basf roundtable agricultural solutions 2012
TRANSCRIPT
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 1
Agricultural Solutions Sustainable growth through market-driven innovations
BASF Roundtable Agricultural Solutions November 12, 2012 London
BASF Roundtable Agricultural Solutions, November 12, 2012
2
Disclaimer
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.
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1 | Introduction Dr. Andreas Kreimeyer Member of the Board of Executive Directors 2 | BASF Crop Protection 3 | BASF Plant Biotechnology
4
1 | BASF maintains good business performance in Q3 2012
2 | ‘We Create Chemistry’ strategy on track; Agricultural Solutions is a key contributor
3 | Agricultural Solutions offers attractive growth opportunities with strong commitment to innovation
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 5
Q1-Q3’12
€59.1 billion
€9.8 billion
€7.1 billion
€7.4 billion
€3.9 billion
€4.25
€4.36
vs. Q1-Q3’11
+7%
+8%
+2%
+11%
(23)%
(23)%
(16)%
Favorable business development in Agricultural Solutions and Oil & Gas Earnings in chemical activities did not match the previous year’s level
BASF maintains good business performance in Q3 2012
Q3’12
€19.0 billion
€2.8 billion
€2.1 billion
€2.0 billion
€0.9 billion
€1.03
€1.19
vs. Q3’11
+8%
+4%
+5%
+6%
(21)%
(21)%
(22)%
Business Performance
Sales
EBITDA
EBIT before special items
EBIT
Net Income
EPS
Adjusted EPS
Sales development Period Volumes Prices Portfolio Currencies
Q3’12 vs. Q3’11 7% (4%) (1%) 6%
Favorable business development in Agricultural Solutions and Oil & Gas Earnings in chemical activities did not match the previous year’s level
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 6
Ongoing portfolio optimization
BASF is strengthening competitiveness of Construction Chemicals in Europe
Measures include:
- Adjusting business to declining markets in Southern Europe and Great Britain
- Enhancing overall efficiency and customer focus
About 400 positions in Europe are affected
BASF to acquire Becker Underwood $1.02 billion (€785 million) purchase
price Strengthens global crop protection
business Leading global provider of
technologies for biological seed treatment
2012 (E) Sales $240 million (€185 million)
Merger control approvals pending
Acquisition of equity in 3 producing fields in Norway: Brage (32.7%), Gjøa (15%), Vega (30%)
2P reserves of ~100 million boe Rise in daily production in Norway
from 3,000 to 40,000 boepd Statoil to receive - 15% in development field Edvard
Grieg - $1.35 billion - up to additional $100 million
depending on success of Vega
Photo: Statoil
Becker Underwood Restructuring of Construction Chemicals
Asset swap with Statoil
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 7
Outlook 2012 confirmed
For the FY 2012, BASF aims to exceed the record levels of sales and EBIT before special items achieved in 2011
BASF will strive again to earn a high premium on cost of capital
Chemical activities - We do not expect demand to pick up in the fourth quarter 2012 - Therefore, 2012 EBIT before special items of chemical activities will come in below the level of the
previous year.
Outlook 2012
GDP: +2.2% (before: 2.3%)
Industrial production: +2.8% (before: 3.4%)
Chemical production: +2.9% (before: 3.5%)
US$/Euro: 1.30 (unchanged)
Oil price (US$/bbl): 110 (unchanged)
Assumptions 2012
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1 | BASF maintains good business performance in Q3 2012
2 | ‘We Create Chemistry’ strategy on track; Agricultural Solutions is a key contributor
3 | Agricultural Solutions offers attractive growth opportunities with strong commitment to innovation
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 9
Chemistry as an enabler BASF has superior growth
opportunities: Innovation, sustainability, Emerging Markets, …
Long-term value creation, ambitious financial targets
The #1 chemical company. 2011: €73.5 billion sales, €8.4 billion EBIT bSI
#1- #3 in >75% of business, present in >200 countries
Production in 41 countries, 6 integrated Verbund sites
10 years of outperformance 16% average annual stock
performance* 15% average annual
dividend increase, >3% yield every single year**
Performance
BASF – The Chemical Company. We create chemistry for a sustainable future
Perspective
* Nov. 2002 - Oct. 2012 ** For 2002-2011
Ludwigshafen, Germany Antwerp, Belgium
Nanjing, China
Kuantan, Malaysia Geismar,
USA Freeport, USA
Verbund site
Positioning
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 10
‘We Create Chemistry’ strategy defines clear financial targets for 2015 and 2020
Grow at least 2 percentage points above chemical production
Earn a premium on cost of capital of at least €2.5 billion on average p.a.
