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BASF Investor Day Automotive Key Note

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Presentation of CEO Kurt Bock and board member Wayne Smith at BASF Investor Day Automotive.

Presentation of CEO Kurt Bock and board member Wayne Smith at BASF Investor Day Automotive.


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  • 1. BASF – creating chemistry for sustainable mobilityKurt BockChairman & CEOWayne SmithMember of the Boardof DirectorsLondonSeptember 5, 2012
  • 2. BASF Investor Day Automotive September 5, 2012 2
  • 3. Investor Day ‘Strategy 2020’ November 2011The future of the chemical industry:many growth opportunities Nine billion people in 2050 but only one Earth Chemistry as enabler Sustainability and Innovation focus on Growth of 60% of chemical innovation as main materials & chemical production production in driver solutions above GDP emerging countriesBASF Investor Day Automotive September 5, 2012 3
  • 4. Investor Day ‘Strategy 2020’ November 2011Our purposeWe create chemistryfor a sustainable future.BASF Investor Day Automotive September 5, 2012 4
  • 5. Investor Day ‘Strategy 2020’ November 2011 Growth above market with increasing share from emerging markets Developed markets* Emerging markets 2001in % of sales ~ 78% ~ 22% (€28 bn**) 2010in % of sales ~ 66% ~ 34% (€53bn**) 2020 in % of ~55% ~ 45% sales** * BASF definition: Developed markets include EU15, Norway, Switzerland, North America, Japan, Australia, New Zealand ** Sales excluding Oil & Gas BASF Investor Day Automotive September 5, 2012 5
  • 6. Investor Day ‘Strategy 2020’ November 2011We expand from chemicals to chemistry 1960 1970 1980 1990 2000 2010 2020 Chemistry as key enabler New molecules for functionalized materials & solutions Improved Deep understanding of applications customer value chains required Functionalized materials & solutions Batteries, membranes ...BASF Investor Day Automotive September 5, 2012 6
  • 7. Investor Day ‘Strategy 2020’ November 2011Moving downstream towards customerindustries Functionalized Materials Classical Chemicals Customized Products & Solutions First customer Chemical Industry industries*2001in % of ~ 50% ~ 50%sales**2010in % of ~ 40% ~ 60%sales**2020in % of ~30% ~ 70%sales*** Agriculture, Construction, Consumer Goods, Health & Nutrition, Electronics, Energy & Resources, Transportation** Sales excluding Oil & GasBASF Investor Day Automotive September 5, 2012 7
  • 8. Investor Day ‘Strategy 2020’ November 2011We add value as one company People Verbund Customer Verbund Technology Verbund Production VerbundBASF Investor Day Automotive September 5, 2012 8
  • 9. Investor Day ‘Strategy 2020’ November 2011Striving for strong profitable growthSales*(in billion €) ~6% Acquisitions ~115 CAGR Innovations Investments Acquisitions ~85 Innovations 64 Investments 2010 Target Target 2015 2020 We will outperform chemical production by 2 percentage points p.a.* Potential impact of IFRS changes not includedBASF Investor Day Automotive September 5, 2012 9
  • 10. Trends in the automotive industry BASF – leading partner to automotive BASF at the forefront of new technologies BASF’s ambition to grow furtherBASF Investor Day Automotive September 5, 2012 10
  • 11. Automotive is a demanding industry –Only the fittest will prosper Structure Trends Concentrated Regulatory framework for industry safer and cleaner transportation Global scale with local focus BASF strengths Emerging markets grow offer opportunities over-proportionally Demanding high performance & cost Global footprint Increasing model variety efficiency Local knowledge and Stronger collaboration Tiered supplier local presence among OEMs and structure Innovation power tier- suppliers 3-5 year innovation Long standing and Standardization of cycle trustful relationships platforms across segments and brands will continueBASF Investor Day Automotive September 5, 2012 11
  • 12. Car production outgrew GDP for thelast 30 yearsGlobal annual car production(in million)160120 80 3% CAGR 40 +40 million cars in last 30 years 1980 1985 1990 1995 2000 2005 2010 2015 2020Source: LMCABASF Investor Day Automotive September 5, 2012 12
  • 13. Unit growth expected to further accelerateGlobal annual car production(in million)160 %120 R ~5 G CA 80 3% CAGR +40 million cars in next 10 years 40 +40 million cars in last 30 years 1980 1985 1990 1995 2000 2005 2010 2015 2020Source: LMCABASF Investor Day Automotive September 5, 2012 13
