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BASF Roundtable Agricultural Solutions 2012

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Slides from BASF Roundtable Agricultural Solutions, November 12, 2012, London: 'Agricultural Solutions - Sustainble growth through market-driven innovations' ...

Slides from BASF Roundtable Agricultural Solutions, November 12, 2012, London: 'Agricultural Solutions - Sustainble growth through market-driven innovations'
Further information and webcast at: http://on.basf.com/UEA3Ab

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    BASF Roundtable Agricultural Solutions 2012 BASF Roundtable Agricultural Solutions 2012 Presentation Transcript

    • Agricultural Solutions Sustainable growth through market-driven innovationsBASFRoundtableAgriculturalSolutionsNovember 12, 2012London BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 1
    • DisclaimerThis 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 Roundtable Agricultural Solutions, November 12, 2012 2
    • 1 | Introduction Dr. Andreas Kreimeyer Member of the Board of Executive Directors2 | BASF Crop Protection3 | BASF Plant Biotechnology 3
    • 1 | BASF maintains good business performance in Q3 20122 | ‘We Create Chemistry’ strategy on track; Agricultural Solutions is a key contributor3 | Agricultural Solutions offers attractive growth opportunities with strong commitment to innovation 4
    • BASF maintains good businessperformance in Q3 2012Business Performance Q3’12 vs. Q3’11 Q1-Q3’12 vs. Q1-Q3’11 Sales €19.0 billion +8% €59.1 billion +7% EBITDA €2.8 billion +4% €9.8 billion +8% EBIT before special items €2.1 billion +5% €7.1 billion +2% EBIT €2.0 billion +6% €7.4 billion +11% Net Income €0.9 billion (21)% €3.9 billion (23)% EPS €1.03 (21)% €4.25 (23)% Adjusted EPS €1.19 (22)% €4.36 (16)%Sales developmentPeriod Volumes Prices Portfolio CurrenciesQ3’12 vs. Q3’11  7%  (4%)  (1%)  6% Favorable business development inin Agricultural Solutions and Oil & Gas Favorable business development Agricultural Solutions and Oil & Gas Earnings inin chemical activities did not match the previous year’s level Earnings chemical activities did not match the previous year’s level BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 5
    • Ongoing portfolio optimization Restructuring of Asset swap Becker Underwood Construction Chemicals with Statoil Photo: Statoil BASF to acquire Becker Underwood  BASF is strengthening  Acquisition of equity in 3 producing competitiveness of Construction fields in Norway: Brage (32.7%), $1.02 billion (€785 million) purchase Chemicals in Europe Gjøa (15%), Vega (30%) price Strengthens global crop protection  Measures include:  2P reserves of ~100 million boe business - Adjusting business to declining  Rise in daily production in Norway markets in Southern Europe and from 3,000 to 40,000 boepd Leading global provider of technologies for biological seed Great Britain  Statoil to receive treatment - Enhancing overall efficiency and - 15% in development field Edvard 2012 (E) Sales $240 million (€185 customer focus Grieg million)  About 400 positions in Europe are - $1.35 billion Merger control approvals pending affected - up to additional $100 million depending on success of Vega BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 6
    • Outlook 2012 confirmedOutlook 2012 For the FY 2012, BASF aims to exceed the record levels of sales and EBIT before special items achieved in 2011 BASF will strive again to earn a high premium on cost of capital Chemical activities - We do not expect demand to pick up in the fourth quarter 2012 - Therefore, 2012 EBIT before special items of chemical activities will come in below the level of the previous year.Assumptions 2012 GDP: +2.2% (before: 2.3%) Industrial production: +2.8% (before: 3.4%) Chemical production: +2.9% (before: 3.5%) US$/Euro: 1.30 (unchanged) Oil price (US$/bbl): 110 (unchanged) BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 7
    • 1 | BASF maintains good business performance in Q3 20122 | ‘We Create Chemistry’ strategy on track; Agricultural Solutions is a key contributor3 | Agricultural Solutions offers attractive growth opportunities with strong commitment to innovation 8
    • BASF – The Chemical Company. We createchemistry for a sustainable future Positioning Performance Perspective Ludwigshafen, Germany Nanjing, Antwerp, China Belgium Kuantan, Geismar, Malaysia USA Freeport, USA Verbund site The #1 chemical company.  10 years of outperformance  Chemistry as an enabler 2011: €73.5 billion sales,  16% average annual stock  BASF has superior growth €8.4 billion EBIT bSI performance* opportunities: Innovation, #1- #3 in >75% of business,  15% average annual sustainability, Emerging present in >200 countries dividend increase, >3% Markets, … Production in 41 countries, yield every single year**  Long-term value creation, 6 integrated Verbund sites ambitious financial targets * Nov. 2002 - Oct. 2012 ** For 2002-2011 BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 9
