Interim / Quarterly Report • Jul 24, 2014
Interim / Quarterly Report
Open in ViewerOpens in native device viewer
| 2nd Quarter | 1st Half | |||||||
|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change % | 2014 | 2013 | Change % | |||
| Sales | million € | 18,455 | 18,353 | 0.6 | 37,967 | 38,091 | (0.3) | |
| Income from operations before depreciation and amortization (EBITDA) |
million € | 2,714 | 2,489 | 9.0 | 5,664 | 5,343 | 6.0 | |
| Income from operations (EBIT) before special items | million € | 2,053 | 1,832 | 12.1 | 4,193 | 4,046 | 3.6 | |
| Income from operations (EBIT) | million € | 2,019 | 1,773 | 13.9 | 4,268 | 3,942 | 8.3 | |
| Financial result | million € | (136) | (162) | 16.0 | (319) | (288) | (10.8) | |
| Income before taxes and minority interests | million € | 1,883 | 1,611 | 16.9 | 3,949 | 3,654 | 8.1 | |
| Net income | million € | 1,299 | 1,157 | 12.3 | 2,776 | 2,603 | 6.6 | |
| Earnings per share | € | 1.41 | 1.26 | 11.9 | 3.02 | 2.83 | 6.7 | |
| Adjusted earnings per share1 | € | 1.54 | 1.40 | 10.0 | 3.18 | 3.07 | 3.6 | |
| Cash provided by operating activities | million € | 940 | 1,989 | (52.7) | 2,644 | 4,030 | (34.4) | |
| Additions to noncurrent assets2 | million € | 1,171 | 1,119 | 4.6 | 2,080 | 2,685 | (22.5) | |
| Research expenses | million € | 471 | 455 | 3.5 | 913 | 884 | 3.3 | |
| Amortization and depreciation2 | million € | 695 | 716 | (2.9) | 1,396 | 1,401 | (0.4) | |
| Segment assets (as of June 30)3 | million € | 57,617 | 54,397 | 5.9 | 57,617 | 54,397 | 5.9 | |
| Personnel costs | million € | 2,360 | 2,356 | 0.2 | 4,684 | 4,635 | 1.1 | |
| Number of employees (as of June 30) | 112,277 | 111,614 | 0.6 | 112,277 | 111,614 | 0.6 | ||
1 For more information, see page 36.
2 Intangible assets and property, plant and equipment (including acquisitions)
3 Intangible assets; property, plant and equipment; inventories; and business-related receivables
| 1 |
|---|
| 5 |
| 6 |
| 7 |
| 8 |
| 10 |
| 12 |
| 13 |
| 14 |
| 15 |
| 16 |
| Statement of Income | 17 |
|---|---|
| Statement of Income and Expense Recognized in Equity | 18 |
| Balance Sheet | 19 |
| Statement of Cash Flows | 20 |
| Statement of Changes in Equity | 21 |
| Segment Reporting | 22 |
| Notes to the Interim Financial Statements | 24 |
| Calculation of Adjusted Earnings per Share5 | 36 |
| Statement in Accordance with Section 37y and | |
| Section 37w(2)(3) of the German Securities Trading Act | 36 |
4 This section is not part of the Interim Management's Report.
5 This section is not part of the Interim Financial Statements.
EBIT before special items (Change compared with 1st half 2013) Million €
0% 4,193 (+147)
The Chemicals segment comprises our business with basic chemicals and intermediates. Its portfolio ranges from solvents, plasticizers and highvolume monomers to glues and electronic chemicals as well as raw materials for detergents, plastics, textile fibers, paints and coatings, plant protection and pharmaceuticals. In addition to supplying customers in the chemical industry and numerous other sectors, we also ensure that other BASF segments are supplied with chemicals for producing downstream products.
Our Performance Products lend stability, color or improved application properties to many everyday items. Our product portfolio includes vitamins and other food additives as well as ingredients for pharmaceuticals and for hygiene, household, cosmetic and personal care items. Other products from this segment improve processes in the paper industry, oil and gas production, mining and water treatment. They can also enhance the efficiency of fuels and lubricants, the effectiveness of adhesives and coatings, and the stability of plastics.
In the Functional Materials & Solutions segment, we bundle system solutions, services and innovative products for specific sectors and customers, in particular for the automotive, electrical, chemical and construction industries as well as for household applications and for sports and leisure. Our portfolio comprises catalysts, battery materials, engineering plastics, polyurethane systems, automotive and industrial coatings and concrete admixtures as well as construction systems such as tile adhesives and decorative paints.
The Agricultural Solutions segment provides innovative solutions in chemical and biological crop protection as well as seed treatment and solutions to manage water, nutrients and plant stress. Our research in plant biotechnology concentrates on plants for greater efficiency in agriculture, better nutrition, and use as renewable raw materials.
Research expenses, sales, earnings and all other data of BASF Plant Science are not included in the Agricultural Solutions segment; these are reported in Other.
We focus our exploration and production on oil and gas-rich regions in Europe, North Africa, South America, Russia and the Middle East. Together with our Russian partner Gazprom, we are active in the transport, storage and trading of natural gas in Europe.
Cathodic e-coating helps maintain the value of millions of automobiles worldwide
The perfect automotive finish is critically determined by the coatings used. The demands made on these coatings are constantly on the rise, in terms of both environmental and corrosion protection. CathoGuard® 800 provides automobile manufacturers with a product that satisfies these technical and environmental standards to an outstanding degree. The coating's high material efficiency makes it additionally impressive.
Cathodic e-coating makes up the first layer in the coating system. It ensures effective corrosion protection and largely dictates the quality of the entire finish. In this process, the cleaned and pretreated car body is immersed in a bath of electrocoat, where both car and coating are electrically charged – the former negatively, the latter positively. After receiving an evenly distributed coat, the car body is rinsed and the coating is baked at 180°C.
CathoGuard® 800 combines several benefits: It achieves excellent surface quality and provides reliable edge protection. Moreover, the improved deposition behavior of CathoGuard® 800 ensures a more homogeneous coating thickness over the various metal substrates of a car's body.
Cathodic e-coating is a sought-after alternative to conventional dipping varnishes, which often contain tin. Furthermore, CathoGuard® 800 has a very low solvent content, and its high material efficiency helps conserve resources. This technology is also ideally suited for integrated coating processes that do not use a primer.
BASF has introduced its innovative CathoGuard® 800 technology in all regions. Today, more than 60 customer plants worldwide are supplied with CathoGuard® 800.
E-coating involves immersing the car body in a bath, where the coating particles are deposited onto the steel plate using electric currents.
BASF's CathoGuard® 800 electrocoat technology efficiently protects car surfaces, edges and cavities against corrosion and is used successfully around the world.
Our business developed positively in the second quarter of 2014. At €18.5 billion, sales rose by 1% compared with the same period of the previous year. We increased sales volumes in all segments except Agricultural Solutions. Negative currency effects and a considerable decline in sales in Other dampened sales growth for the BASF Group.
At around €2.1 billion, income from operations before special items surpassed the level of the second quarter of 2013 by €221 million. We considerably increased our earnings in the chemicals business1 and in the Oil & Gas segment. Earnings declined considerably, however, in the Agricultural Solutions segment and in Other.
We raised sales volumes compared with the second quarter of 2013. We observed strong volumes growth, especially in the Oil & Gas segment. Sales prices decreased overall, predominantly as a result of lower gas prices in the Natural Gas Trading business sector. Currency effects had a highly negative impact on sales in all divisions. On balance, portfolio measures increased sales by 1%.
| 2nd Quarter | |
|---|---|
| Volumes | 6 |
| Prices | (2) |
| Portfolio | 1 |
| Currencies | (4) |
| 1 |
In the Chemicals segment, sales were slightly up compared with the second quarter of 2013. We raised our sales volumes in all divisions, posting especially strong volumes growth in the Petrochemicals division in North America. Lower prices and negative currency effects reduced the sales increase. Earnings considerably surpassed the level of the previous second quarter, mainly as a result of higher margins in the Petrochemicals division.
Sales in the Performance Products segment declined slightly due to negative currency effects. With prices stable, we slightly raised our volumes; sales volumes grew especially in the Asia Pacific region. Earnings increased considerably compared with the second quarter of 2013. This was mainly the result of lower fixed costs, partly owing to restructuring measures.
Second-quarter sales (million €, relative change)
| Chemicals | 2014 | 4,298 | 3% |
|---|---|---|---|
| 2013 | 4,183 | ||
| Performance | 2014 | 3,924 | (3%) |
| Products | 2013 | 4,032 | |
| Functional Mate | 2014 | 4,518 | 0% |
| rials & Solutions | 2013 | 4,503 | |
| Agricultural | 2014 | 1,666 | (4%) |
| Solutions | 2013 | 1,727 | |
| Oil & Gas | 2014 | 3,194 | 13% |
| 2013 | 2,836 | ||
| Other | 2014 | 855 | (20%) |
| 2013 | 1,072 | ||
Sales matched the previous second-quarter level in the Functional Materials & Solutions segment. We considerably increased sales volumes, primarily in the Catalysts division. Negative currency effects put a strain on sales development. In the Construction Chemicals division, sales declined considerably as a result of portfolio effects, as well. We considerably increased our earnings. This was largely because of higher volumes and reduced fixed costs.
1 Our chemicals business comprises the Chemicals, Performance Products and Functional Materials & Solutions segments.
In the Agricultural Solutions segment, sales declined slightly compared with the second quarter of 2013. This was due to negative currency effects. We were able to raise our sales prices in all regions. Volumes remained stable. Earnings were considerably below the previous second-quarter levels, predominantly on account of negative currency effects and higher research expenses.
Sales in the Oil & Gas segment considerably exceeded the level of the previous second quarter. We posted sharply increased sales volumes, especially in the Exploration & Production business sector. The activities in Norway acquired from Statoil also contributed to sales growth. In the Natural Gas Trading business sector, significantly lower gas prices dampened sales development. We were able to raise our earnings considerably as a result of the higher volumes.
Compared with the second quarter of 2013, sales in Other fell considerably. This was primarily due to reduced raw material sales and lower plant availability. Income from operations before special items declined considerably. Currency losses contributed significantly to this development.
In the second quarter of 2014, EBIT contained a total of minus €34 million in special items, partly in connection with various restructuring measures. The previous second quarter had contained special items in EBIT totaling minus €59 million, primarily from special charges for restructuring measures and the integration of Pronova BioPharma.
EBIT increased by €246 million to €2,019 million compared with the previous second quarter. EBITDA rose by €225 million to €2,714 million.
Second-quarter EBIT before special items (Million €, absolute change)
| Chemicals | 2014 | 570 | 75 | |
|---|---|---|---|---|
| 2013 | 495 | |||
| Performance | 2014 | 435 | 41 | |
| Products | 2013 | 394 | ||
| Functional Mate | 2014 | 356 | 63 | |
| rials & Solutions | 2013 | 293 | ||
| Agricultural | 2014 | 433 | (52) | |
| Solutions | 2013 | 485 | ||
| Oil & Gas | 2014 | 587 | 205 | |
| 2013 | 382 | |||
| 2014 | (328) | (111) | ||
| Other | 2013 | (217) | ||
The financial result improved by €26 million to minus €136 million due to the improvement in other financial result and income from shareholdings. The interest result declined, however.
Income before taxes and minority interests grew by €272 million to €1,883 million compared with the same quarter of the previous year. The tax rate rose to 26.9% (second quarter of 2013: 23.8%).
Net income rose by €142 million to €1,299 million.
Earnings per share were €1.41 in the second quarter of 2014 compared with €1.26 in the same period of the previous year. Adjusted for special items and amortization of intangible assets, earnings per share rose to €1.54 (second quarter of 2013: €1.40).
Information on the calculation of adjusted earnings per share can be found on page 36
| 2014 | 2013 | |
|---|---|---|
| 1st quarter | 67 | 10 |
| 2nd quarter | (34) | (46) |
| 1st half | 33 | (36) |
| 3rd quarter | (21) | |
| 4th quarter | 259 | |
| Full year | 202 |
| 2014 | 2013 | |
|---|---|---|
| 1st quarter | 1.64 | 1.67 |
| 2nd quarter | 1.54 | 1.40 |
| 1st half | 3.18 | 3.07 |
| 3rd quarter | 1.28 | |
| 4th quarter | 1.02 | |
| Full year | 5.37 | |
At just under €38 billion, BASF Group sales in the first half of 2014 matched the level of the same period of 2013. We were able to raise sales volumes in all segments. Slightly lower sales prices and negative currency effects put a strain on sales development.
Income from operations before special items grew by 4% to around €4.2 billion. This was mainly due to the considerable earnings increase in the Performance Products and Functional Materials & Solutions segments. The contribution from Other declined considerably, however.
