BASF in South America - Report 2019 How we create value

Page created by Daryl Steele
 
CONTINUE READING
BASF in South America - Report 2019 How we create value
BASF in
South America
Report 2019
How we create value
BASF in South America - Report 2019 How we create value
Index

Index
About this report                                                                                  02
Welcome                                                                                            03
BASF Group at a glance 2019                                                                        04
The BASF Group                                                                                     05
BASF in different regions                                                                          10
BASF on the capital market                                                                         13
BASF in South America                                                                              16
Commitment to South America                                                                        19
Highlights                                                                                         22
Innovative and sustainable solutions for customers                                                 25
Environmental protection, health and safety                                                        28
Sustainability in the value chain                                                                  33
Employees                                                                                          39
Acknowledgements                                                                                   41
Ten year overview — BASF Global                                                                    42
Additional information                                                                             43

About this report
The “BASF in South America” Report is published annually as a
document on the performance of our activities in the three dimensions
of sustainability — economy, environment and society — in South
America.

The reference period for this publication is the fiscal year 2019. This                                      We combine economic success,
report also provides an overview of the BASF Group, together with                                            social responsibility and
its financial performance, prepared in accordance with the
requirements of the International Financial Reporting Standards
                                                                                                             environmental protection
(IFRS) and, where applicable, the German Commercial Code as well                                             Through science and innovation, we co-create with our customers,
as the German Accounting Standards (DRSC). Emissions, waste,                                                 to attend to current and future society issues. With our products
energy and water use from consolidated joint operations are                                                  and processes, we are able to provide sustainable solutions to
included, based proportionally on our participation. The number of                                           global challenges.
employees refer to employees employed by the BASF Group as of
December 31, 2019.                                                                                           We grow through profitably and create value for society. This is how
                                                                                                             we create chemistry for a sustainable future.
The scope of this review and the main focus points of our reports are
defined based on the topics along the value chain, which we
identified in internal strategic discussion processes, ongoing global
data analysis and dialog with shareholders.
    For more information on our selection of sustainability topics, see from page 33 onwards and
basf.com/materiality

2                                                                                       BASF in South America Report 2019
BASF in South America - Report 2019 How we create value
Welcome/A Message from the President

Welcome
A message from BASF president
for South America

BASF remains firm with its purpose of “creating chemistry for a
sustainable future”, innovating and seeking opportunities every day
to generate value for our customers and for society.

Through our corporate strategy, which we launched just over a year
ago, we are on the right track. Supported by the pillars of innovation,
operations, portfolio, sustainability, people and digitalization, we are
effectively placing the customer at the center of our decisions.

We have moved forward with a new organizational structure,
simplifying processes and showing that we can make BASF a more
agile company that is closer to our customers.

We inaugurated the onono — Center for Scientific and Digital
Experiences — to connect everything in the digital transformation          These are some of the short-term results that confirm our long-term
ecosystem and encourage co-creation and development of new                 vision. For circular economy and the main challenges the society is
products. In 2019, we promoted more than 500 experiences,                  facing, such as climate change and mobility, we offer innovative
7 thousand face-to-face interactions and 9 thousand remote                 solutions. We remain firm in our global goal of increasing sales of
interactions. Through the center, we connected with 120 customers,         solutions that significantly contribute to sustainability in the value
70 startups and 10 universities.                                           chain, aiming to reach € 22 billion in 2025, an increase of € 7 billion
                                                                           compared to 2019.
We painted a story filled with innovation through the Suvinil Fora da
Lata (Suvinil Out of the Can) acceleration program, which selected         And to innovate with products and solutions for our customers and
startups that are not afraid to create novelties, with energy and vigor    the needs of society, we believe that diversity is essential. Our aim is
to think outside the box and transform the paint scene in Brazil.          to be as diverse as the society in which we operate. For this reason,
                                                                           we set, as a regional goal, concrete objectives for the inclusion of
We have strengthened the seed business, contributing significantly         black people, women and people with disabilities in order to gradually
to the sustainable development of South America agriculture.               increase their representation in the company.
Increasing proximity to farmers has contributed to the longevity of
their crops and the balance of their business. We innovate, co-create      In South America, despite the challenges of global scenario, we have
and strengthen our relationships.                                          increased sales by 16%, reaching € 3.8 billion, with consecutive
                                                                           growth for seven quarters.
These and other initiatives have brought us 37 recognitions from our
customers and the market, as the most sustainable company in               Our success comes from the effort and passion of our employees to
Brazil by the Exame Sustainability Guide and a stand-out company           better serve our customers, the partnerships with our suppliers and
in the Exame Compliance Guide and Você S/A’s Best Companies to             the dialogue with governments, associations and communities that we
Work for.                                                                  are part of.

We were also recognized in Chile as being one of the 20 most               I am grateful to everyone who, together with us, has contributed to
innovative companies and received the GfK award; in Colombia, we           the results that you will see in this report, which also attests to the
were recognized for solid waste management with the Latinoamérica          fact that, at BASF, we are creating chemistry for a sustainable future.
Verde award; and in Argentina we were recognized by Buenos Aires
government for our relationship with the community and generating          Manfredo Rübens
a social impact.                                                           BASF President for South America

                                                         BASF in South America Report 2019                                                       3
BASF in South America - Report 2019 How we create value
Key data                                                                                                                                    Chemicals
BASF Group 2019
                                                                                                                                                                                                              Million €
BASF Group 2019 at a glance
BASF
                                                                                                           Segment data
                                                                                                                    Sales
                                                                                                                          1
                                                                                                                                                                                           2019                9,532
 BASFGroup
      Group2019
            2019at
                 ataaglance
                      glance
                                                                                                                                                                                           2018               11,694

at a glance
                                                                    2019        2018            +/–

Sales1                                            million €        59,316      60,220        (1.5%)                                         EBIT before special items                      2019                   791
                                                                                                                                                                                           2018                 1,587
EBITDA before special items                 1
                                                  million €          8,217      9,271      (11.4%)

EBITDA1                                           million €         8,036       8,970      (10.4%)

BASF
Key
BASF    Group 2019
         data
BASF Group
EBIT before

              2019     Group
            special items                                           4,536       6,281      (27.8%)
                                                                                                           Segment  Chemicals
                                                                                                                    Industrial
                                                                                                           Segment data
                                                                                                                          1    Solutions
                                      1
                                                                                                                                                                                                              Million €

              2019
                                                  million €

EBIT   1
BASF Group 2019 at a glance
                                                  million €         4,052       5,974      (32.2%)         Segment data
                                                                                                                   data
                                                                                                                    Sales
                                                                                                                          11
                                                                                                                                                                                           2019                9,532
                                                                                                                                                                                                               8,389

at
at a
   aa glance
                                                                                                                                                                                           2018               11,694
                                                                                                                                                                                                               9,120

at    glance
                                                                    2019        2018          +/–

      glance
Net income                                        million €         8,421       4,707       78.9%
Sales                                                              59,316      60,220        (1.5%)–                                        EBIT before special items                      2019                   791
                                                                                                                                                                                                                  820
ROCE11                                            million %€           7.7       12.0
                                                                                                                                                                                           2018                 1,587
                                                                                                                                                                                                                  668
EBITDA
Earningsbefore special items1
         per share                                million €          8,217
                                                                      9.17      9,271
                                                                                 5.12      (11.4%)
                                                                                            79.1%
EBITDA
Assets     1
                                                  million €        8,036
                                                                  86,950        8,970
                                                                               86,556      (10.4%)
                                                                                             0.5%
Key
 Key data
Key       data
           data
                                                                                                                                            Chemicals
                                                                                                                                            Industrial
                                                                                                                                            Chemicals
                                                                                                                                            Nutrition &Solutions
                                                                                                                                                        Care
                                                                                                                                                                                                              Million €

BASF Group 2019
EBIT before
Investments  special items
             including                1
                                                  million €  4,536              6,281      (27.8%)                                           Chemicals                                                        Million
                                                                                                                                                                                                               Million€€
acquisitions
EBIT1
                 2

BASF Group 2019 at a glance
                                              million €
                                              million €
                                                             4,097
                                                             4,052
                                                                               10,735
                                                                                 5,974
                                                                                           (61.8%)
                                                                                           (32.2%)         Segment data
                                                                                                                    Sales
                                                                                                                     Sales
                                                                                                                                            Sales
                                                                                                                                                  1                                        2019
                                                                                                                                                                                           2019
                                                                                                                                                                                            2019
                                                                                                                                                                                                               9,532
                                                                                                                                                                                                               8,389
                                                                                                                                                                                                               9,532
                                                                                                                                                                                                               6,075
                                                                                                                                                                                                                9,532
                                                             2019               2018             +/–                                                                                       2018               11,694
                                                                                                                                                                                           2018                9,120
                                                                                                                                                                                                              11,694
                                                                                                                                                                                                               5,940

at a glance
Net income                                    million €      2019
                                                              2019
                                                             8,421              2018
                                                                                 2018
                                                                                4,707            ++/ /––
                                                                                             78.9%                                                                                          2018               11,694
Sales11
      1
                                              million €     59,316             60,220         (1.5%)                                        EBIT before special items                      2019                   791
ROCE
Sales                                                            7.7
                                                            59,316                12.0
                                                                               60,220         (1.5%)  –                                     EBIT
                                                                                                                                             EBITbefore
                                                                                                                                                  beforespecial
                                                                                                                                                         specialitems
                                                                                                                                                                  items                    2019
                                                                                                                                                                                            2019                  820
                                                                                                                                                                                                                  791
                                                                                                                                                                                                                  793
                                                                                                                                                                                                                   791
 Sales1                                       million%€ €
                                              million        59,316             60,220         (1.5%)                                                                                      2018                 1,587
                                                             2019               2018             +/–                                                                                       2018
                                                                                                                                                                                            2018                  668
                                                                                                                                                                                                                1,587
                                                                                                                                                                                                                  736
                                                                                                                                                                                                                 1,587
EBITDA before special items11 million €                      8,217              9,271       (11.4%)
Earnings
EBITDA       per
            before  share
                      special   items
 EBITDA before special items  million €  1   million  €        9.17
                                                             8,217
                                                               8,217               5.12
                                                                                9,271
                                                                                  9,271       79.1%
                                                                                            (11.4%)
                                                                                              (11.4%)
Employees
EBITDA11 at year-end                          million €    117,628
                                                             8,036            122,404
                                                                                8,970         (3.9%)
                                                                                           (10.4%)
Assets
EBITDA
 EBITDA1                                     million
                                               million€ €  86,950
                                                             8,036
                                                              8,036            86,556
                                                                                8,970
                                                                                  8,970        0.5%
                                                                                           (10.4%)
                                                                                             (10.4%)
Personnel
EBIT beforeexpenses
                  special items11             million
                                              million €€    10,924
                                                             4,536             10,659
                                                                                6,281          2.5%
                                                                                           (27.8%)                                          Industrial Solutions                                              Million €
Key data
Investments        including                                                                                                                Nutrition
                                                                                                                                             Materials&Solutions
                                                                                                                                            Chemicals
                                                                                                                                            Industrial
                                                                                                                                            Materials    Care
BASF Group 2019
EBIT
 EBITbefore
        beforespecial
                    specialitems
                             items1          million
                                               million€ €    4,536
                                                              4,536             6,281
                                                                                  6,281    (27.8%)
                                                                                             (27.8%)                                                                                                          Million
                                                                                                                                                                                                               Million€€
                                                             4,097             10,735      (61.8%)
Research
acquisitions
EBIT
EBIT
     1
     11
 EBIT 	
expenses     1
              and2 development
                                              million €
                                              million
                                               million€€ €
                                              million
                                                             4,052
                                                              2,158
                                                             4,052
                                                              4,052
                                                                                 5,974
                                                                                1,994
                                                                                 5,974
                                                                                  5,974
                                                                                           (32.2%)
                                                                                               8.2%
                                                                                           (32.2%)
                                                                                             (32.2%)
                                                                                                           Segment data
                                                                                                                    Sales
                                                                                                                    Sales
                                                                                                                     Sales
                                                                                                                           1                                                               2019
                                                                                                                                                                                           2019
                                                                                                                                                                                            2019
                                                                                                                                                                                           2018
                                                                                                                                                                                                               8,389
                                                                                                                                                                                                               6,075
                                                                                                                                                                                                               9,532
                                                                                                                                                                                                               8,389
                                                                                                                                                                                                              11,466
                                                                                                                                                                                                               11,466
                                                                                                                                                                                                               9,120
Net income                                    million €      8,421              4,707        78.9%                                                                                         2018                5,940
                                                                                                                                                                                                              11,694
                                                                                                                                                                                                               9,120
                                                                                                                                                                                                              13,270

