Basf Se · XETR:BAS
Basf — Debt Investor Presentation (May 2020)
41 slides from Basf's debt investor presentation, May 26, 2020
Slide 1: We create chemistry for a sustainable future – Virtual Green Bond Roadshow
We create chemistry for a sustainable future Virtual Green Bond Roadshow Dirk Elvermann, President Corporate Finance Christoph Jäkel, Vice President Corporate Sustainability May 26, 2020
Slide 2: Disclaimer
Disclaimer This presentation is only being provided to non-U.S. persons outside the United States in compliance with Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). By attending this presentation or by reading the presentation slides, you warrant and acknowledg
Slide 3: Speakers
Speakers Dr. Dirk Elvermann President Corporate Finance, BASF Dr. Christoph Jäkel Vice President Corporate Sustainability, BASF 3 May 2020 | BASF Green Bond Roadshow
Slide 4: How we operate safely in the COVID-19 environment
How we operate safely in the COVID-19 environment Dedicated safety measures in place ▪ Early activation of BASF’s global crisis management ▪ Divisions, regions and sites have activated crisis plans, which are adjusted as the situation changes ▪ Measures in production are coordinated from a site pers
Slide 5: Key measures to lead BASF through the COVID-19 crisis
Key measures to lead BASF through the COVID-19 crisis Customer focus Global steering of BASF’s Focus on safeguarding cash production network ▪ The customer is at the center of all our ▪ Adapting utilization rates according to ▪ Strong focus on liquidity management activities market demand using prop
Slide 6: Agenda
Agenda 1 2 3 At a glance Pushing the transition to a Green finance framework sustainable economy 4 Proposed terms & structure 6 May 2020 | BASF Green Bond Roadshow
Slide 7: We create chemistry for a sustainable future
Our purpose: We create chemistry for a sustainable future 7 May 2020 | BASF Green Bond Roadshow 7
Slide 8: What we want to achieve
What we want to achieve ▪ We want to be a thought and action leader in the area of sustainability. ▪ We want to increase the role of sustainability in our business decisions. ▪ We want to show how we add value to society along the value chain. Key measures ▪ Decouple our CO2 emissions from organic g
Slide 9: Our ambitious corporate targets – financial and nonfinancial targets
Our ambitious corporate targets – financial and nonfinancial1 targets Grow sales volumes faster than global chemical production every year Achieve a return on capital employed (ROCE)2 considerably above the cost of capital percentage every year Increase EBITDA before special items by 3% to 5% per ye
Slide 10: Q1 2020: BASF Group shows resilience amid corona crisis
Q1 2020: BASF Group shows resilience amid corona crisis with diversified portfolio and financial solidity Financial figures Q1 2020 Q1 2019 Change € € % Sales 16,753 million 15,596 million 7 EBITDA before special items1 2,579 million 2,642 million (2) EBIT before special items1 1,640 million 1,750 m
Slide 11: Strong balance sheet
Strong balance sheet Balance sheet March 31, 2020 vs. December 31, 2019 billion € ▪ Total assets increased by €5.4 billion to €92.4 billion 92.4 92.4 87.0 87.0 ▪ Current assets up by €5 billion, due to higher accounts receivable, increased cash and cash equivalents and other 43.4 receivables 42.4 Eq
Slide 12: Well-balanced financing instruments with strong focus on liquidity and net debt
Well-balanced financing instruments with strong focus on liquidity and net debt BASF’s liquidity position as of March 31, 2020 €4.2 billion cash and cash equivalents1 (on March 31, 2020) Bank loans Commercial paper 18% 20% BASF’s financing facilities US$12.5 billion commercial paper program (for
Slide 13: Well-balanced bond and corporate loan maturity profile
Well-balanced bond and corporate loan maturity profile Profile as of March 31, 2020 billion €1 2.2 2.0 2.0 2.0 1.9 1.8 1.6 1.4 1.4 1.3 1.3 1.2 1.2 1.2 1.0 1.0 0.9 0.8 0.6 0.6 0.5 0.4 0.4 0.3 0.2 0.0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 >2032 Bonds / loans outstanding Marc
Slide 14: Outlook 2020 for BASF Group withdrawn
Outlook 2020 for BASF Group withdrawn Qualitative statements provided end of April 2020 ▪ The sales and earnings forecast for the 2020 business year provided by BASF on February 28, 2020, cannot be met due to the coronavirus pandemic. We are therefore withdrawing our outlook for 2020. ▪ It is curren
