ulrich von deessen€¦ · ~350 external stakeholders and ~90 basf experts and managers from...

150 years

150 years

Ulrich von DeessenPresident Environment,Health and Safety

SRI Roadshow Boston, New YorkJune 23/24, 2015

150 years

BASF SRI Story June 2015

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.

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BASF – Share information

Symbol: BAS

Trading Platform: Deutsche Börse

ISIN: DE000BASF111

IPO: January 30, 1952

Type of shares: Registered shares

Trading lot: none, one share is tradable

Free float (according to Deutsche Börse):100 %

Number of subscribed shares outstanding (as of 12/31/2014):918,478,694

Symbol: BASFY

OTC Trading Platform: OTCQX

CUSIP: 055262505

Ratio: 1 ADR : 1 Ordinary Share

Depositary bank: Deutsche Bank Trust Company Americas– Tel: +1 212 250 9100 (New York broker desk)

– Tel: +44 207 547 6500 (London broker desk)

– E-mail: [email protected]

– Website: www.adr.db.com

Depositary bank’s local custodian: Deutsche Bank AG, Frankfurt

Ordinary Share information ADR information

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Chemistry as an enabler BASF has superior growth

opportunities: – sustainable innovations– investments– emerging markets

The #1 chemical company €74 billion sales, €7.4 billion

EBIT bSI in 2014 #1-3 in ~75% of businesses,

in almost all countries 6 integrated Verbund sites,

production in 60 countries

A track record of strong sales and earnings growth

12% average annual dividend increase, >3% yield in every single year*

~€80 billion marketcapitalization May 2015

Perspective

* For 2004-2014

Ludwigshafen,Germany

Antwerp,Belgium

Nanjing,China

Kuantan,MalaysiaGeismar,

USAFreeport,USA

Verbund site

Positioning Performance

20

30

40

50

60

70

80

90

2008 2009 2010 2011 2012 20142013 2015

We create chemistry for a sustainable future

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Percentage of sales 2014*

* Not depicted here: ~5% of Group sales reported as ‘Other‘. Paper Chemicals results have been incl. in Performance Products until the end of 2014. Thereafter Paper Chemicals has been dissolved.

BASF today – a well-balanced portfolioTotal sales 2014: €74 billion

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BASF with good quarterly resultsin the chemicals and crop protection businesses

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q1´15 vs. Q1´14 5% (8%) (1%) 7%

Business performance Q1’15 Q1’14 vs. Q1’14

Sales €20.1 billion €19.5 billion +3%

EBITDA €2.9 billion €3.0 billion (2%)

EBIT before special items €2.1 billion €2.1 billion (2%)

EBIT €2.0 billion €2.2 billion (10%)

Net income €1.2 billion €1.5 billion (20%)

Reported EPS €1.28 €1.59 (19%)

Adjusted EPS €1.43 €1.63 (12%)

Operating cash flow €2.4 billion €1.7 billion +37%

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0

1

2

3

4

2005 2006 2007 2008 2009** 2010 2011 2012 2013 2014 Q12015

Strong free cash development in Q1 2015

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

Free cash flow*(in billion €)

3.33.5

3.2

2.5

3.2

3.93.7

2.6

3.2

1.7

1.1

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We want to grow or at least maintain our dividend

Dividend paid out per share €2.80, an increase of 3.7%

Average annual dividend increase of approx. 12%(2005-2014)

Attractive dividend yield of 4.0% in 2014**

Dividend yield above 3%in any given year since 2005

3.7%

Key facts

Dividend per share (in €)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2005 2008 2011 2014

0.50

1.00

1.50

2.00

* Dividend yield based on share price at year-end

3.1% 4.1% 3.8% 7.0% 3.9%Yield*

** Based on BASF share price of €69.88 on Dec 30, 2014

4.6%

2.50

3.7%

3.00

3.5% 4.0%

1.00

1.50

1.95 1.951.70

2.202.50 2.60 2.70 2.80

Dividend policy

Attractive shareholder return

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Average annual performance with dividends reinvested

