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Speech Analyst Conference Q2 2012

BASF
BASF

Speech accompanying the 2Q2012 Conference Call for investors and analysts on July 26, 2012

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BASF 2nd Quarter 2012 Analyst Conference Call
July 26, 2012, 11:00 (CEST), Ludwigshafen




Analyst Conference Call Script
Dr. Kurt Bock
Dr. Hans-Ulrich Engel

The spoken word applies.
Page 2
BASF 2nd Quarter 2012 Analyst Conference Call                                                          July 26, 2012




 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 2nd Quarter 2012 Analyst Conference Call                                                     2




 BASF shows solid development
 Second quarter 2012 highlights


   Business performance                            Q2’12             vs. Q2’11

      Sales                                     €19.5 billion          +6%
      EBITDA                                    €3.1 billion           +4%
      EBIT before special items                 €2.5 billion          +11%
      EBIT                                      €2.2 billion           +1%
    Net income                                  €1.2 billion          (15%)
    EPS                                         €1.34                 (16%)
    Adjusted EPS                                €1.60                  (9%)


      New second quarter record for sales and earnings in Agricultural Solutions
      Oil & Gas outperformed mainly due to the resumption of oil production in Libya
      Demand in chemical businesses did not match the strong previous year level
      Weaker than expected demand in China
      Overall sales and earnings in H1 2012 came in above H1 2011
 BASF 2nd Quarter 2012 Analyst Conference Call                                                     3
Page 3
BASF 2nd Quarter 2012 Analyst Conference Call                 July 26, 2012



Dr. Kurt Bock
Ladies and Gentlemen, good morning and thank you for joining us.


[Chart 3: BASF shows solid development]


 The world economy experienced a turbulent first half of 2012 and
  we saw uncertainty increase in all regions. The deepening of the
  euro debt crisis overshadowed the global business sentiment in
  the second quarter. Concerns were also raised by the slower
  growth in China. All in all, chemical demand weakened more than
  expected earlier this year, both in the developed and the
  emerging markets.

 In this challenging environment, BASF was able to deliver a solid
  second quarter. At 19.5 billion euros, sales were 6 percent higher
  than a year ago. Our topline benefited from the weaker euro.

 In Agricultural Solutions we experienced excellent demand for our
  innovative products and delivered an outstanding quarter – the
  best second quarter ever.

 In Oil and Gas, our strong growth was supported by improving
  production volumes in Libya.

 In our chemical businesses, however, volumes could not be
  maintained compared to the very strong level of the previous
  year’s second quarter. During the course of Q2 we saw a swing
  towards lower raw material prices. This triggered cautious
  customer behavior and order delays. Overall, prices were stable.
Page 4
BASF 2nd Quarter 2012 Analyst Conference Call    July 26, 2012
Page 5
BASF 2nd Quarter 2012 Analyst Conference Call                July 26, 2012



 EBITDA came in at 3.1 billion euros, up 4 percent from last year.
  EBIT before special items at 2.5 billion euros significantly
  exceeded last year’s second quarter.

 Special items in EBIT amounted to minus 261 million euros and
  included restructuring charges as well as the impairment of an oil
  field development project in Norway.

 The tax rate increased to 39 percent mainly due to non-
  compensable oil taxes in Libya. This burdened our net income.

 Adjusted earnings per share decreased by 9 percent to 1.60
  euros.

 Overall, in the first half of 2012 we were able to exceed the
  exceptionally high sales and earnings before special items of the
  first half of the previous year.
Page 6
BASF 2nd Quarter 2012 Analyst Conference Call                                                                               July 26, 2012




 Important milestones in Q2 2012

            Investments in                              Strengthening of                     Active portfolio
           emerging markets                           technology platform                     management




  BASF to invest in new                          BASF acquired Novolyte             BASF acquired Mazzaferro‘s
     chemical production site in                   Technologies                        polyamide polymer business
     Dahej, India                                 Novolyte’s energy storage          Production of PA 6 and
  Investment of €150 million                      activities focused on               compounds in Brazil
  Production facilities for                       developing, producing and          Further strengthening position in
     polyurethanes, care chemicals,                marketing performance               engineering plastics and PA
     polymer dispersions for                       electrolyte formulations            polymers in South America
     coatings and paper                           BASF now becomes global            Polymerization plant with a
  Production startup: 2014                        supplier of lithium-ion battery     capacity of 20,000 metric tons
                                                   electrolyte formulations
 BASF 2nd Quarter 2012 Analyst Conference Call                                                                          4

