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BASF’s new Verbund site in Zhanjiang
Dr. Martin Brudermüller
Chairman of the Board of Executive Directors
BASF Investor Update, September 27, 2021
1 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Cautionary note regarding
forward-looking statements
This presentation contains forward-looking statements. These statements are based on current
estimates and projections of the Board of Executive Directors and currently available information.
Forward-looking statements are not guarantees of the future developments and results outlined
therein. These are dependent on a number of factors; they involve various risks and uncertainties; and
they are based on assumptions that may not prove to be accurate. Such risk factors include those
discussed in Opportunities and Risks on pages 158 to 166 of the BASF Report 2020. BASF does not
assume any obligation to update the forward-looking statements contained in this presentation above
and beyond the legal requirements.
2 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
The new Verbund site in Zhanjiang
Market environment in China
– a robust basis for growth
1
Zhanjiang – the location of our
new Verbund site in South China
3
BASF performance in Greater
China – a proven track record
2
The new Verbund site – highly
integrated and sustainable
4
5 Financials and key takeaways
3 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Share of absolute chemical production growth by region
%
2030
Greater China
68%
Europe
8%
North America
6%
Rest of Asia Pacific
13%
Middle East, Africa
4%
South America
2%
1.9
3.0
0.7
0.8
0.5
0.6
0.6
0.8
0.2
0.2
0.1
0.1
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2020 2030
China is the major growth driver for global chemical production:
Two thirds of growth will come from Greater China by 2030
Real chemical production1
trillion US$
4.0
5.6
Greater China
Europe
North America
Rest of Asia Pacific
Middle East, Africa
South America
CAGR
3.3%
Source: BASF 1 Real chemical production excluding pharmaceuticals, US$ base year 2015
Figures may not add up due to rounding effects.
4 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
The absolute growth of the chemical market in China is expected
to be twice as high as in the rest of the world
Absolute growth of chemical market 2020–20301
billion US$
South America North America EMEA Asia Pacific
(excl. mainland China)
Mainland China
Source: BASF 1 Real chemical production excluding pharmaceuticals, US$ base year 2015
Maps for illustrative purposes only
31 90 183 205 1,026
5 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Economic drivers for long-term growth in China remain unchanged
despite the impact of the pandemic
 China will continue to strive to achieve a per capita
GDP level similar to advanced economies
 Continuing urbanization will drive increasing demand
for durable and consumable goods
 Productivity increases will drive growth
 There will be high investments in new technologies,
sustainability and high value-add industries
GDP per capita
2020 estimates, thousand US$
63
45
40 40
32
10
USA South Korea
Germany China
UK Japan
Source: BASF, nominal
6 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
China’s 14th five-year plan and policy initiatives add
momentum to BASF’s strategy implementation in China
BASF is well positioned to benefit
from business opportunities in China
 Customer-driven innovations
 Sustainability front-runner
 Local asset and R&D footprint
 Proven track record and strong relationships
Innovation-driven
development
Dual circulation policy
Opening up to
foreign investors
Green agenda Rural vitalization Urban development
47
58
70
46
41
28
7 1 2
0
50
100
2000–2010 2010–2020 2020–2030 FC
Consumption
Investment
Net export
Five-year plan: Self sufficiency and sustainability
Data source: Oxford Economics, calculation based on real 2015 values
China’s GDP growth: Consumption-driven
%
7 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Today, 90% of BASF’s production assets are in East China,
in South China the company is still under-represented
Key BASF figures in Greater China
 BASF is active in China since 1885
 Over the past 20 years, BASF has invested
more than €6 billion in Greater China
(more than €9 billion with partners)
 Number of companies:
28 major wholly-owned, 7 major joint ventures
 Number of production sites: 27
 Number of sales offices: 24
 Number of employees: 8,948
 Sales of BASF Group companies to customers
in Greater China in 2020: ~€8.5 billion
Guangdong
Chongqing
Nanjing
Shanghai
BASF East China
Sales Assets
52% 90%
BASF South China
Sales Assets
20% 2%
Multi OD
Single OD
100% BASF
Joint venture
Verbund
All data for Greater China is as of December 31, 2020. Sales of fully consolidated companies only; does not include sales of joint ventures consolidated at equity such as
BASF-YPC Company Ltd. (BASF-YPC). EBIT before special items incl. equity contribution from BASF-YPC. Gross asset value and production capacity incl. BASF-YPC
Depicted view of mainland China
8 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Guangdong is home of key customers from fast-growing industries
Guangdong
671
2020
151
2020
Strongly growing
industrial base1
billion US$
Largest automotive
production, China
# of motor vehicles built
in Guangdong (1,000)
Large chemical
production2
billion US$
Steady increase of
private consumption3
billion US$
3,133
2020
611
2020
~5.3% ~3.1%
~6.1%
~5.5%
CAGR 2015–2020
% p.a.
