Markus Kamieth President
Coatings division
Exane BNP Paribas
Investor field trip
CoatingsWell positioned in attractive segments
Münster
September 7, 2016
BASF – Coatings division, September 2016 2
Cautionary note regarding
forward-looking statements
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 forward-looking statements, and the estimates and
assumptions associated with them, except to the extent required by applicable laws and
regulations.
BASF – Coatings division, September 2016 33
Agenda
Functional Materials & Solutions at a glance1
Coatings division- Overview
- Acquisition of Chemetall
- Path forward
2
BASF – Coatings division, September 2016 4
BASF today – a well-balanced portfolio
Total sales 2015: €70.4 billion
Percentage of sales 2015*
* Not depicted here: ~4% of Group sales reported as ‘Other‘ ** Natural Gas Trading has been divested on Sep. 30, 2015.
BASF – Coatings division, September 2016 5
PerformanceMaterialsCatalysts
Sales 2015:
€6.3 billion
Mobile emissions
catalysts
Process catalysts
Battery materials
Precious metals
trading
Sales 2015:
€3.2 billion
Sales 2015:
€6.7 billion
Automotive OEM &
refinish coatings
Industrial coatings*
Decorative paint
solutions
Polyurethane systems
Engineering plastics
Biodegradable
plastics
Foams
Epoxy systems
Downstream solutions supporting
sustainability via innovation
Coatings
Sales 2015:
€2.3 billion
Concrete admixtures
Systems for
residential and
commercial
construction
Construction Chemicals
* BASF to sell its global industrial coatings business to AkzoNobel.
BASF – Coatings division, September 2016 6
Functional Materials & Solutions delivers
profitable growth, high earnings resilience
14.2
10.9
15.0
17.3 17.0 17.3 17.718.5
50
100
150
200
250
0
4
8
12
16
20
2008 2009 2010 2011 2012 2013 2014 2015
Sales*
billion €
EBITDA bSI
indexed
* Figures shown as reported; with “Precious / Base Metal Services” which include the
precious metals trading activities (EBITDA margin ~1%. Sales in 2015: €2,388 million).
BASF – Coatings division, September 2016 7
Sales 2015
billion €
We approach the market with a strong
industry orientation
Consumer
Goods
Construction
Automotive
€18.5
billion
Chemicals/
Industrials
BASF – Coatings division, September 2016 8
Strong customer relationships turn our
innovation power into business success
Numerous formats drive collaboration with our customers
>7,000 BASF experts in customer facing functions* help developing ideas into products
* Sales, marketing, technical experts, customer service; total number of employees >25,000
BASF – Coatings division, September 2016 9
Automotive is a growth business
for BASF
BASF sales to Automotive vs. global vehicle production
(indexed)
* Excl. precious metals, coatings refinish business
50%
75%
100%
125%
150%
175%
2007 2008 2009 2010 2011 2012 2013 2014 2015
BASF sales
to AutomotiveCAGR
6.7%
Global vehicle
production
CAGR
2.8%
BASF – Coatings division, September 2016 1010
Agenda
Functional Materials & Solutions at a glance1
2 Coatings division- Overview
- Acquisition of Chemetall
- Path forward
BASF – Coatings division, September 2016 11
What are coatings used for?
Protection Color
BASF – Coatings division, September 2016 12
Coatings – smart combination of different
functional layers
ClearcoatTransparent protection
BasecoatColor, metallic effect
Primer Finish quality, stone chip resistance
E-coatCorrosion protection
Pre-treatment
BodySteel, aluminum
Example: Automotive OEM coatings
BASF – Coatings division, September 2016 13
More than 75% of Coatings’ sales related
to Automotive markets
Decorative
Paints
Industrial
Coatings**
Automotive
Refinish Coatings
Automotive
OEM Coatings
Coatings
Technology approvals
Efficient and robust
processes
Customer proximity
Well established
premium brands
Distribution network
Value added services
Innovative products
and processes
Flexible production
systems
Best known and most
desired decorative
paint brand in Brazil
Distribution network
Success factors Success factors Success factors Success factors
* Percent of total sales in 2015
** BASF to sell its global industrial coatings business to AkzoNobel.
BASF – Coatings division, September 2016 14
BASF Coatings with strong positions
serving attractive markets
Decorative
Paints
Industrial
Coatings*
Automotive
Refinish Coatings
Automotive
OEM Coatings
5% 3% 4%4%
Expected CAGR of strategic relevant markets 2015 – 2025
#2 globally Coil #3 Europe#3 globally #1 Brazil
Coatings
** BASF to sell its global industrial coatings business to AkzoNobel.
BASF – Coatings division, September 2016 15
Strong partnerships, high-value brands
Leading market position based on technology strength, innovative business models
Technology
Innovative integrated coatings processes
Design
competencies
Color development
Technical know-how & support
Manufacturing
Two outstanding premium brands in Refinish globally
Strong OEM partnerships High brand value
One of the strongest end-consumer brands in Brazil
BASF – Coatings division, September 2016 16
Regionally balanced portfolio – about
50% of sales in emerging markets
Europe
Strong position in Automotive
OEM and Automotive Refinish
Coatings business
North America
Strengthened market position
with Automotive OEM
Coatings, and well-established
Refinish premium brands
Asia Pacific
#1 player in Automotive OEM
Coatings market in China
South America
Market leader position with
Suvinil® for premium
Decorative Paints in Brazil
Asia Pacific
728 (23%)
South America,
Africa, Middle East
602 (19%)Europe
1,266 (40%)
North America
570 (18%)
Sales by region* 2015
in million €
€3,166million
* By location of customer
BASF – Coatings division, September 2016 17
.