    • ‘We Create Chemistry’ strategy definesclear financial targets for 2015 and 2020 Growth targets Profitability targets  Grow at least 2 percentage  Earn a premium on cost of points above chemical capital of at least €2.5 billion on production average p.a.  Sales ~€85 billion  EBITDA ~€15 billion 2015  EPS ~€7.50  Sales ~€115 billion  Double EBITDA to ~€23 billion 2020 (compared with 2010) BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 10
    • Demographic challenges set the stagefor the future of the chemical industry Nine billion people in 2050 but only one earthResources, Environment & Food & Nutrition Quality of lifeClimate Chemistry as an enabler BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 11
    • We expand from chemicals to chemistry 1960 1970 1980 1990 2000 2010 2020  Chemistry as key enabler for New functionalized materials & molecules solutions  Deep understanding of Improved customer value chains applications required Functionalized  Agricultural Solutions materials & perfectly matches BASF’s solutions focus on solutions business BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 12
    • BASF Crop Protection’s offering goesbeyond weed, disease and pest control External factors Risk management Sustai- Exchange Commodity nability Rate Prices Stress Resources Innovation beyond Crop Protection Frost Drought Heat Nutrition Soil Water Natural foes Crop Protection Weeds Diseases Pests BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 13
    • BASF Plant Science –Trait Technology Partner Concept and strengths  BASF has focused on traitGrowers technologies early on  Cutting-edge technology and trait portfolio attracts top partners (seeds, food)  Products to be marketedTrait & via our partners’ channelsSeedPartners  Partnership business model provides high flexibility and keeps asset costs lowTraitTechnologyPartner Plant Science BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 14
    • Multiple synergies between AgriculturalSolutions and BASF Verbund Strong Non-cyclical, Backward- Technological contributor adds earnings integration synergies to BASF‘s resilience and through profitable sourcing Know-how growth synergies Verbund Agricultural Solutions BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 15
    • Agricultural Solutions has increased itsearnings contribution to BASF sustainablyEBIT before special items Sustainably increased earningsin billion €  EBIT bSI more than doubled from 2006 to 2011  New record in 2011: €810 1 million0,8  FY 2011 record has been0,6 already significantly surpassed: Q1-Q3 2012: €1,004 million0,40,2 0 2006 2007 2008 2009 2010 2011 2012 Q1-Q3 BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 16
    • Agricultural Solutions has demonstratedprofitable growth and sustained marginsSales to 3rd parties EBITDA Strong business performancein billion € margin*  Profitable growth over the past 5 years; high EBITDA margin level since 2004  EBITDA margin target: 25% on average  Committed to sustain the high margin level ...  ... while continuing to invest into innovation, leveraging BASF‘s know-how Verbund* Before Special Items. 2004 onwards according to IFRS. 2006 onwards excl. corporate cost BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 17
    • Agricultural Solutions is adding to BASFGroup’s earnings resilienceEBITDA by activity (excluding Other) Agro adds to earnings resiliencein billion €  Agriculture not coupled to12 chemical cycle  Agricultural Solutions delivered10 substantial contribution even in 2009 trough86420 2002 2004 2006 2008 2010 Chemicals business Oil & Gas Agricultural Solutions BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 18
    • Our growth in Crop Protection is backedby a high level of backward integrationSourcing of Top-100 raw materials* (by value) in 2011 Make or buyin million €  Verbund back-integration – security & flexibility of supply from 3rd parties – market-based transfer pricing €515 from Verbund 64% 36% – typically ~40% of the Top-100 million raws come from Verbund  Sourcing synergies* Without a.i. tolling, formulants, packaging – economy of scale via jointCapex BASF procurementin million €/a  Capex2007-2011 – capex will increase to >€250 M/y in 2012-2016 (on average)2012-2016 – insourcing of advanced intermediates 0 100 200 – capacity expansions BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 19
