Q4 2017:
· Sales of 16.1 billion euros
· EBIT of 1.9 billion euros excluding special items (up 58% year-on-year)
2017 year:
· Sales volume increased significantly in all business areas
· Earnings per share 6.62 euros (up 50%); Adjusted earnings per share 6.44 euros (up 33%)
· Operating activities provided cash flow of 8.8 billion euros (up 14%); free cash flow of 4.8 billion euros (up 34%)
· FY17 proposed dividend of € 3.10 per share (2016: € 3.00)
2018 Outlook:
· Mainly through sales growth slightly increase sales
· EBIT excluding special items is expected to be slightly higher than 2017
BASF achieved 'a good start' in 2018 following its good business performance in 2017. Dr. Boké Cécé, Chairman of the Executive Board of BASF Europe, said in a 2017 press conference in Ludwigshafen: 'Last year BASF achieved notable success Growth, further improve profitability.In addition, the company also lay a solid foundation for future development both in personnel and strategy.
In the fourth quarter of 2017, BASF Group's sales increased 8% YoY to EUR16.1 billion, the selling price increased 9%, the sales volume increased 4%, and the sales volume increased in all business fields except oil and natural gas. However, Negative impact was even more pronounced, leading to a 5% decline in sales. EBIT excluding special items was EUR 1.9 billion for the fourth quarter, up 58% from a year earlier. Chemicals, agricultural solutions, oil and gas, and other business areas The significant growth has made up for the decline in revenue from functional materials and solutions and specialty products businesses.
Revitalization of many countries in the world in 2017. Dr. Bokcey said: "BASF has taken full advantage of the economic recovery opportunities and achieved a significant increase in sales and revenue for the full year of 2017 as compared with the previous year." Due to strong market demand, BASF's business units Sales have improved, profitability improved significantly .Sales prices also contributed to profitability, especially in the chemical business area.In general, BASF annual sales rose 12% to 64.5 billion euros.Keys acquired by the end of 2016 Mitel also contributes to sales growth, with custom solutions for metal surface finishes.
BASF's annual revenue growth even more significant increase of about one-third thanks to outstanding contributions to the chemical business, excluding special items EBIT of 8.3 billion euros. Basic chemicals and intermediates business profit and sales Of the total profit margin of chemical products, including chemical products, specialty products, functional materials and solutions, increased significantly compared with the previous year, excluding the interest of special items Pre-tax earnings rose 26% YoY to 7.3bn euros.
Earnings per share increased 50% from 4.42 euros to 6.62 euros.Earnings per share increased from 4.83 euros to 6.44 euros after adjusting for special items and amortization of intangible assets.
Improvements in cash flow provided by operating activities
Compared with the same period of last year, the cash provided by operating activities in 2017 increased by € 1.1 billion to € 8.8 billion mainly due to a net increase of 50% in net income to 6.1 billion euros. Compared with last year, changes in net working capital led to The decrease in cash flow was mainly due to the high cash and trade receivables generated by the Company's operations.
The amount of cash used for investing activities in 2017 was 4 billion euros, compared with 6.5 billion euros in 2016. Expenditure on property, plant, equipment and intangible assets was 4 billion euros, down from 4.1 billion euros in the previous year. Cash flow was € 4.8 billion, an increase of 34% from the same period of last year, with a property right ratio of 44.1% (2016: 42.6%). Net debt fell by € 2.9 billion to € 115.
The proposed dividend of 3.10 euros per share
BASF will propose a dividend increase of € 0.10 to € 3.10 at the annual general meeting, which gives BASF a 3.4% return on dividend based on the closing price of 91.74 euros at the end of 2017. In total, BASF European shareholders will pay 2.8 billion euros.
Business performance by region
With regard to the performance of each region, Dr Bokce said: 'We are very pleased to see the company's strong growth in Asia and its investments in Asia have paid off in recent years. We have doubled our revenue in Asia due to rising profits and sales volume Reaching 2.2 billion euros, becoming the most profitable area of BASF.
In Europe, the economy is gaining momentum, with BASF's EBIT gain of 31% to 4.7 billion euros thanks to higher earnings from the chemical and oil and gas sectors, and despite BASF's growing business in the United States Pre-tax gains in BASF increased to 1.2 billion euros from 1.1 billion euros in North America in early 2017. In South America, Africa, and the Middle East, BASF's EBIT increased from 4.32 100 million euros dropped to 335 million euros.
BASF portfolio performance
In the past year, BASF has made a number of important decisions to include rapidly growing, cyclical businesses into its product portfolio. In 2018, Agribusiness will acquire Bayer's seed and herbicide business Bocci said: "This will be a great complement to our proven and successful crop protection business and biotech activities, and we will enter the seed business through our proprietary assets in key agricultural markets, which will also enable We can put the fruits of seed research into practice more quickly. '
This year, BASF plans to acquire Solvay's global polyamide business, which will expand BASF's range of engineering plastic products used in the transportation, construction and consumer products industries and enhance its ability to acquire raw materials. In addition, BASF expects to improve its access to Asia and The key growth markets in South America.