  • 14. What happens if the vehicle penetrationin China catches up with Brazil?Cars/1000 people in 2011 Cars on the road in China would grow by ~100 millionSource: LMCABASF Investor Day Automotive September 5, 2012 14
  • 15. OEM production in emerging marketswill doubleProduction of passenger cars and LCVs* China(in million units) 7.6% p.a. 33 EMEA North America 17 Japan 3.0% p.a. 30 3.7% p.a. 2.5% p.a. 18 23 10 13 8 India 14.0% 13 South Korea p.a. 4 5 5 0% p.a. South America ASEAN 6.4% p.a. 8.0% p.a. 7 6 3 4 Production 2011; Global production 77 million units * Light commercial vehicles Note: ASEAN comprises Indonesia, Thailand, Vietnam, Malaysia, and Philippines; Total production in 2020; Global production 122 million units Other Asian countries <1million units Source: LMCABASF Investor Day Automotive September 5, 2012 15
  • 16. Emerging country OEMs will grow faster..Global vehicle production(in million units) Chinese and Indian OEMs140 . will gain importance as p.a % 122 regional players120 5.2 The main part of the future 27100 8.5% growth will come from mature 77 global OEMs 80 13 60 4.5% 95 40 64 20 0 2011 2020 Established OEMs Emerging country OEMsSource: LMCABASF Investor Day Automotive September 5, 2012 16
  • 17. ..but established OEMs will maintain lead with more than ¾ of total vehicle production in 2020 million units 2011 2020 Volkswagen 8.7 3.5 12.2 Toyota 7.6 4.4 12.0Renault-Nissan 8.0 3.0 11.0General Motors 8.0 2.3 10.3 Hyundai.Kia 6.6 3.4 10.0 Ford 5.4 2.2 7.6 Fiat-Chrysler 4.3 1.8 6.1 Honda 2.9 3.2 6.1 Suzuki 2.5 2.9 5.4 PSA 3.6 1.1 4.7 SAIC 1.4 1.7 3.1 BMW 1.8 1.2 3.0 Daimler 1.7 0.8 2.5 Source: LMCA BASF Investor Day Automotive September 5, 2012 17
  • 18. All OEMs face a major challenge:Emission reduction Announced Regulations Future Regulations Phase in CA LEV III US Tier 3USA US 2010 Global, 4a Global, 4b Euro 5 Euro 6 Euro 7Europe Global, 4a Euro VI Global, 4b Euro VII Euro 4 Euro 5 Euro 5 Euro 6Brazil Euro V Euro VI Euro 4 Euro 5 Euro 6Russia Euro IV Euro V Euro VI Euro 4 Euro 5 Euro 6India Euro IV Euro V Euro VI Euro 3 Euro 4 Euro 5 Euro 4 Euro 5 Euro 6China Euro IV Euro V Euro 3 Euro 4 Euro 5South Euro V Euro VI Euro VIIKoreaJapan Global, 4a Global, 4bVietnam Euro 3 Euro 4Thailand Euro 4 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Light Duty Heavy Duty MotorcycleBASF Investor Day Automotive September 5, 2012 18
  • 19. All OEMs face a major challenge:Emission reductionCO2 targets(in g/km)280 241240 229200 186 173 158160 164 143 125120 130 95 80 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020Source: BCGBASF Investor Day Automotive September 5, 2012 19
  • 20. The key focus areas of car manufacturers –today and tomorrow Weight reduction Emission reduction Design New powertrains Haptics Heat (Touch & Feel) management Appearance SafetyBASF Investor Day Automotive September 5, 2012 20
  • 21. Chemical content of cars will rise –Innovative chemistry is an enablerChemical content in a standard car Cars Cars Cars in 1950 of today in future Chemical content Chemical content today equals ~€850* per car, and is rising!* Including Precious metalsBASF Investor Day Automotive September 5, 2012 21
  • 22. Chemical market for automotive willalmost doubleChemical market for automotive(in billion €) 120 p .a. 111 ~6% 82 80 65 40 0 2011 2015* 2020** Precious metals constant at 2011 prices Source: LMCA/BCG/BASFBASF Investor Day Automotive September 5, 2012 22
  • 23. Trends in the automotive industry BASF – leading partner to automotive BASF at the forefront of new technologies BASF’s ambition to grow furtherBASF Investor Day Automotive September 5, 2012 23
  • 24. BASF – a leading partner to theautomotive industry BASF sales in 2011 to the automotive industry are €9.5* billion No. 1 chemical supplier to the automotive sector − No. 1 mobile emission catalyst supplier − No. 1 in topcoats for exterior coatings − No. 1 in plastic solutions for lightweight Frontrunner in developing new solutions for the cars of tomorrow − R&D spending for automotive in 2011 ~€200 million Preferred development partner for leading OEMs* Includes Precious MetalsBASF Investor Day Automotive September 5, 2012 24