    • Large share of R&D spending committedto Crop Protection, Plant BiotechnologyTotal R&D expenditures 2011 Strong innovation platformin billion €  €1.6 billion R&D expenditures inChemicals 2011, ~€1.7 billion in 2012Business Agricultural  2020 target: ~€30 billion in salesChemicals Solutions with innovations <10 years8% 26%Plastics  10,100 people; 2,800 projects9%  Research Verbund ~1,950Performance €1.6 Plant Biotech partnerships with universities,Products billion 11% start-ups, industry partners21% Other Corp. R&D 12%  Agro benefits from Know-howFunctionalSolutions Oil & Gas Verbund synergies, especially12% 1% in process design, formulation technologies, biotechnology BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 20
    • 1 | BASF maintains good business performance in Q3 20122 | ‘We Create Chemistry’ strategy on track; Agricultural Solutions is a key contributor3 | Agricultural Solutions offers attractive growth opportunities with strong commitment to innovation 21
    • To stimulate further growth in Agriculture,we pursue two promising Growth Fields Resources, Environment & Climate Food & Nutrition Quality of Life Chemistry as Enabler Industries Customer Consumer Health & Energy & Transportation Construction Electronics Agriculture Goods Nutrition Resources Batteries for Heat Organic Plant Energy Enzymes Medical Mobility Management Electronics Biotechnology Management Lightweight Functional Rare Earth Growth Fields* Composites Crop Care Metals Recycl. Heat Wind Energy Management Water Solutions Growth fields at different stages, >€500 million sales each expected at maturity* Including growth fields still under evaluation BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 22
    • BASF Plant Sciences has generated aleading technology platformPatent Asset Index for Yield & Stress Traits A strong trait technology platformCeres  BASF Plant Science founded in 2009 1998 as a subsidiary of BASFMendel 2010  Strong trait technology platformDuPont 2011 was created, highly attractive toBayer partnersBASF/  Prime example: Yield & StressMonsanto collaboration with Monsanto 0 200 400 600 800 1000 1200 ranks #1 in Patent Asset Index Partnership Partnership Partnership with with with1995 2000 2010 BASF Plant Science Foundation of Acquisition of founded (1998) Metanomics (1998) CropDesign (2006) BASF Roundtable Agricultural Solutions, November 12, 2012 Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 23
    • Agricultural Solutions is a star in our portfolio Important contributions to BASF Group – profitable growth – stable earnings Integrated in BASF Verbund – cost synergies – know-how synergies Important role in reaching goals of our We Create Chemistry strategy – customer focused solutions offer – innovative & sustainable solutions BASF Roundtable Agricultural Solutions, November 12, 2012 24
    • 1 | Introduction2 | BASF Crop Protection Markus Heldt President, Crop Protection Division3 | BASF Plant Biotechnology
    • BASF Agricultural SolutionsStrong fundamentals - YTD earnings topped FY 2011 Q1-Q3 Q1-Q3 ∆%million € ∆% 2012 2011 CERSales* 3,802 3,343 +14% +9%EBITDA before special items 1,114 894 +25% +14%EBITDA margin 29.3% 26.7% - -EBIT before special items 1,004 769 +31% +19%EBIT margin 26.4% 23% - -Assets (as of Sep 30) 5,531 4,941 +12% +10%Research and development expenses 308 293 +5% +4%* Sales drivers Q1-Q3 2012: volumes +7%; prices +2%; currencies +5% BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 26
    • Strong growth in all regions3rd Party sales Q1-Q3 2012 by region Key factsin million €  Europe: Strong performance in Central & Eastern Europe and UKNorth America Europe  North America:954 (+9%) 1,596 (+12%) Strong herbicides sales due to increasing glyphosate €3,802 resistance (+9%)  South America, Africa, ME:Asia Pacific South America, Season in full swing, offsetting418 (+2%) La Niña impact at beginning Africa, Middle East of 2012 834 (+6%)  Asia Pacific: Sales growth mainly driven by India and ChinaIn brackets: growth at constant exchange rates in % vs. prior year BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 27
    • Strong growth in all indications3rd Party sales Q1-Q3 2012 by indication Key factsin million €  Fungicides: Strong volume growth driven by Xemium® sales in Europe,Fungicides Herbicides and strong Plant Health1,624 (+6%) 1,395 (+13%) adoption in North America  Herbicides: €3,802 Main drivers were Clearfield® (+9%) in Europe, Kixor® in North America, IMIs in Asia.  Insecticides: Insecticides/Other Strong demand increase for 783 (+7%) Fipronil especially in Brazil (sugarcane)In brackets: growth at constant exchange rates in % vs. prior year BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 28
