Slides from BASF Roundtable Agricultural Solutions, November 12, 2012, London: 'Agricultural Solutions - Sustainble growth through market-driven innovations'
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BASF Roundtable Agricultural Solutions 2012
1. Agricultural Solutions
Sustainable growth through market-driven
innovations
BASF
Roundtable
Agricultural
Solutions
November 12, 2012
London
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 1
2. Disclaimer
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 Roundtable Agricultural Solutions, November 12, 2012
2
3. 1 | Introduction
Dr. Andreas Kreimeyer
Member of the Board of Executive Directors
2 | BASF Crop Protection
3 | BASF Plant Biotechnology
3
4. 1 | BASF maintains good business performance
in Q3 2012
2 | ‘We Create Chemistry’ strategy on track;
Agricultural Solutions is a key contributor
3 | Agricultural Solutions offers attractive growth
opportunities with strong commitment to
innovation
4
5. BASF maintains good business
performance in Q3 2012
Business Performance Q3’12 vs. Q3’11 Q1-Q3’12 vs. Q1-Q3’11
Sales €19.0 billion +8% €59.1 billion +7%
EBITDA €2.8 billion +4% €9.8 billion +8%
EBIT before special items €2.1 billion +5% €7.1 billion +2%
EBIT €2.0 billion +6% €7.4 billion +11%
Net Income €0.9 billion (21)% €3.9 billion (23)%
EPS €1.03 (21)% €4.25 (23)%
Adjusted EPS €1.19 (22)% €4.36 (16)%
Sales development
Period Volumes Prices Portfolio Currencies
Q3’12 vs. Q3’11 7%
(4%)
(1%) 6%
Favorable business development inin Agricultural Solutions and Oil & Gas
Favorable business development Agricultural Solutions and Oil & Gas
Earnings inin chemical activities did not match the previous year’s level
Earnings chemical activities did not match the previous year’s level
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 5
6. Ongoing portfolio optimization
Restructuring of Asset swap
Becker Underwood
Construction Chemicals with Statoil
Photo: Statoil
BASF to acquire Becker Underwood BASF is strengthening Acquisition of equity in 3 producing
competitiveness of Construction fields in Norway: Brage (32.7%),
$1.02 billion (€785 million) purchase
Chemicals in Europe Gjøa (15%), Vega (30%)
price
Strengthens global crop protection Measures include: 2P reserves of ~100 million boe
business - Adjusting business to declining Rise in daily production in Norway
markets in Southern Europe and from 3,000 to 40,000 boepd
Leading global provider of
technologies for biological seed Great Britain Statoil to receive
treatment - Enhancing overall efficiency and - 15% in development field Edvard
2012 (E) Sales $240 million (€185 customer focus Grieg
million) About 400 positions in Europe are - $1.35 billion
Merger control approvals pending affected - up to additional $100 million
depending on success of Vega
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 6
7. Outlook 2012 confirmed
Outlook 2012
For the FY 2012, BASF aims to exceed the record levels of sales and EBIT before special
items achieved in 2011
BASF will strive again to earn a high premium on cost of capital
Chemical activities
- We do not expect demand to pick up in the fourth quarter 2012
- Therefore, 2012 EBIT before special items of chemical activities will come in below the level of the
previous year.
