basf’s catalysts division: driving accelerated growth...basf investor day automotive september 5,...
TRANSCRIPT
1BASF Investor Day Automotive September 5, 2012 Catalysts
BASF’s Catalysts Division: Driving Accelerated Growth
Frank BozichPresident Catalysts Division
September 5, 2012
2BASF Investor Day Automotive September 5, 2012 Catalysts
Catalysts – a strategic fit for BASF
Chemicals18%
Catalysts9%
Plastics15%
Performance Products21%
Other9%
Agricultural Solutions6%
Functional Solutions15%
Oil & Gas16%
€73.5billion
BASF Group sales 2011
3BASF Investor Day Automotive September 5, 2012 Catalysts
1 | BASF a market leader in catalysts
2 | Strategy for growth in automotive
3 | Emerging opportunity in Battery Materials
4BASF Investor Day Automotive September 5, 2012 Catalysts
Global megatrends drive catalysts demand
Tightening regulationsMobile emissions regulations Fuel & environmental regulations
Higher yields Shift in desired industrial outputCleaner and more efficient use of raw material feedstock
Increasing energy costs
Efficient use of crude oil, natural gas, coal and feedstockRaw material change
Innovation is the key to success in the catalysts market; We create chemistry for a sustainable future
Evolving market dynamics
Accelerated shift to BRIC marketsContinually growing industrial capacities
Air quality Process efficiency Energy efficiency Market expansion
5BASF Investor Day Automotive September 5, 2012 Catalysts
Robust growth in catalyst solutions market
*Strategic relevant market (w/o PM) includes mobile emissions catalysts, chemical catalysts and refinery catalysts
Annual catalysts demand (in € billion)
Mobile emissions catalysts
Refinery catalysts
Chemical catalysts
~15.5
~11.6
4.5
4.0
3.1
6.5
5.6
3.3
~24.3
11.6
12.7 Precious metals demand (w/o jewelry)
Catalyst demand (w/o PM)
BASF strategic relevant market BASF strategic relevant market* (w/o PM)
13% CAGR
6% CAGR
2% CAGR
2011 2011 2015
Data source: BASF internal data
CAGR
8% p.a.
6BASF Investor Day Automotive September 5, 2012 Catalysts
BASF – The # 1 global catalysts
solutions provider
7BASF Investor Day Automotive September 5, 2012 Catalysts
BASF has strongest portfolio in the industry – catalysts, materials, services
FCC* catalysts and additives for oil refining
Emissions-control catalysts for cars, trucks, motorcycles
Precious & Base Metal Services
Supports precious metal-based catalyst businesses with full-loop distribution, financial services for Platinum Group Metals (PGMs)
Chemical and polyolefin catalysts plus adsorbents
Mobile Emissions Catalysts
Chemical Catalysts
Refinery Catalysts
New Business Development
Creates new “white space” business ventures in areas such as energy storage, clean air, recycling, catalytic coatings
Current and next-gen battery materials development
* FCC - Fluid catalytic cracking catalysts
Battery Materials
8BASF Investor Day Automotive September 5, 2012 Catalysts
BASF – leading position in global catalysts market
* Overall position in strategic relevant markets excluding precious metals and substrates; includes BASF joint ventures in Japan and Korea
Product group Global positioning* Regional strength
Mobile Emissions Catalysts
# 1 North AmericaEuropeSouth AmericaJapan and KoreaChina India
# 1# 2# 2# 1# 1# 1
Chemical Catalysts # 1 North AmericaEuropeAsia
# 1 # 1# 2
Refinery Catalysts # 3 North AmericaEuropeAsia
# 3# 5# 5
9BASF Investor Day Automotive September 5, 2012 Catalysts
Strong focus on Mobile Emissions Catalysts
Refinery Catalysts
415
Mobile EmissionsCatalysts 2,484
Underlying sales 2011 (in € million)w/o “Precious & Base Metal Services” and precious metals
Chemical Catalysts566
