Markus Zeise Profitable growth Director Investor … Capital Market Story May 2010 1 ... Dupont, Rohm&Haas (until 2008), PPG, Lyondell (until 2007), Nova Chemicals (Q1-Q3 2009) …

1BASF Capital Market Story May 2010

Profitable growth loves ups and downsProfitable growth loves ups and downsMarkus Zeise Director Investor Relations

Chemical ROC Stars Conference, New York, May 18, 2010


Strong start to 2010

2.0

1.0

1.51.21.1

0.0

0.5

1.0

1.5

2.0

Q1 Q2 Q3 Q4 Q1

Sales developmentPeriod Volumes Prices Portfolio Currencies

Q1’10 vs. Q4’09 9% 4% 0% 4%

Q1’10 vs. Q1’09 24% (2)% 6% (2)%

EBIT before special items (billion €)

20102009

15.5

12.2 13.212.812.5

0

4

8

12

16

Q1 Q2 Q3 Q4 Q1

Sales (billion €)

20102009


Q1 2010 business development

Q1 2010 performance vs. Q4 2009

Strong upward momentum in industrial segments Restocking supported demand Sustainable improvement in Performance ProductsStrong results in Agricultural Solutions

Sales €15.5 billion (+17%)EBITDA €2.6 billion (+18%) EBITDA margin 17.0%EBIT before special items €2.0 billion (+32%)Net income €1.0 billion (+126%)Earnings per share €1.12 (+124%)Adjusted EPS €1.32 (+25%)

First quarter 2010 highlights


BASF Group EBITDA margin excl. non-deductible oil taxesEuropean chemical sector average**U.S. chemical sector average***

* before special items** Akzo Nobel, Bayer, Ciba, Clariant, DSM, Evonic Industries (Q1-Q3 2009),

ICI, Rhodia, Solvay, LBI (since 2008)*** Dow, Dupont, Rohm&Haas (until 2008), PPG, Lyondell (until 2007), Nova

Chemicals (Q1-Q3 2009) Source: Morgan Stanley, company reports

Outperforming sector margins due to well-balanced portfolio

EBITDA margins*

7.5%

10.0%

12.5%

15.0%

17.5%

20.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009


* According to German GAAP** Cash provided by operating activities less capex (in 2005 before CTA)

Record cash flow in 2009

Cash Flow (billion €)

Cash provided by operating activitiesFree cash flow**

6.3

3.8

-1

0

1

2

3

4

5

6

7

2001* 2002* 2003* 2004 2005** 2006 2007 2008 2009


Average annual dividend increase of 12.8%(2001-2009)

Dividend yield above 3% in any given year since 2001

Attractive dividend yield of 3.9% in 2009**

3.9%

Attractive shareholder returns

Key factsDividend per share (€)

1.70

0.70 0.700.85

1.00

1.50

1.95 1.95

0.65

0,0

0,5

1,0

1,5

2,0

2001 2002 2003 2004 2005 2006 2007 2008 2009

0.5

1.0

1.5

2.0

3.1% 3.9% 3.1%

* Dividend yield based on share price at year-end

3.2% 3.1% 4.1% 3.8% 7.0%Yield*

1 | Focus on operational excellence

2 | Well positioned for profitable growth

3 | Outlook

7

Earnings

Earnings

Costs


Vertical and horizontal integration of production plants, energy and waste flows, logistics and site infrastructure

Know-how Verbund

Energy Verbund and combined heat and power plants lead to- Savings of ∼2.6 million tons

oil equivalent p.a.- Reduction of CO2 -emissions

of ~6 million tons p.a.

8

Unique ‘Verbund’ concept Cost savings of >€500 million p.a. in Ludwigshafen alone

BASF site Ludwigshafen, Germany Verbund Concept


Transfer pricing based on market prices

Optimizing profitability along entire value chain through- make or buy decisions- captive use and/or- sales to 3rd parties

‘Verbund simulator’: customized BASF-IT solution supports decision making process

CM = Contribution Margin

Propylene Acrylic acid

Make or buy

Super- absorbents

DownstreamVerbundactivitiese.g. - solvents - plasticizers- polyurethanes

Sales to 3rd parties

Sales to 3rd parties

DownstreamVerbundactivitiese.g. - acrylic monomers- dispersions- surfactants

CM CM

CM

Verbund ensures margin optimization along entire value chain

Key factsExample: Operating division ‘Petrochemicals’

Naphtha

Propane


Since 2001 sales and earnings increased significantly

Fixed costs in 2009 only slightly above 2001 despite major acquisitions- Ciba- Engelhard- Degussa Construction Chem.

