charts basf analyst conference q1 2014
TRANSCRIPT
First Quarter 2014 Financial highlights May 2, 2014
Good start to the year in chemicals business, oil and gas business considerably down
Cautionary note regarding forward-looking statements
This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. BASF has based these forward-looking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and BASF does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.
2 BASF Q1 2014 Analyst Conference Call May 2, 2014
Good start to the year in chemicals business, Oil & Gas considerably down
Business performance Q1’14 Q1’13 vs. Q1’13 Sales €19.5 billion €19.7 billion (1%) EBITDA €3.0 billion €2.9 billion +3% EBIT before special items €2.1 billion €2.2 billion (3%) EBIT €2.2 billion €2.2 billion +4% Net income €1.5 billion €1.4 billion +2% Reported EPS €1.61 €1.57 +3% Adjusted EPS €1.64 €1.67 (2%) Operating cash flow €1.7 billion €2.0 billion (17%)
Sales development Period Volumes Prices Portfolio Currencies
Q1’14 vs. Q1’13 4% (3%) 1% (3%)
3 BASF Q1 2014 Analyst Conference Call May 2, 2014
Portfolio optimization & development
BASF Q1 2014 Analyst Conference Call May 2, 2014
Portfolio optimization in Oil & Gas Increasing backward integration in the US 4
Strengthen competitiveness of Performance Products
Strengthening Verbund sites in Asia
Chemicals Continued volume increase, but lower prices
Intermediates 711
+2%
Monomers 1,590
(5)%
Petrochemicals 2,097
+4%
€4,398 0%
650
495 527 510601
0
200
400
600
800
Q1 Q2 Q3 Q4 Q1
EBIT before special items (million €)
2014 2013
Q1’14 segment sales (million €) vs. Q1’13
Sales development Period Volumes Prices Portfolio Currencies
Q1’14 vs. Q1’13 8% (6%) (0%) (2%)
BASF Q1 2014 Analyst Conference Call May 2, 2014
5
Performance Products Continued strong volume growth
Performance Chemicals
818
0%
Care Chemicals 1,264
(1)%
€3,8720%
Paper Chemicals 344
(5%)
Q1’14 segment sales (million €) vs. Q1’13
Nutrition & Health 495
0% Dispersions & Pigments
951
+2%
379 394 376
216
427
0
200
400
600
Q1 Q2 Q3 Q4 Q1
EBIT before special items (million €)
2014 2013
Sales development Period Volumes Prices Portfolio Currencies
Q1’14 vs. Q1’13 5% (1%) 0% (4%)
BASF Q1 2014 Analyst Conference Call May 2, 2014
6
Functional Materials & Solutions Strong demand from automotive industry
Catalysts 1,458
0%
Construction Chemicals
443
(3%)
Coatings 721
+3%
€4,236+1%
Q1’14 segment sales (million €) vs. Q1’13
239293 300
238
311
050
100150200250300350
Q1 Q2 Q3 Q4 Q1
EBIT before special items (million €)
2014 2013
Sales development Period Volumes Prices Portfolio Currencies
Q1’14 vs. Q1’13 7% (1%) 0% (5%)
Performance Materials 1,614
+3%
BASF Q1 2014 Analyst Conference Call May 2, 2014
7
Agricultural Solutions Good start to the year
Q1’14 segment sales vs. Q1’13 (million €)
Q1’14 EBIT before special items vs. Q1’13 (million €)
2014 2013
0
200
400
600
Q1 Q1
2014 2013
0
500
1.000
1.500
2.000
Q1 Q1
1,653 510 498 1,556
Sales development Period Volumes Prices Portfolio Currencies
Q1’14 vs. Q1’13 9% 3% 0% (6%)
BASF Q1 2014 Analyst Conference Call May 2, 2014 8
Oil & Gas Lower sales and earnings, net income increased
Exploration & Production
792
0%
Natural Gas Trading 3,484
(10%) €4,276 -8%
Q1’14 segment sales (million €) vs. Q1’13 EBIT bSI/Net income (million €)
162397
65
442
0
200
400
600
800
Q1/2013 Net Income Q1/2014 Net Income
Natural Gas Trading
Exploration & Production
Net income
630
Sales development Period Volumes Prices/Currencies Portfolio
Q1’14 vs. Q1’13 (7%) (4%) 3%
468
BASF Q1 2014 Analyst Conference Call May 2, 2014
494
429
9
Review of “Other”
Million € Q1’14 Q1’13 Sales 1,077 1,065 EBIT before special items (203) (182) thereof Corporate research Group corporate costs Currency results, hedges and other valuation effects Styrenics, fertilizers, other businesses
(102) (49) (95)
50
(98) (56)
56
59
Special items (8) (28)
EBIT (211) (210)
BASF Q1 2014 Analyst Conference Call May 2, 2014 10
Strong operating cash flow Million € Q1’14 Q1’13 Cash provided by operating activities 1,704 2,041 thereof Changes in net working capital Miscellaneous items
(1,052) 578
(713) 615
Cash used in investing activities (770) (1,637) thereof Payments related to tangible / intangible assets (936) (831) Acquisitions / divestitures 263 (514) Cash provided by financing activities 389 363 thereof Changes in financial liabilities Dividends
413 (24)
429 (66)
BASF Q1 2014 Analyst Conference Call May 2, 2014 11
Balance sheet remains strong Balance sheet March 31, 2014 vs. December 31, 2013 (billion €)
Liquid funds
Accounts receivable
Long-term assets
37.1
9.4
1.8
Other liabilities
Financial debt
Stockholders’ equity
Dec 31 2013
Mar 31 2014
Mar 31 2014
Dec 31 2013
64.4
Inventories
Other assets
9.6
3.7
Highlights March 31, 2014 Short-term assets increased by
€3.2 billion
Inventories rose slightly by €0.3 billion
Accounts receivables grew seasonally by €1.4 billion
Liquid funds up by €1.3 billion
Financial indebtedness rose by €0.6 billion to €15.1 billion
Net debt reduced to €11.9 billion
Equity ratio: 42%
37.5
10.8
3.1
9.9
3.9
67.9
2.7 Disposal group
Disposal group
12
2.8
BASF Q1 2014 Analyst Conference Call May 2, 2014
27.8
20.9
64.4
1.3
28.4
22.4
2.0
67.9
15.1 14.4
We aim to increase our sales volumes excluding the effects of acquisitions and divestitures.
Nonetheless, sales will decline slightly compared with 2013 due to the divestiture of the gas trading and storage business planned for mid-2014.
We expect a slight increase in EBIT before special items, especially as a result of considerably higher contributions from the Performance Products and Functional Materials & Solutions segments.
We aim to earn a high premium on our cost of capital once again in 2014.
Outlook 2014
GDP: +2.8%
Industrial production: +3.7%
Chemical production: +4.4%
US$ / Euro: 1.30
Oil price (US$ / bbl): 110
Assumptions 2014
Outlook 2014 confirmed
BASF Q1 2014 Analyst Conference Call May 2, 2014 13
14