Compared with the same period of the previous year, we posted higher sales volumes in all segments in the first half of 2014. Prices declined overall. Currency effects also had a negative impact on sales. Portfolio measures contributed 1% to sales.
Factors influencing sales (% of sales)
| 1st Half | |
|---|---|
| Volumes | 4 |
| Prices | (2) |
| Portfolio | 1 |
| Currencies | (3) |
| 0 |
Sales in the Chemicals segment rose slightly compared with the first half of 2013. Sales volumes increased in all divisions; the Petrochemicals division in North America posted particularly considerable volumes growth. Lower sales prices and negative currency effects dampened this development. Earnings rose slightly, especially as a result of higher margins in the Petrochemicals division.
Sales were slightly down in the Performance Products segment despite increased volumes. This was due to negative currency effects. Sales prices matched the level of the first half of the previous year. Our strict fixed cost management and restructuring measures contributed to a decrease in fixed costs and a considerable rise in earnings.
First-half sales (million €, relative change)
| Chemicals | 2014 8,696 |
1% | |
|---|---|---|---|
| 2013 8,579 |
|||
| Performance | 2014 7,796 |
(1%) | |
| Products | 2013 7,912 |
||
| Functional Mate | 2014 8,754 |
1% | |
| rials & Solutions | 2013 8,684 |
||
| Agricultural | 2014 3,319 |
1% | |
| Solutions | 2013 3,283 |
||
| Oil & Gas | 2014 7,470 |
0% | |
| 2013 7,496 |
|||
| Other | 2014 1,932 |
(10%) | |
| 2013 2,137 |
|||
With prices stable, we posted slightly higher sales in the Functional Materials & Solutions segment on account of increased volumes. Strong demand from the automotive industry contributed significantly to this. Currency effects had a negative impact on sales development. In the Construction Chemicals division, sales declined considerably as a result of portfolio effects, as well. We considerably raised our earnings, primarily through higher volumes and reduced fixed costs.
Sales in the Agricultural Solutions segment grew slightly compared with the first half of 2013. We increased volumes and sales prices, more than compensating for negative currency effects. There was a slight drop in earnings, which was largely the result of negative currency influences and higher research expenses.
In the Oil & Gas segment, sales matched the level of the previous first half. Sales rose considerably in the Exploration & Production business sector, primarily due to the activities in Norway acquired from Statoil. However, sales declined slightly in the Natural Gas Trading business sector, mainly because of lower gas prices. Earnings slightly exceeded the level of the first half of 2013 due to higher volumes.
Sales fell considerably in Other, mostly as a result of lower sales of raw materials and decreased plant availability. Income from operations before special items declined considerably. Currency losses and higher charges for the long-term incentive program were largely responsible for this.
Special items in EBIT totaled €75 million in the first half of 2014. This was predominantly attributable to special income from the divestiture of our shares in non-BASF-operated oil and gas fields in the British North Sea. The previous first half had included special items in EBIT of minus €104 million. These resulted from the integration of Becker Underwood and Pronova BioPharma in addition to various restructuring measures.
Compared with the first half of the previous year, EBIT rose by €326 million to €4,268 million. EBITDA grew by €321 million to €5,664 million.
| Chemicals | 2014 | 1,171 | 26 | |
|---|---|---|---|---|
| 2013 | 1,145 | |||
| Performance | 2014 | 862 | 89 | |
| Products | 2013 | 773 | ||
| Functional Mate rials & Solutions |
2014 | 667 | 135 | |
| 2013 | 532 | |||
| Agricultural | 2014 | 943 | (40) | |
| Solutions | 2013 | 983 | ||
| Oil & Gas | 2014 | 1,081 | 69 | |
| 2013 | 1,012 | |||
| Other | 2014 | (531) | (132) | |
| 2013 | (399) | |||
The financial result decreased by €31 million to minus €319 million. This was mainly because of the decline in other financial result. Higher income from shareholdings helped counteract this effect.
Income before taxes and minority interests improved compared with the first half of 2013 by €295 million to €3,949 million. The tax rate rose to 26.1% (first half of 2013: 24.1%).
Net income grew by €173 million to €2,776 million.
Earnings per share amounted to €3.02 in the first half of 2014 compared with €2.83 in the same period of the previous year. Adjusted for special items and amortization of intangible assets, earnings per share rose to €3.18 (first half of 2013: €3.07).
Information on the calculation of adjusted earnings per share can be found on page 36
− At around €4.2 billion, income from operations before special items up by 4% compared with first half of 2013
| 2nd Quarter 2014 | 1st Half 2014 | |
|---|---|---|
| Performance (with dividends reinvested) | ||
| BASF % |
8.9 | 13.4 |
| DAX 30 % |
2.9 | 2.9 |
| DJ EURO STOXX 50 % |
3.9 | 6.3 |
| DJ Chemicals % |
5.2 | 6.0 |
| MSCI World Chemicals % |
4.6 | 7.3 |
| Share prices and trading (XETRA) | ||
| Average € |
83.00 | 81.15 |
| High € |
87.36 | 87.36 |
| Low € |
76.98 | 75.86 |
| Close (end of period) € |
85.03 | 85.03 |
| Average daily trade million shares |
2.4 | 2.6 |
| Outstanding shares (end of period) million shares |
918.5 | 918.5 |
| Market capitalization (end of period) billion € |
78.1 | 78.1 |
Stock markets developed positively in the second quarter of 2014 due to improved economic figures from the United States as well as the European Central Bank's low interest policy. The U.S. benchmark index Dow Jones Industrial Average and the German DAX 30 achieved new peak levels in June. BASF's shares reached a new all-time high of €87.36 on June 20, 2014. However, investors took profits at the end of June. This was due in part to weaker economic figures from Europe and speculation as to an early increase in interest rates by the U.S. Federal Reserve.
The BASF share price dipped slightly as a result, with shares trading at €85.03 at the end of the quarter. Compared with the closing price of the first quarter of 2014, this represents a gain of 5.4%. Assuming the dividend of €2.70 paid out on May 5, 2014, was reinvested, our share performance was 8.9%. In the second quarter, the DAX 30 and the European benchmark index DJ EURO STOXX 50 rose 2.9% and 3.9%, respectively. Over the same period, the global industry index MSCI World Chemicals improved by 4.6%, and DJ Chemicals by 5.2%.
With "A+/A-1 outlook stable" from rating agency Standard & Poor's and "A1/P-1 outlook stable" from Moody's, BASF has good credit ratings, especially compared with its competitors in the chemical industry. We continue to have solid financing. Since the beginning of the year, net debt has increased by around €2 billion to €14.6 billion.
Our financial communication has again won awards. In the annual survey conducted by Britain's IR Magazine, we received the Grand Prix for Investor Relations and took several first prizes – for example, in the "Best Financial Reporting" and "Best Sustainability Practice" categories and in the "Materials" sector.
For up-to-date information on BASF shares online, visit basf.com/share
Change in value of an investment in BASF shares (Jan. – June 2014) (With dividends reinvested; indexed)
We are taking a series of steps to strengthen the competitiveness of the Performance Products segment. In the Care Chemicals division, we will adapt our businesses with detergent and cleaner ingredients and our formulation technology business unit to changing market conditions and customer needs. This will involve eliminating around 120 positions worldwide by the middle of 2015.
Furthermore, we are adjusting our product portfolio in the Nutrition & Health division. Our production network in the growing market for omega-3 fatty acids will be geared toward the attractive segment for highly concentrated omega-3 fatty acids. We are selling the Brattvåg site in Norway, which produces low concentrations of omega-3 fatty acids. The measures currently planned will result in the reduction of around 260 positions worldwide by the end of 2015. In view of growing regional customer demand in the flavor and fragrance industry, we are constructing a citral production plant in Asia with our partner, PETRONAS. Startup is expected in 2016.
BASF and Sinopec are constructing a world-scale plant for neopentylglycol (NPG) at their Verbund site in Nanjing, China. NPG is a versatile polyalcohol that has particularly demonstrated its value as a building block in the production of polyester resins for coatings, unsaturated polyester and alkyd resins, lubricants, and plasticizers. The plant, with a total annual capacity of around 40,000 metric tons, is scheduled to start up at the end of 2015.
BASF, Huntsman, Shanghai Hua Yi (Group) Company, Shanghai Chlor-Alkali Chemical Co. Ltd., and Sinopec Group Assets Management Corporation are planning another diphenylmethane diisocyanate (MDI) plant in Caojing, China. With the new plant, the MDI capacity at this site will be doubled to 480,000 metric tons per year.
The Mexican company Alpek and BASF have signed agreements concerning the expandable polystyrene (EPS) and polyurethane (PU) business activities of their Polioles joint venture in Mexico, as well as BASF's EPS business in North and South America. The agreements do not include BASF's Neopor® (grey EPS) business. Alpek will acquire BASF's EPS business activities in North and South America, including its EPS production site in Altamira, Mexico. In parallel, BASF will acquire Polioles' PU business activities, including selected assets at its Lerma, Mexico site, as well as all marketing and selling rights for PU systems, isocyanates and polyols.
INEOS will acquire BASF's 50% share in the Styrolution joint venture, the world's leading supplier of styrenic plastics. INEOS will pay a purchase price of €1.1 billion. The transaction is subject to approval by the relevant antitrust authorities and is expected to close in the fourth quarter of 2014.
Global gross domestic product grew by around 2.5% in the first half of 2014 compared with the same period of the previous year. Global industrial production rose somewhat faster over the same period, by around 3.5%. The economy in the eurozone has overcome the recession; official statistics have shown mildly positive growth over the last four quarters. Growth impetus arose primarily from exports; domestic demand remained weak. The decline in U.S. gross domestic product in the first quarter of 2014, mainly attributable to inventory effects and extreme weather conditions, was surprisingly considerable compared with the fourth quarter of 2013. However, leading economic indicators suggest that the U.S. economy will grow moderately throughout the year. Growth also slowed down in China in the beginning of the year. Residential construction in particular cooled off considerably. The economy in Brazil was hampered by considerably more negative consumer sentiment.
The forecast for the full year 2014 can be found on page 16
| 2nd Quarter | 1st Half | ||||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % | 2014 | 2013 | Change in % | ||
| Sales to third parties | 4,298 | 4,183 | 3 | 8,696 | 8,579 | 1 | |
| Thereof Petrochemicals |
2,019 | 1,849 | 9 | 4,116 | 3,865 | 6 | |
| Monomers | 1,578 | 1,618 | (2) | 3,168 | 3,298 | (4) | |
| Intermediates | 701 | 716 | (2) | 1,412 | 1,416 | 0 | |
| Income from operations before depreciation and amortization (EBITDA) | 725 | 696 | 4 | 1,507 | 1,537 | (2) | |
| Income from operations (EBIT) before special items | 570 | 495 | 15 | 1,171 | 1,145 | 2 | |
| Income from operations (EBIT) | 536 | 494 | 9 | 1,136 | 1,144 | (1) | |
| Assets (as of June 30) | 11,309 | 10,474 | 8 | 11,309 | 10,474 | 8 | |
| Research expenses | 46 | 45 | 2 | 90 | 87 | 3 | |
| Additions to property, plant and equipment and intangible assets | 477 | 424 | 13 | 749 | 748 | 0 |
Compared with the previous second quarter, we increased sales slightly in the Chemicals segment. This was the result of higher sales volumes in all divisions. We posted considerable volumes growth, especially in the Petrochemicals division in North America. Lower sales prices and negative currency effects partly offset this development (volumes 9%, prices –3%, currencies –3%). Income from operations before special items was considerably above the level of the previous second quarter, primarily due to higher margins in the Petrochemicals division.
Sales grew considerably in the Petrochemicals division. The startup of the tenth oven in the Port Arthur, Texas, steam cracker and the higher capacity utilization rate of the condensation splitter – which uses distillation to separate light crude oil grades in products such as kerosine and diesel – led to considerable volumes growth in North America. Reduced sales prices and the weaker U.S. dollar had a dampening effect on sales in all business areas. Slightly lower margin levels in some product lines were countered by improved margins for steam cracker products, especially in North America. Income from operations rose considerably. Several scheduled plant shutdowns had negatively impacted earnings in the previous second quarter.
Sales declined slightly in the Monomers division. We raised sales volumes in all regions; growth was especially strong for MDI and polyamide 6 extrusion polymers. These higher volumes were only partly able to offset negative currency effects and declining prices, however. Despite reduced fixed costs, earnings were slightly down compared with the previous second quarter on account of lower margins.
In the second quarter of 2014, we increased sales volumes in all regions in the Intermediates division, especially for amines. Sales were slightly below the previous second-quarter level as a result of negative currency effects and lower sales prices. More intense competition put pressure on margins for key products. Reduced fixed costs, however, led to slight earnings improvement.
