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We create chemistry for a sustainable future Andrea Frenzel President South and East Asia, ASEAN and ANZ Daiwa Investment Conference Hong Kong November 7, 2017

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Page 1: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

We create chemistry for a sustainable future

Andrea FrenzelPresidentSouth and East Asia,ASEAN and ANZ

Daiwa Investment Conference Hong KongNovember 7, 2017

Page 2: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 2

Cautionary note regarding forward-looking statements

This presentation contains forward-looking statements. These forward-looking statements are basedon current estimates and projections of the Board of Executive Directors and on currently availableinformation. These forward-looking statements are not guarantees of the future developments andresults outlined therein. Rather, they depend on a number of factors, involve various risks anduncertainties, and are based on assumptions that may not prove to be accurate. Such risk factorsparticularly include those discussed on pages 111 to 118 of the BASF Report 2016. The BASFReport is available online at basf.com/report. BASF does not assume any obligation to update theforward-looking statements contained in this presentation.

Page 3: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 3

Agenda

At a glance1

Strategic levers2

Asia Pacific3

Segments4

Page 4: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 4

Growth above chemical industry average – driven by innovative and sustainable products and solutions

Unique Verbund concept – competitive advantage based on integrated sites, operational excellence and best-in-class technologies

Broad and resilient portfolio – with global market access and strong customer relationships

Earnings growth and strong cash flow generation – based on operational and financial strength

Long-term value creation with progressive dividend policy – grow or at least maintain dividend at the previous year’s level

BASF shares – an attractive investment

Page 5: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 5

Chemicals – a growth industryGlobal annual growth rate of ~3.6%*

…more food needed by 2050

…more primary energy consumption by 2050

…of the world population will live in cities by 2050

Agriculture Health & Nutrition

Energy & Resources

TransportationConstruction &Housing

Consumer Goods

…people by 2050

Electrical & Electronics

Chemistry as enabler to meet current and future needs70% 50%~10 bn 30%

* Forecast average annual real change 2017– 2019; BASF Report 2016, p. 121

Page 6: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 6

Broad and resilient portfolio2016: Sales of €57.6 billion; EBITDA of €10.5 billion

Percentage of sales 2016*

* Not depicted here: ‘Other’ 3% of Group sales and EBITDA €(1.0) billion

Page 7: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 7

Global market access through regional presence

Kuantan

Hong KongNanjing

Freeport

Florham Park

Geismar

LudwigshafenAntwerp

São Paulo

Regional centersSelected sitesVerbund sitesSelected research and development sites

Asia Pacific

Europe

South America, Africa, Middle East

North AmericaSales €14,042 millionEBIT €1,113 millionEmployees 17,583

Sales €26,039 millionEBIT €3,632 millionEmployees 70,784

Sales €12,165 millionEBIT €1,098 millionEmployees 18,156

Sales €5,304 millionEBIT €432 millionEmployees 7,307

2016: Sales by location of customer; EBIT by location of company

Page 8: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 8

Verbund – unique competitive advantageActively managed in line with market requirements

Annual cost savings of more than €1 billion through integrated production Verbund concept supports sustainability, reduces waste and avoids CO2 emissions of 6 million tons p.a.

Energy savings >€300 million p.a.

People, Customers, Technology, Production

Page 9: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 9

BASF Group Q3 2017Considerably higher sales and earnings

Financial figures Q3 2017 Q3 2016 Change

Sales €15.3 billion €14.0 billion 9%

EBITDA before special items €2.8 billion €2.5 billion 12%

EBITDA €3.0 billion €2.4 billion 23%

EBIT before special items €1.8 billion €1.5 billion 16%

EBIT €2.0 billion €1.5 billion 34%

Net income €1.3 billion €0.9 billion 50%

Reported EPS €1.45 €0.97 49%

Adjusted EPS €1.40 €1.10 27%

Operating cash flow €3.8 billion €2.5 billion 52%

Sales development Volumes Prices Portfolio CurrenciesQ3 2017 vs. Q3 2016 4% 7% 1% (3%)

