speech and charts of basf analyst conference q1 2013

BASF 1st Quarter 2013 Analyst Conference Call April 26, 2013, 8:30 a.m. (CEST), Mannheim

Analyst Conference Call Script

Hans-Ulrich Engel Manfredo Rübens The spoken word applies.

Solid 1st quarter of 2013 for BASF

First Quarter 2013Financial highlightsApril 26, 2013

BASF 1st Quarter 2013 Analyst Conference Call April 26, 2013

Cautionary note regarding forward-looking statements

This presentation may contain 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. Forward-looking statements may include, 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 and assumptions with respect to future events and financial performance. Actual financial performance 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. 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.

2

BASF with a solid start to 2013

Business performance Q1’13 Q1’12 vs. Q1’12 Sales €19.7 billion €18.8 billion +5% EBITDA €2.9 billion €3.3 billion (14%) EBIT before special items €2.2 billion €2.0 billion +10% EBIT €2.2 billion €2.6 billion (17%) Net income €1.4 billion €1.7 billion (15%) Reported EPS €1.57 €1.85 (15%) Adjusted EPS €1.67 €1.54 +8% Operating cash flow €2.0 billion €1.5 billion +33%

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q1’13 vs. Q1’12 5% 1% 0% (1%)

3BASF Q1 2013 Analyst Conference April 26, 2013


Hans-Ulrich Engel Ladies and gentlemen, good morning and thank you for joining us.

[Chart 3: BASF with solid start to 2013] BASF started into the year with a solid first quarter despite a

rather moderate global economic development.

Please let me remind you that the basis of comparison with prior

year are the restated numbers we published end of March,

reflecting the IFRS and IAS changes as well as our new segment

structure.

In Q1, 2013 we increased sales by 5 percent to 19.7 billion euros.

This growth was mainly attributable to the excellent development

of our Agricultural Solutions segment and higher volumes in Oil &

Gas. Our chemical activities saw volumes and prices flat

reflecting the overall challenging market environment. In

particular, growth in China following Chinese New Year has come

in below expectations.

We were able to increase EBIT before special items by 10

percent to 2.2 billion euros.

Special items amounted to minus 45 million euros. In the prior

year we reported positive special items of 588 million euros due to

a disposal gain of 645 million euros for the sale of our fertilizer

activities. As a consequence, EBIT for Q1 of this year came in 17

percent lower.

EBITDA declined versus prior year quarter by 450 million euros to

2.9 billion. Last year’s EBITDA included the above mentioned

disposal gain.


For the same reason, net income came in 15 percent lower at

1.4 billion euros.

Net of this effect adjusted earnings per share increased to 1.67

euros in Q1 2013 after 1.54 euros in Q1 2012.

At 2.0 billion euros, operating cash flow was strong and

surpassed the level of the previous year’s first quarter by about

500 million euros.

Free cash flow reached 1.2 billion euros and was up by 400

million euros.


4

Integration activities on track

Key work packages (e.g. IT, finance, human resources) proceed smoothly

Integration expected to be completed by end of 2013

Integration of Becker Underwood and Pronova BioPharma

Water and oilfield & mining activities merged into new global business unit on April 1, 2013

Leather & textile chemicals: concentration of R&D activities at Shanghai Innovation Campus

Plastic additives and pigments businesses: downsizing of Swiss operations and R&D activities

Total net headcount reduction of about 500 positions by the end of 2015

Restructuring measures to strengthen competitiveness of Performance Products segment

BASF Q1 2013 Analyst Conference April 26, 2013

Portfolio optimization

Joint $500 million investment to build integrated aroma ingredient complex

110 new jobs will be created in Kuantan, Malaysia

Investment to meet globally growing demand in flavor and fragrance industry, especially in Asia

Expansion of the existing joint venture with PETRONAS in Kuantan, Malaysia


[Chart 4: Portfolio optimization] Since our last reporting day, we continued to further optimize our

portfolio:

We are on track with the integration of our two recent acquisitions

Becker Underwood and Pronova BioPharma. Key work packages

such as IT, finance and human resources are proceeding

smoothly and we will conclude the integrations latest by the end of

2013.