Sales Change compared with 2nd quarter 2013
EBIT before special items (Change compared with 2nd quarter 2013) Million €
3% 570 (+75)
| 2nd Quarter | 1st Half | |||||||
|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % | 2014 | 2013 | Change in % | |||
| Sales to third parties | 3,924 | 4,032 | (3) | 7,796 | 7,912 | (1) | ||
| Thereof Dispersions & Pigments | 1,034 | 1,039 | 0 | 1,985 | 1,974 | 1 | ||
| Care Chemicals | 1,204 | 1,232 | (2) | 2,468 | 2,507 | (2) | ||
| Nutrition & Health | 520 | 544 | (4) | 1,015 | 1,037 | (2) | ||
| Paper Chemicals | 342 | 370 | (8) | 686 | 732 | (6) | ||
| Performance Chemicals | 824 | 847 | (3) | 1,642 | 1,662 | (1) | ||
| Income from operations before depreciation and amortization (EBITDA) | 646 | 556 | 16 | 1,257 | 1,124 | 12 | ||
| Income from operations (EBIT) before special items | 435 | 394 | 10 | 862 | 773 | 12 | ||
| Income from operations (EBIT) | 454 | 344 | 32 | 868 | 711 | 22 | ||
| Assets (as of June 30) | 14,078 | 14,254 | (1) | 14,078 | 14,254 | (1) | ||
| Research expenses | 90 | 92 | (2) | 175 | 184 | (5) | ||
| Additions to property, plant and equipment and intangible assets | 168 | 255 | (34) | 327 | 1,092 | (70) | ||
Sales were down slightly in the Performance Products segment. With prices stable, slightly increased sales volumes were not able to fully offset negative currency effects (volumes 1%, prices 0%, currencies –4%). We primarily raised volumes in the Asia Pacific region. Income from operations before special items considerably exceeded the level of the previous second quarter. This was predominantly the result of lower fixed costs, due in part to restructuring measures.
Sales in the Dispersions & Pigments division matched the level of the second quarter of 2013. We were able to increase sales volumes, which compensated for negative currency effects and slightly lower sales prices. Demand for dispersions grew, mainly in Asia, while higher sales volumes for resins were especially attributable to increased demand from the European paint and coatings industry. Fixed costs decreased as a result of restructuring measures, strict cost discipline and currency effects. We increased our earnings considerably thanks to the higher volumes.
Despite higher prices, the Care Chemicals division saw a slight, mainly currency-related decline in sales. While we were able to raise sales volumes and prices for personal care ingredients, volumes declined in the hygiene business; in the previous second quarter, we had particularly benefited from temporarily low capacities on the market. Earnings slightly exceeded the level of the second quarter of 2013 due to reduced fixed costs.
Sales Change compared with 2nd quarter 2013
EBIT before special items (Change compared with 2nd quarter 2013) Million €
–3% 435 (+41)
Sales declined slightly in the Nutrition & Health division. In the aroma chemicals business, we posted a considerable decrease in sales volumes as a result of a four-week-long force majeure for citral-based products. Sales volumes also fell in the pharmaceuticals business. However, we slightly increased volumes in the human nutrition business. Considerably higher prices in the pharmaceuticals business more than compensated for continuing pressure on prices in the vitamin business. Negative currency effects, especially from the U.S. dollar and the Japanese yen, dampened sales in all business areas. With margins stable overall, earnings declined considerably on account of the lower volumes.
Sales were considerably down in the Paper Chemicals division. Negative currency effects, declining sales volumes, and price reductions due to lower raw material costs were responsible for this. Especially in Asia, volumes were below the previous second quarter levels because of more intense competition and lower demand. Our strict fixed cost management and improved margins arising from a more favorable product mix contributed to a considerable increase in earnings.
In the Performance Chemicals division, sales decreased slightly. Higher sales volumes in all business areas were only partly able to offset negative currency and portfolio effects as well as a slight dip in prices. We considerably increased volumes, especially in plastic additives and water treatment, oilfield and mining chemicals. Earnings considerably surpassed the level of the second quarter of 2013. In addition to the rise in sales volumes, this development was largely influenced by significantly lower fixed costs resulting from restructuring measures.
| 2nd Quarter | 1st Half | |||||
|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % | 2014 | 2013 | Change in % | |
| 4,518 | 4,503 | 0 | 8,754 | 8,684 | 1 | |
| 1,528 | 1,463 | 4 | 2,986 | 2,916 | 2 | |
| 541 | 589 | (8) | 984 | 1,047 | (6) | |
| 756 | 752 | 1 | 1,477 | 1,450 | 2 | |
| 1,693 | 1,699 | 0 | 3,307 | 3,271 | 1 | |
| 468 | 396 | 18 | 892 | 748 | 19 | |
| 356 | 293 | 22 | 667 | 532 | 25 | |
| 351 | 283 | 24 | 662 | 523 | 27 | |
| 12,745 | 12,528 | 2 | 12,745 | 12,528 | 2 | |
| 93 | 92 | 1 | 180 | 179 | 1 | |
| 140 | 133 | 5 | 250 | 251 | 0 | |
Sales in the Functional Materials & Solutions segment matched the level of the second quarter of 2013 (volumes 6%, prices 0%, currencies –5%, portfolio –1%). We considerably increased our sales volumes, especially in the Catalysts division. High demand from the automotive industry contributed significantly to this. Negative currency effects dampened sales in all divisions. In the Construction Chemicals division, portfolio measures were also responsible for a considerable decline in sales. Income from operations before special items rose considerably because of the volumes increase and lower fixed costs.
Sales in the Catalysts division grew slightly, mainly as a result of higher volumes in precious and base metal trading. Whereas sales volumes declined for chemical catalysts, demand rose for refinery and mobile emissions catalysts. Negative currency effects and lower prices reduced sales growth. At €659 million, sales in the precious metal trading business exceeded the level of the prior second quarter (€588 million). Lower precious metal prices were more than offset by higher volumes. We considerably improved our earnings. This was largely attributable to the growth in volumes for mobile emissions catalysts and in precious metal trading.
Sales in the Construction Chemicals division were considerably below the level of the second quarter of 2013, particularly as a result of negative currency effects. Lower sales volumes and portfolio effects from divestitures conducted in the previous year, especially in Europe, also contributed to this sales decline. By contrast, we were able to increase sales volumes in Russia and India. Earnings fell considerably, mainly due to negative currency effects. Lower fixed costs were only partly able to compensate for this.
Sales Change compared with 2nd quarter 2013
EBIT before special items (Change compared with 2nd quarter 2013) Million €
0% 356 (+63)
Sales in the Coatings division rose slightly despite negative currency effects. Higher volumes and prices contributed significantly here. Sales volumes for automotive OEM coatings improved considerably in Asia, North America and Europe. In the automotive refinish coatings business, higher volumes in Asia and increased sales prices overall were unable to compensate for negative currency effects and a dip in demand in Europe; sales fell slightly as a result. In the decorative paints business, highly negative currency effects in Brazil led to a considerable decline in sales despite increased volumes. Demand for industrial coatings grew in Europe. Earnings considerably exceeded the level of the second quarter of 2013, due in part to reduced fixed costs.
The Performance Materials division's sales matched the level of the second quarter of 2013. We were able to increase sales for engineering plastics, TPU and Cellasto®, benefiting especially from high demand in the automotive industry. In North America, we also observed considerably higher demand from the construction and consumer goods industries. Sales declined overall for polyurethane systems and styrene foams, however. Negative currency effects, especially from the weak U.S. dollar, dampened sales. Price levels remained stable overall. The startup of new plants led to a slight rise in fixed costs compared with the previous second quarter. We were able to slightly increase earnings thanks to higher sales volumes for specialties as well as engineering plastics.
| 2nd Quarter | 1st Half | ||||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % | 2014 | 2013 | Change in % | ||
| Sales to third parties | 1,666 | 1,727 | (4) | 3,319 | 3,283 | 1 | |
| Income from operations before depreciation and amortization (EBITDA) | 476 | 525 | (9) | 1,028 | 1,057 | (3) | |
| Income from operations (EBIT) before special items | 433 | 485 | (11) | 943 | 983 | (4) | |
| Income from operations (EBIT) | 433 | 485 | (11) | 943 | 977 | (3) | |
| Assets (as of June 30) | 7,654 | 7,131 | 7 | 7,654 | 7,131 | 7 | |
| Research expenses | 131 | 111 | 18 | 243 | 211 | 15 | |
| Additions to property, plant and equipment and intangible assets | 105 | 78 | 35 | 168 | 137 | 23 | |
Sales in the Agricultural Solutions segment saw a slight, currency-related decline compared with the second quarter of 2013 (volumes 0%, prices 2%, currencies –6%). We raised our sales prices in all regions. Volumes were stable overall.
In Europe, sales matched the level of the previous second quarter. Our business was very positive in Western Europe. We were able to almost fully compensate for negative currency effects, especially in Eastern Europe, with price increases.
Sales declined slightly in North America. Higher volumes and prices, especially for innovative herbicides and in the Functional Crop Care business unit, were only partly able to offset negative currency effects.
Sales fell considerably in Asia, due primarily to currency effects. Demand was high in China. We observed especially positive development in our business with fungicides.
Sales in South America were considerably below the prior second-quarter level as a result of lower volumes and negative currency effects. In Brazil, insecticide sales declined mainly because of high competitive pressure and unfavorable weather conditions.
Income from operations before special items decreased considerably, primarily as a result of negative currency effects and higher research expenses.
| 1 | Fungicides | 45% |
|---|---|---|
| 2 | Herbicides | 38% |
| 3 | Insecticides | 11% |
| 4 | Functional Crop Care | 6% |
| 1 | Europe | 46% |
|---|---|---|
| 2 | North America | 34% |
| 3 | Asia Pacific | 10% |
| 4 | South America, Africa, Middle East |
10% |
Sales Change compared with 2nd quarter 2013
EBIT before special items (Change compared with 2nd quarter 2013) Million €
| 2nd Quarter | 1st Half | |||||||
|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % | 2014 | 2013 | Change in % | |||
| Sales to third parties | 3,194 | 2,836 | 13 | 7,470 | 7,496 | 0 | ||
| Thereof Exploration & Production | 807 | 525 | 54 | 1,599 | 1,314 | 22 | ||
| Natural Gas Trading | 2,387 | 2,311 | 3 | 5,871 | 6,182 | (5) | ||
| Income from operations before depreciation and amortization (EBITDA) | 705 | 500 | 41 | 1,468 | 1,234 | 19 | ||
| Thereof Exploration & Production | 585 | 398 | 47 | 1,272 | 927 | 37 | ||
| Natural Gas Trading | 120 | 102 | 18 | 196 | 307 | (36) | ||
| Income from operations (EBIT) before special items | 587 | 382 | 54 | 1,081 | 1,012 | 7 | ||
| Thereof Exploration & Production | 477 | 323 | 48 | 906 | 791 | 15 | ||
| Natural Gas Trading | 110 | 59 | 86 | 175 | 221 | (21) | ||
| Income from operations (EBIT) | 585 | 381 | 54 | 1,210 | 1,011 | 20 | ||
| Thereof Exploration & Production | 475 | 322 | 48 | 1,035 | 790 | 31 | ||
| Natural Gas Trading | 110 | 59 | 86 | 175 | 221 | (21) | ||
| Assets (as of June 30) | 11,831 | 10,010 | 18 | 11,831 | 10,010 | 18 | ||
| Thereof Exploration & Production | 7,825 | 5,757 | 36 | 7,825 | 5,757 | 36 | ||
| Natural Gas Trading | 4,006 | 4,253 | (6) | 4,006 | 4,253 | (6) | ||
| Exploration expenses | 23 | 43 | (47) | 47 | 71 | (34) | ||
| Additions to property, plant and equipment and intangible assets | 243 | 233 | 4 | 512 | 428 | 20 | ||
| Net income | 393 | 280 | 40 | 835 | 677 | 23 | ||
Sales grew considerably in the Oil & Gas segment (volumes 24%, prices/currencies –16%, portfolio 5%). This was mainly attributable to increased volumes in the Exploration & Production business sector as well as activities in Norway acquired from Statoil. As a result, income from operations before special items considerably exceeded the level of the previous second quarter. Net income also rose considerably.
We now expect our asset swap with Gazprom to conclude in autumn 2014. The complex legal unbundling process required to establish new companies is taking longer than initially anticipated.
For more on net income in the Oil & Gas segment, see the Notes to the Interim Financial Statements on page 26
We posted a considerable sales increase in the Exploration & Production business sector. This was largely due to higher production volumes from Norway, as well as to offshore lifting in Libya in May 2014. As a result, we were able to more than compensate for the effects of lower gas prices on the European spot markets for gas. The average price for Brent crude oil was \$110 per barrel, compared with \$102 per barrel (+7%) in the second quarter of 2013. The higher contributions from Norway and Libya led to a considerable increase in earnings.
