Earnings Release • Apr 28, 2017
Earnings Release
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Sales and earnings considerably above prior first quarter
| 1st Quarter | ||||
|---|---|---|---|---|
| 2017 | 2016 | Change in % | ||
| Sales | million € | 16,857 | 14,208 | 19 |
| Income from operations before depreciation, amortization and special items | million € | 3,507 | 2,843 | 23 |
| Income from operations before depreciation and amortization (EBITDA) | million € | 3,502 | 2,812 | 25 |
| Amortization and depreciation1 | million € | 1,051 | 946 | 11 |
| Income from operations (EBIT) | million € | 2,451 | 1,866 | 31 |
| Special items | million € | (6) | (40) | 85 |
| EBIT before special items | million € | 2,457 | 1,906 | 29 |
| Financial result | million € | (152) | (188) | 19 |
| Income before taxes and minority interests | million € | 2,299 | 1,678 | 37 |
| Net income | million € | 1,709 | 1,387 | 23 |
| EBIT after cost of capital | million € | 987 | 571 | 73 |
| Earnings per share | € | 1.86 | 1.51 | 23 |
| Adjusted earnings per share | € | 1.97 | 1.64 | 20 |
| Research and development expenses | million € | 424 | 455 | (7) |
| Personnel expenses | million € | 2,641 | 2,445 | 8 |
| Number of employees (March 31) | 113,873 | 112,272 | 1 | |
| Assets (March 31) | million € | 79,074 | 73,727 | 7 |
| Investments including acquisitions2 | million € | 806 | 959 | (16) |
| Equity ratio (March 31) | % | 43.7 | 41.9 | 4 |
| Net debt (March 31) | million € | 14,933 | 12,745 | 17 |
| Cash provided by operating activities | million € | 833 | 1,046 | (20) |
| Free cash flow | million € | 66 | 45 | 47 |
1 Amortization of intangible assets and depreciation of property, plant and equipment (including impairments and write-ups)
2 Additions to intangible assets and property, plant and equipment
| BASF Group | 3 |
|---|---|
| Results of Operations, Net Assets, Financial Position | 3 |
| Outlook | 4 |
| Significant Events | 4 |
| Chemicals | 5 |
| Performance Products | 6 |
| Functional Materials & Solutions | 8 |
| Agricultural Solutions | 10 |
| Oil & Gas | 11 |
| Other | 12 |
| Regions | 13 |
| Statement of Income | 14 |
|---|---|
| Balance Sheet | 15 |
| Statement of Cash Flows | 16 |
| Additional Key Figures | 17 |
Compared with the first quarter of 2016, sales grew by €2,649 million to €16,857 million. We were able to increase sales volumes in all segments and raise prices, especially in the Chemicals segment. Currency effects and the Chemetall business acquired from Albemarle in December 2016 also had a positive impact on sales.
| Volumes | 8% | |
|---|---|---|
| Prices | 8% | |
| Portfolio | 1% | |
| Currencies | 2% | |
| Sales | 19% |
Income from operations (EBIT) before special items1 grew by €551 million to €2,457 million, primarily as a result of the substantially improved contribution from the Chemicals segment. EBIT before special items also rose considerably in the Oil & Gas and Functional Materials & Solutions segments, while Performance Products and Agricultural Solutions posted a slight decline. Earnings in the chemicals business2 contained an initial insurance payment of €100 million for the accident at the North Harbor of the Ludwigshafen site in October 2016, an amount which predominantly pertained to the Chemicals segment.
Special items in EBIT totaled minus €6 million in the first quarter of 2017, compared with minus €40 million in the same period of 2016. Expenses for restructuring measures, integration costs, and other expenses and income were partly offset by gains from divestitures.
EBIT grew by €585 million to €2,451 million compared with the first quarter of 2016.
Year-on-year, income from operations before depreciation, amortization and special items (EBITDA before special items)1 increased by €664 million to €3,507 million and EBITDA1 increased by €690 million to €3,502 million. At minus €152 million, the financial result was €36 million better than in the first quarter of 2016.
Income before taxes and minority interests rose by €621 million to €2,299 million. The tax rate grew from 15.4% to 22.9%, mainly due to higher taxes in Norway.
Net income rose by €322 million to €1,709 million.
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 share1 amounted to €1.97 (first quarter of 2016: €1.64).
Compared with the end of 2016, total assets rose from €76,496 million to €79,074 million. At €50,399 million, noncurrent assets matched the level of December 31, 2016. Growth of €2,729 million in current assets, which totaled €28,675 million, resulted primarily from the increase in trade accounts receivable that accompanied the considerable rise in sales.