Market characteristics
 Around 126 million residents in
Guangdong province (2020)4
 GDP Guangdong (2020):
~US$1,608 billion
(closely trailing South Korea)
 GDP growth from 2020–2035:
5–6% p.a.
 Key customer industries: transportation,
consumer goods, home and personal
care, electronics
 Chemical products are generally
undersupplied from local production
1 Real value added, manufacturing Guangdong
2 Real chemical production Guangdong; inferred by gross output/value added ratio for China
3 Real private consumption Guangdong; IHS forecast
4 General Office of Shenzhen Municipal People’s Government
9 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Guangdong province is the economic growth engine of China
and a powerhouse of BASF’s key customer industries
1,452
4,886
By 2050, GDP of Guangdong is expected to add more than
“one current Germany”
Already today, South China produces more light vehicles
than Germany
GDP 2020, growth until 2030 and 2050
billion US$
1 Growth by 2030 and by 2050 respectively
3,409
1,608
1,491
650
1,213
1,139
1,011
3,673
3,147
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Germany
Guangdong province
Jiangsu province
(existing Verbund
site Nanjing)
(new Verbund site
Zhanjiang)
2020 20301 20501
Light vehicle production in South China and Germany
1,000 units
0
2,000
4,000
6,000
8,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Guangdong Rest of South China South China Germany
Source: IHS and LMC
10 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
The new Verbund site in Zhanjiang
Market environment in China
– a robust basis for growth
1
Zhanjiang – the location of our
new Verbund site in South China
3
BASF performance in Greater
China – a proven track record
2
The new Verbund site – highly
integrated and sustainable
4
5 Financials and key takeaways
11 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
4
8.5
2010 2020
BASF has substantially increased its presence in Greater China
6,980
8,948
2010 2020
As of December 31, 2020. Sales by location of customer of globally consolidated companies (excl. BASF-YPC)
Depicted view of mainland China.
2010 2020
50%
73%
Sales
billion €
Proportion of sales from BASF’s
own production in Greater China
Employees
12 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
BASF’s Verbund site in Nanjing is a prime example of our success
in China
 50:50 joint venture with Sinopec founded in 2000, start-up
in 2005, major expansions in 2011 and 2014
 Scope has continuously expanded over the years towards
longer and more diversified value chains
 Third-largest BASF site, US$5.8 billion gross investment
(100%)
