brudermüller shape, optimistic for 2011

BASF in excellent shape, optimistic for 2011

Dr. Martin Brudermüller

Member of the Boardof Executive Directors, BASF SE

HSBC Blue Chips Conference, Frankfurt, Germany March 31, 2011

2BASF Capital Market Story March 2011

1 | Record year 2010

2 | Focus on operational excellence

3 | Well positioned for profitable growth

4 | Outlook


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

Record year 2010

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


Excellent segment performance 2010

+6%2,430(5%)10,791Oil & Gas

(4%)749+11%4,033Agricultural Solutions

+123%467+36%9,703Functional Solutions

+123%1,554+31%12,288Performance Products

+123%1,284+38%9,830Plastics

+126%2,302+51%11,377Chemicals

Δvs. 2009

EBIT before special

items

Δvs. 2009

SalesSegment€ million


** Cash provided by operating activities less capex (in 2005 before CTA)*** 2009 adjusted for re-classification of settlement payments for currency

derivatives

Continuous strong cash flow

Cash Flow (billion €)

Cash provided by operating activitiesFree cash flow*

-1

0

1

2

3

4

5

6

7

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

6.5

3.9

**


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%

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*

Proposal:

3.7%

2.50

3.1% 3.9%

Attractive shareholder returnsRecord dividend


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%





4 | Outlook


Vertical and horizontal integration of production plants, energy and waste flows, logistics and site infrastructure

Know-how Verbund

Energy Verbund and combined heat and power plants lead to- Savings of ∼2.6 million tons

oil equivalent p.a.- Reduction of CO2-emissions

of ~6 million tons p.a.

9

Unique ‘Verbund’ conceptCost savings of >€500 million p.a. in Ludwigshafen alone

BASF site Ludwigshafen, Germany Verbund Concept


Fixed costs represent around 30% of total costs

Only slightly higher fixed costs, despite major acquisitions(Engelhard, Degussa Construction Chemicals, Ciba and Cognis)

Ciba and Cognis synergies as well as NEXT program will drive fixed costs down– Cost synergies Ciba:

>€450 million by 2012

– Cost synergies Cognis:at least €130 million by 2013

Stringent fixed cost management

Key facts

Fixed costs indexed EBITDA indexedSales indexed

BASF Group development 2001-2010

50

100

150

200

250

300

2001 2004 2007 2010

Index

~270%

~200%

~20%

Δ


> 500 individual projects to simplify processes, structures and production sites in all regions

Project timeline:2008-2011

Annual earnings contribution of €600 million in 2010 achieved

Targeted earnings contribution by 2012: ≥€1 billion

Completed restructuring programs

New efficiency program NEXT

Sustainable improvement of cost baseEfficiency program NEXT on track

New EXcellence Targets (NEXT)Annual earnings contribution (million €)

0

500

1,000

1,500

2,000

2,500

2003 2005 2007 2009 2012





4 | Outlook


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

14


FunctionalSolutions

6%

Other (Infrastructure, R&D)

12%

By region

Oil & Gas* 35%

Chemicals15%

Alternative sitesunder review

2%South America, Africa, Middle East4%

North America14%

Europe**63%

By segment

AgriculturalSolutions4%

Plastics14%

Asia Pacific17%

€12.6billion

€12.6billionPerformance

Products14%

Planned capital expenditures2011-2015

** Thereof ~€4.4 billion for Oil & Gas* Excluding investments in Nord Stream


Emerging marketsSignificant 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


Emerging marketsRecently announced major investment projects

MoU signed with Gazprom to further develop Achimov deposits in Siberia

World-scale acrylic acid, butyle acrylate and superabsorbant polymers (SAP) plant

MoU signed with Petronas to build world-scale specialty chemical facility – potential investment of approx. €1 billion

MoU signed with SINOPEC to explore expansion of the Verbund site – potential investment of approx. $1 billion

MDI plant with world-scale capacity of 400,000 metric tons – investment of €860 million

