basf – we create chemistry · €70.4 billion sales, €6.7 billion ebit bsi in 2015 #1-3 in ~70%...
TRANSCRIPT
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2. Frankfurter Tischgespräch, 21. November 2016 1
Stefan KochInvestor Relations
Deutsche Schutzgemeinschaft für Wertpapierbesitz
2. FrankfurterTischgespräch
21. November 2016
BASF – We create chemistry
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2. Frankfurter Tischgespräch, 21. November 2016 2
150 years
Cautionary note regarding forward-looking statements
This presentation may contain forward-looking statements that are subject to risks anduncertainties, including those pertaining to the anticipated benefits to be realized from theproposals described herein. Forward-looking statements may include, in particular, statementsabout 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 financialperformance. Actual financial performance could differ materially from that projected in theforward-looking statements due to the inherent uncertainty of estimates, forecasts andprojections, and financial performance may be better or worse than anticipated. Given theseuncertainties, readers should not put undue reliance on any forward-looking statements. Theinformation contained in this presentation is subject to change without notice and BASF doesnot undertake any duty to update the forward-looking statements, and the estimates andassumptions associated with them, except to the extent required by applicable laws andregulations.
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32. Frankfurter Tischgespräch, 21. November 2016
Facts and Figures
BASF Strategy “We create chemistry”
Attractive Shareholder Return
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2. Frankfurter Tischgespräch, 21. November 2016 4
150 years
Chemistry as an enabler BASF has superior growth
opportunities: – sustainable innovations– investments– emerging markets
The #1 chemical company €70.4 billion sales, €6.7
billion EBIT bSI in 2015 #1-3 in ~70% of businesses,
present in almost all countries
6 integrated Verbund sites, production in 60 countries
A track record of strong sales and earnings growth
>3.5% dividend yield in every single year from 2006-2015
~€73.6 billion market capitalization on October 31, 2016
PerspectiveLudwigshafen,Germany
Antwerp,Belgium
Nanjing,China
Kuantan,MalaysiaGeismar,
LouisianaFreeport,Texas
Verbund site
Positioning
We create chemistry for a sustainable future
Performance
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150 years
Percentage of sales 2015*
* Not depicted here: ~4% of Group sales reported as ‘Other‘ ** Natural Gas Trading has been divested on Sep. 30, 2015.
BASF today – a well-balanced portfolioTotal sales 2015: €70.4 billion
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150 years
Global reduction in carbon emissions of 6 million metric tons p.a. and reduction of waste
Example Ludwigshafen site:avoidance of 7 million metric tons of freight p.a.= 280,000 fewer truckloads
Shared use of on-site facilities: fire department, security, waste water treatment and analytics
Verbund: Unique competitive advantage
* Savings include only tangible synergies. Additional (intangible) benefits and retained profits are not included.
Verbund generates >€1 billion p.a. global cost savings* and supports sustainability
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2. Frankfurter Tischgespräch, 21. November 2016 7
150 years
Q3 2016: Financial figures for BASF Group
Financial figures Q3 2016 Q3 2015 Change
Sales €14.0 billion €17.4 billion (20%)
EBITDA €2.4 billion €2.9 billion (15%)
EBIT before special items €1.5 billion €1.6 billion (5%)
EBIT €1.5 billion €1.9 billion (22%)
Net income €0.9 billion €1.2 billion (27%)
Reported EPS €0.97 €1.31 (26%)
Adjusted EPS €1.10 €1.07 +3%
Operating cash flow €2.5 billion €3.4 billion (25%)
Sales development Volumes Prices Portfolio Currencies
Q3 2016 vs. Q3 2015 4% (5%) (18%) (1%)
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2. Frankfurter Tischgespräch, 21. November 2016 8
150 years
0
1
2
3
4
5
2007 2008 2009** 2010 2011 2012 2013 2014 2015 Q1-Q32016
Free cash flow development
* Cash provided by operating activities less capex ** 2009 adjusted for re-classification of settlement payments for currency derivatives
Free cash flow*(in billion €)
3.2
2.5
3.2
3.9 3.7
2.6
3.2
1.7
3.6
2.9
Diagramm1
2007
2008
2009**
2010
2011
2012
2013
2014
2015
Q1-Q3 2016
Free Cash Flow
3.245
2.502
3.186
3.912
3.695
2.587
3.21
1.7
3.6
2.9
Sheet1
200720082009**201020112012201320142015Q1-Q3 2016
Free Cash Flow3.2452.5023.1863.9123.6952.5873.2101.73.62.9
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150 years
Outlook 2016 for BASF Group confirmed
Outlook 2016 Sales will be considerably below prior year due to the divestiture of the natural gas trading
and storage activities and the lower oil and gas prices. We expect EBIT before special items to be slightly below the previous year level due to
significantly lower earnings in Oil & Gas.