 Capacity: ~3 million metric tons per year; 33 production plants
including steam cracker
 Strong focus on operational excellence and consistent plant
maintenance resulted in best-in-class asset effectiveness
 With 23% EBITDA margin1 BASF-YPC is one of the most
profitable BASF sites
1 Average 2015–2020
13 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
BASF’s growth and profitability targets require a strong position
in Greater China
1 Restated figures due to reporting of construction chemicals as discontinued operation.
Not included: BASF-YPC as BASF’s share is accounted for at-equity
Depicted view of mainland China
Greater China is the growth engine for BASF
CAGR
2015–2020:
BASF’s
volume growth
in Greater China
Grow sales volumes faster
than global chemical
production every year
9%
Increase EBITDA
before special items
by 3% to 5% per year
EBITDA1 before
special items growth
in Greater China
CAGR
2015–2020: 26%
14 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
The new Verbund site in Zhanjiang
Market environment in China
– a robust basis for growth
1
Zhanjiang – the location of our
new Verbund site in South China
3
BASF performance in Greater
China – a proven track record
2
The new Verbund site – highly
integrated and sustainable
4
5 Financials and key takeaways
15 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Location in Zhanjiang enables BASF to capture long-term profitable
growth in the fastest growing chemical market worldwide
 Customers: Proximity to the economic centers of China’s fastest
growing province Guangdong; shortest sea routes to Southeast Asia
 Excellence in production: Integrated Verbund platform, cutting edge
technologies, smart solutions, deep seaport, world-class logistics
 Developing downstream value chains: BASF will focus on
products that are in high demand, with options for further expansion
 Differentiating from competitors beyond products: Front-runner
position in sustainability and circular economy
 Leveraging industry ecosystems: BASF will benefit from
collaborations with neighbors and government incentives
 Foreign trade advantages: Guangdong province intends to set up
Donghai Island as a free trade zone
BASF
Baosteel
South
China
Sea
Donghai
Island
Sinopec
The inset illustration is indicative and is not an accurate map of the depicted area
16 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
The new Verbund site in Zhanjiang
Market environment in China
– a robust basis for growth
1
Zhanjiang – the location of our
new Verbund site in South China
3
BASF performance in Greater
China – a proven track record
2
The new Verbund site – highly
integrated and sustainable
4
5 Financials and key takeaways
17 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Targets and framework conditions for the new BASF Verbund site
in Zhanjiang
 100% BASF ownership of core Verbund assets
 Building long, multi-step and diversified value chains (C2, C3, C4)
 High profitability and competitiveness through world-scale plants
 Expansion space for further investment phases
 Deployment of smart and innovative technologies to set a new benchmark for sustainability
and digitalization
 World-scale steam cracker with flexibility for major feedstocks
18 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Main construction phases of the new Verbund site
– stepwise approach
Initial phase
on stream: 2022–2023
Phase 1
start-up: as of 2025
Steam
cracker
Phase 2
start-up: as of 2028
Engineering plastics
and thermoplastic
polyurethanes
C2 value chain
Heart of the Verbund:
Petrochemicals plus further
downstream plants
Verbund expansion
and diversification
First downstream plants:
Performance Materials for
automotive and consumer
industries
C3 value chain
C4 value chain
Additional
downstream plants
Key customer
industries
 Transportation
 Electronics
 Consumer goods
 Health and nutrition
Backward integrated into world-scale
upstream plants to achieve Verbund
synergies in downstream value chains
Production plants of the initial phase can operate without integration, while phase 1
and 2 will form the foundation for the development of the BASF Verbund site
19 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
First downstream plants are expected to be operational
by 2022 and 2023
 The official start of construction began in less than
two years from the signing of the Memorandum of
Understanding
 The first plants will produce engineering plastics
and thermoplastic polyurethanes such as
► Ultramid®
► Ultradur®
► Elastollan®
 These products are in strong demand, particularly
in the automotive and consumer goods industries
20 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Product Group1
Company1
BASF-YPC
Nanjing
BASF Zhanjiang
A B C D E
Polyethylene ● ● ● ● ● ● ●
Ethylene oxide ● ● ● ● ● ●
Ethylene glycol ● ● ● ● ● ●
Nonionic surfactants ● ●
Methyltriglycol ●
Styrene monomer ● ● ● ● ●
Standard amines ● ● ●
Propionic acid ● ●
Specialty amines ●
Polypropylene ● ● ● ● ●
Propylene oxide ● ●
Glacial acrylic acid ● ● ●
Superabsorbents ●
Oxo-C4 ● ● ●
n-Butyl acrylate ● ●
2-Ethylhexyl acrylate ● ●
Neopentyl glycol ● ●
Higher carboxylic acids ●
Polyisobutylene ●
Isononanoic acid ● ●
Tridecanol N ●
C9-aldehyde ●
2-Propylheptanol ●
Citral ●
Source: BASF and externally published information; products at Zhanjiang subject to final approval
1 Selected product lines of major refineries/petrochemical sites in Guangdong province
BASF’s new Verbund site will offer a broader and more diversified
downstream product portfolio than competition
C2
C3
C4
Fujian
Guangdong
Guangxi
Hainan
South China
Maoming
Zhanjiang
Pearl River Delta
Qinzhou
East GD / Fujian
Hainan
Integrated refinery/PC complex
Other PC production
BASF Zhanjiang Verbund site
21 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
World-scale Verbund site with diversified value chains
Nutrition & Health
Petrochemicals Care Chemicals
Intermediates
1 At Ludwigshafen site
Capacity figures are nameplate and indicative. Projected set-up is subject to final approval
Ethylene oxide
Butyl acrylate
~400 kt
2-Ethylhexyl acryl.
~100 kt
Acrylic acid
Oxo-C4
Tridecanol N
Diisobutene
C9-aldehyde
HDPE
~500 kt
Neopentylglycol
~80 kt
Propionic aldehyde
Higher carboxylic
acids
Standard amines
Specialty amines
Methyl glycols
Citral
Linalool1
Menthol1
Propionic acid
Ethylene glycol
~800 kt
Operating divisions
Phase 2
Phase 1
Butane /
Naphtha
cracker
Ethylene
capacity:
~1,000 kt
p.a.