Furthermore, we plan to build together with PETRONAS an

integrated aroma ingredients complex in Kuantan, Malaysia as

announced yesterday. The investment will strengthen our

positioning in the citral value chain. The joint site expansion will be

in the magnitude of 500 million US dollars and will create 110 new

jobs. With this investment, we will meet the globally growing

demand in the flavor and fragrance industry, especially in Asia.

In addition, we are implementing measures to strengthen the

competitiveness of our Performance Products segment.

Increased standardization and the entry of new competitors have

changed the business environment for our Plastic Additives and

Pigments as well as for our Water, Leather and Textile Chemicals

activities. To adopt to these changed market conditions, BASF

aims to streamline processes, invest in new technologies and

adjust its portfolio and its organizational setup. The measures will

lead in total to a reduction of about 500 positions worldwide by the

end of 2015. Further measures are being analyzed.

Let me provide you with some more details: BASF aims to

improve the efficiency and profitability of the Plastic Additives and

Pigments & Resins business units in Europe. As announced on


Tuesday of this week, the restructuring will encompass several

Swiss production sites and the Research Center in Basel. It will

lead to a reduction of up to 350 positions in the Basel area by the

end of 2015.

As already announced in early April, we merged the Water and

the Oilfield & Mining activities into a new global business unit. We

also intend to divest the industrial water management business.

In the Leather & Textile Chemicals business, BASF will increase

its focus on the growing Asia Pacific region and high value adding

applications. The global R&D activities for leather and textile

chemicals will be concentrated in Shanghai, China.

These steps will strengthen the competitiveness and the

profitability of the Performance Products segment.

Let me now discuss the Q1 2013 business development by

segment. The restated numbers for the first quarter 2012 serve as

a basis for comparison.


5

ChemicalsEarnings increase due to higher margins

Intermediates700

+4%

Monomers 1,680

+4%

Petrochemicals2,016

(9%)

€4,396-3%

556 601 569445

650

0

200

400

600

800

Q1 Q2 Q3 Q4 Q1

EBIT before special items (million €)

20132012

Q1’13 segment sales (million €) vs. Q1’12

Sales development Period Volumes Prices Portfolio Currencies

Q1’13 vs. Q1’12 (2%) 1% (1%) (1%)



[Chart 5: Earnings increase due to higher margins]

In Chemicals, sales in the first quarter 2013 decreased mainly due

to lower volumes. Prices, in turn, increased slightly. Higher earnings

especially in Petrochemicals and Monomers led to a considerable

increase in EBIT before special items.

In Petrochemicals, sales declined, as volumes were lower due to

the planned shutdowns as well as maintenance work. Sales

prices increased slightly driven by ongoing high raw material

costs. Cracker margins improved in Europe and North America. In

Asia, they were unsatisfactory due to low demand. EBIT before

special items was up significantly.

Please note that there will be a scheduled turnaround of our

cracker in Antwerp in May/June 2013, which will impact EBIT

before special items by a double digit million euro amount in the

second quarter.

Sales in Monomers increased, due to higher volumes and prices

in the isocyanates business in all regions. EBIT before special

items was up significantly. Higher isocyanates and ammonia

margins compensated for declines in caprolactam and polyamide

margins.

Sales in Intermediates increased, benefitting from higher

demand. However, unfavorable supply/demand balances plus

high costs for several key raw materials led to margin pressure in

all regions. Nevertheless, EBIT before special items rose slightly

due to higher volumes.


6

Performance ProductsStable volumes but lower earnings

PerformanceChemicals

891

0%

Care Chemicals1,275

0%

€3,880-2%

Paper Chemicals362

(8%)


Nutrition & Health493

+4% Dispersions& Pigments

859

(7%)

452 442

344

183

379

0

200

400

600

Q1 Q2 Q3 Q4 Q1


20132012


Q1’13 vs. Q1’12 0% (2%) 1% (1%)



[Chart 6: Stable volumes but lower earnings]

Sales in Performance Products were slightly down. Volumes were

stable but prices softened and we faced negative currency effects.

The Pronova BioPharma business which we acquired in February

made a positive contribution to sales and earnings. EBIT before

special items declined due to weaker margins and increased R&D

expenses, but more than doubled compared to Q4, 2012.

