BASF completed the first quarter of 2017 with a considerable rise
in sales and earnings compared to the same quarter of last year.
“BASF has had a good start to the year 2017,” said Dr. Kurt Bock,
Chairman of the Board of Executive Directors of BASF SE. “The
demand trends we observed over the course of 2016 continued in the
first quarter of this year.”
BASF Group’s sales rose by 19% in the first quarter of 2017 to
€16.9 billion. In all segments, the positive volume trend seen
in previous quarters was maintained and led to growth of 8% in
sales volumes. Furthermore, BASF achieved significantly higher
sales prices (up 8%), especially in the Chemicals segment. Currency
effects and the Chemetall business acquired from Albemarle in
December 2016 also contributed to the increase in sales.
BASF Group’s income from operations (EBIT) before special items
was 29% higher at €2.5 billion. Of this amount,
€2.0 billion was generated by the chemicals business, which
comprises the segments Chemicals, Performance Products and
Functional Materials & Solutions. Earnings in the chemicals
business thus grew by 37%.
BASF received an initial insurance payment of €100 million
in connection with the accident that occurred at the North Harbor
in Ludwigshafen last October. Around three-quarters of this amount
was recognized in the Chemicals segment.
EBIT grew by €585 million to €2.5 billion compared
with the first quarter of 2016.
Net income rose by €322 million to €1.7 billion.
Earnings per share were €1.86 in the first quarter of 2017,
compared with €1.51 in the same quarter of 2016. Adjusted for
special items and amortization of intangible assets, earnings per
share amounted to €1.97 (first quarter of 2016: €1.64).
North America
- Sales increase by 13% year-on-year
- Income from operations up by €69 million to €513 million
In North America, sales improved year-on-year by 13% in local
currency terms and 16% in euros. The main drivers were higher sales
prices and volumes, especially in the Chemicals segment. The
greater contribution from the Chemicals segment led to a €69
million increase in income from operations, to €513 million.
“In North America, we remain committed to profitable growth
fueled by innovation, promising market segments and cross-business
initiatives,” said Wayne T. Smith, Chairman and CEO, BASF
Corporation. “We are enhancing our operational excellence through
continuous improvement, and investments such as expansion of our
production capacities for dicamba and dimethenamid-P herbicides in
Beaumont, Texas, form the basis for future growth.”
Outlook for the year 2017
BASF’s expectations for the global economic environment in 2017
remain unchanged:
- Growth in gross domestic product: 2.3%
- Growth in industrial production: 2.3%
- Growth in chemical production: 3.4%
- An average euro/dollar exchange rate of $1.05 per euro
- An average Brent blend oil price for the year of $55 per
barrel
“We remain cautious when it comes to our outlook for the full
year. We still see considerable risks with regard to macroeconomic
development and the political environment,” said Bock. “We confirm
our 2017 forecast for BASF Group sales and earnings. We expect
considerable sales growth for the BASF Group in 2017. According to
our definition, that equates to an increase of at least 6% in
sales. We want to achieve slightly higher EBIT before special items
compared with 2016. In this case, ‘slight’ means a change of 1-10%;
we expect the increase will be toward the top end of that
range.”
Development of the segments
In the Chemicals segment, sales rose by 36%
compared with the previous first quarter to €4.1 billion,
largely as a result of higher prices in the Petrochemicals and
Monomers divisions. Sales were furthermore supported by the higher
level of sales volumes in all divisions. Currency effects slightly
boosted sales. Due to higher margins and volumes, EBIT before
special items grew by €501 million compared with the first
quarter of 2016 and reached €958 million. The negative impact
on earnings in the first quarter of 2017 caused by the accident at
the North Harbor of the Ludwigshafen site was offset by an initial
insurance payment for the damages occurring in the fourth quarter
of 2016. Fixed costs were up year-on-year, due primarily to the
startup of new plants.