Equity increased from €32,568 million to €34,564 million compared with December 31, 2016. The equity ratio grew from 42.6% to 43.7%.
Noncurrent liabilities rose from €28,611 million to €29,778 million. This was largely the result of the increase in noncurrent financial indebtedness due to the issue of bonds with a nominal value totaling €1.9 billion. Among these were bonds of \$600 million with nondilutive warrants due in 2023. Upon exercise, the warrants will be cash-settled only; no new shares will be issued, nor will existing shares of BASF SE be
delivered. As a hedge, BASF has purchased corresponding call options.
Current liabilities declined from €15,317 million to €14,732 million. This was mainly the result of lower current financial indebtedness, brought about primarily by the scheduled repayment of short-term bonds as well as the scaling back of the U.S. dollar commercial paper program.
Total financial indebtedness rose by €498 million to €16,810 million. Net debt1 grew by €532 million to €14,933 million compared with December 31, 2016.
1 For more on this figure, see page 17.
2 Our chemicals business comprises the Chemicals, Performance Products and Functional Materials & Solutions segments.
In the first quarter of 2017, cash provided by operating activities amounted to €833 million, €213 million below the first quarter of 2016. This was largely due to the higher amount of cash tied up in net working capital compared with the previous first quarter, especially in trade accounts receivable.
Cash used in investing activities in the first quarter of 2017 amounted to €1,215 million, compared with €1,258 million in the first quarter of 2016. This was the result of lower payments made for property, plant and equipment and intangible assets, which, at €767 million, were €234 million below the level of the previous first quarter. Contrasting this was, primarily, the €159 million increase in payments made for financial assets and other items.
Cash provided by financing activities declined from €1,997 million in the first quarter of 2016 to €831 million. The first quarter of 2017 saw a cash inflow of €811 million resulting from an increase in financial indebtedness as well as in other financing-related liabilities. The same quarter of the previous year had contained cash inflow arising primarily from the greater use of BASF SE's U.S. dollar commercial paper program as well as from issuing a new bond.
Free cash flow1 amounted to €66 million, compared with €45 million in the same quarter of 2016.
Our ratings have remained unchanged since the publication of the BASF Report 2016. Rated "A1/P-1/outlook stable" by Moody's, "A/A-1/outlook stable" by Standard & Poor's and "A/S-1/outlook stable" by Scope, BASF enjoys good credit ratings, especially compared with competitors in the chemical industry.
Our expectations for the global economic environment in 2017 remain unchanged:
The statements on opportunities and risks made in the BASF Report 2016 remain valid.
For more, see the BASF Report 2016, Opportunities and Risks Report, pages 111 to 118
BASF and the Stahl group of companies signed an agreement on March 22, 2017, to combine BASF's leather chemicals business with the Stahl group. The transaction comprises BASF's global leather chemicals business, as well as the leather chemicals production site in L'Hospitalet, Spain, with around 210 positions, 110 of which in Asia. Subject to the approval of relevant authorities, the transaction is expected to close in the fourth quarter of 2017. With their complementary strengths, BASF and Stahl will create a leading provider of leather chemicals with a clear focus on innovation. Under the terms of the agreement, BASF will receive a 16% minority stake in the Stahl group as well as a payment; this will result in special income. Furthermore, in the medium to long term, BASF will supply Stahl with significant volumes of leather chemicals from remaining plants.
We confirm the sales and earnings forecast2 for the BASF Group made in the BASF Report 2016:
On April 24, 2017, BASF Group company Wintershall Nederland Transport & Trading B.V., based in Rijswijk, Netherlands, signed financing agreements for the Nord Stream 2 project. The project is being conducted by Nord Stream 2 AG, a company based in Zug, Switzerland, which is a 100% subsidiary of PAO Gazprom, headquartered in Moscow, Russia. BASF will finance up to 10% of the project costs, which are estimated at €9.5 billion.
1 For more on this figure, see page 17.
2 With reference to sales, "slight" represents a change of 1–5%, while "considerable" applies to changes of 6% and higher. "At prior-year level" indicates no change (+/–0%).
For earnings, "slight" means a change of 1–10%, while "considerable" is used for changes of 11% and higher. "At prior-year level" indicates no change (+/–0%).