Page 10: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 10

Stepwise increase of earnings levelEBIT and EBITDA*billion €, 2001–2016

3.7

4.7 4.6

7.0 7.28.4

8.9

7.76.5

9.9

11.2

10.010.4

11.0 10.6 10.59.7

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1-Q32017

EBIT EBITDA

0.7

2.2 2.2

4.5 4.85.5

6.0

4.6

2.8

6.7

8.06.7 7.2

7.6

6.2 6.3 6.6

CAGREBITDA

7%CAGREBIT16%

* 2010, 2011 indicative, adjusted for IFRS 10 & 11; 2001–2009 as reported, without non-compensable foreign income taxes on oil production

Avg. EBITDA level in depicted years

9.7

Page 11: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 11

billion €, 2001–2016

2.3 2.3

4.9 4.65.3

5.9 5.85.0

5.76.5

7.16.6

8.1

7.0

9.4

7.7 7.6

0123456789

10

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1-Q32017

Free cash flowOperating cash flow

-0.5 -0.1

2.8 2.63.3 3.5 3.2

2.53.2

3.9 3.7

2.63.2

1.7

3.6 3.6

5.0

6.3%

Strong cash flow development

Page 12: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 12

Attractive dividendWe want to grow or at least maintain dividend at the previous year’s level

* Dividend yield based on share price at year-end

Dividend per share€

0.65 0.70 0.700.85

1.00

1.50

1.95 1.951.70

2.20

2.50 2.60 2.70 2.80 2.90

0

1

2

3

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Yield* 3.1% 3.9% 3.1% 3.2% 3.1% 4.1% 3.8% 7.0% 3.9% 3.7% 4.6% 3.7% 3.5% 4.0% 4.1% 3.4%

3.00

Page 13: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 13

Delivering consistent, long-term valueCurrent market capitalization: €83 billion*

Average annual performance (with dividends reinvested)

0 2 4 6 8 10 12 14

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+5.0%

BASF

+6.6%

+1.1%

+10.6%

Last 10 years October 2007 – September 2017

0 2 4 6 8 10 12 14

Last 3 years October 2014 – September 2017

+11.3%

+6.5%

+10.6%

+9.8%

* As of September 29, 2017

Page 14: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 14

Sales growth – slightly faster than global chemical production

Deliver attractive returns – earn a significant premium on cost of capital

EBITDA growth – well above global chemical production

Remain a strong cash provider – continuously generate high levels of free cash flow

Progressive dividend policy – grow or at least maintain dividend at previous year’s level

Financial targets for the coming years

Page 15: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 15

Innovations for a sustainable future

Investments in organic growth

M&A opportunities and portfolio pruning measures

Our priorities

Operational excellence and cost discipline

We aim to grow sales and earnings faster than global chemical productionin the coming years, driven by

Page 16: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 16

Outlook 2017 for BASF Group

Assumptions 2017 Now PreviousGDP growth +2.8% +2.5%

Growth in industrial production +3.1% +2.5%

Growth in chemical production* +3.4% +3.4%

Exchange rate US$1.10 per euro US$1.10 per euro

Oil price (Brent) US$50 per barrel US$50 per barrel

* Excluding pharma

Outlook 2017 Now PreviousSales Considerable increase Considerable increase EBIT before special items and EBIT Considerable increase Considerable increaseEBIT after cost of capital Considerable increase Slight increase

Page 17: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 17

Agenda

At a glance1

Strategic levers2► Portfolio development► Investments► Innovation► Sustainability► Operational excellence

Page 18: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 18

Continuous global portfolio development

target(in % of sales*)~50% ~50%

Maintaining a balanced portfolio

Divestment of businesses,e.g., due to loss of differentiation

Divestment of businesses,

e.g., due to lower market attractiveness

Commoditization leads to restructuring

Growth fields

Innovation pipeline

Acquisitions

Specialties and solutions Differentiated commodities

Attractive markets Differentiation by process

technologies and integration

Attractive markets Differentiation by customer

proximity and innovations

* Excluding Oil & Gas sales

Page 19: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 19

Portfolio development towards more market-driven and innovative businesses

Strong Partnerships Gazprom PETRONAS Sinopec Total

Selected transactions 2010−today

BASFcore business

~€5.5 billion salesin emerging and innovation-driven businesses

Acquisitions Functional crop care Personal care & food Omega-3 fatty acids Enzymes Battery materials Specialty plastics Selected assets in Oil & Gas Refinish coatings Surface treatment

