Analyst Conference Call Q2 2019

Ludwigshafen, July 25, 2019

Cautionary note regarding
forward-looking statements

This presentation contains forward-looking statements. These statements are based on current
estimates and projections of the Board of Executive Directors and currently available information.
Forward-looking statements are not guarantees of the future developments and results outlined
therein. These are dependent on a number of factors; they involve various risks and uncertainties; and
they are based on assumptions that may not prove to be accurate. Such risk factors include those
discussed in Opportunities and Risks on pages 123 to 130 of the BASF Report 2018. BASF does not
assume any obligation to update the forward-looking statements contained in this presentation above
and beyond the legal requirements.

2 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Key drivers for the earnings decline in H1 2019

 Uncertainty even higher than expected; low visibility

 Slowdown in global industrial production stronger than
expected (+1.5% in H1 2019)
 Slowdown in global automotive production
(-6% in H1 2019)
Macro  Slowdown in European and German chemical production
(Europe -0.5% and Germany -3.5% in H1 2019)
 Severe weather conditions in North America
(affecting agricultural sector)
 No ease of trade conflicts

 Lower margins in isocyanates and cracker  Margin development in isocyanates and cracker
Micro products products even weaker than expected
 Turnarounds of steam crackers in Port Arthur and
Antwerp

Expected Unexpected

3 July 25, 2019 | BASF Analyst Conference Call Q2 2019

BASF Group H1 2019 – Sales and EBIT before special items
Sales bridge H1 2019 vs. H1 2018 EBIT before special items by segment H1 2019 vs. H1 2018
million € million €

4,253
4,500
31,483 681 31,335
1,248
30,000
-1,408
-669 3,500 2,777

25,000 Agricultural Solutions 23% 

2,500
Nutrition & Care (6%)

20,000
Surface Technologies 4% 
1,500
Industrial Solutions 14% 
15,000
Materials (58%)


500
Chemicals (54%)

10,000
H1 2018 Volumes Prices Portfolio Currencies H1 2019 Other (122%)

-500
H1 2018 H1 2019
Sales development
H1 2019 vs. H1 2018 (4%) (2%)  4%  2%
 

4 July 25, 2019 | BASF Analyst Conference Call Q2 2019

BASF Group H1 2019 – Volume development(4%)
Volume development
%
Δ Volume H1 2019
Δ Volume H1 2019 rest of the portfolio

0%
(4%) Adverse
Lower weather conditions
demand from in North America
Cracker automotive
turnarounds

Volume development by region*

South America,
%
Africa, Middle East

2%

(2%)

(6%) Asia Pacific

(7%)

Europe
North America

5 July 25, 2019 | BASF Analyst Conference Call Q2 2019 * Location of customer
Historically low North American cracker margins
with global repercussions*
US$/mt North America North East Asia Western Europe
1,600 1,600 1,600

1,400 1,400 1,400

1,200 1,200 1,200

1,000 1,000 1,000

800 800 800

600 600 600

400 400 400

200 200 200

0 0 0
01/2015
04/2015
07/2015
10/2015
01/2016
04/2016
07/2016
10/2016
01/2017
04/2017
07/2017
10/2017
01/2018
04/2018
07/2018
10/2018
01/2019
04/2019
07/2019

01/2015
04/2015
07/2015
10/2015
01/2016
04/2016
07/2016
10/2016
01/2017
04/2017
07/2017
10/2017
01/2018
04/2018
07/2018
10/2018
01/2019
04/2019
07/2019
01/2015
04/2015
07/2015
10/2015
01/2016
04/2016
07/2016
10/2016
01/2017
04/2017
07/2017
10/2017
01/2018
04/2018
07/2018
10/2018
01/2019
04/2019
07/2019
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Spot cash margin, weighted average feed Spot cash margin, Naphtha feed Production cash margin, Naphtha feed
Ethane, purity, spot FOB Mont Belvieu Naphtha, full range, spot average C&F Japan Naphtha, full range, spot average, CIF NWE ARA
Ethylene, spot, pipeline delivered USGC Ethylene, spot average, CFR NE Asia
Ethylene, contract incl. market typical discounts
(estimated), delivered WE

6 July 25, 2019 | BASF Analyst Conference Call Q2 2019 * All data according to IHS Markit
Isocyanate margins on subdued level below historical averages*

