09 (15)% 28% 0%

FY’10 vs. FY’09 (2)% (3)% 0%

106

EBIT bSI Natural Gas TradingEBIT bSI Exploration & Production

Net income

Q4’10 segment sales (million €) vs. Q4’09 EBIT before special items / Net income (million €)

20102009

374607

508

713

134


Review of “Other”

Million € Q4 2010 Q4 2009 2010 2009Sales 1,590 1,263 5,851 4,577thereof Styrenics 857 685 3,401 2,502

EBIT before special items (139) 51 (648) (717)thereof Corporate research

Group corporate costs Currency results, hedges and other valuation effects Styrenics, fertilizers, other businesses

(96) (66)

(229)

142

(79) (45)

9

80

(323) (226) (460)

387

(319) (209) (512)

339

Special items 149 293 (59) 90

EBIT 10 344 (707) (627)


0

1

2

3

4

5

6

7

8

9

1.8

(0.6)

(2.5)

(1.8)

6.5

(1.9)

1.5

* Payments related to intangible assets and property, plant and equipment

Cash 12/31/09

Operating CF

Capex* Acquisitions Dividends Other cash inflows

Cash 12/31/10

Excellent operating cash flow in 2010

thereof €1.6 bn dividends to BASF SE shareholders

Net cash-out for purchase of Cognis: €0.6 bn

Excellent operating cash flow despite €1.7 bn increase in net working capital

Capex* on last year´s level

Full Year 2010 (billion €)

Debt repayment

(2.3)0.5


Balance sheet remains strong

Balance sheet 2010 vs. 2009 (billion €)

Liquid funds

Accounts receivable

Long-term assets

22.7

15.0

21.7

31.7

7.7

1.8

Other liabilities

Financial debt

Stock- holders’ Equity

Dec 31 2010

Dec 31 2009

Dec 31 2009

Dec 31 2010

59.4

34.5

10.2

1.5

51.3

18.6

14.8

17.9

Inventories

Other assets

8.7

4.5

6.8

3.3

59.4

51.3

Impact of Cognis acquisitionAs of December 31, 2010:

Increase in long-term assets by €2.9 billion, thereof

– Goodwill: €0.6 billion– Other intangible assets:

€1.3 billion– Property, plant and

equipment: €0.8 billion

Addition of– €0.5 billion of inventories– €0.4 billion of receivables

Financial debt: €2.6 billion(incl. purchase price of €0.7 billion)


Outlook 2011

32


Outlook BASF Group 2011 Expectations for global economy

2010

GDP 3.9%

Chemicals (excl. Pharma) 9.3%

Industrial production 8.9%

US$ / Euro 1.33

Oil price (US$ / bbl) 79.50

Forecast 2011

3.3%

5.2%

5.0%

1.35

90


Outlook 2011 by regionChemicals (excl. Pharma)

EU-27

USA

Asia (excl. Japan)

Japan

South America

Industrial production

5.2%

2.9%

3.3%

9.6%

1.9%

5.0%

3.0%

3.9%

10.0%

2.3%

4.3%4.6%

World 9.3%

10.1%

5.0%

13.0%

8.8%

6.4%

8.9%

6.0%

5.7%

14.5%

15.8%

6.2%

2010 2011 2010 2011


Outlook 2011 for our key customer industries*

Key customer industries of BASF

2009 (World)

2010 (World)

Growth forecast 2011

(World)Industries total (8.1) 8.9 5.0Construction (5.8) (1.3) 3.6

Automotive (per-unit-base) (11.3) 21.5 6.1Electronics (11.1) 12.0 5.9

Information & Communications (11.9) 16.6 9.2

Textiles (8.7) 8.8 5.6Paper (3.3) 7.9 5.7

Nutrition (0.7) 3.9 3.4

Agriculture 0.9 4.2 2.3* Growth Production Index in % p.a.; change compared with previous year


Outlook 2011 by segments

Segments EBIT before special items 2011

Chemicals

Plastics

Performance Products

Functional Solutions

Agricultural Solutions

Oil & Gas

BASF Group (incl. Other)


We aim to grow sales on average by two percentage points per year faster than chemical market growth.We strive to grow our earnings further year by year, and to achieve an EBITDA margin of 18% by 2012.

We expect to achieve in 2011:- Significant increase in sales and EBIT before special items.- A high premium on our cost of capital. - Significantly higher sales and earnings in the 1st quarter 2011 vs. previous year’s quarter.

Targets 2011

Medium-term targets

Outlook 2011

We aim to continuously increase the annual dividend, or at least maintain it at the level of the previous year.

Dividend policy


BackupFinancial Highlights Agricultural Solutions

39


Agricultural Solutions Performance Q4 and FY2010

Million € Q4 2010 Q4 2009 Δ% FY 2010 FY 2009 Δ%

Sales* 845 703 20 4,033 3,646 11

EBITDA** 88 100 (12) 938 980 (4)

EBITDA** margin 10.4% 14.2% - 23.3% 26.9% -

EBIT** 42 44 (5) 749 776 (4)

EBIT** margin 5.0% 6.3% - 18.6% 21.3% -

Assets (as of Dec. 31) - - - 5,063 4,681 8

* Sales increase at constant exchange rates in Q4: +15% (FY: +6%)** before special items


Agricultural Solutions Sales by region

Million € FY 2010 FY 2009 Δ% Δ% (CER)*

Europe 1,566 1,520 +3 +1

North America 999 932** +7 +2

South America 1,030 816** +26 +20

Asia / Pacific 438 378 +16 +7

Total 4,033 3,646 +11 +6

* constant exchange rates ** restated figures due to new definition of regions


Agricultural Solutions Sales by indication

Million € FY 2010 FY 2009 Δ% Δ% (CER)*

Fungicides 1,739 1,708 +2 -2

Herbicides 1,410 1,165 +21 +16

Insecticides / Others 884 773 +14 +9

Total 4,033 3,646 +11 +6

* constant exchange rates