at a glance
Net income                                    million  €     2019
                                                             8,421              2018
                                                                                4,707            +/–
                                                                                             78.9%                                                                                          2018               13,270
 Net income	
Greenhouse          gas                        million
                                    million metric tons €      8,421              4,707        78.9%
ROCE    1                                                      20.1
                                                                 7.7              21.9
                                                                                  12.0       (8.2%)   –                                     EBIT before special items                      2019                  820
emissions     3
                                   of CO 2 equivalents%                                                                                     EBIT
                                                                                                                                             EBITbefore
                                                                                                                                                  beforespecial
                                                                                                                                                         specialitems
                                                                                                                                                                  items                    2019
                                                                                                                                                                                            2019                 793
                                                                                                                                                                                                                 791
                                                                                                                                                                                                                 820
                                                                                                                                                                                                               1,003
                                                                                                                                                                                                                1,003
ROCE
Sales 11
 ROCE1	                                      million %€%        7.7
                                                            59,3167.7             12.0
                                                                               60,220
                                                                                    12.0      (1.5%)––                                                                                     2018                  668
                                                             2019               2018             +/–                                                                                       2018
                                                                                                                                                                                            2018                 736
                                                                                                                                                                                                               1,587
                                                                                                                                                                                                                 668
                                                                                                                                                                                                               2,400
                                                                                                                                                                                                                2,400
Earnings     per share
Energy efficiency       in           kilogram of sales€         9.17               5.12       79.1%
Earnings
EBITDA
 Earnings    per
            before
               per  share
                      special items1 million € €
                     share                                     9.17
                                                             8,217
                                                                598
                                                                 9.17              5.12
                                                                                9,271
                                                                                   626
                                                                                    5.12      79.1%
                                                                                            (11.4%)
                                                                                              (4.5%)
                                                                                               79.1%
production
Employees processes
                at year-end              product/MWh       117,628            122,404         (3.9%)
Assets                                        million €    86,950              86,556          0.5%
Assets
EBITDA
 Assets
          1
                                              million
                                               million€ €  86,950
                                                             8,036
                                                             86,950            86,556
                                                                                8,970
                                                                                86,556         0.5%
                                                                                           (10.4%)
                                                                                                0.5%
Accelerator
Personnel        sales
               expenses                       million  €    15,017
                                                            10,924             14,284
                                                                               10,659           5.1%
                                                                                               2.5%
Investments        including                  million €                                                                                     Nutrition & Care                                                  Million €
Key data
Investments
EBIT  before
 Investments
acquisitions
Number
Research
acquisitions
            ofand
 acquisitions
                   including
                  special  items
                 2 including
                on-site
                                   1
                                              million
                         sustainability million €
                 2 2 development
                    	                        million
                                                       €
                                               million€ €
                                                             4,097
                                                             4,536
                                                             4,097
                                                              4,097
                                                                  81
                                                              2,158
                                                                               10,735
                                                                                6,281
                                                                               10,735
                                                                                10,735
                                                                                   100
                                                                                1,994
                                                                                           (61.8%)
                                                                                           (27.8%)
                                                                                           (61.8%)
                                                                                             (61.8%)
                                                                                           (19.0%)
                                                                                               8.2%
                                                                                                                                            Materials
                                                                                                                                            Industrial
                                                                                                                                            Nutrition
                                                                                                                                            Chemicals
                                                                                                                                            Surface
                                                                                                                                            Sales
                                                                                                                                                      &Solutions
                                                                                                                                             Industrial  Care
                                                                                                                                                     Technologies
                                                                                                                                                        Solutions 
                                                                                                                                                                                           2019
                                                                                                                                                                                                              Million
                                                                                                                                                                                                               Million€€
                                                                                                                                                                                                               6,075
audits
EBIT of raw
     1
expenses     1      material suppliers millionmillion €€     4,052               5,974     (32.2%)                                          Sales                                          2019               11,466
                                                                                                                                                                                                               8,389
                                                                                                                                                                                                               6,075
                                                                                                                                                                                                               9,532
                                                                                                                                                                                                              13,142
                                                                                                                                             Sales                                          2019
                                                                                                                                                                                           2018                 8,389
                                                                                                                                                                                                               5,940
                                                                    2019        2018            +/–                                                                                        2018
                                                                                                                                                                                            2018              13,270
                                                                                                                                                                                                               9,120
                                                                                                                                                                                                               5,940
                                                                                                                                                                                                              11,694
                                                                                                                                                                                                              11,199
                                                                                                                                                                                                                9,120
Net   income gas
Greenhouse                                     million
                                    million metric   tons€          8,421       4,707        78.9%
                                                                     20.1        21.9        (8.2%)                                         EBIT before special items                      2019                  793
emissions3                         of CO 2 equivalents                                                                                      EBIT
                                                                                                                                             EBITbefore
                                                                                                                                                  beforespecial
                                                                                                                                                         specialitems
                                                                                                                                                                  items                    2019
                                                                                                                                                                                            2019               1,003
                                                                                                                                                                                                                 820
                                                                                                                                                                                                                 793
                                                                                                                                                                                                                 791
                                                                                                                                                                                                                 722
                                                                                                                                                                                                                  820
ROCE11
Sales                                          million %€           2019
                                                                       7.7
                                                                   59,316       2018
                                                                                 12.0
                                                                               60,220           +/–
                                                                                             (1.5%)                                                                                        2018                  736
                                                                    2019
                                                                     2019       2018
                                                                                 2018           ++/ /––                                                                                    2018
                                                                                                                                                                                            2018               2,400
                                                                                                                                                                                                                 668
                                                                                                                                                                                                                 736
                                                                                                                                                                                                               1,587
                                                                                                                                                                                                                 617
                                                                                                                                                                                                                  668
Energy efficiency in                 kilogram of sales
Earningsbefore
EBITDA
Employees     peratshare
                       special items1 million €
                      year-end                                        9.17
                                                                      598
                                                                    8,217
                                                                  117,628         5.12
                                                                                  626
                                                                                9,271
                                                                              122,404        79.1%
                                                                                             (4.5%)
                                                                                            (11.4%)
                                                                                             (3.9%)
production
Employees        processes
                 atatyear-end            product/MWh
                                                                  117,628     122,404        (3.9%)
   Employees           year-end                                    117,628     122,404        (3.9%)
Assets
EBITDA expenses
Personnel
           1
                                               million €€
                                               million            86,950
                                                                    8,036
                                                                   10,924      86,556
                                                                                8,970
                                                                               10,659         0.5%
                                                                                           (10.4%)
                                                                                              2.5%
Accelerator
Personnel          sales                       million €           15,017      14,284          5.1%
  Personnelexpenses
                 expenses                     million
                                                 million€ €        10,924
                                                                    10,924     10,659
                                                                                10,659        2.5%
                                                                                                2.5%                                        Materials                                                         Million €
Investments
EBIT
Research
Number
        before
             ofand  including
                    special  items
                      development
                 on-site
                                   1
                           sustainability
                                               million €            4,536
                                                                    4,097
                                                                                6,281
                                                                               10,735
                                                                                           (27.8%)
                                                                                           (61.8%)
                                                                                                                                            Surface
                                                                                                                                             SurfaceTechnologies
                                                                                                                                            Nutrition
                                                                                                                                            Materials
                                                                                                                                            Industrial&Solutions
                                                                                                                                            AgriculturalCare
                                                                                                                                                         Solutions 
                                                                                                                                                      Technologies                                            Million
                                                                                                                                                                                                               Million€€
Research
acquisitions
  Research    1and
                  2 development
                 and   development             million   €€         2,158
                                                                        81      1,994
                                                                                  100         8.2%
                                                                                           (19.0%)
expenses
audits 1 of raw      material suppliers million                     2,158
                                                                     2,158      1,994
                                                                                 1,994        8.2%
                                                                                               8.2%                                         Sales                                          2019               11,466
EBIT
expenses
 ­expenses1
              1                                million
                                               million    €
                                                 million€ €
                                                                    4,052       5,974      (32.2%)                                          Sales
                                                                                                                                             Sales                                         2019
                                                                                                                                                                                            2019              13,142
                                                                                                                                                                                                               6,075
                                                                                                                                                                                                              11,466
                                                                                                                                                                                                               8,389
                                                                                                                                                                                                               7,814
                                                                                                                                                                                                               13,142
                                                                                                                                                                                           2018               13,270
Greenhouse gas                      million metric tons                                                                                                                                    2018
                                                                                                                                                                                            2018              11,199
                                                                                                                                                                                                               5,940
                                                                                                                                                                                                              13,270
                                                                                                                                                                                                               9,120
                                                                                                                                                                                                               6,156
                                                                                                                                                                                                               11,199
Net   income
Greenhouse
   Greenhouse gas   gas            million    million
                                             metric  tons €         8,421
                                                                     20.1       4,707
                                                                                 21.9       78.9%
                                                                                            (8.2%)
emissions      3
                                   ofmillion  metric tons
                                      CO 2 equivalents               20.1
                                                                       20.1      21.9
                                                                                   21.9     (8.2%)
                                                                                             (8.2%)                                         EBIT before special items                      2019                1,003
emissions
   emissions
               33
                                  ofofCO
                                        CO2 2equivalents
                                              equivalents                                                                                   EBIT
                                                                                                                                             EBITbefore
                                                                                                                                                  beforespecial
                                                                                                                                                         specialitems
                                                                                                                                                                  items                    2019
                                                                                                                                                                                            2019                 722
                                                                                                                                                                                                                 793
                                                                                                                                                                                                               1,003
                                                                                                                                                                                                                 820
                                                                                                                                                                                                               1,095
                                                                                                                                                                                                                  722
ROCE     1
                                                        %              7.7       12.0             –                                                                                        2018                2,400
Energy efficiency in                 kilogram of sales              2019        2018           +/–                                                                                         2018
                                                                                                                                                                                            2018                 617
                                                                                                                                                                                                                 736
                                                                                                                                                                                                               2,400
                                                                                                                                                                                                                 668
                                                                                                                                                                                                                 734
                                                                                                                                                                                                                  617
Energy
   Energyefficiency
             efficiency   in         kilogram   ofofsales             598         626       (4.5%)
production
Earnings      per    sharein
                 processes             kilogram
                                         product/MWh  sales
                                                        €             9.17
                                                                      598
                                                                       598        5.12
                                                                                  626
                                                                                   626      79.1%
                                                                                            (4.5%)
                                                                                             (4.5%)
production       processes
   productionatprocesses
Employees             year-end           product/MWh
                                           product/MWh            117,628     122,404       (3.9%)
Accelerator sales
Assets                                         million €           15,017
                                                                  86,950       14,284
                                                                               86,556         5.1%
                                                                                             0.5%
Accelerator
   Accelerator
Personnel          sales
                     sales
                expenses                       million
                                                 million€€ €       15,017
                                                                    15,017
                                                                   10,924      14,284
                                                                                14,284
                                                                               10,659         5.1%
                                                                                               5.1%
                                                                                             2.5%
                                               million                                                                                      Surface Technologies                                              Million €
Number
Investments
Number
             of on-site
             of  on-site
                           sustainability
                    including
                           sustainability                              81
                                                                    4,097         100
                                                                               10,735      (19.0%)
                                                                                           (61.8%)
                                                                                                                                            Agricultural
                                                                                                                                            Materials
                                                                                                                                            Surface      Solutions
                                                                                                                                            NutritionTechnologies
                                                                                                                                            Nutrition &&Care
                                                                                                                                                         Care                                                Million
                                                                                                                                                                                                               Million€€
  Number
Research
audits        of
          of raw
acquisitions      2on-site
               andmaterial   sustainability
                      development
                                suppliers million €                    81         100      (19.0%)
audits                                                                  81
                                                                    2,158          100
                                                                                1,994       (19.0%)
                                                                                              8.2%                                          Sales                                          2019               13,142
  ­auditsofofraw
expenses      1rawmaterial
                      materialsuppliers
                                 suppliers million €                                                                                        Sales
                                                                                                                                             Sales                                         2019
                                                                                                                                                                                            2019               7,814
                                                                                                                                                                                                              11,466
                                                                                                                                                                                                              13,142
                                                                                                                                                                                                               6,075
                                                                                                                                                                                                                6,075
                                                                                                                                                                                           2018               11,199
                                                                                                                                                                                           2018
                                                                                                                                                                                            2018               6,156
                                                                                                                                                                                                              13,270
                                                                                                                                                                                                              11,199
                                                                                                                                                                                                               5,940
                                                                                                                                                                                                                5,940
Greenhouse gas                         million metric tons
                                                                      20.1        21.9      (8.2%)                                          EBIT before special items                      2019                   722
emissions3                             of CO 2 equivalents                                                                                  EBIT
                                                                                                                                             EBITbefore
                                                                                                                                                  beforespecial
                                                                                                                                                         specialitems
                                                                                                                                                                  items                    2019
                                                                                                                                                                                            2019                1,095
                                                                                                                                                                                                                1,003
                                                                                                                                                                                                                  722
                                                                                                                                                                                                                  793
                                                                                                                                                                                                                   793
                                                                                                                                                                                           2018                   617
                                                                    2019        2018           +/–                                                                                         2018
                                                                                                                                                                                            2018                  734
                                                                                                                                                                                                                2,400
                                                                                                                                                                                                                  617
                                                                                                                                                                                                                  736
                                                                                                                                                                                                                   736
Energy efficiency in                      kilogram of sales
                                                                      598         626       (4.5%)
production
Employees processes
            at year-end                      product/MWh
                                                                  117,628     122,404       (3.9%)
Acceleratorexpenses
Personnel   sales                                 million €        15,017
                                                                   10,924      14,284
                                                                               10,659         5.1%
                                                                                              2.5%
                                                  million €                                                                                 Agricultural Solutions                                            Million €
Number ofandon-site sustainability
                                                                                                                                            Surface Technologies
                                                                                                                                            Agricultural
                                                                                                                                            Materials
                                                                                                                                            Agricultural Solutions
                                                                                                                                                         Solutions                                           Million
                                                                                                                                                                                                               Million€€
Research       development                                              81        100      (19.0%)                                          Sales                                     2019                     7,814
audits of raw material suppliers                                     2,158      1,994        8.2%
expenses  1
                                                  million €                                                                                 Sales
                                                                                                                                             Sales                                    2019
                                                                                                                                                                                       2019                   13,142
                                                                                                                                                                                                               7,814
                                                                                                                                                                                                              11,466
                                                                                                                                                                                                                7,814
                                                                                                                                                                                      2018                     6,156
                                                                                                                                                                                      2018
                                                                                                                                                                                       2018                   11,199
                                                                                                                                                                                                               6,156
                                                                                                                                                                                                              13,270
                                                                                                                                                                                                                6,156
Greenhouse gas                    million metric tons
                                                                      20.1        21.9      (8.2%)                                        EBIT before special items                   2019                     1,095
emissions   3
                                  of CO 2 equivalents                                                                                     EBIT
                                                                                                                                           EBITbefore
                                                                                                                                                 beforespecial
                                                                                                                                                           specialitemsitems          2019
                                                                                                                                                                                       2019                      722
                                                                                                                                                                                                               1,095
                                                                                                                                                                                                               1,003
                                                                                                                                                                                                                1,095
1 Restated figures, for more information,   see basf.com/report                                                                                                                       2018                       734
2 Additions to intangible assets and property, plant and equipment                                         1   The segment data for 2018 has been restated to reflect the new segment 2018
                                                                                                                                                                                       2018
                                                                                                                                                                                      structure.                 617
                                                                                                                                                                                                                 734
                                                                                                                                                                                                               2,400
                                                                                                                                                                                                                  734
Energy
3        efficiency
  Excluding            in to thirdkilogram
             sale of energy        partiesof sales                                                             Figures do not include the construction chemicals activities presented as discontinued operations.
                                                                598               626        (4.5%)
production processes                  product/MWh

Accelerator sales                                 million €        15,017      14,284          5.1%
4
Number of on-site sustainability
                                                                                                                                            Agricultural Solutions
                                                                                                                                            Surface Technologies                                              Million €
                                                                         81       100      (19.0%)
audits of raw material suppliers                                                                                                            Sales                                          2019                 7,814
                                                                                                                                                                                                               13,142
                                                                                                                                                                                           2018                 6,156
                                                                                                                                                                                                               11,199

1 Restated figures, for more information, see basf.com/report                                                                               EBIT before special items                      2019                 1,095
                                                                                                                                                                                                                  722
2 Additions to intangible assets and property, plant and equipment                                         1 The segment data for 2018 has been restated to reflect the new segment 2018structure.           734
                                                                                                                                                                                                             617
3 Excluding sale of energy to third parties                                                                  Figures do not include the construction chemicals activities presented as discontinued operations.

4                                                                                                                                           Agricultural Solutions                                            Million €

                                                                                                                                            Sales                                          2019                 7,814
                                                                                                                                                                                           2018                 6,156
1    Restated figures, for more information, see basf.com/report
11   Restated                                                                                                                               EBIT before special items                      2019                 1,095
2     Restatedfigures,
     Additions to        for
                          formore
                   intangible
                figures,          information,
                               assets
                              more               see
                                                  seebasf.com/report
                                        and property,
                                    information,      plant and equipment
                                                      basf.com/report                                      1 The segment data for 2018 has been restated to reflect the new segment structure.
2
32   Additions
      Additionsto
     Excluding   tointangible
                sale           assets
                       of energy
                     intangible         and
                                 to third
                                assets      property,
                                             property,plant
                                           parties
                                         and           plantand
                                                             andequipment
                                                                 equipment                                 11 The
                                                                                                               Thesegment
                                                                                                              Figures do notdata
                                                                                                                    segment       for
                                                                                                                                   for2018
                                                                                                                             include
                                                                                                                             data      the
                                                                                                                                        2018 has
                                                                                                                                              hasbeen
                                                                                                                                                  beenrestated
                                                                                                                                            construction        totoreflect
                                                                                                                                                         chemicals
                                                                                                                                                        restated     reflectthe
                                                                                                                                                                     activities  new
                                                                                                                                                                                  newsegment
                                                                                                                                                                              thepresented     2018
                                                                                                                                                                                                structure.
                                                                                                                                                                                           as discontinued
                                                                                                                                                                                       segment                       734
                                                                                                                                                                                                 structure. operations.
33   Excluding
      Excludingsale
                  saleofofenergy
                           energytotothird
                                      thirdparties
                                            parties                                                           Figures
                                                                                                               Figuresdo
                                                                                                                       donot
                                                                                                                          notinclude
                                                                                                                               includethetheconstruction
                                                                                                                                             constructionchemicals
                                                                                                                                                          chemicalsactivities
                                                                                                                                                                       activitiespresented
                                                                                                                                                                                  presentedasasdiscontinued
                                                                                                                                                                                                discontinuedoperations.
                                                                                                                                                                                                             operations.