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Speech Analyst Conference Q2 2012

  • 1. BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012, 11:00 (CEST), Ludwigshafen Analyst Conference Call Script Dr. Kurt Bock Dr. Hans-Ulrich Engel The spoken word applies.
  • 2. Page 2 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 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 2nd Quarter 2012 Analyst Conference Call 2 BASF shows solid development Second quarter 2012 highlights Business performance Q2’12 vs. Q2’11  Sales €19.5 billion +6%  EBITDA €3.1 billion +4%  EBIT before special items €2.5 billion +11%  EBIT €2.2 billion +1%  Net income €1.2 billion (15%)  EPS €1.34 (16%)  Adjusted EPS €1.60 (9%)  New second quarter record for sales and earnings in Agricultural Solutions  Oil & Gas outperformed mainly due to the resumption of oil production in Libya  Demand in chemical businesses did not match the strong previous year level  Weaker than expected demand in China  Overall sales and earnings in H1 2012 came in above H1 2011 BASF 2nd Quarter 2012 Analyst Conference Call 3
  • 3. Page 3 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Dr. Kurt Bock Ladies and Gentlemen, good morning and thank you for joining us. [Chart 3: BASF shows solid development]  The world economy experienced a turbulent first half of 2012 and we saw uncertainty increase in all regions. The deepening of the euro debt crisis overshadowed the global business sentiment in the second quarter. Concerns were also raised by the slower growth in China. All in all, chemical demand weakened more than expected earlier this year, both in the developed and the emerging markets.  In this challenging environment, BASF was able to deliver a solid second quarter. At 19.5 billion euros, sales were 6 percent higher than a year ago. Our topline benefited from the weaker euro.  In Agricultural Solutions we experienced excellent demand for our innovative products and delivered an outstanding quarter – the best second quarter ever.  In Oil and Gas, our strong growth was supported by improving production volumes in Libya.  In our chemical businesses, however, volumes could not be maintained compared to the very strong level of the previous year’s second quarter. During the course of Q2 we saw a swing towards lower raw material prices. This triggered cautious customer behavior and order delays. Overall, prices were stable.
  • 4. Page 4 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012
  • 5. Page 5 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012  EBITDA came in at 3.1 billion euros, up 4 percent from last year. EBIT before special items at 2.5 billion euros significantly exceeded last year’s second quarter.  Special items in EBIT amounted to minus 261 million euros and included restructuring charges as well as the impairment of an oil field development project in Norway.  The tax rate increased to 39 percent mainly due to non- compensable oil taxes in Libya. This burdened our net income.  Adjusted earnings per share decreased by 9 percent to 1.60 euros.  Overall, in the first half of 2012 we were able to exceed the exceptionally high sales and earnings before special items of the first half of the previous year.
  • 6. Page 6 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Important milestones in Q2 2012 Investments in Strengthening of Active portfolio emerging markets technology platform management  BASF to invest in new  BASF acquired Novolyte  BASF acquired Mazzaferro‘s chemical production site in Technologies polyamide polymer business Dahej, India  Novolyte’s energy storage  Production of PA 6 and  Investment of €150 million activities focused on compounds in Brazil  Production facilities for developing, producing and  Further strengthening position in polyurethanes, care chemicals, marketing performance engineering plastics and PA polymer dispersions for electrolyte formulations polymers in South America coatings and paper  BASF now becomes global  Polymerization plant with a  Production startup: 2014 supplier of lithium-ion battery capacity of 20,000 metric tons electrolyte formulations BASF 2nd Quarter 2012 Analyst Conference Call 4
