BASF Capital Market Story, Q2/2010

Profitable growth loves ups and downs

BASF Capital Market Story September 2010 1

Continued sales and earnings growth

Sales (billion €) EBIT before special items (billion €)

20 2.5 2.2
15.5 16.2 2.0
16 2.0
12.5 12.8 13.2
1.5
12 1.5 1.2
1.1
8 1.0

4 0.5

0 0.0
Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2
2009 2010 2009 2010

Sales development
Period Volumes Prices Portfolio Currencies
Q2’10 vs. Q2’09 14% 9% 1% 6%
Q2’10 vs. Q1’10 (2)%* 2% 0% 5%

* +4% volume growth w/o Oil & Gas


Continuous strong cash flow

Cash Flow (billion €)

7

6

5

4

3 2.7
1.8
2

1

0
2001* 2002* 2003* 2004 2005** 2006 2007 2008 2009 2010
-1
1HY
Cash provided by operating activities * According to German GAAP
** Cash provided by operating activities less capex (in 2005 before CTA)
Free cash flow**


Attractive shareholder returns

Dividend per share (€) Key facts
Average annual dividend
increase of 12.8%
1.95 1.95
2.0
2.0 (2001-2009)
1.70
1.50 Dividend yield above 3% in any
1.5
1.5 given year since 2001
1.00 Attractive dividend yield of
1.0
1.0 0.85 3.9% in 2009*
0.65 0.70 0.70
0.5
0.5
Consistent, long-term value
Jan 2001 – August 2010:
Average annual performance
0.0
of BASF share** of 10%
2001 2002 2003 2004 2005 2006 2007 2008 2009

Yield* 3.1% 3.9% 3.1% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9%

* Dividend yield based on share price at year-end
** With dividends reinvested


1 | Focus on operational excellence
Costs

2 | Well positioned for profitable growth
Earnings

3 | Outlook
Earnings

5

Unique ‘Verbund’ concept
Cost savings of >€500 million p.a. in Ludwigshafen alone

BASF site Ludwigshafen, Germany Verbund Concept
Vertical and horizontal
integration of production plants,
energy and waste flows,
logistics and site infrastructure
Know-how Verbund
Energy Verbund and combined
heat and power plants
lead to
- Savings of ∼2.6 million tons
oil equivalent p.a.
- Reduction of CO2-emissions
of ~6 million tons p.a.

6BASF Capital Market Story September 2010 6

Tenacious fixed cost management

BASF Group development 2001-2009 Key facts
Since 2001 sales and earnings
Index
Trend
increased significantly
250
Fixed costs represent around
30% of total costs
200
Ciba synergies and NEXT will
drive fixed costs down
150
Synergies from Ciba integration
100 2010E:
€350 million run-rate
50
2001 2003 2005 2007 2009

Fixed costs indexed Sales indexed EBITDA indexed


Sustainable improvement of cost base

Annual earnings contribution (million €) New EXcellence Targets (NEXT)
> 500 individual projects to
simplify processes, structures
2,500 and production sites in all
regions
2,000
Project timeline:
1,500 2008-2011
1,000 Annual earnings contribution of
€600 million in 2010 expected
500
Targeted earnings contribution
0 by 2012:
2003 2005 2007 2009 2010E 2012 ≥€1 billion

Completed restructuring programs New efficiency program NEXT


Costs

Earnings

3 | Outlook
Earnings

9

Well positioned for profitable growth

Leading positions Ongoing Excellent
in growth industries portfolio innovation
and emerging optimization platform
markets
Translate megatrends Continue with active Product and system
into business growth portfolio management innovation as growth
Continue expansion in Drive portfolio closer drivers
Asia to customers Strong pipeline of
innovations

We strive to outperform global chemical production
Growth target:
growth by at least 2 percentage points p.a.