  • 25. Acting as one company BASF has thebroadest offering to automotive industryCoatings, Pigments Steering wheel HeadrestsHeadliner Roof module HatrackDashboardDoor side partABS cableWindow encapsulation CatalystsAir intake manifold, charge-air linesBattery materials Fuel additivesLubricants, engine coolants Carpet, Floor matsEngine encapsulation Seats, handrests, armrestsAir-filter housing Leather and textile chemicalsOil pan Cross beam Wheel rimSpoiler, lower bumper stiffener Suspension:Brake fluids Jounce bumper, Top mount, Coil Spring isolatorBASF Investor Day Automotive September 5, 2012 25
  • 26. BASF is the No.1 chemical partner forthe automotive industryTop 100 suppliers Automotive (2011) Supplier ranking Rank Company Sales Confirmed by three leading automotive (in € billion) industry publications ‘BASF is the1 Bosch 30.4 No. 1 chemical partner’:2 Continental 29.117 9.541 DuPont46 PPG Industries51 Lanxess61 Bayer Source: Automobilproduktion, July 24, 201269 EvonikBASF Investor Day Automotive September 5, 2012 26
  • 27. Building on our cross-divisionalcustomer industry approach BASF sales by first Bubble Size: BASF divisional sales by first customer industry (2011)** customer industry* Consumer goods > 15 % Transportation > 15 % Construction < 10 % Energy & Resources < 10 % Inorganics Petro- Construction Dispersions Performance Poly- chemicals Chemicals & Pigments Chemicals urethanes Care Paper Performance Catalysts Intermediates Coatings Chemicals Chemicals Polymers* Excluding Oil & Gas and Other** Excluding Agricultural Solutions, Health & Nutrition, Oil & Gas and OtherBASF Investor Day Automotive September 5, 2012 27
  • 28. Automotive industry structure requiresclose collaboration among all players OEMs increase level of external sourcing OEM OEMs influence sourcing decisions at tier-suppliers Module/ OEMs build exclusive R&D system supplier Tier-1 partnerships with key suppliers to ensure future innovation power Component supplier Tier-2 Suppliers gradually increase added value and get involved in design at early stage Parts supplier Suppliers provide techno- Tier-3+ logical leadership, extensive module and system integration skills AftermarketBASF Investor Day Automotive September 5, 2012 28
  • 29. BASF’s offering is an unparalleled fitto the whole automotive value chainBASF Group Sales 2011 Industry structure* BASF products Coatings Coolants & Brake Fluids Plastics for OEMs 30% with own processing OEM Module/ Plastics system supplier Catalysts Tier-1 Coatings for car parts BASF €73.5 Automotive Plastics bn Sales** 60% Component supplier Catalysts Tier-2 Coatings for car parts €9.5 billion Pigments Plastics Parts supplier Pigments Tier-3+ Solvents Refinish coatings Aftermarket Coolants & Brake Fluids 10% Fuel additives* Based on business model, not real supply chain** Includes Precious MetalsBASF Investor Day Automotive September 5, 2012 29
  • 30. BASF’s cross divisional approach addsvalue to our customers Innovation Poly- Communications urethanes Asia Breadth of portfolio Catalysts Global coverage Pacific Dispersions & Pigments Europe Engineering North Plastics America South Intermediates America Performance Communi- Chemicals cations Coatings R&DBASF Investor Day Automotive September 5, 2012 30
  • 31. BASF has global automotive presenceand is near to all major OEMsAutomotive Production sites and R&D centersSource: company dataBASF Investor Day Automotive September 5, 2012 31
  • 32. BASF is working with all global andemerging country OEMsBASF Investor Day Automotive September 5, 2012 32
  • 33. Early involvement – more than 100innovation workshops in last 3 years Through tailor-made customer events Bring together BASF experts from different operating units, regions and R&D with customers Demonstration of BASF’s comprehensive product and solutions portfolio More than 100 innovation workshops, high-level meetings, and Tech Days across all regions within Hyundai the last three years A win-win-situation for all Strengthens business relationships Leads to numerous joint development projects such as concept cars smart forvision and HED7 Numerous commercial projects for near- and mid-term realization evolved ZF FriedrichshafenBASF Investor Day Automotive September 5, 2012 33
  • 34. BASF and Hyundai.Kia – taking thepartnership to a new level Tech fair in Roadshows at Korea at Hyundai. Kia Hyundai. Kia site production sites Large exhibition Roadshows held in where BASF Europe, NAFTA and presents its Asia comprehensive 2010 presented at product and Geneva solutions portfolio 2008 Motor Show 2006 2004 2007 2005 Kick-off concept BASF Management car project Forming 25 joint kick off innovation work Demonstrate the BASF senior team innovation power in management and 25 joint innovation form of a concept car global key account work teams met teams jointly present quarterly at R&D BASF auto centre of competencies to Hyundai.Kia in Hyundai.Kia KoreaBASF Investor Day Automotive September 5, 2012 34