Precious & BaseMetal Services
2,860
RefineryCatalysts
415
ChemicalCatalysts
566
Mobile EmissionsCatalysts1,319
Total sales 2011 (in € million)
€6.4*billion
€2.4*billion
* Including €55 million in other sales
10BASF Investor Day Automotive September 5, 2012 Catalysts
Balanced sales base
* Excludes “Precious & Base Metal Services” and precious metals
Asia25%
South America, Africa, Middle East12%
Sales 2011 by industry*
Europe29%
North America34%
Refinery18%
Other2%
Chemicals24%
Motor vehicles 56%
Sales 2011 by region*
€2.4billion
€2.4billion
11BASF Investor Day Automotive September 5, 2012 Catalysts
Global manufacturing and R&D footprint, with close customer proximity
Netherlands
KoreaJapan
GermanyItalyUSASpain
Brazil
South Africa
IndiaThailand
China
Manufacturing sitesR&D sites
United Kingdom
12BASF Investor Day Automotive September 5, 2012 Catalysts
Strong R&D platform
Global R&D presence
~€131 million in catalysis R&D spend in 2011
Focus on product innovation and aligning regional capabilities to local market needs
>650 catalyst experts globally
Supported by 10,000 scientists in global Verbund
Key facts
Tokyo, Japan (NE Chemcat)
Seoul, Korea (Heesung)Shanghai, China
Hannover, Germany
Ludwigshafen, Germany
Union & Iselin, New Jersey
R&D sites
Beachwood, Ohio
Nienburg, Germany
Guilin, China
Pasadena, Texas
Huntsville, Alabama
De Meern, Netherlands
13BASF Investor Day Automotive September 5, 2012 Catalysts
Sales and profitability development by business
Sales (in € bn)
2.4
EBITDA Indexed
1.81.6
1.4
1.8
Sales (in € bn) EBITDA: avg. 3% .
1.2
2.52.4 2.5
Underlying sales (in € billion)w/o “Precious & Base Metal Services” and precious metals
Sales of “Precious & Base Metal Services” (in € billion)
2.9
14BASF Investor Day Automotive September 5, 2012 Catalysts
1 | BASF a market leader in catalysts
2 | Strategy for growth in automotive
3 | Emerging opportunity in Battery Materials
15BASF Investor Day Automotive September 5, 2012 Catalysts
Growth drivers for Mobile Emissions Catalysts
Global tightening of environmental regulations
– in established and emerging markets
– driving heavy-duty diesel market CAGR of 22% through 2015
Accelerated shift of vehicle manufacturing to BRIC countries
– Chinese automotive production will grow to 26 million units by 2015 which corresponds to 11% CAGR
Ongoing powertrain changes, requiring continuous development of new catalytic solutions
16BASF Investor Day Automotive September 5, 2012 Catalysts
Emissions catalysts market – regulation remains primary demand driver
Light Duty Heavy Duty Motorcycle
USA CA LEV III US Tier 3
US 2010 Global, 4a Global, 4b
EuropeEuro 5 Euro 6 Euro 7
Global, 4a Euro VI Global, 4b Euro VIIEuro 4 Euro 5
BrazilEuro 5 Euro 6
Euro V Euro VI
RussiaEuro 4 Euro 5 Euro 6Euro IV Euro V Euro VI
IndiaEuro 4 Euro 5 Euro 6Euro IV Euro V Euro VIEuro 3 Euro 4 Euro 5
China Euro 4 Euro 5 Euro 6Euro IV Euro V
Euro 3 Euro 4 Euro 5
South Korea
Euro V Euro VI Euro VII
Japan Global, 4a Global, 4b
Vietnam Euro 3 Euro 4
Thailand Euro 42010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Phase in
Announced Regulations Future Regulations
17BASF Investor Day Automotive September 5, 2012 Catalysts
BASF – leading mobile emissions catalysts provider
BASF:
# 1 in light-duty vehicles
# 2 in heavy-duty diesel vehicles
# 2 in motorcycles
Mobile Emissions Catalysts SRM* (in € billion)
10% p.a.
* Strategic relevant market excluding precious metals
22% p.a.
15% p.a.
Light-duty
Motorcycles
Heavy-duty diesel
4.0
6.5CAGR
13 % p.a.
18BASF Investor Day Automotive September 5, 2012 Catalysts
What makes BASF the Mobile Emissions Catalysts market leader?