Assumptions 2016 GDP growth: +2.3% Growth in industrial production: +2.0% Growth in chemical production*: +3.4% Exchange rate: $1.10 per euro Oil price (Brent): $45 per barrel (previous forecast: $40 per barrel)
* Excluding pharma
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102. Frankfurter Tischgespräch, 21. November 2016
Facts and Figures
BASF Strategy “We create chemistry”
Attractive Shareholder Return
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150 years
Chemicals remains a growth industry
… more food needed by 2050
… more primary energy consumption by 2050
… of the world population will live in cities by 2050
Agriculture Health & nutrition
Energy & resources
Transportation Construction & housing
Consumer goods
… people by 2050
70% 50%~10bn
Electrical & electronics
30%
Chemistry as enabler for current and future needs
11
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2. Frankfurter Tischgespräch, 21. November 2016 12
150 years
Continuous portfolio development
Specialties and solutions
Differentiated commodities
target(in % of sales*)
~ 50% ~ 50%
Maintaining a balanced portfolio
Divestment of businesses, e.g., due to loss of differentiation
Divestment of businesses, e.g., due to
lower market attractiveness
Commoditization leads to restructuring
Growth fields
Innovation pipeline
Acquisitions
* Excluding Oil & Gas sales
Attractive markets Differentiation by process
technologies and integration
Attractive markets Differentiation by customer
proximity and innovations
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150 years
Functional crop care Personal care & food Omega-3 fatty acids Enzymes Battery materials Specialty plastics Selected assets in Oil & Gas Refinish coatings Surface treatment*
BASFcore business
Strong partnerships
Gazprom Monsanto Petronas Shell Sinopec Statoil Total Yara
Selected transactions 2010 − until today
Acquisitions
~ €5.2 billion salesin emerging and innovation-driven
businesses
Divestitures
Styrenics Fertilizers Selected assets in Oil & Gas Natural gas trading & storage Custom synthesis business Textile chemicals Polyolefin catalysts Industrial coatings*
~ €20 billion salesin businesses with
limited fit and differentiation
potential
Portfolio development towards more market-driven and innovative businesses
* Closing expected in 2016
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150 years
Provide a return on investment above the WACC
Are EPS accretive by year three at the latest
Financial acquisition criteria
Generate profitable growth above the industry average
Are innovation-driven
Offer a special value proposition to customers
Reduce earnings cyclicality
Strategic acquisition criteria
We want to acquire businesses which …
Acquisitions
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150 years
50
100
150
200
250
300
350
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Strong track record in operational excellence
EBITDA
Sales
* Excl. companies with major IFRS 10/11 restatements, i.e. BASF YPC Nanjing, Libya onshore, other Oil & Gas and Catalysts companies
BASF Group* 2001–2015(indexed; CAGR 2001–2015)
Fixed Costs
CAGREBITDA
9%
CAGRSales
6%
CAGRFixed Costs3%
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150 years
0
1,000
2,000
3,000
4,000
2015 2018
Annual earnings contribution(in million €)
Targeted annual earnings contribution of €1 billion from end of 2018 on
Optimization of processes and structures in all regions, e.g.– manufacturing– incremental capacities– productivity increase
Project timeline: 2016–2018
DrivE program
Operational excellenceDrivE with ~€1 billion earnings contribution
NEXT 2008-2011 DrivE 2016-2018
STEP 2012-2015
Diagramm1
2015201520152015
2018201820182018
Sheet1!#REF!