Product group

Feasibility study to be completed in 2011

Brazil

Feasibility studies to be completed by 2012

Nanjing, China

Feasibility studies to be completed in 2011

Malaysia

Negotiation to be conducted in 2011

Russia

Chongqing, China

Location

Commercial operation expected in 2014

Start up


6.5

12.5

20

0

5

10

15

20

2005 2010* 2020

BASF’s profitable growth pathin 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


Ongoingportfolio optimization

19


BASFcore

businesses

Powerful partnerships

Major acquisitions Major divestitures

Pharmaceuticals

Fibers

Printing systems

Polyolefins (Basell)

Polystyrene North America

Agchem generics

Premix

Crop protectionOil & Gas (Revus)Engineering Plastics Electronic ChemicalsCustom synthesisCatalysts (Engelhard)Construction Chem.Water-based resinsPigments (Ciba)Plastic additives (Ciba)Care Chem. (Cognis)Nutrition & Health (Cognis)

15 billion Euro(Sales)

9 billion Euro*

(Sales)

GazpromMonsantoPetronasShellSinopecTotal

* Not including Styrenics business

Selected transactions 2001 to date

Styrenics (Styrolution)(LoI for JV announced)

Pro-active portfolio management

Sale of shares in K+S(Proceeds for BASF ~€1 billion)


Cognis – integrating a global leader in value-added products

Pro forma business performance FY’2010Sales: ~€3 billionEBITDA: ~€550 millionEBITDA margin: ~18%Closing on December 9, 2010

Integration objectivesAchieve 20% EBITDA margin in the Performance Products segment by 2012Acquisition accretive as of 2012 Integration costs of €290 million until end of 2012Inventory step-up of €120 million in 2010/2011In 2010, total integration costs of €80 million incurred –thereof 75% inventory step-up.Synergies to generate €275 million of additional EBIT

- Cost synergies: €140 million by 2013- Growth synergies: €135 million by 2015


BASF + CognisImproved market positions

PreviousBASF 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


StyrolutionPlanning 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



25


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 €)


Further increase in R&D spending planned for 2011

Innovation will spur further growth

Total R&D expenditures 2010 (billion €)

€1.5 bn R&D expenditures in 2010 (vs. €1.4 bn in 2009)

~ 9,600 employees in R&D

~ 3,000 projects and topics

Research Verbund: About 1,900 partnerships with universities, start-ups and industry partners

Strong commitment to R&D

24%

1%

Corporate Research22%


26%

FunctionalSolutions12%

PerformanceProducts19%

Chemicals9%

Plastics10%

€1.5billion

Other2%





4 | Outlook


Outlook BASF Group 2011Expectations for global economy

2010

GDP 3.9%

Chemical production (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 regionChemical production (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*

0.9(0.7)(3.3)(8.7)(11.9)(11.1)(11.3)

(5.8)

(8.1)

2009(World)

3.43.9Nutrition

5.68.8Textiles

9.216.6Information & Communications

2.34.2Agriculture

5.77.9Paper

5.912.0Electronics6.121.5Automotive (per-unit-base)

3.6(1.3)Construction

5.08.9Industries total

Growth forecast 2011

(World)2010

(World)Key customer industries of BASF

* Growth Production Index in % p.a.; change compared with previous year


Outlook 2011 by segments

Oil & Gas


BASF Group (incl. Other)

Functional Solutions

Performance Products

Plastics

Chemicals

EBIT before special items 2011Segments


We aim to grow sales on average by two percentage points per year faster than chemical production 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


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


BackupFinancial Highlights Q4

38


6%2%13%4%*Q4’10 vs. Q4’09

Sales development

5%2%8% 11%FY’10 vs. FY’09

CurrenciesPortfolioPricesVolumesPeriod

* 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

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


ChemicalsStrong 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

8%0%20%9%Q4’10 vs. Q4’09

Sales development

5%0%28%18%FY’10 vs. FY’09


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

20102009


PlasticsHigh demand and price increases lifted sales significantly

Polyurethanes1,363+20%

PerformancePolymers

1,088+34%

€2,451+26%

251279

349 371

285

0

200

400

Q4 Q1 Q2 Q3 Q4

7%0%9%10%Q4’10 vs. Q4’09

Sales development

6%0%10%22%FY’10 vs. FY’09



20102009


5%6%4%3%Q4’10 vs. Q4’09

Sales development

4%11%4%12%FY’10 vs. FY’09


Performance ProductsEarnings 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%