4
44
BASF in South America - Report 2019 How we create value
The BASF Group

The BASF Group                                                                                               Since May 1, 2019, BASF has reported its share of Wintershall DEA’s
                                                                                                             net income in EBIT before special items and in EBIT of the BASF Group,
                                                                                                             presented under Other. BASF and LetterOne intend to list Wintershall
At BASF, we create chemistry for a sustainable future. We                                                    DEA on the stock exchange by way of an initial public offering (IPO) in
combine economic success with environmental protection and                                                   the second half of 2020, provided market conditions are suitable.
social responsibility. The approximately 118,000 employees in
the BASF Group work on contributing to the success of our                                                    The disclosures and indicators in the Management’s Report on
customers in nearly all sectors and almost every country in the                                              sustainability in 2019 no longer include data on Wintershall. The
world. Our portfolio is divided into the Chemicals, Materials,                                               Construction Chemicals business is included in the disclosures on
Industrial Solutions, Surface Technolo­gies, Nutrition & Care                                                environmental protection, health and safety, employees and compliance,
and Agricultural Solutions segments.                                                                         but has already been removed from the sales-related sustainability
                                                                                                             figures. The business acquired from Bayer in 2018 is included in the
Organization of the BASF Group in 2019                                                                       indicators.
                                                                                                               For more informations, see basf.com/report
As of January 1, 2019, we have 11 divisions grouped into six segments
as follows:                                                                                                  BASF’s new segment structure allows for a more differentiated steering
                                                                                                             of our businesses according to their market-specific competitive
  Chemicals: Petrochemicals, Intermediates                                                                  environment. It increases transparency regarding the results of our
  Materials: Performance Materials, Monomers                                                                segments and divisions and highlights the importance of the Verbund
  Industrial Solutions: Dispersions & Pigments, Performance                                                 and value chains to our business success. BASF aims to clearly position
   Chemicals                                                                                                 its businesses against their relevant competitors and establish a high-
  Surface Technologies: Catalysts, Coatings                                                                 performance organization to enable BASF to be successful in an
  Nutrition & Care: Care Chemicals, Nutrition & Health                                                      increasingly competitive market environment.
  Agricultural Solutions: Agricultural Solutions
                                                                                                             Our divisions bear operational responsibility and are organized
The segment data for 2018 presented in this report has been                                                  according to sectors or products. They manage our 54 global and
restated to reflect the new segment structure.                                                               regional business units and develop strategies for the 76 strategic
                                                                                                             business units.1
On December 21, 2019, BASF and an affiliate of Lone Star, a global
private equity firm, signed an agreement on the sale of BASF’s                                               Our regional and country organizations help to leverage market potential.
construction chemicals business. The purchase price on a cash and                                            For financial reporting purposes, we have organized the regional divisions
debt-free basis is €3.17 billion. The transaction is expected to close                                       into four regions: Europe; North America; Asia Pacific; South America,
in the third quarter of 2020, subject to the approval of the relevant                                        Africa, Middle East.
competition authorities. The Construction Chemicals division was
previously reported under the Surface Technologies segment. The                                              Together with our divisions, the three global research divisions
signing of the agreement had an immediate effect on the reporting                                            – Process Research & Chemical Engineering, Advanced Materials &
of BASF Group. Retroactively as of January 1, 2018, sales and                                                Systems Research and Bioscience Research – safeguard our innovative
earnings of the Construction Chemicals division are no longer                                                capacity and competitiveness.
included in sales, EBITDA, EBIT and EBIT before special items of the
BASF Group. Until closing, the income after taxes of the Construction                                        Business processes such as the procurement of raw materials and
Chemicals business will be presented in the income after taxes of                                            services, production and transport to customers were the shared
BASF Group as a separate item (“Income after taxes from discon­                                              responsibility of the divisions and the functional units in 2019. Seven
tinued operations”).                                                                                         functional units and eight corporate units support the BASF Group’s
                                                                                                             business activities. The functional and corporate units provided services
Following the approval of all relevant authorities, BASF and LetterOne                                       in areas such as finance, human resources, tax and legal, engineering,
completed the merger of Wintershall and DEA on May 1, 2019. In                                               site management, purchasing and logistics, environmental protection,
September 2018, BASF and LetterOne had signed a transaction                                                  health and safety, investor relations, and communications. As part of the
agreement to merge their respective oil and gas businesses in a joint                                        further development of the corporate strategy, in 2019 BASF embedded
venture. Shareholder loans were replaced by bank loans in the course                                         business-critical parts of its functional units into the divisions, such as
of the merger. Since May 1, 2019, BASF’s participating interest in                                           engineering services, procurement and logistics. This increased
Wintershall DEA has been reported in the Consolidated Financial                                              customer proximity and improved customer-specific agility. We have
Statements of the BASF Group according to the equity method, with an                                         also created leaner structures in our functional units, research and
initial valuation at fair value. The gain from the transition from full                                      development and in governance functions.
consolidation to the equity method is shown in income after taxes from
discontinued operations.

1 E xcluding the Construction Chemicals activities presented as discontinued operations

5                                                                                          BASF in South America Report 2019
BASF in South America - Report 2019 How we create value
The BASF Group

Organizational realignment as of January 1, 2020                                                                     Furthermore, one facility’s by-products can serve as feedstock
                                                                                                                     elsewhere. This not only saves us raw materials and energy, it also
BASF has created the conditions for greater customer proximity,                                                      avoids emissions, lowers logistics costs and leverages synergies.
increased competitiveness and profitable growth with an
organizational realignment as part of the implementation of its                                                      We also make use of the intelligent Verbund principle for more than
strategy. We are streamlining our administration, sharpening the                                                     production, applying it for technologies, the market and digitalization
roles of services and regions, and simplifying procedures and                                                        as well. Expert knowledge is pooled in our global research platforms.
processes as part of our ongoing Excellence Program. Customer-
focused operating divisions, cross-functional service units and                                                      Procurement and sales markets
regions as well as a lean corporate center are the cornerstones of
the new organization.                                                                                                BASF supplies products and services to around 100,000 customers1
                                                                                                                     from various sectors in almost every country in the world. Our
The Corporate Center units support the Board of Executive Directors                                                  customer portfolio ranges from major global customers and
in steering the company as a whole. These include central tasks from                                                 medium-sized businesses to end consumers.
the following areas: strategy; finance; law, insurance, and tax;
environmental protection, health and safety; human resources;                                                        We work with over 75,000 Tier 1 suppliers2 from different sectors
communications; investor relations and internal audit.                                                               worldwide. They supply us with important raw materials, chemicals,
                                                                                                                     investment goods and consumables, and perform a range of services.
In addition, four global service units were established: Global                                                      Some of our most important raw materials (based on volume) are
Engineering Services and Global Digital Services offer services for                                                  naphtha, liquid gas, natural gas, benzene and caustic soda.
individual sites, globally for the divisions or other units of the BASF
Group. Global Procurement makes purchasing even more effective. The                                                  Business and competitive environment
newly established Global Business Services unit will be a global, flexible
and demand-driven service unit that strengthens the competitive­ness                                                 BASF’s global presence means that it operates in the context of
of the divisions and provides services in areas such as finance, human                                               local, regional and global developments and is bound by various
resources, environmental protection, health and safety, intellectual                                                 conditions. These include:
property, communications, supply chain and consulting.                                                               – Global economic environment
                                                                                                                     – L egal and political requirements (such as European Union
The role of regions and countries is being sharpened. Going forward,                                                    regulations)
they will primarily represent BASF locally and even better support the                                               – International trade agreements
growth of business units with local proximity to customers.                                                          – Industry standards
                                                                                                                     – Environmental agreements (such as the E.U. Emissions Trading
The ongoing Excellence Program is expected to contribute €2 billion                                                     System)
to EBITDA annually from the end of 2021 onward compared with                                                         – Social aspects (such as the U.N. Universal Declaration of Human
baseline 2018. BASF expects a reduction of a total of around 6,000                                                      Rights)
positions worldwide until the end of 2021. This decrease results from
the organizational simplification and from efficiency gains in                                                       BASF holds one of the top three market positions in around 70% of
administration, the service units and the operating divisions.                                                       the business areas in which it is active. Our most important global
In addition, central, functional and regional structures are being                                                   competitors include Arkema, Bayer, Clariant, Corteva, Covestro,
streamlined in the context of the announced portfolio changes.                                                       Dow, Dupont, DSM, Evonik, Formosa Plastics, Huntsman, Lanxess,
                                                                                                                     SABIC, Sinopec, Solvay, Syngenta, Wanhua and many hundreds of
Sites and Verbund                                                                                                    local and regional competitors. We expect competitors from Asia
                                                                                                                     and the Middle East in particular to gain increasing significance in the
BASF has companies in more than 90 countries. We operate six                                                         years ahead.
Verbund sites and 361 additional production sites worldwide. Our
Verbund site in Ludwigshafen, Germany, is the world’s largest                                                        Corporate legal structure
chemical complex owned by a single company that was developed
as an integrated network. This was where the Verbund principle was                                                   As the publicly traded parent company, BASF SE takes a central
originally established and continuously optimized before being                                                       position: directly or indirectly, it holds the shares in the companies
implemented at additional sites.                                                                                     belonging to the BASF Group, and is also the largest operating
                                                                                                                     company. The majority of Group company cover a broad spectrum
The Verbund system is one of BASF’s great strengths. We add value                                                    of our company. In the BASF Group Consolidated Financial
by using our resources efficiently. The Production Verbund                                                           Statements, 295 companies including BASF SE are fully consolidated.
intelligently links production units and their energy supply so that, for                                            We consolidate seven joint operations on a proportional basis, and
example, the waste heat of one plant provides energy to others.                                                      account for 25 companies using the equity method.
1 T
   he number of customers refers to all external companies (sold-to parties) that had contracts with the BASF Group in the business year concerned under which sales were generated.
2 BASF considers all direct suppliers of the BASF Group in the business year concerned as Tier 1 suppliers. These are suppliers that provide us with raw materials, investment goods, consumables and services.
  Suppliers can be natural persons, companies or legal persons under public law.

                                                                                         BASF in South America Report 2019                                                                                                6
BASF in South America - Report 2019 How we create value
The BASF Group
  The BASF Group

Our
OurStrategy
    Strategy                                                                                                         Customer focus and customer industry orientation
                                                                                                                     Customer focus and customer industry orientation
                                                                                                                     ▪ BASF puts customers at the center of its decisions and
Corporate
 CorporateStrategy
           Strategy
                                                                                                                     ▪▪ BASF puts customers at the center of its decisions and
                                                                                                                       activities
                                                                                                                        ­activities
                                                                                                                     ▪ Closer dialog with our customers to increase customer
                                                                                                                     ▪▪ Closer dialog with our customers to increase customer
At BASF, we are passionate about chemistry and our                                                                     satisfaction
  At BASF, we are passionate about chemistry and our                                                                     satisfaction
customers. To be the world’s leading chemical company for
  ­customers. To be the world’s leading chemical company for
our customers, we will grow profitably and create value for                                                          To be the world’s leading chemical company for our customers, we
   our customers, we will grow profitably and create value for                                                        To be the world’s leading chemical company for our customers, we
society. Thanks to our expertise, our innovative and entrepre­                                                       want to further strengthen our customer focus throughout the entire
   society. Thanks to our expertise, our innovative and entrepre­                                                     want to further strengthen our customer focus throughout the entire
neurial spirit, and the power of our Verbund integration, we                                                         organization. This is why we are aligning our business even closer
   neurial spirit, and the power of our Verbund integration, we                                                       organization. This is why we are aligning our business even closer
make a decisive contribution to changing the world we live in                                                        with the needs of our customers.
   make a decisive contribution to changing the world we live in                                                      with the needs of our customers.
for the better. This is our goal. This is what drives us and what
   for the better. This is our goal. This is what drives us and what
we do best: We create chemistry for a sustainable future.                                                            Our diverse portfolio – from basic chemicals to high value-added
   we do best: we create chemistry for a sustainable future.                                                          Our diverse portfolio – from basic chemicals to high value-added
                                                                                                                     products and system solutions – means that we are active in many
                                                                                                                      products and system solutions – means that we are active in many
Today,    the world is changing more rapidly than ever before, driven by
   Today, the world is changing more rapidly than ever before, driven by
                                                                                                                     value    chains and value creation networks. As a result, we use various
                                                                                                                      value chains and value creation networks. As a result, we use ­various
demographic
   demographicchange
                   changeand  andnew
                                   newdigital
                                        digitaltechnologies.
                                                technologies.Our Ourcustomers
                                                                      ­customersinin                                 business
                                                                                                                      business strategies,
                                                                                                                                  strategies, which  we flexibly
                                                                                                                                              which we   flexibly adapt
                                                                                                                                                                   adaptto
                                                                                                                                                                         tothe
                                                                                                                                                                            theneeds
                                                                                                                                                                                 needsofofindividual
                                                                                                                                                                                            individu-
different   industries  and   regions  face  diverse   social  and  environmental
   different industries and regions face diverse social and environmental                                            alindustries.
                                                                                                                         industries.These
                                                                                                                                      Theserange
                                                                                                                                              rangefrom
                                                                                                                                                     fromcost
                                                                                                                                                            costleadership
                                                                                                                                                                  leadershiptototailored,
                                                                                                                                                                                  tailored,customer
                                                                                                                                                                                            custom-
challenges
   challengesdue duetotolimited
                          limitednatural
                                  naturalresources,
                                           resources,climate
                                                         climatechange
                                                                   changeand andthe
                                                                                 the                                 er-specific   solutions  for downstream      products.  This  industry
                                                                                                                      specific solutions for downstream products. This industry orientation  orienta-
increasing
   increasing demands of a growing global population. Chemistry is iskey
              demands      of a growing   global   population.   Chemistry      keyto                                tion  is primarily driven  forward and   enhanced    by the  divisions.
                                                                                                                      is primarily driven forward and enhanced by the divisions. Around       Around
                                                                                                                                                                                                 half
tosolving
    solvingmany
              manyofofthese
                        thesechallenges.
                                challenges.By Bycombining
                                                  combiningour  ourunique
                                                                    uniqueexpertise
                                                                             exper-                                  half  of  our business   units are oriented    toward specific
                                                                                                                      of our business units are oriented toward specific indus­tries. indus tries.
tise  with
   with   ourour customers’
               customers’       competence,
                              competence,     wewe cancan  jointly
                                                        jointly    develop
                                                                develop       profit-
                                                                          profitable,
able,   innovative
   innovative   and and   sustainable
                    sustainable         solutions
                                  solutions         for these
                                             for these  global global   challenges.
                                                                challenges.