Ciba integration, restructuring measures and NEXT will drive fixed costs down

Fixed costs represent around 30% of total costs

Fixed costs indexed EBITDA indexedSales indexed

Tenacious fixed cost management

Key factsBASF Group development 2001-2009

TrendIndex

50

100

150

200

250

2001 2003 2005 2007 2009


Capex will remain below depreciation

Maintenance cost fully expensed∼€1.2 billion in 2009

5-year capex plan:∼€11.8 billion (2010-2014)

Capex 2010E:∼€2.5 billion

Biggest projects:- Nord Stream on-shore pipelines- Expansion of Verbund site

Nanjing, China- New oleum plant in Antwerp,

Belgium

Key facts

Ongoing capex discipline

Depreciation and amortization Capex; maintenance not includedCapex: payments related to property, plant and equipment and intangible asset

0

1

2

3

2001 2002 2003 2004 2005 2006 2007 2008 2009

D&A / Capex (billion €)

3.7

2.5


> 500 individual projects to simplify processes, structures and production sites in all regions

Project timeline:2008-2011

Annual earnings contribution of €300 million in 2009

Targeted earnings contribution by 2012:≥€1 billion

Completed restructuring programs New efficiency program NEXT

Sustainable improvement of cost base

New EXcellence Targets (NEXT)Annual earnings contribution (million €)

20120

500

1,000

1,500

2,000

2,500

2003 2005 2007 2009


130

350

Integration costs2009: €785 million2010: ~€200 million2011/2012: ~€100 million

Net reduction of positions- Target: 3,800- End of Q1 2010: >1,300

Ciba non-production sites- To be consolidated: 58- Exited: 43

23 Ciba production sites under strategic review- Planned exit: 14*(Thereof already implemented: 4)

Ciba integration: synergies exceed targets Structural integration of Ciba completed

Expected synergy run rate (million €) Impact of Ciba acquisition

450 >450Synergy Target

Synergy run rate Effective in 2009

* On two sites exit of production activities only

0

100

200

300

400

500

2009 2010 2011/2012 SteadyState



3 | Outlook

14

Earnings

Earnings

Costs


Leading positions in growth industries

and emerging markets

Ongoing portfolio

optimization

Excellent innovation platform

We strive to outperform global chemical production growth by at least 2 percentage points p.a.

Well positioned for profitable growth

Translate megatrends into business growthContinue expansion in Asia

Continue with active portfolio managementDrive portfolio closer to customers

Product and system innovation as growth driversStrong pipeline of innovations

Growth target:


Leading positions in growth industries and

emerging markets

16


These four end-use industries represent ~50% of BASF’s chemical activities

Growth in end-use industries Benefiting from broad business portfolio

* in % of BASF Group Sales 2008** 2009-12 p.a.

Automotive

Construction

Electrical/Electronics

Food

Inorganics

Petrochemicals

Intermediates

Performance Polymers

Polyurethanes

Dispersions& Pigments

Care Chemicals

Paper Chemicals

Performance Chemicals

Catalysts (incl. precious metals)

Construction Chemicals

5.0 - 7.5%

2.5 - 5.0%

5.0 - 7.5%

2.5 - 5.0%

Coatings

10-15%

10-15%

~5%

~5%

Communication

Health & Nutrition

Housing

Mobility

Sales by industry* Bubble size: net sales to 3rd parties Global growth**


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 Cellasto®

for enhanced passenger comfort and safety

UV-cured coatingsHigh environmental compatibility, rapidcoating process

Astacin® leather finishesenvironment-friendly

Catalystsfor purification of exhaust fumes and reduction of NOx and CO

Growth driversShare of plastics in medium-sized cars expected to grow from today’s ~15% to over 25% in 2020Global automotive market expected to grow by 5.0-7.5% p.a. mid-term

Value for our customers and the environment

Substitution of metal parts by lighter plastic leads to weight reduction of approx. 50%Every 100 kg weight reduction cuts- fuel consumption by 0.35 l/100 km- CO2 -emissions by 10.3 g/km

Keropur®

Fuel additives help reducefuel consumption

Innovative system supplier to the automotive industry

Business case plastics BASF’s plastics sales* to automotive industry €1.4 billion

Benefiting from trend to more efficient cars Sustainable value for our customers and the environment

*by first customer industry in 2009

19BASF Capital Market Story May 2010* Value generated through the plant biotech trait across the respective value chain; 1 Partner CTC; 2 Partner: KWS

