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1BASF SRI Story January 2011

BASF – A sustainable investmentJanuary 2011


BASF – The Chemical Company

Investment Highlights

No 1 chemical company worldwide

Competitive advantage based on unique Verbundconcept with approx. 380 production sites

Superior growth opportunities through strong positioning in growth markets, acquisitions in core businesses and excellent innovation platform

Sustainable shareholder returns

For 2010, we expect sales of ~€63 billion and EBIT before special items of more than €8 billion


BASF today – a well-balanced portfolio Total sales 2009: €50.7 billion

* Styrenics reported under ‘Other’

Percentage of sales 2009

Chemicals

15%

Plastics*

14%

Functional Solutions14%

Performance Products18%

Agricultural Solutions7%

Oil & Gas

22%

Construction Chemicals

Inorganics

Petrochemicals

Intermediates

Performance Chemicals

Coatings

Dispersions & Pigments

Performance Polymers

Polyurethanes

Crop Protection

Exploration & Production and Natural Gas Trading

Care Chemicals

Catalysts

Paper Chemicals


"A business cannot be successful in the long term if it does not act responsibly toward the environment and society.

That is why sustainability is an integral part to our strategy."

Dr. Jürgen Hambrecht Chairman of the Board of Executive Directors

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Sustainability: a board-level responsibility

SustainabilityCenter

SustainabilityCenter

Executive Board BASF SEExecutive Board BASF SE

Sustainability CouncilSustainability Council

Headed by Dr. Harald SchwagerHeaded by Dr. Harald Schwager

Central UnitsCentral Units Functional UnitsFunctional Units Operating UnitsOperating Units RegionsRegions


Long-term success through Sustainability

Three pillars of Sustainability

Create value

Economy

€$%+

Environment

Provide solutions

Social Responsibility

Generate trust

7BASF SRI Story January 2011 7

1 | Delivering sustainable returns

2 | Minimizing environmental impact

3 | Providing sustainable solutions for the future

4 | Taking responsibility for employees and society


Business dynamics remained strong in Q3

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q3’10 vs. Q2’10 (3)%* 0% 0% 0%

Q3’10 vs. Q3’09 5% 10% 0% 8%

1-9 ’10 vs. 1-9 ’09 14% 6% 2% 4%

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

1.21.5

2.02.2 2.2

0.0

0.5

1.0

1.5

2.0

2.5

Q3 Q4 Q1 Q2 Q3

EBIT before special items (billion €)

20102009

12.8 13.215.5 16.2 15.8

0

4

8

12

16

20

Q3 Q4 Q1 Q2 Q3

Sales (billion €)

20102009


Cash provided by operating activitiesFree cash flow**

Strong cash flow generation

Cash Flow (billion €)

-1

0

1

2

3

4

5

6

7

2001* 2002* 2003* 2004 2005** 2006 2007 2008 2009 2010Q1-Q3

5.3

3.8

***

* According to German GAAP** Cash provided by operating activities less capex (in 2005 before CTA)*** 2009 adjusted for re-classification of settlement payments for currency

derivatives


BASF total return well above benchmark levels

Dividend increase of 12.8% p.a. (2001-2009)

Attractive dividend yield of 3.9% in 2009, based on share price at year-end

Dividend policy: Increase dividend each year, or at least maintain it at the previous year‘s level

Commitment to shareholder value

Delivering long-term value

Long-term performance Jan 2001 – December 2010 (average annual performance with dividends reinvested)

+13.9%

-2.7%

+0.4

+7.1%

-5 0 5 10 15

BASF

Euro Stoxx 50

DAX 30

MSCI World Chemicals

+0.7%


Outlook: record year 2010

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

We aim to grow sales on average by two percentage points per year above chemical market growth.

We strive to grow our earnings further year by year and to achieve an EBITDA margin of 18% until 2012.

We expect:

the good business development to continue in the fourth quarter of 2010

sales of ~€ 63 billion and EBIT before special items of more than € 8 billion in 2010

to earn a high premium on our cost of capital

to increase the dividend

Targets 2010

Medium-term targets

Dividend policy






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Reduction of emissions to air of

Greenhouse gases per metric ton of sales product - 25%

Air pollutants - 70%

Reduction of emissions to water of

Organic substances - 80%

Nitrogen - 80%

Heavy metals - 60%

Clear targets to reduce emissions

Global Goals 2020 (baseline 2002)


Energy efficiency:Highly efficient power plants using low-emission gasEnergy-efficient processesLogistics optimization

Installation of proprietary nitrous oxide decomposition catalysts

Use of waste flows as raw material for other production processes

Important measures

Solid track record – GHG emissions

Kyoto

+86%

-27%

-61%

Production volumes

GHG emissions per product volume

Absolute GHG emissions

* Index = 100

1990* 2009


2005 2006 2007 2008 20092002

baseline

2020 Goal -80%

Organic substances (in %)