3 For an explanation of this figure, see the BASF Report 2016, page 28.
| 1st Quarter | |||
|---|---|---|---|
| 2017 | 2016 | Change in % | |
| Sales to third parties | 4,105 | 3,019 | 36 |
| Thereof Petrochemicals | 1,654 | 1,196 | 38 |
| Monomers | 1,699 | 1,177 | 44 |
| Intermediates | 752 | 646 | 16 |
| Income from operations before depreciation and amortization (EBITDA) | 1,239 | 719 | 72 |
| Amortization and depreciation2 | 265 | 259 | 2 |
| Income from operations (EBIT) | 974 | 460 | 112 |
| Special items | 16 | 3 | 433 |
| EBIT before special items | 958 | 457 | 110 |
| Assets (March 31) | 13,468 | 12,148 | 11 |
| Investments including acquisitions3 | 183 | 276 | (34) |
| Research and development expenses | 29 | 36 | (19) |
1 On January 1, 2017, the Monomers and Dispersions & Pigments divisions' activities for the electronics industry were combined into the global Electronic Materials business unit and allocated to the Dispersions & Pigments division. For better comparability, the affected figures for 2016 have been adjusted accordingly.
2 Amortization of intangible assets and depreciation of property, plant and equipment (including impairments and write-ups)
3 Additions to intangible assets and property, plant and equipment
Sales in the Chemicals segment considerably exceeded the level of the previous first quarter, 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, income from operations (EBIT) before special items grew considerably compared with the first quarter of 2016, especially in the Monomers division. 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.
The Petrochemicals division raised its sales considerably compared with the previous first quarter. A sharp increase in prices for raw materials such as naphtha, along with solid demand, led to higher sales prices – especially for steam cracker products. Volumes were slightly up compared with the previous first quarter. Margins improved for steam cracker products in all regions as well as for acrylic monomers in Asia. The first insurance payment for the accident at the North Harbor resulted in lower fixed costs. EBIT before special items grew considerably as an effect of the higher margins and a significantly increased earnings contribution from our share in BASF-YPC Company Ltd., based in Nanjing, China.
Compared with the first quarter of 2016, sales in the Monomers division increased considerably. This was mainly the result of higher prices, especially for isocyanates. Sales volumes rose sharply, primarily for isocyanates and polyamides. EBIT before special items grew considerably as a consequence of increased margins. Earnings were also positively influenced by the restructuring of our caprolactam production in Europe. Predominantly on account of maintenance measures, fixed costs were higher than in the previous first quarter.
Sales in the Intermediates division also rose considerably yearon-year, mostly through substantial volumes growth in all regions and product lines. Overall, sales prices matched the level of the previous first quarter. EBIT before special items fell considerably, largely dampened by higher fixed costs arising from the startup of new facilities in all regions as well as from shutdowns. The ongoing intensely competitive environment and increased raw material prices both weighed down margins, especially for butanediol and derivatives.
| 1st Quarter | |||
|---|---|---|---|
| 2017 | 2016 | Change in % | |
| Sales to third parties | 4,260 | 3,913 | 9 |
| Thereof Dispersions & Pigments | 1,399 | 1,266 | 11 |
| Care Chemicals | 1,362 | 1,204 | 13 |
| Nutrition & Health | 486 | 488 | 0 |
| Performance Chemicals | 1,013 | 955 | 6 |
| Income from operations before depreciation and amortization (EBITDA) | 714 | 758 | (6) |
| Amortization and depreciation2 | 215 | 215 | – |
| Income from operations (EBIT) | 499 | 543 | (8) |
| Special items | (16) | (12) | (33) |
| EBIT before special items | 515 | 555 | (7) |
| Assets (March 31) | 15,404 | 14,558 | 6 |
| Investments including acquisitions3 | 213 | 180 | 18 |
| Research and development expenses | 93 | 99 | (6) |
1 On January 1, 2017, the Monomers and Dispersions & Pigments divisions' activities for the electronics industry were combined into the global Electronic Materials business unit and allocated to the Dispersions & Pigments division. For better comparability, the affected figures for 2016 have been adjusted accordingly.
2 Amortization of intangible assets and depreciation of property, plant and equipment (including impairments and write-ups)
3 Additions to intangible assets and property, plant and equipment
In the Performance Products segment, sales were considerably up compared with the first quarter of 2016. This was mainly the result of increased volumes in the Dispersions & Pigments, Care Chemicals and Performance Chemicals divisions. We experienced positive currency effects in all divisions and slightly raised sales prices overall. Portfolio effects dampened sales development. Income from operations (EBIT) before special items declined slightly compared with the solid level of the previous first quarter due to lower margins and higher fixed costs.
| Volumes | 7% | |
|---|---|---|
| Prices | 2% | |
| Portfolio | (2%) | |
| Currencies | 2% | |
| Sales | 9% |
In the Dispersions & Pigments division, we achieved considerably higher sales than in the previous first quarter. This was mostly attributable to significant volumes growth in all business areas. Currency effects and slightly elevated prices also had a positive impact on sales. Sales were slightly dampened by the divestiture of the photoinitiator business in August 2016. EBIT before special items was considerably below the high level of the prior first quarter, owing to lower margins and slightly higher fixed costs. The margin decline was mainly brought about by rising raw material prices as well as the larger proportion of sales from the lower-margin dispersions business for paper coatings.