C2 value chain
C3 value chain
C4 value chain
Nonionic surfactants
~220 kt
22 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
BASF’s Zhanjiang Verbund site will have the lowest projected
CO2 footprint in the world
Phase 1
full start-up
Coal-powered
petrochemical site
of similar scope
Gas-powered
petrochemical
site
2050
net zero
2030
Renewable
energy
Syngas
incl. CO2
recycling
Cracker
eDrive
Power
supply
Projected BASF CO2 emissions of Verbund site in South China
million metric tons
1.8
4.2
Power supply
rest of site
Renewable
energy
6–9
Cracker
Verbund
Integration
Transformation
to net zero 2050
23 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Our unique process concepts will significantly reduce carbon
emissions compared to state-of-the-art technologies
Grey-to-
green
Power-to-
steam
New
technologies
Continuous
opex
Verbund
advantage
Renewable power,
instead of conventional
power plant based on
natural gas or coal
Electricity (eDrives),
instead of steam-driven
turbines for compressor
machines in the cracker
 Avoids on-purpose
steam production via
boilers run by fossil-
fuel energy
 Enables equilibrium in
the steam balance for
the entire Verbund
Syngas produced
from CO2 off-gas
from ethylene oxide
process and excess
hydrogen from
production
Excess steam to
preheat air in the
cracker furnaces
increasing the overall
system efficiency
 Fuel gas released by
new air preheating
process as second
feedstock for syngas
production
 Excess gas streams
as raw materials for
production instead of
thermal usage
BASF Group levers
Specific measures at the new Verbund site to reduce CO2 emissions by more than 50%
24 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
BASF is the first company to purchase renewable energy under the new pilot
trading rules in Guangdong province
CO2 reduction via renewable direct power-purchase mechanism
– an unprecedented step in Guangdong province
BASF
Transmission and distribution
Power producer
Primary energy
(mainly coal)
Renewable energy
(mainly hydro, wind and photovoltaic)
Others
(mainly nuclear)
Grid company
Today
BASF
Mixed
power supply
Renewable
power supply
 Until 2020, a renewable direct power-purchase
(R-DPP) policy did not exist in Guangdong
 BASF successfully unlocked R-DPP policy
change in 2021 with strong government
support
 Initial phase (10 MW): 100% renewable
energy contracted with CR-Power
 Phase 1 and 2 (>400 MW): 100% renewable
energy targeted by 2030
~ 70%
~ 25%
~ 5%
25 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
The new Verbund site in Zhanjiang
Market environment in China
– a robust basis for growth
1
Zhanjiang – the location of our
new Verbund site in South China
3
BASF performance in Greater
China – a proven track record
2
The new Verbund site – highly
integrated and sustainable
4
5 Financials and key takeaways
26 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
Key financials of BASF’s new Verbund site in Zhanjiang
 The greenfield character of the new Verbund site results in a higher share of infrastructure investments
compared with a brownfield project
 Infrastructure investments will be diluted with future investments/expansions
 The new Verbund site will be BASF’s key platform for long-term profitable and sustainable growth in China
even beyond phase 1 and phase 2
€4.0–5.0 billion
sales
€1.0–1.2 billion
EBITDA
€8.0–10.0 billion
total capital expenditures
(peak: 2023–2025)
Projected key financials by 2030
27 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
2021 2022 2023 2024 2025
Capex budget by type of investment
billion €, 2021–2025
Investments in ongoing business
Growth projects: Zhanjiang Verbund site and battery materials
BASF Group: High capex discipline in ongoing business to support
investments in growth projects
Capex budget by type of investment
billion €, 2021–2025
Investments
in ongoing
business
Growth project:
Zhanjiang
Verbund site
€22.9 billion,
thereof €3.6
billion in 2021
Growth project:
battery materials
Average capex
~€2.0 billion
p.a.
Average capex
~€2.6 billion
p.a.