Divestitures

~€21.0 billion salesin businesses with limited fit and differentiation potential

Styrenics Fertilizers Selected assets in Oil & Gas Natural gas trading & storage Custom synthesis business Textile chemicals Polyolefin catalysts Industrial coatings Leather chemicals

Page 20: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 20

Clear acquisition criteria

We want to acquire businesses which …

provide a return on investment above the WACC

are EPS accretive by year three at the latest

We want to acquire businesses which …

generate profitable growth above the industry average

are innovation-driven

offer a special value proposition to customers

reduce earnings cyclicality

Acquisitioncriteria

Strategic acquisition criteria Financial acquisition criteria

Page 21: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 21

Complementary acquisitions to strengthen the portfolio of BASF Group

Solvayʼs integrated global polyamide business

Purchase price: ~€1.6 billion Sales 2016: ~€1.3 billion EBITDA 2016: ~€200 million Market CAGR: >3.5% Closing expected in Q3 2018

Significant parts of Bayerʼs seed and non-selective herbicide businesses

Purchase price: ~€5.9 billion Sales 2016: ~€1.3 billion EBITDA 2016: ~€385 million Sales CAGR: ~15% (2014–2016) Closing expected in Q1 2018

ChemetallSurface treatment business

Purchase price: ~US$3.1 billion Sales 2015: ~US$845 million EBITDA 2015: ~US$200 million Sales CAGR: ~7% (2007–2015) Closed in December 2016

Page 22: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 22

BASF signed agreement to acquire significant parts of Bayer’s seed and non-selective herbicide businesses

Fully enabled seed and trait businesses Attractive and sizeable seed portfolio for canola/oilseed

rape, soybean and cotton in the Americas and Europe

Excellent trait research for canola, soybean and cotton

LibertyLink® technology for herbicide tolerance and related trademarks

Complementary crop protection business Global glufosinate-ammonium-based non-selective herbicide

business

State-of-the-art production facilities in the U.S., Canada and Germany

Page 23: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 23

BASF to acquire Solvay’s global polyamide business

* Application examples

Broader global scope Enhanced presence, especially in Asia and South America

Stronger capabilities to serve global and regional customers

Wider range of engineering plastics Technyl®, Ultramid®, Ultradur®, Ultraform®, Ultracom®

Broadening technical skills and innovation capabilities* Heat-resistant and high-voltage electrical and electronic parts

Tailor-made solutions for components in automotive

Mechanically strong and thermally stable consumer goods

Improved reliability of supply Backward integration into all key raw materials for polyamide 6.6

Fully integrated engineering plastics value chain

Page 24: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 24

Investments in organic growthInvestments of ~€3.9 billion planned for 2017

Performance Products

21%

Oil & Gas23% €19.0 billion

Capex budget 2017–2021 by segment

Other13%

Chemicals24%

Capex budget 2017–2021 by region

Asia Pacific16%

North America22%

Agricultural Solutions4%

Other**3%

Functional Materials& Solutions

15%

€19.0 billion

South America*10%

* Including Africa and Middle East, ** Alternative sites currently being investigated

Europe 49%

Oil & Gas Europe

Page 25: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 25

Selected investments in Asia Pacificwith start-up in 2017–2018

Total investments >€500 million

Second coatingsplant within 3 years

Capacity: 50,000 metric tons

BASF’s first facility in Asia Pacific to produce process catalysts

New site to produce light-duty and motor-cycle emissions catalysts

Aroma ingredients complex

Kuantan, Malaysia

Automotive coatings

Caojing, China

Highly reactive polyisobutene

Kuantan, Malaysia

Chemical catalysts

Caojing, China

Mobile emissions catalysts

Rayong, Thailand

Page 26: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 26

Oil & Gas2%

Innovation will drive future growth

Agricultural Solutions26%

Chemicals10%

Performance Products20%

Corporate Research21%

Key facts

€1.86 billion R&D expenditures in 2016

R&D expense to sales ratio ~3%

~10,000 employees in R&D

~3,000 projects

~850 new patents in 2016

Research Verbund: Cooperations with more than 600 excellent partners from universities, startups and industry

In 2016, sales of >€10 billion from innovations on the market since 2011

R&D expenditures 2016

€1.86 billion

Functional Materials & Solutions

21%

Page 27: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 27

Innovation in Asia Pacific – for Asia and the world

Innovation Campus Asia Pacific, Mumbai Focus: crop protection, process engineering