Slide 15: Active portfolio management
Active portfolio management BASF closed acquisition of Lone Star Funds to acquire BASF’s DIC to acquire BASF’s polyamide business from Solvay construction chemicals business global pigments business ▪ Sales 2018: ~€1 billion ▪ Sales 2019: ~€2.6 billion ▪ Sales 2018: ~€1 billion ▪ BASF acquired the g
Slide 16: Agenda
Agenda 1 2 3 At a glance Pushing the transition to a Green finance framework sustainable economy 4 Proposed terms & structure 16 May 2020 | BASF Green Bond Roadshow
Slide 17: Resource efficiency – BASF's Verbund is ideal for CO2 emission reduction
Resource efficiency – BASF’s Verbund is ideal for CO2 emission reduction ▪ Combined heat and power plants and integrated energy Verbund prevented 6.4 million metric tons of CO2e emissions in 2019 ▪ Synergies in logistics and infrastructure, minimization of waste ▪ BASF uses fossil raw materials resp
Slide 18: BASF has a strong track record of CO2 emission reduction
BASF has a strong track record of CO2 emission reduction – our goal: CO2-neutral growth until 2030 Absolute greenhouse gas (GHG) emissions ▪ Since 1990, we have doubled our production volumes Indexed (1990 = 100) and cut our GHG emissions in halves; the emission intensity thus decreased by 75%, from
Slide 19: From a linear to a more circular economy – ChemCycling
From a linear to a more circular economy – BASF contribution: ChemCyclingTM ▪ Plastic waste for which no high-value recycling processes are established yet is turned into virgin-grade high performance materials ▪ Using recycling feedstock from plastic waste in chemical production helps to save fossi
Slide 20: Alliance to End Plastic Waste (AEPW)
Alliance to End Plastic Waste (AEPW) – take action, develop solutions and catalyze investment ▪ Founded in 2019, BASF is a founding member of the AEPW ▪ 46 members from entire plastics value chain ▪ Commitment to spend US$1.5 billion over five years for infrastructure development, innovation, educat
Slide 21: Around 30% of BASF Group sales from sustainable solutions
Around 30% of BASF Group sales from sustainable solutions – leveraging our innovation power Percentage of sales 2019 ▪ Portfolio segmentation: >50,000 specific product applications analyzed by 2019 (€51.9 billion in sales, Substantial sustainability 96.3% of relevant portfolio1) contribution in the
Slide 22: Value balancing alliance – consistent assessment in monetary terms
Value balancing alliance – consistent assessment in monetary terms of the impact of business activities on the well-being of people Stakeholders Companies ▪ Founded in June 2019, BASF is a founding member of the value balancing alliance Member ▪ From traditional reporting of input and output compani
Slide 23: BASF in sustainability ratings and rankings
BASF in sustainability ratings and rankings ISS ESG Rating: B- Status: Prime (decile rank 1) CDP Climate rating: A- (leadership status) Water rating: A list MSCI ESG Research Rating: AA FTSE4Good Global Index Inclusion in the FTSE4Good Global Index 2019 Rating: Highest ESG score in the chemical indu
Slide 24: Agenda
Agenda 1 2 3 At a glance Pushing the transition to a Green finance framework sustainable economy 4 Proposed terms & structure 24 May 2020 | BASF Green Bond Roadshow
Slide 25: Rationale for issuing green finance instruments
Rationale for issuing green finance instruments We create chemistry for a sustainable future Contributing to the development of the Alignment with BASF’s sustainability strategy green bond market ◼ For decades, we are committed to create environmental and social value with ◼ Address the increasing d
Slide 26: BASF's green finance framework
BASF’s green finance framework Pillars Use of proceeds Project selection and Management of proceeds Reporting External review evaluation Re-/financing of eligible projects Proceeds of green finance Allocation and impact BASF’s portfolio from the eligible green project Carried out by the BASF instrum
Slide 27: Focus on the use of proceeds
Focus on the use of proceeds GBP / GLP Eligible green product/project category UN EU Environmental Objectives1 category SDGs Accelerator solutions ▪ EU Environmental Objective 1: article 6: Only the highest level of sustainable products (‘Accelerator’) is eligible. These products substantial contrib