2005 2006 2007 2008 2009

Heavy metals (in %)

2020 Goal -60%

Water protection concepts to protect natural water reservoirs

Technical improvements in wastewater treatment plants, e.g. in Nanjing, China

Improvements in methods such as neutralization, precipitation or flocculation

Structural changes

Most important measures

2002 baseline

-51.7-64.2 -65.9

-77.5 -79.7

-26.2-42.6 -44.3

-55.9 -61.4

Emissions to water

Reduction in emissions to water


Improve specific energy efficiencyof production processes + 25%

BASF‘s Verbund concept:

Integration of production plants, energy and waste flows, logistics and site infrastructure

In 2009, BASF generated 45% of its global steam requirements from waste heat

Primary energy savings for BASF Group: 2.6 million toe/a equals almost USD 1 billion

Clear target to improve energy efficiency

Global Goals 2020 (baseline 2002)


Trough intelligent combination of production processes, the additional need for energy at our Antwerp site is minimal

Total heat consuming chemical production processes in 2009: 1,000 ton/h steam

Total heat producing chemical production processes in 2009: 775 ton/h steam

Additional energy supply by own energy power station:225 ton/h steam

Example: Energy Verbund in Antwerp

Energy efficiency through the Verbund (Steam in average ton/h)

-1000 -500 0 500 1000

Heat consuming chemical processes

Own energy power station

Heat generating chemical processes

Steam consumption Steam production


Reduction in transportation accidents - 70%(baseline 2003)

Reduction in lost time injury rate per million working hours(baseline 2002) - 80%

Review of all products that are sold worldwide by BASF in quantities of more than 1 metric ton per year, based on a risk assessment >99%

Clear targets for safety and product stewardship

Global Goals 2020


We ensure that our products pose no danger to people or the environment when they are used responsibly and in the manner intended.

Support of the ICCA Global Product Strategy (GPS), aiming to harmonize global safety standards

First stage of REACH* registration now underway

Estimated costs of €50 million annually until 2018

Commitment beyond compliance

Product stewardship

*REACH = Registration, Evaluation, Authorization and Restriction of Chemicals


xxImplementation of consistent standards and guidelines for transportation and storage of chemical products

Continuous monitoring of transportation partners with regards to safety and quality in all regions

Joint safety initiatives with our service providers

Most important measures

2003 baseline

2005 2006 2007 2008 2009

-57%

Solid track record – Safety

Transportation accidents per 10,000 shipments(Goal 2020: -70%)

0.56

0.24

2020 Goal


Study conducted by GTZ (German Technical Cooperation) shows that Nanjing site exceeds international standards in the area of health and safety and creates and secures local jobs

Systematic safety training ensures a high safety standard of our own employees and our contractors

Asian Verbund sites being served by state-of-the-art utilities, such as gas-fired power plants

In 2009, BASF published first sustainability report in China with disclosure of emission data

BASF Verbund sites in Asia

Setting same standards worldwide






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Providing solutions for the challenges of the future

Construction & Housing

60% of the world population will live in cities by 2030

Which materials are needed to make energy consumption more efficient?

Energy & Climate

8 billion people will live on earth by 2030

How can we ensure food and water supply for everyone?

40% more primary energy will be needed in 2030

How can we contribute to climate protection and energy supply?

Health & NutritionMobility & Communication

2 billion cars will drive on earth by 2030

How can we reduce emissions and fuel consumption ?


Solutions for more efficient carsMegatrend Mobility

Ultramid®

for light-weight motor parts

Terblend N® and Terluran®

for high-quality plastic components

Neopolen®

for absorption of collision energy

Lumogen® Black and Sicopal ® Blackfor heat reduction of dashboards

UV cured coatings high environmental compatibility, rapid coating processes

Astacin® leather finishesenvironment-friendly

Catalystsfor purification of exhaust fumes and reduction of air pollutants

BASF’s sales 2009* to the automotive industry: €5 billion

Sales of plastics to the automotive industry:approx. €1.4 billion

Growth driversShare of plastics in medium-sized cars expected to grow from today’s ~15% to over 25% in 2020 driven by stricter regulatory requirements

Global automotive market expected to grow by 5.0-7.5% p.a. mid-term

Keropur®

Fuel additives help reduce fuel consumption

Business case plastics

*by first customer industry in 2009

Innovative system supplier to the automotive industry


Solutions for more efficient cars Examples

Up to 50% weight reductionEvery 100 kg weight reduction cuts fuel consumption by 0.4 l/100 km and CO2 emissions by 1 kg/100 km

Light-weight plastics Eco-efficient coatings

Savings of primary energy: 15-20% in the production processReduction of VOC and CO2emissions: 15-20% in the production process

Capable of destroying over 90% of hydrocarbons, carbon monoxide and nitrogen oxides produced by gasoline engines