In Dispersions & Pigments, sales came in below prior year

quarter. The European dispersions business suffered from the

cold weather period. We experienced softer demand for pigments

from key customers in all regions. Resins faced lower demand in

North America and price pressure in Asia. Higher raw material

costs could not be passed on to our customers resulting in a

significant drop in EBIT before special items.

In Care Chemicals, sales were stable. Volumes increased thanks

to higher demand for hygiene and personal care product

ingredients. Prices decreased primarily due to the pass-through of

lower raw material costs especially for lauric oils. Higher margins

for personal care ingredients lifted EBIT before special items.

In Nutrition & Health, sales increased because of the

consolidation of Pronova. Volumes and prices were affected by

weaker demand in animal and human nutrition. Pressure on

vitamin prices continued. EBIT before special items came in

significantly lower than a year ago. Special items of minus 10

million euros mainly resulted from the depreciation of the

inventory step-up for the acquired Pronova business.


In Paper Chemicals, lower demand for paper products led to a

significant sales decline in all regions. We experienced intense

competition, particularly in Asia and North America. EBIT before

special items decreased considerably due to lower volumes.

Sales in Performance Chemicals were stable. A slight increase

in volumes and prices was offset by negative currency effects.

Fuel and lubricants, plastic additives and water solutions

experienced a drop in sales. Oilfield and mining solutions

contributed positively to sales. EBIT before special items

decreased compared to the previous year’s first quarter.


7

Functional Materials & SolutionsIncreased demand in Performance Materials

Catalysts1,453

(1%)

ConstructionChemicals

458

(9%)

Coatings698

(2%)

€4,181+0%


257216 231 228 239

0

50

100

150

200

250

300

Q1 Q2 Q3 Q4 Q1


20132012


Q1’13 vs. Q1’12 2% 0% 0% (2%)


Performance Materials 1,572

+6%


[Chart 7: Increased demand in Performance Materials]

In Functional Materials & Solutions, sales were stable. Overall

volumes were up especially in the newly created Performance

Materials division. EBIT before special items declined mainly due to

lower earnings in our Catalysts division.

Sales in Catalysts were slightly down due to lower rare earth

prices which were passed through. While demand grew for

refinery and mobile emission catalysts, our business with

chemical catalysts developed weaker than in the prior year.

Demand growth for mobile emission catalysts in Asia and North

America overcompensated lower demand in Europe. However,

lower chemical catalyst sales as well as start-up and R&D costs

incurred by the battery materials business led to a decline of EBIT

before special items.

Sales in Construction Chemicals declined in this seasonally

weak quarter. Demand in Europe and North America decreased

significantly mainly due to the long cold weather period. We saw

continued structural weakness in Southern European markets.

Margins improved supported by selective price increases and

lower raw material costs. Thanks to our global restructuring

program, EBIT before special items came in slightly higher.

In Coatings, sales were slightly below the prior-year quarter.

OEM coatings demand grew strongly in the Americas and Asia. In

Europe it was stable due to our strong business relations with

premium car manufacturers. Demand for refinish coatings was up

in Asia and South America.


Sales for decorative paints were impacted by weaker demand and

negative currency effects in South America as well as the

divestiture of the Relius business in Europe. EBIT before special

items matched the level of the previous year.

Sales in the new Performance Materials division were up on

higher volumes for polyurethane systems, engineering plastics

and polyurethane solutions. Our business with premium

automotive manufacturers in Europe continued to perform well.

Volumes for Styropor and Neopor foams which are mainly sold to

the construction industry were weak due to the long cold weather

period in Europe. Nevertheless, we were able to slightly increase

EBIT before special items.


8

Agricultural SolutionsExcellent start into the year, record sales and earnings

Q1’13 segment sales (million €) vs. Q1’12 EBIT before special items (million €)

20132012

0

200

400

Q1 Q1

20132012

0

500

1.000

1.500

Q1 Q1

1,556 4984191,327


Q1’13 vs. Q1’12 13% 1% 4% (1%)



[Chart 8: Agricultural Solutions – Excellent start into the year]

Agricultural Solutions delivered an excellent quarter. Sales rose

strongly, driven by high demand for our products in the Northern

Hemisphere. Slightly higher prices were offset by currency effects.

The integration of the former Becker Underwood business led to a

positive portfolio effect. With an EBIT before special items of almost

500 million euros, Q1 2013 marked an all-time record. Special items

of minus six million euros were mainly related to the depreciation of

the inventory step-up for the former Becker Underwood business.