'However, we also divest business when we think some businesses can achieve greater success in different environments,' said Bokce. For example, BASF transferred its leather chemicals business to Starbucks in late September 2017 Group, a leading producer of leather products in the field of process chemicals, BASF now holds a 16% stake in Stahl.
BASF has announced a fundamental change in its oil and gas business operations under which BASF and the Letter One Group merge their respective oil and gas operations to form a joint venture company called Wintershall DEA which will be the largest in Europe (Oil and gas business) independent exploration and production company, has a good growth prospects in the medium-term plan, the purpose is to operate the joint venture listed.
2018 outlook
BASF predicts that the growth of global economy and chemical production will be basically at the same level as that of 2017 by 2018. It is estimated that all regions will further increase and the resurgent economies of Brazil and Russia will continue to improve.However, in addition to these positive fundamentals, BASF Also see the market volatility will be exacerbated.In addition, the dollar (the exchange rate factor) have a negative impact on sales and earnings.
Looking forward to 2018, BASF forecasts the overall economic conditions as follows (data in parentheses in previous year):
Global economic growth + 3.0% (+ 3.1%)
Global chemical production growth + 3.4% (+ 3.5%)
The average euro / dollar exchange rate: 1 euro exchange 1.20 US dollars (1 euro for 1.13 US dollars)
Average crude oil price (Brent): 65 US dollars a barrel (54 US dollars a barrel)
Bocci Ci said: 'Under the current environment, we hope to continue to achieve incremental growth in 2018, BASF Group's sales and non-special items before EBIT gains can be slightly increased' sales growth will be mainly due to sales . The increase in revenue was mainly attributable to the significant contribution of specialty products, functional materials and solutions, and the oil and natural gas business. After the chemical business achieved strong results in 2017, the Company expects to exclude interest tax The pre-return rate will drop significantly, mainly due to lower margins in the business area.
The 2018 projections include plans to acquire an important portion of the Bayer seed and non-selective herbicide business, which is expected to be completed in the first half of 2018. Based on the timing of the acquisition, taking into account the seasonal factors in the takeover of the business And expected business integration costs, which could have a positive impact on the business of agricultural solutions and BASF's sales in 2018, adversely affecting revenue.
The forecast does not include the expected merger between BASF and LetterOne's oil and gas business and, once the deal is signed, revenues from the oil and gas business will no longer be included in BASF's sales and EBIT - dating back to 2018 January 1, and re-declare the data for the previous year. The revenue of the oil and gas business will be separately presented as 'Termination Operating Revenues' before income from minority interests of BASF Group. From the trade deadline, BASF accounted for a share of the Wintershall DEA Revenue is likely to be accounted for using the equity method and included in the EBIT income of BASF.
Performance in all business areas
In a favorable market environment, thanks to higher selling prices and sales volume, sales in the chemicals business increased 21% to 4.2 billion euros in the fourth quarter of 2017. BASF achieved higher profits, especially for isocyanates, acids and EBIT, excluding polyol, polyol, cracked products and acrylic monomers, rose 67% YoY to EUR 1.1 billion excluding all special items, with all businesses gaining higher returns.
In FY 2017, sales in the chemicals business increased by 3.4 billion euros to 16.3 billion euros, mainly due to higher selling prices, especially in the unit business unit, which saw sales growth in all business units. The EBIT increased by 2.2 billion euros to 4.2 billion euros, mainly due to the higher profits from the isocyanate business of the unit business unit. The stronger profits of the two major business units of petrochemicals and intermediates also contributed to the increase in revenue ; A slight increase in fixed costs offset some of the revenue. The payment of premiums for the North Harbor accident at Ludwigshafen Base in October 2016 offset its negative impact on 2017 earnings.
Features Products Business Areas Sales increased 2% to € 3.8 billion in the fourth quarter of 2017. The increase in sales of all business units and the modest increase in the overall selling price offset the unfavorable impact of unfavorable exchange rate factors and product mix. Pressure, temporary closure of citral plants at Ludwigshafen base and higher fixed costs, EBIT excluding exceptional items decreased by € 237 million to € 111 million.
Features Products Business Areas Full-year 2017 sales were € 16.2 billion, an increase of € 659 million from the previous year, thanks to higher sales in all businesses. Higher prices for the Care Chemicals and Dispersions & Pigments business Resulting in a favorable impact on sales, with a modest decline in sales of all business units due to portfolio measures and unfavorable exchange rates, and pre-EBT net loss excluding special items decreased by EUR 361 million to EUR 1.4 billion from 2016. This was mainly due to Because raising sales prices does not fully compensate for the impact of rising raw material prices, resulting in lower profits.
