BASF s Polyurethanes Division Driving efficiency, comfort and sustainability

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Winifred Webb
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1 Raimar Jahn President Polyurethanes Division September 5, 2012 BASF s Polyurethanes Division Driving efficiency, comfort and sustainability

2 Polyurethanes a strategic fit for BASF BASF Group sales 2011 Oil & Gas 16% Other 9% Chemicals 18% Agricultural Solutions 6% 73.5 billion Plastics 15% Polyurethanes 8% Functional Solutions 15% Performance Products 21% BASF Investor Day Automotive September 5, 2012 Polyurethanes 2

3 1 BASF leading in Polyurethanes 2 BASF Polyurethanes for the automotive industry BASF Investor Day Automotive September 05, 2012 Polyurethanes 3

4 Polyurethanes is an attractive global market Polyurethane demand (in million tons) CAGR 5.1% p.a Asia Pacific Americas Europe Key facts Polyurethane market will continue to grow faster than GDP Major growth drivers are Higher disposable incomes Increased energy efficiency requirements More demanding health and comfort expectations Markets Source : Markets & Markets study 2011 PU 4.9% 5.1% GDP 2.4% 3.0% BASF Investor Day Automotive September 5, 2012 Polyurethanes 4

9 billion Footware 8% Electrical, electronics 11% 5.

5 and BASF has an overall leading position BASF sales by region 2011 South America, Africa, Middle East 7 % Europe 38% BASF sales by first customer industry 2011 Other 14% Construction 24% 5.9 billion Footware 8% Electrical, electronics 11% 5.9 billion North America 20% Asia Pacific 35% Automotive 21% Furniture 22% BASF position 2011 MDI TDI PU Systems PU Specialties #1 #1 #1 #1 BASF Investor Day Automotive September 5, 2012 Polyurethanes 5

6 Polyurethanes Sales and earnings development Sales* (in billion) EBITDA (indexed) * Sales to 3 rd parties BASF Investor Day Automotive September 5, 2012 Polyurethanes 6

7 BASF accesses the market via different sales channels PU basic products PU systems PU specialties BASF Investor Day Automotive September 5, 2012 Polyurethanes 7

BASF is the leading global player in MDI and TDI with regional world scale plants BASF MDI/TDI production sites BASF success factors World-scale economics Best-in-class cost structure Backward

8 BASF is the leading global player in MDI and TDI with regional world scale plants BASF MDI/TDI production sites BASF success factors World-scale economics Best-in-class cost structure Backward integration in Verbund Located in each major region PU basic product business Focus on large volume applications Reliable outlet into systems and specialties BASF capacities 2012 MDI : 1,280 kt TDI : 560 kt Production sites Production sites (under construction) BASF Investor Day Automotive September 5, 2012 Polyurethanes 8

9 BASF accesses the market via different sales channels PU basic products PU systems PU specialties BASF Investor Day Automotive September 5, 2012 Polyurethanes 9

Based on an intense global network BASF is the global leader in PU systems BASF system houses BASF success factors Close proximity to customers Strong focus on application development Intensive

10 Based on an intense global network BASF is the global leader in PU systems BASF system houses BASF success factors Close proximity to customers Strong focus on application development Intensive customer collaboration Constant flow of innovations Reliable supply of raw materials PU system house business Broad customer portfolio Active in all relevant markets Growth through selected acquisitions Further extension of network PU System houses PU System houses (under construction) BASF set up 2012 More than 40 system houses, technical service centres and production hubs >1,400 kt sales capacity BASF Investor Day Automotive September 5, 2012 Polyurethanes 10

11 BASF accesses the market via different sales channels PU basic products PU systems PU specialties BASF Investor Day Automotive September 5, 2012 Polyurethanes 11

PU Specialties Strong innovation focus and close customer cooperation BASF specialties sites BASF success factors Local production and expertise in all regions Broad product portfolio High customer