R&D Center AustraliaFocus: mining

R&D Center Japan Focus: electronics,

battery materials

R&D Center SouthKoreaFocus: electronics

Innovation Campus Asia Pacific Phase II, Shanghai Focus: polymers & materials, process engineering, formulations

Advanced Materials & Systems Research

global HQ in Shanghai

Innovation Campus Asia Pacific Phase I, Shanghai Focus: polymers & materials

20142012 2013 20172015

* As of December 31, 2016

At a glance Two regional Innovation Campuses >1,100 R&D personnel*

Page 28: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 28

Innovations for a sustainable futureExamples with significant contributions to sustainability

FWC™ Four-Way Conversion catalyst removes particulates

Acronal® MB – from biomass to dispersions

Trilon M® phosphate alternative for dishwashing detergents

SLENTITE® high-performance insulation material

Green Sense® resource-efficient concrete production

ecovio® biodegradable polymer solution

Page 29: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 29

Sustainable Solution Steering®Novel methodology to screen and steer our portfolio

4.2% 0.3%

>60,000 product applications analyzed

27.2% Accelerators

– Strong growth in their markets

– deliver margins above the average

– represent majority of BASF’s R&D pipeline

68.3% Performers

<1% Challenged products

Increase the share of Accelerators from 23% in 2014 to 28% by 2020

27.2%

68.3%

Substantial sustainability contribution in the value chain

Meets basic sustainability standards on the market

Specific sustainability issues which are being actively addressed

Significant sustainability concern,action plan developed

SustainableSolutionSteering

Percentage of sales 2016

Page 30: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 30

Carbon efficiencyResponsible use of raw materials by the chemical industry

BASF uses raw materials responsibly: ~80% of carbon converted to products, ~20% needed for processes*

Continuous efficiency improvements

22 million tons CO2 emissions by BASF in 2016 compared to 10–30 million tons p.a. for one coal-fired power plant

Chemical industry: only ~10% of global consumption of fossil resources**

Growing world population needs access to energy, housing, healthcare and food

Consumption of resources has to be reduced in order to limit global warming to <2°C

Chemistry as enabler for low-carbon technologies (e.g., lightweight parts, battery materials, insulation, etc.) 20%

CO280% products

* BASF carbon mass balance calculation (2016, non-audited); **IEA 2015

Page 31: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 31

0

0,.001

Earnings contribution 2016 2017–2018 Total

Operational excellenceDrivE with ~€1 billion targeted earnings contribution

DrivE program

Targeted annual earnings contribution of €1 billion from end of 2018 on

Optimization of processes and structures in all regions, including

– manufacturing

– incremental capacities

– productivity increase

Project timeline: 2016–2018

€350 million

€650 million

Goal €1 billion

Annual earnings contribution DrivEmillion €

1,000

Page 32: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 32

Strong track record in operational excellence

* Excl. companies with major IFRS 10/11 restatements, i.e. BASF YPC Nanjing, Libya onshore, other Oil & Gas and Catalysts companies

50

100

150

200

250

300

350

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EBITDA

Sales

Fixed Costs

CAGREBITDA

8%

CAGRSales

4%

3%

CAGRFixed Costs

BASF Group* 2001–2016 indexed; CAGR 2001–2016

Page 33: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 33

Digitalization will support BASF’s growth and efficiencyDigital Business Models

Smart Innovation

Smart Supply Chain

Smart Manu-facturing

Growth

Digital business models Customer connectivity Digitalization in R&D

New revenue streams Increased supply share Higher innovation output

Predictive maintenance Augmented reality in production Smart supply chain

Increased capacity Increased work efficiency Reduced working capital

Efficiency

Page 34: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 34

Agenda

At a glance1

Strategic levers2

Asia Pacific3

Page 35: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 35

Asia and China continue to dominate global chemical productionReal chemical production (excl. pharma)(trillion US$)

2012CAGR3.5%2012 2020

World

CAGR5.4%1.6 2.5

Asia Pacific

2020

Source: BASF

3.3 4.3

58%

19%

15%

8%

12%

66%

5%

9%

7%

1%8%

72%

5%

7%

7%

1%

Greater China

South KoreaJapan

South Asia

ANZ

South East AsiaAsia Pacific

OthersEurope

North America

50%

23%

18%9%

Page 36: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 36

BASF in Asia Pacific 2016

Nanjing

Hong Kong

Kuala Lumpur

Kuantan

* Only selected sites and offices are depicted in this chart. Site and office numbers refer to companies of significant size where BASF holds a stake greater than 50%.