In the Natural Gas Trading business sector, sales were slightly above the level of the previous second quarter. Lower gas prices were more than offset by higher volumes. Because of sharply falling gas prices on the European spot markets for gas, we were able to optimize our procurement portfolio and considerably increase our earnings.
Sales Change compared with 2nd quarter 2013
EBIT before special items (Change compared with 2nd quarter 2013) Million €
13% 587 (+205)
| Sales Location of company |
Sales Location of customer |
EBIT before special items |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
||
| 2nd Quarter | ||||||||||
| Europe | 10,481 | 10,333 | 1 | 9,960 | 9,788 | 2 | 1,347 | 1,074 | 25 | |
| Thereof Germany | 7,526 | 7,287 | 3 | 3,296 | 3,325 | (1) | 533 | 498 | 7 | |
| North America | 4,159 | 3,986 | 4 | 4,075 | 3,930 | 4 | 466 | 485 | (4) | |
| Asia Pacific | 2,861 | 3,005 | (5) | 3,053 | 3,204 | (5) | 172 | 196 | (12) | |
| South America, Africa, Middle East | 954 | 1,029 | (7) | 1,367 | 1,431 | (4) | 68 | 77 | (12) | |
| 18,455 | 18,353 | 1 | 18,455 | 18,353 | 1 | 2,053 | 1,832 | 12 | ||
| 1st Half | ||||||||||
| Europe | 22,382 | 22,571 | (1) | 21,387 | 21,444 | 0 | 2,805 | 2,551 | 10 | |
| Thereof Germany | 16,445 | 16,215 | 1 | 7,170 | 7,563 | (5) | 1,197 | 1,261 | (5) | |
| North America | 8,059 | 7,707 | 5 | 7,915 | 7,580 | 4 | 957 | 939 | 2 | |
| Asia Pacific | 5,709 | 5,829 | (2) | 6,090 | 6,223 | (2) | 346 | 441 | (22) | |
| South America, Africa, Middle East | 1,817 | 1,984 | (8) | 2,575 | 2,844 | (9) | 85 | 115 | (26) | |
| 37,967 | 38,091 | 0 | 37,967 | 38,091 | 0 | 4,193 | 4,046 | 4 |
Sales at companies located in Europe decreased by 1% yearon-year. Higher volumes in all segments were unable to fully compensate for lower prices and negative currency effects. Sales declined considerably in Other, particularly on account of reduced sales of raw materials and a lower plant availability rate. Income from operations before special items grew by €254 million to €2,805 million, mainly due to higher contributions from the Performance Products, Functional Materials & Solutions and Oil & Gas segments.
In North America, sales grew by 10% in U.S. dollars and by 5% in euro terms. This was largely attributable to significantly higher sales volumes, especially in the Petrochemicals division and the Functional Materials & Solutions segment. At €957 million, earnings surpassed the level of the same period of 2013 by €18 million, mostly as a result of the Petrochemicals division's considerably higher contribution.
Sales in Asia Pacific rose by 4% in local-currency terms, but were down by 2% in euro terms owing to negative currency effects and slightly declining sales prices. We posted a considerable sales decrease in the Chemicals segment. Earnings fell by €95 million to €346 million. Considerably lower earnings in the Chemicals segment as well as currency losses contributed to this.
In South America, Africa, Middle East, sales grew by 8% in local-currency terms but fell by 8% in euro terms. With sales volumes stable overall, increased prices were only partly able to offset highly negative currency effects. In the Agricultural Solutions segment, lower volumes additionally reduced sales. Earnings decreased by €30 million, amounting to €85 million. This was mainly due to currency losses.
We have offered Ultramid® (polyamide) for flexible packaging films based on renewable raw materials since May. We use an innovative approach that replaces up to 100% of the fossil resources used at the beginning of the production process with certified biomass, and indicate the proportion of renewable raw materials contained in the final product. Ultramid® produced using the "mass balance approach" is identical with conventionally made products in terms of formulation and quality, but reduces the emission of greenhouse gases and the use of fossil resources.
Graffiti, writing and stickers can turn public property into eyesores. This is why we have developed RELEST® Powder PUR Anti-Sticker coating. The product's nonstick surface prevents such vandalism, reducing cleaning costs. The slightly roughened surface of the powder coating keeps stickers from adhering properly, and graffiti can be removed more easily. It was specially developed for coating light and traffic signal poles, as well as circuit breaker panel boxes.
We have discovered a new way in which our Initium® fungicide works. The research findings show that Initium® inhibits fungal respiration in an innovative manner, making Initium® the first – and currently only – fungicide in this new classification. This also means that it is not cross-resistant with other commercial fungicides, and as such, is ideal for managing fungal resistance in specialty crops.
Linde and BASF have agreed on a collaboration for the development and licensing of processes for the "on-purpose" production of linear butenes and butadiene. The new process aims to enable the direct production of butadiene from butane via the intermediate butene. Currently, the industry relies mainly on butadiene as a co-product of naphtha cracking. Yet the shift to lighter feedstock is leading to reduced volumes of co-products. The new technology is being developed through mini plant and pilot plant operation in Ludwigshafen.
Compared with the end of 2013, the number of BASF Group employees rose by 71 to a total of 112,277 as of June 30, 2014. On this date, 64.6% of BASF Group employees were employed in Europe while North America accounted for 15.1% of employees, Asia Pacific for 14.8% and South America, Africa, Middle East for 5.5%.
Compared with the same period of 2013, personnel costs in the first half of 2014 grew by 1.1% to €4,684 million. This was largely due to higher expenses for the long-term incentive program. Currency effects partly countered this increase.
| June 30, 2014 |
Dec. 31, 2013 |
|
|---|---|---|
| Europe | 70,922 | 70,977 |
| Thereof Germany | 52,454 | 52,523 |
| North America | 16,979 | 16,996 |
| Asia Pacific | 16,708 | 16,708 |
| South America, Africa, Middle East | 7,668 | 7,525 |
| 112,277 | 112,206 |
In the first half of 2014, the world economy and global industrial production grew somewhat faster than in the previous first half, although more slowly than we had anticipated. With sales stable, we were able to slightly increase our earnings despite negative currency effects.
For 2014, we now expect weaker growth in the global economy than was foreseen six months ago. We expect to perform well in a market environment that remains volatile and challenging. We stand by our outlook for 2014 despite even more unfavorable currency developments and increasing political risks: We strive to slightly raise our income from operations before special items. Sales are likely to decrease slightly due to the divestiture of the gas trading and storage business planned for autumn 2014 and as a result of negative currency effects.
In 2014, opportunities for us may arise from stronger growth in the global economy and in our customer industries.
We also see opportunities in consistently implementing our "We create chemistry" strategy and further improving our operational excellence, as well as in strengthening research and development. We will continue to concentrate on expanding our business in growth markets as well as on innovations, portfolio optimization, restructuring and increasing efficiency. For example, our excellence program, STEP, serves to strengthen our competitiveness and profitability. Starting at the end of 2015, STEP is expected to contribute around €1 billion to earnings each year. STEP comprises more than 100 individual projects and is running right on schedule.
However, there are also risks to the development of our business. A renewed intensification of the sovereign debt crisis in Europe, an escalation of the conflict in the Ukraine, and the deceleration of growth in China would all have a negative impact on global economic growth. A weaker U.S. dollar would be detrimental to our earnings. Rising raw material costs could furthermore lead to lower margins.
The statements on opportunities and risks made in the BASF Report 2013 remain valid.
For more information, see the Opportunities and Risks Report in the BASF Report 2013 on pages 106-114
We have reduced some of our expectations for the global economy in 2014 (previous forecast in parentheses):
The slight upturn in growth expected for the global economy and key customer industries in 2014 will have a positive effect on our business. We aim to increase our sales volumes, excluding the effects of acquisitions and divestitures. Nevertheless, sales will presumably see a slight dip compared with 2013 due to the divestiture of the gas trading and storage business planned for autumn 2014, as well as to continuing negative currency effects. We expect income from operations before special items to rise slightly, especially as a result of considerably higher contributions from the Performance Products and Functional Materials & Solutions segments. Income from operations is likely to increase considerably. Special income from the planned divestiture of our gas trading and storage business as well as from the divestiture of our share in the Styrolution joint venture will make a significant contribution here. We aim to considerably improve income from operations after cost of capital and therefore once again earn a high premium on our cost of capital.
Statement of income (million €)
| Explanations in Note | 2nd Quarter | 1st Half | |||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
||
| Sales | 18,455 | 18,353 | 0.6 | 37,967 | 38,091 | (0.3) | |
| Cost of sales | (13,564) | (13,627) | 0.5 | (28,231) | (28,499) | 0.9 | |
| Gross profit on sales | 4,891 | 4,726 | 3.5 | 9,736 | 9,592 | 1.5 | |
| Selling expenses | (1,856) | (1,891) | 1.9 | (3,626) | (3,697) | 1.9 | |
| General and administrative expenses | (344) | (343) | (0.3) | (650) | (672) | 3.3 | |
| Research and development expenses | (471) | (455) | (3.5) | (913) | (884) | (3.3) | |
| Other operating income [5] |
280 | 204 | 37.3 | 681 | 544 | 25.2 | |
| Other operating expenses [5] |
(548) | (525) | (4.4) | (1,121) | (1,085) | (3.3) | |
| Income from companies accounted for using the equity method [6] |
67 | 57 | 17.5 | 161 | 144 | 11.8 | |
| Income from operations | 2,019 | 1,773 | 13.9 | 4,268 | 3,942 | 8.3 | |
| Other income from shareholdings | 32 | 22 | 45.5 | 38 | 28 | 35.7 | |
| Other expenses from shareholdings | (4) | (6) | 33.3 | (5) | (21) | 76.2 | |
| Interest income | 39 | 35 | 11.4 | 73 | 61 | 19.7 | |
| Interest expense | (174) | (158) | (10.1) | (332) | (312) | (6.4) | |
| Other financial result | (29) | (55) | 47.3 | (93) | (44) | ||
| Financial result [7] |
(136) | (162) | 16.0 | (319) | (288) | (10.8) | |
| Income before taxes and minority interests | 1,883 | 1,611 | 16.9 | 3,949 | 3,654 | 8.1 | |
| Income taxes [8] |
(507) | (383) | (32.4) | (1,032) | (882) | (17.0) | |
| Income before minority interests | 1,376 | 1,228 | 12.1 | 2,917 | 2,772 | 5.2 | |
| Minority interests [9] |
(77) | (71) | (8.5) | (141) | (169) | 16.6 | |
| Net income | 1,299 | 1,157 | 12.3 | 2,776 | 2,603 | 6.6 | |
| Earnings per share (€) [10] |
|||||||
| Undiluted | 1.41 | 1.26 | 11.9 | 3.02 | 2.83 | 6.7 | |
| Diluted | 1.41 | 1.26 | 11.9 | 3.02 | 2.83 | 6.7 | |
| 1st Half | ||
|---|---|---|
| 2014 | 2013 | |
| Income before minority interests | 2,917 | 2,772 |
| Remeasurements of defined benefit plans | (2,017) | 795 |
| Revaluation due to acquisition of majority of shares | – | (1) |
| Deferred taxes for items that will not be reclassified to the statement of income | 606 | (231) |
| Income and expense recognized directly in equity that will not be reclassified | ||
| to the statement of income at a later date | (1,411) | 563 |
| Foreign currency translation adjustment | 153 | (290) |
| Fair value changes in available-for-sale securities | – | 3 |
| Cash flow hedges | (69) | 18 |
| Deferred taxes for items that will be reclassified to the statement of income | 11 | 7 |
| Income and expense recognized directly in equity that will be reclassified to the statement of income at a later date | 95 | (262) |
| Minority interests | 20 | 5 |
| Total income and expense recognized directly in equity | (1,296) | 306 |
| Income before minority interests and income and expense recognized directly in equity | 1,621 | 3,078 |
| Thereof attributable to shareholders of BASF SE | 1,460 | 2,904 |
| Thereof attributable to minority interests | 161 | 174 |
| Other comprehensive income | ||||||
|---|---|---|---|---|---|---|
| Remeasurements of defined benefit plans |
Foreign currency translation adjustment |
Fair value changes in available-for-sale securities |
Cash flow hedges |
Revaluation due to acquisition of majority of shares |
Total income and expense recognized directly in equity |
|
| As of January 1, 2014 | (2,444) | (917) | 15 | (54) | – | (3,400) |