Sales in the Care Chemicals division considerably exceeded the level of the previous first quarter, primarily through increased volumes of ingredients for the detergents and cleaners industry as well as the stronger demand for oleochemical surfactants and fatty alcohols. Higher prices in connection with increased raw material prices, together with currency effects, also supported sales growth. EBIT before special items declined slightly compared with the first quarter of 2016. This was predominantly the result of lower margins in the hygiene business – driven downward by ongoing intense competition – as well as higher maintenance costs.
Sales in the Nutrition & Health division matched the level of the previous first quarter. Portfolio effects dampened sales development. Volumes fell slightly: Increased volumes in the animal nutrition business were only partly able to offset declines in the other business areas. Sales were supported, however, by higher prices overall – especially for vitamins in the animal nutrition business – as well as by positive currency effects. EBIT before special items improved considerably on account of stronger margins.
Sales in the Performance Chemicals division rose considerably compared with the first quarter of 2016. This was largely due to higher volumes in all business areas, especially plastic additives, as well as fuel and lubricant additives. Sales volumes increased in all regions, with Asia showing the fastest growth rates. Currency effects also provided a slight boost to sales, while slightly declining prices slowed sales development. EBIT before special items was considerably down yearon-year; the solid volumes growth was only partly able to compensate for lower margins.
| 1st Quarter | ||||
|---|---|---|---|---|
| 2017 | 2016 | Change in % | ||
| Sales to third parties | 5,198 | 4,408 | 18 | |
| Thereof Catalysts | 1,689 | 1,467 | 15 | |
| Construction Chemicals | 560 | 533 | 5 | |
| Coatings | 999 | 738 | 35 | |
| Performance Materials | 1,950 | 1,670 | 17 | |
| Income from operations before depreciation and amortization (EBITDA) | 688 | 594 | 16 | |
| Amortization and depreciation1 | 167 | 142 | 18 | |
| Income from operations (EBIT) | 521 | 452 | 15 | |
| Special items | (10) | (4) | ||
| EBIT before special items | 531 | 456 | 16 | |
| Assets (March 31) | 17,730 | 13,462 | 32 | |
| Investments including acquisitions2 | 163 | 130 | 25 | |
| Research and development expenses | 99 | 96 | 3 | |
1 Amortization of intangible assets and depreciation of property, plant and equipment (including impairments and write-ups)
2 Additions to intangible assets and property, plant and equipment
Compared with the same quarter of the previous year, sales grew considerably in the Functional Materials & Solutions segment. 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. We considerably raised our income from operations (EBIT) before special items compared with the previous first quarter, thanks in particular to the volumes growth and the Chemetall acquisition.
| Volumes | 8% | |
|---|---|---|
| Prices | 3% | |
| Portfolio | 4% | |
| Currencies | 3% | |
| Sales | 18% |
The Catalysts division achieved considerable sales growth compared with the first quarter of 2016. This was largely attributable to higher volumes, especially in the businesses with mobile emissions catalysts and chemical catalysts. Sales were additionally supported by price increases – especially for precious metals – and by currency effects. The divestiture of the polyolefin catalysts business in June 2016 had a slightly negative impact on sales. In precious metal trading, sales rose to €627 million due to the higher price levels and positive currency effects (first quarter of 2016: €499 million). EBIT before special items grew considerably, mainly as a result of increased volumes.
Sales rose slightly in the Construction Chemicals division. This was primarily the result of acquiring the Henkel Group's western European building material business for professional users at the beginning of 2017, in addition to the slight increase in volumes. Prices declined slightly. In Europe, the aforementioned acquisition allowed us to considerably boost sales. Sales grew slightly in North America and considerably in Asia. In the region South America, Africa, Middle East, we posted a considerable sales decline due to reduced volumes in the Middle East and to negative currency effects. EBIT before special items was considerably below the first quarter of the previous year. This resulted in part from lower margins on account of higher raw material prices.
