third quarter 2014 financial highlights - basf€¦ · third . quarter 2014 . financial highlights...
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Third Quarter 2014 Financial highlights October 24, 2014
BASF with higher sales and earnings despite declining demand
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 Q3 2014 Analyst Conference Call October 24, 2014
Q3 2014: BASF with higher sales and earnings despite declining demand
Sales development Period Volumes Prices Portfolio Currencies
Q3’14 vs. Q3’13 7% (4%) 0% 0%
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Business performance Q3’14 vs. Q3’13 Q1-Q3’14 vs. Q1-Q3’13
Sales €18.3 billion +3% €56.3 billion +1%
EBITDA €2.5 billion +1% €8.2 billion +4%
EBIT before special items €1.8 billion +9% €6.0 billion +5%
EBIT €1.8 billion +8% €6.1 billion +8%
Net income €1.0 billion (5%) €3.8 billion +3%
Reported EPS €1.14 (5%) €4.16 +3%
Adjusted EPS €1.27 (1%) €4.45 +2%
BASF Q3 2014 Analyst Conference Call October 24, 2014
Sales analysis: BASF without Oil & Gas Chemical business: no volume growth, stable prices
7%
-4%
0% 0% 0% 1%
-1%
0%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Factors influencing sales in Q3 2014 vs. Q3 2013
Price Currency Portfolio Volume
BASF Group: Sales: +3%
BASF Group w/o Oil & Gas: Sales: 0%
BASF Q3 2014 Analyst Conference Call October 24, 2014 4
BASF Q3 2014 Analyst Conference Call October 24, 2014
Recent transaction with Statoil
Acquisition of participations in oil & gas fields in Norway
Purchase price amounts to US$1.25 billion
Increase of production to ~60,000 boepd in Norway
Additional reserves and resources of ~170 million boe
Restructuring of Performance Products
Strengthening of R&D platforms
Important corporate developments
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BASF to sell textile chemicals business to Archroma
Paper Chemicals division to be dissolved, product lines moved to other divisions
Strategic options for parts of kaolin business in evaluation
Total earnings improvement of ~€500 million by 2017
Future set up of global research platforms:
- Process Research & Chemical Engineering, led out of Europe
- Bioscience Research, led out of North America (from 2015)
- Advanced Materials & Systems Research, led out of Asia (from 2016)
Chemicals Earnings growth despite flat volumes
Intermediates 701
0%
Monomers 1,587
(1%)
Petrochemicals 1,913
(1%)
€4,201 (1%)
Q3’14 segment sales (million €) vs. Q3’13
Sales development Period Volumes Prices Portfolio Currencies
Q3’14 vs. Q3’13 0% (1%) 0% 0%
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EBIT before special items (million €)
527 510601 570 616
0
200
400
600
800
Q3 Q4 Q1 Q2 Q3
2014 2013
BASF Q3 2014 Analyst Conference Call October 24, 2014
Performance Products Sales and earnings stability during restructuring
Performance Chemicals
847
+3%
Care Chemicals 1,203
0% €3,919 (1%)
Paper Chemicals 344
(6%)
Q3’14 segment sales (million €) vs. Q3’13
Nutrition & Health 522
(3%) Dispersions & Pigments
1,003
0%
EBIT before special items (million €)
Sales development Period Volumes Prices Portfolio Currencies
Q3’14 vs. Q3’13 0% 0% 0% (1%)
376
216
427 435376
0
200
400
600
Q3 Q4 Q1 Q2 Q3
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2014 2013
BASF Q3 2014 Analyst Conference Call October 24, 2014
Functional Materials & Solutions Continued robust demand from automotive
Catalysts 1,572
+7%
Construction Chemicals
565
(2%)
Coatings
736
+1%
€4,527+2%
Q3’14 segment sales (million €) vs. Q3’13
Sales development Period Volumes Prices Portfolio Currencies
Q3’14 vs. Q3’13 1% 2% 0% (1%)
Performance Materials 1,654
(1%)
300238
311356
310
0
200
400
Q3 Q4 Q1 Q2 Q3
8
EBIT before special items (million €)
2014 2013
BASF Q3 2014 Analyst Conference Call October 24, 2014
Agricultural Solutions Strong earnings decline in seasonally slow quarter
9 BASF Q3 2014 Analyst Conference Call October 24, 2014
Q3’14 segment sales (million €) vs. Q3’13
Sales development Period Volumes Prices Portfolio Currencies
Q3’14 vs. Q3’13 (4%) 2% 0% (1%)
0
100
200
Q3 Q30
300
600
900
1,200
Q3 Q3
1,018 (3%)
43
(75%)
172 1,054
EBIT before special items (million €)
2014 2013 2014 2013
62
451*
194
265
0
100
200
300
400
500
Q3/2013 Net Income Q3/2014 Net Income
Oil & Gas Considerably higher sales and earnings
Exploration & Production
611
(19%)
Natural Gas Trading 3,059
+29% €3,670 +17%
Q3’14 segment sales (million €) vs. Q3’13 EBIT bSI/Net income (million €)
Natural Gas Trading
Exploration & Production
Net income
Sales development Period Volumes Prices/Currencies Portfolio
Q3’14 vs. Q3’13 43% (26%) 0%
422
360
310
504
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BASF Q3 2014 Analyst Conference Call October 24, 2014
* Incl. one-time disposal gain of 164 million euros from the divestment of a 15% stake in Edvard Grieg field
Review of “Other”
Million € Q3’14 Q3’13 Sales 977 947 EBIT before special items (7) (105) Thereof Corporate research Group corporate costs Currency result, hedges and other valuation effects Other business
(96) (53) 100
23
(90) (57) (74)
59
Special items (20) (24)
EBIT (27) (129)
11 BASF Q3 2014 Analyst Conference Call October 24, 2014
Cash Flow Solid cash flow in Q1-Q3 2014
Million € Q1-Q3’14 Q1-Q3’13 Cash provided by operating activities 4,765 5,982 Thereof Changes in net working capital Miscellaneous items
(739) (425)
374 (327)
Cash provided by investing activities (3,625) (4,629) thereof Payments related to tangible / intangible assets (3,426) (3,038) Acquisitions / divestitures 355 (1,093) Cash used in financing activities (995) (1,300) thereof Changes in financial liabilities Dividends
1,661 (2,656)
1,304 (2,604)
12 BASF Q3 2014 Analyst Conference Call October 24, 2014
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 autumn 2014 and negative currency effects.
Despite the challenging environment, we strive for a slight increase in EBIT before special items.
Outlook 2014
GDP: 2.3% (previous: 2.5%)
Industrial production: 3.4% (previous: 3.7%)
Chemical production: 4.0% (previous: 4.4%)
US$ / Euro: 1.35 (unchanged)
Oil price (US$ / bbl): 105 (previous: 110)
Assumptions 2014
Outlook 2014
13 BASF Q3 2014 Analyst Conference Call October 24, 2014
Update on key assumptions of the “We create chemistry” strategy
Growth 2010 – 2015 (today‘s view)
Global GDP 2.6% p.a.
Chemical production (excl. pharma)
4.0% p.a.
Industrial production 3.4% p.a.
Growth 2010 – 2015 (‘We create chemistry’ *)
3.4% p.a.
4.9% p.a.
4.6% p.a.
* Rebased figures, new base year 2010
BASF Q3 2014 Analyst Conference Call October 24, 2014 14
BASF Q3 2014 Analyst Conference Call October 24, 2014
EBITDA / EBITDA impact (billion €)
Lower market growth and lower margins adversely impact 2015 EBITDA expectation
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