** As of December 31, 2016.

*** Sales by location of customer.

BASF is present in 17 countries

Customers from 38 markets

~100 production sites*

>120 sales offices*

18,156 employees**

~€12.2 billion sales***

~€1.1 billion EBITRegional centerVerbund sitesSelected sitesR&D/Technical centersShared Services Center

Page 37: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 37

BASF’s performance in Asia Pacific

0.0

0.5

1.0

1.5

2.0

2012 2013 2014 2015 2016 Q1-3 2017

1.6

0

5

10

15

2012 2013 2014 2015 2016 Q1-3 2017

12.5 12.4 12.3 12.3

EBIT (billion €)

0.9 0.8 0.70.4

Sales* (billion €)

* By location of customer

1.1

10.612.2

Developments in 2017 Considerable sales growth across all

sub-regions and business segments, driven by higher prices and volumes

Significant increase in earnings in Chemicals and Functional Materials & Solutions; higher earnings in Agricultural Solutions

Underlying demand across most sectors remains strong

Page 38: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 38

Agricultural Solutions4%

BASF in Asia Pacific: Balanced portfolioSales* by segment in 2016(billion €)

Sales* by sub-region in 2016(billion €)

Functional Materials & Solutions37%

Performance Products 29%

Other3%

Chemicals27%

€12.2 billion

South East Asia15%

Greater China49%

Australia, New Zealand3%

South Asia11%

Japan13%

South Korea9%

€12.2 billion

* Sales to third parties by location of customer

Page 39: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 39

Balanced asset base in Asia Pacific: Investments for profitable growth

Planned investments 2017–2021: ~€3 billion (16% of BASF Group)

Increasing focus on investments where BASF: − is technologically leading − has a competitive advantage − expects strong profitable market

growth

Target remains: ~75% own manufactured products by 2020(2016: ~59%)

** Without China

Selected major capex projects*

Care chemicals Polyurethane specialties

Specialty plasticsEngineering plasticsPolymer dispersions2-Ethylhexanoic acid

AminesSurfactants

Acrylic acid & SAPResins

Specialty plasticsCrop protection products

MDI (Chongqing)Innovation Campus (Shanghai)

PolyamidesNeopentylglycol

IsononanolCoating resins

Automotive coatingsButanediol/PolyTHF®

Specialty amines Ethylene oxide

Polyvinylpyrrolidone

Startup 2012–2016

Startup planned for 2017–2021

China

Asia Pacific**

Process catalystsEmollients and waxesMDI (Caojing)Automotive coatingsPlastic additives

Aroma chemicalsAutomotive catalystsHighly reactive polyisobuteneInnovation Campus (Mumbai)Automotive coatingsSpecialty plasticsPlastic additives

* Investments in property, plant and equipment (excluding acquisitions)

Page 40: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 40

Agenda

At a glance1

Strategic levers2

Asia Pacific3

Segments4

Page 41: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 41

Intermediates728+10%

Monomers1,770+41%

Petrochemicals1,525+16%

€4,023+25%

Sales Q3 2017 vs. Q3 2016*million €

EBIT before special items* million €

488629

9581,120 1,102

0

400

800

1,200

Q3 Q4 Q1 Q2 Q3

Sales development Volumes Prices Portfolio CurrenciesQ3 2017 vs. Q3 2016 6% 22% 0% (3%)

2017

* Effective January 1, 2017, the Monomers and Dispersions & Pigments divisions’ activities for the electronics industry were combined into the global Electronic Materials business unit and allocated to the Dispersions & Pigments division in the Performance Products segment. The 2016 figures have been adjusted accordingly.

