BASF reported solid financial results for the second quarter of 2012. Sales increased 6% to €19.5 billion compared to the second quarter of 2011. EBIT before special items rose 11% to €2.5 billion. However, net income declined 15% to €1.2 billion due to higher taxes. Business performed well in Europe and Agricultural Solutions. Demand weakened in China and the chemicals businesses. BASF confirmed its outlook for 2012 of exceeding 2011 sales and EBIT before special items despite a weaker global economic outlook.
1. BASF shows solid development
Second Quarter 2012
Financial highlights
July 26, 2012
BASF 2nd Quarter 2012 Analyst Conference Call 1
2. Forward-looking statements
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.
BASF 2nd Quarter 2012 Analyst Conference Call 2
3. BASF shows solid development
Second quarter 2012 highlights
Business performance Q2’12 vs. Q2’11
Sales €19.5 billion +6%
EBITDA €3.1 billion +4%
EBIT before special items €2.5 billion +11%
EBIT €2.2 billion +1%
Net income €1.2 billion (15%)
EPS €1.34 (16%)
Adjusted EPS €1.60 (9%)
New second quarter record for sales and earnings in Agricultural Solutions
Oil & Gas outperformed mainly due to the resumption of oil production in Libya
Demand in chemical businesses did not match the strong previous year level
Weaker than expected demand in China
Overall sales and earnings in H1 2012 came in above H1 2011
BASF 2nd Quarter 2012 Analyst Conference Call 3
4. Important milestones in Q2 2012
Investments in Strengthening of Active portfolio
emerging markets technology platform management
BASF to invest in new BASF acquired Novolyte BASF acquired Mazzaferro‘s
chemical production site in Technologies polyamide polymer business
Dahej, India Novolyte’s energy storage Production of PA 6 and
Investment of €150 million activities focused on compounds in Brazil
Production facilities for developing, producing and Further strengthening position in
polyurethanes, care chemicals, marketing performance engineering plastics and PA
polymer dispersions for electrolyte formulations polymers in South America
coatings and paper BASF now becomes global Polymerization plant with a
Production startup: 2014 supplier of lithium-ion battery capacity of 20,000 metric tons
electrolyte formulations
BASF 2nd Quarter 2012 Analyst Conference Call 4
5. Outlook 2012 confirmed
Outlook 2012
For the FY 2012, BASF aims to exceed the record levels of sales and EBIT before special
items achieved in 2011
BASF will strive again to earn a high premium on cost of capital
Chemical businesses:
• Given the weak demand outlook, we expect volumes to be flat in H2 2012 vs. H1 2012
• In 2012, EBIT before special items is expected to come in below the level of 2011
Revised assumptions 2012
GDP: +2.3% (before: 2.7%)
Industrial production: +3.4% (before: 4.1%)
Chemical production: +3.5% (before: 4.1%)
US$/Euro: 1.30 (unchanged)
Oil price (US$/bbl): 110 (unchanged)
BASF 2nd Quarter 2012 Analyst Conference Call 5
6. Chemicals
Earnings impacted by weaker margins throughout the portfolio
Q2’12 segment sales (million €) vs. Q2’11 EBIT before special items (million €)
Intermediates Inorganics 426
+21% 800
763 674
+10% 621
600
467
€3,348 381
436
400
-1%
200
Petrochemicals
2,159 0
(8%) Q2 Q3 Q4 Q1 Q2
2011 2012
Sales development
Period Volumes Prices Portfolio Currencies
Q2’12 vs. Q2’11
(14%)
(2%) 10% 5%
BASF 2nd Quarter 2012 Analyst Conference Call 6
7. Plastics
Sequential earnings improvement in challenging environment
Q2’12 segment sales (million €) vs. Q2’11 EBIT before special items (million €)
Polyurethanes 383
400
1,580
317
+5%
256
€2,878 219
200
+2% 110
Performance