28 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang
BASF’s new Verbund site in Zhanjiang: Key takeaways
China’s
macroeconomic
environment is
robust and develops
towards more
self-sufficiency
and sustainability
Guangdong
province is the
economic growth
engine of China
and a powerhouse
of BASF’s key
customer industries
BASF is very well
positioned to capture
future growth in China
by leveraging its unique
Verbund know-how
and longstanding
relationships
BASF has a proven
track record of
strong top line and
earnings growth in
Greater China
The new Verbund
site will be a key
platform for long-
term profitable and
sustainable growth
of BASF Group
BASF’s new Verbund site in Zhanjiang

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BASF’s new Verbund site in Zhanjiang

  • 1. BASF’s new Verbund site in Zhanjiang Dr. Martin Brudermüller Chairman of the Board of Executive Directors BASF Investor Update, September 27, 2021
  • 2. 1 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Cautionary note regarding forward-looking statements This presentation contains forward-looking statements. These statements are based on current estimates and projections of the Board of Executive Directors and currently available information. Forward-looking statements are not guarantees of the future developments and results outlined therein. These are dependent on a number of factors; they involve various risks and uncertainties; and they are based on assumptions that may not prove to be accurate. Such risk factors include those discussed in Opportunities and Risks on pages 158 to 166 of the BASF Report 2020. BASF does not assume any obligation to update the forward-looking statements contained in this presentation above and beyond the legal requirements.
  • 3. 2 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang The new Verbund site in Zhanjiang Market environment in China – a robust basis for growth 1 Zhanjiang – the location of our new Verbund site in South China 3 BASF performance in Greater China – a proven track record 2 The new Verbund site – highly integrated and sustainable 4 5 Financials and key takeaways
  • 4. 3 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Share of absolute chemical production growth by region % 2030 Greater China 68% Europe 8% North America 6% Rest of Asia Pacific 13% Middle East, Africa 4% South America 2% 1.9 3.0 0.7 0.8 0.5 0.6 0.6 0.8 0.2 0.2 0.1 0.1 0.0 1.0 2.0 3.0 4.0 5.0 6.0 2020 2030 China is the major growth driver for global chemical production: Two thirds of growth will come from Greater China by 2030 Real chemical production1 trillion US$ 4.0 5.6 Greater China Europe North America Rest of Asia Pacific Middle East, Africa South America CAGR 3.3% Source: BASF 1 Real chemical production excluding pharmaceuticals, US$ base year 2015 Figures may not add up due to rounding effects.
  • 5. 4 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang The absolute growth of the chemical market in China is expected to be twice as high as in the rest of the world Absolute growth of chemical market 2020–20301 billion US$ South America North America EMEA Asia Pacific (excl. mainland China) Mainland China Source: BASF 1 Real chemical production excluding pharmaceuticals, US$ base year 2015 Maps for illustrative purposes only 31 90 183 205 1,026
  • 6. 5 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Economic drivers for long-term growth in China remain unchanged despite the impact of the pandemic  China will continue to strive to achieve a per capita GDP level similar to advanced economies  Continuing urbanization will drive increasing demand for durable and consumable goods  Productivity increases will drive growth  There will be high investments in new technologies, sustainability and high value-add industries GDP per capita 2020 estimates, thousand US$ 63 45 40 40 32 10 USA South Korea Germany China UK Japan Source: BASF, nominal
  • 7. 6 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang China’s 14th five-year plan and policy initiatives add momentum to BASF’s strategy implementation in China BASF is well positioned to benefit from business opportunities in China  Customer-driven innovations  Sustainability front-runner  Local asset and R&D footprint  Proven track record and strong relationships Innovation-driven development Dual circulation policy Opening up to foreign investors Green agenda Rural vitalization Urban development 47 58 70 46 41 28 7 1 2 0 50 100 2000–2010 2010–2020 2020–2030 FC Consumption Investment Net export Five-year plan: Self sufficiency and sustainability Data source: Oxford Economics, calculation based on real 2015 values China’s GDP growth: Consumption-driven %