Three-way-catalysts (TWC)

Value for the environment: Value for the environment: Value for the environment:


BASF’s sales 2009* to the construction industry: €3.8 billion

Sales of insulating foams to the construction industry: approx. €1 billion in 2009

Growth drivers

Market potential of innovative refurbishing of more than €400 billion in Germany alone

Market growth for insulating foams expected to outpace construction industry growth

Solutions for more efficient housingMegatrend Construction & Housing

COLO-FAST®

for solar panel frames

Micronal® PCM latent-heat storage system

Neopor® and Rheocell®

for heat insulation

Styrodur® C for insulation ofwalls and floors

Lumogen®, Paliogen®

and Sicopal®black pigments forcool surfaces

Elastopor® H for insulation ofceilings, roofs and walls

HECK® MultiThermsystems for insulation of walls (inside and outside)

X-SEED®

concrete hardener

Business case insulation

*by first customer industry in 2009

Walltite®

Sprayfoam for insulation of walls

Innovative system supplier to the construction industry


Solutions for more efficient housingExamples

Savings of up to 50% of heating oil equivalentsSavings through product sold in 2008 for old buildings: 208 million t CO2equivalents

Insulation materials Pigments for solar heat management

Solar heat buildup of dark construction elements cut by 50%Reduced need for cooling and air conditioning

5% of global CO2emissions attributable to cement productionSavings through super-plasticizers sold in 2008: 22 million t CO2 equivalents

Concrete admixtures

Value for the environment: Value for the environment:Value for the environment:


Solutions for future nutrition Megatrend Health & Nutrition

Agricultural production to double in next 20-30 years, food for 8 billion people needed in 2030

Use of grain for fuel growing by ~ 20% per year

Estimated market value in 2025: $50 billion

BASF pipeline value €1.9 billion*

Value for the environment and society:

Improvement of global food supply in terms of quality and quantity

Conservation tillage, reduction of soil erosion

Improvement of land-use efficiency and better use of available water

Business case Plant Biotechnology

*Expected gross trait sales before partner share in 2020


Solutions for sustainable use of water Megatrend Health & Nutrition

Business case waterGlobal water consumption will almost double by 2025 Major challenges: water scarcity, water quality

Filter membrane made of Ultrason®

The filter membrane provides ultra filtration and removes viruses as well as bacteria from dirty surface water It is portable and able to purify at least 18,000 liters of water reliably without the need for batteries

Trilon® MA dishwashing tab based on Trilon® M produces 80% less wastewater load compared with phosphate-based formulations Trilon® M has a market potential of €300 million

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Climate protection products already account for 10% of BASF’s sales

Results: BASF products save three times more GHG emissions than are released in the production and disposal of all products

BASF wants to maintain or even improve this factor of 3:1 in the long term

90 million t/a

thereof 27 million t/a from BASF

Savings of CO2 equivalents

Emissions of CO2 equivalents

BASF’s corporate carbon footprint

Emissions for raw materials, production and disposal of all BASF products

3 : 1

Total savings of CO2 emissions through use of BASF products

over the lifecycle

Automobile 14Housing 248

Industry 13

Additional Products 6

Agriculture 6

Savings: 287 million t/a

Solutions for climate protection Megatrend Energy & Climate






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Increase the proportion of non-German senior executives worldwide

Increase the proportion of femalesenior executives

Proportion of senior executives with international experience >70%

Mandatory leadership feedback for senior executives worldwide 80%

Global Goals 2020

Competition for the best employees


More than 86,000 employees participated in training programs worldwide in 2009

2,401 apprentices in over 50 occupations in 2009

Competitive advantages through diversity: Diversity + Inclusion initiative to recruit and support employees with different cultural backgrounds, experiences and ways of thinking

Addressing demographic change with the Generations@Work program

Balancing career and family: 488 BASF SE employees on parental leave in 2009 (thereof 5.3% fathers)

Our employees – key to our success

Taking responsibility for our employees


Supporting education and science: Kids’ Labs in 15 countries, Knowledge Factory reaching 120,000 children, “Action on Education” initiative

International donations of more than €48 million in 2009

Combining business sense with social needs

Grameen Social Business: giving people in Bangladesh access to better healthcare and provide them with entrepreneurial opportunities

Samruddhi business model: coaching soybean farmers to help them select the best agricultural practices

Creating value through social commitment

Taking responsibility for our communities


BASF’s engagement for sustainability is highly recognized

Leader in Materials sector

Member from the start

Member 2010

ASPI Eurozone

Constituent of ECPI Ethical Index €uro

Leader in Chemicals sector


Delivering long-term sustainable returns

Operating to minimize environmental impact and maximize energy efficiency

Providing solutions for global challenges in housing, mobility, energy and nutrition

Adding to the opportunities and well-being of our employees and the communities in which we operate

BASF – a sustainable investment

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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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