  • 7. Page 7 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 [Chart 4: Important milestones in Q2 2012] In the second quarter, we achieved several important milestones:  With its robust local industries, India is set to become a pillar of growth in Asia Pacific. In order to ensure local supply for growing markets and industries we have decided to invest 150 million euros in a chemical production site in Dahej, on the West coast of India. The new site will be an integrated hub for polyurethane manufacturing and also host production facilities for care chemicals and polymer dispersions for coatings and paper. The startup of production is planned for 2014.  The acquisition of Novolyte Technologies was the latest in a series of strategic steps to strengthen our technology position in battery materials. The integration of Novolyte’s electrolyte formulation activities now positions BASF as global supplier of lithium-ion battery electrolytes with production sites in Europe, the United States and Asia Pacific.  In Brazil, we acquired the polyamide polymer business of Mazzaferro Group. We are thus further strengthening our production presence with regard to engineering plastics and polyamide polymers in South America, where demand for polyamide in the automotive and extrusion industries is growing strongly.
  • 8. Page 8 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Outlook 2012 confirmed Outlook 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 businesses: • Given the weak demand outlook, we expect volumes to be flat in H2 2012 vs. H1 2012 • In 2012, EBIT before special items is expected to come in below the level of 2011 Revised assumptions 2012  GDP: +2.3% (before: 2.7%)  Industrial production: +3.4% (before: 4.1%)  Chemical production: +3.5% (before: 4.1%)  US$/Euro: 1.30 (unchanged)  Oil price (US$/bbl): 110 (unchanged) BASF 2nd Quarter 2012 Analyst Conference Call 5
  • 9. Page 9 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 [Chart 5: Outlook 2012 confirmed] In our last quarterly conference call on April 27, we reiterated our full year ambitions to exceed the previous year’s record levels of sales and EBIT before special items. In the first half of 2012, we were able to surpass the exceptionally high sales and earnings levels of 2011. However, the recent weakening of the global economy, which we see reflected in our order books, led us to be more cautious in our 2012 macroeconomic assumptions. For 2012, we now expect global GDP to expand only by 2.3 percent, down 0.4 percentage points from our previous assumption. Industrial production we now see at 3.4 percent and chemical production at 3.5 percent, a reduction of 0.7 and 0.6 percentage points respectively. Our assumptions for the Brent oil price at 110 US dollars per barrel and the dollar/euro exchange rate at 1.30 remain unchanged. Given the weak demand outlook, we now expect volumes in our chemical businesses to be flat in the second half of this year compared to the first half. Consequently, EBIT before special items in our chemical businesses for the full year 2012 is expected to come in below the level of 2011. How is BASF addressing these challenges and the significant political and economic uncertainties? First and foremost, it is our objective to protect margins and to create value for our investors. Our operational excellence program STEP which we announced in November 2011 is on track to deliver one billion euros of earnings contribution annually by the year 2015. Wherever possible we will
  • 10. Page 10 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012
  • 11. Page 11 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 accelerate actions and evaluate our cost base and expenditures. We are continuing to optimize our working capital as demonstrated by the strong cash flow development in the second quarter. Due to the uncertainty around the development of business in Asia, we will slow down the planned build-up in personnel, particularly in the emerging markets. For BASF Group overall, our target is unchanged: we aim to exceed the 2011 record levels in sales and EBIT before special items in 2012. Furthermore, we expect to again earn a high premium on our cost of capital. With this I’ll hand over to Hans.
  • 12. Page 12 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Chemicals Earnings impacted by weaker margins throughout the portfolio Q2’12 segment sales (million €) vs. Q2’11 EBIT before special items (million €) Intermediates Inorganics 426 +21% 800 763 674 +10% 621 600 467 €3,348 381 436 400 -1% 200 Petrochemicals 2,159 0 (8%) Q2 Q3 Q4 Q1 Q2 2011 2012 Sales development Period Volumes Prices Portfolio Currencies Q2’12 vs. Q2’11  (14%)  (2%)  10%  5% BASF 2nd Quarter 2012 Analyst Conference Call 6
  • 13. Page 13 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Dr. Hans-Ulrich Engel Good morning ladies and gentlemen. Let me highlight the financial performance of each segment in more detail and focus on the respective business developments in comparison to the second quarter of 2011. [Chart 6: Chemicals – Earnings impacted by weaker margins throughout the portfolio] Sales in the Chemicals segment slightly declined mainly due to lower volumes, plant turnarounds and the effects of an earnings neutral swap agreement for different grades of propylene in the US. As you might recall, since Q3 2011 we now swap like-for-like propylene which does not show up as sales anymore. Feedstock sales to Styrolution and to the recently divested fertilizer business contributed positively to the topline. EBIT before special items declined significantly due to lower margins.  In Petrochemicals, sales decreased due to weakening demand in the course of the quarter. The scheduled eight week turnaround of our cracker in Port Arthur, Texas, negatively impacted volumes. Raw material prices started to drop from record levels and consequently prices for all product lines went down. As expected, margins were under pressure. This led to a significant drop in earnings.