0 3 6 9 12 15 18

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+9.9%

Last 5 yearsJune 2010 – May 2015

+18.3%

+9.8%

+13.9%

+15.5%

Last 10 yearsJune 2005 – May 2015

BASF

+10.6%

+4.7%

+16.4%

Delivering consistent, long-term value

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We aim to increase volumes and sales excluding the effects of acquisitions and divestitures. Sales are likely to be slightly higher than in 2014, driven by higher sales in the Performance

Products and Functional Materials and Solutions segments. We expect EBIT before special items to be on the level of 2014. Higher earnings in our

chemicals business and in the Agricultural Solutions segment are anticipated to compensate for considerably lower earnings in Oil & Gas.

We aim to earn again a substantial premium on our cost of capital, but on a lower levelthan in 2014.

Outlook 2015

GDP: +2.8% Industrial production: +3.6% Chemical production: +4.2% US$ / Euro: 1.20 Oil price (US$ / bbl): 60-70

Assumptions 2015

Outlook 2015 confirmed

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SUPPLY DEMAND

1976 2010

Annual regenerative capacity of the planet

Human beings now demand more from the earth than can be regenerated

Earth’s resources

Consumption of Earth’s resources

+Nine billion people in 2050 but only one earth

Sustainability will become even more important

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BASF SRI Story June 2015 14

Strategy – Our purposeSustainability is an integral part of our strategy

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Corporate Sustainability Board (CSB) Cross-functional steering

committee Monitors the implementation of the

sustainability strategy and decideson cross-divisional initiatives Defines sustainability goals

Sustainability Core Team Supports the CSB to drive the

implementation of CSB decisions

Stakeholder Advisory Council Consists of BASF experts and

stakeholders Exchange of ideas and develop

BASF’s sustainability approach further

We integrate sustainability in our management systems

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Board of Executive Directors of BASF SE

Corporate Sustainability BoardChair: Member of the Board

Chair: Sustainability Strategy

Sustainability Core Team

Internal External

Stakeholder Advisory CouncilChair: CEO

Strategy and managementSustainability – a board member responsibility since 2002

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Our Materiality Assessment helps to identify relevant sustainability topics for BASF as well as opportunities and risks related to sustainability

~350 external stakeholders and ~90 BASF experts and managers from various functions within BASF, provided information on 38 topics potentially relevant for BASF

Eight material aspects have been identified for BASF based on the results of the stakeholder survey and internal workshops:

Energy and Climate Water

Products and Solutions

Food

Responsible production

Resources andEcosystems

Employment andEmployabilityPartnering

Strategic issue managementMateriality Assessment

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Global reduction in carbon emissions of 6 million metric tons/a. and reduction of waste

Example Ludwigshafen site: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

Responsible productionVerbund: Unique competitive advantage

* Savings include only tangible synergies. Additional (intangible) benefits and retained profits are not included.

Verbund generates >€1 billion p.a. global cost savings* & supports sustainability

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BASF SRI Story June 2015 19

Combined heat and power plants

Combined heat and power plants are plants that use natural gas to produce electricity and steam

Benefit for climate protection: − Compared with separate methods of generating

steam and electricity, we saved around 11.8 million MWh of fossil fuels and prevented 2.4 million metric tons of carbon emissions in 2014

− Utilization rate of natural gas as a fuel can reach up to 90% – nearly all the heat is converted into energy. Conventional power plants are only around half as efficient.