Profitability targets Growth targets
2015
2020
Sales ~€85 billion
Sales ~€115 billion
EBITDA ~€15 billion EPS ~€7.50
Double EBITDA to ~€23 billion (compared with 2010)
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 11
Demographic challenges set the stage for the future of the chemical industry
Nine billion people in 2050 but only one earth
Resources, Environment & Climate
Food & Nutrition Quality of life
Chemistry as an enabler
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 12
We expand from chemicals to chemistry
Chemistry as key enabler for functionalized materials & solutions
Deep understanding of customer value chains required
Agricultural Solutions perfectly matches BASF’s focus on solutions business
1960 1970 1980 1990 2000 2010 2020
New molecules
Improved applications
Functionalized materials & solutions
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 13
BASF Crop Protection’s offering goes beyond weed, disease and pest control
Commodity Prices
Sustai- nability
Risk management Exchange Rate
External factors
Frost Drought Water Nutrition Soil
Stress
Heat
Innovation beyond Crop Protection
Weeds Diseases
Natural foes
Pests
Crop Protection
Resources
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 14
BASF Plant Science – Trait Technology Partner
Growers
Concept and strengths BASF has focused on trait
technologies early on Cutting-edge technology
and trait portfolio attracts top partners (seeds, food)
Products to be marketed via our partners’ channels
Partnership business model provides high flexibility and keeps asset costs low
Trait Technology Partner
Plant Science
Trait & Seed Partners
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 15
Multiple synergies between Agricultural Solutions and BASF Verbund
Non-cyclical, adds earnings
resilience
Technological synergies through
Know-how Verbund
Agricultural Solutions
Strong contributor to BASF‘s profitable
growth
Backward- integration
and sourcing
synergies
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 16
EBIT before special items in billion €
0
0,2
0,4
0,6
0,8
1
2006 2007 2008 2009 2010 2011 2012Q1-Q3
Agricultural Solutions has increased its earnings contribution to BASF sustainably
EBIT bSI more than doubled from 2006 to 2011
New record in 2011: €810 million
FY 2011 record has been already significantly surpassed: Q1-Q3 2012: €1,004 million
Sustainably increased earnings
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 17
Strong business performance 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
Agricultural Solutions has demonstrated profitable growth and sustained margins
Sales to 3rd parties in billion €
EBITDA margin*
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 18
Oil & Gas Agricultural Solutions
Chemicals business
0
2
4
6
8
10
12
2002 2004 2006 2008 2010
Agricultural Solutions is adding to BASF Group’s earnings resilience
Agriculture not coupled to chemical cycle
Agricultural Solutions delivered substantial contribution even in 2009 trough
Agro adds to earnings resilience EBITDA by activity (excluding Other) in billion €
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 19
in million €
from 3rd parties 64%
Sourcing of Top-100 raw materials* (by value) in 2011
from Verbund 36%
Make or buy Verbund back-integration
– security & flexibility of supply – market-based transfer pricing – typically ~40% of the Top-100 raws come from Verbund
Sourcing synergies
– economy of scale via joint BASF procurement
Capex
– capex will increase to >€250 M/y in 2012-2016 (on average)
– insourcing of advanced intermediates
– capacity expansions
€515 million
Our growth in Crop Protection is backed by a high level of backward integration
Capex in million €/a
0 100 200
2012-2016
2007-2011
* Without a.i. tolling, formulants, packaging
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 20
Total R&D expenditures 2011 in billion €
Large share of R&D spending committed to Crop Protection, Plant Biotechnology
€1.6 billion R&D expenditures in 2011, ~€1.7 billion in 2012
2020 target: ~€30 billion in sales with innovations <10 years
10,100 people; 2,800 projects
Research Verbund ~1,950 partnerships with universities, start-ups, industry partners
Agro benefits from Know-how Verbund synergies, especially in process design, formulation technologies, biotechnology
Functional Solutions 12%
Other Corp. R&D 12%
Chemicals 8%
Agricultural Solutions
26% Plastics
9% Performance Products 21%
Oil & Gas 1%
Chemicals Business
Plant Biotech 11%
€1.6 billion
Strong innovation platform
21
1 | BASF maintains good business performance in Q3 2012
2 | ‘We Create Chemistry’ strategy on track; Agricultural Solutions is a key contributor
3 | Agricultural Solutions offers attractive growth opportunities with strong commitment to innovation
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 22
To stimulate further growth in Agriculture, we pursue two promising Growth Fields
Resources, Environment & Climate Food & Nutrition Quality of Life
* Including growth fields still under evaluation
Consumer Goods
Chemistry as Enabler
Transportation Health & Nutrition Construction Electronics Agriculture C
usto
mer
In
dust
ries
Energy Management
Water Solutions
Wind Energy
Rare Earth Metals Recycl.