  • 8. 7 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Today, 90% of BASF’s production assets are in East China, in South China the company is still under-represented Key BASF figures in Greater China  BASF is active in China since 1885  Over the past 20 years, BASF has invested more than €6 billion in Greater China (more than €9 billion with partners)  Number of companies: 28 major wholly-owned, 7 major joint ventures  Number of production sites: 27  Number of sales offices: 24  Number of employees: 8,948  Sales of BASF Group companies to customers in Greater China in 2020: ~€8.5 billion Guangdong Chongqing Nanjing Shanghai BASF East China Sales Assets 52% 90% BASF South China Sales Assets 20% 2% Multi OD Single OD 100% BASF Joint venture Verbund All data for Greater China is as of December 31, 2020. Sales of fully consolidated companies only; does not include sales of joint ventures consolidated at equity such as BASF-YPC Company Ltd. (BASF-YPC). EBIT before special items incl. equity contribution from BASF-YPC. Gross asset value and production capacity incl. BASF-YPC Depicted view of mainland China
  • 9. 8 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Guangdong is home of key customers from fast-growing industries Guangdong 671 2020 151 2020 Strongly growing industrial base1 billion US$ Largest automotive production, China # of motor vehicles built in Guangdong (1,000) Large chemical production2 billion US$ Steady increase of private consumption3 billion US$ 3,133 2020 611 2020 ~5.3% ~3.1% ~6.1% ~5.5% CAGR 2015–2020 % p.a. Market characteristics  Around 126 million residents in Guangdong province (2020)4  GDP Guangdong (2020): ~US$1,608 billion (closely trailing South Korea)  GDP growth from 2020–2035: 5–6% p.a.  Key customer industries: transportation, consumer goods, home and personal care, electronics  Chemical products are generally undersupplied from local production 1 Real value added, manufacturing Guangdong 2 Real chemical production Guangdong; inferred by gross output/value added ratio for China 3 Real private consumption Guangdong; IHS forecast 4 General Office of Shenzhen Municipal People’s Government
  • 10. 9 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Guangdong province is the economic growth engine of China and a powerhouse of BASF’s key customer industries 1,452 4,886 By 2050, GDP of Guangdong is expected to add more than “one current Germany” Already today, South China produces more light vehicles than Germany GDP 2020, growth until 2030 and 2050 billion US$ 1 Growth by 2030 and by 2050 respectively 3,409 1,608 1,491 650 1,213 1,139 1,011 3,673 3,147 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Germany Guangdong province Jiangsu province (existing Verbund site Nanjing) (new Verbund site Zhanjiang) 2020 20301 20501 Light vehicle production in South China and Germany 1,000 units 0 2,000 4,000 6,000 8,000 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Guangdong Rest of South China South China Germany Source: IHS and LMC
  • 11. 10 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang The new Verbund site in Zhanjiang Market environment in China – a robust basis for growth 1 Zhanjiang – the location of our new Verbund site in South China 3 BASF performance in Greater China – a proven track record 2 The new Verbund site – highly integrated and sustainable 4 5 Financials and key takeaways
  • 12. 11 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang 4 8.5 2010 2020 BASF has substantially increased its presence in Greater China 6,980 8,948 2010 2020 As of December 31, 2020. Sales by location of customer of globally consolidated companies (excl. BASF-YPC) Depicted view of mainland China. 2010 2020 50% 73% Sales billion € Proportion of sales from BASF’s own production in Greater China Employees
  • 13. 12 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang BASF’s Verbund site in Nanjing is a prime example of our success in China  50:50 joint venture with Sinopec founded in 2000, start-up in 2005, major expansions in 2011 and 2014  Scope has continuously expanded over the years towards longer and more diversified value chains  Third-largest BASF site, US$5.8 billion gross investment (100%)  Capacity: ~3 million metric tons per year; 33 production plants including steam cracker  Strong focus on operational excellence and consistent plant maintenance resulted in best-in-class asset effectiveness  With 23% EBITDA margin1 BASF-YPC is one of the most profitable BASF sites 1 Average 2015–2020
  • 14. 13 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang BASF’s growth and profitability targets require a strong position in Greater China 1 Restated figures due to reporting of construction chemicals as discontinued operation. Not included: BASF-YPC as BASF’s share is accounted for at-equity Depicted view of mainland China Greater China is the growth engine for BASF CAGR 2015–2020: BASF’s volume growth in Greater China Grow sales volumes faster than global chemical production every year 9% Increase EBITDA before special items by 3% to 5% per year EBITDA1 before special items growth in Greater China CAGR 2015–2020: 26%
  • 15. 14 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang The new Verbund site in Zhanjiang Market environment in China – a robust basis for growth 1 Zhanjiang – the location of our new Verbund site in South China 3 BASF performance in Greater China – a proven track record 2 The new Verbund site – highly integrated and sustainable 4 5 Financials and key takeaways