Our
  Ourpurpose
           purposereflects
                     reflects what
                                what wewe dodo and
                                                and why
                                                     why wewe do do it:  it: We
                                                                              we create
                                                                                  create
chemistry
  ­chemistry   forfor
                   a sustainable
                      a sustainable  future. WeWe
                                        future.  want   to to
                                                     want  contribute
                                                               contributetotoaaworldworld
that
   thatprovides
         providesa aviable
                       viablefuture
                               futurewith
                                       withenhanced
                                            enhancedquality
                                                        qualityofoflife
                                                                     lifeforforeveryyone.
                                                                                ever­ ­one.
This
   Thisis iswhy
             whyweweoffer
                      offerproducts
                             productsandandsolutions
                                             solutionsthat
                                                       thatare
                                                            aredesigned
                                                                  designedto     tomake
                                                                                    make
thethebest
        bestuse
              useofofavailable
                      availableresources
                                 resources and    help to
                                             and help  to overcome
                                                          overcomechallenges.
                                                                            challenges.

Our
  Ouraspiration
       aspirationisistotobebethe theworld’s
                                        world’sleading
                                                  leadingchemical
                                                            chemical company
                                                                         company and   and
achieve
  achieveprofitable
             profitablegrowth.
                          growth.We  Weaim aimtotoprimarily
                                                    primarilygrow
                                                                groworganically
                                                                        organically andand
thus
  thusare
        arestrengthening
              strengtheningour  ourcustomer
                                       customerfocus.
                                                    focus.Our Ourgrowth
                                                                    growth strategy
                                                                               strategy isis
based
  basedononinvestment
                investmentininstrategic
                                   strategicgrowth
                                                 growthmarkets
                                                           markets andand innovation-
                                                                              innovation-­
driven
  drivensectors.
           sectors.The TheAsian
                            Asianmarket
                                     marketcontinues
                                               continuestotoplayplayaakey keyrole
                                                                                role here.
                                                                                      here.
With
  Witha ashare
            shareofofmore
                        morethan
                              than40    %,
                                      40­ %,China
                                              Chinaisisalready
                                                         alreadythe theworld’s
                                                                         world’slargest
                                                                                   largest
chemical
  chemicalmarket
              marketand anddrives
                             drivesthethegrowth
                                            growthofofglobal
                                                        globalchemical
                                                                chemicalproduction.
                                                                             p
                                                                             ­ roduction.
ByBy2030,
      2030,China’s
              China’sshare
                         sharewill
                                willincrease
                                      increasetotonearly
                                                     nearly50 50%%––andandwe wewant
                                                                                  wantto to
  participateininthis
participate        thisgrowth.
                        growth.ToTofurther
                                       furtherour
                                                ourgrowth
                                                    growthininthis
                                                                 thisdynamic
                                                                      dynamicmarket,
                                                                                  market,                                 BASF and
                                                                                                                         BASF   and HYMER: creating
                                                                                                                                             Creating
weweplan
       plan   to build
           to build       an integrated
                      an integrated     Verbund­
                                               Verbund
                                                    site insite   in ­
                                                            ZhanjiangZhanjiang      in the
                                                                          in the south-
  southern    Chinese     province     of G
                                          ­  uangdong.     We
ern Chinese province of Guangdong. We also want to expand our   also  want     to expand
                                                                                                                          innovation together
                                                                                                                         innovation
  our existing
existing          joint venture
          joint venture          with Sinopec
                           with Sinopec       at theatVerbund
                                                       the V­ erbund
                                                                 site insite in Nanjing.
                                                                          Nanjing.                                        The VisionVenture
                                                                                                                         The    VisionVenture concept
                                                                                                                                                concept vehicle is a good example example of   of how
                                                                                                                                                                                                   how we
                                                                                                                                                                                                        we
                                                                                                                          create    innovations
                                                                                                                         create innovations       for   the  future   in close   partnership
                                                                                                                                                                                 partnership with our
                                                                                                                                                                                                  with  our
                                                                                                                          customers. BASF
                                                                                                                         customers.      BASF and
                                                                                                                                                and HYMER GmbH & Co. KG,            KG, BadBad Waldsee,
                                                                                                                                                                                                 Waldsee,
     Corporatepurpose
    Corporate  purpose                                                                                                   Germany, the European market leader for motor ­
                                                                                                                          Germany,
                                                                                                                          campers, show
                                                                                                                                        the  European
                                                                                                                                       show what
                                                                                                                                                            market
                                                                                                                                              what aa campervan
                                                                                                                                                                      leader
                                                                                                                                                        campervan could
                                                                                                                                                                              for  motor     hhomes
                                                                                                                                                                                               omes andand
                                                                                                                         campers,                                       could look
                                                                                                                                                                              look like
                                                                                                                                                                                     like in
                                                                                                                                                                                           in 2025.
                                                                                                                                                                                              2025. More
                                                                                                                                                                                                      More
     Wecreate
    We  createchemistry
               chemistryfor
                         foraasustainable
                               sustainablefuture
                                           future                                                                         than 2020 BASF
                                                                                                                                     BASF solutions
                                                                                                                                            solutions open
                                                                                                                                                         open upup entirely
                                                                                                                         than                                       entirely new
                                                                                                                                                                             new d ­design
                                                                                                                                                                                     esign options
                                                                                                                                                                                              options and
                                                                                                                                                                                                       and
                                                                                                                         functionalities, including various high-performance plastics, over
                                                                                                                          functionalities,  including    various   high-­ performance       plastics,  over
                                                                                                                          100 3D-printed
                                                                                                                         100    3D-printed components,
                                                                                                                                             components, a      a tailored
                                                                                                                                                                  tailored package
                                                                                                                                                                            package of  of measures
                                                                                                                                                                                            measures for for
 CustomerOrientation
Customer  Orientation                                                                                                    preventing noises and vibrations, and a new coating technology.
                                                                                                                          preventing    noises  and   ­
                                                                                                                                                      v ibrations,  and   a new   coating     technology.
                                                                                                                          In less
                                                                                                                         In   less than
                                                                                                                                    than twelve
                                                                                                                                          twelve months,
                                                                                                                                                  months, HYMERHYMER and  and BASF
                                                                                                                                                                               BASF t­together
                                                                                                                                                                                        ogether turned
                                                                                                                                                                                                    turned
  Ourcustomers
Our     customersare areour ournumber
                                number one  one priority.
                                                 priority. We
                                                           We want
                                                                 want to
                                                                       to view
                                                                           view                                          their ideas and expertise into a near-production concept camper-
                                                                                                                          their  ideas  and expertise     into a near-­ production    concept     camper-
  e
  ­ verything  we  do    through  the   lens  of customer
everything we do through the lens of customer relevance. BASF relevance. BASF                                             van. The
                                                                                                                         van.     The VisionVenture
                                                                                                                                       VisionVenture was
                                                                                                                                       ­                   was unveiled
                                                                                                                                                                 unveiled toto the
                                                                                                                                                                                the public
                                                                                                                                                                                       public inin August
                                                                                                                                                                                                    August
  suppliesproducts
supplies    productsand andservices
                             servicestotoaround
                                           around100,000
                                                    100,000customers       from
                                                               customers11from                                            2019.
                                                                                                                         2019.
  various  sectors  in  almost  every   country  in  the  world.
various sectors in almost every country in the world. Our customerOur customer                                               	For more information on the collaboration with HYMER and the BASF materials used in the
                                                                                                                              For more information on the collaboration with HYMER and the BASF materials used in the
                                                                                                                               ­VisionVenture, see basf.com/en/vision-venture
  portfolioranges
portfolio    rangesfrom
                      frommajor
                             majorglobal
                                    globalcustomers
                                             customers and and medium-sized
                                                                 medium-sized                                                 VisionVenture, see basf.com/en/vision-venture
  businesses   to end   consumers.
businesses to end consumers.

  1 The number of customers refers to all external companies (sold-to parties) that had contracts with the BASF Group in the business year concerned under which sales were generated.
1 The number of customers refers to all external companies (sold-to parties) that had contracts with the BASF Group in the business year concerned under which sales were generated.

    7                                                                                    BASF in South America Report 2019
                                                                                        BASF In [ Your Country ] Report 2019
8
BASF in South America - Report 2019 How we create value
The BASF Group
                                                                                                                                                                                                        The BASF Group

We are continually refining our organization to even better meet the                                                  total enterprise cost. GM also recognized us in June with the
 We are continually refining our organization to even better meet the                                                 total enterprise cost. GM also recognized us in June with the
different needs of our customers. In 2019, we embedded significant                                                    Sustainability Partner award, the first to be given to a supplier.
 different needs of our customers. In 2019, we embedded significant                                                   ­Sustainability Partner award, the first to be given to a supplier.
parts of our functional services – including parts of research and
 parts of our functional services – including parts of research and
development, IT, procurement, human resources and communi-                                                            The Haier industrial group presented the Golden Magic Cube award
 development, IT, procurement, human resources and communi­
 ­                                                                                                                    The Haier industrial group presented the Golden Magic Cube award
cations – into the operating divisions. This makes the operating                                                      to BASF-YPC Company Limited, a 50-50 joint venture between
 cations – into the operating divisions. This makes the operating                                                     to BASF-YPC Company Limited, a 50-50 joint venture between
divisions more agile, enabling them to target specific market demands                                                 BASF and Sinopec, for the third time in a row in March 2019. The
 ­divisions more agile, enabling them to target specific market d
                                                                ­ emands                                              BASF and Sinopec, for the third time in a row in March 2019. The
and differentiate themselves from the competition. We also simplified                                                 award recognizes, among other things, high product quality, service
  and differentiate themselves from the competition. We also simplified                                               award ­recognizes, among other things, high product quality, service
processes to make the way we work more effective, more efficient                                                      reliability and a strong customer focus.
  processes to make the way we work more effective, more efficient                                                    reliability and a strong customer focus.
and more agile. The objective is to satisfy customer requests in a
  and more agile. The objective is to satisfy customer requests in a
more focused and targeted way and improve our reaction times so                                                       In March 2019, Airbus presented us with our fifth Supply Chain &
  more focused and targeted way and improve our reaction times so                                                     In March 2019, Airbus presented us with our fifth Supply Chain &
that
  thatour
       ourcustomers
           customersexperience
                       experienceaanew
                                    newBASF.
                                          BASF.                                                                       Quality
                                                                                                                      Quality Improvement
                                                                                                                                Improvementaward. award.Airbus    highlighted
                                                                                                                                                             Airbus            in particular
                                                                                                                                                                     highlighted             the con-
                                                                                                                                                                                   in particular  the
                                                                                                                      sistently  high   delivery reliability and quality of the products
                                                                                                                      consistently high delivery reliability and quality of the products   Naftoseal ®

We
 Weaimaimtotoput
              putthe
                  thecustomer
                      customeratatthe thecenter
                                          centerofofour
                                                     ourdecisions
                                                         decisions and
                                                                    and every-
                                                                          every­                                      and  Ardrox   ®
                                                                                                                                      , which  we  market    under  the Chemetall    brand.
                                                                                                                      ­Naftoseal® and Ardrox®, which we market under the Chemetall brand.
thing
 thing we do. Our ability to optimally combine our in-depth expertise
      we   do.  Our  ability to  optimally combine    our  in-depth   e
                                                                      ­ xpertise
with
 withour
       ourwide
             widerange
                   rangeofofresources
                              resources reflects
                                          reflects our
                                                    our ambition
                                                         ambition to
                                                                   to be
                                                                       be more
                                                                           more                                       In
                                                                                                                      In July
                                                                                                                         July 2019,
                                                                                                                               2019, Jaguar     Land Rover
                                                                                                                                       Jaguar Land     Rover (JLR)
                                                                                                                                                                (JLR) recognized
                                                                                                                                                                       recognized BASFBASF forforthe
                                                                                                                                                                                                  thefirst
                                                                                                                                                                                                      first
than  just  a  supplier.  We    position  ourselves   as  a
 than just a supplier. We position ourselves as a solution-­ solution- oriented
                                                                        oriented                                      time  with the  Customer    First Recognition     Award    in gold for
                                                                                                                      time with the Customer First Recognition Award in gold for ­outstandingoutstanding
system
 systemprovider.
          provider.WeWewant
                         want toto work  closely with
                                   work closely   withour
                                                       ourpartners
                                                            partnerstotodevelop
                                                                         devel-                                       customer
                                                                                                                      customer focus.
                                                                                                                                   focus. AnAn interdisciplinary
                                                                                                                                                interdisciplinary team
                                                                                                                                                                    team at   at BASF
                                                                                                                                                                                 BASF hashas supported
                                                                                                                                                                                               supported
op  customsolutions
 custom       solutionsthatthatare
                                 are both
                                      both profitable
                                            profitable and
                                                        and sustainable.
                                                              sustainable. WeWe                                       JLR
                                                                                                                      JLR for
                                                                                                                            for many
                                                                                                                                 many years      now with
                                                                                                                                         years now      with innovative
                                                                                                                                                              innovative solutions
                                                                                                                                                                              solutions for
                                                                                                                                                                                         for automotive
                                                                                                                                                                                              automotive
contribute
 contributeour ourexpertise   to to
                                  optimize  processes    andand
                                                              applications   to-                                      OEM
                                                                                                                      OEM coatings,
                                                                                                                              coatings, including
                                                                                                                                           includingthe      CathoGuard800
                                                                                                                                                        theCathoGuard               RE RE
                                                                                                                                                                                        technology    and
                                                                                                                                                                            ®
                    expertise        optimize  processes           applications                                                                                                ®
                                                                                                                                                                                  800        technology
gether  withwith
 together     ourour
                   customers.
                      customers.                                                                                      basecoats
                                                                                                                      and basecoats to realize the individual
                                                                                                                                          to realize             color preferences
                                                                                                                                                       the individual                   of JLR custom-
                                                                                                                                                                           color preferences     of JLR
                                                                                                                      ers in the premium
                                                                                                                      customers              segment.
                                                                                                                                    in the premium        The award
                                                                                                                                                      segment.     Thehonors
                                                                                                                                                                          award partners    that demon-
                                                                                                                                                                                  honors partners    that
ToToeven
     evenbetter
             betterunderstand
                    understandour  ourcustomers’
                                       customers’ needs,
                                                     needs, wewe regularly
                                                                   regularly ask
                                                                              ask                                     strate  JLR’s principles
                                                                                                                      demonstrate                 – personalized,
                                                                                                                                       JLR’s principles               transparent,
                                                                                                                                                          – personalized,              easy to
                                                                                                                                                                               trans­parent,     dotobusi-
                                                                                                                                                                                              easy     do
them
  themfor
        forfeedback
            feedbackon  onour
                            ourperformance.
                                 performance.InIn2019,
                                                  2019,wewerolled
                                                             rolledout
                                                                     out the
                                                                          the Net
                                                                              Net                                     ness  with,with,
                                                                                                                      business     dependable     and make
                                                                                                                                         dependable             one feel
                                                                                                                                                         and make     onespecial     – which
                                                                                                                                                                              feel special     are crucial
                                                                                                                                                                                            – which   are
Promoter      System®worldwide
  PromoterSystem         worldwidetotoestablish
                                        establishongoing,
                                                  ongoing,closer
                                                             closer dialog
                                                                     ­dialog with                                     to the automotive     manufacturer’s      success.
                      ®
                                                                             with                                     crucial  to the automotive     manufacturer’s     s­ uccess.
customers
  customersand  andfurther
                     furtherincrease
                              increasecustomer
                                       customersatisfaction
                                                   satisfaction and
                                                                 and customer
                                                                        customer
loyalty.
  loyalty.This
           Thisdigital
                 digitalplatform
                         platformcreates
                                   createsaaframework
                                             framework to  to learn
                                                               learn from
                                                                      from feed-
                                                                            feed-
back
  backand
        andrespond
              respondquickly.
                         quickly.