NEXT
STEP
NewPro
1000
1300
1000
1300
1000
Sheet1
201420152018
NEXT100010001000
STEP100013001300
NewPro1000
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150 years
Investments for organic growth
Performance Products16%
Oil & Gas24%
€19.5billion
FunctionalMaterials &Solutions12%
Capex budget 2016-2020
Other14%
Chemicals30%
Capex budget 2016-2020
Asia Pacific18%
€19.5billion
South America*9%
North America26%
Europe46%
AgriculturalSolutions4%
Other1%
by segment by region
* Including Africa and Middle East
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150 years
€1.95 billion R&D expendituresin 2015; to be maintained in 2016
~10,000 employees in R&D
~3,000 projects
Ranked No.1 in thePatent Asset Index™
~1,000 new patents in 2015
Research Verbund: Cooperations with more than 600 excellent partners from universities, start-upsand industry
Strong commitment to innovationInnovations for a sustainable future
Key facts
1.61.7
1.8 1.9 1.95
0,0
0,5
1,0
1,5
2,0
2011 2012 2013 2014 2015
R&D expenditures (billion €)
Chemicals11%
Performance Products20%
Functional Mat. & Sol.20%
Agricultural Solutions26%
Oil & Gas2%
Corporate Research21%
2.0
1.5
1.0
0.5
0
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150 years
Four-Way Conversion Catalyst removes particulates
Trilon M® high-performance phosphate alternative
SLENTITE® high-performance insulation material
ecovio® biodegradable polymer solution
Green Sense® resource efficient concrete production
Innovations for a sustainable future
Acronal® MB – from biomass to dispersions
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202. Frankfurter Tischgespräch, 21. November 2016
Business development
BASF Strategy “We create chemistry”
Attractive Shareholder Return
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150 years
0,0
0,5
1,0
1,5
2,0
2,5
3,0
2006 2009 2012 2015
2.90
We want to grow or at least maintain our dividend at the previous year’s level
Dividend of €2.90 per share, an increase of 3.6%
Dividend yield of 4.1% in 2015
Dividend yield above 3.5%in any given year since 2006
4.6%
Attractive shareholder return
Key facts 2015
Dividend per share (€)
0.50
1.00
1.50
2.00
* Dividend yield based on share price at year-end
4.1% 3.8% 7.0% 3.9% 3.7%Yield* 3.7%
2.50
3.5%
3.00
4.0% 4.1%
1.50
1.95 1.951.70
2.202.50 2.60 2.70
Dividend policy
2.80
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150 years
Delivering consistent, long-term value
Average annual performance with dividends reinvested
0 3 6 9 12 15
Euro Stoxx 50
DAX 30
MSCI World Chemicals
+5.5%
Last 5 yearsNovember 2011 – October 2016
+12.5%
+8.3%
+11.7%
+9.9%
Last 10 yearsNovember 2006 – October 2016
BASF
+6.9%
+0.4%
+13.1%
Diagramm1
MSCI World
DAX
Euro Stoxx
BASF
Ost
9.1%
12.0%
8.1%
6.9
5.5
0.4
13.1
Sheet1
MSCI WorldDAXEuro StoxxBASF
Ost6.95.500.413.1
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150 years
Profitability of BASF will grow faster than global chemical production
Sales growthSlightly faster than the global chemical production
EBITDA growthWell above global chemical production
Remain a strong cash providerContinuously generate high levels of free cash flow
Financial targets for the coming years
Deliver attractive returnsEarn a significant premium on cost of capital
Progressive dividend policy We want to grow or at least maintain our dividend
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2. Frankfurter Tischgespräch, 21. November 2016 24
150 years
Thank you for your attention
BASF Investor Relations
Telefon: 0621 60-48230
E-Mail: [email protected]
Website: www.basf.com/aktie
Twitter: @BASF_IR
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150 years
Foliennummer 1Cautionary note regarding �forward-looking statements Foliennummer 3We create chemistry �for a sustainable futureBASF today – a well-balanced portfolio�Total sales 2015: €70.4 billionVerbund: Unique competitive advantageQ3 2016: Financial figures for BASF GroupFree cash flow developmentFoliennummer 9Foliennummer 10Chemicals remains a growth industryContinuous portfolio development Portfolio development towards more market-driven and innovative businesses�Acquisitions Strong track record in operational excellence Operational excellence�DrivE with ~€1 billion earnings contributionInvestments for organic growthFoliennummer 18Innovations for a sustainable future�Foliennummer 20Foliennummer 21Foliennummer 22Profitability of BASF will grow faster than global chemical productionThank you for your attentionFoliennummer 25