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Robust 3Q 2013 for BASF


Sales of 55.8 billion euros is increase of 3.1 percent

BASF raised sales in the third quarter of 2013 by 1.5% to around €17.7 billion despite significantly negative currency effects. This growth was mainly the result of increased volumes, particularly in the Oil & Gas segment. Income from operations (EBIT) before special items rose by €221 million to just under €1.7 billion.

“Our business performance was robust in the third quarter of 2013. The increase in earnings was largely due to higher contributions from the Functional Materials & Solutions and Performance Products segments in addition to lower charges in Other,” said Dr. Kurt Bock, chairman of the Board of Executive Directors of BASF SE.

Compared with the previous third quarter, EBIT rose by €279 million to about €1.7 billion. Income before taxes and minority interests grew by €287 million to €1.5 billion compared with the previous third quarter. Net income rose by €171 million to around €1.1 billion. Earnings per share were €1.20 in the third quarter of 2013, compared with €1.01 in the same quarter of 2012.

The company’s expectations for the global economic environment in 2013 remain unchanged.

“We do not anticipate an upturn in the global economy for the fourth quarter of 2013,” Bock said. “The environment is likely to remain challenging: We anticipate uneven development marked by economic uncertainty. Currency effects will continue to negatively impact sales and earnings in the fourth quarter. Nevertheless, we still aim to exceed the 2012 levels in sales and EBIT before special items.”

In addition to innovation-driven acquisitions and investments in its production Verbund, BASF is continuing the restructuring of its portfolio. One focus is on the Performance Products segment, where the growth and profitability of some standard products do not yet meet requirements. As announced, a number of measures in the pigments business are being implemented to strengthen competitiveness and sharpen its customer focus. At the same time, as the market leader in pigments, BASF will continue to invest in its production network as well as in research and development.

Cash provided by operating activities amounted to around €6.0 billion in the first three quarters of 2013, up by €957 million compared with the same period of 2012. Free cash flow was €2.9 billion compared with €2.3 billion in the first nine months of the previous year.

At €4.2 billion, sales in the Chemicals segment were 8% below the level of the third quarter of 2012. Reduced prices dampened sales, especially in the Monomers division. In addition to negative currency effects, lower volumes in all divisions contributed to this sales decrease. EBIT before special items in the segment declined to €527 million compared with €569 million in the previous year’s quarter, largely as a result of lower margins for isocyanates in Asia and ammonia.

Sales volumes increased in the Performance Products segment. Sales of €3.9 billion were just under the level of the previous year’s quarter, mostly due to currency effects. Margins were largely stable. At €376 million, EBIT before special items nevertheless exceeded the level of the third quarter of 2012 by 9%. This was mainly the result of BASF’s fixed-cost management.

In the Functional Materials & Solutions segment, sales rose by 3% to €4.4 billion compared with the prior third quarter. While the Catalysts and Performance Materials divisions were able to increase sales through higher volumes, sales declined in the Construction Chemicals and Coatings divisions. This was mostly attributable to negative currency effects. Earnings significantly increased in all divisions except Coatings. EBIT before special items for the segment was €300 million compared with €231 million in the third quarter of 2012.