9%1%10%15%Q4’10 vs. Q4’09

Sales development

8%1%10%17%FY’10 vs. FY’09


Functional SolutionsEarnings 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 SolutionsSouth 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)%

6%0%(4)%18%Q4’10 vs. Q4’09

Sales development

5%0%(3)% 9%FY’10 vs. FY’09


703845


132230

0

200

400

600

800

Q4 Q4

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

Exploration &Production1,059+9%

Natural GasTrading

1,905+16%

€2,964+13%

0%28%(15)%Q4’10 vs. Q4’09

Sales development

0%(3)%(2)%FY’10 vs. FY’09

PortfolioPrices/CurrenciesVolumesPeriod

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”

(707)(59)

(323)(226)(460)

387

(648)3,4015,8512010

344293

(79)(45)

9

80

51685

1,263Q4 2009

(627)90

(319)(209)(512)

339

(717)2,5024,5772009

10149

(96)(66)

(229)

142

(139)857

1,590Q4 2010

Salesthereof Styrenics

EBIT before special itemsthereof Corporate research

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

Special items

EBIT

Million €


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

Cash12/31/09

OperatingCF

Capex* Acquisitions Dividends Other cashinflows

Cash12/31/10

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 €)

Debtrepayment

(2.3)0.5


Balance sheet remains strong

Balance sheet 2010 vs. 2009 (billion €)

Liquid funds

Accountsreceivable

Long-termassets

22.7

15.0

21.7

31.7

7.7

1.8

Otherliabilities

Financialdebt

Stock-holders’Equity

Dec 312010

Dec 312009

Dec 312009

Dec 312010

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)


BackupFinancial Highlights Agricultural Solutions

49


Powerful Crop Protection Pipeline 2011Value jumps to €2.4 billion

* Launched: First registration in major market in 2002 (or elder than 5 years to current year), In launch: First registration in major market 1 to 5 years prior to current yearIn development: First registration in major market in current year or within next 5 years after current year. Points do not refer to exact launch year.

** Herbicide tolerance (HT) project Cultivance also reported in BASF Biotech Pipeline.

Stage IIILaunched2002-2005

Stage IIIn Launch2006-2010

Stage IIn Development

2011-2016

F 500® (F), Boscalid (F),

Oryzastrobin (F), F 500® seed treatment (F)

HT Project Cultivance**

Tritosulfuron (H), Chlorfenapyr (I)

Metaflumizone (I)

1 Insecticide

Topramezone (H), Kixor® (H)

€ 700 Million € 1,700 Million

Stage*

Market segments

Peak SalesPotential

Initium® (F)

Xemium® (F)

HT Project Dicamba

Field crops, specialtycrops, seed treatment

Metrafenone (F), Dimoxystrobin (F)

Field crops, specialtycrops, seed treatment

Field crops, specialtycrops, non-crop


5,063

18.6%

749

23.3%

938

4,033

FY 2010

4,681

21.3%

776

26.9%

980

3,646

FY 2009

8

-

(4)

-

(4)

11

Δ%

-14.2%10.4%EBITDA** margin

(5)4442EBIT**

-6.3%5.0%EBIT** margin

---Assets (as of Dec. 31)

(12)10088EBITDA**

20703845Sales*

Δ%Q4 2009Q4 2010Million €

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

Agricultural SolutionsPerformance Q4 and FY 2010


+7+16378438Asia / Pacific

4,033

1,030

999

1,566

FY 2010

3,646

816**

932**

1,520

FY 2009

+11

+26

+7

+3

Δ%

+20South America

+6Total

+2North America

+1Europe

Δ% (CER)*Million €

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

Agricultural SolutionsSales by region


4,033

884

1,410

1,739

FY 2010

3,646

773

1,165

1,708

FY 2009

+11

+14

+21

+2

Δ%

+9Insecticides / Others

+6Total

+16Herbicides

-2Fungicides

Δ% (CER)*Million €

* constant exchange rates

Agricultural SolutionsSales by indication

Dr. Martin BrudermüllerHSBC Blue Chips Conference

March 31, 2011Frankfurt, Germany

Stronger Asia for a Stronger BASF

55Stronger Asia for a Stronger BASF___March 2011

1 | Market growth in Asia Pacific2 | BASF in Asia Pacific3 | Asia Pacific Strategy 2020