Assumptions 2012
GDP: +2.2% (before: 2.3%)
Industrial production: +2.8% (before: 3.4%)
Chemical production: +2.9% (before: 3.5%)
US$/Euro: 1.30 (unchanged)
Oil price (US$/bbl): 110 (unchanged)
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 7
8. 1 | BASF maintains good business performance
in Q3 2012
2 | ‘We Create Chemistry’ strategy on track;
Agricultural Solutions is a key contributor
3 | Agricultural Solutions offers attractive growth
opportunities with strong commitment to
innovation
8
9. BASF – The Chemical Company. We create
chemistry for a sustainable future
Positioning Performance Perspective
Ludwigshafen,
Germany
Nanjing,
Antwerp,
China
Belgium
Kuantan,
Geismar, Malaysia
USA
Freeport,
USA
Verbund site
The #1 chemical company. 10 years of outperformance Chemistry as an enabler
2011: €73.5 billion sales, 16% average annual stock BASF has superior growth
€8.4 billion EBIT bSI performance* opportunities: Innovation,
#1- #3 in >75% of business, 15% average annual sustainability, Emerging
present in >200 countries dividend increase, >3% Markets, …
Production in 41 countries, yield every single year** Long-term value creation,
6 integrated Verbund sites ambitious financial targets
* Nov. 2002 - Oct. 2012
** For 2002-2011
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 9
10. ‘We Create Chemistry’ strategy defines
clear financial targets for 2015 and 2020
Growth targets Profitability targets
Grow at least 2 percentage Earn a premium on cost of
points above chemical capital of at least €2.5 billion on
production average p.a.
Sales ~€85 billion EBITDA ~€15 billion
2015
EPS ~€7.50
Sales ~€115 billion Double EBITDA to ~€23 billion
2020 (compared with 2010)
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 10
11. Demographic challenges set the stage
for the future of the chemical industry
Nine billion people in 2050 but only one earth
Resources, Environment & Food & Nutrition Quality of life
Climate
Chemistry as an enabler
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 11
12. We expand from chemicals to chemistry
1960 1970 1980 1990 2000 2010 2020
Chemistry as key enabler for
New functionalized materials &
molecules solutions
Deep understanding of
Improved customer value chains
applications
required
Functionalized Agricultural Solutions
materials & perfectly matches BASF’s
solutions focus on solutions business
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 12
13. BASF Crop Protection’s offering goes
beyond weed, disease and pest control
External factors
Risk management
Sustai- Exchange Commodity
nability Rate Prices
Stress Resources
Innovation beyond
Crop Protection
Frost Drought Heat Nutrition Soil Water
Natural foes
Crop
Protection
Weeds Diseases Pests
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 13
14. BASF Plant Science –
Trait Technology Partner
Concept and strengths
BASF has focused on trait
Growers technologies early on
Cutting-edge technology
and trait portfolio attracts
top partners (seeds, food)
Products to be marketed
Trait &
via our partners’ channels
Seed
Partners Partnership business model
provides high flexibility and
keeps asset costs low
Trait
Technology
Partner
Plant Science
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 14
15. Multiple synergies between Agricultural
Solutions and BASF Verbund
Strong Non-cyclical, Backward- Technological
contributor adds earnings integration synergies
to BASF‘s resilience and through
profitable sourcing Know-how
growth synergies Verbund
Agricultural Solutions
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 15
16. Agricultural Solutions has increased its
earnings contribution to BASF sustainably
EBIT before special items Sustainably increased earnings
in billion € EBIT bSI more than doubled
from 2006 to 2011
New record in 2011: €810
1
million
0,8 FY 2011 record has been
0,6 already significantly surpassed:
Q1-Q3 2012: €1,004 million
0,4
0,2
0
2006 2007 2008 2009 2010 2011 2012
Q1-Q3
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 16
17. Agricultural Solutions has demonstrated
profitable growth and sustained margins
Sales to 3rd parties EBITDA Strong business performance
in billion € margin*
Profitable growth over the past 5
years; high EBITDA margin level
since 2004
EBITDA margin target:
25% on average
Committed to sustain the high
margin level ...
... while continuing to invest into
innovation, leveraging BASF‘s
know-how Verbund
* Before Special Items.
