Goal Achievement in 2018 We carry out our corporate purpose, “We create chemistry for a sustainable future,” by pursuing ambitious goals along our entire value chain. In this way, we aim to achieve profitable growth and take on social and environmental responsibility. This also helps to achieve the United Nations’ Sustainable Development Goals (SDGs).1 We are focusing on issues where we as a company can make a significant contribution, such as sustainable consumption and production, climate protection or fighting hunger. Goal areas along the value chain 1 Sustainable Development Goals (SDGs): SDG 1 – No poverty, SDG 2 – Zero hunger, SDG 3 – Good health and well-being, SDG 4 – Quality education, SDG 5 – Gender equality, SDG 6 – Clean water and sanitation, SDG 7 – Affordable and clean energy, SDG 8 – Decent work and economic growth, SDG 9 – Industry, innovation and infrastructure, SDG 10 – Reduced inequalities, SDG 11 – Sustainable cities and communities, SDG 12 – Responsible consumption and production, SDG 13 – Climate action, SDG 14 – Life below water, SDG 15 – Life on land, SDG 16 – Peace, justice and strong institutions, SDG 17 – Partnerships for the goals More information on the SDGs Procurement 2020 goal Status at end of 2018 SDGs More on 2 Our suppliers are evaluated based on risk due to the size and scale of our supplier portfolio. We define relevant suppliers as Tier 1 suppliers showing an elevated sustainability risk potential as identified by our risk matrices and our purchasers’ assessments. We also use further sources of information to identify relevant suppliers such as evaluations from Together for Sustainability (TfS), a joint initiative of chemical companies for sustainable supply chains. Assessment of sustainability performance of relevant suppliers2; development of action plans where improvement is necessary 70% 60% SDG 8, 12, 16, 17 more Growth and profitability As determined in 2015, our aim was, on average, to grow sales slightly faster and EBITDA considerably faster than global chemical production (excluding pharmaceuticals; 2018: 2.7%; average change since 2015: 3.3%), and to earn a significant premium on our cost of capital. Another goal was to achieve a high level of free cash flow each year, either raising or at least maintaining the dividend at the prior-year level. More information on our results of operations in 2018More information on our financial position in 2018For a definition of “slight” and “considerable,” see Actual Development Compared with Outlook for 2018 (XLS:) Download 2018 Changesince 2017 Average change since 20154 3 The average change was calculated using the changes in the non-adjusted figures from 2015 to 2017 and the change in the adjusted figures from 2018 to 2017. This gives an approximate average change on a comparable basis in each case. However, the figures does not take into account the structural decline in sales and EBITDA due to the classification of the oil and gas business as a discontinued operation. 4 Baseline 2015: excluding the gas trading and storage business transferred to Gazprom Sales3 €62.7 billion 2.4% 3.3% EBITDA3 €9.2 billion (14.9%) 3.8% Dividends per share paid out €3.10 €0.10 Premium on cost of capital €0.8 billion Free cash flow €4.0 billion Employees 2021 goal Status at end of 2018 SDGs More on 5 The term “senior executives” refers to leadership levels 1 to 4, whereby level 1 denotes the Board of Executive Directors. In addition, individual employees can attain senior executive status by virtue of special expertise. Proportion of women inleadership positions withdisciplinary responsibility 22–24% 21.7% SDG 5, 16 more Long-term goals International representation among senior executives5 Increase in proportion ofnon-German senior executives(baseline 2003: 30%) 40.4% more Senior executives withinternational experience Proportion of senior executives withinternational experience over 80% 85.4% more Safety in production 2025 goal Status at end of 2018 SDGs More on Reduction of worldwide lost-time injury rateper 200,000 working hours ≤0.1 0.3 SDG 3, 8 more Reduction of worldwide process safety incidentsper 200,000 working hours ≤0.1 0.3 SDG 3, 12, 15 more Annual goal Health Performance Index >0.9 0.96 SDG 3, 8 more Product stewardship 2020 goal Status at end of 2018 SDGs More on Risk assessment of products that we sell in quantities of more than one metric ton per year worldwide >99% 91% SDG 3, 12 more Energy and climate protection 2020 goal Status at end of 2018 SDGs More on 1 The selection of relevant sites is determined by the amount of primary energy used and local energy prices; figures relate to BASF operations including the discontinued oil and gas business. Coverage of our primary energy demand by certified energy management systems (ISO 50001) at all relevant sites1 90% 73.0% SDG 7, 12, 13, 14, 15 more Reduction of greenhouse gas emissions per metric ton of sales product (excluding the oil and gas business, baseline 2002) (40%) (34.2%) SDG 12, 13, 14, 15 more Water 2025 goal Status at end of 2018 SDGs More on Introduction of sustainable water management at all production sites in water stress areas and at all Verbund sites (excluding the oil and gas business) 100% 50.0% SDG 3, 6, 12, 14, 15 more Products and solutions 2020 goal Status at end of 2018 SDGs More on Increase the proportion of sales generated by products that make a substantial contribution to sustainable development (Accelerator products) 28% 27.7% SDG 3, 8, 9, 12, 13 more Business expansion in emerging markets Sales2 in emerging markets 2 Percentage of BASF Group sales by location of customer Overall, growth in the emerging markets declined slightly in 2018. We define the emerging markets as Greater China, the ASEAN countries,3 India, Pakistan and Bangladesh; Central and South America; eastern Europe; the Middle East, Turkey and Africa. Momentum eased slightly in eastern Europe. The eastern E.U. countries continued to post dynamic growth, albeit slower than in the previous year. Russia’s output rose faster than in the previous year, buoyed by the comparatively high oil price and strong growth in the construction sector. In the emerging markets of Asia, which account for over 60% of the gross domestic product (GDP) of all emerging economies, growth declined slightly. The Chinese economy noticeably cooled, while India and Thailand saw stronger increases in economic output compared with the previous year. In South America, the economy darkened significantly as Argentina fell back into recession. Brazil continued its moderate recovery despite political uncertainty ahead of the presidential elections and production outages caused by strikes in the spring. Although growth slowed significantly in Turkey, the Middle East as a whole only recorded a slight decline. The oil-producing states benefited from rising oil prices. Growth remained more or less stable in Africa, too. The weaker trend in South Africa was offset by a marked upturn in Nigeria. Compared with 2017, sales at our companies located in emerging markets rose by 2% to €17,144 million, largely as a result of higher sales prices and volumes. Measured by location of customer, we increased sales in the emerging markets by 1% to €21,799 million. This brought sales to customers in emerging markets to around 35% of total sales in 2018. 3 Brunei, Indonesia, Malaysia, Myanmar, Cambodia, Laos, the Philippines, Singapore, Thailand, Vietnam back next