InIn 2019,
      2019, wewe also
                   also worked
                         worked on on an
                                       an expanded
                                           expanded IT-based
                                                          IT-based customer
                                                                       customer
relation ship
          shipmanagement
  relation­     managementsystem.
                               system.We We want
                                             want to
                                                   to roll
                                                         roll out
                                                              out this
                                                                   this state-of-
                                                                        state-of-
the-art,
  the-art,even
            evenmore
                  more user-friendly
                         user-friendly application
                                        application inin 2020
                                                          2020 to to help
                                                                      help sales
                                                                            sales
employees
  employeesdeliver
               delivercustomer
                       customersupport.
                                  support.

WeWe are           pursuinga aseries
       are also pursuing          series  of measures
                                       of measures        thatincrease
                                                     that will  will increase
                                                                        trans-
  par­encyency
transpar     for our  customers,
                  for our customers,enhance  customer
                                        enhance          service
                                                  customer        andand
                                                              service  explore
                                                                           ex-
  joint joint
plore    growth    potential.
               growth          Our comprehensive
                        potential.  Our comprehensiveunderstanding    of value
                                                           understanding    of
  chains
value      and and
        chains   valuevalue
                       creation  networks
                             creation       as well
                                      networks      as our
                                                 as well as global  setup
                                                            our global     and
                                                                        setup
  market
and        knowledge
      market    knowledgeremain  key key
                              remain  success  factors.
                                          success  factors.

 Qualitymanagement
Quality  management                                                                                                       Creation Center: from
                                                                                                                                            Frominspiration
                                                                                                                                                 inspirationto
                                                                                                                                                             to
                                                                                                                          solution in one place
 Ourcustomers’
Our    customers’satisfaction
                     satisfactionisis the
                                       the basis
                                             basis for
                                                    for our
                                                         our business
                                                              business success,
                                                                         success,
 which   is why  quality management       is of vital significance  for
which is why quality management is of vital significance for BASF. We   BASF.    We                                       Discover, understand,
                                                                                                                                          understand,     createcreate– this– isthis
                                                                                                                                                                                  whatiswewhat offer ourwec ­ ustomers
                                                                                                                                                                                                               offer our
 strive to  continually  improve    processes      and   products.
strive to continually improve processes and products. This is also    This  is also                                       customers with the new Creation Centers. These bring
                                                                                                                          with   the   new    Creation      Centers.       These      creative    c
                                                                                                                                                                                                  ­  enters           to-
                                                                                                                                                                                                                 creative
 reflectedininour
reflected      ourGlobal
                    GlobalQuality
                             QualityPolicy.
                                     Policy.TheThemajority
                                                     majority of
                                                               of our
                                                                  our produc
                                                                       produc­tion
                                                                                tion                                      gether   our    comprehensive           materials,       design,
                                                                                                                          centers bring together our comprehensive materials, design,         and    –  in  particular  –
 sites  and   business   units  are   certified   according    to  ISO  9001.  11 In                                      our  development          expertise      in high-­  p erformance        plastics     using  the
sites and business units are certified according to ISO 9001. In                                                          and – in particular – our development expertise in high-
 addition,wewe
 ­
addition,      alsoalso
                    meetmeet     industry
                           industry           and customer-specific
                                     and customer-specific                   quality
                                                                  quality require-                                        latest visualization
                                                                                                                          performance        plastics technologies.
                                                                                                                                                           using the latest This enables         us totechnologies.
                                                                                                                                                                                     visualization        address the
 requirements    that go  beyond    the
ments that go beyond the ISO standard.   ISO   standard.                                                                  This enables us to address the specific individual needsand
                                                                                                                          specific    individual     needs      of  our   customers        and    partners,        of to-
                                                                                                                                                                                                                       our
                                                                                                                          gether     transform       ideas     into    tailored     p
                                                                                                                                                                                    ­ roducts
                                                                                                                          customers and partners, and together transform ideas into tai-           and    applications
 Customerawards
Customer  awards                                                                                                          even more
                                                                                                                          lored   products quickly.
                                                                                                                                                  andThe      first Creation
                                                                                                                                                         applications              Center
                                                                                                                                                                                even     more opened
                                                                                                                                                                                                  quickly. in Mumbai,
                                                                                                                                                                                                                The first
                                                                                                                          India,  in  May    2019.     Y
                                                                                                                                                       ­ okohama,
                                                                                                                          Creation Center opened in Mumbai, India, in May J
                                                                                                                                                                          ­ apan,     and   Shanghai,        China,  fol-
                                                                                                                                                                                                                   2019.
 Weagain
We   againreceived
           receivedawards
                     awardsfromfromaanumber
                                         number ofof satisfied
                                                      satisfied customers
                                                                  customers in
                                                                             in                                           lowed     in  August       2019.      Our     fourth
                                                                                                                          Yokohama, Japan, and Shanghai, China, followed in August Creation      Center       worldwide
 2019. For  example,   in May    2019   we   were  named
2019. For example, in May 2019 we were named a 2018 General   a  2018  General                                            opened
                                                                                                                          2019.    Ourin Ludwigs­     hafen, Germany,
                                                                                                                                          fourth Creation                        in early 2020.
                                                                                                                                                                  Center worldwide            opened in Ludwigs-
 Motors(GM)
Motors  (GM)Supplier
               Supplierofofthe
                            theYear
                                Yearforforthe
                                           thefourteenth
                                               fourteenth time
                                                             time since
                                                                   since 2002.
                                                                         2002.                                               For more information on BASF’s Creation Centers, see basf.com/en/creation-center
                                                                                                                          hafen, Germany, in early 2020.
 The award  is presented    to suppliers    who  distinguish    themselves
The award is presented to suppliers who distinguish themselves by           by                                                 For more information on BASF’s Creation Centers, see basf.com/en/creation-center
 meeting  performance    metrics   for  quality, execution,    innovation
meeting performance metrics for quality, execution, innovation and         and

 1 ISO 9001 is a standard published by the International Organization for Standardization (ISO) and sets out the requirements for a quality management system.
1 ISO 9001 is a standard published by the International Organization for Standardization (ISO) and sets out the requirements for a quality management system.

                                                                                          BASF in South America Report 2019
                                                                                         BASF In [ Your Country ] Report 2019
                                                                                                                                                                                                                             8
                                                                                                                                                                                                                              9
BASF in South America - Report 2019 How we create value
TheBASF
The
The
The  BASFGroup
    BASF  Group
         Group
The BASF
    BASF Group
         Group