    • Crop Protection growth story continues,€6 billion sales targeted for mid of decadeSales drivers Financial Targetsin million € ~ 6,000  €6 billion sales target expected to be reached at mid of decade due to: ~ 4,700 – strong momentum and 4,165 additional value extraction from our existing portfolio New Herbicide Growth & & FCC** in Fungicide product ~ 50% Renaissance emerging AgCelence Becker – new product launches launches & Innovations markets growth Underwood – emerging market business 46% 44% models gaining further grip  EBITDA margin target: 25% on average 2011 2012E 2015E Emerging Markets** Latin America, Eastern Europe, South Africa, Asia (w/o Japan, Australia, New Zealand)** FCC = Functional Crop Care BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 29
    • Global expansion of AgCelence®leverages our Plant Health portfolio sales to third parties AgCelence®Sales in million €  Umbrella brand for Plant800 Health solutions, global rollout in full swing  Plant Health effect:600 Improved stress tolerance, growth, crop quality400  F 500® fungicide continues to be a key contributor to Plant Health business200  3rd capacity expansion for F500® announced in September 2012 0 2008 2011 2015E North America Europe/EMA Latin America Asia BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 30
    • Limited impact of US drought on BASFGeneral situation US drought has reduced 2012 yield expectations and fungicide use in corn and soy High crop prices expect to prevail for extended period, driving continued demand for high-yield systems June 5th Farmers losses partially mitigated by crop insurance; good liquidity expected for 2013 BASF Research 2012, Stark County, IllinoisPlant Health segment Despite drought, >20 million acres treated (corn, soy) June 16th Only moderate impact on BASF business expected in Q1 2013 due to channel inventories Plant Health will remain a major growth driver for BASF July 2nd BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 31
    • Very successful Xemium® launchconfirms blockbuster potential Xemium®  New fungicide for all market segments  Strengthens BASF’s global leadership position Successful launch  Global registration proceeds in record time. Target: >100 crops, >50 countries  Outstanding Q1-Q3 sales  Initial peak sales potential: >€200 million Xemium registered Next upcoming registrations BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 32
    • Continued growth in herbicides; salestarget of >€1.75 billion for 2015BASF launches Herbicide Renaissance  Urgent need for innovation Engenia®  Rethinking of weed control  Multiple modes of action needed BASF’s multi-level approach  Strong herbicide pipeline  Successful expansion of Kixor®  Herbicide-tolerant production systems:1990 2000 2010 – Clearfield® in global launch – Cultivance® and Engenia® (Dicamba) in approval Roundup Ready® (RR) Accelerating market Increasing weed launched by Monsanto penetration of RR resistance to in 1996 system in the Americas Glyphosate BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 33
    • Acquisition of Becker Underwoodsupports Agricultural solutions strategyStrategy Becker Underwood adds value  Strengthens our traits & seed partnerships via expanded Crop seed treatment offering protection  Gives access to growth market of biological Crop Protection  Complements offering in strategic crops and countries, Agricultural i.e. Americas Solutions Innovation  Opens door to combined beyond crop Traits & seed solutions of chemical and protection partnerships biological crop protection  Strengthens know-how and technology platform BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 34
    • Becker Underwood further strengthensBASF’s position as solution provider Becker Underwood (Sales 2012E**: €185 million) Timelines  Closing of transaction expected by year end 2012  Becker Underwood will be Seed Horticulture & Foliar Plant Livestock Enhancement Landscape Specialty Health Nutrition* part of Functional Crop Care, support all three pillars  Structural integration to be completed by end of 2013 Global Business Unit Functional Crop Care (FCC) Innovations Seed Solutions beyond Crop Biologicals Protection* To be part of Health & Nutrition ** Fiscal year ended September 30, 2012 BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 35
    • We will grow Emerging Markets salessignificantlyEmerging Market sales Key driversindexed  Latin America: Additional Eastern Europe % Latin America resources established, new %300 financial tools introduced 300200  Eastern Europe: Headcount 200 to double from 2008 - 2013100 100  Asia: Additional investments 0 0 in assets, resources planned 2007 2011 2015E >€ 3 bn. 2007 2011 2015E in 2015  Africa: Crop Protection is a % Asia 600 Africa main driver for BASF Group’s600500 500 growth in Africa400 400300 300200 200100 100 0 0 2007 2011 2015E 2007 2011 2015E BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 36