Leading positions
in growth industries and
emerging markets


Ambitious targets for 2020

Regional sales targets 2020 Profitable growth to more than
€90 billion in sales by 2020

Europe, including
Outgrow global chemical
North America Africa, Middle East production growth by
p.a
. 2 percentage points
p.a.
5-6% 4-5
%
€17 Earn premium on cost of
€9 bn bn* €49
bn** capital in all regions
€30
2009 2020
bn Asia Pacific
.
p.a
%
2009 2020 7-8 €20
South America bn
€9bn
. a.
~8% p 2009 2020
€6 bn
€3 bn

2009 2020
* corresponds to sales of €17 billion in 2020,
assuming $/€ of 1.40
** oil price assumption of $75/bbl until 2013,
thereafter increase to ~$100/bbl up to 2020


Growth in emerging markets
Outgrowing Asian Pacific chemical market by 2 percentage points p.a.

China BASF expects to double
sales to €20 billion in Asia
S. Korea
Japan Pacific by 2020:
Pakistan
Strengthen market focus
Bangladesh Taiwan through industry and customer
Hong Kong target groups
India Thailand
Vietnam Develop and market
Malaysia innovations in Asia for Asia
Singapore Invest in Asia to generate 70%
Indonesia of sales through local
production
Regional headquarters – €2 billion investments
Verbund site
planned for 2009-2013
Australia
Chemical production site *

Asia Pacific service center

R&D center * * Some sites not shown due to scale New Zealand

Ongoing
portfolio optimization


Pro-active portfolio management

Selected transactions
Major acquisitions 1999 to date Major divestitures

Crop protection Pharmaceuticals
Superabsorbents BASF Fertilizers
Oil & Gas (Revus)
core Refineries
Engineering Plastics
businesses Fibers
Electronic Chemicals
Printing systems
Custom synthesis
Polyolefins (Basell)
Catalysts (Engelhard)
Construction Chem. Polystyrene
Powerful North America
Water-based resins partnerships Agchem generics
Pigments (Ciba)
Gazprom Premix
Plastic additives (Ciba)
Monsanto
Cognis Petronas Styrenics
(acquisition announced) (to be divested)
Shell
16 billion Euro* Sinopec 10 billion Euro**
(Sales) Total (Sales)
* not including Cognis ** not including Styrenics business

Active portfolio management pays off

EBITDA by activity (in billion €, without Other) Our diversified portfolio
is a key strength

10
Recent acquisitions reshaped
portfolio
8 - Closer to customers
6 - Innovation-driven
- Solution provider
4
BASF Group EBITDA
2 considerably higher in 2009
0
compared to last trough 2001,
supported by all activities
2001* 2003* 2005 2007** 2009

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 taxes

Cognis
A global leader in value-added products

Care Chemicals Nutrition & Health Functional Products

Products and formulations for Products, formulations and Specific solutions based on
the personal and home care concepts for functional food, renewable resources for
markets beverage, dietary supplements mining, synthetic lubricants,
and pharma coatings and crop protection
industries

Sales 2009: €1,457 million Sales 2009: €325 million Sales 2009: €786 million
EBITDA margin 2009: 13.2% EBITDA margin 2009: 13.2% EBITDA margin 2009: 11.2%


BASF + Cognis
Clear targets

Integration into Performance Products segment with the following 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

Cost synergies of at least 5% of 2009 net sales fully achieved by 2013


Excellent
innovation platform


Innovation will spur further growth

Total R&D expenditures 2009 (billion €) Strong commitment to R&D
R&D investments:
3.5% of sales*
Chemicals Corporate Research
9% 23%
More than 9,300 employees
involved in R&D
Plastics
9%
Around 1,900 partnerships with
24% Other
€1.4 universities, startup companies
Performance 2% and industry partners
Products billion
1% Five Growth Clusters:
20%
- Nanotechnology
Functional Agricultural - Energy Management
Solutions Solutions
- Plant Biotechnology
12% 25% - Industrial Biotechnology
- Raw Material Change
Budget for Growth Clusters
(2009-2011): up to €1 billion
R&D spending in 2010 planned on similar level * Excluding Oil & Gas