The BASF Group
Our
Our Targets
Our Targets
    Targets                                                                                                                                               purchases
                                                                                                                                                          purchases
                                                                                                                                                         ­purchases
                                                                                                                                                         p urchases to    to the
                                                                                                                                                                         to
                                                                                                                                                                         to   the 2018
                                                                                                                                                                              the
                                                                                                                                                                              the    2018 level
                                                                                                                                                                                     2018
                                                                                                                                                                                     2018      level while
                                                                                                                                                                                              level
                                                                                                                                                                                              level    while growing
                                                                                                                                                                                                       while
                                                                                                                                                                                                       while      growing production
                                                                                                                                                                                                                  growing
                                                                                                                                                                                                                  growing    production volumes.
                                                                                                                                                                                                                             production
                                                                                                                                                                                                                             production             volumes. In
                                                                                                                                                                                                                                                   volumes.
                                                                                                                                                                                                                                                   volumes.           In
                                                                                                                                                                                                                                                                      In
                                                                                                                                                                                                                                                                      In
                                                                                                                                                          other
                                                                                                                                                          other
                                                                                                                                                         other     words,
                                                                                                                                                                   words,
                                                                                                                                                                   words,     we
                                                                                                                                                                             we
                                                                                                                                                                             we     want
                                                                                                                                                                                    want
                                                                                                                                                                                   want     to
                                                                                                                                                                                            to
                                                                                                                                                                                           to    decouple
                                                                                                                                                                                                 decouple
                                                                                                                                                                                                decouple          greenhouse
                                                                                                                                                                                                                  greenhouse
                                                                                                                                                                                                                  greenhouse
                                                                                                                                                          other words, we want to decouple greenhouse gas emissions from              gas
                                                                                                                                                                                                                                      gas
                                                                                                                                                                                                                                      gas    emissions
                                                                                                                                                                                                                                             emissions
                                                                                                                                                                                                                                             emissions            from
                                                                                                                                                                                                                                                                  from
                                                                                                                                                                                                                                                                 from
 Business success
Business
Business
Business     success tomorrow
             success
             success   tomorrow means
                      tomorrow
                      tomorrow       means creating
                                     means
                                     means   creating value
                                             creating
                                             creating     value for
                                                         value
                                                         value   for the
                                                                 for
                                                                 for  the environ-
                                                                     the
                                                                     the  environ-
                                                                          environ-
                                                                          environ-                                                                        organic growth.
                                                                                                                                                          organic
                                                                                                                                                         organic
                                                                                                                                                          organic     growth. We
                                                                                                                                                                      growth.
                                                                                                                                                                      growth.      We have
                                                                                                                                                                                   We
                                                                                                                                                                                   We   have also
                                                                                                                                                                                        have
                                                                                                                                                                                        have      also defined
                                                                                                                                                                                                  also
                                                                                                                                                                                                  also    defined targets
                                                                                                                                                                                                          defined
                                                                                                                                                                                                          defined      targets for
                                                                                                                                                                                                                       targets
                                                                                                                                                                                                                       targets       for safety
                                                                                                                                                                                                                                    for
                                                                                                                                                                                                                                    for    safety for
                                                                                                                                                                                                                                          safety
                                                                                                                                                                                                                                          safety      for people
                                                                                                                                                                                                                                                     for
                                                                                                                                                                                                                                                     for     people
                                                                                                                                                                                                                                                             people
                                                                                                                                                                                                                                                             people
 ment,
ment,
ment,    society
        society  and
                 and  business.
                      business.    We
                                   We   have
                                        have  set
                                              set  ourselves
                                                   ourselves    ambitious
                                                                ambitious
ment, society and business. We have set ourselves ambitious global
        society  and business.     We   have set  ourselves     ambitious   global
                                                                            global
                                                                            global                                                                        and
                                                                                                                                                          and
                                                                                                                                                         and      the
                                                                                                                                                                 the
                                                                                                                                                                the    environment,
                                                                                                                                                                       environment,
                                                                                                                                                                      environment,         aaa  sustainable
                                                                                                                                                                                                sustainable
                                                                                                                                                                                                sustainable         product
                                                                                                                                                                                                                    product
                                                                                                                                                                                                                    product
                                                                                                                                                          and the environment, a sustainable product portfolio, responsible        portfolio,
                                                                                                                                                                                                                                   portfolio,
                                                                                                                                                                                                                                   portfolio,       responsible
                                                                                                                                                                                                                                                    responsible
                                                                                                                                                                                                                                                   responsible
 targets
targets
targets   along
          along  our
                 our entire
                     entire    value
                              value   chain.
                                     chain.  We
                                             We   report
                                                  report    trans
                                                           trans  parently
                                                                  parently
targets along our entire value chain. We report transparently on our
          along  our entire   value  chain.  We  report    trans­p arently  on
                                                                           on
                                                                           on   our
                                                                               our
                                                                               our                                                                        procurement, sustainable
                                                                                                                                                          procurement,
                                                                                                                                                         procurement,
                                                                                                                                                          procurement,        sustainable water
                                                                                                                                                                              sustainable
                                                                                                                                                                              sustainable         water manage­
                                                                                                                                                                                                 water
                                                                                                                                                                                                 water      managem
                                                                                                                                                                                                           manage
                                                                                                                                                                                                           manage       ment,
                                                                                                                                                                                                                        ment,       engaged employees,
                                                                                                                                                                                                                                   engaged
                                                                                                                                                                                                                          ent, engaged
                                                                                                                                                                                                                        ment,      engaged          employees,
                                                                                                                                                                                                                                                    employees,
                                                                                                                                                                                                                                                    employees,
 target
target
target   achievement
        achievement
        achievement
targetTargets
Our                     so
                       so
                       so   that
                           that
                           that   our
                                  our
                                 our   customers,
                                      customers,
                                      customers,      investors,
                                                     investors,
                                                    investors,   e
                                                                 ­employees
                                                                  employees
        achievement so that our customers, investors, employees andmployees    and
                                                                               and
                                                                              and                                                                         and
                                                                                                                                                          and
                                                                                                                                                         and     inclusion
                                                                                                                                                                inclusion
                                                                                                                                                               inclusion
                                                                                                                                                          and inclusion
                                                                                                                                                          purchases           of
                                                                                                                                                                              of
                                                                                                                                                                             of
                                                                                                                                                                         to of    diversity.
                                                                                                                                                                                  diversity.
                                                                                                                                                                                 diversity.
                                                                                                                                                                              thediversity.
                                                                                                                                                                                     2018 level while growing production volumes. In
 other stakeholders
other
other
other   stakeholders can
       stakeholders
       stakeholders    can track
                      can
                      can    track our
                             track
                             track  our progress.
                                    our
                                    our  progress.
                                         progress.
                                         progress.                                                                                                        other words, we want to decouple greenhouse gas emissions from
Business success tomorrow means creating value for the environ-                                                                                           The objective
                                                                                                                                                          The
                                                                                                                                                         The
                                                                                                                                                          The   objective
                                                                                                                                                               objective
                                                                                                                                                               objective
                                                                                                                                                          organic     growth. of these
                                                                                                                                                                              of
                                                                                                                                                                             of
                                                                                                                                                                              of  these
                                                                                                                                                                                  these
                                                                                                                                                                                  these
                                                                                                                                                                                   We have targets
                                                                                                                                                                                           targets
                                                                                                                                                                                          targets
                                                                                                                                                                                           targetsalsoisisdefined
                                                                                                                                                                                                       is
                                                                                                                                                                                                       is   to steer
                                                                                                                                                                                                           to
                                                                                                                                                                                                           to
                                                                                                                                                                                                           to    steertargets
                                                                                                                                                                                                               steer
                                                                                                                                                                                                               steer    our business
                                                                                                                                                                                                                        our
                                                                                                                                                                                                                        our
                                                                                                                                                                                                                        our  business
                                                                                                                                                                                                                             business
                                                                                                                                                                                                                             business
                                                                                                                                                                                                                                    for safety  intofor
                                                                                                                                                                                                                                               into
                                                                                                                                                                                                                                              into
                                                                                                                                                                                                                                               into    aa sustain­
                                                                                                                                                                                                                                                      aa    sustain-
                                                                                                                                                                                                                                                           sustain-
                                                                                                                                                                                                                                                           sustain-
                                                                                                                                                                                                                                                             people
 We want
We
We
We
ment, want
      want
      want  to grow
           to
           to
           to
        societygrow
               grow   faster than
                      faster
                 and faster
               grow   faster  thanWe
                              than
                              than
                      business.     thehave
                                    the
                                   the
                                    the  market
                                        market
                                        market   and thus
                                                 and
                                             set and
                                        market   and   thus be
                                                       thus
                                                       thus
                                                 ourselves     be economi­
                                                              be
                                                              be   economi
                                                                   economi
                                                                   economi
                                                               ambitious        cally
                                                                                cally
                                                                               ccally
                                                                                 ally
                                                                             global                                                                       able
                                                                                                                                                          able
                                                                                                                                                         able     future
                                                                                                                                                                 future
                                                                                                                                                                future
                                                                                                                                                          able future
                                                                                                                                                          and            and,
                                                                                                                                                                         and,
                                                                                                                                                                         and,    at
                                                                                                                                                                                 at
                                                                                                                                                                                 at   the
                                                                                                                                                                                     the
                                                                                                                                                                                     the
                                                                                                                                                                         and, at the same
                                                                                                                                                                 the environment,          same
                                                                                                                                                                                          same
                                                                                                                                                                                          same       time,
                                                                                                                                                                                                    time,
                                                                                                                                                                                                    time,     contribute
                                                                                                                                                                                                              contribute
                                                                                                                                                                                                              contribute
                                                                                                                                                                                                    time, contribute
                                                                                                                                                                                            a sustainable           product  to
                                                                                                                                                                                                                            to
                                                                                                                                                                                                                            to      the
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   the    implementa
                                                                                                                                                                                                                                         implementa
                                                                                                                                                                                                                                        implementa­
                                                                                                                                                                                                                            to portfolio,
                                                                                                                                                                                                                                   the implementa              tion
                                                                                                                                                                                                                                                               tion
                                                                                                                                                                                                                                                              ttion
                                                                                                                                                                                                                                                    responsible ion ofof
                                                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                                                      of
 successful
successful    and
             and   profitable.
                   profitable.  Furthermore,
                                Furthermore,   we
                                               we   want
                                                    want  to
                                                          to   provide
                                                              provide     answers
                                                                         answers                                                                          the
                                                                                                                                                          the United
                                                                                                                                                              United     Nations’
                                                                                                                                                                         Nations’      Sustainable
                                                                                                                                                                                       Sustainable         Development
                                                                                                                                                                                                          Development            Goals
                                                                                                                                                                                                                                 Goals      (SDGs).
                                                                                                                                                                                                                                            (SDGs).      111
                                                                                                                                                                                                                                                         1
                                                                                                                                                                                                                                                             We
                                                                                                                                                                                                                                                           1 We      are
                                                                                                                                                                                                                                                                    are
successful
successful
targets      and
             andour
         along     profitable.
                   profitable. Furthermore,
                                Furthermore,
                     entire value             we
                                    chain. Wewe    want  to
                                                   wanttrans
                                                report       provide
                                                          to provide     ­
                                                                         a nswers
                                                                 parentlyanswers
                                                                            on our                                                                       the  United     Nations’
                                                                                                                                                          the United Nations’
                                                                                                                                                          procurement,                 Sustainable
                                                                                                                                                                                       Sustainable
                                                                                                                                                                              sustainable                 Development
                                                                                                                                                                                                 water Development
                                                                                                                                                                                                           management,Goals    Goals
                                                                                                                                                                                                                                   engaged (SDGs)
                                                                                                                                                                                                                                            (SDGs).      .
                                                                                                                                                                                                                                                        11
                                                                                                                                                                                                                                                             We
                                                                                                                                                                                                                                                             We are
                                                                                                                                                                                                                                                    employees,      are
 to the
to
to
to   theachievement
    the
    the
target   most pressing
         most
         most
         most    pressing
                 pressing
                pressing    challenges
                            challenges
                           challenges
                            challenges
                        so that           of our
                                         of
                                         of
                                         of  our time.
                                             our
                                             our
                                 our customers,   time. To
                                                  time.
                                                  time.   To combat
                                                         To
                                                         To
                                                  investors,    combat
                                                                combat
                                                                combat
                                                                 employees  climate
                                                                           climate
                                                                           climate
                                                                           climate
                                                                                and                                                                       focusing
                                                                                                                                                          focusing
                                                                                                                                                         focusing
                                                                                                                                                          focusing
                                                                                                                                                          and          on issues
                                                                                                                                                                       on
                                                                                                                                                                      on
                                                                                                                                                                       on
                                                                                                                                                                inclusion   issues
                                                                                                                                                                           issues
                                                                                                                                                                           issues      where we
                                                                                                                                                                                       where
                                                                                                                                                                                       where
                                                                                                                                                                                       where
                                                                                                                                                                              of diversity.       we as
                                                                                                                                                                                                  we
                                                                                                                                                                                                  we    as aa
                                                                                                                                                                                                       as
                                                                                                                                                                                                       as    aa ­ccompany
                                                                                                                                                                                                                  company
                                                                                                                                                                                                                  company
                                                                                                                                                                                                                   ompany can    can make
                                                                                                                                                                                                                                 can
                                                                                                                                                                                                                                can     make aa
                                                                                                                                                                                                                                        make
                                                                                                                                                                                                                                       make        aa significant
                                                                                                                                                                                                                                                        significant
                                                                                                                                                                                                                                                       significant
                                                                                                                                                                                                                                                       significant
 change
change
change
change
other     and global
          and
          and
          and   globalcan
                global
                global
       stakeholders     warming,
                        warming,
                        warming,
                        warming,    weprogress.
                                    we
                                   we
                                    we
                            track our   have resolved
                                        have
                                        have
                                        have  resolved to
                                              resolved
                                              resolved    to limit
                                                         to
                                                         to    limit total
                                                              limit
                                                              limit   total green-
                                                                     total
                                                                     total  green-
                                                                            green-
                                                                            green-                                                                        contribution,such
                                                                                                                                                          contribution,
                                                                                                                                                         contribution,
                                                                                                                                                          contribution,     suchas
                                                                                                                                                                            such
                                                                                                                                                                            such    asclimate
                                                                                                                                                                                    as
                                                                                                                                                                                    as  climateprotection,
                                                                                                                                                                                        climate
                                                                                                                                                                                        climate     protection,sustainable
                                                                                                                                                                                                    protection,
                                                                                                                                                                                                    protection,       sustainableconsumption
                                                                                                                                                                                                                      sustainable
                                                                                                                                                                                                                      sustainable         consumptionand
                                                                                                                                                                                                                                         consumption
                                                                                                                                                                                                                                         consumption                and
                                                                                                                                                                                                                                                                   and
                                                                                                                                                                                                                                                                   and
 house gas
house
house
house    gas emissions
         gas
         gas   emissions from
               emissions
               emissions    from our
                            from
                            from   our production
                                   our
                                   our  production sites
                                        production
                                        production    sites and
                                                      sites
                                                      sites    and our
                                                              and
                                                              and      our e
                                                                      our
                                                                      our   energy
                                                                            energy
                                                                           ­energy
                                                                             nergy                                                                        production,
                                                                                                                                                          production,
                                                                                                                                                         production,
                                                                                                                                                          production,
                                                                                                                                                          The  objective   and
                                                                                                                                                                           and
                                                                                                                                                                          and
                                                                                                                                                                           and    fighting
                                                                                                                                                                                  fighting
                                                                                                                                                                                 fighting
                                                                                                                                                                              of fighting     hunger.
                                                                                                                                                                                              hunger.
                                                                                                                                                                                              hunger.
                                                                                                                                                                                              hunger.
                                                                                                                                                                                  these targets        is to steer our business into a sustain-
We want to grow faster than the market and thus be economically                                                                                           able future and, at the same time, contribute to the implementation of
successful and profitable. Furthermore, we want to provide answers                                                                                        the United Nations’ Sustainable Development Goals (SDGs).11 We are
  Status
  Status
toStatus
   the most
           of
           of  Target
           of Target
               pressing
                        Achievement
               Target Achievement
                        Achievement
                         challenges of our
                                             in 2019
                                             intime.
                                            in   2019To combat climate
                                                2019                                                                                                      focusing on issues where we as a company can make a significant
change and global warming, we have resolved to limit total green-                                                                                         contribution, such as climate protection, sustainable consumption and
house
    Growgas  emissions   from than
                                our  production   sites and our energy                                                                                    production,      and fighting       hunger.
         sales  volumes faster
                         faster than global
                                     global
                                                                                                                             ––3%
                                                                                                                               3%                           Achieve aaa return
                                                                                                                                                                          return    on capital
                                                                                                                                                                                        capital     employed (ROCE)  (ROCE)
                                                                                                                                                                                                                                                                             7.7%
                                                                                                                                                                                                                              2222
                                                                                                                                                                                                                                 2
   Grow
   Grow  sales
         sales volumes
               volumes  faster  than global                                                                                                                 Achieve
                                                                                                                                                            Achieve      return     on
                                                                                                                                                                                    on  capital     employed
                                                                                                                                                                                                   employed          (ROCE)
                                                                                                                                                                                                                                                                             7.7%
         Growsales
              salesvolumes
                     volumesfaster
                              faster  than global                                                                                                             Achieveaa                                                   2 2
        Grow
        Grow
        Grow sales
             sales  volumes
                    volumes  faster
                             faster  than
                                   than
                                     than  global
                                         global ­chemical
                                           global                                                                                                             Achieve
                                                                                                                                                             Achieve
                                                                                                                                                              Achieve aareturn
                                                                                                                                                                         returnon
                                                                                                                                                                        return
                                                                                                                                                                        return  oncapital
                                                                                                                                                                                on
                                                                                                                                                                                on  capital
                                                                                                                                                                                   capital
                                                                                                                                                                                   capital  employed
                                                                                                                                                                                            employed
                                                                                                                                                                                          employed
                                                                                                                                                                                            employed     (ROCE)2
                                                                                                                                                                                                        (ROCE)
                                                                                                                                                                                                      (ROCE)
                                                                                                                                                                                                        (ROCE)
         chemical production
        chemical
        chemical
        production production
                  production   every year
                               every
                              every
                   every year every   year
                                     year                                                                               (Global
                                                                                                                       (Global  chemical
                                                                                                                                chemical                      considerablyabove
                                                                                                                                                              considerably
                                                                                                                                                              considerably
                                                                                                                                                            considerably    abovethe
                                                                                                                                                                            above
                                                                                                                                                                            above   thecost
                                                                                                                                                                                   the
                                                                                                                                                                                   the  costofof
                                                                                                                                                                                        cost
                                                                                                                                                                                        cost  of
                                                                                                                                                                                              of capital
                                                                                                                                                                                                 capital
                                                                                                                                                                                                 capital
                                                                                                                                                                                               capital                                                              (Cost
                                                                                                                                                                                                                                                                   (Cost  of
                                                                                                                                                                                                                                                                          of capital:
                                                                                                                                                                                                                                                                             capital: 10%)
                                                                                                                                                                                                                                                                                      10%)
        chemical  production         year                                                                               (Globalchemical
                                                                                                                       (Global
                                                                                                                      (Global
                                                                                                                       (Global
                                                                                                                                chemical
                                                                                                                                chemical
                                                                                                                                chemical                      considerably  above  the  cost of  capital                                                            (Costof
                                                                                                                                                                                                                                                                   (Cost
                                                                                                                                                                                                                                                                  (Cost
                                                                                                                                                                                                                                                                   (Cost
                                                                                                                                                                                                                                                                          ofcapital:
                                                                                                                                                                                                                                                                          of
                                                                                                                                                                                                                                                                          of
                                                                                                                                                                                                                                                                             capital:10%)
                                                                                                                                                                                                                                                                             capital:
                                                                                                                                                                                                                                                                             capital:
                                                                                                                                                                                                                                                                                      10%)
                                                                                                                                                                                                                                                                                      10%)
                                                                                                                                                                                                                                                                                      10%)
                                                                                                                      production:
                                                                                                                      production:
                                                                                                                      production:
                                                                                                                      production:
                                                                                                                      production:
                                                                                                                    ­pproduction:  1.8%)
                                                                                                                                   1.8%)
                                                                                                                                   1.8%)
                                                                                                                                   1.8%)
                                                                                                                                   1.8%)
                                                                                                                       roduction: 1.8%)                       percentage
                                                                                                                                                              percentage
                                                                                                                                                              percentage
                                                                                                                                                            ­ppercentage   everyyear­
                                                                                                                                                                           every
                                                                                                                                                                           every
                                                                                                                                                               ercentage every    year
                                                                                                                                                                                 year
                                                                                                                                                                                 year
                                                                                                                                   1.8%)                                   every year
     Status of Target Achievement in 2019

                                                                                                                         –––11%
                                                                                                                            11%                                                                                                                                             €3.30
         Increase  EBITDA  before special   items by                                                                                                         Increaseathe
                                                                                                                                                                       the  dividend   pershare
                                                                                                                                                                                           share   every  year
         Increase
        Increase
        Grow      EBITDA
                  EBITDA
               sales
        Increase           before
                           before
                      volumes
                  EBITDA          special
                                  special
                              faster
                          before            items
                                           items
                                     thanitems
                                 special   global by
                                                  by
                                                byby
                                                                                                                             3%                              Increase
                                                                                                                                                            Increase
                                                                                                                                                            Achieve
                                                                                                                                                            Increase   the
                                                                                                                                                                      the   dividend
                                                                                                                                                                            dividend
                                                                                                                                                                         return        per
                                                                                                                                                                                       per
                                                                                                                                                                                 on capital
                                                                                                                                                                           dividend   per  share
                                                                                                                                                                                           share   every
                                                                                                                                                                                                   every
                                                                                                                                                                                             employed
                                                                                                                                                                                                 every   year
                                                                                                                                                                                                         year
                                                                                                                                                                                                         (ROCE)
                                                                                                                                                                                                       year
                                                                                                                                                                                                                                                                             7.7%3333
                                                                                                                                                                                                                22
        Increase
         3–5%per
         3–5%
        3–5%
        chemical
        3–5%
                  EBITDA
                peryear
                per
               per  year
                    year
                    year
                           before
                    production
        3–5% per year
                                  special
                               every year
                                           items
                                                                                                                      (Global
                                                                                                                      (Global chemical
                                                                                                                              chemical
                                                                                                                                                            Increase
                                                                                                                                                             basedon
                                                                                                                                                             based
                                                                                                                                                            based   on
                                                                                                                                                                   on
                                                                                                                                                                      the
                                                                                                                                                            considerably
                                                                                                                                                            based
                                                                                                                                                                            dividend
                                                                                                                                                                    onaaaastrong
                                                                                                                                                                           strong
                                                                                                                                                                           strong
                                                                                                                                                                          strong
                                                                                                                                                                            above  free
                                                                                                                                                                                       per
                                                                                                                                                                                    free
                                                                                                                                                                                    free
                                                                                                                                                                                     the
                                                                                                                                                                                  free
                                                                                                                                                                                           share
                                                                                                                                                                                         cash
                                                                                                                                                                                         cash
                                                                                                                                                                                         cash
                                                                                                                                                                                         cost
                                                                                                                                                                                       cash
                                                                                                                                                            based on a strong free cash flow
                                                                                                                                                                                               flow
                                                                                                                                                                                              flow
                                                                                                                                                                                              flow
                                                                                                                                                                                              of
                                                                                                                                                                                            flow
                                                                                                                                                                                                   every
                                                                                                                                                                                                  capital
                                                                                                                                                                                                         year
                                                                                                                                                                                                                                                                  (Cost
                                                                                                                                                                                                                                                                  (Cost of
                                                                                                                                                                                                                                                                            €3.30
                                                                                                                                                                                                                                                                        of capital:
                                                                                                                                                                                                                                                                           capital:
                                                                                                                                                                                                                                                                             (2018:
                                                                                                                                                                                                                                                                            (2018:
                                                                                                                                                                                                                                                                            (2018:   10%)
                                                                                                                                                                                                                                                                                     10%)
                                                                                                                                                                                                                                                                                    €3.20)
                                                                                                                                                                                                                                                                                    €3.20)
                                                                                                                                                                                                                                                                                    €3.20)
                                                                                                                                                                                                                                                                             (2018:€3.20)
                                                                                                                                                                                                                                                                                    €3.20)
                                                                                                                                                                                                                                                                            (2018:
                                                                                                                                                                                                                                                                           (2018:   €3.20)
                                                                                                                     production:
                                                                                                                     production: 1.8%)
                                                                                                                                 1.8%)                      percentage every year                                                                                           (2018:  €3.20)