US$/mt North America Asia Western Europe

6,500 6,500 6,500

5,500 5,500 5,500

4,500 4,500 4,500

3,500 3,500 3,500

2,500 2,500 2,500

1,500 1,500 1,500

500 500 500

01.2017
03.2017
05.2017
07.2017
09.2017
11.2017
01.2018
03.2018
05.2018
07.2018
09.2018
11.2018
01.2019
03.2019
05.2019

01.2017
03.2017
05.2017
07.2017
09.2017
11.2017
01.2018
03.2018
05.2018
07.2018
09.2018
11.2018
01.2019
03.2019
05.2019
01.2017
03.2017
05.2017
07.2017
09.2017
11.2017
01.2018
03.2018
05.2018
07.2018
09.2018
11.2018
01.2019
03.2019
05.2019
2017 2018 2019 2017 2018 2019 2017 2018 2019

TDI margin above toluene TDI margin above toluene TDI margin above toluene

Polymeric MDI margin above benzene Polymeric MDI margin above benzene Polymeric MDI margin above benzene

TDI, bulk, domestic, midpoint TDI, CFR South East Asia, spot, midpoint TDI, Western Europe, contract, midpoint
Polymeric MDI, Western Europe, contract, midpoint
Polymeric MDI, drummed, domestic, midpoint Polymeric MDI, CFR China, spot, midpoint

7 July 25, 2019 | BASF Analyst Conference Call Q2 2019 * All data according to ICIS, Reed Business Information
Strategy announced in November 2018 is being implemented
with speed and determination
 People: Transform organization to be more agile and
customer focused

 Portfolio: Sharpen portfolio and strengthen the Verbund

 Digitalization: Leverage automation/digitalization across

the company and develop new business models

 Operations: Improve competitiveness through technological

leadership and operational excellence

 Sustainability: Drive long-term competitiveness via carbon

management and circular economy approaches

 Innovation: Innovate with impact for our customers

by closely connecting research and development

8 July 25, 2019 | BASF Analyst Conference Call Q2 2019

BASF to reshape organization
– Leaner structures and simplified processes
A lean Corporate Center with <1,000 FTE supports
the Board of Executive Directors in steering BASF Group
(Corporate Development; Finance; Legal, Compliance, Tax & Insurance;
EHS; HR; Communications; Investor Relations; Corporate Audit)

Service Units ensure a competitive,

demand-driven and effective service delivery
(Global Engineering Services, Global Digital Services, Global Business
Services, Global Procurement)
Our
customers Our Operating Divisions & Technology
Platforms are empowered to drive growth and profitability
The Regions & Countries focus on supporting
and enabling the businesses locally

9 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Excellence program 2019-2021

Key facts
 Operational excellence with focus on production, logistics and planning
 In digitalization and automation, smart supply chains and smart
manufacturing are major contributors
€2 billion
annual EBITDA
 Organizational development targets leaner structures
in the areas of services, R&D and headquarters (~€300 million) contribution from
 Significant parts of functional services embedded in businesses, 2021 onward
closer to our customers
 Leaner structures and simplification of process landscape
 Estimated one-time costs of €0.8 billion over the 3-year period. This
includes special charges in a mid-triple-digit million-euro-range

10 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Active portfolio management

Divestitures and other strategic options Acquisitions

Water and paper chemicals BASF to acquire Solvayʼs integrated polyamide business
 Sales 2018: ~€0.8 billion  On January 18, 2019, the EU Commission granted conditional
 Closing took place on January 31, 2019 clearance for BASF to acquire Solvay’s polyamide business
 Closing expected in H2 2019 after all remaining conditions have
Oil & Gas been fulfilled, incl. the sale of the remedy package to a third party
 Sales 2018: ~€4.1 billion
 Merger took place on May 1, 2019
 IPO planned for H2 2020, subject to market conditions
“Best-owner”:
Construction Chemicals  Asset and
 Sales 2018: ~€2.5 billion technology fit
 High interest from various parties; indicative bids received
 Signing expected by the end of 2019  Benefit from
or contribution
Pigments to Verbund
 Sales 2018: ~€1 billion
 Divestment process started
 Closing expected by the end of 2020 at the latest

11 July 25, 2019 | BASF Analyst Conference Call Q2 2019

BASF Group Q2 2019 – Sales decreased slightly;
EBIT before special items considerably below prior-year quarter
Financial figures Q2 2019 Q2 2018 Change
€ € %
Sales 15,158 million 15,783 million (4)
EBITDA before special items 1,975 million 2,709 million (27)
EBITDA 1,626 million 2,645 million (39)
EBIT before special items 1,045 million 1,972 million (47)
EBIT 548 million 1,906 million (71)
Net income 6,460 million 1,480 million 336
Reported EPS 7.03 1.61 337
Adjusted EPS 0.82 1.77 (54)
Cash flows from operating activities 1,946 million 2,224 million (13)