  • 14. Page 14 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012
  • 15. Page 15 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012  Sales in Inorganics increased significantly driven by feedstock sales to the divested fertilizer activities as well as the startup of a new sodium methylate plant in Brazil. EBIT before special items came in above the previous year’s quarter.  In Intermediates, strong demand from important customer industries, such as agrochemicals and plastics, as well as positive currency impacts resulted in significantly higher sales. Nevertheless, margins were under pressure as rising costs for key raw materials could not be fully compensated by higher prices. Accordingly, earnings came in below Q2 2011.
  • 16. Page 16 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Plastics Sequential earnings improvement in challenging environment Q2’12 segment sales (million €) vs. Q2’11 EBIT before special items (million €) Polyurethanes 383 400 1,580 317 +5% 256 €2,878 219 200 +2% 110 Performance Polymers 0 1,298 Q2 Q3 Q4 Q1 Q2 (2%) 2011 2012 Sales development Period Volumes Prices Portfolio Currencies Q2’12 vs. Q2’11  (5%) 0%  1%  6% BASF 2nd Quarter 2012 Analyst Conference Call 7
  • 17. Page 17 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 [Chart 7: Plastics – Sequential earnings improvement in challenging environment] Sales in Plastics were slightly higher compared to a strong second quarter in 2011. Favorable exchange rates were a strong support. Continued weak demand for polyamide precursors resulted in lower volumes. Overall, EBIT before special items was considerably down but improved compared to Q1 2012.  In Performance Polymers, sales remained below the prior year’s quarter. Polyamide precursors were impacted by lower textile fiber demand in Asia. Engineering plastics benefitted from healthy demand from the automotive industry in North America and Asia. Based on lower volumes and lower capacity utilization, EBIT before special items was significantly below last year.  Sales in Polyurethanes increased. Lower volumes in TDI and MDI were mostly a result of scheduled turnarounds at several sites. While volumes went down for basic products, prices could be partially increased. Specialties were driven by strong demand from the automotive sector. EBIT before special items was slightly below the level of the previous year’s quarter due to the turnarounds and higher raw material costs.
  • 18. Page 18 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Performance Products Higher prices could not fully compensate weak demand vs.Q2 ‘11 Q2’12 segment sales (million €) vs. Q2’11 EBIT before special items (million €) Care Chemicals Performance 600 1,237 Chemicals 513 (9%) 944 440 452 446 +4% 400 Nutrition €4,122 & Health +1% 220 509 200 +6% Dispersions Paper Chemicals & Pigments 0 427 1,005 Q2 Q3 Q4 Q1 Q2 +2% +7% 2011 2012 Sales development Period Volumes Prices Portfolio Currencies Q2’12 vs. Q2’11  (5%)  1% 0%  5% BASF 2nd Quarter 2012 Analyst Conference Call 8
  • 19. Page 19 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 [Chart 8: Performance Products – Higher prices could not fully compensate weak demand vs. Q2 ‘11] Sales in the Performance Products segment came in slightly higher. Volumes were down due to a generally weaker economic sentiment. However, we were able to increase prices, and we profited from currency tailwinds. Earnings were significantly down due to margin pressure given weak demand and higher raw material prices.  In Dispersions & Pigments, positive currency effects and slightly increased volumes resulted in higher sales. In North America, sales increased significantly driven by strong demand and higher prices. Europe experienced lower volumes mostly due to weaker demand for pigments. EBIT before special items was down mainly due to an unfavorable product mix.  In Care Chemicals, sales declined as a result of cautious customer behavior in anticipation of falling raw material prices. Consequently, volumes were below the previous year. Margins were under pressure. Hence, EBIT before special items was down significantly.  In Nutrition & Health, sales increased in all businesses and regions except for Europe. Overall volumes were in line with Q2 2011. Favorable exchange rate effects and price increases positively contributed to the topline. As a result of higher raw material costs, earnings could not be maintained at the previous year’s level.