2004 onwards according to IFRS. 2006 onwards excl. corporate cost
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 17
18. Agricultural Solutions is adding to BASF
Group’s earnings resilience
EBITDA by activity (excluding Other) Agro adds to earnings resilience
in billion € Agriculture not coupled to
12 chemical cycle
Agricultural Solutions delivered
10
substantial contribution even in
2009 trough
8
6
4
2
0
2002 2004 2006 2008 2010
Chemicals business
Oil & Gas
Agricultural Solutions
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 18
19. Our growth in Crop Protection is backed
by a high level of backward integration
Sourcing of Top-100 raw materials* (by value) in 2011 Make or buy
in million € Verbund back-integration
– security & flexibility of supply
from 3rd parties
– market-based transfer pricing
€515 from Verbund
64% 36% – typically ~40% of the Top-100
million
raws come from Verbund
Sourcing synergies
* Without a.i. tolling, formulants, packaging
– economy of scale via joint
Capex BASF procurement
in million €/a
Capex
2007-2011 – capex will increase to >€250
M/y in 2012-2016 (on average)
2012-2016 – insourcing of advanced
intermediates
0 100 200
– capacity expansions
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 19
20. Large share of R&D spending committed
to Crop Protection, Plant Biotechnology
Total R&D expenditures 2011 Strong innovation platform
in billion €
€1.6 billion R&D expenditures in
Chemicals 2011, ~€1.7 billion in 2012
Business Agricultural 2020 target: ~€30 billion in sales
Chemicals Solutions with innovations <10 years
8% 26%
Plastics 10,100 people; 2,800 projects
9%
Research Verbund ~1,950
Performance €1.6 Plant Biotech
partnerships with universities,
Products billion 11%
start-ups, industry partners
21% Other Corp. R&D
12% Agro benefits from Know-how
Functional
Solutions Oil & Gas
Verbund synergies, especially
12% 1% in process design, formulation
technologies, biotechnology
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 20
21. 1 | BASF maintains good business performance
in Q3 2012
2 | ‘We Create Chemistry’ strategy on track;
Agricultural Solutions is a key contributor
3 | Agricultural Solutions offers attractive growth
opportunities with strong commitment to
innovation
21
22. To stimulate further growth in Agriculture,
we pursue two promising Growth Fields
Resources, Environment & Climate Food & Nutrition Quality of Life
Chemistry as Enabler
Industries
Customer
Consumer Health & Energy &
Transportation Construction Electronics Agriculture
Goods Nutrition Resources
Batteries for Heat Organic Plant Energy
Enzymes Medical
Mobility Management Electronics Biotechnology Management
Lightweight Functional Rare Earth
Growth
Fields*
Composites Crop Care Metals Recycl.
Heat
Wind Energy
Management
Water Solutions
Growth fields at different stages, >€500 million sales each expected at maturity
* Including growth fields still under evaluation BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 22
23. BASF Plant Sciences has generated a
leading technology platform
Patent Asset Index for Yield & Stress Traits A strong trait technology platform
Ceres BASF Plant Science founded in
2009
1998 as a subsidiary of BASF
Mendel
2010 Strong trait technology platform
DuPont
2011 was created, highly attractive to
Bayer partners
BASF/ Prime example: Yield & Stress
Monsanto
collaboration with Monsanto
0 200 400 600 800 1000 1200
ranks #1 in Patent Asset Index
Partnership Partnership Partnership
with with with
1995 2000 2010
BASF Plant Science Foundation of Acquisition of
founded (1998) Metanomics (1998) CropDesign (2006)
BASF Roundtable Agricultural Solutions, November 12, 2012
Group Results Group Strategy Verbund Synergies Agro Growth via Innovation 23
24. Agricultural Solutions is a star in our portfolio
Important contributions to BASF Group
– profitable growth
– stable earnings
Integrated in BASF Verbund
– cost synergies
– know-how synergies
Important role in reaching goals of our We Create Chemistry strategy
– customer focused solutions offer
– innovative & sustainable solutions
BASF Roundtable Agricultural Solutions, November 12, 2012