17
Coatings’ sites are in proximity to 80% of
global Automotive production
North America
3 Production sites
1 R&D center
Europe
8 Production sites
3 R&D centers
Asia Pacific
6 Production sites
4 R&D centers
South America
3 Production sites
1R&D center
Production sites
R&D centers
Africa
1 Production site
BASF – Coatings division, September 2016 18
BASF Coatings with strong #1 position as
supplier to OEMs in China
BASF Coatings well positioned to
capture future growth in China
A strong base: #1 in the Chinese
OEM segment already today
Strong R&D hub at BASF
Innovation Campus, Shanghai
>30% of our global Coatings R&D
capacity will be in Asia by 2020
Commitment to further grow our
asset footprint in the region
OEM market in China
Growing demand for the latest
OEM Coatings technology
Sustainability and innovative
process solutions become key
A long history in China
Basecoat plant
Caojing
Resins plant
Caojing
Headquarters &
Production Minhang
Automotive coatings
plant Shanghai
BASF Coatings grows faster than Chinese OEM market
BASF – Coatings division, September 2016 19
BASF to acquire Guangdong Yinfan
Chemistry
Transaction Highlights
Agreement signed in April 2016
Acquisition of state-of-the-art
facilities, technology and
established brands
Complementary product portfolio
and customer base
Local production footprint to
enhance customer proximity
Transaction expected to close in
the second half of 2016
Strengthens BASF position in the fast-growing Chinese automotive aftermarket
Closer proximity to Refinish customers
Jiangmen City
Guangdong Province
BASF – Coatings division, September 2016 20
Coatings has delivered profitable growth
in recent years
2.5
2.2
2.6
2.83.0 2.9
3.0
3.2
50
100
150
200
250
0
1
2
3
2008 2009 2010 2011 2012 2013 2014 2015
Sales
billion €
EBITDA bSI
indexed
BASF – Coatings division, September 2016 21
BASF to acquire Chemetall
Transaction highlights
Purchase price of US$3.2 billion (debt free)
All-cash offer, financing secured
Expected closing of transaction by the end of 2016
Synergies on industry-typical level
EPS accretive in year 1 excluding integration costs, in year 2 including integration costs
Transaction will significantly enhance BASF Coatings’ position as complete solutions provider
Chemetall – a global technology and innovation leader in metal surface treatment
BASF – Coatings division, September 2016 22
Chemetall complements BASF’s portfolio,
adding highly attractive surface treatment
Superior products and processes for BASF customers - also beyond Coatings
Chemetall
Pre-treatment
BASF
Coatings
Offer full solution competence
to customers across wide range
of industries
Benefit from convergence of
pre-treatment and coatings,
offering superior product and
process solutions
Develop superior application
processes leveraging joint
expertise
Complete surface
treatment provider
Excellent customer
access and
approvals especially
in automotive
Well recognized
customer service
offering in coatings
Chemical know-how
and strong R&D
platforms within
BASF Group
In-depth customer
insights across wide
industry range
Recognized
technology leader in
metal surface
treatment
Complete portfolio
beyond pure surface
treatment
+
BASF – Coatings division, September 2016 23
Chemetall – an excellent strategic fit for
BASF Coatings
Technology
adjacency
Compelling combination of surface treatment and coatings technologies
Creates unmatched “solution competence” for customers
Access to key
growth markets
Superior access to growth industries (e.g. automotive, aerospace)
Global footprint with local production, technical centers in China and India
Downstream
solution business
Complex formulation businesses based on application know-how
Customer centricity, product quality and technical service as differentiators
Enhanced
technology basis
Growth opportunities through combining broad technical and application
competence with BASF’s chemistry and formulation know-how
Strong and
robust financials
Excellent track record of growth above market and attractive margins
“Asset light” business model with strong free cash flow conversion
Industry-leading
expert team
High-quality resources and technical expertise
~1,200 sales professionals with in-depth application and process know-how
BASF – Rating Agency Meeting, March 2016 24
Coatings: Path forward
We aim at continued profitable growth via:
Focusing on Automotive globally and profitable niche
segments
Leveraging our technology leadership and cost
competitiveness
Further strengthening our collaborations with OEMs
Continued expansion of our asset footprint in Emerging
Markets
BASF – Coatings division, September 2016
BASF – Coatings division, September 2016 25
BASF – Coatings division, September 2016 26
Chemetall – a global leader in surface
treatment products and services
FiguresFacts
Sales
2015: US$845 million
2016E*: US$851 million
2017E*: US$895 million
EBITDA
2015: US$202 million
2016E*: US$217 million
2017E*: US$231 million
EBITDA margin
2015: 24%
2016E*: 25%
2017E*: 26%
CAGR sales
(2007 – 2015)~7% (at constant exchange rates)
Key customer
industries
Automotive, aerospace, coil,
metal forming
Regional sales
~50% Western Europe
~30% North America
~20% Emerging markets, mainly Asia
Employees ~2,500 (~50% sales professionals)
Sites21 production sites in all regions
10 R&D sites
One of the strongest globally managed
brands in the sector
Proprietary manufacturing technologies,
rigorous product quality and performance
standards
Leading market positions in the automotive,
aerospace and cold forming segments
Long-standing, service-intensive customer
relationships
Significant global presence and record of
accelerated expansion in emerging markets
Track record of strong growth and high
profitability* average analysts’ estimates