Sales in the Coatings division grew considerably compared with the first quarter of 2016. This was predominantly attributable to the Chemetall business acquired from Albemarle in December 2016, as well as a sharp increase in sales volumes, primarily of automotive OEM coatings. We experienced positive currency effects and slightly lower prices overall, with price developments varying by region. In the automotive OEM coatings business, volumes growth in Asia, Europe and North America led to a considerable increase in sales. Sales were also considerably up in the automotive refinish coatings and decorative paints businesses. We were able to considerably increase EBIT before special items as a result of the acquired Chemetall business and the growth in sales volumes.
In the Performance Materials division, sales were considerably above the level of the first quarter of 2016. This was mostly the result of higher sales volumes arising from stronger demand from both the automotive industry and the consumer goods sector in Europe and Asia. In Asia, volumes also increased to the construction sector; higher demand in North America came from the automotive industry in particular. Worldwide, business development was especially positive for polyurethane systems, engineering plastics, thermoplastic polyurethanes and styrene foams. Rising raw material prices led to sales price increases; currency effects, too, helped support sales development. Year-on-year, we slightly raised EBIT before special items as a result of this volumes growth.
| 1st Quarter | |||
|---|---|---|---|
| 2017 | 2016 | Change in % | |
| Sales to third parties | 1,855 | 1,780 | 4 |
| Income from operations before depreciation and amortization (EBITDA) | 595 | 645 | (8) |
| Amortization and depreciation1 | 64 | 55 | 16 |
| Income from operations (EBIT) | 531 | 590 | (10) |
| Special items | (2) | (1) | (100) |
| EBIT before special items | 533 | 591 | (10) |
| Assets (March 31) | 10,012 | 9,316 | 7 |
| Investments including acquisitions2 | 36 | 77 | (53) |
| Research and development expenses | 109 | 114 | (4) |
1 Amortization of intangible assets and depreciation of property, plant and equipment (including impairments and write-ups)
2 Additions to intangible assets and property, plant and equipment
Compared with the first quarter of 2016, sales in the Agricultural Solutions segment grew slightly despite a market environment that remained difficult. The main drivers here were higher volumes and positive currency effects, with prices stable.
| Volumes | 2% | |
|---|---|---|
| Prices | 0% | |
| Portfolio | 0% | |
| Currencies | 2% | |
| Sales | 4% |
Sales in Europe nearly matched the level of the previous first quarter. We raised volumes considerably in central and eastern Europe, especially for herbicides. By contrast, western Europe posted a volumes decline.
Positive currency effects and increased demand led to considerable sales growth in North America. Higher volumes arose primarily from solid business development for herbicides, especially the new solutions EngeniaTM und Zidua® PRO.
Sales rose considerably in Asia. This was largely attributable to higher volumes of fungicides due to earlier demand in China and the launch of the new Seltima® formulation in India, as well as to solid sales volumes for herbicides in Indonesia and Australia.
In the region South America, Africa, Middle East, a considerable increase in sales was mainly the result of positive currency effects from the Brazilian real. Higher volumes of herbicides in Argentina and of insecticides in Africa and the Middle East contributed to the increase, while lower prices dampened sales development.
Income from operations before special items declined slightly 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.
| 1st Quarter | |||
|---|---|---|---|
| 2017 | 2016 | Change in % | |
| Sales to third parties | 829 | 611 | 36 |
| Income from operations before depreciation and amortization (EBITDA) | 482 | 307 | 57 |
| Amortization and depreciation1 | 313 | 241 | 30 |
| Income from operations (EBIT) | 169 | 66 | 156 |
| Special items | (1) | − | − |
| EBIT before special items | 170 | 66 | 158 |
| Assets (March 31) | 12,667 | 12,147 | 4 |
| Investments including acquisitions2 | 180 | 280 | (36) |
| Research and development expenses | 9 | 10 | (10) |
| Exploration expenses | 10 | 33 | (70) |
| Net income | 140 | 47 | 198 |
1 Amortization of intangible assets and depreciation of property, plant and equipment (including impairments and write-ups)
2 Additions to intangible assets and property, plant and equipment
Sales in the Oil & Gas segment increased considerably yearon-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.
| Volumes | 12% | |
|---|---|---|
| Prices/currencies | 24% | |
| Portfolio | 0% | |
| Sales | 36% |
Income from operations before special items also improved considerably. This was largely attributable to the rise in prices. Net income grew significantly.