         Increase  EBITDA          before    special   items by
                                                                                                                        –8.2%
                                                                                                                          11%                               Increase the dividend     per share every   year
                                                                                                                                                                                                                                                                             €3.30   3
                                                                                                                      –– 8.2%                                                                                                                                                 €15.0
          Grow
         Grow
          GrowCO
         Grow
        Grow     CO
                 CO      ­neutrally
                         ­neutrally
                 CO22222-neutrally
                 CO                    until
                                       until
                         ­neutrallyuntil
                        ­neutrally             2030
                                              2030
                                       until2030
                                       until   2030
                                              2030                                                                                                           Achieve
                                                                                                                                                            Achieve  €22
                                                                                                                                                                     €22
                                                                                                                                                             Achieve€22
                                                                                                                                                            Achieve
                                                                                                                                                            Achieve      billion
                                                                                                                                                                         billion
                                                                                                                                                                     €22billion
                                                                                                                                                                     €22           in
                                                                                                                                                                                  in
                                                                                                                                                                         billioninin
                                                                                                                                                                         billion      Accelerator
                                                                                                                                                                                      Accelerator
                                                                                                                                                                                   inAccelerator
                                                                                                                                                                                  in  Accelerator
                                                                                                                                                                                      Accelerator  sales
                                                                                                                                                                                                   sales
                                                                                                                                                                                                   sales
                                                                                                                                                                                                   sales
                                                                                                                                                                                                 sales   4444
                                                                                                                                                                                                         4  4

                                                                                                                                                                                                                                                                              €15.0
                                                                                                                                                                                                       4 4
         Grow
         3–5%    CO
                 per222­neutrally
          (Development   year
                           of carbon  until
                                     emissions2030
                                                 compared                                                                                                   Achieve
                                                                                                                                                            based  on€22
                                                                                                                                                                      a  billion
                                                                                                                                                                        strong   free Accelerator
                                                                                                                                                                                       cash  flow  sales
         (Development
         (Development
          (Development
         (Development
        (Development
        (Development
                           of
                         ofof
                           of
                           of carbon
                              carbon
                              carbon
                              carbon
                            carbon   emissions
                                     emissions
                                     emissions
                                     emissions
                                   emissions    compared
                                                compared
                                                 compared
                                                compared
                                             ­compared
                        of carbon emissions compared                                                                                                         by2025
                                                                                                                                                            by
                                                                                                                                                            by
                                                                                                                                                            by  2025
                                                                                                                                                               2025
                                                                                                                                                               2025                                                                                                           (2018:
                                                                                                                                                                                                                                                                              (2018: €3.20)
                                                                                                                                                                                                                                                                                     €3.20)
         with
        with
        with  baseline
              baseline
              baseline  2018)
                       2018)
                       2018)                                                                                                                                by 2025
                                                                                                                                                                                                                                                                             billion
         withbaseline
              baseline  2018)
                                                                                                                                                                                                                                                                             billion
        with
        with  baseline 2018)
                      2018)
        with  baseline 2018)
                                                                                                                                                                                                                                                                            ­b illion
                                                                                                                                                                                                                                                                             billion

         Reduce
         Reduce
        Reduce
        Grow
        Reduce
        Reduce
         per
        per
               CO worldwide
                 worldwide
                 worldwide
                  22
         per 200,000
             200,000
             200,000
        (Development
        (Development
        200,000
                    ­neutrally
                 worldwide
                 worldwide
                        working
                        working
                     ofworking
                     of
                 workingcarbon
                        carbon
                                process
                               process
                               process
                                 until 2030
                               process
                               process
                                  hours
                                 hours
                                 hours
                               emissions
                               emissions
                            hours
                                           safety
                                           safety
                                           safety
                                         safety
                                           safety
                                          to ≤≤≤by
                                         to
                                         to
                                                       incidents
                                                      incidents
                                                      incidents
                                                    incidents
                                                      incidents
                                                 0.12025
                                                 0.1
                                                0.1
                                         compared
                                   to ≤ tocompared
                                         0.1           by 2025
                                                      by
                                                      by  2025
                                                          2025
                                                               per                                                         0.3
                                                                                                                           0.3
                                                                                                                       – 8.2%
                                                                                                                           0.3
                                                                                                                                                             Reducethe
                                                                                                                                                            Reduce
                                                                                                                                                            Reduce
                                                                                                                                                            Achieve
                                                                                                                                                            Reduce
                                                                                                                                                            Reduce
                                                                                                                                                             per2025
                                                                                                                                                            per
                                                                                                                                                            per
                                                                                                                                                            by
                                                                                                                                                                      theworldwide
                                                                                                                                                                      the
                                                                                                                                                                     the
                                                                                                                                                                     €22
                                                                                                                                                                     the
                                                                                                                                                                 200,000
                                                                                                                                                                 200,000
                                                                                                                                                                 200,000
                                                                                                                                                            200,000
                                                                                                                                                                          worldwide
                                                                                                                                                                          worldwide
                                                                                                                                                                          worldwide
                                                                                                                                                                          billion
                                                                                                                                                                          worldwide
                                                                                                                                                                          working
                                                                                                                                                                          working
                                                                                                                                                                          working
                                                                                                                                                                     working   hours
                                                                                                                                                                                       lost­time
                                                                                                                                                                                       lost­time
                                                                                                                                                                                      lost­time
                                                                                                                                                                                  in Accelerator
                                                                                                                                                                                     lost-time
                                                                                                                                                                                      lost­time
                                                                                                                                                                                    hours
                                                                                                                                                                                    hours
                                                                                                                                                                                    hours   to ≤≤≤by
                                                                                                                                                                                           to
                                                                                                                                                                                           to
                                                                                                                                                                                      to ≤ to
                                                                                                                                                                                           0.1    0.1
                                                                                                                                                                                                      injury
                                                                                                                                                                                                     injury
                                                                                                                                                                                                     injury
                                                                                                                                                                                                       sales
                                                                                                                                                                                                   injury
                                                                                                                                                                                                     injury
                                                                                                                                                                                                   0.12025
                                                                                                                                                                                                   0.1  by
                                                                                                                                                                                                        by
                                                                                                                                                                                                              rate
                                                                                                                                                                                                             rate
                                                                                                                                                                                                             rate
                                                                                                                                                                                                           rate
                                                                                                                                                                                                              44
                                                                                                                                                                                                             rate
                                                                                                                                                                                                        by 2025
                                                                                                                                                                                                            2025
                                                                                                                                                                                                            2025
                                                                                                                                                                                                                 per                                                            0.3
                                                                                                                                                                                                                                                                                 0.3
                                                                                                                                                                                                                                                                             €15.0
                                                                                                                                                                                                                                                                                0.3
        per
         with200,000
         with baseline working
              baseline 2018)     hours       ≤ 0.1    by  2025                                                                                              per  200,000  working   hours      ≤ 0.1    by 2025
                                                                                                                                                                                                                                                                            billion
                       2018)

         Introduce
         Introduce
        Introduce
        Reduce
        Introduce
        Introduce
         production
         production
        production
        per
                    sustainable
                    sustainable
                    sustainable
                  worldwide
                   sustainable
                    sustainable
                      sites
                      sites
                     sites
              200,000sites
        production     working
                            in
                                    watermanagement
                                    water
                                    water
                                 process
                                    water
                                    water
                              inwater
                              in
                             in  water
                                 water
                                 water
                                            management
                                            management
                                            management
                                           safety
                                            management
                                        stress
                                        stress
                                       stress
                                   hours
                                      stress     areas
                                                 areas
                                                areas
                                          to ≤ areas
                                               0.1     and
                                                       and
                                                       and
                                                   byand
                                                      2025
                                                           at
                                                           at
                                                           at
                                                   incidents
                                                         atat
                                                            at
                                                            at
                                                           at
                                                         atat
                                                            all
                                                               all
                                                               all
                                                              all
                                                            allall                                                     35.8%
                                                                                                                          0.3
                                                                                                                       35.8%                                 Morethan
                                                                                                                                                             More
                                                                                                                                                            More
                                                                                                                                                            Reduce
                                                                                                                                                            More
                                                                                                                                                            More
                                                                                                                                                             atBASF,
                                                                                                                                                             at
                                                                                                                                                            at
                                                                                                                                                            per
                                                                                                                                                            at
                                                                                                                                                                    than
                                                                                                                                                                   than
                                                                                                                                                                   than
                                                                                                                                                                   than
                                                                                                                                                                BASF,
                                                                                                                                                                BASF,
                                                                                                                                                                BASF,
                                                                                                                                                                       the80%
                                                                                                                                                                          80%
                                                                                                                                                                          80%
                                                                                                                                                                         80%
                                                                                                                                                                          80%
                                                                                                                                                                        they
                                                                                                                                                                        they
                                                                                                                                                                       they
                                                                                                                                                                 200,000
                                                                                                                                                                       they
                                                                                                                                                                                ofour
                                                                                                                                                                                of
                                                                                                                                                                               of
                                                                                                                                                                               of
                                                                                                                                                                               of
                                                                                                                                                                                    ouremployees
                                                                                                                                                                                    our
                                                                                                                                                                                   our
                                                                                                                                                                            worldwide
                                                                                                                                                                                   our
                                                                                                                                                                              canthrive
                                                                                                                                                                             can
                                                                                                                                                                             can  thrive
                                                                                                                                                                            working
                                                                                                                                                                             can
                                                                                                                                                                                        employees
                                                                                                                                                                                        employees
                                                                                                                                                                                        employees
                                                                                                                                                                                        employees
                                                                                                                                                                                   thrive
                                                                                                                                                                                   thrive
                                                                                                                                                                                      hoursand
                                                                                                                                                                                           and
                                                                                                                                                                                           and
                                                                                                                                                                                          andto
                                                                                                                                                                                                      feelthat
                                                                                                                                                                                                     feel
                                                                                                                                                                                                     feel
                                                                                                                                                                                         lost­time feel
                                                                                                                                                                                                    injury
                                                                                                                                                                                                     feel
                                                                                                                                                                                                perform
                                                                                                                                                                                               perform
                                                                                                                                                                                               perform
                                                                                                                                                                                                ≤ 0.1 by
                                                                                                                                                                                              perform
                                                                                                                                                                                                            that
                                                                                                                                                                                                            that
                                                                                                                                                                                                           that
                                                                                                                                                                                                             rate
                                                                                                                                                                                                           that
                                                                                                                                                                                                           at
                                                                                                                                                                                                           at
                                                                                                                                                                                                           at
                                                                                                                                                                                                           2025
                                                                                                                                                                                                        atat
                                                                                                                                                                                                                                                                              79%
                                                                                                                                                                                                                                                                               0.3
                                                                                                                                                                                                                                                                              79%
        production   sites   in  water stress   areas  and                                                                                                  at  BASF,  they  can  thrive   and perform
         all Verbund
         all
        all  Verbund
             Verbund
        Verbund        sites
                       sites
                       sites
                  sitessites    by 2030
                                by
                               by
                         by 2030   2030
                                   2030                                                                                                                      theirbest
                                                                                                                                                             their
                                                                                                                                                            their
                                                                                                                                                            their  best
                                                                                                                                                                   best
                                                                                                                                                                   best
        all  Verbund           by  2030                                                                                                                     their  best

        Introduce sustainable water management at all
                                                                                                                        35.8%                                 More than 80% of our employees feel that
                                                                                                                                                                                                                                                                              79%
        production thesites
          Increasethe       in water
                        proportion     stress
                                       womenareas
                                    ofwomen             and at
                                                 inleadership
                                                     leadership
                                                                                                                          23%
                                                                                                                          23%                                 at BASF,
                                                                                                                                                               Cover    they
                                                                                                                                                                      90%   ofcan  thrive and
                                                                                                                                                                                ourrelevant
                                                                                                                                                                                    relevant    perform
                                                                                                                                                                                              spend     withat
                                                                                                                                                                                                                                                                              81%
                                                                                                                                                                                                                                                                              81%
                                                                                                                                                                                                      5
         Increase
         Increase  the
                  the  proportion
                       proportion   of
                                   of  women
                                       women    in
                                                in   leadership
                                                    leadership                                                                                                Cover
                                                                                                                                                              Cover  90%
                                                                                                                                                                     90%    of
                                                                                                                                                                           of  our
                                                                                                                                                                               our  relevant
                                                                                                                                                                                   relevant  spend
                                                                                                                                                                                             spend  555 with
                                                                                                                                                                                                    5
                                                                                                                                                                                                        with
        Increase       proportion  of         inin                                                                                                           Cover   90%   of  our           spend     with
                                                                                                                          23%                                                                                                                                                 81%
                                                                                                                                                                                                   55
        Increase  the  proportion  of  women        leadership                                                                                                Cover  90%   of  our relevant  spend      with
        all Verbund
          positions
         positions
          positions
         positions
        positions      sites
                     with
                    with
                     with
                    with
                   with       by 2030responsibility
                          disciplinary
                          disciplinary
                          disciplinary
                          disciplinary
                         disciplinary   responsibility
                                       responsibility    to
                                                        to
                                        responsibilitytoto
                                       responsibility    to
                                                        to                                                                                                    their best
                                                                                                                                                              sustainability
                                                                                                                                                              sustainability
                                                                                                                                                               sustainability
                                                                                                                                                              sustainability
                                                                                                                                                            ­ssustainability    evaluations
                                                                                                                                                                               evaluations
                                                                                                                                                                                evaluations
                                                                                                                                                                               evaluations
                                                                                                                                                               ustainability evaluations      by
                                                                                                                                                                                              by
                                                                                                                                                                                              by
                                                                                                                                                                                              by
                                                                                                                                                                                           byby  2025
                                                                                                                                                                                                 2025
                                                                                                                                                                                                 2025
                                                                                                                                                                                                 2025
                                                                                                                                                                                               2025
        positions   with  disciplinary responsibility                                                                                                                          evaluations       2025
          22–24%by
         22–24%
         22–24%
        22–24%     by2021
                   by
                  by   2021
                      2021
                      2021
        22–24% by 2021
        Newtarget
        New
        New
        New
        New
             targetfor
            target
            target
            target
                     for
                     for
                    for
                    for
                         2030:
                         2030:
                         2030:
                       2030:
                         2030:
                               30%
                               30%
                               30%
                             30%
                               30%
                                                                                                                                                              Have80%
                                                                                                                                                              Have
                                                                                                                                                              Have
                                                                                                                                                            Have
                                                                                                                                                              Have
                                                                                                                                                                     80%of
                                                                                                                                                                    80%
                                                                                                                                                                    80%
                                                                                                                                                                    80%
                                                                                                                                                                           ofour
                                                                                                                                                                           of
                                                                                                                                                                          of
                                                                                                                                                                          of
                                                                                                                                                              sustainability
                                                                                                                                                              sustainability
                                                                                                                                                              sustainability
                                                                                                                                                            ­ssustainability
                                                                                                                                                                              oursuppliers
                                                                                                                                                                              our
                                                                                                                                                                              our
                                                                                                                                                                              our
                                                                                                                                                                                  suppliersimprove
                                                                                                                                                                                  suppliers
                                                                                                                                                                                  suppliers
                                                                                                                                                                                  suppliers
                                                                                                                                                                               performance
                                                                                                                                                                               performance
                                                                                                                                                                               performance
                                                                                                                                                               ustainability performance
                                                                                                                                                                                             improvetheir
                                                                                                                                                                                             improve
                                                                                                                                                                                            improve
                                                                                                                                                                                            improve
                                                                                                                                                                                               upon
                                                                                                                                                                                               upon
                                                                                                                                                                                              upon
                                                                                                                                                                                            upon
                                                                                                                                                                                                        their
                                                                                                                                                                                                       their
                                                                                                                                                                                                       their
                                                                                                                                                                                                      their
                                                                                                                                                                                                     re-evaluation
                                                                                                                                                                                                    re-evaluation
                                                                                                                                                                                                    re-evaluation
                                                                                                                                                                                                 re-evaluation
                                                                                                                                                                                                                                                                              52%
                                                                                                                                                                                                                                                                              52%
                                                                                                                                                                                                                                                                              52%
                                                                                                                                                                               performance    upon  re-evaluation