  • 16. 15 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Location in Zhanjiang enables BASF to capture long-term profitable growth in the fastest growing chemical market worldwide  Customers: Proximity to the economic centers of China’s fastest growing province Guangdong; shortest sea routes to Southeast Asia  Excellence in production: Integrated Verbund platform, cutting edge technologies, smart solutions, deep seaport, world-class logistics  Developing downstream value chains: BASF will focus on products that are in high demand, with options for further expansion  Differentiating from competitors beyond products: Front-runner position in sustainability and circular economy  Leveraging industry ecosystems: BASF will benefit from collaborations with neighbors and government incentives  Foreign trade advantages: Guangdong province intends to set up Donghai Island as a free trade zone BASF Baosteel South China Sea Donghai Island Sinopec The inset illustration is indicative and is not an accurate map of the depicted area
  • 17. 16 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang The new Verbund site in Zhanjiang Market environment in China – a robust basis for growth 1 Zhanjiang – the location of our new Verbund site in South China 3 BASF performance in Greater China – a proven track record 2 The new Verbund site – highly integrated and sustainable 4 5 Financials and key takeaways
  • 18. 17 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Targets and framework conditions for the new BASF Verbund site in Zhanjiang  100% BASF ownership of core Verbund assets  Building long, multi-step and diversified value chains (C2, C3, C4)  High profitability and competitiveness through world-scale plants  Expansion space for further investment phases  Deployment of smart and innovative technologies to set a new benchmark for sustainability and digitalization  World-scale steam cracker with flexibility for major feedstocks
  • 19. 18 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Main construction phases of the new Verbund site – stepwise approach Initial phase on stream: 2022–2023 Phase 1 start-up: as of 2025 Steam cracker Phase 2 start-up: as of 2028 Engineering plastics and thermoplastic polyurethanes C2 value chain Heart of the Verbund: Petrochemicals plus further downstream plants Verbund expansion and diversification First downstream plants: Performance Materials for automotive and consumer industries C3 value chain C4 value chain Additional downstream plants Key customer industries  Transportation  Electronics  Consumer goods  Health and nutrition Backward integrated into world-scale upstream plants to achieve Verbund synergies in downstream value chains Production plants of the initial phase can operate without integration, while phase 1 and 2 will form the foundation for the development of the BASF Verbund site
  • 20. 19 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang First downstream plants are expected to be operational by 2022 and 2023  The official start of construction began in less than two years from the signing of the Memorandum of Understanding  The first plants will produce engineering plastics and thermoplastic polyurethanes such as ► Ultramid® ► Ultradur® ► Elastollan®  These products are in strong demand, particularly in the automotive and consumer goods industries
  • 21. 20 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Product Group1 Company1 BASF-YPC Nanjing BASF Zhanjiang A B C D E Polyethylene ● ● ● ● ● ● ● Ethylene oxide ● ● ● ● ● ● Ethylene glycol ● ● ● ● ● ● Nonionic surfactants ● ● Methyltriglycol ● Styrene monomer ● ● ● ● ● Standard amines ● ● ● Propionic acid ● ● Specialty amines ● Polypropylene ● ● ● ● ● Propylene oxide ● ● Glacial acrylic acid ● ● ● Superabsorbents ● Oxo-C4 ● ● ● n-Butyl acrylate ● ● 2-Ethylhexyl acrylate ● ● Neopentyl glycol ● ● Higher carboxylic acids ● Polyisobutylene ● Isononanoic acid ● ● Tridecanol N ● C9-aldehyde ● 2-Propylheptanol ● Citral ● Source: BASF and externally published information; products at Zhanjiang subject to final approval 1 Selected product lines of major refineries/petrochemical sites in Guangdong province BASF’s new Verbund site will offer a broader and more diversified downstream product portfolio than competition C2 C3 C4 Fujian Guangdong Guangxi Hainan South China Maoming Zhanjiang Pearl River Delta Qinzhou East GD / Fujian Hainan Integrated refinery/PC complex Other PC production BASF Zhanjiang Verbund site
  • 22. 21 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang World-scale Verbund site with diversified value chains Nutrition & Health Petrochemicals Care Chemicals Intermediates 1 At Ludwigshafen site Capacity figures are nameplate and indicative. Projected set-up is subject to final approval Ethylene oxide Butyl acrylate ~400 kt 2-Ethylhexyl acryl. ~100 kt Acrylic acid Oxo-C4 Tridecanol N Diisobutene C9-aldehyde HDPE ~500 kt Neopentylglycol ~80 kt Propionic aldehyde Higher carboxylic acids Standard amines Specialty amines Methyl glycols Citral Linalool1 Menthol1 Propionic acid Ethylene glycol ~800 kt Operating divisions Phase 2 Phase 1 Butane / Naphtha cracker Ethylene capacity: ~1,000 kt p.a. C2 value chain C3 value chain C4 value chain Nonionic surfactants ~220 kt