Polymers 0
1,298 Q2 Q3 Q4 Q1 Q2
(2%) 2011 2012
Sales development
Period Volumes Prices Portfolio Currencies
Q2’12 vs. Q2’11
(5%) 0% 1% 6%
BASF 2nd Quarter 2012 Analyst Conference Call 7
8. Performance Products
Higher prices could not fully compensate weak demand vs.Q2 ‘11
Q2’12 segment sales (million €) vs. Q2’11 EBIT before special items (million €)
Care Chemicals Performance
600
1,237 Chemicals 513
(9%) 944 440 452 446
+4% 400
Nutrition €4,122
& Health +1% 220
509 200
+6% Dispersions
Paper Chemicals & Pigments 0
427 1,005 Q2 Q3 Q4 Q1 Q2
+2% +7% 2011 2012
Sales development
Period Volumes Prices Portfolio Currencies
Q2’12 vs. Q2’11
(5%) 1% 0% 5%
BASF 2nd Quarter 2012 Analyst Conference Call 8
9. Functional Solutions
Demand from the automotive industry remained strong
Q2’12 segment sales (million €) vs. Q2’11 EBIT before special items (million €)
Catalysts Construction
200
1,620 Chemicals 167 162
+8% 621 148
150 134
+8%
€2,974 88
100
+8%
50
Coatings 0
733 Q2 Q3 Q4 Q1 Q2
+6% 2011 2012
Sales development
Period Volumes Prices Portfolio Currencies
Q2’12 vs. Q2’11 0%
(1%) 3% 6%
BASF 2nd Quarter 2012 Analyst Conference Call 9
10. Agricultural Solutions
Record Q2 sales and earnings driven by strong demand
Q2’12 segment sales (million €) vs. Q2’11 EBIT before special items (million €)
1,467
1,205
414
1.000 400
331
500 200
0 0
Q2 Q2 Q2 Q2
2011 2012 2011 2012
Sales development
Period Volumes Prices Portfolio Currencies
Q2’12 vs. Q2’11 14% 2% 0% 6%
BASF 2nd Quarter 2012 Analyst Conference Call 10
11. Oil & Gas
Strong growth supported by oil production in Libya
Q2’12 segment sales (million €) vs. Q2’11 EBIT bSI/Net income (million €)
Exploration &
1,000
Production 880
1,251 800
+122%
€3,585 600 793
+46% 400 332
Natural Gas 200 269
Trading 257 213
63 87
2,334 0
Q2/2011 Q2/2012
+23%
Exploration & Production
Non compensable oil taxes
(Q2 2011: €0 million; Q2 2012: €445 million)
Natural Gas Trading Net income
Sales development
Period Volumes Prices/Currencies Portfolio
Q2’12 vs. Q2’11 31% 14% 1%
BASF 2nd Quarter 2012 Analyst Conference Call 11
12. Review of “Other”
Million € Q2 2012 Q2 2011
Sales 1,107 1,714
thereof Styrenics - 811
EBIT before special items (76) (163)
thereof Corporate research (95) (87)
Group corporate costs (61) (59)
Currency results, hedges and other 52 (118)
valuation effects
Styrenics, fertilizers, other businesses 13 76
Special items (116) 27
EBIT (192) (136)
BASF 2nd Quarter 2012 Analyst Conference Call 12
13. Strong operating cash flow at €3.5 billion
Million € H1 2012 H1 2011
Cash provided by operating activities 3,460 3,038
thereof Changes in net working capital (651) (1,178)
Cash provided by investing activities (1,084) 81
thereof Payments related to tangible / intangible assets (1,669) (1,265)
thereof Acquisitions / divestitures 430 32
Cash used in financing activities (2,198) (2,764)
thereof Changes in financial liabilities 269 (486)
Dividends (2,462) (2,278)
First half 2012
Increase in net working capital by €0.7 billion
Free cash flow amounted to €1.8 billion
Dividend payments to BASF SE shareholders €2.3 billion
Net debt decreased by €0.7 billion to €11.5 billion in comparison to H1 2011
BASF 2nd Quarter 2012 Analyst Conference Call 13
15. Regional sales and earnings Q2 2012
Sales and EBIT before special items by location of company; in million EUR; changes in comparison to Q2 2011
Europe
North America Sales 11.146 +9%
-5% Sales 3.767
57% EBIT bSI 1.877 +33%
-28% EBIT bSI 330 Sales
19% BASF Group
19.481
South America, 5%
Africa, Middle East
18%
+1% Sales 979
Asia Pacific
-36% EBIT bSI 54 Sales 3.589 +9%
EBIT bSI 229 -20%
BASF 2nd Quarter 2012 Analyst Conference Call