         Increase the proportion of women in leadership
         positions with disciplinary responsibility to
                                                                                                                              23%                           Cover 90% of our relevant spend55 with
                                                                                                                                                            sustainability evaluations by 2025
                                                                                                                                                                                                                                                                               81%
         22–24% by 2021

         New target for 2030: 30%
                                                                                                                                                            Have 80% of our suppliers improve their
                                                                                                                                                                        sustainability performance upon re-evaluation
                                                                                                                                                                                                                                                                               52%
 111
 1
11 1    For
        For
       For   more
            more
            more
        Formore
       For
       For
       For
                    information
                   information
                  information
             moreinformation
            more
            more
                    informationon
                  information
                  information
                                   on
                                  on
                                  on
                                   onthe
                                  on
                                  on
                                        the
                                       the
                                       the   Sustainable
                                            Sustainable
                                            Sustainable
                                        theSustainable
                                       the
                                       the
                                                                 Development
                                                                 Development
                                                                 Development
                                              SustainableDevelopment
                                            Sustainable
                                            Sustainable
                                                                 DevelopmentGoals
                                                                 Development
                                                                 Development
                                                                                  Goals
                                                                                 Goals
                                                                                 Goals    (SDGs),
                                                                                         (SDGs),
                                                                                         (SDGs),
                                                                                  Goals(SDGs),
                                                                                 Goals
                                                                                 Goals
                                                                                          (SDGs),see
                                                                                         (SDGs),
                                                                                         (SDGs),
                                                                                                     see
                                                                                                     see
                                                                                                    see    sustainabledevelopment.un.org
                                                                                                          sustainabledevelopment.un.org
                                                                                                          sustainabledevelopment.un.org
                                                                                                     seesustainabledevelopment.un.org
                                                                                                    see
                                                                                                    see
                                                                                                           sustainabledevelopment.un.org
                                                                                                          sustainabledevelopment.un.org
                                                                                                          sustainabledevelopment.un.org
 222
 2
22 2    Return
        Return
       Return
        Returnon
       Return
       Return
       Return
                on
               on
               on    capital
                     capital
                     capital
                oncapital
               on
               on
                              employed
                              employed
                             employed
                      capitalemployed
                     capital
                     capital
                              employed(ROCE)
                             employed
                             employed
                                             (ROCE)
                                            (ROCE)
                                           (ROCE)
                                             (ROCE)isis
                                           (ROCE)
                                           (ROCE)      is
                                                       is
                                                         is
                                                        is  aaaameasure
                                                         isaa
                                                            a
                                                                 measure
                                                                measure
                                                                measure
                                                                 measureof
                                                                measure
                                                                measure
                                                                           of
                                                                           of
                                                                          of   the
                                                                              the
                                                                              the
                                                                           ofthe
                                                                          of
                                                                          of
                                                                                   profitability
                                                                                   profitability
                                                                                   profitability
                                                                               theprofitability
                                                                              the
                                                                              the
                                                                                                  of
                                                                                                  of
                                                                                                 of
                                                                                    profitabilityof
                                                                                   profitability
                                                                                   profitability
                                                                                                      our
                                                                                                     our
                                                                                                     our
                                                                                                  ofour
                                                                                                 of
                                                                                                 of
                                                                                                           operations.
                                                                                                          operations.
                                                                                                          operations.
                                                                                                      ouroperations.
                                                                                                     our
                                                                                                     our
                                                                                                           operations.We
                                                                                                          operations.
                                                                                                          operations.
                                                                                                                           We
                                                                                                                           We
                                                                                                                           We    calculate
                                                                                                                                calculate
                                                                                                                                calculate
                                                                                                                            Wecalculate
                                                                                                                           We
                                                                                                                           We
                                                                                                                                            this
                                                                                                                                            this
                                                                                                                                           this
                                                                                                                                 calculatethis
                                                                                                                                calculate
                                                                                                                                calculate
                                                                                                                                                     indicator
                                                                                                                                                    indicator
                                                                                                                                                   indicator
                                                                                                                                             thisi­ndicator
                                                                                                                                           this
                                                                                                                                           this
                                                                                                                                                               as
                                                                                                                                                               as
                                                                                                                                                               as
                                                                                                                                                     indicatoras
                                                                                                                                                   indicator
                                                                                                                                                   indicator
                                                                                                                                                                    the
                                                                                                                                                                   the
                                                                                                                                                                   the
                                                                                                                                                                asthe
                                                                                                                                                               as
                                                                                                                                                               as
                                                                                                                                                                        EBIT
                                                                                                                                                                        EBIT
                                                                                                                                                                        EBIT
                                                                                                                                                                    theEBIT
                                                                                                                                                                   the
                                                                                                                                                                   the
                                                                                                                                                                              generated
                                                                                                                                                                             generated
                                                                                                                                                                             generated
                                                                                                                                                                        EBITgenerated
                                                                                                                                                                        EBIT
                                                                                                                                                                        EBIT
                                                                                                                                                                                        by
                                                                                                                                                                                        by
                                                                                                                                                                                        by
                                                                                                                                                                              generatedby
                                                                                                                                                                             generated
                                                                                                                                                                             generated
                                                                                                                                                                                             the
                                                                                                                                                                                            the
                                                                                                                                                                                            the
                                                                                                                                                                                         bythe
                                                                                                                                                                                        by
                                                                                                                                                                                        by
                                                                                                                                                                                                  segments
                                                                                                                                                                                                 segments
                                                                                                                                                                                                 segments
                                                                                                                                                                                             thesegments
                                                                                                                                                                                            the
                                                                                                                                                                                            the
                                                                                                                                                                                                           as
                                                                                                                                                                                                           as
                                                                                                                                                                                                           as
                                                                                                                                                                                                  segmentsas
                                                                                                                                                                                                 segments
                                                                                                                                                                                                 segments  as
                                                                                                                                                                                                           as  aaaapercentage
                                                                                                                                                                                                            asaa
                                                                                                                                                                                                               a
                                                                                                                                                                                                                    percentage
                                                                                                                                                                                                                    percentage
                                                                                                                                                                                                                   percentage  of
                                                                                                                                                                                                                               of
                                                                                                                                                                                                                               of
                                                                                                                                                                                                                    percentageof
                                                                                                                                                                                                                   percentage
                                                                                                                                                                                                                   percentage
                                                                                                                                                                                                                                    the
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                ofthe
                                                                                                                                                                                                                               of
                                                                                                                                                                                                                               of
                                                                                                                                                                                                                                        average
                                                                                                                                                                                                                                        average
                                                                                                                                                                                                                                        average
                                                                                                                                                                                                                                    theaverage
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                                 cost
                                                                                                                                                                                                                                                 cost
                                                                                                                                                                                                                                                cost
                                                                                                                                                                                                                                         averagecost
                                                                                                                                                                                                                                        average
                                                                                                                                                                                                                                        average
                                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                                 costof
                                                                                                                                                                                                                                                cost
                                                                                                                                                                                                                                                cost  of
                                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                                          capital
                                                                                                                                                                                                                                                          capital
                                                                                                                                                                                                                                                         capital
                                                                                                                                                                                                                                                       ofcapital
                                                                                                                                                                                                                                                         capital
                                                                                                                                                                                                                                                         capital
                                                                                                                                                                                                                                                                  basis.
                                                                                                                                                                                                                                                                  basis.
                                                                                                                                                                                                                                                                  basis.
                                                                                                                                                                                                                                                          capitalbasis.
                                                                                                                                                                                                                                                                   basis.
                                                                                                                                                                                                                                                                  basis.
                                                                                                                                                                                                                                                                  basis.
 333
 3
33 3    Dividend
        Dividend
       Dividend   proposed
                  proposed
                 proposed
        Dividendproposed
       Dividend
       Dividend
       Dividend
                   proposedby
                 proposed
                 proposed
                                by
                                by
                                by   the
                                    the
                                    the
                                 bythe
                                by
                                by
                                          Board
                                          Board
                                          Board
                                     theBoard
                                    the
                                    the
                                          Boardof
                                          Board
                                          Board
                                                   of
                                                  of
                                                  of   Executive
                                                       Executive
                                                      Executive
                                                   ofExecutive
                                                  of
                                                  of
                                                                      Directors
                                                                      Directors
                                                                      Directors
                                                       ExecutiveDirectors
                                                      Executive
                                                      Executive
                                                                      Directors
                                                                      Directors
                                                                     Directors
 444
 4
44 4    Accelerator
        Accelerator
       Accelerator     products
                       products
                       products
        Acceleratorproducts
       Accelerator
       Accelerator
       Accelerator
                        productsare
                       products
                       products
                                   are
                                  are
                                  are    products
                                         products
                                        products
                                   areproducts
                                  are
                                  are
                                         productsthat
                                        products
                                        products
                                                     that
                                                     that
                                                    that
                                                      thatmake
                                                    that
                                                    that
                                                                make
                                                                make
                                                               make  a
                                                                     aa  substantial
                                                                        substantial
                                                                        substantial
                                                                makeaaasubstantial
                                                               make
                                                               make  a
                                                                                       sustainability
                                                                                      sustainability
                                                                                      sustainability
                                                                         substantialsustainability
                                                                        substantial
                                                                        substantial
                                                                                                        contribution
                                                                                                        contribution
                                                                                                        contribution
                                                                                       sustainabilitycontribution
                                                                                      sustainability
                                                                                      sustainability
                                                                                                         contributionin
                                                                                                        contribution
                                                                                                        contribution
                                                                                                                          in
                                                                                                                         in
                                                                                                                        in    the
                                                                                                                             the
                                                                                                                             the
                                                                                                                        ininthe
                                                                                                                       in
                                                                                                                                   value
                                                                                                                                  value
                                                                                                                                  value
                                                                                                                              thevalue
                                                                                                                             the
                                                                                                                             the  value
                                                                                                                                  value
                                                                                                                                         chain.
                                                                                                                                         chain.
                                                                                                                                         chain.
                                                                                                                                   valuechain.
                                                                                                                                          chain.
                                                                                                                                         chain.
                                                                                                                                         chain.
 555
 5
55 5    We
        We
       We    understand
            understand
            understand
        Weunderstand
       We
       We
       We
                            relevant
                           relevant
                           relevant
             understandrelevant
            understand
            understand
                                       spend
                                       spend
                                      spend
                            relevantspend
                           relevant
                           relevant
                                        spendas
                                      spend
                                      spend
                                                as
                                                as
                                                as  procurement
                                                    procurement
                                                   procurement
                                                 asprocurement
                                                as
                                                as
                                                    procurementvolumes
                                                   procurement
                                                   procurement
                                                                         volumes
                                                                        volumes
                                                                        volumes
                                                                         volumeswith
                                                                        volumes
                                                                        volumes
                                                                                    with
                                                                                    with
                                                                                    with   suppliers
                                                                                          suppliers
                                                                                          suppliers
                                                                                    withsuppliers
                                                                                    with
                                                                                   with
                                                                                                       defined
                                                                                                       defined
                                                                                                      defined
                                                                                           suppliersdefined
                                                                                          suppliers
                                                                                          suppliers
                                                                                                       definedas
                                                                                                      defined
                                                                                                      defined
                                                                                                                as
                                                                                                                as
                                                                                                                as   “relevant.”
                                                                                                                    “relevant.”
                                                                                                                    “relevant.”
                                                                                                                 as“relevant.”
                                                                                                                as
                                                                                                                as
                                                                                                                     “relevant.”For
                                                                                                                    “relevant.”
                                                                                                                   “relevant.”
                                                                                                                                     For
                                                                                                                                    For
                                                                                                                                    For   more
                                                                                                                                         more
                                                                                                                                         more
                                                                                                                                     Formore
                                                                                                                                    For
                                                                                                                                    For
                                                                                                                                                   information,
                                                                                                                                                  information,
                                                                                                                                                 information,
                                                                                                                                          morei­nformation,
                                                                                                                                         more
                                                                                                                                         more
                                                                                                                                                   information,see
                                                                                                                                                 information,
                                                                                                                                                 information,
                                                                                                                                                                   see
                                                                                                                                                                  see
                                                                                                                                                                  see   basf.com/report
                                                                                                                                                                        basf.com/report
                                                                                                                                                                       basf.com/report
                                                                                                                                                                   seebasf.com/report
                                                                                                                                                                  see
                                                                                                                                                                  see
                                                                                                                                                                        basf.com/report
                                                                                                                                                                       basf.com/report
                                                                                                                                                                       basf.com/report

                                                                                                                               [Your
                                                                                                                          In[[[South          ] Report
 10
 10
910                                                                                                                 BASFIn
                                                                                                                    BASF
                                                                                                                    BASF
                                                                                                                    BASF
                                                                                                                    BASF
                                                                                                                         In
                                                                                                                          in
                                                                                                                         In
                                                                                                                                Your America]]] Report
                                                                                                                                YourCountry
                                                                                                                                     Country
                                                                                                                                     Country
                                                                                                                                Your Country
                                                                                                                                                 Report2019
                                                                                                                                                 Report 2019
                                                                                                                                                        2019
                                                                                                                                                 Report2019
                                                                                                                                                        2019
11     For
       For more
            more information
                  information on
                              on the
                                  the Sustainable
                                      Sustainable Development
                                                    Development Goals
                                                                   Goals (SDGs),
                                                                          (SDGs), seesee sustainabledevelopment.un.org
                                                                                         sustainabledevelopment.un.org
22     Return
       Return on
              on capital
                   capital employed
                           employed (ROCE)
                                      (ROCE) is
                                              is aa measure
                                                    measure of
                                                             of the
                                                                the profitability
                                                                    profitability of
                                                                                  of our
                                                                                     our operations.
                                                                                         operations. We
                                                                                                      We calculate
                                                                                                           calculate this
                                                                                                                     this indicator
                                                                                                                           indicator as
                                                                                                                                     as the
                                                                                                                                        the EBIT
                                                                                                                                            EBIT generated
                                                                                                                                                 generated by
                                                                                                                                                           by the
                                                                                                                                                              the segments
                                                                                                                                                                  segments as
                                                                                                                                                                           as aa percentage
                                                                                                                                                                                 percentage of
                                                                                                                                                                                            of the
                                                                                                                                                                                               the average
                                                                                                                                                                                                   average cost
                                                                                                                                                                                                           cost of
                                                                                                                                                                                                                of capital
                                                                                                                                                                                                                   capital basis.
                                                                                                                                                                                                                           basis.
33     Dividend
       Dividend proposed
                 proposed byby the
                               the Board
                                    Board of
                                          of Executive
                                              Executive Directors
                                                         Directors
44     Accelerator
       Accelerator products
                     products are
                              are products
                                   products that
                                             that make
                                                   make aa substantial
                                                           substantial sustainability
                                                                       sustainability contribution
                                                                                       contribution in
                                                                                                     in the
                                                                                                        the value
                                                                                                            value chain.
                                                                                                                  chain.
BASF in South America - Report 2019 How we create value
You can also read