BASF
Strong finish to 2013, despite stiff headwinds / All segments aside from Performance Products improve EBIT before special items
 From left: Hans-Ulrich Engel and Kurt Bock explaining BASF's 2013 financials (Photo: BASF) |
Amid economic headwinds, stiffened by negative currency effects in numerous emerging markets as well as in Japan, and a sluggish overall start to the year in major geographic markets, BASF (Ludwigshafen / Germany; www.basf.com) achieved its goal of increasing year-on-year sales and earnings in 2013, CEO Kurt Bock said at the annual results press conference in Ludwigshafen.
For the full year, business was driven in part by the recovery of business in North America and booming business in the Oil & Gas segment. While volumes were solid, currency influences were mostly negative. Group sales improved by 2.6% to not quite EUR 74 bn, while EBIT before special items rose 8% to EUR 7.2 bn. In the year’s final quarter, sales of EUR 18.1 bn were only slightly higher than the prior year figure of EUR 18 bn, but EBIT before special items soared by 55% to EUR 1.45 bn up from EUR 1.23 bn. The figure included special income of EUR 429m from reclassification of a gas business. Earnings improved in all operating segments, Bock said.
In the Chemicals segment, including petrochemicals, monomers and intermediates, sales to third parties declined by 5% to EUR 17 bn in full year 2013, falling in the fourth quarter by the same margin to USD 4.2 bn. Annual sales of the segment’s petrochemicals division sank by 6% to EUR 7.8 bn, while sales of monomers including polyurethane feedstocks MDI and TDI dropped back 6% to EUR 6.4 bn, and intermediates receded by the same margin to EUR 2.8 bn. Despite setbacks due to negative currency effects and weak margins for MDI and TDI, overall EBIT before special items rose by 0.5% to EUR 2.2 bn. In Q4, EBIT before special items improved by 14.6% to EUR 510m.
For 2013, BASF said a “considerable earnings increase” in petrochemicals offset the weakness in monomers. Here the PU feedstock business was dealt a further blow when work on the new EUR 1 bn TDI plant at Ludwigshafen – now scheduled to go on stream in 2015 – had to be temporarily halted following the explosion of a World War II bomb found in the soil.
In the upstream polyamide area, part of the monomers division, the further expansion of caprolactam capacity in China pressured prices in 2013 and dampened full-year sales and earnings for fibre polymers. On a brighter note, business with polymers for extrusion applications continued to develop positively in the face of growing competition.
BASF’s Functional Materials & Solutions segment, which incorporates engineering plastics and polyurethane systems, saw sales to third parties ease forward 1% in 2013 to EUR 17.3 bn, thanks mainly to higher volumes. In the fourth quarter, sales also rose by 1%, to EUR 4.1 bn. Annual EBIT before special items climbed almost 15% to around EUR 1.1 bn. The Performance Materials division with its engineering plastics and polyurethane systems activities saw sales to third parties rise 4.7% in 2013 to nearly EUR 6.5 bn, boosted by higher volumes.
Despite “significantly reduced” year-on-year growth, the group said business with PU systems, engineering plastics and specialities for the automotive industry “developed successfully.” In Europe, BASF benefited from its project business as well as the high level of exports by German premium car manufacturers. Demand from North America improved. While growth in Europe’s building industry generally “remained negative,” sales of PU systems to the sector gathered momentum. This business also picked up in other regions amid market growth. BASF noted that it “successfully concluded” the restructuring of its expandable polystyrene (“Styropor”) operations in Asia last year and also bundled capacity for PU systems and specialities in South America.
For 2014, the world’s largest chemical producer said it aims to increase sales volumes, adjusted for the effects of acquisitions and divestitures. Revenues are likely to decline due to divestiture of a gas trading business. EBIT is expected to see a “slight increase”, reflecting the divestiture but Bock said he also expects “considerably higher contributions” from the Performance Products and Functional Materials and Solutions segments, here due in part to successful restructuring.
e-Service:
BASF Report 2013 as a PDF file
For the full year, business was driven in part by the recovery of business in North America and booming business in the Oil & Gas segment. While volumes were solid, currency influences were mostly negative. Group sales improved by 2.6% to not quite EUR 74 bn, while EBIT before special items rose 8% to EUR 7.2 bn. In the year’s final quarter, sales of EUR 18.1 bn were only slightly higher than the prior year figure of EUR 18 bn, but EBIT before special items soared by 55% to EUR 1.45 bn up from EUR 1.23 bn. The figure included special income of EUR 429m from reclassification of a gas business. Earnings improved in all operating segments, Bock said.
In the Chemicals segment, including petrochemicals, monomers and intermediates, sales to third parties declined by 5% to EUR 17 bn in full year 2013, falling in the fourth quarter by the same margin to USD 4.2 bn. Annual sales of the segment’s petrochemicals division sank by 6% to EUR 7.8 bn, while sales of monomers including polyurethane feedstocks MDI and TDI dropped back 6% to EUR 6.4 bn, and intermediates receded by the same margin to EUR 2.8 bn. Despite setbacks due to negative currency effects and weak margins for MDI and TDI, overall EBIT before special items rose by 0.5% to EUR 2.2 bn. In Q4, EBIT before special items improved by 14.6% to EUR 510m.
For 2013, BASF said a “considerable earnings increase” in petrochemicals offset the weakness in monomers. Here the PU feedstock business was dealt a further blow when work on the new EUR 1 bn TDI plant at Ludwigshafen – now scheduled to go on stream in 2015 – had to be temporarily halted following the explosion of a World War II bomb found in the soil.
In the upstream polyamide area, part of the monomers division, the further expansion of caprolactam capacity in China pressured prices in 2013 and dampened full-year sales and earnings for fibre polymers. On a brighter note, business with polymers for extrusion applications continued to develop positively in the face of growing competition.
BASF’s Functional Materials & Solutions segment, which incorporates engineering plastics and polyurethane systems, saw sales to third parties ease forward 1% in 2013 to EUR 17.3 bn, thanks mainly to higher volumes. In the fourth quarter, sales also rose by 1%, to EUR 4.1 bn. Annual EBIT before special items climbed almost 15% to around EUR 1.1 bn. The Performance Materials division with its engineering plastics and polyurethane systems activities saw sales to third parties rise 4.7% in 2013 to nearly EUR 6.5 bn, boosted by higher volumes.
Despite “significantly reduced” year-on-year growth, the group said business with PU systems, engineering plastics and specialities for the automotive industry “developed successfully.” In Europe, BASF benefited from its project business as well as the high level of exports by German premium car manufacturers. Demand from North America improved. While growth in Europe’s building industry generally “remained negative,” sales of PU systems to the sector gathered momentum. This business also picked up in other regions amid market growth. BASF noted that it “successfully concluded” the restructuring of its expandable polystyrene (“Styropor”) operations in Asia last year and also bundled capacity for PU systems and specialities in South America.
For 2014, the world’s largest chemical producer said it aims to increase sales volumes, adjusted for the effects of acquisitions and divestitures. Revenues are likely to decline due to divestiture of a gas trading business. EBIT is expected to see a “slight increase”, reflecting the divestiture but Bock said he also expects “considerably higher contributions” from the Performance Products and Functional Materials and Solutions segments, here due in part to successful restructuring.
e-Service:
BASF Report 2013 as a PDF file
26.02.2014 Plasteurope.com [227600-0]
Published on 26.02.2014
German version of this article...