The world’s leading chemical company, BASF continues to grow as their newly released annual report 2011 shows. BASF’s annual sales has increased 15% from the last year.
- Full year 2011 Sales €73.5 billion (plus 15%)
- EBIT before special items €8.4 billion (plus 4%)
- Earnings per share €6.74 (plus 36%)
- Dividend proposal: €2.50 (previous year €2.20)
- Outlook 2012: Increase in sales and earnings targeted in challenging environment
before special items improved by 4% to €8.4 billion and EBIT increased almost 11% to €8.6 billion.
At the Annual Press Conference, Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF said: “2011 was another very successful year for BASF. Thus we are continuing our ambitious dividend policy and will, therefore, again propose a higher dividend of €2.50 at the Annual Meeting. This is an increase of €0.30 or 13.6% compared with the previous year.”
At around €18.1 billion, sales in the fourth quarter of 2011 were higher than in the fourth quarter of 2010, as well as in the third quarter of 2011.
Chief Financial Officer Dr. Hans-Ulrich Engel highlighted the strong cash flow from operating activities. “At €7.1 billion, our operating cash flow exceeded the high level of the previous year once again,” he said.
Sales growth in almost all segments in 4th quarter
In Chemicals, price increases in all divisions led to higher sales in the fourth quarter of 2011. In addition, the transfer of the styrenics business to the Styrolution joint venture contributed positively because ethylene sales to the joint venture have been reported as third-party sales since October 1, 2011. Despite lower volumes in major product lines, sales in Plastics increased in the fourth quarter of 2011 due to higher prices primarily in the Performance Polymers division. In engineering plastics, higher demand in North America, mainly from the automotive industry, compensated for lower volumes in Europe and Asia. The Performance Products segment posted a 19% rise in sales compared with the same quarter of the previous year. In Oil & Gas, sales increased by 33% driven by higher sales volumes in Natural Gas Trading and higher prices in both business sectors.
Outlook for the year 2012
BASF’s outlook for 2012 is based on the following economic conditions:
- Global economic growth at the previous year’s level (plus 2.7%)
- Solid growth in global chemical production, excluding pharmaceuticals (plus 4.1%)
- An average exchange rate of $1.30 per euro
- An average oil price (Brent) of $110 per barrel
Bock said: “We expect the global economy to pick up speed over the course of 2012 following a moderate start. Uncertainties due to the sovereign debt crises, in particular in Europe and the United States, will dampen growth prospects. Positive impetus for the chemical industry will again mainly come from the emerging markets.”
Excluding the effects of acquisitions and divestitures, BASF wants to increase sales volumes. The company aims to exceed the 2011 record levels in sales and EBIT before special items. Earnings will be supported by the resumption of crude oil production in Libya, as well as growing volumes in the chemicals business.
BASF also plans to increase its global research and development expenditures to €1.7 billion in 2012 (2011: €1.6 billion).