In Europe, we realized considerable sales growth due to high

demand for herbicides and fungicides. We saw strong sales in

France, Germany and Eastern Europe despite the delayed spring

season.

North America delivered an excellent performance, thanks to

strong herbicide demand and excellent sales of our Xemium

fungicide. Sales rose by more than thirty percent, excluding the

contribution of Becker Underwood.

Sales in Asia were up slightly. The strong growth of our fungicide

and herbicide business in India and China was largely offset by

negative currency effects.

South American sales decreased compared to the strong

previous year quarter, as some product lines saw high

competitive pressure towards the end of the season.

Following the very positive first quarter development we are

confident to once again increase sales and earnings in 2013. Our

optimism is backed by our innovative product portfolio, sound

demand growth and the performance of the acquired Becker

Underwood business.


9

Oil & GasSales growth due to higher production

Exploration &Production

789

+14%

Natural GasTrading 3,871

+21% €4,660+20%

Q1’13 segment sales (million €) vs. Q1’12 EBIT bSI/Net income (million €)

201415

162397

0

200

400

600

800

Q1/2012 Net Income Q1/2013 Net Income

Natural Gas Trading

Exploration & Production

Net income

640

Sales development Period Volumes Prices/Currencies Portfolio

Q1’13 vs. Q1’12 19% 1% 0%


439 468

630


[Chart 9: Oil & Gas – Increased oil and gas production]

Sales in Oil & Gas grew strongly mainly due to higher volumes in

Exploration & Production as well as in Natural Gas Trading. EBIT

before special items came in slightly lower at 630 million euros.

Please note that due to changes in IFRS 10 & 11 sales from our

onshore production in Libya are no longer reported in the top line.

Instead, the equity income is considered in the EBIT line since

January 1, 2013.

The significant sales increase in Exploration & Production was

driven by higher volumes due to the start-up of additional wells of

our Achimgaz joint venture late in 2012 and by higher offshore

production in Libya. The higher volumes more than compensated

for a lower oil price.

Overall, EBIT before special items in Exploration & Production

increased, as the additional more than offset the negative impact

from the lower oil price.

Sales in Natural Gas Trading grew strongly, mainly caused by

significantly higher volumes. This was driven by an increase in

demand due to the long cold weather period as well as higher

spot market sales in Europe. Margins, however, decreased due to

stronger competition. Earnings came in below the very high level

of the prior year’s first quarter.

Net income in Oil & Gas decreased slightly to 397 million euros.


10

Review of “Other”

Million € Q1’13 Q1’12Sales 1,065 976EBIT before special items (182) (314)thereof Corporate research

Group corporate costs Currency results, hedges and other valuation effectsStyrenics, fertilizers,other businesses

(97)(56)

56

59

(97)(58)

(206)

145

Special items (28) 578

EBIT (210) 264



[Chart 10: Review of ‘Other’]

Sales in ‘Other’ increased to 1.1 billion euros mainly due to higher

sales of the Ellba joint venture.

EBIT before special items came in at minus 182 million euros. The

improvement versus a year ago was also triggered by a large swing

in provisions for our long-term incentive program.

Special items of minus 28 million euros were mainly related to the

relocation of our plant biotechnology activities to the US and

subsequent organizational measures. In the prior year first quarter,

the 645 million euro disposal gain from the sale of our fertilizer

activities led to positive special items of 578 million euros.


11

Strong operating cash flow of €2 billionMillion € Q1’13 Q1’12Cash provided by operating activities 2,041 1,539thereof Changes in net working capital

Miscellaneous items(713)

615(310)(560)

Cash provided by investing activities (1,637) 176thereof Payments related to tangible / intangible assets (831) (697)

Acquisitions / divestitures (514) 683Cash used in financing activities 363 (44)thereof Changes in financial liabilities

Dividends 429(66)

33(72)

Net working capital increased by €713 million mainly as a result of higher trade accounts receivable Cash outflows in acquisitions/divestitures of -€514 million primarily as a result of the

Pronova BioPharma acquisition Free cash flow amounted to €1.2 billion, an increase of €368 million vs. Q1 2012

First quarter 2013



[Chart 11: Strong operating cash flow of €2.0 billion]

Cash provided by operating activities was 2.0 billion euros in the first

quarter of this year, an increase of about 500 million euros versus

Q1 2012.