Data on Other (million €)
| 1st Quarter | ||||
|---|---|---|---|---|
| 2017 | 2016 | Change in % | ||
| Sales | 610 | 477 | 28 | |
| Income from operations before depreciation and amortization (EBITDA) | (216) | (211) | (2) | |
| Amortization and depreciation1 | 27 | 34 | (21) | |
| Income from operations (EBIT) | (243) | (245) | 1 | |
| Special items | 7 | (26) | ||
| EBIT before special items | (250) | (219) | (14) | |
| Thereof Costs for cross-divisional corporate research | (81) | (99) | 18 | |
| Costs of corporate headquarters | (52) | (55) | 5 | |
| Other businesses | 5 | 18 | (72) | |
| Foreign currency results, hedging and other measurement effects | (31) | 68 | ||
| Miscellaneous income and expenses | (91) | (151) | 40 | |
| Assets (March 31)2 | 9,793 | 12,096 | (19) | |
| Investments including acquisitions3 | 31 | 16 | 94 | |
| Research and development expenses | 85 | 100 | (15) | |
1 Amortization of intangible assets and depreciation of property, plant and equipment (including impairments and write-ups)
2 Contains assets of businesses accounted for in Other as well as reconciliation with assets of the BASF Group
3 Additions to intangible assets and property, plant and equipment
Sales in Other rose considerably year-on-year, mainly as a result of increased prices in raw materials trading. Income from operations before special items fell considerably. This was predominantly a consequence of valuation effects for our long-term incentive program.
| Sales Location of company |
Sales Location of customer |
Income from operations Location of company |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2016 | Change in % |
2017 | 2016 | Change in % |
2017 | 2016 | Change in % |
|
| 1st Quarter | |||||||||
| Europe | 8,332 | 7,106 | 17 | 7,920 | 6,766 | 17 | 1,421 | 1,161 | 22 |
| Thereof Germany | 5,235 | 4,479 | 17 | 2,208 | 1,904 | 16 | 825 | 583 | 42 |
| North America | 4,371 | 3,756 | 16 | 4,230 | 3,677 | 15 | 513 | 444 | 16 |
| Asia Pacific | 3,317 | 2,572 | 29 | 3,530 | 2,723 | 30 | 496 | 199 | 149 |
| South America, Africa, Middle East | 837 | 774 | 8 | 1,177 | 1,042 | 13 | 21 | 62 | (66) |
| 16,857 | 14,208 | 19 | 16,857 | 14,208 | 19 | 2,451 | 1,866 | 31 |
Sales at companies located in Europe grew by 17% compared with the first quarter of 2016. This was mainly the result of substantially higher volumes and prices. We were able to significantly increase sales volumes in all segments of the chemicals business1 as well as in the Oil & Gas segment. Prices especially boosted sales development in the Chemicals segment. At €1,421 million, income from operations exceeded the level of the previous first quarter by €260 million, primarily because of the considerable increase in the chemicals business and in the Oil & Gas segment.
In North America, sales improved year-on-year by 13% in local currency terms and 16% in euros. The main drivers here 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.
Sales in Asia Pacific rose by 26% in local currency terms and 29% in euros. All segments were able to substantially improve their volumes, and prices rose sharply in the Chemicals segment in particular. We raised income from operations by €297 million to €496 million compared with the first quarter of 2016. This was due to the sharp increase in the Chemicals segment.
In South America, Africa, Middle East, sales in euros saw a primarily currency-related increase of 8%. In local currency terms, sales were down by 3%. Volumes especially declined in the Functional Materials & Solutions segment, while sales prices rose overall. At €21 million, income from operations was €41 million short of the previous first quarter's level. All segments except for Chemicals posted a decline.
