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BASF FY2010 results

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Charts accompanying the FY2010 Conference Call for investors and analysts on February 24, 2011.

Charts accompanying the FY2010 Conference Call for investors and analysts on February 24, 2011.

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  • 1. BASF in excellentshape, optimisticfor 20114Q/FY’2010 ConferenceLudwigshafen, February 24, 2011
  • 2. Forward-looking statementsThis presentation includes forward-looking statements that are subject to risks anduncertainties, including those pertaining to the anticipated benefits to be realized from theproposals described herein. This presentation contains a number of forward-lookingstatements including, in particular, statements about future events, future financialperformance, plans, strategies, expectations, prospects, competitive environment,regulation and supply and demand. BASF has based these forward-looking statements onits views with respect to future events and financial performance. Actual financialperformance of the entities described herein could differ materially from that projected in theforward-looking statements due to the inherent uncertainty of estimates, forecasts andprojections, and financial performance may be better or worse than anticipated. Given theseuncertainties, readers should not put undue reliance on any forward-looking statements.Forward-looking statements represent estimates and assumptions only as of the date thatthey were made. The information contained in this presentation is subject to change withoutnotice 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 byapplicable laws and regulations.BASF 4Q/FY’2010 Conference | February 24th, 2011 2
  • 3. Full year results 2010 Business performance 2010 vs. 2009 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% Record sales and record EBIT before special items Chemical businesses take advantage of strong economic recovery Consistent long term value generationBASF 4Q/FY’2010 Conference | February 24th, 2011 3
  • 4. Fourth quarter 2010 highlights Business performance Q4’10 vs. Q4’09 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% Record sales boosted by ongoing strong demand Strong earnings growth despite significant one-off costs not recurring in 2011 Highest net income ever in a fourth quarterBASF 4Q/FY’2010 Conference | February 24th, 2011 4
  • 5. Attractive shareholder returns Dividend per share (€) Key facts Average annual dividend increase of 14.5% Proposal: 2.50 2.5 (2001-2010) 2.20 1.95 1.95 Dividend yield above 3% in any 2.00 2.0 1.70 given year since 2001 1.50 1.50 1.5 Attractive dividend yield of 1.00 3.7% in 2010** 1.00 1.0 0.85 0.65 0.70 0.70 0.5 0.50 0.0 2001 2004 2007 2010 Yield* 3.1% 3.9% 3.1% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9% 3.7% * Dividend yield based on share price at year-end ** With dividends reinvestedBASF 4Q/FY’2010 Conference | February 24th, 2011 5
  • 6. Delivering consistent, long-term valueLong-term performance January 2001 – December 2010(average annual performance with dividends reinvested) +13.9% BASF -2.7% Euro Stoxx 50 +0.7% DAX 30 +7.1% MSCI World Chemicals -3 0 3 6 9 12 15BASF 4Q/FY’2010 Conference | February 24th, 2011 6
  • 7. Successful value creating strategyBASF 4Q/FY’2010 Conference | February 24th, 2011 7
  • 8. Well positioned for profitable growth Leading positions Ongoing Excellent in growth industries portfolio innovation and emerging optimization platform markets Continue expansion in Continue with active Product and system emerging markets, portfolio management innovation as growth especially Asia Drive portfolio closer drivers Translate megatrends to end customer Megatrend innovations into business growth for long-term growth We strive to outperform global chemical production Growth target: growth by at least 2 percentage points p.a.BASF 4Q/FY’2010 Conference | February 24th, 2011 8
  • 9. Leading positions in growth industries and emerging marketsBASF 4Q/FY’2010 Conference | February 24th, 2011 9