Sales development Volumes Prices Portfolio Currencies

Q2 2019 vs. Q2 2018 (6%) (2%)  2%  2%
 

12 July 25, 2019 | BASF Analyst Conference Call Q2 2019

BASF Group Q2 2019 – Sales and EBIT before special items
Sales bridge Q2 2019 vs. Q2 2018 EBIT before special items by segment Q2 2019 vs. Q2 2018
million € million €

1,972
15,783
272 1,900
321 15,158
15,000
-869
-349 Agricultural Solutions (56%) 

1,045
1,200 Nutrition & Care 3% 

Surface Technologies 7% 
12,500
Industrial Solutions 14% 

500
Materials (56%)


Chemicals (74%)

10,000
Q2 2018 Volumes Prices Portfolio Currencies Q2 2019 Other (37%)

-200
Q2 2018 Q2 2019
Sales development
Q2 2019 vs. Q2 2018 (6%) (2%)  2%  2%
 

13 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Cash flow development H1 2019

H1 2019 H1 2018
million € million €
Cash flows from operating activities 2,319 3,455
Thereof Changes in net working capital (904) (1,221)
Miscellaneous items (6,752) (351)
Cash flows from investing activities 452 (1,735)
Thereof Payments made for tangible / intangible assets (1,722) (1,449)
Acquisitions / divestitures 2,292 64
Cash flows from financing activities (3,227) (518)
Thereof Changes in financial and similar liabilities (215) 2,526
Dividends (3,013) (3,044)
Free cash flow 597 2,006

14 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Balance sheet remains strong

Balance sheet June 30, 2019 vs. December 31, 2018

billion €  Total assets increased by ~€2.2 billion,
mainly due to the new IFRS 16 standard
88.8 86.6 88.8 86.6
on leases and higher accounts
receivables related to the acquired
agricultural solutions businesses

40.8 36.1  Noncurrent assets increased by

43.3 Equity
Noncurrent
€16.0 billion, mainly due to the
59.3
assets recognition of our participating interests
in Wintershall Dea and Solenis
Financial
21.0
20.8 debt  Net debt increased by €675 million to
12.2
€18.9 billion
Liabilities of
10.7 5.8
Inventories 12.4 disposal group  Equity ratio: 46% (June 30, 2019)
Accounts 3.2
receivable 11.2 Disposal 27.0 23.9 Other
14.6 liabilities
Other assets 3.8 group*
Liquid funds 2.1 2.6
June 30, 2019 Dec. 31, 2018 June 30, 2019 Dec. 31, 2018

15 July 25, 2019 | BASF Analyst Conference Call Q2 2019 * For the oil & gas business and the paper and water chemicals business
Underlying assumptions for H2 and full year 2019

 Continued low growth in global gross domestic product

(H2 2019 vs. H1 2019: around +1%; FY 2019 vs. FY 2018: around +2.5%)
 Continued low growth in global industrial production
(H2 2019 vs. H1 2019: around +0.5%; FY 2019 vs. FY 2018: around +1.5%)
 Further slowdown in global automotive production
(H2 2019 vs. H1 2019: around -2%; FY 2019 vs. FY 2018: around -4.5%)
Macro
 Global chemical production negatively impacted by further decline in automotive
(H2 2019 vs. H1 2019: around -1.5%; FY 2019 vs. FY 2018: around +1.5%)
 No ease of trade conflicts, but also no further escalation
 Normal weather conditions in the southern hemisphere, particularly in South America

 Low margins in isocyanates and cracker products to persist

Micro
 Turnaround of steam cracker in Ludwigshafen

Expected

16 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Outlook 2019 for BASF Group

Outlook 2019* Since July 8, 2019 Previous

Sales Slight decline Slight increase
EBIT before special items Considerable decline of up to 30% Slight increase
ROCE Considerable decline Slight decline

Further underlying assumptions for 2019

 Exchange rate: US$1.15 per euro (unchanged)
 Oil price (Brent): US$70 per barrel (unchanged)