    • We are committed to keep investing intoinnovationTotal R&D expenditures Commitment to innovationin million €  Core of our business model: Innovative solution provider  High R&D intensity in Crop 410 Protection (~9% of sales) 390  Increased R&D investments: 358 – 2007 - 2011: € 1.8 billion – 2012 - 2016: ~€ 2.5 billion 329 321 2007 2008 2009 2010 2011 2012 BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 37
    • We have a strong innovation pipeline A strong pipeline Weed  Total Peak Sales Potential at management €2.8 billion, increased >50% Dicamba HT since 2008  In-launch pipeline (2002-2009) at €1.6 billion  Young pipeline (2010-2020) Disease at €1.2 billion and growing management  Ongoing R&D and inlicensing activities in insecticides  Functional Crop Care projects Plant shaping up Health Functional Nitrogen  Pipeline update in Q1 2013 Crop Care Management Water Management BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 38
    • Capex to be further increased, followingour strategyCapex 2007-2011 Capex 2007-2011in billion €  F500®: capacity expansionVarious* Key Projects  Kixor® and Xemium®: new (F500, Kixor, Xemium) €0.8 production plants billion  Formulation: New plants and expansionsPlanned capex 2012-2016 Planned capex 2012-2016in billion €  F500®: 3rd capacity expansionVarious* Key Projects  Xemium®: backward integration (F500, Xemium, Dicamba) >€1.4  Dicamba: capacity expansion billion  New formulation plants (Asia)  R&D expansion (India, USA)* Formulation sites, research sites, infrastructure BASF Roundtable Agricultural Solutions, November 12, 2012 Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 39
    • Summary and outlook Positive market fundamentals expected to persist (high crop prices, accelerated technology adaption in emerging markets) BASF is strongly positioned as solution provider Continued profitable growth, based upon high demand for innovative solutions and strong pipeline New sales and earnings records forecasted for 2012 Expected sales of ~€6 billion in 2015 BASF Roundtable Agricultural Solutions, November 12, 2012 40
    • 411 | Introduction2 | BASF Crop Protection3 | BASF Plant Biotechnology Dr. Peter Eckes President, BASF Plant Science BASF Roundtable Agricultural Solutions, November 12, 2012
    • The GM success story continuesGlobal GM crop area Key factsin million hectares; 1 ha = 2.47 acres  Global GM crop area continued to 160 grow in 2011 (8% from 2010)160140  Biotech crops are planted on120 about 11% of the cultivated land100  In 2011, 16.7 million farmers grew80 GM crops in 29 countries60  Market expected to grow to €32 billion by 2020**4020 0 1997 2000 2003 2006 2011 * CAGR 1997-2011 ** Source: Context Outlook 2010, BASF estimates; incl. license value; major crops only; net farm value Source: ISAAA 2011 BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 42
    • Americas as the growth driver for GMcultivation 7 % <0,001 % Europe Canada 2% China 43 % USA 19 % Brazil 7 % India 15 % ArgentinaSource: Clive James, ISAAA 2011 BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 43
    • BASF Plant Science refocuses on strategicmarketsSituation Decision in January 2012  Active portfolio & site management 7%  Strengthen position in North Canada America; expand the new HQ in Research Triangle Park (NC) 43 USA %  Stop projects with EU market focus  Refocus activities on main markets in North and South America <0,001 %  Consolidate global site footprint Europe  Trait Technology Partner Strategy remains unchanged BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 44
    • Cutting-edge trait technology platformsmake us the ideal partner The Best Traits… …for the Best Seeds Unique technology platforms for  Strong partnerships with leading yield screening, metabolite profiling seed and food companies ensure optimal market access Strong global academic network BASF z Plant Science z BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 45
    • Cutting-edge trait technology platformsfuel strong pipeline Trait Discovery Stage I Stage II Stage III Stage IV Business total development gene identification proof of concept early product advanced product pre-launch potential* time: 10-12 years & proof of concept in target crops development development Drought-tolerant corn 2nd Generation 1st Gen. 250-500 M $ Higher-yielding corn >500 M $ Yield & Stress Improved nitrogen utilization in corn 250-500 M $ with Drought-tolerant cotton <250 M $ Monsanto1 Higher-yielding soybean 2nd Generation 1st Gen. 250-500 M $ Higher-yielding canola <250 M $ Higher-yielding wheat tbd** Higher-yielding sugar cane2 tbd** Yield & Stress Higher-yielding sugar beet3 tbd** with others Higher-yielding rice4 <250 M $ Feed Improved corn feed tbd** Specialities Healthy fatty acids in canola5 250-500 M $ Nematode resistant soybean1 tbd** Input Traits Herbicide-tolerant soybean6 <250 M $ Fungal resistant soybean tbd** Target gross trait sales before partner share in 2020***: €1.8 bn1 as communicated at Monsanto pipeline update in January 2012, * peak gross trait sales of last family member in country of 1st launch before partner share2 with CTC, 3 with KWS , 4 with Bayer, 5 with Cargill, 6 with Embrapa ** to be defined when product enters Phase II *** adjusted due to discontinuation of potato projects BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 46