  • 10. Emerging marketsSignificant sales growth in emerging markets BASF Group (w/o Oil & Gas) Emerging Markets Net sales in billion € Sales 2010 in emerging markets: €14.5 billion (27%) 60 Investments in emerging 50 markets 2005-2010: 13% 27% GR €3 billion 40 CA % Ongoing increase of CA GR 7 - sales force 30 22% - regional R&D 20 Emerging markets definition, according to Dow Jones: 10 35 countries * 0 * Bahrain, Brazil, Bulgaria, Chile, China, Colombia, Czech 2005 2010 Republic, Egypt, Estonia, Hungary, India, Indonesia, Jordan, Latvia, Kuwait, Lithuania, Malaysia, Mauritius, Mexico, Morocco, Oman, Pakistan, Peru, Philippines, Poland, Qatar, Emerging Markets (Dow Jones definition) Romania, Russia, Slovakia, Sri Lanka, South Africa, South Korea, Taiwan, Thailand, Turkey, United Arab Emirates Developed MarketsBASF 4Q/FY’2010 Conference | February 24th, 2011 10
  • 11. BASF’s profitable growth pathin Asia PacificSales by location of customers (in billion €) Achievements 2005-2010 Sales growth 14% p.a. 20 (vs. Asian market growth 10.5% p.a.)20 Record EBITDA of €1.8 billion in 2010, resulting in an EBITDA margin of 14%15 Target 2011-2020 12.5 . Well on track to double sales by 2020 p .a % (based on sales of €9 bn in 2008)10 14 Outgrowing Asian Pacific chemical market 6.5 by 2 percentage points p.a. through 5 – Innovations out of Asia – Investments 2011-2015: €2.3 billion – Generating 70% of sales based on 0 local manufacturing 2005 2010* 2020 – Strengthening market focus through industry and customer target groupsBASF 4Q/FY’2010 Conference | February 24th, 2011 * excluding Cognis 11
  • 12. Ongoing portfolio optimizationBASF 4Q/FY’2010 Conference | February 24th, 2011 12
  • 13. Cognis – integrating a global leaderin value-added productsPro forma business performance FY’2010 Sales: ~ €3 billion EBITDA: ~ €550 million EBITDA margin: ~18% Closing on December 9, 2010Integration 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 synergiesBASF 4Q/FY’2010 Conference | February 24th, 2011 13
  • 14. BASF + CognisImproved market positions Current Future BASF position BASF positionPersonal care ingredients 3 1Home care ingredients 1 1Mining chemicals 3 2Functional nutritioningredients 6 3Coating additives 7 3Heavy-duty drivelinelubricants > 10 3BASF 4Q/FY’2010 Conference | February 24th, 2011 14
  • 15. StyrolutionPlanning a 50/50 joint venture with INEOS Scope Global No.1 in styrenics Sales 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 countries 29 production facilities across 11 countries More than 3,000 employees Milestones Nov 29, 2010: LoI signed by BASF and INEOS Jan 1, 2011: Carve-out of BASF‘s Styrenics activities into separate legal entities Second half of 2011: Start of planned JV Styrolution Value creating divestiture process Styrolux T/S shrink filmBASF 4Q/FY’2010 Conference | February 24th, 2011 * Pro-forma figures, based on BASF‘s and INEOS‘ sales in 2009 15
  • 16. Active portfolio management pays offEBITDA by activity (in billion €, excluding Other) Our diversified portfolio is a key strength12 Recent acquisitions reshaped10 portfolio 8 – Closer to end customers – Innovation-driven 6 – Profitable growth above 4 industry average 2 BASF’s EBITDA in 2010 0 (excluding Other) amounted to €11.7 billion 2001* 2004 2007** 2010 Chemical activities * Based on German GAAP Agricultural Solutions ** As of 2007 according to new segment structure (excl. Styrenics and corporate costs) Oil & Gas, including non-deductible oil taxesBASF 4Q/FY’2010 Conference | February 24th, 2011 16
  • 17. Excellent innovation platformBASF 4Q/FY’2010 Conference | February 24th, 2011 17
  • 18. Natugrain® TS X-SEED® PCI Geofug®Ecovio® CypoSol® NaphthaMax® IIIKaurit® LightBASF 4Q/FY’2010 Conference | February 24th, 2011 Elastopave® Xemium® 18
  • 19. 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 submission process underway Untreated Market launch from 2012 onwards Xemium® global peak sales potential: >€200 million * Source: Philips McDougall, own estimationBASF 4Q/FY’2010 Conference | February 24th, 2011 19