  • 20. Page 20 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012
  • 21. Page 21 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012  Despite challenging market conditions sales in Paper Chemicals increased, thanks to slightly higher prices and a positive currency development. Volumes, though, were negatively impacted by measures to streamline our portfolio. Nevertheless, EBIT before special items came in higher mainly due to our continuing restructuring efforts towards fixed cost reduction.  In Performance Chemicals, sales rose due to successful price increases as well as currency impacts. Volumes were down due to weaker demand. Earnings were up.
  • 22. Page 22 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Functional Solutions Demand from the automotive industry remained strong Q2’12 segment sales (million €) vs. Q2’11 EBIT before special items (million €) Catalysts Construction 200 1,620 Chemicals 167 162 +8% 621 148 150 134 +8% €2,974 88 100 +8% 50 Coatings 0 733 Q2 Q3 Q4 Q1 Q2 +6% 2011 2012 Sales development Period Volumes Prices Portfolio Currencies Q2’12 vs. Q2’11 0%  (1%)  3%  6% BASF 2nd Quarter 2012 Analyst Conference Call 9
  • 23. Page 23 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 [Chart 9: Functional Solutions – Demand from the automotive industry remained strong] In our Functional Solutions segment, sales increased mainly due to portfolio effects and currency tailwinds. Demand from the construction industry in North America rose slightly. Earnings though declined due to higher raw material costs and lower results in precious metal trading.  Catalysts’ sales rose mainly attributable to continuous strong demand for mobile emission and chemical catalysts. Slightly higher volumes, however, could not fully compensate for the high raw material costs as well as the lower trading results in precious metals. As a result, earnings were below the strong quarter of the previous year.  Sales in Construction Chemicals were up due to successful price increases as well as positive exchange rate and portfolio effects. Volumes increased in North America and Asia but remained below the previous year’s quarter in Europe. Earnings before special items were up given higher prices and improved margins.  In Coatings, we saw strong demand for automotive OEM coatings and industrial coatings. Margins were mostly maintained thanks to successful price increases in all regions and the optimization of our raw materials portfolio. EBIT before special items however, came in slightly lower than in the previous year’s quarter due to higher fixed costs.
  • 24. Page 24 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Agricultural Solutions Record Q2 sales and earnings driven by strong demand Q2’12 segment sales (million €) vs. Q2’11 EBIT before special items (million €) 1,467 1,205 414 1.000 400 331 500 200 0 0 Q2 Q2 Q2 Q2 2011 2012 2011 2012 Sales development Period Volumes Prices Portfolio Currencies Q2’12 vs. Q2’11  14%  2% 0%  6% BASF 2nd Quarter 2012 Analyst Conference Call 10
  • 25. Page 25 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 [Chart 10: Agricultural Solutions – Record Q2 sales and earnings driven by strong demand] Our Agricultural Solutions segment delivered an outstanding quarter, with sales increasing by 22 percent year over year. High demand for our innovative products in all indications and in all regions drove significant volume growth. The positive pricing trend was intact for the fourth quarter in a row, and the stronger US dollar led to tailwind on currency. EBIT before special items reached a new second quarter record, putting year-to-date earnings ahead of the full-year 2011 figure. In Europe, positive business momentum continued especially in Central and Eastern Europe, and in the United Kingdom. Our Clearfield herbicides made a strong contribution, and our new fungicide Xemium is living up to its blockbuster potential. Moreover, last week it got approved for use in crop protection products in the EU-27, which will help us to obtain registrations for Xemium- containing products in additional countries. In North America, significant sales growth was supported by excellent demand for our Plant Health products and for herbicides, mainly Kixor. The prevailing drought condition in the Midwest USA did not impact our sales for the quarter, but is certainly something to watch out for. Sales in South America also developed very well, as high demand for our Fipronil insecticide and for F500 overcompensated weather challenges affecting the South of Brazil and Argentina. In Asia, sales were strongly up versus the previous year’s quarter, driven by higher herbicide sales in India and by strong fungicide sales across the region.