| Additions | (2,017) | – | – | (69) | – | (2,086) |
| Releases | – | 153 | – | – | – | 153 |
| Deferred taxes | 606 | (2) | – | 13 | – | 617 |
| As of June 30, 2014 | (3,855) | (766) | 15 | (110) | – | (4,716) |
| As of January 1, 2013 | (3,571) | 165 | 17 | (73) | 1 | (3,461) |
| Additions | – | – | 3 | – | – | 3 |
| Releases | 795 | (290) | – | 18 | (1) | 522 |
| Deferred taxes | (231) | 4 | (1) | 4 | – | (224) |
| As of June 30, 2013 | (3,007) | (121) | 19 | (51) | – | (3,160) |
| Explanations in Note | June 30, 2014 | June 30, 2013 | Change in % | Dec. 31, 2013 | Change in % |
|---|---|---|---|---|---|
| Intangible assets [11] |
12,031 | 12,278 | (2.0) | 12,235 | (1.7) |
| Property, plant and equipment [11] |
19,092 | 17,531 | 8.9 | 18,254 | 4.6 |
| Investments accounted for using the equity method [11] |
3,378 | 3,476 | (2.8) | 4,137 | (18.3) |
| Other financial assets [11] |
789 | 631 | 25.0 | 630 | 25.2 |
| Deferred tax assets | 1,636 | 1,500 | 9.1 | 992 | 64.9 |
| Other receivables and miscellaneous assets | 1,591 | 1,063 | 49.7 | 876 | 81.6 |
| Noncurrent assets | 38,517 | 36,479 | 5.6 | 37,124 | 3.8 |
| Inventories [12] |
9,844 | 9,319 | 5.6 | 9,592 | 2.6 |
| Accounts receivable, trade [12] |
10,364 | 10,621 | (2.4) | 9,376 | 10.5 |
| Other receivables and miscellaneous assets [12] |
3,677 | 3,650 | 0.7 | 3,630 | 1.3 |
| Marketable securities [12] |
16 | 18 | (11.1) | 17 | (5.9) |
| Cash and cash equivalents [12] |
2,360 | 2,228 | 5.9 | 1,815 | 30.0 |
| Assets of disposal groups | 3,624 | 2,084 | 73.9 | 2,828 | 28.1 |
| Current assets | 29,885 | 27,920 | 7.0 | 27,258 | 9.6 |
| Total assets | 68,402 | 64,399 | 6.2 | 64,382 | 6.2 |
| Explanations in Note | June 30, 2014 | June 30, 2013 | Change in % | Dec. 31, 2013 | Change in % | |
|---|---|---|---|---|---|---|
| Subscribed capital | [13] | 1,176 | 1,176 | – | 1,176 | – |
| Capital surplus | [13] | 3,165 | 3,188 | (0.7) | 3,165 | – |
| Retained earnings | [13] | 26,477 | 23,934 | 10.6 | 26,170 | 1.2 |
| Other comprehensive income | (4,716) | (3,160) | (49.2) | (3,400) | (38.7) | |
| Equity of shareholders of BASF SE | 26,102 | 25,138 | 3.8 | 27,111 | (3.7) | |
| Minority interests | 767 | 987 | (22.3) | 678 | 13.1 | |
| Equity | 26,869 | 26,125 | 2.8 | 27,789 | (3.3) | |
| Provisions for pensions and similar obligations | [14] | 5,647 | 4,732 | 19.3 | 3,709 | 52.3 |
| Other provisions | [15] | 3,012 | 2,932 | 2.7 | 2,924 | 3.0 |
| Deferred tax liabilities | 2,688 | 2,622 | 2.5 | 2,849 | (5.7) | |
| Financial indebtedness | [16] | 11,257 | 10,768 | 4.5 | 11,151 | 1.0 |
| Other liabilities | [16] | 1,299 | 1,205 | 7.8 | 1,157 | 12.3 |
| Noncurrent liabilities | 23,903 | 22,259 | 7.4 | 21,790 | 9.7 | |
| Accounts payable, trade | 4,115 | 4,422 | (6.9) | 4,505 | (8.7) | |
| Provisions | [15] | 2,506 | 2,588 | (3.2) | 2,616 | (4.2) |
| Tax liabilities | 1,393 | 994 | 40.1 | 954 | 46.0 | |
| Financial indebtedness | [16] | 5,744 | 3,913 | 46.8 | 3,256 | 76.4 |
| Other liabilities | [16] | 2,237 | 2,646 | (15.5) | 2,182 | 2.5 |
| Liabilities of disposal groups | 1,635 | 1,452 | 12.6 | 1,290 | 26.7 | |
| Current liabilities | 17,630 | 16,015 | 10.1 | 14,803 | 19.1 | |
| Total equity and liabilities | 68,402 | 64,399 | 6.2 | 64,382 | 6.2 |
| 1st Half | ||
|---|---|---|
| 2014 | 2013 | |
| Net income | 2,776 | 2,603 |
| Depreciation and amortization of intangible assets, property, plant and equipment and financial assets | 1,396 | 1,414 |
| Changes in net working capital | (1,375) | (633) |
| Miscellaneous items | (153) | 646 |
| Cash provided by operating activities | 2,644 | 4,030 |
| Payments related to property, plant and equipment and intangible assets | (2,125) | (1,884) |
| Acquisitions/divestitures | 355 | (516) |
| Financial investments and other items | (531) | (182) |
| Cash used in investing activities | (2,301) | (2,582) |
| Capital increases/repayments, share repurchases | – | – |
| Changes in financial liabilities | 2,781 | 1,762 |
| Dividends | (2,592) | (2,585) |
| Cash used in / provided by financing activities | 189 | (823) |
| Net changes in cash and cash equivalents | 532 | 625 |
| Cash and cash equivalents as of beginning of year and other changes | 1,828 | 1,603 |
| Cash and cash equivalents at end of quarter | 2,360 | 2,228 |
Cash provided by operating activities amounted to €2,644 million in the first half of 2014, down by €1,386 million year-on-year. The €1,375 million outflow in net working capital was the result of a sharp seasonal increase in trade accounts receivable in the Agricultural Solutions segment, stockpiling in anticipation of scheduled plant shutdowns, and lower trade accounts payable. At €633 million, the outflow in net working capital was considerably lower in the first half of 2013, having been additionally influenced by the release of funds in inventory and precious metal trading. The negative value in miscellaneous items was due in part to the reclassification to "cash used in investing activities" of disposal gains from the sale of shares in non-BASFoperated oil and gas fields in the British North Sea to the Hungarian MOL Group. In the first half of the previous year, miscellaneous items had included the release of €646 million in funds, arising primarily from the decline in net assets of the natural gas trading disposal group.
Investing activities led to a cash outflow of €2,301 million, compared with €2,582 million in the same period of the previous year. At €2,125 million, payments related to property, plant and equipment and intangible assets were higher than in the first half of 2013. In the first half of 2014, proceeds of €355 million came from the divestiture of shares in non-BASF-operated oil and gas fields to the MOL Group, as well as from the sale of the PolyAd Services business to Edgewater Capital Partners, L.P., based in Cleveland, Ohio. Payments for acquisitions in the same period of 2013 had been primarily related to the acquisition of Pronova BioPharma ASA, headquartered in Lysaker, Norway.
Financing activities resulted in a cash inflow of €189 million, compared with an outflow of €823 million in the first half of the previous year. The cash inflow resulting from the change in financial liabilities amounted to €2,781 million. This was largely attributable to the issuance of several bonds with a nominal value of €1,550 million, as well as the assumption of around €980 million in bank loans. Dividends of €2,480 million were paid to shareholders of BASF SE, an increase of €92 millioncompared with the previous year. Payments of €112 million were made to minority shareholders of Group companies in the form of dividends.
Cash and cash equivalents amounted to €2,360 million as of June 30, 2014, compared with €1,815 million at the end of 2013. Net debt rose to €14,641 million as of the end of the first half of 2014, compared with €12,592 million as of December 31, 2013.
1st Half 2014 (million €)
| Number of subscribed shares outstanding |
Subscribed capital |
Capital surplus |
Retained earnings |
Other com prehensive income1 |
Equity of shareholders of BASF SE |
Minority interests |
Equity | |
|---|---|---|---|---|---|---|---|---|
| As of January 1, 2014 | 918,478,694 | 1,176 | 3,165 | 26,170 | (3,400) | 27,111 | 678 | 27,789 |
| Effects of acquisitions achieved in stages |
– | – | – | – | – | – | – | – |
| Dividends paid | – | – | – | (2,480) | – | (2,480) | (112)2 | (2,592) |
| Net income | – | – | – | 2,776 | – | 2,776 | 141 | 2,917 |
| Change in income and expense recognized directly in equity |
– | – | – | – | (1,316) | (1,316) | 20 | (1,296) |
| Changes in scope of consolidation and other changes |
– | – | – | 11 | – | 11 | 40 | 51 |
| As of June 30, 2014 | 918,478,694 | 1,176 | 3,165 | 26,477 | (4,716) | 26,102 | 767 | 26,869 |
| As of January 1, 2013 | 918,478,694 | 1,176 | 3,188 | 23,708 | (3,461) | 24,611 | 1,010 | 25,621 |
|---|---|---|---|---|---|---|---|---|
| Effects of acquisitions achieved in stages |
– | – | – | – | – | – | – | – |
| Dividends paid | – | – | – | (2,388) | – | (2,388) | (197)2 | (2,585) |
| Net income | – | – | – | 2,603 | – | 2,603 | 169 | 2,772 |
| Change in income and expense recognized directly in equity |
– | – | – | – | 301 | 301 | 5 | 306 |
| Changes in scope of consolidation and other changes |
– | – | – | 11 | – | 11 | – | 11 |
| As of June 30, 2013 | 918,478,694 | 1,176 | 3,188 | 23,934 | (3,160) | 25,138 | 987 | 26,125 |
1 Details are provided in "Development of income and expense recognized directly in equity of shareholders of BASF SE" on page 18.
2 Including profit and loss transfers
| Sales | EBITDA | Income from operations (EBIT) before special items |
Income from operations (EBIT) |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
|
| Chemicals | 4,298 | 4,183 | 2.7 | 725 | 696 | 4.2 | 570 | 495 | 15.2 | 536 | 494 | 8.5 |
| Performance Products | 3,924 | 4,032 | (2.7) | 646 | 556 | 16.2 | 435 | 394 | 10.4 | 454 | 344 | 32.0 |
| Functional Materials & Solutions |
4,518 | 4,503 | 0.3 | 468 | 396 | 18.2 | 356 | 293 | 21.5 | 351 | 283 | 24.0 |
| Agricultural Solutions | 1,666 | 1,727 | (3.5) | 476 | 525 | (9.3) | 433 | 485 | (10.7) | 433 | 485 | (10.7) |
| Oil & Gas | 3,194 | 2,836 | 12.6 | 705 | 500 | 41.0 | 587 | 382 | 53.7 | 585 | 381 | 53.5 |
| Other | 855 | 1,072 | (20.2) | (306) | (184) | (66.3) | (328) | (217) | (51.2) | (340) | (214) | (58.9) |
| 18,455 | 18,353 | 0.6 | 2,714 | 2,489 | 9.0 | 2,053 | 1,832 | 12.1 | 2,019 | 1,773 | 13.9 |
| Research expenses | Assets | Additions to noncurrent assets1 |
Amortization and depreciation2 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
|
| Chemicals | 46 | 45 | 2.2 | 11,309 | 10,474 | 8.0 | 477 | 424 | 12.5 | 189 | 202 | (6.4) |
| Performance Products | 90 | 92 | (2.2) | 14,078 | 14,254 | (1.2) | 168 | 255 | (34.1) | 192 | 212 | (9.4) |
| Functional Materials & Solutions |
93 | 92 | 1.1 | 12,745 | 12,528 | 1.7 | 140 | 133 | 5.3 | 117 | 113 | 3.5 |
| Agricultural Solutions | 131 | 111 | 18.0 | 7,654 | 7,131 | 7.3 | 105 | 78 | 34.6 | 43 | 40 | 7.5 |
| Oil & Gas | 11 | 19 | (42.1) | 11,831 | 10,010 | 18.2 | 243 | 233 | 4.3 | 120 | 119 | 0.8 |
| Other | 100 | 96 | 4.2 | 10,785 | 10,002 | 7.8 | 38 | (4) | 34 | 30 | 13.3 | |
| 471 | 455 | 3.5 | 68,402 | 64,399 | 6.2 | 1,171 | 1,119 | 4.6 | 695 | 716 | (2.9) |
1 Investments in intangible assets and property, plant and equipment (including acquisitions)
2 Amortization and depreciation of intangible assets and property, plant and equipment
| Sales | EBITDA | Income from operations (EBIT) before special items |
Income from operations (EBIT) |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
|
| Chemicals | 8,696 | 8,579 | 1.4 | 1,507 | 1,537 | (2.0) | 1,171 | 1,145 | 2.3 | 1,136 | 1,144 | (0.7) |
| Performance Products | 7,796 | 7,912 | (1.5) | 1,257 | 1,124 | 11.8 | 862 | 773 | 11.5 | 868 | 711 | 22.1 |
| Functional Materials & Solutions |
8,754 | 8,684 | 0.8 | 892 | 748 | 19.3 | 667 | 532 | 25.4 | 662 | 523 | 26.6 |
| Agricultural Solutions | 3,319 | 3,283 | 1.1 | 1,028 | 1,057 | (2.7) | 943 | 983 | (4.1) | 943 | 977 | (3.5) |
| Oil & Gas | 7,470 | 7,496 | (0.3) | 1,468 | 1,234 | 19.0 | 1,081 | 1,012 | 6.8 | 1,210 | 1,011 | 19.7 |
| Other | 1,932 | 2,137 | (9.6) | (488) | (357) | (36.7) | (531) | (399) | (33.1) | (551) | (424) | (30.0) |
| 37,967 | 38,091 | (0.3) | 5,664 | 5,343 | 6.0 | 4,193 | 4,046 | 3.6 | 4,268 | 3,942 | 8.3 |
| Research expenses | Assets | Additions to noncurrent assets1 |
Amortization and depreciation2 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
2014 | 2013 | Change in % |
|
| Chemicals | 90 | 87 | 3.4 | 11,309 | 10,474 | 8.0 | 749 | 748 | 0.1 | 371 | 393 | (5.6) |
| Performance Products | 175 | 184 | (4.9) | 14,078 | 14,254 | (1.2) | 327 | 1,092 | (70.1) | 389 | 413 | (5.8) |
| Functional Materials & Solutions |
180 | 179 | 0.6 | 12,745 | 12,528 | 1.7 | 250 | 251 | (0.4) | 230 | 225 | 2.2 |
| Agricultural Solutions | 243 | 211 | 15.2 | 7,654 | 7,131 | 7.3 | 168 | 137 | 22.6 | 85 | 80 | 6.3 |
| Oil & Gas | 23 | 28 | (17.9) | 11,831 | 10,010 | 18.2 | 512 | 428 | 19.6 | 258 | 223 | 15.7 |
| Other | 202 | 195 | 3.6 | 10,785 | 10,002 | 7.8 | 74 | 29 | 155.2 | 63 | 67 | (6.0) |
| 913 | 884 | 3.3 | 68,402 | 64,399 | 6.2 | 2,080 | 2,685 | (22.5) | 1,396 | 1,401 | (0.4) |
1 Investments in intangible assets and property, plant and equipment (including acquisitions)
2 Amortization and depreciation of intangible assets and property, plant and equipment
| 2nd Quarter | 1st Half | ||||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change in % | 2014 | 2013 | Change in % | ||
| Sales | 855 | 1,072 | (20.2) | 1,932 | 2,137 | (9.6) | |
| EBIT before special items | (328) | (217) | (51.2) | (531) | (399) | (33.1) | |
| Thereof Group corporate costs | (57) | (58) | 1.7 | (106) | (114) | 7.0 | |
| Corporate research | (97) | (97) | – | (195) | (194) | (0.5) | |
| Currency results, hedges and other valuation effects | (117) | (63) | (85.7) | (212) | (7) | ||