55


0

2000

40006000

8000

10000

12000

1400016000

18000

20000

2010 2015 2020

45%

6%

5%

12%

10%

41%

13%

10%

21%

~5% p.a.

7%

25%

2010

7%

11%10%

36%

31%

6%

GDP growth in Asia Pacific will remain above global average until 2020

in billion €GDP* GDP* growth 2010 – 2020

Greater ChinaJapan

South AsiaASEAN

ANZKorea

* Source: BASF, real figures (base 2010)

in % p.a.

Japan 1.4ANZ 2.5Korea South 3.9ASEAN 4.7South Asia 7.0Greater China 7.6Asia Pacific ~5.0World ~3.3

17,000

21,500

13,000

5%


Asia – largest chemical market worldwide

Chemical demand (excluding pharma)

Asia Pacific 49%€1,500 billion

2020 €3,100 billion

2010€2,000 billion

6.5% p.a.Asia Pacific 41%

€800 billion

Source: BASF, real figures (base 2010)

Asia Pacific 41%

Western Europe 23%

North America 20%

South America 9%

Rest of world 7%

Asia Pacific 49%

Western Europe 20%

North America 16%

South America 8%

Rest of world 7%


1 | Market growth in Asia Pacific2 | BASF in Asia Pacific3 | Asia Pacific Strategy 2020

58


Key facts

Customers in 15 countries

Approx. 16,000 employees

120 production sites

12 R&D sites with total

headcount of 500 staff

~60% local production

Sales: €12.5 billion

New Zealand

Australia

China

Pakistan

Bangladesh

India Thailand

Singapore

Indonesia

Taiwan

JapanS. Korea

Malaysia

VietnamHong Kong

Asia Pacific service center

Regional headquarters

Verbund site

Chemical production site

R&D center

All figures as of December 2010

BASF is well positioned in Asia Pacific


We delivered on our Asia Pacific Strategy 2010

Sales target EBIT before special items target

22%20%23%13%17%

0

10

20

30

2007 2008 2009 Target2010

2010

* Sales to third parties by location of customers without Oil&Gas

Contribute 20% of BASF Group’s global sales in its chemical businesses*, thereof half in Greater China

Contribute 20% of BASF Group’s global earnings in its chemical businesses*

10%10%10%9%9%

14%10%12%10%11%

0

10

20

30

2007 2008 2009 Target2010

2010

30%

20%

10%

0%

Asia PacificGreater ChinaSales* target

30%

20%

10%

0%

Asia PacificEBIT before special items target

in % in %

* EBIT before special items without Oil&Gas


457612

700846 764

935

1,204

1,776

0

500

1.000

1.500

2.000

2003

2004

2005

2006

2007

2008

2009

2010

+ 15.7% p.a.

Sales and profitability of BASF’s business in Asia Pacific

Sales by location of customers EBITDAin billion € in million €

8.79.39.6

8.1

6.55.3

4.5

0

2

4

6

8

10

12

2003

2004

2005

2006

2007

2008

2009

2010

12.5

+ 21.4% p.a.


Sales Asia Pacific 2010: €12.5 billion

* Sales to third parties by location of customers

Sales by segment* Sales by sub-region*

Plastics25%

Others15%

Performance Products22%

FunctionalSolution14%

Agriculture4%

Chemicals22%

Greater China

46%

ANZ4%

South Asia10%

Japan13%

Korea10%

ASEAN16%

€12.5 billion

€12.5 billion


1 | Market growth in Asia Pacific2 | BASF in Asia Pacific 3 | Asia Pacific Strategy 2020

63


1. Strengthen our market focus through Industry and Customer Target Groups

2. Develop and market innovations in Asia for Asia

3. Invest in organic growth in Asia to achieve 70% of our sales based on local production

4. Improve operational excellence in Asia

5. Build the best team in the industry

BASF aims to grow above market: Asia Pacific sales to double by 2020

64


BASF’s targets for profitable growthin Asia Pacific

Aim to grow sales on average two percentage points per year above chemical market in Asia Pacific.