Future nutrition of growing world population Plant biotechnology pipeline taps into huge market potential

Development Discovery Stage I Stage II Stage III Stage IV Market Value*Identifying

genes & proof of concept

up to 6 years

Look for proof of

concept II up to 4 years

Early product development

up to 3 years

Advanced product

development up to 2 years

Pre-Launch

up to 3 years

Superior agricultural productivity

Better and healthier nutrition/feed

Plants as renewable raw materials

Improved amino acid

High oil

Healthier fatty acids (Omega-3&6)

Amylopectin

Herbicide tolerance

Fungal resistance

Yield & stress (corn, soybean, cotton, canola)

< $100 million

$100-200 million

> $2 billion

< $100 million

$300–500 million

Yield & stress(sugarcane1, sugar-beet2)


Clear growth targets for Asia PacificBASF expects to double sales to €20 billion in Asia Pacific by 2020

Earn a premium on our cost of capital

Strengthen market focus through industry and customer target groups

Develop and market innovations in Asia for Asia

Invest in Asia to generate 70% of sales in Asia Pacific through local production

- Investments of €2 billion planned for 2010-2014- Expansion of Nanjing Verbund site to produce downstream

products for the Chinese market (2009-2011) underway- Investment in new world-scale MDI plant in Chongqing,

China considered (start-up 2014)

Improve operational excellence in Asia Pacific- At least €130 million p.a. earnings contribution by 2012

Growth in emerging markets Outgrow Asian chemical market by 2 percentage points p.a.

Verbund site Nanjing, China


Ongoing portfolio optimization


BASFcore

businesses

Powerful partnerships

Major acquisitions Major divestitures

Pharmaceuticals

Fertilizers

Refineries

Fibers

Printing systems

Polyolefins (Basell)

Polystyrene North America

Agchem generics

Premix

Crop protection

Superabsorbents

Oil & Gas (Revus)

Engineering Plastics

Electronic Chemicals

Custom synthesis

Catalysts (Engelhard)

Construction Chem.

Water-based resins

Pigments (Ciba)

Plastic additives (Ciba)

16 billion Euro(Sales)

10 billion Euro**(Sales)

GazpromMonsantoPetronasShellSinopecTotal

* to be divested; ** not including Styrenics business

Selected transactions 1999 to date

Styrenics*

Pro-active portfolio management


0

1

2

3

4

5

6

7

2001** 2003** 2005 2007*** 2009

BASF Group more profitable in 2009 than in last trough (2001-2003) as a result of- rigorous cost savings- active portfolio management

Oil & Gas and Agro businesses provide a substantial earnings basis – their combined earnings in 2009 were higher than total BASF Group earnings in previous trough year 2001

Key facts

Strength through diversity: Active portfolio management pays off

Chemical activities Agricultural Solutions

EBIT* before special items by activity (billion €)

Oil & Gas

* Without ‘Other’ and without non-compensable foreign taxes on oil production** Based on German GAAP*** As of 2007 according to new segment structure (excl. Styrenics and corporate costs)


Excellent innovation platform


Targeted annual sales from product innovation*:2010: up to €6 billion2015: €6-8 billion

Five Growth Clusters:- Nanotechnology- Energy Management- Plant Biotechnology- Industrial Biotechnology- Raw Material Change

Budget for Growth Clusters (2009-2011):up to €1 billion

R&D spending in 2010 planned on similar level

24%

1%

Innovation will spur further growth

Key facts

* New or improved products or new applications, max. 5 years on market, including Growth Clusters

Total R&D expenditures 2009 (billion €)

Oil & Gas1% Corporate Research

23%

Agricultural Solutions

25%Performance Products20%

Functional Solutions12%

Chemicals9%Plastics9% €1.4

billionOther

1%


2.50

2.75

3.00

3.25

3.50

3.75

4.00

5,000 7,000 9,000 11,000 13,000

Com

petit

ive

impa

ct

BASF BayerDuPontDow

Competitive impact* versus size of patent portfolio for chemical peers,development 1998 - 2008

* Defined as market coverage x citationsPortfolio size

Acquisition of Ciba

BASF’s patents grew in number and impact Acquisition of Ciba further enhanced BASF’s patent position

Company Structure as of end 2009; BASF without Ciba

Source: Otto-Beisheim School of Management (WHU), Germany; study Prof. Ernst


Construction Chemicals Crop ProtectionPolyurethanes

Elastopave®

Intelligent bonding of stones for road and lane constructionBecause of open-pored bon-ding of stones and PU a drainage pavement system is generated