  • 23. 22 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang BASF’s Zhanjiang Verbund site will have the lowest projected CO2 footprint in the world Phase 1 full start-up Coal-powered petrochemical site of similar scope Gas-powered petrochemical site 2050 net zero 2030 Renewable energy Syngas incl. CO2 recycling Cracker eDrive Power supply Projected BASF CO2 emissions of Verbund site in South China million metric tons 1.8 4.2 Power supply rest of site Renewable energy 6–9 Cracker Verbund Integration Transformation to net zero 2050
  • 24. 23 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Our unique process concepts will significantly reduce carbon emissions compared to state-of-the-art technologies Grey-to- green Power-to- steam New technologies Continuous opex Verbund advantage Renewable power, instead of conventional power plant based on natural gas or coal Electricity (eDrives), instead of steam-driven turbines for compressor machines in the cracker  Avoids on-purpose steam production via boilers run by fossil- fuel energy  Enables equilibrium in the steam balance for the entire Verbund Syngas produced from CO2 off-gas from ethylene oxide process and excess hydrogen from production Excess steam to preheat air in the cracker furnaces increasing the overall system efficiency  Fuel gas released by new air preheating process as second feedstock for syngas production  Excess gas streams as raw materials for production instead of thermal usage BASF Group levers Specific measures at the new Verbund site to reduce CO2 emissions by more than 50%
  • 25. 24 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang BASF is the first company to purchase renewable energy under the new pilot trading rules in Guangdong province CO2 reduction via renewable direct power-purchase mechanism – an unprecedented step in Guangdong province BASF Transmission and distribution Power producer Primary energy (mainly coal) Renewable energy (mainly hydro, wind and photovoltaic) Others (mainly nuclear) Grid company Today BASF Mixed power supply Renewable power supply  Until 2020, a renewable direct power-purchase (R-DPP) policy did not exist in Guangdong  BASF successfully unlocked R-DPP policy change in 2021 with strong government support  Initial phase (10 MW): 100% renewable energy contracted with CR-Power  Phase 1 and 2 (>400 MW): 100% renewable energy targeted by 2030 ~ 70% ~ 25% ~ 5%
  • 26. 25 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang The new Verbund site in Zhanjiang Market environment in China – a robust basis for growth 1 Zhanjiang – the location of our new Verbund site in South China 3 BASF performance in Greater China – a proven track record 2 The new Verbund site – highly integrated and sustainable 4 5 Financials and key takeaways
  • 27. 26 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang Key financials of BASF’s new Verbund site in Zhanjiang  The greenfield character of the new Verbund site results in a higher share of infrastructure investments compared with a brownfield project  Infrastructure investments will be diluted with future investments/expansions  The new Verbund site will be BASF’s key platform for long-term profitable and sustainable growth in China even beyond phase 1 and phase 2 €4.0–5.0 billion sales €1.0–1.2 billion EBITDA €8.0–10.0 billion total capital expenditures (peak: 2023–2025) Projected key financials by 2030
  • 28. 27 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang 2021 2022 2023 2024 2025 Capex budget by type of investment billion €, 2021–2025 Investments in ongoing business Growth projects: Zhanjiang Verbund site and battery materials BASF Group: High capex discipline in ongoing business to support investments in growth projects Capex budget by type of investment billion €, 2021–2025 Investments in ongoing business Growth project: Zhanjiang Verbund site €22.9 billion, thereof €3.6 billion in 2021 Growth project: battery materials Average capex ~€2.0 billion p.a. Average capex ~€2.6 billion p.a.
  • 29. 28 BASF Investor Update, September 27, 2021 I New Verbund site Zhanjiang BASF’s new Verbund site in Zhanjiang: Key takeaways China’s macroeconomic environment is robust and develops towards more self-sufficiency and sustainability Guangdong province is the economic growth engine of China and a powerhouse of BASF’s key customer industries BASF is very well positioned to capture future growth in China by leveraging its unique Verbund know-how and longstanding relationships BASF has a proven track record of strong top line and earnings growth in Greater China The new Verbund site will be a key platform for long- term profitable and sustainable growth of BASF Group