With expected chemical market growth of ~5% p.a. this will double sales by 2020 –while earning a premium on our cost of capital.

in billion €Sales in Asia Pacific Clear targets for 2020

0

10

20

2008 2020

expected market growth

of ~5% p.a.

BASF to double sales by 2020


Leading positions in growth industries

and emerging markets

Ongoing portfolio

optimization


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

Translate megatrends into business growthContinue expansion in Asia

Continue with active portfolio managementDrive portfolio closer to customers

Product and system innovation as growth driversStrong pipeline of innovations

Growth target:

Well positioned for profitable growth


Leading positions in growth industries and

emerging markets

67


Focus on five most important growth industries

Inorganics

Catalysts

Petro-chemicals

Intermediates

ConstructionChemicals

Coatings

Dispersion& Pigments

CareChemicals

PerformanceChemicals

PerformancePolymers

Polyurethanes

7% p.a.

7% p.a.

7% p.a.

5% p.a.

4% p.a.

~6% p.a.

Bubble Size: BASF Net Sales to 3rd parties (2009)Targeted BASF Industry Sales

Growth*

BASF Group Sales by

Industry in A/P

Construction

Pharma

Coatings

Packaging

Automotive

* 2010-2020 p.a.

10%

2%

8%

8%

14%


5 Main ITGs* in Asia

All ITGs started and well on track

>150 CTGs*

Many cross divisional customer strategies

developed

>€600m identified

Additional sales potential 2012

Industry & Customer Target Groups take us to the next level of competitiveness

* ITG: Industry Target Group; CTG: Customer Target Group

Current status:


2.32.4

3.4

2.0

0,0

1,0

2,0

3,0

1996-2000 2001-2005 2006-2010 2011-2015

Continuous investments underline our long-term commitment to Asia

Investments Major investment projectsin billion €

CaojingMDI/TDI2006

NanjingExpansion of Verbund site

2009 –2011

ChongqingMDI2014*

NanjingExpansion ofVerbund site

tbd***

MalaysiaWorld-scaleSpecialties

tbd**

Year Verbund Location2001 Verbund site Kuantan

2005 Verbund site Nanjing

* commercial operation estimate** feasibility studies to be completed 2011*** feasibility studies to be completed 2012

plan++actual+

+ incl. intangibles; ++ excl. intangibles


Nanjing Heart of our Chinese Verbund network

Key factsNanjing site

50/50 joint venture with Sinopec

USD2.9 billion investment to date

Capacity: ~ 2 million metric tons of sales products/year

Commercial start-up:June 2005

Ongoing USD1.4 billion investment in expansion of steam cracker (to 740,000 mt) and investment in nine new downstream plants and expansion of four existing plants


NanjingCurrent extension of value chains

Naphtha

Propylene

CO/H2

CO

CO/H2

CO

NH3 MeOH

CrackerExpansion to 750 kt/a

Polyethylene

EthyleneOxide

Oxo-alcohols

Acrylic Acid

Syngas

Acrylates

PropionicAcid

FormicAcid

DimethylFormamide

MethylAmines

Ethylene

Natural Gas

EthyleneGlycol

Oxygen

Crude C4

SAP

Non ionic surfactants

Butadiene Isobutene

2-Propylheptanol

Polyisobutene

Styrene Monomer

PS

EPS

EA/EOA/DMEOA

WCP

Aromatics


Further down stream expansionevaluations at Nanjing site

BASF / Sinopec signed MOU looking into further opportunities for expansion at Nanjing site

Projects under consideration:

