Annual Press Conference BASF BASF increases sales and earnings and is cautiously optimistic for 2014
BASF increased sales and earnings in 2013 compared with the previous year. For the full year, sales rose by just under 3% to reach €74.0 billion. For 2014 the company is cautiously optimistic with regards to global economic development.
Ludwigshafen/Germany – “2013 was again a demanding year, with a lot of headwind for our industry. Nevertheless, we achieved our goal: We sold more, worked more closely together with our customers and enhanced our portfolio,” said Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF at the Annual Press Conference in Ludwigshafen.
Sales of BASF Group in the fourth quarter of 2013 were €18.1 billion, slightly above the same period of the previous year. Volumes increased in all segments. Sales prices were slightly lower overall in the fourth quarter; negative currency effects lowered sales in all divisions. Acquisitions contributed to sales growth, particularly in the Oil & Gas and Agricultural Solutions segments. Income from operations (EBIT) before special items improved in all operating segments in the fourth quarter and increased by €223 million to €1.5 billion. EBIT rose by €584 million to €1.6 billion. This included special income of €429 million from the reclassification of GASCADE Gastransport GmbH. This joint venture had previously been fully consolidated. Since December 31, 2013, GASCADE has been accounted for using the equity method in the BASF Group financial statements due to a change in the voting rights in their supervisory board.
For the full year, sales rose by just under 3% to reach €74.0 billion. A considerable, mainly volumes-driven sales increase in the Oil & Gas and Agricultural Solutions segments was largely responsible for this development. Sales slightly declined in the chemicals business, which includes the Chemicals, Performance Products and Functional Materials & Solutions segments, despite higher sales volumes. This was mainly on account of negative currency effects. EBIT before special items in 2013 rose by €543 million to €7.2 billion. In addition to the successful business with crop protection products and a higher contribution from the Functional Materials & Solutions segment, this increase was also due in large part to the earnings improvement in Other.
Net income amounted to €4.8 billion, slightly above the previous year’s level. Earnings per share rose from €5.25 to €5.27. Adjusted earnings per share amounted to €5.37, €0.27 under the previous year. “At €7.9 billion, operating cash flow reached a record level,” said Dr. Hans-Ulrich Engel, Chief Financial Officer of BASF.
At the Annual Shareholders’ Meeting on May 2, the Board of Executive Directors and the Supervisory Board will propose a dividend of €2.70 per share. This is an increase of €0.10 compared with the previous year. Based on the 2013 year-end share price of €77.49, BASF shares again offer a high dividend yield of 3.5%.
Outlook for full year 2014
“We do not expect strong tailwinds this year either. Nevertheless, we are cautiously optimistic with regards to global economic development. The world economy is expected to grow slightly faster in 2014 than in 2013, despite continuing volatility,” said Bock. For the global chemical industry, the company anticipates growth rates comparable with the previous year’s level and forecasts somewhat higher growth in key customer industries such as the transportation, consumer goods and electronics industries. This will likely have a positive effect on BASF’s business.