    • Launch of 1st commercial BASF/Monsantoproduct: DroughtGard™ Hybrids  Disease Tolerance Germplasm  Drought Tolerance System approach – germplasm,  Yield Potential traits and agronomic recommendations  DroughtGard™ Hybrids Total Yield demonstrate enhanced hydroefficiency capability under drought stress  Maintains top-end yield potential Agronomic Trait in well-watered conditions Practices Packages  Advantage over competitor products under drought stress  Insect Control Grower-level  Completed ~250 Ground  Weed Control Recommendations Breakers trials in 2012  Drought Tolerance  Full commercialization in 2013/14 BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 47
    • The DroughtGard™ Hybrid – the first andonly drought management system Monsanto’s Ground Breakers On-farm trial program designed to:  Provide select farmers early exposure to the latest products ND ND MN and agronomic systems SD  Support a better understanding of WY NE IA where, how and in which system a product will perform best CO KS MO  Help support commercial decisions OK AR DroughtGard™ Hybrid System NM  ~250 Ground Breakers farmers on LA LA TX thousands of acres  Stewardship guidelines followed throughout the unfolding of the regulatory approvals  Targeted for the Western Corn Belt BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 48
    • The DroughtGard™ Hybrid Systemoutperforms the competition DroughtGard Hybrids™ Drought-tolerant competitor product BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 49
    • Higher yielding rice: Biotech solutionstap an attractive and expanding market Megatrend population increase  Currently rice provides ~20% of human caloric intake globally*  Current yield increase ~0.8% p.a. vs. future need of 1.2-1.5%* Partner strategy  Market access via non-exclusive license agreements  First partnership signed with Bayer CropScience (#1 in global hybrid rice market) Attractive market  Yield increase offers an attractive value potential for combination of hybrid- & biotechnology  Key markets: Asia and Americas* Rice Almanac, 3rd ed., IRRI, 2002; A.J. Garris, et al., Genetics 169, 2005, 1631 BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 50
    • Higher yielding rice: First results showstrength of yield trait system Seed weight (indexed) 6 4 2Transgene Reference 0 TraitMill™ Indica Screen Field Trail Discovery Validation Development japonica indica indica BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 51
    • Fungal-resistant soybeans: Innovationinspired by nature Where do our resistance genes come from? The idea of Non-Host Resistance  Soybeans, our host species, are highly susceptible to Asian Soybean Rust (ASR)  There are plants with a natural Birdsfoot trefoil Chickpea immunity against ASR, like peanuts, chickpeas, certain clover and trefoil, etc.  Non-Host Resistance relies on taking these resistance genes and introducing them into soybean  Learning from nature enables an innovative biotech approach Peanut Low hop clover BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 52
    • Fungal-resistant soybeans: Innovationyields first promising resultsEfficacy against ASR: 2012 field trials in Brazil Fungal diseases have a major impact on soybean harvestEnhanced resistance*  Asian Soybean Rust (ASR) can100% result in yield losses of 10 to 90% 80% Objective: 60%  Provide broad, durable resistance against fungal diseases based on 40% multiple genes 20%  Reliable insurance consisting of 0% biotech trait & fungicide treatment Lead gene 1 Lead gene 2 control  Convenient system for easy use Target market:  South America, primarily Brazil (Total harvested area of 30 Mio ha potentially at risk of ASR damage) Resistance gene expressed Susceptible mother variety* Best event BASF Roundtable Agricultural Solutions, November 12, 2012 Market Strategy Pipeline Projects Summary 53
    • Summary and outlook Refocused on key markets in Americas and Asia Concentrate on highly attractive yield traits Discovery platforms enable innovative gene discovery Strong pipeline with target gross trait sales before partner share of €1.8 bn BASF Plant Science slated to become an operating division of BASF within this decade BASF Roundtable Agricultural Solutions, November 12, 2012 54
    • BASF Roundtable Agricultural Solutions, November 12, 2012