| Other business | 37 | 37 | – | 87 | 96 | (9.4) | |
| Special items | (12) | 3 | (20) | (25) | 20.0 | ||
| EBIT | (340) | (214) | (58.9) | (551) | (424) | (30.0) |
3 For more information on Other, see the Notes to the Interim Financial Statements on pages 25 and 26.
The Consolidated Financial Statements of the BASF Group for the year ending December 31, 2013, were prepared in accordance with the International Financial Reporting Standards (IFRS) valid as of the balance sheet date. The Interim Financial Statements as of June 30, 2014, have been prepared in line with the rules of International Accounting Standard 34 in abbreviated form and using the same accounting policies. The Interim Financial Statements and Interim Management's Report have been neither audited nor subject to an auditor's review.
The BASF Report 2013 containing the Consolidated Financial Statements as of December 31, 2013, can be found online at: basf.com/report
| Closing rates | Average rates 1st Half |
||||
|---|---|---|---|---|---|
| 1 € equals | June 30, 2014 |
Dec. 31, 2013 |
2014 | 2013 | |
| Brazil (BRL) | 3.00 | 3.26 | 3.15 | 2.67 | |
| China (CNY) | 8.47 | 8.35 | 8.45 | 8.13 | |
| Great Britain (GBP) | 0.80 | 0.83 | 0.82 | 0.85 | |
| Japan (JPY) | 138.44 | 144.72 | 140.40 | 125.41 | |
| Malaysia (MYR) | 4.39 | 4.52 | 4.48 | 4.04 | |
| Mexico (MXN) | 17.71 | 18.07 | 17.97 | 16.50 | |
| Russian Federation (RUB) | 46.38 | 45.32 | 47.99 | 40.76 | |
| Switzerland (CHF) | 1.22 | 1.23 | 1.22 | 1.23 | |
| South Korea (KRW) | 1,382.04 | 1,450.93 | 1,438.29 | 1,450.32 | |
| United States (USD) | 1.37 | 1.38 | 1.37 | 1.31 | |
In addition to BASF SE, all material subsidiaries are included in the BASF Group Financial Statements on a fully consolidated basis. Joint arrangements that are classified as joint operations according to IFRS 11 are proportionally consolidated. Changes in the number of fully and proportionally consolidated companies are shown in the table.
Since the beginning of 2014, seven companies have been deconsolidated due to mergers with other BASF companies or because of divestitures. Three subsidiaries were included in the scope of consolidation for the first time, two of which due to increased significance while the other is a newly established company.
The decrease in the number of companies accounted for using the equity method resulted from the sale of one company.
| 2014 | 2013 | |
|---|---|---|
| As of January 1 | 309 | 312 |
| Thereof proportionally consolidated | 8 | 8 |
| First-time consolidations | 3 | 6 |
| Thereof proportionally consolidated | – | – |
| Deconsolidations | 7 | 3 |
| Thereof proportionally consolidated | – | – |
| As of June 30 | 305 | 315 |
| Thereof proportionally consolidated | 8 | 8 |
| 2014 | 2013 | |
|---|---|---|
| As of January 1 | 34 | 32 |
| As of June 30 | 33 | 33 |
BASF did not make any material acquisitions in the first half of 2014.
On March 25, 2014, BASF concluded the sale of selected oil and gas investments in the North Sea to the Hungarian MOL Group, as agreed upon on December 12, 2013. MOL acquired 14 licenses, including for the non-BASF-operated Broom field (29%) as well as for the Catcher (20%), Cladhan (33.5%) and Scolty/Crathes (50%) developments. The transaction also included the sale of BASF's shares in the infrastructure of the Sullom Voe Terminal and in the Brent Pipeline System. The transaction was financially retroactive to January 1, 2013. The purchase price agreed upon was \$375 million; less adjustments, the total purchase price amounted to €264 million.
On June 2, 2014, BASF completed the sale of its PolyAd Services business to Edgewater Capital Partners, L.P. PolyAd Services provides services for a wide range of plastic applications in various industries, such as the automotive, construction, packaging and electronics industry. The activities had been allocated to the Performance Chemicals division.
On June 30, 2014, BASF and INEOS announced that INEOS will acquire BASF's 50% share in Styrolution. An option for INEOS to purchase BASF's share in Styrolution was already included in the joint venture agreement of 2011. The transaction, which is still subject to approval by the relevant antitrust authorities, is expected to close in the fourth quarter. As of June 30, 2014, Styrolution's proportional carrying amount of €776 million was reclassified into assets of disposal groups. The equity method will be discontinued until the transaction is complete. The negative fair value of options for the disposal of shareholdings amounting to minus €158 million has also been frozen, and will be recognized directly in the income statement at the time of disposal. It is contained in liabilities of disposal groups.
BASF's business is conducted by 14 operating divisions aggregated into five segments for reporting purposes. The divisions are allocated to the segments based on their business models.
The Chemicals segment comprises the classical chemicals business with basic chemicals and intermediates. It forms the core of BASF's Production Verbund and is the starting point for a majority of the value chains. In addition to supplying the chemical industry and other sectors, the segment ensures that other BASF divisions are supplied with chemicals for producing downstream products. Chemicals comprises the Petrochemicals, Monomers and Intermediates divisions.
The Performance Products segment consists of the Dispersions & Pigments, Care Chemicals, Nutrition & Health, Paper Chemicals and Performance Chemicals divisions. Customized products allow customers to make their production processes more efficient or to give their products improved application properties.
The Functional Materials & Solutions segment bundles system solutions, services and innovative products for specific sectors and customers, in particular for the automotive, electronic, chemical and construction industries. It comprises the Catalysts, Construction Chemicals, Coatings and Performance Materials divisions.
Agricultural Solutions is made up of the Crop Protection division, whose products secure yields and guard crops against fungal infections, insects and weeds, in addition to serving as biological and chemical seed treatments. Plant biotechnology research is not assigned to this segment; it is reported in Other.
The Oil & Gas segment is composed of the Oil & Gas division with its Exploration & Production and Natural Gas Trading business sectors.
Activities not assigned to a particular division are reported in Other. These include the sale of raw materials, engineering and other services, rental income and leases, and the production of precursors not assigned to a particular segment.
With cross-divisional corporate research, BASF is developing growth fields and ensuring its long-term competence with regard to technology and methods. This includes plant biotechnology research. Corporate research costs are not allocated to the segments, but rather are also reported under Other, as are corporate costs, which comprise expenses for steering the BASF Group.
Earnings from currency conversion that are not allocated to the segments are also reported under Other, as are earnings from the hedging of raw material prices and foreign currency exchange risks. Furthermore, revenues and expenses from the long-term incentive (LTI) program are reported here.
Transfers between the segments are generally executed at adjusted market-based prices which take into account the higher cost efficiency and lower risk of Group-internal transactions.
Assets, as well as their depreciation and amortization, are allocated to the segments based on economic control. Assets used by more than one segment are allocated based on the percentage of usage.
Sales in Other declined by €217 million compared with the second quarter of the previous year. This was mainly due to reduced sales of raw materials as well as lower plant availability. In Other, income from operations in the second quarter of 2014 was €126 million lower than in the same period of the previous year. Currency losses were largely responsible for this.
| 1st Half | ||
|---|---|---|
| 2014 | 2013 | |
| Assets of businesses included under Other | 3,040 | 3,207 |
| Financial assets | 789 | 631 |
| Deferred tax assets | 1,636 | 1,500 |
| Cash and cash equivalents / marketable securities | 2,376 | 2,246 |
| Defined benefit assets | 34 | 166 |
| Miscellaneous receivables / prepaid expenses | 2,910 | 2,252 |
| Assets of Other | 10,785 | 10,002 |
| 2nd Quarter | 1st Half | |||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Income from operations | 585 | 381 | 1,210 | 1,011 |
| Income from shareholdings | 8 | 6 | 8 | (3) |
| Other income | (17) | 24 | (64) | 54 |
| Income before taxes and minority interests | 576 | 411 | 1,154 | 1,062 |
| Income taxes | (174) | (114) | (307) | (310) |
| Income before minority interests | 402 | 297 | 847 | 752 |
| Minority interests | (9) | (17) | (12) | (75) |
| Net income | 393 | 280 | 835 | 677 |
In the reconciliation reporting for Oil & Gas, the income from operations of the Oil & Gas segment is reconciled to the contribution of the companies in this segment to the net income of the BASF Group.
By contrast with the same period of the previous year, offshore lifting was conducted in Libya in the second quarter of 2014. Furthermore, the additional activities acquired in Norway in the previous year boosted income from operations.
The Oil & Gas segment's other income relates to income and expenses not included in the segment's income from operations, the interest result and the other financial result. The yearon-year decrease came from currency results not allocated to the segment.
Highly taxed operating income in Norway and offshore lifting in Libya raised the tax rate in the second quarter.
| 2nd Quarter | 1st Half | |||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Income on the reversal of provisions | 7 | (18) | 28 | 30 |
| Revenue from miscellaneous revenue-generating activities | 47 | 40 | 81 | 83 |
| Income from foreign currency and hedging transactions | (9) | 77 | 125 | 132 |
| Income from the translation of financial statements in foreign currencies | 18 | 3 | 24 | 41 |
| Gains on the disposal of fixed assets and divestitures | 44 | 5 | 181 | 14 |
| Income on the reversal of valuation allowances for business-related receivables | 13 | 3 | 21 | 18 |
| Miscellaneous income | 160 | 94 | 221 | 226 |
| Other operating income | 280 | 204 | 681 | 544 |
| 2nd Quarter | 1st Half | |||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Expenses from the measurement of LTI options as well as other personnel obligations | 74 | 24 | 142 | 112 |
| Restructuring measures | 12 | 31 | 22 | 64 |
| Environmental protection and safety measures, costs of demolition and removal, and project expenses related to capital expenditures that are not subject to mandatory capitalization |
85 | 105 | 145 | 149 |
| Amortization, depreciation and impairments of intangible assets and property, plant and equipment | 10 | 14 | 12 | 22 |
| Costs from miscellaneous revenue-generating activities | 39 | 43 | 67 | 86 |
| Expenses from foreign currency and hedging transactions | 92 | 52 | 236 | 129 |
| Losses from the translation of financial statements in foreign currencies | 28 | 21 | 75 | 39 |
| Losses from the disposal of fixed assets and divestitures | 4 | 7 | 9 | 12 |
| Oil and gas exploration expenses | 23 | 43 | 47 | 71 |
| Expenses from the addition of valuation allowances for business-related receivables | 19 | 20 | 34 | 36 |
| Expenses from the use of inventories measured at market value and the derecognition of obsolete inventory |
36 | 63 | 70 | 94 |
| Miscellaneous expenses | 126 | 102 | 262 | 271 |
| Other operating expenses | 548 | 525 | 1,121 | 1,085 |
Income from foreign currency and hedging transactions declined year-on-year by €25 million to minus €101 million. This decrease is attributable to higher expenses from commodity derivatives as well as the appreciation of the Russian ruble.