  • 35. Hyundai.Kia and BASFgrowing successfullyIndex 2003 = 100% BASF increase in sales by ~550% Hyundai increase in car production by 225%BASF Investor Day Automotive September 5, 2012 35
  • 36. BASF has grown twice as fast as theautomotive productionAutomotive production BASF 3rd party sales to(in million) automotive industry (in billion €) ~2.4% 6% 9.5 ~77 ~70 7.6 2007 2011 2007 2011BASF Investor Day Automotive September 5, 2012 36
  • 37. Trends in the automotive industry BASF – leading partner to automotive BASF at the forefront of new technologies BASF’s ambition to further growBASF Investor Day Automotive September 5, 2012 37
  • 38. Video
  • 39. BASF evolved from a raw materialsupplier to a solution provider Past Today Future Part Substitution Functional Integration Single Solutions System Solutions Raw Material Know-How System and value chain know-how Cost reduction Cost and complexity reductionBASF Investor Day Automotive September 5, 2012 39
  • 40. Delivering innovative solutions fromacross the BASF portfolio Selective Catalytic Integrated Lightweight Enhanced driving Reduction (SCR) coatings process construction: and interior comfort: on filter Plastic wheels Cellasto® System solution Engineering and System supplier Process innovator provider design expertBASF Investor Day Automotive September 5, 2012 40
  • 41. Innovation focused to meet industry needs Multifunctional lightweight Emission construction Weight reduction reduction New Design powertrains Integrated temperature management Haptics (Touch & Feel) Heat Appearance management Safety Energy storage and managementBASF Investor Day Automotive September 5, 2012 41
  • 42. Multifunctional lightweight constructionGlobal competence in seating Weight – Design – Safety – Haptics Innovative combination and unique network of cross divisional material expertise: Seat – one of the most heavy, complex and value-intensive applications in the car‘s interior BASF bundled material and simulation competence BASF provides products and solutions for: − weight reduction − improved safety − better haptics − freedom of design Several projects with OEMs as well as major Tier 1 suppliers (Opel, Faurecia, Daimler, Hyundai)BASF Investor Day Automotive September 5, 2012 42
  • 43. Integrated temperature managementInsulation / heat management solutionsThermal engine encapsulation Functional pigmentsfor optimized heat management for high IR* reflectivityStatus: pilot Status: commercialPolymer foams for NIR** reflective polymerthermal insulation film for car windowsStatus: lab Status: pilot* Infrared** Near InfraredBASF Investor Day Automotive September 5, 2012 43
  • 44. BASF – developing a leading position inbattery material solutions Business potential 2020 BASF SRM* includes cathodes and electrolytes : > €5 billion Sales potential for BASF: > €500 million Existing activities Chemicals & materials for lithium-ion Work on battery concepts for Generation IV Intensive collaborating with leading universities & industry partners Targets Position BASF as system supplier for cell manufacturers Utilize technology and business synergies Expand electrolyte activities * Strategic relevant marketBASF Investor Day Automotive September 5, 2012 44
  • 45. Trends in the automotive industry BASF – leading partner to automotive BASF at the forefront of new technologies BASF’s ambition to grow furtherBASF Investor Day Automotive September 5, 2012 45
  • 46. Automotive to contribute significantlyto BASF 2020 growth targetsGrowth targets(in billion €) 17.0 +6.7% 12.3 +5.7% 12.0*** 9.5 +8.0% 7.6 8.2** 6.0* +5.7% 4.8 +4.0% 5.0 +5.7% 3.5 2.8 4.1 2007 2011 2015 2020 BASF precious metal sales (trading and mobile emissions catalyst production) BASF Automotive chemical sales* Incl. sales of €400 million related to cross-divisional initiatives; ** Incl. sales of €600 million related to cross-divisional initiatives;*** Incl. sales of €600 million related to cross-divisional initiatives and sales of €500 million related to batteryBASF Investor Day Automotive September 5, 2012 46
  • 47. 47
  • 48. Hyundai concept car HED7Introduction of Thomas BürkleBASF Investor Day Automotive September 5, 2012 4848

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