2016

ChemicalsHigher earnings driven by increased margins and higher volumes

Page 42: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 42

Performance ProductsEBIT before special items declined, EBIT increased due to special incomefrom transfer of leather chemicals business

Performance Chemicals980+4%

Nutrition & Health451(11%)

Care Chemicals1,213+3%

€3,983+2%

EBIT before special items* million €

Sales Q3 2017 vs. Q3 2016*million €

Dispersions & Pigments1,339+3%

Sales development Volumes Prices Portfolio CurrenciesQ3 2017 vs. Q3 2016 6% 0% (1%) (3%)

473

237

515405 385

0

200

400

600

800

Q3 Q4 Q1 Q2 Q320172016

* Effective January 1, 2017, the Monomers and Dispersions & Pigments divisions’ activities for the electronics industry were combined into the global Electronic Materials business unit and allocated to the Dispersions & Pigments division in the Performance Products segment. The 2016 figures have been adjusted accordingly.

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BASF Capital Market Story, October 2017 43

Functional Materials & Solutions Sales increased on good demand from automotive and construction, earnings declined

Coatings951+20%

Catalysts1,506 (3%)

ConstructionChemicals

618+2%

Performance Materials1,900+11%

€4,975+7%

497 458531

422 397

0

200

400

600

800

Q3 Q4 Q1 Q2 Q3

EBIT before special items million €

Sales Q3 2017 vs. Q3 2016million €

Sales development Volumes Prices Portfolio CurrenciesQ3 2017 vs. Q3 2016 0% 6% 4% (3%)

20172016

Page 44: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 44

Agricultural SolutionsEarnings decreased, primarily due to the difficult market situation in Brazil

1,049 987

0

1,000

2,000

Q3 2016 Q3 2017

Sales Q3 2017 vs. Q3 2016million €

Sales development Volumes Prices Portfolio CurrenciesQ3 2017 vs. Q3 2016 5% (8%) 0% (3%)

EBIT before special items million €

97

21

0

100

200

300

Q3 2016 Q3 2017

(6%)

(78%)

Page 45: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 45

Oil & GasHigher oil and gas prices and volumes, EBIT before special items lower due to one-time earnings effects in the prior-year quarter

Sales Q3 2017 vs. Q3 2016million €

194 180

33

139

0

100

200

300

Q3 2016 Q3 2017

Sales development Volumes Prices/Currencies PortfolioQ3 2017 vs. Q3 2016 9% 11% 0%

EBIT before special items Net income

618739

0

500

1,000

Q3 2016 Q3 2017

EBIT before special items, net income million €

+20%

Page 46: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 46

Review of “Other”

million € Q3 2017 Q3 2016

Sales 548 538

EBIT before special items (325) (233)

Thereof Costs of corporate research (93) (77)

Costs of corporate headquarters (57) (54)

Foreign currency results, hedging and other measurement effects (116) (101)

Other businesses 13 15

Special items (5) (23)

EBIT (330) (256)

Page 47: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 47

Cash flow development Q1 – Q3 2017

million € Q1 – Q3 2017 Q1 – Q3 2016

Cash provided by operating activities 7,597 5,840

Thereof Changes in net working capital 94 (393)

Miscellaneous items (190) (172)

Cash used in investing activities (3,413) (2,776)

Thereof Payments made for tangible / intangible assets (2,606) (2,915)

Acquisitions / divestitures (44) 212

Cash used in financing activities (1,546) (1,898)

Thereof Changes in financial liabilities 1,276 837

Dividends (2,841) (2,753)

Free cash flow 4,991 2,925

Page 48: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 48

Balance sheet remains strong

Total assets decreased slightly to €76.0 billion

Provisions for pension obligations decreased by €1.4 billion to €6.8 billion

Net debt at €12.3 billion(December 31, 2016: €14.4 billion)

Equity ratio at 43.9% (December 31, 2016: 42.6%)

Balance sheet September 30, 2017 vs. December 31, 2016billion €

Liquid funds*

Accountsreceivable

Long-termassets

Inventories

Other assets

Otherliabilities

Financialdebt

Equity

27.6 26.5

16.3 16.2

32.6 33.3

Dec 31, 2016 Sep 30, 20171.9 3.93.0 3.911.0

10.6

10.0 10.0

50.6 47.6

Dec 31, 2016 Sep 30, 2017

76.5 76.0

* Including marketable securities

76.5 76.0

Page 49: Daiwa Investment Conference, Hong Kong - BASF · BASF Capital Market Story, October 2017 24 Investments in organic growth Investments of ~€3.9 billion planned for 2017 Performance

BASF Capital Market Story, October 2017 49BASF Investor Day 2015 – Keynote speech 49