  • 26. Page 26 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Oil & Gas Strong growth supported by oil production in Libya Q2’12 segment sales (million €) vs. Q2’11 EBIT bSI/Net income (million €) Exploration & 1,000 Production 880 1,251 800 +122% €3,585 600 793 +46% 400 332 Natural Gas 200 269 Trading 257 213 63 87 2,334 0 Q2/2011 Q2/2012 +23% Exploration & Production Non compensable oil taxes (Q2 2011: €0 million; Q2 2012: €445 million) Natural Gas Trading Net income Sales development Period Volumes Prices/Currencies Portfolio Q2’12 vs. Q2’11  31%  14%  1% BASF 2nd Quarter 2012 Analyst Conference Call 11
  • 27. Page 27 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 [Chart 11: Oil & Gas – Strong growth supported by oil production in Libya] Sales in Oil & Gas continued to grow strongly driven by higher volumes both from Exploration & Production as well as Natural Gas Trading. EBIT before special items increased significantly. Net income came in slightly below 2011 due to higher taxes.  In Exploration & Production, sales were up by 122 percent mainly due to the resumption of oil production in Libya. Thanks to additional capacity in the export pipeline we could temporarily raise our oil production in Libya from an average of 70,000 barrels in Q1 up to roughly 80,000 barrels of oil per day in Q2. Strong volumes and higher prices in euro led to substantially higher earnings.  Sales in Natural Gas Trading increased strongly due to higher prices and volumes. Earnings grew significantly due to higher volumes and prices as well as due to concession income from the OPAL pipeline.
  • 28. Page 28 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Review of “Other” Million € Q2 2012 Q2 2011 Sales 1,107 1,714 thereof Styrenics - 811 EBIT before special items (76) (163) thereof Corporate research (95) (87) Group corporate costs (61) (59) Currency results, hedges and other 52 (118) valuation effects Styrenics, fertilizers, other businesses 13 76 Special items (116) 27 EBIT (192) (136) BASF 2nd Quarter 2012 Analyst Conference Call 12
  • 29. Page 29 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 [Chart 12: Review of “Other”] Sales in “Other” decreased significantly due to the divestment of our styrenics activities into the Styrolution joint venture as well as the sale of our fertilizer business. EBIT before special items improved substantially because of positive valuation effects associated with the long-term-incentive program for executives. Special items in Other included provisions for potential asset devaluations and restructuring costs which we will allocate to the respective businesses as soon as the measures are implemented.
  • 30. Page 30 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 Strong operating cash flow at €3.5 billion Million € H1 2012 H1 2011 Cash provided by operating activities 3,460 3,038 thereof Changes in net working capital (651) (1,178) Cash provided by investing activities (1,084) 81 thereof Payments related to tangible / intangible assets (1,669) (1,265) thereof Acquisitions / divestitures 430 32 Cash used in financing activities (2,198) (2,764) thereof Changes in financial liabilities 269 (486) Dividends (2,462) (2,278) First half 2012 Increase in net working capital by €0.7 billion  Free cash flow amounted to €1.8 billion  Dividend payments to BASF SE shareholders €2.3 billion  Net debt decreased by €0.7 billion to €11.5 billion in comparison to H1 2011 BASF 2nd Quarter 2012 Analyst Conference Call 13
  • 31. Page 31 BASF 2nd Quarter 2012 Analyst Conference Call July 26, 2012 [Chart 13: Strong operating cash flow at €3.5 billion ] Let me now conclude with our cash flow for the first half of 2012. Cash provided by operating activities came in at 3.5 billion euros in the first half of 2012 and we recorded a strong free cash flow of 1.8 billion euros. Net working capital increased by 0.7 billion euros. Cash used in investing activities amounted to 1.1 billion euros. As planned, capex was up by 32% at 1.7 billion euros. The net proceeds from acquisitons and divestitures amounted to 430 million euros. This included the proceeds from the sale of our fertilizer assets in Q1 as well as 278 million euros which we paid for various smaller acquisitions. Financing activities led to a cash outflow of 2.2 billion euros, mainly due to dividend payments to shareholders of BASF SE and minority shareholders in group companies. Net debt decreased by 0.7 billion euros to 11.5 billion euros in comparison to the end of the first half in 2011. Thank you for your attention. We are now happy to take your questions. BASF 4Q/FY’2010 Conference | February 24th, 2011 40