The rise in net working capital led to an outflow of more than 700

million euros, mainly related to an increase of trade accounts

receivables. However, this was mostly offset by an increase of

liabilities in the magnitude of 600 million euros related to the

disposal group for the assets to be swapped with Gazprom. This is

reported under miscellaneous items.

Cash used in investing activities amounted to minus 1.6 billion

euros. This included cash outflows for acquisitions of 514 million

euros, primarily for Pronova BioPharma. In Q1 2012, the divestiture

of our fertilizer activities had led to a cash inflow of 680 million

euros. Capex amounted to 831 million euros compared to 700

million euros in the previous year’s quarter.

Free cash flow came in at 1.2 billion euros compared to 0.8 billion

euros in Q1 2012.


Balance sheet remains strongBalance sheet March 31, 2013 vs. Dec. 31, 2012 (billion €)

Liquid funds

Accountsreceivable

Long-termassets

27.7

13.3

23.2

35.3

9.5

1.6

Otherliabilities

Financialdebt

Stockholders’equity

Dec 312012

Dec 312012

March 312013

March 312013

62.7

25.6

12.8

22.3

Inventories

Other assets

9.6

3.4

62.7

Highlights March 31, 2013 Long term assets increased

mainly due to consolidation offormer Pronova BioPharmabusiness

Short term assets up due toincrease in accounts receivable

Increase in financial debt due toissuance of long-term bonds

Net debt: €10.9 billion

Equity ratio: 41%

36.5

11.1

2.4

9.9

3.7

66.7

3.1

66.7

Disposal group

2.5

Disposalgroup

12

3.3 2.0



[Chart 12: “Balance sheet remains strong”]

Let’s now have a look at our balance sheet.

Total assets compared to year-end 2012 rose by 4.0 billion euros

to 66.7 billion euros.

The Pronova BioPharma acquisition resulted in a net increase in

long-term assets by about 550 million euros. This was due to an

increase in both intangible assets as well as in property, plant and

equipment. Intangible assets contain goodwill of 158 million euros

related to Pronova BioPharma.

BASF’s inventories remained fairly constant. Accounts receivable,

however, were up by 1.5 billion euros reflecting in particular the

strong sales in Agricultural Solutions.

Our financial indebtedness increased from 12.8 billion euros at

year-end 2012 to 13.3 billion euros by the end of the first quarter

2013. Given favorable market conditions, we issued long-term

bonds with a total amount of 1.2 billion euros.

Net debt amounted to 10.9 billion euros, a decrease of roughly

300 million euros versus the end of 2012.

At 41 percent, our equity ratio remained on a strong level.


13

Excluding the effects of acquisitions and divestitures, we strive to increase our sales volumes in 2013

We aim to exceed the 2012 restated levels in sales and EBIT before special items

The expected increase in demand, together with our measures to improve operational excellence and raise efficiency, will contribute to this

We aim to earn a high premium on cost of capital once again in 2013

Outlook 2013

GDP: +2.4%

Industrial production: +3.4%

Chemical production: +3.6%

US$ / Euro: 1.30

Oil price (US$ / bbl): 110

Assumptions 2013


Outlook 2013 confirmed


[Chart 13: Outlook 2013 confirmed]

Let me now come to our outlook for 2013.

We keep our macroeconomic assumptions for the year unchanged.

However, uncertainties have increased during Q1 mainly because

growth in China was below expectations and new concerns in the

Euro area came up. On the positive side, US growth has been more

robust than expected and sentiment in Japan is currently improving.

We expect global chemical production to grow by about 3.6 percent.

However, in Q1 growth still has been below.

Today we confirm our outlook 2013 for BASF Group, based on the

restated figures we provided in March of this year:

We strive to increase volumes in 2013, excluding the effects of

acquisitions and divestitures.

We want to exceed the 2012 levels in sales and EBIT before

special items.

The expected increase in demand, together with our measures to

improve operational excellence and raise efficiency, will

contribute to this.

And last but not least, we aim to earn a high premium on our cost

of capital once again in 2013.

Thank you for your attention. We are now happy to take your

questions.

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