12 PU Specialties Strong innovation focus and close customer cooperation BASF specialties sites BASF success factors Local production and expertise in all regions Broad product portfolio High customer intimacy Constant flow of innovations Application development experience TPU business Clear focus on high-value applications, e.g. automotive Active in all relevant industries MPU business Specialties sites Specialties sites (under construction) Known as Cellasto Parts and system solutions for the automotive industry BASF Investor Day Automotive September 5, 2012 Polyurethanes 12

13 1 BASF leading in Polyurethanes 2 BASF Polyurethanes for the automotive industry BASF Investor Day Automotive September 05, 2012 Polyurethanes 13

Polyurethanes helping meet the current and future needs of the auto industry

High flexibility and adaption to requirements Interior comfort like haptics seating

vibration-dampening Weight reduction Reduction of energy consumption and CO 2

14 Polyurethanes helping meet the current and future needs of the auto industry Efficiency Comfort Sustainability Process improvement with customized solutions High flexibility and adaption to requirements Interior comfort like haptics seating noise reduction smell/emissions Driving comfort like shock absorbing vibration-dampening Weight reduction Reduction of energy consumption and CO 2 emissions Bio-based solutions for niche applications BASF Investor Day Automotive September 5, 2012 Polyurethanes 14

Polyurethanes the ideal choice for car makers Headliner Dashboard Steering wheel Headrests Roof module Hatrack Door side part ABS cable Window encapsulation Engine encapsulation Carpet,

15 Polyurethanes the ideal choice for car makers Headliner Dashboard Steering wheel Headrests Roof module Hatrack Door side part ABS cable Window encapsulation Engine encapsulation Carpet, Floor mats Air-filter housing Seats, handrests, armrests Spoiler Suspension: Jounce bumper, Top mount, Coil Spring isolator BASF Investor Day Automotive September 5, 2012 Polyurethanes 15

Cellasto a true success story Inside every second car manufactured in the world Cellasto solutions offer

second car Additional growth potentials with top mounts Standard material currently rubber BASF preferred

Introduction at Chinese OEMs Further multiplication at existing top mount customers Grow top mount

16 Cellasto a true success story Inside every second car manufactured in the world Cellasto solutions offer Improved driving comfort Optimized driving dynamics Reduced component weight Jounce Bumpers Inside every second car Additional growth potentials with top mounts Standard material currently rubber BASF preferred supplier of Celasto solution Introduced at all Western, Japanese, Korean OEMs Path forward with top mounts Introduction at Chinese OEMs Further multiplication at existing top mount customers Grow top mount business to more than 50 million parts p.a. by 2020 BASF Investor Day Automotive September 5, 2012 Polyurethanes 16

17 Cellasto A unique BASF offering to the automotive industry BASF Investor Day Automotive September 5, 2012 Polyurethanes 17

Innovative TPU solutions to enhance car safety Elastollan Innovative TPU cable sheathings Main applications Jacketing of

charger cables Door handle Key customer benefits Safety through high flame retardance Excellent mechanical properties

to more electric components and assistance systems US regulation for mandatory use of rear cameras Additional potential

18 Innovative TPU solutions to enhance car safety Elastollan Innovative TPU cable sheathings Main applications Jacketing of cables for ABS and ESP systems Jacketing of cables for brake pad control units and other assistance solutions Sheathing of charger cables Door handle Key customer benefits Safety through high flame retardance Excellent mechanical properties Meeting new temperature regulations for electric and hybrid vehicles Growth drivers Higher comfort and safety demands lead to more electric components and assistance systems US regulation for mandatory use of rear cameras Additional potential through electric parking break and mandatory usage of ABS and EPS. BASF Investor Day Automotive September 5, 2012 Polyurethanes 18

Innovative polyurethane solutions to reduce car weight Elastoflex Innovative solutions for light-weight construction Elastoflex E Paper honeycomb technology for interior applications Honeycomb

19 Innovative polyurethane solutions to reduce car weight Elastoflex Innovative solutions for light-weight construction Elastoflex E Paper honeycomb technology for interior applications Honeycomb technology: intelligent combination of paper, glass-fiber and polyurethane systems Technology proven and commercial with several OEMs like Daimler and Volkswagen Key benefits Lightweight with excellent strength Low processing cost Main applications Trunk floors Sky roofs BASF Investor Day Automotive September 5, 2012 Polyurethanes 19