Strong innovation pipeline

New product New technology New product

Kaurit® Light CypoSol® Natugrain® TS
Light-weight wood-based Contact free and eco-friendly Feed additive for cost-efficient
panels printing of solar cells with and more sustainable animal
30% less weight than metallization inks nutrition ("more from less")
conventional chipboard while Lead-free and solvent free An enzyme used in poultry feed
offering the same strength formulations improving energy utilization
Potential to revolutionize Increased process yield due White biotechnology based
furniture market to reduction of cracking rates production process


Innovation pipeline worth €19 billion

Net present value by segments (billion €) R&D contributes significantly
to earnings growth
20 €19 billion Net Present Value (NPV)
4% Chemicals represents discounted earnings
7% Plastics
after tax from R&D projects
15 17% Performance Products after deduction of R&D
9% Functional Solutions expenditures
10 Major contribution from
Agricultural Solutions and
45% Agricultural Solutions
Performance Products
5 History of high success rate
3% Oil & Gas due to consequent R&D
15% Corporate Research controlling and Phasegate
0 3.5
4.5 process, including life cycle
management

* New or improved products or new applications,
max. 5 years on market, including Growth Clusters


Costs

Earnings

3 | Outlook
Earnings

23

Outlook 2010
Expectations for global economy

Previous Forecast New Forecast

GDP 2.7% 3% - 4%

Chemicals (excl. Pharma) 5.3% 7% - 8%

Industrial production 4.9% 7% - 8%

US$ / EURO 1.40 1.30

Oil price (US$ / bbl) 75 75


Outlook

Short-term targets 2010
We expect that in Q3 BASF will again perform significantly better then expected.
We expect sales to outpace global chemical production growth.
We expect to substantially increase sales and to significantly improve EBIT before special
items.
We expect to earn a sizable premium on our cost of capital.
We expect to increase the dividend.

Medium-term targets
We aim to grow sales on average by two percentage points per year
above chemical market growth.
We strive for an EBITDA margin of 18% until 2012.

Dividend policy
We aim to continuously increase the annual dividend,
or at least maintain it at the level of the previous year.

Forward-looking statements

This presentation includes 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. This presentation contains a number of forward-looking
statements including, 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 with respect to future events and financial performance. Actual financial
performance of the entities described herein 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.

Forward-looking statements represent estimates and assumptions only as of the date that
they were made. 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 today – a well-balanced portfolio
Total sales 2009: €50.7 billion

Percentage of sales 2009

Chemicals Plastics* Performance Functional Agricultural Oil & Gas
Products Solutions Solutions
15% 14% 18% 14% 7% 22%
Inorganics Performance Dispersions & Catalysts Crop Exploration &
Polymers Pigments Protection Production
and
Petrochemicals Polyurethanes Care Construction Natural Gas
Chemicals Chemicals Trading
Intermediates Paper Coatings
Chemicals
Performance
Chemicals

* Styrenics reported under ‘Other’


Delivering consistent, long-term value

Long-term performance January 2001 – August 2010 Committed to
(average annual performance with dividends reinvested) shareholder value
BASF total return well above
benchmark levels
10% BASF
Average annual dividend
increase of 12.8%
(2001-2009)
-3.5% Euro Stoxx 50
Attractive dividend yield of
3.9% in 2009, based on share
-0.9%
price at year-end
DAX 30
Aim to increase dividend each
year, or at least maintain it at
5.1% MSCI World Chemicals the previous year‘s level

-5 0 5 10 15


Chemicals
Strong demand and better margins boost earnings

Q2’10 segment sales (million €) vs. Q1’10 EBIT before special items (million €)

Intermediates Inorganics 687
648 325 600
+11% +15% 461
€2,970 400 364
315
258
+15%
200
Petrochemicals
1,997 0
+16% Q2 Q3 Q4 Q1 Q2
2009 2010