Statement of Income
Statement of Income (million €)
| 1st Quarter | ||||
|---|---|---|---|---|
| 2017 | 2016 | Change in % | ||
| Sales revenue | 16,857 | 14,208 | 19 | |
| Cost of sales | (11,482) | (9,530) | (20) | |
| Gross profit on sales | 5,375 | 4,678 | 15 | |
| Selling expenses | (2,017) | (1,868) | (8) | |
| General administrative expenses | (343) | (326) | (5) | |
| Research and development expenses | (424) | (455) | 7 | |
| Other operating income | 307 | 428 | (28) | |
| Other operating expenses | (598) | (666) | 10 | |
| Income from companies accounted for using the equity method | 151 | 75 | 101 | |
| Income from operations (EBIT) | 2,451 | 1,866 | 31 | |
| Income from other shareholdings | 10 | 3 | 233 | |
| Expenses from other shareholdings | (5) | (7) | 29 | |
| Net income from shareholdings | 5 | (4) | ||
| Interest income | 74 | 47 | 57 | |
| Interest expenses | (153) | (146) | (5) | |
| Interest result | (79) | (99) | 20 | |
| Other financial income | 19 | 26 | (27) | |
| Other financial expenses | (97) | (111) | 13 | |
| Other financial result | (78) | (85) | 8 | |
| Financial result | (152) | (188) | 19 | |
| Income before taxes and minority interests | 2,299 | 1,678 | 37 | |
| Income taxes | (527) | (258) | ||
| Income before minority interests | 1,772 | 1,420 | 25 | |
| Minority interests | (63) | (33) | (91) | |
| Net income | 1,709 | 1,387 | 23 | |
| Earnings per share | ||||
| Basic € |
1.86 | 1.51 | 23 | |
| Diluted € |
1.86 | 1.51 | 23 |
| March 31, 2017 | March 31, 2016 | Change in % | Dec. 31, 2016 | Change in % | |
|---|---|---|---|---|---|
| Intangible assets | 15,091 | 12,166 | 24 | 15,162 | 0 |
| Property, plant and equipment | 26,104 | 24,858 | 5 | 26,413 | (1) |
| Investments accounted for using the equity method | 4,764 | 4,452 | 7 | 4,647 | 3 |
| Other financial assets | 618 | 527 | 17 | 605 | 2 |
| Deferred tax assets | 2,565 | 2,309 | 11 | 2,513 | 2 |
| Other receivables and miscellaneous assets | 1,257 | 1,292 | (3) | 1,210 | 4 |
| Noncurrent assets | 50,399 | 45,604 | 11 | 50,550 | 0 |
| Inventories | 10,218 | 9,602 | 6 | 10,005 | 2 |
| Accounts receivable, trade | 13,123 | 10,685 | 23 | 10,952 | 20 |
| Other receivables and miscellaneous assets | 3,457 | 3,779 | (9) | 3,078 | 12 |
| Marketable securities | 34 | 21 | 62 | 536 | (94) |
| Cash and cash equivalents1 | 1,843 | 4,036 | (54) | 1,375 | 34 |
| Current assets | 28,675 | 28,123 | 2 | 25,946 | 11 |
| Total assets | 79,074 | 73,727 | 7 | 76,496 | 3 |
1 For a reconciliation of the amounts shown in the Statement of Cash Flows with the Balance Sheet item "cash and cash equivalents," see page 16.
| March 31, 2017 | March 31, 2016 | Change in % | Dec. 31, 2016 | Change in % | |
|---|---|---|---|---|---|
| Subscribed capital | 1,176 | 1,176 | – | 1,176 | – |
| Capital surplus | 3,130 | 3,141 | 0 | 3,130 | – |
| Retained earnings | 33,227 | 31,508 | 5 | 31,515 | 5 |
| Other comprehensive income | (3,808) | (5,557) | 31 | (4,014) | 5 |
| Equity of shareholders of BASF SE | 33,725 | 30,268 | 11 | 31,807 | 6 |
| Minority interests | 839 | 632 | 33 | 761 | 10 |
| Equity | 34,564 | 30,900 | 12 | 32,568 | 6 |
| Provisions for pensions and similar obligations | 7,590 | 8,322 | (9) | 8,209 | (8) |
| Other provisions | 3,660 | 3,329 | 10 | 3,667 | 0 |
| Deferred tax liabilities | 3,280 | 2,920 | 12 | 3,317 | (1) |
| Financial indebtedness | 14,309 | 10,335 | 38 | 12,545 | 14 |
| Other liabilities | 939 | 862 | 9 | 873 | 8 |
| Noncurrent liabilities | 29,778 | 25,768 | 16 | 28,611 | 4 |
| Accounts payable, trade | 4,882 | 3,831 | 27 | 4,610 | 6 |
| Provisions | 3,128 | 2,860 | 9 | 2,802 | 12 |
| Tax liabilities | 1,361 | 1,239 | 10 | 1,288 | 6 |
| Financial indebtedness | 2,501 | 6,467 | (61) | 3,767 | (34) |
| Other liabilities | 2,860 | 2,662 | 7 | 2,850 | 0 |
| Current liabilities | 14,732 | 17,059 | (14) | 15,317 | (4) |
| Total equity and liabilities | 79,074 | 73,727 | 7 | 76,496 | 3 |
| 1st Quarter | ||
|---|---|---|
| 2017 | 2016 | |
| Net income | 1,709 | 1,387 |
| Depreciation and amortization of intangible assets, property, plant and equipment and financial assets | 1,051 | 946 |
| Changes in net working capital | (1,985) | (1,248) |
| Other items | 58 | (39) |
| Cash provided by operating activities | 833 | 1,046 |
