BASF: Market environment remains volatile and challenging
Full year 2015:
- Sales €70.4 billion (minus 5%)
- EBIT before special items €6.7 billion (minus 8%)
- EBIT €6.2 billion (minus 18%)
- Higher earnings in the chemicals business;
Oil & Gas considerably below previous year
- Earnings per share €4.34 (minus 23%);
Adjusted earnings per share €5.00 (minus 8%)
- Record operating cash flow of €9.4 billion (plus 36%)
- Dividend proposal of €2.90 for business year 2015
- Considerable sales decline due to divestiture of gas trading business
- EBIT before special items expected at level slightly below 2015, based on an average oil price of $40 per barrel
Ludwigshafen, Germany – February 26, 2016 – The market environment continued to be volatile and challenging. Growth rates for the global economy, industrial production and the chemical industry in 2015 all lagged considerably behind the company’s expectations. “Over the course of the year, global economic growth slowed significantly. In this economic environment, we have taken decisive measures: We have significantly reduced our inventories, strengthened our cost management and pruned our portfolio,” said Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE at the Annual Press Conference in Ludwigshafen.
In the fourth quarter of 2015, sales were €13.9 billion, 23% below the level of the same quarter of the previous year. This was mainly due to the asset swap with Gazprom, which was completed at the end of September. As a result of the swap, the sales contribution of roughly €3 billion from the gas trading and storage business ceased in the Oil & Gas segment in the fourth quarter of 2015. In total, portfolio measures in the fourth quarter reduced sales by 19%. Due to lower raw material prices, sales prices declined by 11%; volumes grew by 4%. Positive currency effects contributed 3%.
Income from operations (EBIT) before special items fell by €436 million to about €1 billion in the fourth quarter. The decline was especially due to significantly lower earnings in the Oil & Gas and Chemicals segments compared with the previous fourth quarter. Earnings in Oil & Gas decreased primarily due to lower prices, whereas in the Chemicals segment the decline was mainly attributable to lower margins in the Petrochemicals division.
Sales and earnings in 2015 below previous year mainly due to lower oil and gas prices
For the full year, sales decreased by 5% to €70.4 billion. Sales prices fell in almost all divisions (minus 9%), largely on account of the sharp drop in raw material prices. Sales volumes in 2015 rose slightly overall (plus 3%), mainly as a result of higher volumes in the Oil & Gas segment. Volumes in the chemicals business, which comprises the Chemicals, Performance Products and Functional Materials & Solutions segments, were almost at the same level as the previous year. Volumes and prices rose in the Agricultural Solutions segment. Currency effects positively influenced sales in all segments (plus 6%). The asset swap with Gazprom reduced sales (portfolio: minus 5%).
At €6.7 billion, EBIT before special items was €618 million below the level of the previous year. Major influences here were the oil-price-related decline in sales from oil and gas production activities as well as decreased earnings in Other, mainly brought about by currency effects. Contrasting this was the significant increase in earnings in the Functional Materials & Solutions segment.
At €6.2 billion, EBIT for the BASF Group in 2015 was €1.4 billion lower than the previous year’s level. Special items in 2015 resulted in an earnings impact to EBIT of minus €491 million compared to an earnings contribution of plus €269 million in 2014. This was mostly due to impairments of around €600 million on assets in the Oil & Gas segment, as a result of the strong decline in oil and gas prices in past months.
Net income amounted to €4.0 billion, below the previous year’s level of €5.2 billion. Earnings per share dipped from €5.61 to €4.34. In 2015, earnings per share adjusted for special items and amortization of intangible assets amounted to €5.00 compared with €5.44 in the previous year.
Record operating cash flow
At a record level of €9.4 billion, cash provided by operating activities in 2015 exceeded the previous year’s level by €2.5 billion. This was largely attributable to a decrease in the amount of capital tied down in net working capital. Free cash flow rose by €2.0 billion to €3.6 billion in 2015 despite higher payments for property, plant and equipment and intangible assets.
At 44.5% (December 31, 2014: 39.5%), the equity ratio was at a very high level. Net debt decreased by €710 million to €13.0 billion.
Dividend proposal of €2.90
BASF stands by its ambitious dividend policy and plans to propose a dividend of €2.90 per share for the business year 2015 at the Annual Shareholders’ Meeting (previous year: €2.80). The company would thus pay out around €2.7 billion to its shareholders. “Based on the year-end share price for 2015 of €70.72, BASF shares again offer a high dividend yield of around 4.1%. We continue to aim to increase our dividend each year, or at least maintain it at the previous year’s level,” said Bock.
Azioni in portafoglio :10
Dividendi incassati :23.21
Nuovo dividendo annuo stimato :15.80