  • 20. Innovation pipeline worth €21 billionNet present value by segments (billion €) R&D contributes significantly to earnings growth €21 bn The pipeline NPV of €21 billion 20 €19 bn 3% Chemicals is a bottom-up aggregation of 7% Plastics all R&D projects 14% Performance Products High success rate due to 15 8% Functional Solutions stringent R&D controlling via Phasegate process 10 46% Agricultural Solutions Expected Commercial Value: ~50% of NPV (probability- weighted) 5 2% Oil & Gas In 2010, sales of new products 20% Corporate Research (5 years or younger) exceeded 0 0,0 3.5 4.5 0,0 the target of €6 billion 2009 2010 Target 2015: up to €8 billion sales with new products * New or improved products or new applications, max. 5 years on market, including Growth ClustersBASF 4Q/FY’2010 Conference | February 24th, 2011 20
  • 21. Financial highlights Q4 2010BASF 4Q/FY’2010 Conference | February 24th, 2011 21
  • 22. BASF Group Q4 2010Record sales and strong earnings increase vs. PYQSales (billion €) EBIT before special items (billion €)20 2.5 2.2 2.2 15.5 16.2 15.8 16.4 2.016 2.0 1.8 13.2 1.512 1.5 8 1.0 4 0.5 0 0.0 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2009 2010 2009 2010Sales development Period Volumes Prices Portfolio Currencies Q4’10 vs. Q4’09 4%* 13% 2% 6% FY’10 vs. FY’09 11% 8% 2% 5% * Volumes +8% (without Oil & Gas)BASF 4Q/FY’2010 Conference | February 24th, 2011 22
  • 23. ChemicalsStrong earnings improvement vs. PYQ due to higher demandQ4’10 segment sales (million €) vs. Q4’09 EBIT before special items (million €)Intermediates Inorganics 687 326 617655 600 537+32% +24% 461 €2,945 400 315 +37% 200 Petrochemicals 1,964 0 +41% Q4 Q1 Q2 Q3 Q4 2009 2010Sales development Period Volumes Prices Portfolio Currencies Q4’10 vs. Q4’09 9% 20% 0% 8% FY’10 vs. FY’09 18% 28% 0% 5%BASF 4Q/FY’2010 Conference | February 24th, 2011 23
  • 24. PlasticsHigh demand and price increases lifted sales significantlyQ4’10 segment sales (million €) vs. Q4’09 EBIT before special items (million €)Polyurethanes 400 371 3491,363+20% 279 285 251 €2,451 200 +26% Performance Polymers 0 1,088 +34% Q4 Q1 Q2 Q3 Q4 2009 2010Sales development Period Volumes Prices Portfolio Currencies Q4’10 vs. Q4’09 10% 9% 0% 7% FY’10 vs. FY’09 22% 10% 0% 6%BASF 4Q/FY’2010 Conference | February 24th, 2011 24
  • 25. Performance ProductsEarnings significantly up vs. previous year despite one-off costsQ4’10 segment sales (million €) vs. Q4’09 EBIT before special items (million €)Care Chemicals 500 471 Performance 419763 Chemicals 400 370+42% 778 294Nutrition €3,060 300 +15% 209& Health384 +18% 200+10% 100 Paper Chemicals Dispersions 0 405 & Pigments Q4 Q1 Q2 Q3 Q4 +2% 730 2009 2010 +17%Sales development Period Volumes Prices Portfolio Currencies Q4’10 vs. Q4’09 3% 4% 6% 5% FY’10 vs. FY’09 12% 4% 11% 4%BASF 4Q/FY’2010 Conference | February 24th, 2011 25
  • 26. Functional SolutionsEarnings declined considerably due to one-time operating costsQ4’10 segment sales (million €) vs. Q4’09 EBIT before special items (million €)Catalysts Construction Chemicals 165 1581,369 514 150+62% +11% 111 101 €2,569 100 +35% 50 33 Coatings 686 0 +15% Q4 Q1 Q2 Q3 Q4 2009 2010Sales development Period Volumes Prices Portfolio Currencies Q4’10 vs. Q4’09 15% 10% 1% 9% FY’10 vs. FY’09 17% 10% 1% 8%BASF 4Q/FY’2010 Conference | February 24th, 2011 26
  • 27. Agricultural SolutionsSouth America drove strong sales growthQ4’10 segment sales (million €) vs. Q4’09 EBIT before special items (million €) (5)%1,000 +20% 50 44 845 42 800 703 40 600 30 400 20 200 10 0 0 Q4 Q4 Q4 Q4 2009 2010 2009 2010Sales development Period Volumes Prices Portfolio Currencies Q4’10 vs. Q4’09 18% (4)% 0% 6% FY’10 vs. FY’09 9% (3)% 0% 5%BASF 4Q/FY’2010 Conference | February 24th, 2011 27
  • 28. Oil & GasEarnings grew substantially y-o-y as a result of higher oil pricesQ4’10 segment sales (million €) vs. Q4’09 EBIT before special items / Net income (million €)Exploration & 800 713Production 1061,059 600 508+9% €2,964 400 134 +13% 607 Natural Gas 200 374 Trading 230 132 1,905 0 +16% Q4 Q4 2009 2010 EBIT bSI Natural Gas Trading Net income EBIT bSI Exploration & ProductionSales development Period Volumes Prices/Currencies Portfolio Q4’10 vs. Q4’09 (15)% 28% 0% FY’10 vs. FY’09 (2)% (3)% 0%BASF 4Q/FY’2010 Conference | February 24th, 2011 28
