BASF sets the bar high

“We aim to grow again in 2013 and exceed the 2012 levels in sales and earnings before interest and taxes (EBIT) before special items,” said Dr. Kurt Bock, chairman of the Board of Executive Directors of BASF SE.
 
The expected increase in demand, together with measures to improve operational excellence and raise efficiency, would contribute to this, he added. BASF aims to earn a high premium on its cost of capital once again in 2013.

Bock said: “Innovations are the basis for future profitable growth and thus lie at the core of our competitiveness.” Therefore, BASF will once again increase its research and development spending in 2013, after expenditures of €1.7 billion in the past year – around 9 per cent more than in 2011.

The company saw sales increase in almost all segments in 2012’s fourth quarter.

In chemicals, sales in the fourth quarter increased. For the full year 2012, chemicals sales increased by 7 per cent to €13.8 billion.

The fourth quarter’s sales in plastics increased due to higher volumes and prices as well as positive currency effects. In 2012, sales in the plastics segment increased 4 per cent to €11.4 billion. EBIT before special items declined by 27 per cent to €873 million.

As for performance products, sales for the full year 2012 of €15.9 billion were around 1 per cent higher than in the previous year. EBIT before special items fell 17 per cent to €1.4 billion.

Sales in functional solutions in 2012 were €11.5 billion, 1 per cent higher than in 2011. At €561 million, EBIT before special items was slightly above the previous year.

Sales in agricultural solutions were up in the fourth quarter of 2012. BASF’s agricultural solutions had another record year in 2012, with sales rising by 12 per cent to €4.7 billion and EBIT before special items growing by 28 per cent to more than €1 billion.

Sales in oil and gas in the fourth quarter grew strongly mainly due to significantly increased oil production in Libya and higher volumes from natural gas trading. For the full year, sales rose by 39 per cent to €16.7 billion and EBIT before special items almost doubled to €4.1 billion. Net income also grew to €1.2 billion.

In the fourth quarter, sales in the company’s other areas were around €1.2 billion. These activities include the sale of raw materials, engineering and other services, rental income and leases. EBIT before special items declined by €91 million mainly due to lower earnings of other businesses. In 2012, these sales were €4.8 billion, a decline of 24 per cent and EBIT before special items decreased to minus €839 million. This was primarily due to the divestiture of the styrenic plastics activities and the fertilizer business, BASF said.

For the full year 2012, the company increased sales to €78.7 billion, up per cent compared with 2011. EBIT before special items improved by 5 per cent to €8.9 billion and EBIT by almost 5 per cent to around €9 billion. Net income fell by €1.3 billion to €4.9 billion.

At the annual shareholders’ meeting, the Board of Executive Directors and the Supervisory Board will propose a higher dividend of €2.60 per share. This is an increase of €0.10 compared with the previous year. Based on the 2012 year-end share price of €71.15, the dividend yield would be 3.65 per cent.