The increase in gains from the disposal of fixed assets and divestitures resulted from the disposal gains from the sale of the PolyAd Services business to Edgewater Capital Partners, L.P.
The growth in miscellaneous income was largely due to the reversal of a provision recognized in the previous year for a payroll tax obligation as well as to higher earnings from precious metal trading.
Expenses from the measurement of LTI options rose. This was because of the greater increase of the BASF share in comparison with the previous second quarter.
In the Oil & Gas segment, income from companies accounted for using the equity method grew compared with the previous second quarter. The companies OAO Severneftegazprom, Nord Stream AG and GASCADE Gastransport GmbH made a substantial contribution to this development. The share in Styrolution Holding GmbH also contributed significantly to income. Because this company has been marked for divestiture since June 30, 2014, the equity method will be discontinued until the transaction closes.
Impairment charges in one of BASF's associated companies dampened earnings. Due to strikes at export terminals in Libya, all onshore crude oil and associated gas-producing activities have been suspended since July 2013, which also reduced earnings. Since the creation of the natural gas trading disposal group in November 2012, the equity-accounted carrying amounts of companies in this group remain unchanged and are only tested for impairment.
| Million € | 2nd Quarter | 1st Half | ||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Income from investments in affiliated and associated companies | 30 | 18 | 33 | 20 |
| Income from the disposal of shareholdings | – | 1 | – | 1 |
| Income from profit transfer agreements | 2 | 2 | 4 | 5 |
| Income from tax allocation to participating interests | – | 1 | 1 | 2 |
| Income from shareholdings | 32 | 22 | 38 | 28 |
| Expenses from profit transfer agreements | (2) | (1) | (3) | (11) |
| Write-downs on / losses from the sale of shareholdings | (2) | (5) | (2) | (10) |
| Expenses from shareholdings | (4) | (6) | (5) | (21) |
| Interest income from cash and cash equivalents | 30 | 32 | 54 | 56 |
| Interest and dividend income from securities and loans | 9 | 3 | 19 | 5 |
| Interest income | 39 | 35 | 73 | 61 |
| Interest expenses | (174) | (158) | (332) | (312) |
| Net interest income from overfunded pension plans and similar obligations | 1 | – | 1 | – |
| Net interest income from other long-term employee obligations | – | – | – | – |
| Income from the capitalization of construction interest | 38 | 24 | 72 | 44 |
| Miscellaneous financial income | – | (7) | – | 48 |
| Other financial income | 39 | 17 | 73 | 92 |
| Write-downs on / losses from the disposal of securities and loans | – | (3) | (1) | (4) |
| Net interest expense from underfunded pension plans and similar obligations | (36) | (48) | (73) | (96) |
| Net interest expense from other long-term employee obligations | (2) | (1) | (5) | (3) |
| Interest accrued on other noncurrent liabilities | (20) | (20) | (38) | (33) |
| Miscellaneous financial expenses | (10) | – | (49) | – |
| Other financial expenses | (68) | (72) | (166) | (136) |
| Financial result | (136) | (162) | (319) | (288) |
Higher dividends and comparable income led to an increase in income from shareholdings compared with the previous second quarter.
The interest result declined as a result of higher interest expenses. The rise in interest expenses was primarily on account of financial indebtedness through the issuance of new bonds. This was partly countered by slightly higher interest income. The increase was predominantly attributable to higher interest income from loans to companies accounted for using the equity method.
Net interest expense from underfunded pension plans and similar obligations declined compared with the previous year, mainly as a result of the lower defined benefit obligation as of December 31, 2013.
Miscellaneous financial expenses in the first half of 2014 include expenses from the market valuation of options for the disposal of BASF's share in Styrolution amounting to €42 million. In the previous year, financial gains of €68 million had arisen from the valuation.
Income before taxes and minority interests (million €)
| 2nd Quarter | 1st Half | |||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Germany | 451 | 414 | 1,004 | 1,091 |
| Foreign | 1,432 | 1,197 | 2,945 | 2,563 |
| Income before taxes and minority interests | 1,883 | 1,611 | 3,949 | 3,654 |
| 2nd Quarter | 1st Half | ||||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Germany million € |
174 | 118 | 365 | 297 | |
| Foreign million € |
333 | 265 | 667 | 585 | |
| Income taxes million € |
507 | 383 | 1,032 | 882 | |
| Tax rate % |
26.9 | 23.8 | 26.1 | 24.1 |
The increased tax rate compared with the first half of 2013 was mostly the result of the greater portion of earnings from foreign companies in countries with high tax rates, particularly Norway. The tax-free special income from the sale of investments in North Sea oil and gas fields to the MOL Group partly compensated for this in the first half of 2014.
| Million € | 2nd Quarter | 1st Half | |||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Minority interests in profits | 85 | 76 | 163 | 174 | |
| Minority interests in losses | (8) | (5) | (5) | ||
| Minority interests | 77 | 71 | 141 | 169 |
For companies active in natural gas trading, the weather-related sales decline and ongoing margin pressure led to minority interests in losses, compared with minority interests in profits in the first half of 2013. However, higher minority interests in profits arose from the startup of the tenth oven in the steam cracker at the Port Arthur, Texas, site in March 2014, as well as a higher capacity utilization rate for the condensation splitter at BASF Total Petrochemicals LLC since the beginning of the year.
| 2nd Quarter | 1st Half | |||||
|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |||
| Net income | million € | 1,299 | 1,157 | 2,776 | 2,603 | |
| Number of outstanding shares (weighted average) | in thousands | 918,479 | 918,479 | 918,479 | 918,479 | |
| Earnings per share | € | 1.41 | 1.26 | 3.02 | 2.83 |
The calculation of earnings per share is based on the weighted average number of common shares outstanding. The calculation of diluted earnings per common share reflects all possible outstanding common shares and the resulting effect on income of the BASF employee incentive share program, "plus."
There was no dilutive effect in the second quarter of 2014 and in the corresponding period of 2013; undiluted earnings per share were the same as the diluted value per share.
| 1st Half 2014 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Intangible assets |
Property, plant and equipment |
Investments accounted for using the equity method |
Other financial assets |
||||||
| Acquisition costs | |||||||||
| Balance as of January 1 | 15,286 | 54,466 | 4,137 | 824 | |||||
| Additions | 44 | 2,036 | 12 | 166 | |||||
| Disposals | (233) | (748) | – | (10) | |||||
| Transfers | 36 | 2 | (769) | (3) | |||||
| Exchange differences | 88 | 278 | (2) | 1 | |||||
| Balance as of June 30 | 15,221 | 56,034 | 3,378 | 978 | |||||
| Amortization and depreciation | |||||||||
| Balance as of January 1 | 3,051 | 36,212 | – | 194 | |||||
| Additions | 291 | 1,105 | – | – | |||||
| Disposals | (159) | (524) | – | (5) | |||||
| Transfers | – | 1 | – | – | |||||
| Exchange differences | 7 | 148 | – | – | |||||
| Balance as of June 30 | 3,190 | 36,942 | – | 189 | |||||
| Net carrying amount as of June 30 | 12,031 | 19,092 | 3,378 | 789 |
| 1st Half 2013 | ||||
|---|---|---|---|---|
| Intangible assets |
Property, plant and equipment |
Investments accounted for using the equity method |
Other financial assets |
|
| Acquisition costs | ||||
| Balance as of January 1 | 14,876 | 53,919 | 3,459 | 792 |
| Additions | 555 | 2,130 | – | 36 |
| Disposals | (122) | (448) | (6) | (5) |
| Transfers | 42 | (6) | 38 | 1 |
| Exchange differences | (176) | (158) | (15) | – |
| Balance as of June 30 | 15,175 | 55,437 | 3,476 | 824 |
| Amortization and depreciation | ||||
| Balance as of January 1 | 2,683 | 37,309 | – | 178 |
| Additions | 306 | 1,095 | – | 13 |
| Disposals | (114) | (401) | – | (4) |
| Transfers | 53 | (4) | – | 6 |
| Exchange differences | (31) | (93) | – | – |
| Balance as of June 30 | 2,897 | 37,906 | – | 193 |
| Net carrying amount as of June 30 | 12,278 | 17,531 | 3,476 | 631 |
Significant investments in the first half of 2014 were primarily related to the construction of the TDI plant in Ludwigshafen, Germany; the acrylic acid production complex in Camaçari, Brazil; the MDI plant in Chongqing, China; and oil and gas production facilities and wells in Europe and South America. Investments for expansion purposes were particularly made at the sites in Ludwigshafen, Germany; Antwerp, Belgium; Geismar, Louisiana; and Freeport, Texas.
Disposals of property, plant and equipment were largely attributable to the sale of selected oil and gas investments in the North Sea to the Hungarian MOL Group.
Disposals of intangible assets were also related to the sale of selected oil and gas investments in the North Sea to the MOL Group as well as to the derecognition of fully amortized technologies.
Transfers of €776 million from investments accounted for using the equity method resulted from the reclassification of Styrolution to disposal groups.
| Million € | June 30, 2014 | June 30, 2013 | Dec. 31, 2013 |
|---|---|---|---|
| Raw materials and factory supplies | 2,692 | 2,538 | 2,560 |
| Work-in-process, finished goods and merchandise | 7,018 | 6,672 | 6,923 |
| Advance payments and services-in-process | 134 | 109 | 109 |
| Inventories | 9,844 | 9,319 | 9,592 |
| Accounts receivable, trade | 10,364 | 10,621 | 9,376 |
| Other receivables and miscellaneous current assets | 3,677 | 3,650 | 3,630 |
| Marketable securities | 16 | 18 | 17 |
| Cash and cash equivalents | 2,360 | 2,228 | 1,815 |
| Assets of disposal groups | 3,624 | 2,084 | 2,828 |
| Other current assets | 9,677 | 7,980 | 8,290 |
| Current assets | 29,885 | 27,920 | 27,258 |
Work-in-process, finished goods and merchandise are combined into one item due to the production conditions in the chemical industry. Services-in-process primarily relate to services not invoiced as of the balance sheet date. Inventories are valued using the weighted average cost method.
Trade accounts receivable increased in comparison with yearend 2013 primarily as a result of seasonal effects in the Agricultural Solutions segment.
At the Annual Shareholders' Meeting of May 2, 2014, shareholders authorized the Board of Executive Directors, with the approval of the Supervisory Board, to increase the subscribed capital by issuing new registered shares up to a total of €500 million against cash or contributions in kind through May 1, 2019. The Board of Executive Directors is empowered, following the approval of the Supervisory Board, to decide on the exclusion of shareholders' subscription rights for these new shares in certain predefined cases covered by the enabling resolution. Until now, this option has not been exercised and no new shares have been issued.
Transfers in other retained earnings increased legal reserves by €25 million in the first half of 2014.
Assumptions used to determine the defined benefit obligation (in %)
| Germany | United States | Switzerland | United Kingdom | |||||
|---|---|---|---|---|---|---|---|---|
| June 30, 2014 Dec. 31, 2013 June 30, 2014 Dec. 31, 2013 June 30, 2014 | Dec. 31, 2013 June 30, 2014 Dec. 31, 2013 | |||||||
| Discount rate | 3.00 | 3.90 | 4.10 | 4.80 | 1.50 | 2.40 | 4.30 | 4.40 |
| Projected pension increase | 2.00 | 2.00 | – | – | – | – | 3.10 | 3.10 |
Assumptions used to determine expenses for pension benefits (from January 1 through June 30 of the respective year in %)
| Germany | United States | Switzerland | United Kingdom | |||||
|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |
| Discount rate | 3.90 | 3.50 | 4.80 | 3.75 | 2.40 | 2.00 | 4.40 | 4.40 |
| Projected pension increase | 2.00 | 2.00 | – | – | – | – | 3.10 | 2.70 |
The assumptions used to determine the defined benefit obligation as of December 31, 2013, are used in the 2014 reporting year to determine the expenses for pension plans.