24
25. 1 | Introduction
2 | BASF Crop Protection
Markus Heldt
President, Crop Protection Division
3 | BASF Plant Biotechnology
26. BASF Agricultural Solutions
Strong fundamentals - YTD earnings topped FY 2011
Q1-Q3 Q1-Q3 ∆%
million € ∆%
2012 2011 CER
Sales* 3,802 3,343 +14% +9%
EBITDA before special items 1,114 894 +25% +14%
EBITDA margin 29.3% 26.7% - -
EBIT before special items 1,004 769 +31% +19%
EBIT margin 26.4% 23% - -
Assets (as of Sep 30) 5,531 4,941 +12% +10%
Research and development expenses 308 293 +5% +4%
* Sales drivers Q1-Q3 2012: volumes +7%; prices +2%; currencies +5%
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 26
27. Strong growth in all regions
3rd Party sales Q1-Q3 2012 by region Key facts
in million € Europe:
Strong performance in Central
& Eastern Europe and UK
North America Europe
North America:
954 (+9%) 1,596 (+12%)
Strong herbicides sales due
to increasing glyphosate
€3,802 resistance
(+9%) South America, Africa, ME:
Asia Pacific
South America, Season in full swing, offsetting
418 (+2%) La Niña impact at beginning
Africa, Middle East
of 2012
834 (+6%)
Asia Pacific:
Sales growth mainly driven by
India and China
In brackets: growth at constant exchange rates in % vs. prior year
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 27
28. Strong growth in all indications
3rd Party sales Q1-Q3 2012 by indication Key facts
in million € Fungicides:
Strong volume growth driven
by Xemium® sales in Europe,
Fungicides Herbicides
and strong Plant Health
1,624 (+6%) 1,395 (+13%) adoption in North America
Herbicides:
€3,802 Main drivers were Clearfield®
(+9%) in Europe, Kixor® in North
America, IMIs in Asia.
Insecticides:
Insecticides/Other Strong demand increase for
783 (+7%) Fipronil especially in Brazil
(sugarcane)
In brackets: growth at constant exchange rates in % vs. prior year
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 28
29. Crop Protection growth story continues,
€6 billion sales targeted for mid of decade
Sales drivers Financial Targets
in million €
~ 6,000 €6 billion sales target
expected to be reached at
mid of decade due to:
~ 4,700 – strong momentum and
4,165 additional value extraction
from our existing portfolio
New
Herbicide
Growth & &
FCC** in
Fungicide
product ~ 50%
Renaissance
emerging
AgCelence
Becker – new product launches
launches
& Innovations
markets
growth
Underwood
– emerging market business
46%
44% models gaining further grip
EBITDA margin target:
25% on average
2011 2012E 2015E
Emerging Markets*
* Latin America, Eastern Europe, South Africa, Asia (w/o Japan, Australia, New Zealand)
** FCC = Functional Crop Care
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 29
30. Global expansion of AgCelence®
leverages our Plant Health portfolio
sales to third parties AgCelence®
Sales in million €
Umbrella brand for Plant
800 Health solutions,
global rollout in full swing
Plant Health effect:
600
Improved stress tolerance,
growth, crop quality
400 F 500® fungicide continues
to be a key contributor to
Plant Health business
200 3rd capacity expansion for
F500® announced in
September 2012
0
2008 2011 2015E
North America Europe/EMA
Latin America Asia
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 30
31. Limited impact of US drought on BASF
General situation
US drought has reduced 2012 yield expectations and
fungicide use in corn and soy
High crop prices expect to prevail for extended period,
driving continued demand for high-yield systems June 5th
Farmers losses partially mitigated by crop insurance;
good liquidity expected for 2013
BASF Research 2012, Stark County, Illinois
Plant Health segment
Despite drought, >20 million acres treated (corn, soy)
June 16th
Only moderate impact on BASF business expected in Q1
2013 due to channel inventories
Plant Health will remain a major growth driver for BASF
July 2nd
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 31
32. Very successful Xemium® launch
confirms blockbuster potential
Xemium®
New fungicide for all market
segments
Strengthens BASF’s global
leadership position
Successful launch
Global registration proceeds in
