BASF achieves top results in 2011 and has ambitious targets for 2012

Full year 2011:
- Sales €73.5 billion (plus 15%)
- EBIT before special items €8.4 billion (plus 4%)
- Earnings per share €6.74 (plus 36%)
4th quarter 2011:
- Sales €18.1 billion (plus 10%)
- EBIT before special items €1.5 billion (minus 14%)
North America: 2011 sales rose 17% in U.S. dollar terms
Outlook 2012: Increase in sales and earnings targeted in challenging environment

Ludwigshafen, Germany – February 24, 2012 – BASF significantly surpassed the record levels of 2010 in sales and earnings, and thus again earned a high premium on its cost of capital in 2011. Compared with 2010, sales increased by 15% to €73.5 billion. All regions contributed to this increase. Income from operations (EBIT) before special items improved by 4% to €8.4 billion and EBIT increased almost 11% to €8.6 billion.

At the Annual Press Conference, Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF said: “2011 was another very successful year for BASF. Thus we are continuing our ambitious dividend policy and will, therefore, again propose a higher dividend of €2.50 at the Annual Meeting. This is an increase of €0.30 or 13.6% compared with the previous year.”

At around €18.1 billion, sales in the fourth quarter of 2011 were higher than in the fourth quarter of 2010, as well as in the third quarter of 2011. However, the slowing of the economy over the course of the year was reflected in the EBIT before special items, which at €1.5 billion was 14% below the fourth quarter of 2010. The trend that the company observed at the beginning of the second half of the year continued. Customers were more cautious in their ordering, reduced their inventories and put off orders in expectation that the economy would decline and prices could possibly soften.

Payments related to property, plant and equipment and intangible assets (capex) of €3.4 billion were €862 million above the previous year’s level. Important capital expenditures that started operations in 2011 include the expansion of the company’s site in Nanjing, China; the construction of a methylamines plant in Geismar, Louisiana; the construction of an oleum plant in Antwerp, Belgium; as well as the extension of its European natural gas pipeline system.

BASF in North America sustained good performance in 2011

In North America, sales grew by 17% in U.S. dollars and by 11% in euro terms to reach €14.7 billion. “BASF in North America sustained its good performance in 2011,” said Hans Engel, CFO BASF SE and CEO of BASF Corporation, the company’s North American subsidiary. “Sales exceeded the previous year’s levels in nearly all segments. In the Performance Products segment, this was mainly driven by the full-year inclusion of the acquired Cognis businesses. Our region ended the year with a record EBIT, which rose by €207 million to €1.3 billion.”

Outlook for the year 2012

BASF’s outlook for 2012 is based on the following economic conditions:

Global economic growth at the previous year’s level (plus 2.7%)
Solid growth in global chemical production, excluding pharmaceuticals (plus 4.1%)
An average exchange rate of $1.30 per euro
An average oil price (Brent) of $110 per barrel

Bock said: “We expect the global economy to pick up speed over the course of 2012 following a moderate start. Uncertainties due to the sovereign debt crises, in particular in Europe and the United States, will dampen growth prospects. Positive impetus for the chemical industry will again mainly come from the emerging markets.”

Excluding the effects of acquisitions and divestitures, BASF wants to increase sales volumes. The company aims to exceed the 2011 record levels in sales and EBIT before special items. Earnings will be supported by the resumption of crude oil production in Libya, as well as growing volumes in the chemicals business.

BASF plans to increase its global research and development expenditures to €1.7 billion in 2012 (2011: €1.6 billion).

“We aim to earn a high premium on our cost of capital once again in 2012. In the first half of 2012, we will likely not achieve the high levels of the first two quarters of the previous year. For the second half, we expect to surpass the levels of the same period of the previous year,” said Bock.

About BASF

BASF Corporation, headquartered in Florham Park, New Jersey, is the North American affiliate of BASF SE, Ludwigshafen, Germany. BASF has more than 16,000 employees in North America, and had sales of $19.9 billion in 2011. For more information about BASF’s North American operations, visit www.basf.us.

BASF is the world’s leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. We combine economic success, social responsibility and environmental protection. Through science and innovation we enable our customers in almost all industries to meet the current and future needs of society. Our products and system solutions contribute to conserving resources, ensuring healthy food and nutrition and helping to improve the quality of life. We have summed up this contribution in our corporate purpose: We create chemistry for a sustainable future. BASF posted sales of about €73.5 billion in 2011 and had more than 111,000employees as of the end of the year. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA) and Zurich (AN). Further information on BASF is available on the Internet at www.basf.com.

On February 24, 2012, you can obtain further information from the Internet at the following addresses:

BASF Report 2011

basf.com/overview (English)

basf.com/uebersicht (German)

Press release

basf.com/pressrelease (English)

basf.com/pressemitteilungen (German)

Live Transmission (from 10:30 a.m. CET)
basf.com/pcon (English)

basf.com/pk (German)

Speech – print version (from 10:30 a.m. CET)

basf.com/pcon (English)

basf.com/pk (German)