Heat Management Enzymes Plant
Biotechnology Batteries for
Mobility Lightweight Composites
Heat Management
Functional Crop Care
Medical Organic Electronics
Gro
wth
Fi
elds
*
Energy & Resources
Growth fields at different stages, >€500 million sales each expected at maturity
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 23
BASF Plant Science founded (1998)
Acquisition of CropDesign (2006)
Foundation of Metanomics (1998)
2010 1995 2000
BASF Plant Science founded in 1998 as a subsidiary of BASF
Strong trait technology platform was created, highly attractive to partners
Prime example: Yield & Stress collaboration with Monsanto ranks #1 in Patent Asset Index
A strong trait technology platform Patent Asset Index for Yield & Stress Traits
BASF Plant Sciences has generated a leading technology platform
0 200 400 600 800 1000 1200
DuPont
Mendel
Bayer
Ceres
BASF/ Monsanto
2010
2009
2011
Partnership with
Partnership with
Partnership with
24
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
Agricultural Solutions is a star in our portfolio
BASF Roundtable Agricultural Solutions, November 12, 2012
1 | Introduction 2 | BASF Crop Protection Markus Heldt President, Crop Protection Division 3 | BASF Plant Biotechnology
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 26
million € Q1-Q3 2012
Q1-Q3 2011 ∆% ∆%
CER Sales* 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 Agricultural Solutions Strong fundamentals - YTD earnings topped FY 2011
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 27
Strong growth in all regions
3rd Party sales Q1-Q3 2012 by region in million €
Key facts Europe:
Strong performance in Central & Eastern Europe and UK
North America: Strong herbicides sales due to increasing glyphosate resistance
South America, Africa, ME: Season in full swing, offsetting La Niña impact at beginning of 2012
Asia Pacific: Sales growth mainly driven by India and China
Asia Pacific 418 (+2%)
Europe 1,596 (+12%)
South America, Africa, Middle East
834 (+6%)
North America 954 (+9%)
€3,802 (+9%)
In brackets: growth at constant exchange rates in % vs. prior year
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 28
Fungicides: Strong volume growth driven by Xemium® sales in Europe, and strong Plant Health adoption in North America
Herbicides: Main drivers were Clearfield® in Europe, Kixor® in North America, IMIs in Asia.