record time. Target:
>100 crops, >50 countries
Outstanding Q1-Q3 sales
Initial peak sales potential:
>€200 million
Xemium registered Next upcoming registrations
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 32
33. Continued growth in herbicides; sales
target of >€1.75 billion for 2015
BASF launches Herbicide Renaissance
Urgent need for innovation
Engenia®
Rethinking of weed control
Multiple modes of action
needed
BASF’s multi-level approach
Strong herbicide pipeline
Successful expansion of Kixor®
Herbicide-tolerant production
systems:
1990 2000 2010 – Clearfield® in global launch
– Cultivance® and Engenia®
(Dicamba) in approval
Roundup Ready® (RR) Accelerating market Increasing weed
launched by Monsanto penetration of RR resistance to
in 1996 system in the Americas Glyphosate
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 33
34. Acquisition of Becker Underwood
supports Agricultural solutions strategy
Strategy Becker Underwood adds value
Strengthens our traits & seed
partnerships via expanded
Crop seed treatment offering
protection
Gives access to growth market
of biological Crop Protection
Complements offering in
strategic crops and countries,
Agricultural i.e. Americas
Solutions
Innovation Opens door to combined
beyond crop Traits & seed
solutions of chemical and
protection partnerships
biological crop protection
Strengthens know-how and
technology platform
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 34
35. Becker Underwood further strengthens
BASF’s position as solution provider
Becker Underwood (Sales 2012E**: €185 million) Timelines
Closing of transaction
expected by year end 2012
Becker Underwood will be
Seed Horticulture & Foliar Plant Livestock
Enhancement
Landscape
Specialty Health Nutrition* part of Functional Crop Care,
support all three pillars
Structural integration to be
completed by end of 2013
Global Business Unit
Functional Crop Care (FCC)
Innovations
Seed Solutions beyond Crop Biologicals
Protection
* To be part of Health & Nutrition ** Fiscal year ended September 30, 2012
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 35
36. We will grow Emerging Markets sales
significantly
Emerging Market sales Key drivers
indexed Latin America: Additional
Eastern Europe
%
Latin America resources established, new
%
300
financial tools introduced
300
200
Eastern Europe: Headcount
200
to double from 2008 - 2013
100 100
Asia: Additional investments
0 0 in assets, resources planned
2007 2011 2015E
>€ 3 bn. 2007 2011 2015E
in 2015 Africa: Crop Protection is a
% Asia
600
Africa main driver for BASF Group’s
600
500 500
growth in Africa
400 400
300 300
200 200
100 100
0
0
2007 2011 2015E 2007 2011 2015E
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 36
37. We are committed to keep investing into
innovation
Total R&D expenditures Commitment to innovation
in million € Core of our business model:
Innovative solution provider
High R&D intensity in Crop
410 Protection (~9% of sales)
390
Increased R&D investments:
358 – 2007 - 2011: € 1.8 billion
– 2012 - 2016: ~€ 2.5 billion
329
321
2007 2008 2009 2010 2011 2012
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 37
38. We have a strong innovation pipeline
A strong pipeline
Weed Total Peak Sales Potential at
management €2.8 billion, increased >50%
Dicamba HT since 2008
In-launch pipeline (2002-2009)
at €1.6 billion
Young pipeline (2010-2020)
Disease at €1.2 billion and growing
management
Ongoing R&D and inlicensing
activities in insecticides
Functional Crop Care projects
Plant shaping up
Health
Functional Nitrogen Pipeline update in Q1 2013
Crop Care Management
Water
Management
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 38
39. Capex to be further increased, following
our strategy
Capex 2007-2011 Capex 2007-2011
in billion € F500®: capacity expansion
Various* Key Projects Kixor® and Xemium®: new
(F500, Kixor, Xemium)
€0.8 production plants
billion
Formulation: New plants and
expansions
Planned capex 2012-2016 Planned capex 2012-2016
in billion € F500®: 3rd capacity expansion
Various* Key Projects Xemium®: backward integration
(F500, Xemium, Dicamba)