Functional Materials and Solutions Business Sector Sales increased 7% in the fourth quarter of 2017. Revenue was mainly due to the higher selling price of 5.3 billion euros. Higher raw material costs resulted in lower profit, excluding special items EBIT, in turn, dropped 42% to only € 267 million In addition, higher fixed costs also affected earnings.
In FY17, sales of functional materials and solutions business segment increased by 2 billion euros to 20.7 billion euros, mainly due to higher selling prices and sales, as well as the acquisition of Albemarle's Kayamy in December 2016 At the same time, the exchange rate factor caused a slight decline in sales.High demand for BASF products in the automotive and construction industries contributed significantly to the increase in sales due to lower profit and higher fixed costs, excluding special items Pretax earnings decreased by 329 million euros to 1.6 billion euros from 2016. The special fees for 2017 mainly consisted of the integration costs incurred in the acquisition of the company and acquisition of Western Europe construction materials business for the specialized users from Henkel Group.
Agricultural Solutions Business In the fourth quarter of 2017, sales increased 4% to 1.3 billion euros. The substantial increase in sales offset the impact of lower selling prices and unfavorable exchange rates. Compared with the same period of 2016, EBIT excluding special items increased by 128 million euros, up 162% to 207 million euros.
Agricultural Solutions Business The full year 2017 sales of EUR 5.7 billion, an increase of 127 million euros as a result of the higher volume of sales resulted in lower and lower price increases in the sustained hardship crop protection product market environment The impact of exchange rate factors, especially in South America, decreased EBM-54 million to EUR 1 billion excluding non-specific items from 2016. This slight decline was mainly due to the lower average profit from the blending of different products and Tough market conditions in Brazil In hurricanes, production facilities in Beaumont, Texas and Manat, Puerto Rico, were forced to shut down, which negatively affected earnings, with a slight increase in fixed costs.
Sales in the oil and gas segment decreased 7% to 862 million euros in the fourth quarter of 2017 due to lower sales volume However, the higher selling prices of oil and natural gas have had a beneficial effect on revenue, excluding interest tax on special items Ex-revenue increased 97 million euros to 260 million euros.
Thanks to higher selling prices and sales volume, full-year sales in the oil and gas business segment increased by Euro 476 million to EUR 3.2 billion in FY 2017. The average crude oil price (Brent) for 2017 is USD 54 per barrel (2016 : US $ 44 / barrel). Natural gas prices in the European spot market rose 25% YoY in 2015. The increase was mainly due to the higher volume of natural gas sold and the same level as in the previous year. EBITDA excluding special items increased by 276 million euros To 793 million euros, mainly due to the higher sales price of oil and gas and the higher share of BASF's stake in the Yuzhno Russkoye gas field, as well as the comprehensive measures aimed at optimizing exploration and technology projects and their successful implementation Also had a positive impact on cost-saving measures Net income increased by 357 million euros to 719 million euros.
Other Business Areas Sales increased from Euro 518 million to Euro 608 million in the fourth quarter of 2017. This was mainly due to the valuation effect of BASF's Long Term Incentive Plan and EBIT excluding exceptional items increased from negative EUR 386 million to negative 38 million euros.
Other Business Areas 2017 full year sales increased by 224 million euros to 2.2 billion euros from 2016, mainly as a result of the higher selling prices of raw materials trading business. Ex-earnings before interest and tax excluding exceptional items in other business sectors increased from 2016 286 million euros to a negative 774 million euros This improvement is also due to the long-term incentive plan valuation effect.
About BASF in Greater China
BASF's roots in the Greater China market date back to 1885, and BASF has been a loyal partner in China ever since. As the largest foreign-invested chemical company in China, BASF's major investment projects are located in Shanghai, Nanjing and Chongqing, with Shanghai Innovation The park is also a hub of research and development both in the world and in the Asia Pacific region with sales of 7.3 billion euros to customers in Greater China in 2017 and 8,982 employees by the end of 2007. For more information visit www.basf. com.
About BASF
At BASF, we create a new chemical role - the future of sustainable development - combining economic success with social responsibility and environmental protection. BASF employs more than 115,000 people worldwide and serves customers in virtually all countries and all industries Success in making a contribution to our business. Our products fall into five main business areas: Chemicals, Specialty Products, Functional Materials and Solutions, Agricultural Solutions, Oil and Gas. BASF has global sales of 64.5 billion euros in 2017. BASF's shares are held in Frankfurt (BAS), London (BFA) and Zurich (BAS) Stock Exchanges For more information visit: www.basf.com.