• World scale HPPO

• New acrylic acid plant and butyl acrylate plant

• Capacity increases of 2-PH, styrene monomer and non-ionic surfactants plants

Estimated collective investment approx. USD1 billion

Individual feasibility studies to be completed by 2012

Nanjing site Key facts


Naphtha

Propylene

CO/H2

CO

CO/H2

CO

NH3 MeOH

CrackerExpansion to 750 kt/a

Polyethylene

EthyleneOxide

Oxo-alcohols

Acrylic Acid

Syngas

Acrylates

PropionicAcid

FormicAcid

DimethylFormamide

MethylAmines

Ethylene

Natural Gas

EthyleneGlycol

Oxygen

Crude C4

SAP

Non ionic surfactants

Butadiene Isobutene

2-Propylheptanol

Polyisobutene

Styrene Monomer

PS

EPS

EA/EOA/DMEOA

Aromatics

BASF-YPC

Cationic monomers

C-PAM

New facility

Organic flocculants

NanjingBASF to build first wholly-owned facility


Water Treatment / Paper ChemicalsNew facility in Nanjing

First 100% BASF-owned plant in Nanjing Verbund site

Plants to produce feedstock for organic flocculants

Chemical water treatment solutions based on organic flocculants contribute to relieve growing scarcity of clean water for municipal and industrial use

Organic flocculants also used as retention aids in the paper industry

Production start-up in Q3 2012

40,000 t/a quarternized cationic monomers plant

20,000 t/a cationic polyacrylamidesplant


Market for polyurethanes in China expected to grow at double digit rates and to become largest in the world within the next decade

New MDI plant with world-scale capacity of 400,000 metric tons of crude MDI per year

Investment: €860 million

Project will be one of the main anchor activities in Western China

Project approved by Chinese authorities in March 2011

Commercial operation expected 2014

76

MDI plant in Chongqing

Key facts


Key factsKuantan site

BASF Petronas Chemicals

60/40 JV BASF + Petronas

Approximately 600 employees

Products: plasticizers, acrylic monomers, BDO & derivatives

MOU to jointly look into new worldscale specialty chemical facilities in Malaysia signed Dec. 2010

Toray BASF PBT Resin Sdn. Bdh.

50/50 JV BASF + Toray

April 2006 commercial start-up

PBT resin

Kuantan, MalaysiaVerbund site for the ASEAN region


Site optimization in Asia – bringing more efficiency and value to our assets

Our site optimization initiative is vital part of “NEXT”

Aim to further increase overall production efficiency from existing plants:• Yield more energy efficient processes• Yield extra production capacitiesEfficiency of implementation in Asia Pacific done in different waves:

• 1st wave - Eight largest production sites in Asia: Nanjing, Kuantan, Shanghai, Yeosu, Ulsan, Thane, Mangalore and Pasir Gudang

• 2nd wave: Smaller sites being consideredApprox. €150 million annual earnings contribution from 1st wave by 2012


Ongoingportfolio optimization

79


BASFcore

businesses

Powerful partnerships

Start-up / PlannedNew capacities

Closures / SaleExisting capacities

SinopecPetronas

• Verbund site, China

• Verbund site, Malaysia

• Dispersions & Pigments

Indonesia + China

• Intermediates Lab, China

• Innovation Campus, China

• Cellasto plant, China

• PU System House, China

• MDI Plant, China

• Cationic monomers, China

Selected transactions 2008 to date

• Process Catalysts, China

• Marine Coatings Tolling, Japan

• Styrene Monomer, Korea

• Admixture Business, Korea

• Admixture, Suzhou, China

• Coatings + Admixture, Japan

• Automotive OEM Coatings,

Australia + Philippines

• Effect Pigments, China

Actively managing business portfolio



81


Local product adaptation

Focus on technical customer support

more than 15 Locations: Nansha, Chigasaki, Sydney, Tuas, …

Basic research, cooperations with universities

Focus on new technologies

2 Locations: Shanghai, Chandivali

Product developmentand formulations

Focus on Asian market needs

10 Locations: Singapore, Pasir, Gudang, Amagasaki...

Regional R&D Center Local Technical Center

Leverage all our innovation opportunities in Asia Pacific!