>€1.4 Dicamba: capacity expansion
billion
New formulation plants (Asia)
R&D expansion (India, USA)
* Formulation sites, research sites, infrastructure
BASF Roundtable Agricultural Solutions, November 12, 2012
Results Portfolio Development Becker Underwood Emerging Markets Innovation & Investments 39
40. Summary and outlook
Positive market fundamentals expected to persist
(high crop prices, accelerated technology adaption in emerging
markets)
BASF is strongly positioned as solution provider
Continued profitable growth, based upon high demand for
innovative solutions and strong pipeline
New sales and earnings records forecasted for 2012
Expected sales of ~€6 billion in 2015
BASF Roundtable Agricultural Solutions, November 12, 2012
40
41. 41
1 | Introduction
2 | BASF Crop Protection
3 | BASF Plant Biotechnology
Dr. Peter Eckes
President, BASF Plant Science
BASF Roundtable Agricultural Solutions, November 12, 2012
42. The GM success story continues
Global GM crop area Key facts
in million hectares; 1 ha = 2.47 acres
Global GM crop area continued to
160 grow in 2011 (8% from 2010)
160
140 Biotech crops are planted on
120 about 11% of the cultivated land
100 In 2011, 16.7 million farmers grew
80
GM crops in 29 countries
60 Market expected to grow to
€32 billion by 2020**
40
20
0
1997 2000 2003 2006 2011
* CAGR 1997-2011
** Source: Context Outlook 2010, BASF estimates;
incl. license value; major crops only; net farm value
Source: ISAAA 2011
BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 42
43. Americas as the growth driver for GM
cultivation
7 % <0,001 %
Europe
Canada
2%
China
43 %
USA
19 %
Brazil
7 %
India
15 %
Argentina
Source: Clive James, ISAAA 2011 BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 43
44. BASF Plant Science refocuses on strategic
markets
Situation Decision in January 2012
Active portfolio & site management
7% Strengthen position in North
Canada America; expand the new HQ in
Research Triangle Park (NC)
43 USA
%
Stop projects with EU market focus
Refocus activities on main markets
in North and South America
<0,001 %
Consolidate global site footprint
Europe
Trait Technology Partner Strategy
remains unchanged
BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 44
45. Cutting-edge trait technology platforms
make us the ideal partner
The Best Traits… …for the Best Seeds
Unique technology platforms for Strong partnerships with leading
yield screening, metabolite profiling seed and food companies ensure
optimal market access
Strong global academic network
BASF
z Plant Science
z
BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 45
46. Cutting-edge trait technology platforms
fuel strong pipeline
Trait Discovery Stage I Stage II Stage III Stage IV Business
total development gene identification proof of concept early product advanced product pre-launch potential*
time: 10-12 years & proof of concept in target crops development development
Drought-tolerant corn 2nd Generation 1st Gen. 250-500 M $
Higher-yielding corn >500 M $
Yield & Stress Improved nitrogen utilization in corn 250-500 M $
with
Drought-tolerant cotton <250 M $
Monsanto1
Higher-yielding soybean 2nd Generation 1st Gen. 250-500 M $
Higher-yielding canola <250 M $
Higher-yielding wheat tbd**
Higher-yielding sugar cane2 tbd**
Yield & Stress
Higher-yielding sugar beet3 tbd**
with others
Higher-yielding rice4 <250 M $
Feed Improved corn feed tbd**
Specialities Healthy fatty acids in canola5 250-500 M $
Nematode resistant soybean1 tbd**
Input Traits
Herbicide-tolerant soybean6 <250 M $
Fungal resistant soybean tbd**
Target gross trait sales before partner share in 2020***: €1.8 bn
1 as communicated at Monsanto pipeline update in January 2012, * peak gross trait sales of last family member in country of 1st launch before partner share
2 with CTC, 3 with KWS , 4 with Bayer, 5 with Cargill, 6 with Embrapa ** to be defined when product enters Phase II
*** adjusted due to discontinuation of potato projects BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 46
47. Launch of 1st commercial BASF/Monsanto
product: DroughtGard™ Hybrids
Disease Tolerance