Sales in the Performance Products segment grew
by 9% versus the first quarter of 2016 and amounted to
€4.3 billion. This was mainly the result of increased volumes
in the Dispersions & Pigments, Care Chemicals and Performance
Chemicals divisions. The segment experienced positive currency
effects in all divisions and slightly raised sales prices overall.
Portfolio effects dampened sales development. EBIT before special
items declined by €40 million compared with the solid level of
the previous first quarter due to lower margins and higher fixed
costs and came in at €515 million.
In the Functional Materials & Solutions
segment, sales grew by 18% year-on-year at €5.2 billion. This
was predominantly the result of a sharp rise in sales volumes,
primarily driven by higher demand from the automotive industry.
Sales development was also supported by the Chemetall business
acquired from Albemarle in December 2016, along with slight price
increases and currency effects. Compared with the previous first
quarter, EBIT before special items rose by €75 million to
reach €531 million, thanks in particular to the volume growth
and the Chemetall acquisition.
The Agricultural Solutions segment reported a
4% year-on-year increase in sales to €1.9 billion despite a
market environment that remained difficult. The main drivers here
were higher volumes and positive currency effects, with prices
stable. EBIT before special items declined by €58 million to
€533 million compared with the strong first quarter of 2016.
This was the result of lower average margins due to a different
product mix. Fixed costs rose slightly, due in part to the startup
of new plants.
Sales of €829 million in the Oil & Gas
segment were 36% higher than in the first quarter of the prior
year, mainly driven by higher prices. The price of a barrel of
Brent blend crude oil averaged $54 in the first quarter of 2017
(first quarter of 2016: $34). Gas prices on European spot markets
also rose sharply compared with the previous first quarter.
Production volumes matched the level of the previous first quarter,
while sales volumes, especially of gas, exceeded the level of the
first quarter of 2016. EBIT before special items also improved
considerably, rising by €104 million versus the prior-year
period to reach €170 million. This was largely attributable to
the rise in prices. Net income grew significantly.
Compared with the first quarter of the prior year, sales in
Other rose by €133 million to
€610 million, mainly as a result of increased prices in raw
materials trading. EBIT before special items fell by
€31 million and amounted to minus €250 million. This
was predominantly a consequence of valuation effects for our
long-term incentive program.
More information about business development in the regions can
be found on page 13 of the Quarterly Statement published today.
About BASF
BASF Corporation, headquartered in Florham Park, New Jersey, is
the North American affiliate of BASF SE, Ludwigshafen, Germany.
BASF has more than 17,500 employees in North America, and had sales
of $16.2 billion in 2016. For more information about BASF’s North
American operations, visit www.basf.us.
At BASF, we create chemistry for a sustainable future. We
combine economic success with environmental protection and social
responsibility. The approximately 114,000 employees in the BASF
Group work on contributing to the success of our customers in
nearly all sectors and almost every country in the world. Our
portfolio is organized into five segments: Chemicals, Performance
Products, Functional Materials & Solutions, Agricultural
Solutions and Oil & Gas. BASF generated sales of about €58
billion in 2016. BASF shares are traded on the stock exchanges in
Frankfurt (BAS), London (BFA) and Zurich (BAS). Further information
at www.basf.com.
You can obtain further information from the internet at the
following addresses:
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Forward-looking statementsThis release contains
forward-looking statements. These statements are based on current
estimates and projections of BASF management and currently
available information. They are not guarantees of future
performance, involve certain risks and uncertainties that are
difficult to predict, and are based upon assumptions as to future
events that may not be accurate. Many factors could cause the
actual results, performance or achievements of BASF to be
materially different from those that may be expressed or implied by
such statements. BASF does not assume any obligation to update the
forward-looking statements contained in this release.
For more information contact:
Maureen Paukert
BASF Corporation
Tel: (973) 245-6077
E-mail: maureen.paukert@basf.com
Juliana Ernst
BASF SE
Phone: +49 621 60-99123
juliana.ernst@basf.com