Since the first-time application of IAS 19 (revised), the standardized return on plan assets is ascertained by multiplying plan assets at the beginning of the year by the discount rate used for existing obligations at the beginning of the year. This takes into account benefit and contribution payments made during the year.
Discount rate reductions in most of the significant currency zones due to the development of the capital markets in the first half of 2014 were primarily responsible for actuarial losses in pension obligations. Taking into account the deviation between the actual and standardized return on plan assets as well as the change in the asset ceiling, a negative remeasurement occurred in the amount of €2,017 million. This was recognized in other comprehensive income (OCI), taking into account deferred taxes of €606 million. This valuation effect was also primarily responsible for the €1,938 million increase in pension provisions.
| June 30, 2014 |
Dec. 31, 2013 |
|
|---|---|---|
| Legal reserves | 513 | 488 |
| Other retained earnings | 25,964 | 25,682 |
| Retained earnings | 26,477 | 26,170 |
In accordance with the resolution of the Annual Meeting on May 2, 2014, BASF SE paid a dividend of €2.70 per share from the retained profit of the 2013 fiscal year. With 918,478,694 shares entitled to dividends, this amounts to a total dividend payout of €2,479,892,473.80.
| January 1, 2014 |
Additions | Unwinding of discount |
Utilization | Reversals | Other changes |
June 30, 2014 |
|---|---|---|---|---|---|---|
| 996 | 5 | 20 | (17) | – | (14) | 990 |
| 601 | 74 | 4 | (91) | (9) | 3 | 582 |
| 1,866 | 842 | 3 | (1,260) | (12) | (35) | 1,404 |
| 612 | 636 | – | (150) | (12) | 17 | 1,103 |
| 228 | 26 | – | (50) | (6) | 1 | 199 |
| 105 | 11 | – | (11) | (5) | – | 100 |
| 1,132 | 142 | – | (111) | (26) | 3 | 1,140 |
| 5,540 | 1,736 | 27 | (1,690) | (70) | (25) | 5,518 |
On June 30, 2014, other provisions were €22 million below year-end 2013. Provisions for employee obligations decreased significantly as a result of utilization for variable compensation payments for the past fiscal year. This decline was only partly offset by additions made in the first half of the year to provisions for employee obligations pertaining to variable compensation for the current reporting year.
There was a seasonal rise in provisions for sales and purchase risks. By the middle of 2014, the recognition of short-term provisions for rebates in the Agricultural Solutions segment considerably exceeded the utilization of prior-year provisions.
Other provisions included long-term tax provisions, as well as further present obligations and accruals.
| June 30, 2014 December 31, 2013 |
June 30, 2013 | |||||
|---|---|---|---|---|---|---|
| Current | Noncurrent | Current | Noncurrent | Current | Noncurrent | |
| Accounts payable, trade | 4,115 | – | 4,505 | – | 4,422 | – |
| Bonds and other liabilities to the capital market | 4,649 | 9,556 | 2,493 | 10,102 | 2,470 | 9,715 |
| Liabilities to credit institutions | 1,095 | 1,701 | 763 | 1,049 | 1,443 | 1,053 |
| Financial indebtedness | 5,744 | 11,257 | 3,256 | 11,151 | 3,913 | 10,768 |
| Tax liabilities | 1,393 | – | 954 | – | 994 | – |
| Advances received on orders | 98 | – | 284 | – | 114 | – |
| Negative fair values from derivatives and liabilities for precious metal obligations |
286 | 102 | 125 | 193 | 254 | 197 |
| Liabilities related to social security | 148 | 18 | 125 | 35 | 173 | 20 |
| Miscellaneous liabilities | 1,551 | 991 | 1,528 | 760 | 1,983 | 810 |
| Deferred income | 154 | 188 | 120 | 169 | 122 | 178 |
| Other liabilities | 2,237 | 1,299 | 2,182 | 1,157 | 2,646 | 1,205 |
| Liabilities | 13,489 | 12,556 | 10,897 | 12,308 | 11,975 | 11,973 |
| Nominal value (million, Effective in issuing interest June 30, Dec. 31, Currency currency) rate 2014 2013 BASF SE Commercial paper USD 1,650 1,208 1,232 4.5% Bond 2006/2016 EUR 500 4.62% 499 499 variable Bond 2013/2016 EUR 200 variable 200 200 4.25% Bond 2009/2016 EUR 200 4.40% 199 199 variable Bond 2014/2017 EUR 300 variable 300 – 5.875% Bond 2009/2017 GBP 400 6.04% 497 478 4.625% Bond 2009/2017 EUR 300 4.69% 299 299 variable Bond 2013/2018 EUR 300 variable 300 300 |
Carrying amounts based on effective interest method |
||
|---|---|---|---|
| June 30, 2013 |
|||
| 1,221 | |||
| 498 | |||
| – | |||
| 199 | |||
| – | |||
| 464 | |||
| 299 | |||
| 300 | |||
| 1.5% Bond 2012/2018 EUR 1,000 1.51% 1,000 1,000 |
745 | ||
| 1.375% Bond 2014/2019 EUR 750 1.44% 748 – |
– | ||
| variable Bond 2013/2020 EUR 300 variable 300 300 |
300 | ||
| 1.875% Bond 2013/2021 EUR 700 1.94% 697 697 |
697 | ||
| 2% Bond 2012/2022 EUR 1,000 2.16% 988 987 |
986 | ||
| 2.5% Bond 2014/2024 EUR 500 2.60% 496 – |
– | ||
| 3.675% Bond 2013/2025 NOK 1,450 3.70% 172 173 |
184 | ||
| 3% Bond 2013/2033 EUR 500 3.15% 490 489 |
197 | ||
| 2.875% Bond 2013/2033 EUR 200 3.09% 198 198 |
197 | ||
| 3.25% Bond 2013/2043 EUR 200 3.27% 199 199 |
199 | ||
| 3.89% U.S. Private Placement Series A 2013/2025 USD 250 3.92% 183 181 |
– | ||
| 4.09% U.S. Private Placement Series B 2013/2028 USD 700 4.11% 511 506 |
– | ||
| 4.43% U.S. Private Placement Series C 2013/2034 USD 300 4.45% 219 217 |
– | ||
| BASF Finance Europe N.V. | |||
| 6% Bond 2008/2013 EUR 1,250 6.15% – – |
1,249 | ||
| 5% Bond 2007/2014 EUR 1,250 5.04% 1,250 1,250 |
1,250 | ||
| 3.625% Bond 2008/2015 CHF 200 3.77% 164 163 |
162 | ||
| 5.125% Bond 2009/2015 EUR 2,000 5.07% 2,001 2,001 |
2,002 | ||
| 4.5% Bond 2009/2016 EUR 150 4.56% 150 150 |
150 | ||
| Ciba Specialty Chemicals Finance Luxembourg S.A. | |||
| 4.875% Bond 2003/2018 EUR 477 4.88% 433 428 |
423 | ||
| Other bonds 504 449 |
463 | ||
| Bonds and other liabilities to the capital market 14,205 12,595 |
12,185 | ||
| Liabilities to credit institutions 2,796 1,812 |
2,496 | ||
| Financial indebtedness 17,001 14,407 |
14,681 |
The BASF Group maintains relationships with several related parties over which it exercises material or significant influence, or which are controlled by the Group but are not consolidated due to their minor significance. The following table shows the scope of the Group's transactions with related parties.
A significant portion of joint venture sales were related to Wintershall Erdgas Handelshaus GmbH & Co. KG, Berlin; these amounted to €170 million in the first half of 2014 compared with €96 million in the same period of the previous year.
Substantial sales to associated companies and other shareholdings were attributable to the Styrolution Group. Sales to Styrolution Group companies amounted to €826 million in the first half of 2014 compared with €1,196 million in the first half of 2013. In addition, sales to associated companies and other shareholdings arose primarily from the business with Erdgas Münster GmbH, Münster, Germany; and with VNG – Verbundnetz Gas Aktiengesellschaft, Leipzig, Germany. Sales to these companies amounted to €184 million in the first half of 2014 compared with €346 million in first half of 2013.
There were no reportable related-party transactions with members of the Board of Executive Directors or the Supervisory Board and their related parties during the reporting period.
| 2nd Quarter | 1st Half | |||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Nonconsolidated subsidiaries | 123 | 151 | 290 | 350 |
| Joint operations | 68 | 108 | 172 | 217 |
| Joint ventures | 163 | 161 | 328 | 319 |
| Associated companies and other shareholdings | 713 | 899 | 1,392 | 1,663 |
| Accounts receivable, trade | ||||
|---|---|---|---|---|
| June 30, 2014 | June 30, 2013 | Dec. 31, 2013 | ||
| Nonconsolidated subsidiaries | 196 | 247 | 154 | |
| Joint operations | 9 | 34 | 35 | |
| Joint ventures | 118 | 123 | 117 | |
| Associated companies and other shareholdings | 178 | 373 | 397 | |
| Accounts payable, trade | ||||
| June 30, 2014 | June 30, 2013 | Dec. 31, 2013 |
| Nonconsolidated subsidiaries | 47 | 52 | 70 |
|---|---|---|---|
| Joint operations | 31 | 62 | 57 |
| Joint ventures | 204 | 356 | 293 |
| Associated companies and other shareholdings | 43 | 41 | 101 |
| Other receivables | |||
|---|---|---|---|
| June 30, 2014 | June 30, 2013 | Dec. 31, 2013 | |
| Nonconsolidated subsidiaries | 200 | 260 | 187 |
| Joint operations | 143 | 164 | 152 |
| Joint ventures | 138 | 144 | 66 |
| Associated companies and other shareholdings | 786 | 45 | 710 |
| Other payables | |||
|---|---|---|---|
| June 30, 2014 | June 30, 2013 | Dec. 31, 2013 | |
| Nonconsolidated subsidiaries | 113 | 157 | 115 |
| Joint operations | 22 | 25 | 7 |
| Joint ventures | 55 | 580 | 103 |
| Associated companies and other shareholdings | 278 | 72 | 120 |
| 2nd Quarter | 1st Half | ||||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Income before taxes and minority interests | million € | 1,883 | 1,611 | 3,949 | 3,654 |
| Special items | million € | 33 | 46 | (34) | 36 |
| Amortization of intangible assets | million € | 145 | 153 | 291 | 306 |
| Amortization of intangible assets contained in special items | million € | – | – | – | – |
| Adjusted income before taxes and minority interests | million € | 2,061 | 1,810 | 4,206 | 3,996 |
| Adjusted income taxes | million € | (563) | (446) | (1,138) | (1,003) |
| Adjusted income before minority interests | million € | 1,498 | 1,364 | 3,068 | 2,993 |
| Adjusted minority interests | million € | (79) | (71) | (144) | (170) |
| Adjusted net income | million € | 1,419 | 1,293 | 2,924 | 2,823 |
| Weighted average number of outstanding shares | in thousands | 918,479 | 918,479 | 918,479 | 918,479 |
| Adjusted earnings per share | € | 1.54 | 1.40 | 3.18 | 3.07 |
The earnings per share figure adjusted for special items and amortization of intangible assets has become internationally established as a key figure that can be compared over the course of time and is particularly suitable for forecasts of future earnings.
Special items are primarily the result of the integration of acquired businesses, restructuring measures, impairment losses, and gains or losses resulting from divestitures and sales of investments. These involve expenses and income that do not arise in conjunction with ordinary business activities.
Intangible assets primarily result from the purchase price allocation following acquisitions. The amortization of intangible assets is therefore of a temporary nature.
The calculation of earnings per share in accordance with the International Financial Reporting Standards (IFRS) is presented in the Notes on page 30. Adjusted income before taxes and minority interests, adjusted net income and adjusted earnings per share are key ratios that are not defined under IFRS. They should not be viewed in isolation, but rather treated as supplementary information.
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the Interim Financial Statements give a true and fair view of the assets, liabilities, financial position and profit situation of the Group, and the Interim Management's Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group in the remainder of the financial year.
Ludwigshafen, July 22, 2014
BASF SE The Board of Executive Directors
This report 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 prove to 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. Such factors include those discussed on pages 106 to 114 in the BASF Report 2013. The BASF Report can be found online at: basf.com/report. We do not assume any obligation to update the forward-looking statements contained in this report.
Interim Report 3rd Quarter 2014
Full-Year Results 2014
Annual Shareholders' Meeting 2015 / Interim Report 1st Quarter 2015
• By phone: +49 621 60-99001
General inquiries Phone: +49 621 60-0, fax: +49 621 60-42525
Media Relations Jennifer Moore-Braun, phone: +49 621 60-99123, fax: +49 621 60-92693
Investor Relations Magdalena Moll, phone: +49 621 60-48230, fax: +49 621 60-22500
Internet
BASF SE, 67056 Ludwigshafen, Germany
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.