X-SEED®

Unique concrete hardening acceleratorMakes concrete application more efficient, reduces CO2emissions related to concrete production and lowers energy consumption

Peak sales: ∼€30 millionPeak sales: ∼€15 million Peak sales: >€200 million

Kixor®

Innovative, highly effective herbicide against broadleaf weeds in key cropsWith both contact and residual activity

Strong innovation pipeline Exciting new product launches



3 | Outlook

28

Earnings

Earnings

Costs


Back to growth in all regions in 2010

Outlook for Gross Domestic Product 2010 (%)*

United States

Western Europe

Japan

Asia excl. Japan

South America

World

Outlook for Gross Domestic Product (%)*

Recovery of the global economy; moderate rise in global GDP (+2.7%)

Recovery likely to be slow and uneven

Growth in global industrial production (+4.9%)

Growth of global chemical production without pharma (+5.3%)

Average oil price (Brent) of $75/bbl

Average exchange rate of $1.40 per €

Basic assumptions for 2010

2.6

1.1 1.3

7.0

3.72.7

8.0

6.0

4.0

2.0

0

10.0

* Real change compared with previous year; Chemical production excl. pharma


Improved outlook for our key customer industries

Key customer industries of BASF

Decline in 2009 * (World)

Growth forecast 2010 * (World)

Industries total -8.3% +4.9%

Construction -5.2% +1.8%

Automotive (per-unit-base) -11.6% +7.3%

Electronics -9.8% +3.9%

Information & Communications -7.3% +7.3%

Textiles -10.0% +3.0%

Paper -6.2% +3.2%

Nutrition +0.2% +2.8%

Agriculture +0.2% +1.9%

* Real change compared with previous year


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 for an EBITDA margin of 18% until 2012.

We expect sales to outpace global chemical production growth.

We expect to increase sales and to significantly improve EBIT before special items.

We expect to again earn a premium on our cost of capital.

Outlook 2010

Outlook

Medium-term targets

Dividend policy


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.

Forward-looking statements



* 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


Coatings

Dispersions & Pigments


Polyurethanes

Crop Protection

Exploration & Production and Natural Gas Trading

Care Chemicals

Catalysts

Paper Chemicals

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


Million € Q1 2010 Q4 2009 Δ% Q1 2009 Δ%Sales

changes due to - volumes - prices - portfolio - currencies

15,454 13,174 +17%

+9% +4%

0% +4%

12,219 +27%

+24% (2)% +6% (2)%

EBITDA 2,627 2,232 +18% 1,587 +66%

EBIT before special items 1,954 1,479 +32% 985 +98%

Special items (114) (473) . (57) .

EBIT 1,840 1,006 +83% 928 +98%

Net income 1,029 455 +126% 375 +174%

EPS (€) 1,12 0,50 +124% 0,41 +173%

Adjusted EPS (€) 1,32 1.06 +25% 0.55 +140%

Financial highlights Strong earnings improvement in Q1


Chemicals Strong volume growth and margin expansion

Intermediates583+17%

Inorganics282

+7%

Petrochemicals1,723+24%

€2,588 +20%

258

364315

84

461

0

100

200

300

400

500

Q1 Q2 Q3 Q4 Q1


Q1’10 vs. Q4’09 7% 8% 0% 5%

Q1’10 vs. Q1’09 38% 33% 0% (5)%

Q1’10 segment sales (million €) vs. Q4’09 EBIT before special items (million €)

20102009


Plastics Higher volumes offset increased raw material costs

Polyurethanes1,220+8%


977+20%

€2,197 +13%

279

(29)

251216

138

-100

0

100

200

300

Q1 Q2 Q3 Q4 Q1


Q1’10 vs. Q4’09 5% 4% 0% 4%

Q1’10 vs. Q1’09 44% 9% 0% (3)%


20102009


419

123

209

286

80

0

100

200

300

400

500

Q1 Q2 Q3 Q4 Q1


Q1’10 vs. Q4’09 7% 1% 0% 3%

Q1’10 vs. Q1’09 27% (2)% 47% (1)%

Dispersions & Pigments

723+15%

Performance Chemicals725

+7%

Paper Chemicals420+6%

€2,871 +11%

Care Chemicals1,003+13%


20102009

Performance Products Sustainably higher earnings supported by synergies


Catalysts1,064+26%

Construction Chemicals432

(9)%

Coatings594

+0%

€2,090 +10%

48

106 101

(46)