# 1 in Light-duty # 2 in Heavy-duty diesel # 2 in Motorcycles
Key factors: Technology leadership – matching innovation focus with regulation maturity
Proximity to the customer – local manufacturing, technical services and R&D presence, especially in emerging regions
Greater access to Asia – strong position in Asia through joint ventures in Japan and Korea
Focus on high growth market – heavy-duty diesel vehicles
Leveraging BASF’s inroads – excellent customer relations in global automotive markets
19BASF Investor Day Automotive September 5, 2012 Catalysts
Technology leadership Provider of choice for innovative technology solutions
Saves mass, space and cost by combining four functions in just two components
Selected for Hyundai’s HED-7 concept car
Converts nitrogen oxides (NOx) to nitrogen
High-quality and cost-effective solution for NOx emission control
Controls nitrogen oxides and particulate matter
Superior durability; maintains performance while saving systems space and weight
Diesel Oxidation Catalyst (DOC)/LNT and
SCR on filter
Lean Nitrogen Oxides Trap (LNT)
Selective Catalytic Reduction (SCR) on filter
~38% of Mobile Emission Catalysts sales in 2011 comefrom innovations developed over the last five years
20BASF Investor Day Automotive September 5, 2012 Catalysts
Technology leadership Innovation leader in environmental technology
Global emissions catalysts patent applications (2006 – Q1 2012)
CompetitorsBASF
Number of patents
21BASF Investor Day Automotive September 5, 2012 Catalysts
Proximity to the customerLeveraging local presence and capabilities in China
Estimated annual sales of 25 million passenger cars in China by 2020
BASF is a market leader in China
BASF has leading position among top 5 local OEMs
>20 million catalysts manufactured at integrated Shanghai emissions catalysts and R&D hub since 2000
>€65 million invested in Shanghai-based operations to date
Targeting €54 million in incremental Catalysts division investment in China through 2016
A decade of progress in China
BASF catalysts site in ShanghaiBASF catalysts site in Shanghai
BASF catalysts site in ShanghaiBASF catalysts site in Shanghai
22BASF Investor Day Automotive September 5, 2012 Catalysts
Proximity to the customerExpansions in high-growth mobile emissions catalysts regions
#2 catalysts supplier
Manufacturing capacity expanded at Indaiatuba, Brazil, production site (2008, 2010, 2011)
India growing at 16% CAGR
#1 catalysts supplier
Manufacturing capacity expanded at Chennai, India, production site (2009, 2011)
Brazil growing at 9% CAGR 2011 – 15
BASF catalysts site in BrazilBASF catalysts site in Brazil
BASF catalysts plant in IndiaBASF catalysts plant in India
BASF invested ~€16 million to expand capacities in these high-growth regions since 2006
Targeting €42 million incremental investments in Brazil and India through 2016
23BASF Investor Day Automotive September 5, 2012 Catalysts
Greater access to Asia Strong position in Asia through joint ventures
Joint ventures expand BASF’s Asian leadership:
BASF and JV partners have leading ~30% mobile emissions catalysts market share in Asia
BASF has ~50% share with Japanese and Korean OEMs, e.g. Hyundai and Nissan
Access to a high percentage of global transplant business with leading OEMs
Greater R&D capabilities and collaboration
Location Joint venture
Established Ownership stake
KoreaPartner:
Koo Family, founder of LG Group
1983 BASF 50%
Japan Partner:Sumitomo Metal Mining Co., Ltd
1963 BASF 50%
Heesung Catalysts
Corporation
N. E. Chemcat Corporation
24BASF Investor Day Automotive September 5, 2012 Catalysts
Focus on high-growth market Heavy-duty diesel vehicles
BASF’s current technologies and business
Leading edge technologies for new on-road and off-road regulations
Cost effective state-of-the art technologies for emerging markets
On-road market: Significant new business already awarded to BASF
Off-road market: Gold Certification status at Caterpillar – the #1 player in off-road
Targets
Increase market share in on-road market
Secure leading share with top customers in emerging off-road market
25BASF Investor Day Automotive September 5, 2012 Catalysts
Strong relationship with all major global and regional OEMs
26BASF Investor Day Automotive September 5, 2012 Catalysts
We have won “majority of platform competitions over the 2008 – 2011
timeframe”
27BASF Investor Day Automotive September 5, 2012 Catalysts
1 | BASF a market leader in catalysts