| Payments made for property, plant and equipment and intangible assets | (767) | (1,001) |
| Acquisitions/divestitures | (22) | − |
| Financial assets and other items | (426) | (257) |
| Cash used in investing activities | (1,215) | (1,258) |
| Capital increases/repayments and other equity transactions | 14 | 5 |
| Changes in financial liabilities | 811 | 1,996 |
| Dividends | 6 | (4) |
| Cash provided by financing activities | 831 | 1,997 |
| Net changes in cash and cash equivalents | 449 | 1,785 |
| Cash and cash equivalents as of beginning of year and other changes | 1,394 | 2,251 |
| Cash and cash equivalents at end of quarter | 1,843 | 4,036 |
| 1st Quarter | |||
|---|---|---|---|
| 2017 | 2016 | Change % | |
| EBIT1 | 2,451 | 1,866 | 31 |
| – Special items | (6) | (40) | 85 |
| EBIT before special items2 | 2,457 | 1,906 | 29 |
| + Amortization, depreciation and valuation allowances on | |||
| intangible assets and property, plant and equipment before special items | 1,050 | 937 | 12 |
| EBITDA before special items3 | 3,507 | 2,843 | 23 |
| 1st Quarter | |||
|---|---|---|---|
| 2017 | 2016 | Change % | |
| EBIT1 | 2,451 | 1,866 | 31 |
| + Amortization, depreciation and valuation allowances on intangible assets and property, plant and equipment | 1,051 | 946 | 11 |
| EBITDA3 | 3,502 | 2,812 | 25 |
| 1st Quarter | |||
|---|---|---|---|
| 2017 | 2016 | ||
| Income before taxes and minority interests | million € | 2,299 | 1,678 |
| – Special items | million € | (6) | (40) |
| + Amortization and valuation allowances on intangible assets | million € | 141 | 132 |
| – Amortization and valuation allowances on intangible assets contained in special items | million € | − | − |
| Adjusted income before taxes and minority interests | million € | 2,446 | 1,850 |
| – Adjusted income taxes | million € | 578 | 313 |
| Adjusted income before minority interests | million € | 1,868 | 1,537 |
| – Adjusted minority interests | million € | 63 | 32 |
| Adjusted net income | million € | 1,805 | 1,505 |
| Weighted average number of outstanding shares | thousands | 918,479 | 918,479 |
| Adjusted earnings per share3 | € | 1.97 | 1.64 |
| 1st Quarter | ||
|---|---|---|
| 2017 | 2016 | |
| Cash provided by operating activities | 833 | 1,046 |
| – Payments made for property, plant and equipment and intangible assets | 767 | 1,001 |
| Free cash flow | 66 | 45 |
| March 31, 2017 | Dec. 31, 2016 | |
|---|---|---|
| Noncurrent financial indebtedness | 14,309 | 12,545 |
| + Current financial indebtedness | 2,501 | 3,767 |
| Financial indebtedness | 16,810 | 16,312 |
| – Marketable securities | 34 | 536 |
| – Cash and cash equivalents | 1,843 | 1,375 |
| Net debt4 | 14,933 | 14,401 |
1 The calculation of income from operations (EBIT) is shown in the Statement of Income on page 14.
2 For more information on this figure, see the BASF Report 2016, page 28.
3 For more information on this figure, see the BASF Report 2016, page 53.
4 For more information on this figure, see the BASF Report 2016, page 56.
Annual Shareholders' Meeting 2017
Half-Year Financial Report 2017
Quarterly Statement 3rd Quarter 2017
Full-Year Results 2017
Quarterly Statement 1st Quarter 2018 / Annual Shareholders' Meeting 2018
This quarterly statement contains forward-looking statements. These forward-looking statements are based on current estimates and projections of the Board of Executive Directors and on currently available information. These forward-lookings statements are not guarantees of the future developments and results outlined therein. Rather, they depend on a number of factors, involve various risks and uncertainties, and are based on assumptions that may not prove to be accurate. Such risk factors particularly include those discussed on pages 111 to 118 of the BASF Report 2016. The BASF Report is available online at basf.com/report. We do not assume any obligation to update the forward-looking statements contained in this quarterly statement.
Published on April 27, 2017
You can find this and other publications online at www.basf.com/publications
General inquiries Headquarters, phone: +49 621 60-0
Media Relations Juliana Ernst, phone: +49 621 60-99123
Investor Relations Dr. Stefanie Wettberg, phone: +49 621 60-48002
Internet www.basf.com
BASF SE, 67056 Ludwigshafen, Germany
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