111

-100

-50

0

50

100

150

Q1 Q2 Q3 Q4 Q1


Q1’10 vs. Q4’09 1% 4% 0% 5%

Q1’10 vs. Q1’09 22% 12% 0% (1)%


20102009

Functional Solutions Demand from automotive industry improved


Agricultural Solutions Continuous strong performance

321344

0

100

200

300

400

Q1 Q1


Q1’10 vs. Q4’09 57% 0% 0% 6%

Q1’10 vs. Q1’09 2% (1)% 0% (1)%


20102009

0

200

400

600

800

1,000

1,200

Q1 Q120102009

1,1451,145


213

273

0

200

400

600

800

Q1 Q1

Exploration & Production1,025(1)%

Natural Gas Trading

2,200(23)%

€3,225 (17)%

Sales developmentPeriod Volumes Prices/Currencies Portfolio

Q1’10 vs. Q4’09 16% 8% 0%

Q1’10 vs. Q1’09 17% (34)% 0%

254 145

EBIT bsi Natural Gas TradingEBIT bsi Exploration & Production

Net income

Q1’10 segment sales (million €) vs. Q1’09 EBIT before special items / Net income (million €)

20102009

471484

725629

Oil & Gas Low gas prices impacted sales and earnings


Review of “Other”

Million € Q1 2010 Q1 2009

Sales 1,338 916

thereof Styrenics 792 517

EBIT before special items (266) (216)thereof Group Corporate Costs

Corporate Research Currency results, hedges and other valuation effects Styrenics, fertilizers, other businesses

(51) (82)

(136)

101

(54) (81)

(193)

109

Special items (34) (52)

EBIT (300) (268)


Regional results Q1 2010 vs. Q1 2009 Strong earnings improvement in all regions

Million € Sales* Q1 2010

Sales* Q1 2009

Δ% EBIT** Q1 2010

EBIT** Q1 2009

Δ%

Europe 8,957 8,007 +12% 1,251 799 +57%thereof Germany 6,466 6,065 +7% 918 428 +114%

North America 3,167 2,151 +47% 329 70 +370%

Asia Pacific 2,556 1,481 +73% 310 52 +496%

South America, Africa, Middle East 774 580 +33% 64 64 0%

* based on location of company ** before special items

•


Cost of capital

Million € 2009 2008

EBIT 3,677 6,463

Less EBIT of “Others” (627) (930)

Less non-compensable foreign income taxes for oil production 870 1,851

Less cost of capital* 3,660 3,921

EBIT after cost of capital (226) 1,621

* In 2009 9% (in 2008: 10%) on the average operating assets of the segments


Region Site / plant closures Site / business divestituresEurope Inorganics Frankfurt, Germany Coatings Verbania, Italy

Intermediates Feluy, BelgiumPerformance Polymers Rudolstadt, Germany

Tarragona, Spain Ludwigshafen, Germany

Construction Chemicals Swinton, UK Altlandsberg, Germany

Styrenics Ludwigshafen, Germany

North America Coatings Decatur, USA Belvidere, USA

Catalysts East Newark, USA

Asia Pacific Intermediates Ulsan, Korea Catalysts Nanjing, ChinaConstruction Chemicals Ansung, KoreaCoatings Ako, JapanStyrenics Ulsan, Korea

South America Africa Middle East

Styrenics Sao José Dos Campos, Brazil

Pro-active asset optimization Close or divest ~20 plants and sites in 2009/10


Plastic Additives - Thomastown, Australia - Goa, India

Ciba site consolidation is progressing

Paper Coatings Chemicals - Guturribay, Spain - Kaipiainen, Finland - Ribécourt, FrancePaper Sizing Agents - Gron/Sens, France - Tolosa, SpainPaper Starch - Lapua, Finland - Mietoinen, Finland - Kokemäki, Finland

Paper Chemicals

R&D

Paper Chemicals Paper Starch - Berwick, USAPaper Functional Chemicals - Estrada do Colegio, Brazil

Division

Americas &Asia Pacific

Europe

Region Planned site/plant closures/divestitures: 14

Pilot plant - Klybeck, Switzerland*


Performance Chemicals Formulation Water Treatment - Saint-Denis, France*

* Exit of production activities only


Our new image campaign “We create chemistry”


Documents

Markus Zeise Profitable growth Director Investor … Capital Market Story May 2010 1 ... Dupont, Rohm&Haas (until 2008), PPG, Lyondell (until 2007), Nova Chemicals (Q1-Q3 2009) …