  • 29. Review of “Other” Million € Q4 2010 Q4 2009 2010 2009 Sales 1,590 1,263 5,851 4,577 thereof Styrenics 857 685 3,401 2,502 EBIT before special items (139) 51 (648) (717) thereof Corporate research (96) (79) (323) (319) Group corporate costs (66) (45) (226) (209) Currency results, hedges and other (229) 9 (460) (512) valuation effects Styrenics, fertilizers, other businesses 142 80 387 339 Special items 149 293 (59) 90 EBIT 10 344 (707) (627)BASF 4Q/FY’2010 Conference | February 24th, 2011 29
  • 30. Excellent operating cash flow in 2010Full Year 2010 (billion €) Capex* on 9 last year´s level 8 Net cash-out for purchase 7 (2.5) of Cognis: €0.6 bn 6 6.5 (0.6) thereof €1.6 bn dividends to 5 BASF SE shareholders 4 (1.9) 3 (1.8) 2 Excellent operating cash flow (2.3) despite €1.7 bn increase in 1 1.8 0.5 net working capital 1.5 0 Cash Operating Capex* Acquisitions Dividends Debt Other cash Cash 12/31/09 CF repayment inflows 12/31/10 * Payments related to intangible assets and property, plant and equipmentBASF 4Q/FY’2010 Conference | February 24th, 2011 30
  • 31. Balance sheet remains strongBalance sheet 2010 vs. 2009 (billion €) Impact of Cognis acquisition As of December 31, 2010: 59.4 59.4 Increase in long-term assets by €2.9 billion, thereof 51.3 51.3 Stock- – Goodwill: €0.6 billion 22.7 holders’ Long-term Equity – Other intangible assets: assets 34.5 18.6 €1.3 billion 31.7 – Property, plant and Financial 15.0 debt equipment: €0.8 billion 14.8 Inventories 8.7 Addition of Accounts 6.8 receivable 21.7 Other – €0.5 billion of inventories 10.2 7.7 17.9 liabilities Other assets 4.5 3.3 – €0.4 billion of receivables Liquid funds 1.5 1.8 Financial debt: €2.6 billion Dec 31 Dec 31 Dec 31 Dec 31 (incl. purchase price of €0.7 billion) 2010 2009 2009 2010BASF 4Q/FY’2010 Conference | February 24th, 2011 31
  • 32. Outlook 2011BASF 4Q/FY’2010 Conference | February 24th, 2011 32
  • 33. Outlook BASF Group 2011Expectations for global economy 2010 Forecast 2011GDP 3.9% 3.3%Chemicals (excl. Pharma) 9.3% 5.2%Industrial production 8.9% 5.0%US$ / Euro 1.33 1.35Oil price (US$ / bbl) 79.50 90BASF 4Q/FY’2010 Conference | February 24th, 2011 33
  • 34. Outlook 2011 by region Industrial production Chemicals (excl. Pharma) 2010 2011 2010 2011World 8.9% 5.0% 9.3% 5.2%EU-27 6.0% 3.0% 10.1% 2.9%USA 5.7% 3.9% 5.0% 3.3%Asia (excl. Japan) 14.5% 10.0% 13.0% 9.6%Japan 15.8% 2.3% 8.8% 1.9%South America 6.2% 4.6% 6.4% 4.3%BASF 4Q/FY’2010 Conference | February 24th, 2011 34
  • 35. Outlook 2011 for ourkey customer industries* Growth Key customer industries 2009 2010 forecast 2011 of BASF (World) (World) (World) Industries total (8.1) 8.9 5.0 Construction (5.8) (1.3) 3.6 Automotive (per-unit-base) (11.3) 21.5 6.1 Electronics (11.1) 12.0 5.9 Information & Communications (11.9) 16.6 9.2 Textiles (8.7) 8.8 5.6 Paper (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 yearBASF 4Q/FY’2010 Conference | February 24th, 2011 35
  • 36. Outlook 2011 by segments Segments EBIT before special items 2011 Chemicals Plastics Performance Products Functional Solutions Agricultural Solutions Oil & Gas BASF Group (incl. Other)BASF 4Q/FY’2010 Conference | February 24th, 2011 36
  • 37. Outlook 2011 Targets 2011 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. Medium-term targets 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. Dividend policy We aim to continuously increase the annual dividend, or at least maintain it at the level of the previous year.BASF 4Q/FY’2010 Conference | February 24th, 2011 37
  • 38. BASF 4Q/FY’2010 Conference | February 24th, 2011 38
  • 39. Backup Financial Highlights Agricultural SolutionsBASF 4Q/FY’2010 Conference | February 24th, 2011 39
  • 40. Agricultural SolutionsPerformance 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 itemsBASF 4Q/FY’2010 Conference | February 24th, 2011 40
  • 41. Agricultural SolutionsSales 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 regionsBASF 4Q/FY’2010 Conference | February 24th, 2011 41
  • 42. Agricultural SolutionsSales 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 ratesBASF 4Q/FY’2010 Conference | February 24th, 2011 42