Slide 28: 1. Accelerator solutions
1. Accelerator solutions Sustainable Solution Steering – BASF’s Accelerators contribute to the UN Sustainable Development Goals Sales shares of contributing Primarily Accelerators (%) addressed SDGs Resource efficiency 28.9% Climate change and energy Health and safety Sustainable 61.9% Solution Cost
Slide 29: 1. Accelerator solutions – examples
1. Accelerator solutions Examples with significant contributions to sustainability Cetiol® Ultimate ecovio® – compostable cling film Acronal® MB – from biomass 100% renewable-based emollient for fresh-food packaging to dispersions 29 May 2020 | BASF Green Bond Roadshow
Slide 30: 2. Carbon management at BASF: climate target 2030
2. Carbon management at BASF: climate target 2030 and further reductions in the long term in scope Developing Reducing the CO2 Increasing the share of breakthrough emissions from our renewable energies in technologies for low production by our global power emission production in improving energy and
Slide 31: 3. Circular economy – ChemCycling
3. Circular economy – ChemCyclingTM Chemical recycling represents a missing link for sustainable growth ▪ In 2019, BASF invested €20 million in Quantafuel Close the loop (pyrolysis of mixed plastic waste and purification of the resulting oil) ChemCyclingTM ▪ BASF providing technical support in the s
Slide 32: 4. Battery-materials production and recycling
4. BASF combines battery-materials production and recycling with the goal of closing the loop in the circular economy Battery materials circular economy Battery materials circular economy ▪ BASF is well-positioned in the value chain with Metal mining strategic partnerships to secure and recycle & re
Slide 33: 5. Increasing importance of renewable energy
5. Increasing importance of renewable energy ▪ In 2019, internally generated power in the BASF Group had a carbon footprint of around 0.26 tons of CO2 per MWh of electricity and was below the national grid factor at most BASF Group locations (purchased electricity: around 0.46 tons of CO2 per MWh) ▪
Slide 34: Process for project evaluation and selection
Process for project evaluation and selection BASF Sustainable Finance Roundtable Corporate Treasury, Group Reporting & Performance Management, Corporate Sustainability and Investor Relations Check for ▪ Basic sustainability requirements, incl. “do no significant harm” criterion ▪ Sustainability valu
Slide 35: Management of proceeds
Management of proceeds Green finance instruments net proceeds are tracked in a portfolio approach Indicative investment allocation ◼ Allocation: BASF intends to allocate the proceeds from the green finance instruments to eligible green projects. ◼ Portfolio approach: BASF will strive to achieve a le
Slide 36: Reporting
Reporting Allocation reporting Impact reporting The allocation reporting may provide: The impact reporting may provide: ◼ Allocation per green eligible project category ◼ Description of the eligible projects ◼ Balance amount of unallocated net proceeds ◼ Environmental impact metrics per eligible pro
Slide 37: External review
External review SPO provided by ISS ESG – “Sustainability Steering Methodology” assured by external auditor ▪ BASF’s Sustainable Solution Steering methodology has been assured by an external auditor ▪ The methodology is also adopted by other companies in the chemical industry and known as the Produc
Slide 38: Agenda
Agenda 1 2 3 At a glance Pushing the transition to a Green finance framework sustainable economy 4 Proposed terms & structure 38 May 2020 | BASF Green Bond Roadshow
Slide 39: Proposed terms & structure
Proposed terms & structure Issuer BASF SE Ratings (Moody’s / S&P) A2, Review for downgrade (Moody’s) / A, CreditWatch negative (S&P) Currency EUR Format/status Senior, Unsecured, Reg S Bearer Tranche size EUR Benchmark EUR Benchmark Maturity 2023 (3 year FXD) 2027 (7 year FXD) Coupon [ ] % annually
Slide 40: BASF's credit highlights
BASF’s credit highlights ▪ Unique Verbund concept – competitive advantage based on integrated sites, operational excellence and best-in-class technologies ▪ Industry-leading innovation platform – covering a broad range of technologies and providing solutions for a multitude of customers ▪ Creating v
Slide 41: O- BASF
O- BASF We create chemistry