~70% of our electricity demand worldwide is covered by gas-based combined heat and power plants

Energy and climateCombined heat and power plants increase energy efficiency

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Global analysis of production sites conducted

~ 22% of our production sites are located in regions with high water stress

These sites account for around 6.5% of BASF’s total water demand and seawater accounted for 85.2% of the water demand in water stress areas

Water use and discharge

86% of our water use is for cooling purposes and 89.4% of our water discharge is uncontaminated

European Water Stewardship (EWS) certificate

In 2013, BASF was the first chemical company to achieve gold-level certification according to the EWS standard for its production site in Tarragona, Spain

In 2014, the Ludwigshafen site has also been awarded gold level certification

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WaterResponsible use of water resources is key priority

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Products and solutionsSustainable solution steering – Supports our customers to meet their sustainability needs

23% - AcceleratorSubstantial sustainability contribution in the value chain

74.1% - PerformerMeets basic sustainability standards in the market

2.6% - TransitionerSpecific sustainability issue which is actively addressed

0.3% - ChallengedSignificant sustainability concern identified and action plan in development

Active portfolio steering

1. Analyze sustainability needs and trends of value chains

2. Check product sustainability performance in the market

3. Develop action plans for strategies, R&D and market approach

End of 2014

98.3% of the relevant portfolio analyzed

Relevant portfolio accounted for €66.3 billion in sales in 2014

More than 60,000 product solutions assessed

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Products and solutions23% of our solutions are “Accelerators”

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“Accelerators“ contribute in the following areas:

(Double nomination possible)0% 10%

Cost savings downstream

Biodiversity and renewablesClimate change and energy

Emission reductionResource efficiency

Water

Health and safetyUN Millennium

Development goals

23%

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Example: Paper coating

1. Identification of “Challenged”: Polyfluorinated substances as coatings for paper packaging (environmental concern)

2. Development of action plan: Start of research project

3. Launch of “Accelerator”:Recyclable Epotal® SP-101 D and biodegradable ecovio® paper coating

Renewables

Resource efficiency

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Products and solutionsSustainable solution steering supports the launch of new “Accelerator”

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Status2014

Target 2020

Energy & climate protection Greenhouse gases* -33.9% -40% Energy efficiency* +19.0% +35%

Emissions to air & water

Air pollutants* -63.2% -70%

Organic substances* -79.5% -80%

Nitrogen* -85.4% -80% Heavy metals* -64.8% -60%

Water

Drinking water for production -26.3% -50% Sustainable water management

in water stress areas 29.7% 100%

Status2014

Target 2020

Safety, health and security Lost-time injuries -54.5% -80%

Transport accidents -64.3% -70%

“Safety check” of products 61.4% >99%

Health Performance Index** 0.91 >0.9

Employees

Increase the number of:

Female executives 19.1%

Non-German senior executives 34.3%

Senior executives with international experience 83.0% >80%

Establishment of personnel development 45,000 --

*excluding oil and gas production ** Highest possible score 1.0 25

Ecology & social responsibility Targets overview

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Growth fields for innovationGrowth fields

White Biotechnology

Materials, Systems & Nanotechnology

Raw Material Change

Key customer industries

Health & Nutrition

Consumer Goods

Transportation

Energy & Resources

Electronics

Agriculture

Construction

Technology fields

...

Batteries for Mobility

Enzymes

Heat Management for Construction

Organic Electronics

Functional Crop Care

Plant Biotechnology

E-Power Management

Wind Energy

Lightweight Composites

Water Solutions

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Further increase of R&D spending in 2015

~10,700 employees in R&D

~3,000 projects

Research Verbund: Cooperations with ~600 excellent partners from universities, start-upsand industry

Target 2015: – €10 billion in sales from

innovations launched within the last 5 years

Strong commitment to innovationInnovations for a sustainable future

Key factsR&D expenditures (€ billion)

Chemicals10%

Performance Products19%

Functional Mat. & Sol.20%

Agricultural Solutions27%

Oil & Gas3%

Corporate Research21%

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1.51.6

1.71.8 1.9

0.0

0.5

1.0

1.5

2.0

2010 2011 2012 2013 2014

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Products and solutions for a sustainable future

Four-Way Conversion Catalyst (FWC™)

Trilon M® for more sustainable detergents and cleaners

SAVIVA™ – The Next Generation of Superabsorbents

Hexamoll® DINCH® – Non-phthalate plasticizer

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Multibore® – Ultrafiltration Membranes