Sales development
Q2’10 vs. Q2’09 21% 36% 0% 7%
Q2’10 vs. Q1’10 2% 8% 0% 5%


Plastics
Positive volume momentum


Polyurethanes 400 349
1,400
+15% 279
251
216
€2,584
200
+18% 138

Performance
Polymers
1,184 0
+21% Q2 Q3 Q4 Q1 Q2
2009 2010

Sales development
Q2’10 vs. Q2’09 27% 14% 0% 7%
Q2’10 vs. Q1’10 8% 4% 0% 6%


Performance Products
Earnings further up, additional synergies realized

Paper Chemicals Performance Chemicals 500 471
440 806 419
+5% +11% 400
286
€3,151 300
209
+10% 200
Dispersions & 100
80
Care Chemicals Pigments
1,048 857 0
+4% +19% Q2 Q3 Q4 Q1 Q2
2009 2010

Sales development
Q2’10 vs. Q2’09 16% 4% 4% 5%
Q2’10 vs. Q1’10 4% 2% 0% 4%


Functional Solutions
Demand from automotive industry recovers


Catalysts Construction Chemicals 165
1,225 576 150
+15% +33% 111
106 101
€2,453 100

+17% 48
50
Coatings
652 0
+10% Q2 Q3 Q4 Q1 Q2
2009 2010

Sales development
Q2’10 vs. Q2’09 19% 11% 1% 9%
Q2’10 vs. Q1’10 8% 2% 1% 6%


Agricultural Solutions
Strong herbicide but weaker fungicide business

1HY’10 segment sales (million €) vs. 1HY’09 EBIT before special items (million €)

2,500 2,320 +2% 2,356
800 711 -10%
641
2,000
600
1,500
400
1,000
200
500

0 0
1HY 1HY 1HY 1HY
2009 2010 2009 2010

Sales development
Q2’10 vs. Q2’09 1% (4)% 0% 6%
Q2’10 vs. Q1’10 2% (1)% 0% 5%
1HY’10 vs. 1HY’09 1% (2)% 0% 3%

Oil & Gas
Higher gas trading volumes positively impact sales

Q2’10 segment sales (million €) vs. Q2’09 EBIT before special items / Net income (million €)

Exploration & 800
Production
854 600 506 515
(10)% 37
€2,374 95
400
(3)%
Natural Gas 200 469
420
Trading 181 148
1,520 0
+1% Q2 Q2
2009 2010
EBIT bSI Natural Gas Trading Net income
Sales development EBIT bSI Exploration & Production

Period Volumes Prices/Currencies Portfolio
Q2’10 vs. Q2’09 4% (7)% 0%
Q2’10 vs. Q1’10 (27)% 1% 0%


Acquisition of Cognis
Transaction highlights

Purchase price equity: €700 million

LTM*-EBITDA, reported: €386 million
LTM*-EBITDA, adjusted: €422 million (before special items)

Enterprise value: €3.1billion
– Represents a multiple of 7.3 x LTM*-EBITDA adjusted

100% cash consideration, no financing conditions

Expected closing in November 2010

BASF Capital Market Story September 2010 *LTM = last twelve months 36

Ciba integration: synergies exceed targets
Structural integration of Ciba completed

Expected synergy run rate (million €) Impact of Ciba acquisition
Integration costs
500 >450 2009: €785 million
450
Synergy 2010: ~€200 million
400 Target 2011/2012: ~€100 million
350
Net reduction of positions
300 - Target: 3,800
200
130 Ciba non-production sites
100 - To be consolidated: 58

0 23 Ciba production sites
2009 2010 2011/2012 Steady under strategic review
State - Planned exit: 14*
Synergy run rate
Effective in 2009

* On two sites exit of production activities only

BASF Capital Market Story, Q2/2010

BASF Capital Market Story, Q2/2010

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