Germplasm Drought Tolerance System approach – germplasm,
Yield Potential traits and agronomic
recommendations
DroughtGard™ Hybrids
Total Yield demonstrate enhanced
hydroefficiency capability under
drought stress
Maintains top-end yield potential
Agronomic Trait in well-watered conditions
Practices Packages
Advantage over competitor
products under drought stress
Insect Control
Grower-level Completed ~250 Ground
Weed Control
Recommendations Breakers trials in 2012
Drought Tolerance
Full commercialization in 2013/14
BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 47
48. The DroughtGard™ Hybrid – the first and
only drought management system
Monsanto’s Ground Breakers
On-farm trial program designed to:
Provide select farmers early
exposure to the latest products
ND
ND
MN and agronomic systems
SD
Support a better understanding of
WY
NE IA where, how and in which system a
product will perform best
CO KS MO Help support commercial decisions
OK AR DroughtGard™ Hybrid System
NM
~250 Ground Breakers farmers on
LA
LA
TX thousands of acres
Stewardship guidelines followed
throughout the unfolding of the
regulatory approvals
Targeted for the Western Corn Belt
BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 48
49. The DroughtGard™ Hybrid System
outperforms the competition
DroughtGard
Hybrids™
Drought-tolerant
competitor product
BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 49
50. Higher yielding rice: Biotech solutions
tap an attractive and expanding market
Megatrend population increase
Currently rice provides ~20% of
human caloric intake globally*
Current yield increase ~0.8% p.a.
vs. future need of 1.2-1.5%*
Partner strategy
Market access via non-exclusive
license agreements
First partnership signed with
Bayer CropScience
(#1 in global hybrid rice market)
Attractive market
Yield increase offers an attractive
value potential for combination of
hybrid- & biotechnology
Key markets: Asia and Americas
* Rice Almanac, 3rd ed., IRRI, 2002; A.J. Garris, et al., Genetics 169, 2005, 1631 BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 50
51. Higher yielding rice: First results show
strength of yield trait system
Seed weight
(indexed)
6
4
2
Transgene Reference 0
TraitMill™ Indica Screen Field Trail
Discovery Validation Development
japonica indica indica
BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 51
52. Fungal-resistant soybeans: Innovation
inspired by nature
Where do our resistance genes
come from?
The idea of Non-Host Resistance
Soybeans, our host species, are
highly susceptible to Asian
Soybean Rust (ASR)
There are plants with a natural
Birdsfoot trefoil Chickpea immunity against ASR, like
peanuts, chickpeas, certain clover
and trefoil, etc.
Non-Host Resistance relies on
taking these resistance genes and
introducing them into soybean
Learning from nature enables an
innovative biotech approach
Peanut Low hop clover
BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 52
53. Fungal-resistant soybeans: Innovation
yields first promising results
Efficacy against ASR: 2012 field trials in Brazil Fungal diseases have a major
impact on soybean harvest
Enhanced resistance*
Asian Soybean Rust (ASR) can
100% result in yield losses of 10 to 90%
80% Objective:
60% Provide broad, durable resistance
against fungal diseases based on
40%
multiple genes
20%
Reliable insurance consisting of
0% biotech trait & fungicide treatment
Lead gene 1 Lead gene 2 control
Convenient system for easy use
Target market:
South America, primarily Brazil
(Total harvested area of 30 Mio ha
potentially at risk of ASR damage)
Resistance gene expressed Susceptible mother variety
* Best event BASF Roundtable Agricultural Solutions, November 12, 2012
Market Strategy Pipeline Projects Summary 53
54. Summary and outlook
Refocused on key markets in Americas and Asia
Concentrate on highly attractive yield traits
Discovery platforms enable innovative gene discovery
Strong pipeline with target gross trait sales before partner share of €1.8 bn
BASF Plant Science slated to become an operating division of BASF within
this decade
BASF Roundtable Agricultural Solutions, November 12, 2012
54