05.06.19
BASF reported its first quarter 2019 results.
“In the first quarter of 2019, BASF Group sales rose by 3% year on year to €16.2 billion,” said Dr. Martin Brudermüller, chairman of the Board of Executive Directors of BASF SE, at the company’s Annual Shareholders’ Meeting.
Compared with the first quarter of 2018, income from operations (EBIT) before special items declined by €549 million to €1.7 billion.
“As expected, this is primarily due to the considerably lower contributions from the Materials and Chemicals segments. In these segments, we had exceptionally high isocyanates margins and strong cracker margins in the first quarter of the previous year,” said Brudermüller.
Prices declined by 2% compared with the prior first quarter, which was attributable mainly to the businesses with isocyanates and cracker products. Higher prices in the Surface Technologies, Agricultural Solutions and Industrial Solutions segments could only partially offset the expected price decline in the Materials and Chemicals segments. Owing to the overall cautious ordering behavior of customers, sales volumes at the BASF Group were down by 4%.
The sales growth was mainly driven by portfolio effects in the Agricultural Solutions segment resulting from the acquisition of significant businesses and assets from Bayer in August 2018. Currency effects also had a positive impact on sales in all segments.
Net income declined by €273 million to €1.4 billion. Earnings per share amounted to €1.53 in the first quarter of 2019 (first quarter of 2018: €1.83). Earnings per share adjusted for special items and amortization of intangible assets amounted to €1.65 (first quarter of 2018: €1.93).
In the first quarter of 2019, cash flows from operating activities amounted to €373 million, €858 million below the figure for the prior-year quarter. Free cash flow declined from €604 million in the prior-year quarter to minus €368 million, mainly as a result of lower cash flows from operating activities.
Business development in the segments in the first quarter 2019
Sales in the Chemicals segment (comprising Petrochemicals and Intermediates) declined by 13% compared with the first quarter of 2018 to €2.5 billion. The Petrochemicals division in particular saw a considerable decline in sales, while the Intermediates division recorded a slight decrease. Sales development was driven by lower volumes and prices in both divisions.
In the Materials segment (comprising Performance Materials and Monomers), sales of €2.9 billion were down by 15% compared with the first quarter of 2018. The sales decline was seen in both the Monomers and Performance Materials divisions and was primarily due to lower isocyanates prices in the Monomers division.
EBIT before special items declined considerably in both divisions, coming in at €323 million compared with €816 million in the previous first quarter. This was mainly a result of lower isocyanates margins in the Monomers division. In the Performance Materials division, higher margins were unable to compensate for the lower volumes, primarily in the automotive sector.
In the Industrial Solutions segment (comprising Dispersions & Pigments and Performance Chemicals), sales of €2.2 billion were 2% lower than in the prior-year quarter. Sales in the Dispersions & Pigments division were on a level with the first quarter of 2018, while sales in the Performance Chemicals division declined slightly. The year-on-year decrease was primarily due to the transfer of BASF’s paper and water chemicals business, which was previously reported under Performance Chemicals, to the Solenis group.
The Industrial Solutions segment increased EBIT before special items by 15% compared with the first quarter of 2018 to €264 million. This was primarily attributable to considerably higher EBIT before special items in the Performance Chemicals division as a result of higher prices, volumes growth and positive currency effects. The Dispersions & Pigments division also slightly increased EBIT before special items, mainly due to higher prices and positive currency effects.
“In the first quarter of 2019, BASF Group sales rose by 3% year on year to €16.2 billion,” said Dr. Martin Brudermüller, chairman of the Board of Executive Directors of BASF SE, at the company’s Annual Shareholders’ Meeting.
Compared with the first quarter of 2018, income from operations (EBIT) before special items declined by €549 million to €1.7 billion.
“As expected, this is primarily due to the considerably lower contributions from the Materials and Chemicals segments. In these segments, we had exceptionally high isocyanates margins and strong cracker margins in the first quarter of the previous year,” said Brudermüller.
Prices declined by 2% compared with the prior first quarter, which was attributable mainly to the businesses with isocyanates and cracker products. Higher prices in the Surface Technologies, Agricultural Solutions and Industrial Solutions segments could only partially offset the expected price decline in the Materials and Chemicals segments. Owing to the overall cautious ordering behavior of customers, sales volumes at the BASF Group were down by 4%.
The sales growth was mainly driven by portfolio effects in the Agricultural Solutions segment resulting from the acquisition of significant businesses and assets from Bayer in August 2018. Currency effects also had a positive impact on sales in all segments.
Net income declined by €273 million to €1.4 billion. Earnings per share amounted to €1.53 in the first quarter of 2019 (first quarter of 2018: €1.83). Earnings per share adjusted for special items and amortization of intangible assets amounted to €1.65 (first quarter of 2018: €1.93).
In the first quarter of 2019, cash flows from operating activities amounted to €373 million, €858 million below the figure for the prior-year quarter. Free cash flow declined from €604 million in the prior-year quarter to minus €368 million, mainly as a result of lower cash flows from operating activities.
Business development in the segments in the first quarter 2019
Sales in the Chemicals segment (comprising Petrochemicals and Intermediates) declined by 13% compared with the first quarter of 2018 to €2.5 billion. The Petrochemicals division in particular saw a considerable decline in sales, while the Intermediates division recorded a slight decrease. Sales development was driven by lower volumes and prices in both divisions.
In the Materials segment (comprising Performance Materials and Monomers), sales of €2.9 billion were down by 15% compared with the first quarter of 2018. The sales decline was seen in both the Monomers and Performance Materials divisions and was primarily due to lower isocyanates prices in the Monomers division.
EBIT before special items declined considerably in both divisions, coming in at €323 million compared with €816 million in the previous first quarter. This was mainly a result of lower isocyanates margins in the Monomers division. In the Performance Materials division, higher margins were unable to compensate for the lower volumes, primarily in the automotive sector.
In the Industrial Solutions segment (comprising Dispersions & Pigments and Performance Chemicals), sales of €2.2 billion were 2% lower than in the prior-year quarter. Sales in the Dispersions & Pigments division were on a level with the first quarter of 2018, while sales in the Performance Chemicals division declined slightly. The year-on-year decrease was primarily due to the transfer of BASF’s paper and water chemicals business, which was previously reported under Performance Chemicals, to the Solenis group.
The Industrial Solutions segment increased EBIT before special items by 15% compared with the first quarter of 2018 to €264 million. This was primarily attributable to considerably higher EBIT before special items in the Performance Chemicals division as a result of higher prices, volumes growth and positive currency effects. The Dispersions & Pigments division also slightly increased EBIT before special items, mainly due to higher prices and positive currency effects.