Global R&D Center

We innovate for local customer needs and participate in latest technologies


Strengthening our R&D platform in Asia Pacific

Singapore

Shanghai

Chandivali

83

12 R&D sites in Asia Pacific

R&D employees to increase from 500 to more than 800 by 2020

Co-operations with ~100 research institutes and universities

Build two R&D clusters in Asia Pacific in China and India

Leverage global R&D capabilities with Competence Centers in Singapore, India and China

Key facts


€55 million investment includes

innovation campus and Greater

China head office

To open in H2/2012

450 scientific and technical

professionals

Integrated into global R&D

network

Local and international team

New Asia Pacific Innovation Campus to be established in Shanghai


Innovation in Asia for AsiaExample Dispersions & Pigments

Antimicrobial coatings

Microscope pictures of dead / alive (red/green spots) E. coli on BASF paint

Interior Premium Paint Market in Asia Pacific:

~€500 million in 2010. Target to increase our current share of 4% in this high margin market.

Market requirement:

Long lasting ‘microbe-free’ surface

BASF Solution through chemistry:

Suppress microbial growth by having an anti-microbial attached to the polymer backbone forlong lasting efficacy and thereby enhancing the differentiation of our products in the market.


Stronger Asia for a stronger BASF

Outgrow regional chemical market by 2 percentage points

Asia Pacific sales to reach €20 billion

More than 70% of sales in Asia Pacific through local production

Develop and market innovations in Asia for Asia

Build the best team in the industry

Vision 2020Roadmap 2011Identify more investment and acquisition opportunities.

Enhance cross-divisional thinking and collaboration through industry and customer target groups.

Increase brand awareness.

Sharpen focus on our people.

We continue to earn a substantial premium over our cost of capital


Shanghai

Hebei

ShaanxiGansu

Inner

Mongolia

Ningxia

Jiangxi

Henan

Sichuan

Hebei

SichuanSichuan

Liaoning

Henan

Hubei

HunanJiangxiChongqing

Hebei

Anhui

Tianjin

Hong Kong

Phased approach to capture potential of emerging provinces in China

Beijing

Fujian

Upside potential > €200 million sales through increased penetration of emerging provinces

BASF will target inland cities and provinces in a phased approach

Higher business penetration in China following State development measures –“Go West” Campaign

Key facts


Solutions for more efficient cars –megatrend mobility

Ultramid®

for light-weight motor parts

Terblend N® and Terluran®

for high-quality plastic components

Neopolen®

for absorption of collision energy

Lumogen® Blackand Sicopal ® Blackfor heat reduction of dashboards

UV cured coatingshigh environmental compatibility, rapid coating processes

Astacin® leather finishesenvironment-friendly

Catalystsfor purification of exhaust fumes and reduction of air pollutants

Global automotive market expected to grow by 5.0-7.5% p.a. mid-term

Example engineering plastics: share of plastics in medium-sized cars expected to grow from today’s ~15% to over 25% in 2020: even greater potential in China

Keropur®

Fuel additiveshelp reduce fuel consumption

Sustainable mobilityInnovative system supplier to the automotive industry


Global construction market expected to grow by up to 5 % p.a. midterm

BASF’s sales 2009* to the construction industry: €3.8 bln

Globally, buildings use 35% of world’s energy: enormous potential for savings through insulation

Example Shanghai: fully-insulated buildings would reduce energy consumption by more than two-thirds

Solutions for more efficient housing –megatrend construction and housing

COLO-FAST®

for solar panel frames

Micronal® PCMlatent-heat storage system

Neopor® and Rheocell®

for heat insulation

Styrodur® C for insulation ofwalls and floors

Lumogen®, Paliogen®

and Sicopal®black pigments forcool surfaces

Elastopor® H for insulation ofceilings, roofs and walls

HECK® MultiThermsystems for insulation of walls (inside and outside)

X-SEED®

concrete hardener

Sustainable housing

Walltite®

Sprayfoam for insulation of walls

Innovative system supplier to the construction industry

brudermüller shape, optimistic for 2011

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