* For sales, “slight” represents a change of 1–5%, while “considerable” applies to changes of 6% and higher. For earnings, “slight” means a change of 1–10%,
while “considerable” is used for changes of 11% and higher. At a cost of capital percentage of 10% for 2018 and 2019, we define a change in ROCE
of 0.1 to 1.0 percentage points as “slight,” a change of more than 1.0 percentage points as “considerable.”
17 July 25, 2019 | BASF Analyst Conference Call Q2 2019
Chemicals
Sales declined on lower volumes and prices; earnings decreased due to lower volumes and margins

Sales Q2 2019 vs. Q2 2018 EBIT before special items

million € million €
800
Petrochemicals
1,463
(26%)
Intermediates 457
717 398
(11%)
€2,180 400
306
(22%) 257

119

0
Q2 Q3 Q4 Q1 Q2
2018 2019

Sales development Volumes Prices Portfolio Currencies

Q2 2019 vs. Q2 2018 
(17%) 
(6%) 0%  1%

19 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Materials
Sales down on lower prices and volumes; earnings decreased mainly due to lower isocyanate margins

Sales Q2 2019 vs. Q2 2018 EBIT before special items

million € Performance million €
Materials
1,562 800 765
(8%) 664
Monomers 600
1,399
(22%) €2,961 400 323 334
(16%)
200 155

0
Q2 Q3 Q4 Q1 Q2
2018 2019

Sales development Volumes Prices Portfolio Currencies

Q2 2019 vs. Q2 2018 (5%) (12%) 0%  1%
 

20 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Industrial Solutions
Sales decreased primarily due to portfolio effects; earnings up on higher margins and lower fixed costs

Sales Q2 2019 vs. Q2 2018 EBIT before special items

million € million €
400
Dispersions & Pigments
1,336
Performance (4%) 264
243
Chemicals 213
805 €2,141 200 164
(15%)
(9%)
61

0
Q2 Q3 Q4 Q1 Q2
2018 2019

Sales development Volumes Prices Portfolio Currencies

Q2 2019 vs. Q2 2018 (2%) 0% (8%)  1%
 

21 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Surface Technologies
Sales increased mainly due to higher prices; earnings up on lower fixed costs and higher margins

Sales Q2 2019 vs. Q2 2018 EBIT before special items

million € million €
Construction Chemicals* 300
Catalysts
680
2,222
+2% 211
+18% 190
200 178
159
Coatings €3,841 142
939
(2%) +9% 100

0
Q2 Q3 Q4 Q1 Q2
2018 2019
* Until signing of a transaction agreement, Construction Chemicals will be reported under Surface Technologies

Sales development Volumes Prices Portfolio Currencies

Q2 2019 vs. Q2 2018 
(4%)  11% 0%  2%

22 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Nutrition & Care
Sales increased primarily due to higher product availability; earnings mainly up on lower fixed costs

Sales Q2 2019 vs. Q2 2018 EBIT before special items

million € million €
400
Nutrition & Health Care Chemicals
491 1,004 300
+26% (4%) 214 222 220
189
200
€1,495
+4% 100 79

0
Q2 Q3 Q4 Q1 Q2
2018 2019

Sales development Volumes Prices Portfolio Currencies

Q2 2019 vs. Q2 2018  5% (3%) 0%  2%


23 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Agricultural Solutions
Earnings down due to seasonality of the acquired businesses and lower volumes in crop protection
Sales H1 2019 vs. H1 2018 EBIT before special items Q2 2019 vs. Q2 2018 and
million € H1 2019 vs. H1 2018
million €
Fungicides
Seeds & Traits 1,000
1,237 861
1,037 (7%) 800 701
- Seed Treatment
€4,445 256 600
+38%
Herbicides +38% 400
1,532 Insecticides 278
+8% 383
200 121
+34%
0
Q2 2019 Q2 2018 H1 2019 H1 2018

Sales development Volumes Prices Portfolio Currencies

Q2 2019 vs. Q2 2018 
(12%)  3%  28%  1%

H1 2019 vs. H1 2018


(9%)  3%  43%  1%

24 July 25, 2019 | BASF Analyst Conference Call Q2 2019

Review of “Other”

Financial figures Q2 2019 Q2 2018

million € million €
Sales 744 689

EBIT before special items (182) (133)

Thereof Costs of corporate research (100) (90)

Costs of corporate headquarters (66) (66)

Foreign currency results, hedging and other
measurement effects (13) 32

Other businesses 39 17

Special items (191) (16)

EBIT (373) (149)

25 July 25, 2019 | BASF Analyst Conference Call Q2 2019