2 | Strategy for growth in automotive
3 | Emerging opportunity in Battery Materials
28BASF Investor Day Automotive September 5, 2012 Catalysts
Electromobility The race to the future
Batteries are the key enabling technology for future mobility
Electromobility supports global sustainable transportation needs and reduced emissions targets
The future of electromobility depends on batteries with higher energy density, greater power, lower cost
Innovative solutions from the chemical industry will determine the future performance of batteries
Battery materials such as cathodes and electrolytes are vital to performance, cost and safety of batteries
29BASF Investor Day Automotive September 5, 2012 Catalysts
All major powertrain visions rely on battery
Electromobility will play a significant role in future automotive alternatives
Fuel tank E-motor Battery ExtenderCombustion
Chemistry is the key enabler
Conventional Mild Hybrid Full HybridPlug-in Hybrid
Range Extender
Full Electric
Ford FusionHonda CR-Z Nissan LeafToyota Prius PHV Chevrolet VoltConventional
0.5 Kwh 2 Kwh 4 Kwh 16 Kwh 24 Kwh
30BASF Investor Day Automotive September 5, 2012 Catalysts
BASF – developing a leading position in battery materials solutions
BASF SRM* (cathodes and electrolytes): >€5 billion market potential by 2020
Battery Materials Activities:Developing advanced cathodes and electrolytes for lithium-ion batteries as well as next generation battery systems
Collaborating with leading universities, institutes & industry partners
Battery Materials Targets:
Position BASF as a leading global solution provider for battery and cell manufacturers
Leverage technology and business synergies, with strong cooperation from battery producers and OEMs
Achieve sales of at least €500 million by 2020
* Strategic relevant market
BASF intends to become a leading player in the global battery materials market
31BASF Investor Day Automotive September 5, 2012 Catalysts
Battery materials acquisitions Extending our capabilities and technical strength
Nickel-Metalhydride (NiMH) batteriesAcquisition of Ovonic Battery Co. (Feb. 2012)
Electrolyte technologiesAcquisition of Merck’s electrolytes activities (April 2012)
Electrolyte formulations for lithium-ionbatteries
Acquisition of Novolyte Technologies (April 2012)
Lithium-sulfur batteriesInvestment of $50 million in Sion Power (Jan. 2012)
32BASF Investor Day Automotive September 5, 2012 Catalysts
BASF: Investing & expanding Targeting a three-digit million Euro investment 2011-2016
Cathode Materials
Investments in Elyria, Ohio; production start-up by end of 2012
Suitable for NCM* materials and next-generation HE-NCM*
Lithium iron phosphate cathode technology
Licensing agreement for production and sale of advanced cathode material used in hybrid vehicles and grid storage batteries
Electrolytes
Extension of BASF’s business with high-purity electrolyte formulations
Acquired global vinylene carbonate license from Mitsubishi Chemical
BASF NCM production plant Elyria, Ohio
BASF research laboratory, Ludwigshafen
* NCM: Nickel Cobalt Manganese, HE-NCM: High Energy Nickel Cobalt Manganese
33BASF Investor Day Automotive September 5, 2012 Catalysts
BASF’s Technology Roadmap – Battery materials technologies for today and tomorrow
Gen1: Gen2: Current
Gen 3:2017
Gen 4: 2022+
Ni-MH***
Li-ion**
Li-ion HV**
Li-S*
*** Ni-MH: Nickel-metal hydrideCurrent activities focused on technology licensing
From Ni-MH to Lithium-Sulfur
Driving range (in km)
* Li-S: Lithium-Sulfur, ** Li-ion: Lithium ion, Li-ion HV: Lithium high voltage
34BASF Investor Day Automotive September 5, 2012 Catalysts
BASF’s Catalysts Division targets 2015
Operational targets
Extend our position as the global leader in catalysis
Maintain our # 1 market position in light duty gasoline vehicles, particularly in emerging Asia
Significantly increase our market share in heavy duty diesel vehicles
Build on our industry-leading technology position
Build a leadership position in global Battery Materials market
35BASF Investor Day Automotive September 5, 2012 Catalysts
Financial targets
Achieve total Catalysts division sales, ex. metals*, of at least €3.0 billion by 2015 (as disclosed in 2011)
Earn a premium on cost of capital** by 2014
BASF’s Catalysts Division targets 2015
* Excluding ‘Precious & Base Metal Services’ and precious metals** Excluding ‘Precious & Base Metal Services’, precious metals and battery materials