Insecticides: Strong demand increase for Fipronil especially in Brazil (sugarcane)
Fungicides 1,624 (+6%)
Herbicides 1,395 (+13%)
Insecticides/Other 783 (+7%)
Key facts
€3,802 (+9%)
Strong growth in all indications 3rd Party sales Q1-Q3 2012 by indication in million €
In brackets: growth at constant exchange rates in % vs. prior year
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 29
Crop Protection growth story continues, €6 billion sales targeted for mid of decade
Financial Targets
€6 billion sales target expected to be reached at mid of decade due to:
– strong momentum and additional value extraction from our existing portfolio
– new product launches
– emerging market business models gaining further grip
EBITDA margin target: 25% on average
Emerging Markets* * Latin America, Eastern Europe, South Africa, Asia (w/o Japan, Australia, New Zealand) ** FCC = Functional Crop Care
Sales drivers in million €
2012E 2011
Fungicide & AgCelence
growth
Herbicide Renaissance& Innovations
FCC** & Becker
Underwood
Growth in emerging markets
New product
launches
~ 4,700 4,165
~ 6,000
~ 50%
46% 44%
2015E
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 30
Global expansion of AgCelence®
leverages our Plant Health portfolio AgCelence®
Umbrella brand for Plant Health solutions, global rollout in full swing
Plant Health effect: Improved stress tolerance, growth, crop quality
F 500® fungicide continues to be a key contributor to Plant Health business
3rd capacity expansion for F500® announced in September 2012
0
200
400
600
800
2008 2011 2015E
Asia Europe/EMA
Latin America North America
sales to third parties Sales in million €
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 31
Limited impact of US drought on BASF
General 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 Farmers losses partially mitigated by crop insurance;
good liquidity expected for 2013
Plant Health segment Despite drought, >20 million acres treated (corn, soy) Only moderate impact on BASF business expected in Q1
2013 due to channel inventories Plant Health will remain a major growth driver for BASF
June 5th
July 2nd
June 16th
BASF Research 2012, Stark County, Illinois
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 32
Next upcoming registrations Xemium registered
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
Very successful Xemium® launch confirms blockbuster potential
Xemium®
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 33
Continued growth in herbicides; sales target of >€1.75 billion for 2015
Urgent need for innovation 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: – Clearfield® in global launch – Cultivance® and Engenia®
(Dicamba) in approval Roundup Ready® (RR) launched by Monsanto in 1996
Increasing weed resistance to Glyphosate
Accelerating market penetration of RR system in the Americas
Engenia®
BASF launches
2010 1990 2000
Herbicide Renaissance
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 34
Acquisition of Becker Underwood supports Agricultural solutions strategy
Strategy Strengthens our traits & seed
partnerships via expanded seed treatment offering
Gives access to growth market of biological Crop Protection
Complements offering in strategic crops and countries, i.e. Americas
Opens door to combined solutions of chemical and biological crop protection
Strengthens know-how and technology platform
Becker Underwood adds value
Innovation beyond crop protection
Traits & seed partnerships
Crop protection
Agricultural Solutions
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 35
Closing of transaction expected by year end 2012
Becker Underwood will be part of Functional Crop Care, support all three pillars
Structural integration to be completed by end of 2013
Timelines
Becker Underwood further strengthens BASF’s position as solution provider
Global Business Unit Functional Crop Care (FCC)
Seed Solutions Innovations beyond Crop
Protection Biologicals
* To be part of Health & Nutrition ** Fiscal year ended September 30, 2012
Foliar Plant Health
Seed Enhancement Landscape Horticulture &
Specialty
Becker Underwood (Sales 2012E**: €185 million)
Livestock Nutrition*
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 36
Latin America: Additional resources established, new financial tools introduced
Eastern Europe: Headcount to double from 2008 - 2013
Asia: Additional investments in assets, resources planned
Africa: Crop Protection is a main driver for BASF Group’s growth in Africa
We will grow Emerging Markets sales significantly
0
100
200
300
2007 2011 2015E
Latin America
0
100
200
300
2007 2011 2015E
Eastern Europe
0
100
200
300
400
500
600
2007 2011 2015E
Asia
0
100
200
300
400
500
600
2007 2011 2015E
Africa
Emerging Market sales indexed
% %
%