Polyurethane solutions to improve car interior comfort Elastoflex E Global solutions for

Technology proven and commercial with all leading OEMs Identical technology platforms

mechanical properties PU foam Main applications Dashboard Door panel Next steps Ongoing

20 Polyurethane solutions to improve car interior comfort Elastoflex E Global solutions for soft interior surfaces Elastoflex E Polyurethane foam for interior applications Technology proven and commercial with all leading OEMs Identical technology platforms globally available Key benefits Soft interior surfaces Very robust processing Excellent mechanical properties PU foam Main applications Dashboard Door panel Next steps Ongoing global launch of technology platforms BASF Investor Day Automotive September 5, 2012 Polyurethanes 20

Innovative polyurethane solutions for temperature management Polyurethane performance foams to reduce

supplementary air-conditioning in summer and winter Example: Smart forvision Thermal engine

(up to 10%) and reduced CO 2 -emissions Example: Hyundai hed-7 Next steps Advance development project

21 Innovative polyurethane solutions for temperature management Polyurethane performance foams to reduce energy requirements of cars Thermal insulation of car body and doors Reduction of energy demand for supplementary air-conditioning in summer and winter Example: Smart forvision Thermal engine encapsulation Engine encapsulation Engine reaches operating temperature faster leading to fuel savings (up to 10%) and reduced CO 2 -emissions Example: Hyundai hed-7 Next steps Advance development project with leading German OEM Hyundai to decide on serial production BASF Investor Day Automotive September 5, 2012 Polyurethanes 21

Enhanced driving comfort through polyurethane seating foams Elastoflex Tailor-made

polyurethanes Growth drivers Number of cars produced Success factors Cost

develop light-weight solutions Broad portfolio and cross-divisional approach of

22 Enhanced driving comfort through polyurethane seating foams Elastoflex Tailor-made foam solutions for car seats Market More than 90% of all car seats are based on polyurethanes Growth drivers Number of cars produced Success factors Cost leadership through world-scale production facilities Innovation strengths to develop light-weight solutions Broad portfolio and cross-divisional approach of BASF allowing innovative seat solutions BASF Investor Day Automotive September 5, 2012 Polyurethanes 22

23 What makes BASF successful in Polyurethanes? Innovation & close customer interaction Tailor-made systems & specialties Global network and production in all regions BASF Verbund with strong automotive competence BASF Investor Day Automotive September 5, 2012 Polyurethanes 23

24 Passion for the automotive industry drives BASF Polyurethanes BASF Investor Day Automotive September 5, 2012 Polyurethanes 24

25 BASF Polyurethanes speaks the language of the automotive industry BASF Investor Day Automotive September 5, 2012 Polyurethanes 25

26 BASF s Polyurethanes targets 2015 Operational targets Further strengthen polyurethane basic product business Invest in world-scale production plants for MDI and TDI (e.g. Chongqing, China; Ludwigshafen, Germany) Continue to further improve production process technologies to remain cost leader Expand polyurethane specialty business and system houses Remain innovation leader Invest in new capacities for polyurethane specialties (MPU, TPU) and system houses Continue with selected acquisitions to further broaden portfolio BASF Investor Day Automotive September 5, 2012 Polyurethanes 26

27 BASF s Polyurethanes targets 2015 Financial targets Grow sales to ~ 7.7 billion by 2015, especially driven by growth in emerging markets Increase earnings through larger share of PU systems and specialty elastomers Ensure attractive premium on cost of capital Remain global No. 1 for Polyurethanes BASF Investor Day Automotive September 5, 2012 Polyurethanes 27

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BASF s Performance Polymers Delivering sustainable value

BASF s Performance Polymers Delivering sustainable value BASF s Delivering sustainable value Wolfgang Hapke President Performance Polymers Division September 5, 2012 A strategic fit for BASF BASF Group sales 2011 Oil & Gas 16% Other 9% Chemicals 18% Agricultural