MDI plant Antwerp

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Process improvement program 2000-2013MDI/Antwerp Target: Increase production

output by continuous process improvement via incrementalsteps

Achieved benefits: – Increased sales– Production cost* reduction

Process improvements in MDI

1992 – 2001 2009 – 20132002 – 2008

Annual EBIT improvement 2000-2013: ~ €220 million/a

Strong increase of production output in the last decade

* Production cost = Personnel, maintenance and energy cost (inflation adjusted) 30

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0

50

100

150

BASF Competitors

FWC™Combines functionality of a 3-way conversion catalyst with integrated filter on a ceramic substrate

Reduces gaseous emissionsPrecious metal-based catalytic coating removes exhaust gases from engine emissions**

Removes particulatesFilters & combusts particulates

Complies with emissions limitsHelps automakers meet new Euro 6c regulatory standards

FWC™ introduced in 2013 Sustains BASF’s leading technology position

Leading position: Global mobile emissions catalysts patents*

FWC™ reduces emission of gaseous pollutants and particulates

HC

CO

NOx

N2

H2O

CO2

Particulates

Four-Way Conversion Catalyst (FWC™)

* 2009 – 2013 ** Hydrocarbons, carbon monoxide, nitrogen oxides 31

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SAVIVA™ – The Next Generation ofSuperabsorbent Polymers (SAP)

SAVIVA™ – Based on a pioneering SAP technology platform SAVIVA™ the next generation of SAP Round-shaped particles with micro-pores initiates

innovative liquid distribution mechanism

Compared to other SAPs SAVIVA™ leads to: Efficiency gains:

− SAP reduction− Fluff reduction− Reduction of storage, packaging and

transportation costs

Improved sustainability: − Better carbon footprint due to SAP and weight

reduction.− Enabler for future diaper designs offering a new

level of comfort and dryness

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SAVIVA™ round shaped particle

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Trilon® M – Chelating agent for more sustainable detergents and cleaners

Trilon® M – Alternative to Phosphate for automatic dish washing High sustainability performance: Bio-degradable and

eco-friendly Fast growing global market demand driven by

regulatory changes and consumer demand for environmentally-friendly products

2010: Capacity expansion to 120,000 tons 2014: Announcement to build a new Trilon® M world

scale plant in Alabama, USA

Compared with alternative chelating agents Trilon® M Is readily biodegradable Meets eco-label requirements Has better eco-toxicology profile Shows high performance

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Hexamoll® DINCH® - Non-phthalate plasticizer

Hexamoll® DINCH® is a non-phthalate plasticizer developed for applications with close human contact

Plasticizers are added to PVC to turn it from being hard and brittle to soft and flexible

BASF has invested more than €7 million in toxicological research for Hexamoll® DINCH®

Hexamoll® DINCH® ranked first in a TÜV Rheinland –certified eco-efficiency analysis for toys in 2011

It can be used in a variety of applications such as toys, food packaging, medical devices, sport & leisure articles, consumer goods as well as flooring and wall covering

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For turning dirty water into clean water

Multibore® membranes are manufactured from BASF’s Ultrason® E high-performance resin

Multibore® membranes contain pores 3,000 times smaller than the diameter of a human hair – suspended solids, bacteria and viruses cannot pass through them

Example – Drinking Water

inge® technology is used for water purification and also as a pretreatment stage for sea water desalination

In Ghana for example, where drinking water is a scarce resource, inge® Ultrafiltration solutions help to produce clean drinking water in a sea water desalination plant for half a million people

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inge® Ultrafiltration membrane Multibore®

We create chemistry that helps thirst love the sea

Multibore® – Ultrafiltration Membranes

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Global ESG Leaders Indices

Worldwide public recognition for sustainability and transparency

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Worldwide public recognition for sustainability and transparency

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150 years

ulrich von deessen€¦ · ~350 external stakeholders and ~90 basf experts and managers from...

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