>€ 3 bn. in 2015
Key drivers
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 37
We are committed to keep investing into innovation
Core of our business model: Innovative solution provider
High R&D intensity in Crop Protection (~9% of sales)
Increased R&D investments: – 2007 - 2011: € 1.8 billion – 2012 - 2016: ~€ 2.5 billion
321 329
358
390 410
2007 2008 2009 2010 2011 2012
Total R&D expenditures in million €
Commitment to innovation
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 38
Dicamba HT
We have a strong innovation pipeline
Plant Health
Nitrogen Management
Water Management
A strong pipeline
Weed management
Total Peak Sales Potential at €2.8 billion, increased >50% since 2008
In-launch pipeline (2002-2009) at €1.6 billion
Young pipeline (2010-2020) at €1.2 billion and growing
Ongoing R&D and inlicensing activities in insecticides
Functional Crop Care projects shaping up
Pipeline update in Q1 2013
Functional Crop Care
Disease management
BASF Roundtable Agricultural Solutions, November 12, 2012
Portfolio Development Results Becker Underwood Emerging Markets Innovation & Investments 39
Capex to be further increased, following our strategy Capex 2007-2011 in billion €
€0.8 billion
Various*
Capex 2007-2011 F500®: capacity expansion Kixor® and Xemium®: new
production plants Formulation: New plants and
expansions
Planned capex 2012-2016 F500®: 3rd capacity expansion Xemium®: backward integration Dicamba: capacity expansion New formulation plants (Asia) R&D expansion (India, USA)
Key Projects (F500, Kixor, Xemium)
>€1.4 billion
Various* Key Projects (F500, Xemium, Dicamba)
* Formulation sites, research sites, infrastructure
Planned capex 2012-2016 in billion €
BASF Roundtable Agricultural Solutions, November 12, 2012
40
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
41
1 | Introduction 2 | BASF Crop Protection 3 | BASF Plant Biotechnology Dr. Peter Eckes President, BASF Plant Science
BASF Roundtable Agricultural Solutions, November 12, 2012
Key facts
Global GM crop area continued to grow in 2011 (8% from 2010)
Biotech crops are planted on about 11% of the cultivated land
In 2011, 16.7 million farmers grew GM crops in 29 countries
Market expected to grow to €32 billion by 2020**
Global GM crop area in million hectares; 1 ha = 2.47 acres
* CAGR 1997-2011 ** Source: Context Outlook 2010, BASF estimates;
incl. license value; major crops only; net farm value Source: ISAAA 2011
0
20
40
60
80
100
120
140
2003 1997 2006 2011 2000
160 160
Pipeline Projects Market Strategy 42 Summary
The GM success story continues
BASF Roundtable Agricultural Solutions, November 12, 2012
7%
Canada
Source: Clive James, ISAAA 2011
43% USA
19% Brazil
15% Argentina India
7%
China
2 %
<0,001 %
Europe
Americas as the growth driver for GM cultivation
Pipeline Projects Market Strategy 43 Summary
BASF Roundtable Agricultural Solutions, November 12, 2012
Situation
7%
Canada
43%
USA
<0,001 %
Europe
BASF Plant Science refocuses on strategic markets
Decision in January 2012
Active portfolio & site management
Strengthen position in North America; expand the new HQ in Research Triangle Park (NC)
Stop projects with EU market focus
Refocus activities on main markets in North and South America
Consolidate global site footprint
Trait Technology Partner Strategy remains unchanged
Pipeline Projects Market Strategy 44 Summary
BASF Roundtable Agricultural Solutions, November 12, 2012
The Best Traits…
Unique technology platforms for yield screening, metabolite profiling
Strong global academic network
…for the Best Seeds
Strong partnerships with leading
seed and food companies ensure optimal market access
z
z
BASF Plant Science
Cutting-edge trait technology platforms make us the ideal partner
Pipeline Projects Market Strategy 45 Summary
BASF Roundtable Agricultural Solutions, November 12, 2012
Cutting-edge trait technology platforms fuel strong pipeline
Pipeline Projects Market Strategy 46 Summary
Business potential*
Discovery gene identification & proof of concept
Stage I proof of concept in target crops
Stage II early product development
Stage III advanced product
development
Stage IV pre-launch
Trait total development time: 10-12 years
Higher-yielding corn
Higher-yielding canola
Higher-yielding sugar cane2
Drought-tolerant cotton
Higher-yielding sugar beet3
Higher-yielding rice4
Improved nitrogen utilization in corn
Higher-yielding wheat
Yield & Stress with Monsanto1
Higher-yielding soybean 2nd Generation
Drought-tolerant corn 2nd Generation
Improved corn feed Feed Specialities Healthy fatty acids in canola5
Input Traits
Nematode resistant soybean1
Herbicide-tolerant soybean6
Fungal resistant soybean
Yield & Stress with others
Target gross trait sales before partner share in 2020***: €1.8 bn
1st Gen.
