Outlook for 2013
BASF's outlook for 2013 is based on the following economic conditions (previous year figures in parentheses):
•World economic growth: +2.4% (+2.2%) •Growth in global chemical production: +3.6% (+2.6%) •An average euro/dollar exchange rate of $1.30 per euro ($1.28 per euro) •An average oil price of $110/barrel ($112/barrel)
"We aim to grow again in 2013 and exceed the 2012 levels in sales and EBIT before special items," said Bock. The company strives to increase sales and earnings in all operating segments. The expected increase in demand, together with measures to improve operational excellence and raise efficiency, will contribute to this. BASF aims to earn a high premium on its cost of capital once again in 2013.
Bock said, "Innovations are the basis for future profitable growth and thus lie at the core of our competitiveness." Therefore, BASF will once again increase its research and development spending in 2013, after expenditures of EUR 1.7 billion in the past year -- around 9% more than in 2011.
Sales increase in almost all segments in the fourth quarter
In Chemicals, sales in the fourth quarter 2012 increased, equally driven by price and portfolio effects. Volume growth and currency tailwinds also contributed to topline growth. EBIT before special items declined mainly due to lower margins and plant shutdowns. For the full year 2012, sales increased by 7% to EUR 13.8 billion. EBIT before special items decreased by 30% to EUR 1.7 billion.
Sales in Plastics increased due to higher volumes and prices as well as positive currency effects. There was continuing strong demand from the automotive industry, particularly in North America and Asia. EBIT before special items rose substantially due to a significant improvement in earnings in Polyurethanes. In 2012, sales in the Plastics segment increased 4% to EUR 11.4 billion. EBIT before special items declined by 27% to EUR 873 million.
Sales in Performance Products came in above the previous fourth quarter, mainly driven by higher volumes. Price declines were offset by positive currency effects. EBIT before special items in the segment decreased due to lower margins. Sales for the full year 2012 of EUR 15.9 billion were around 1% higher than in the previous year. EBIT before special items fell 17% to EUR 1.4 billion.
Sales in Functional Solutions decreased slightly compared with the fourth quarter of 2011. Volumes were down, particularly due to a lower contribution from precious metals trading. A small decrease in sales prices was compensated for by currency tailwinds. Healthy demand in Catalysts and Coatings came from the automotive industry. Strict fixed cost management led to a substantial increase in EBIT before special items. Sales in 2012 were EUR 11.5 billion, 1% higher than in 2011. At EUR 561 million, EBIT before special items was slightly above the previous year.
Sales in Agricultural Solutions were up in the fourth quarter of 2012. Growth was driven by higher volumes, the Becker Underwood acquisition, and favorable currency effects. Sales in South America increased significantly despite dry weather conditions in Brazil. Prices were just below the high level of the prior-year quarter. EBIT before special items was lower than in the fourth quarter of 2011 due to higher R&D expenditures and investments in growth markets. In addition, royalty income in North America reported in the fourth quarter in 2011 was already reported in the third quarter in 2012. Agricultural Solutions had another record year in 2012. Sales rose by 12% to EUR 4.7 billion. EBIT before special items grew by 28% to more than EUR 1 billion. The EBITDA margin target of 25% was achieved.
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