1st Gen. 250-500 M $
<250 M $
250-500 M $
<250 M $ tbd**
tbd**
tbd** <250 M $
tbd**
250-500 M $ tbd**
<250 M $
tbd**
>500 M $
250-500 M $
1 as communicated at Monsanto pipeline update in January 2012, 2 with CTC, 3 with KWS , 4 with Bayer, 5 with Cargill, 6 with Embrapa
* peak gross trait sales of last family member in country of 1st launch before partner share ** to be defined when product enters Phase II *** adjusted due to discontinuation of potato projects
BASF Roundtable Agricultural Solutions, November 12, 2012
System approach – germplasm, traits and agronomic recommendations DroughtGard™ Hybrids
demonstrate enhanced hydroefficiency capability under drought stress
Maintains top-end yield potential in well-watered conditions
Advantage over competitor products under drought stress
Completed ~250 Ground Breakers trials in 2012
Full commercialization in 2013/14
Insect Control Weed Control Drought Tolerance
Grower-level Recommendations
Disease Tolerance Drought Tolerance Yield Potential
Total Yield
Germplasm
Agronomic Practices
Trait Packages
Launch of 1st commercial BASF/Monsanto product: DroughtGard™ Hybrids
Pipeline Projects Market Strategy 47 Summary
BASF Roundtable Agricultural Solutions, November 12, 2012
TX
NM OK
LA
AR
MO
IA
MN ND
SD
NE
KS CO
WY
TX
NM OK
LA
AR
MO
IA
MN ND
SD
NE
KS CO
WY
Monsanto’s Ground Breakers On-farm trial program designed to: Provide select farmers early
exposure to the latest products and agronomic systems
Support a better understanding of where, how and in which system a product will perform best
Help support commercial decisions DroughtGard™ Hybrid System ~250 Ground Breakers farmers on
thousands of acres Stewardship guidelines followed
throughout the unfolding of the regulatory approvals
Targeted for the Western Corn Belt
The DroughtGard™ Hybrid – the first and only drought management system
Pipeline Projects Market Strategy 48 Summary
BASF Roundtable Agricultural Solutions, November 12, 2012
DroughtGard Hybrids™
Drought-tolerant competitor product
The DroughtGard™ Hybrid System outperforms the competition
Pipeline Projects Market Strategy 49 Summary
BASF Roundtable Agricultural Solutions, November 12, 2012
Higher yielding rice: Biotech solutions tap 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
Pipeline Projects Market Strategy 50 Summary
BASF Roundtable Agricultural Solutions, November 12, 2012
Transgene Reference
Seed weight (indexed)
indica
Development Discovery
japonica
Validation
indica
Higher yielding rice: First results show strength of yield trait system
0
2
4
6
TraitMill™ Indica Screen Field Trail
Pipeline Projects Market Strategy 51 Summary
BASF Roundtable Agricultural Solutions, November 12, 2012
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 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
Birdsfoot trefoil
Peanut
Fungal-resistant soybeans: Innovation inspired by nature
Chickpea
Low hop clover
Pipeline Projects Market Strategy 52 Summary
BASF Roundtable Agricultural Solutions, November 12, 2012
0%
20%
40%
60%
80%
100%
Enhanced resistance*
Lead gene 1 Lead gene 2 control
* Best event
Fungal-resistant soybeans: Innovation yields first promising results
Fungal diseases have a major impact on soybean harvest Asian Soybean Rust (ASR) can
result in yield losses of 10 to 90% Objective: Provide broad, durable resistance
against fungal diseases based on multiple genes
Reliable insurance consisting of biotech trait & fungicide treatment
Convenient system for easy use Target market: South America, primarily Brazil
(Total harvested area of 30 Mio ha potentially at risk of ASR damage)
Efficacy against ASR: 2012 field trials in Brazil
Resistance gene expressed Susceptible mother variety
Pipeline Projects Market Strategy 53 Summary
BASF Roundtable Agricultural Solutions, November 12, 2012
54
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
Summary and outlook