Adding value through growth and innovation: BASF's formula for success
Ludwigshafen (ots)
* BASF presents excellent financial statements for 2000 * Sales climb by 22 percent * Income from operations before special items rises by 15 percent
In 2000, BASF posted the highest sales and the highest income from operations before special items in its history. Sales climbed by 22 percent to almost Euro36 billion, whereas income from operations before special items rose by more than 15 percent to Euro 3.4 billion. The company plans to pay out a dividend of Euro 2.00 per share - the highest ever in BASF's history.
"I am pleased to be able to present such good figures for BASF, after what has not been an easy year for the chemical industry," explained Dr. Jürgen F. Strube, Chairman of the Board of Executive Directors of BASF Aktiengesellschaft, in Ludwigshafen, Germany today (March 14, 2001). "Our formula for success is paying off," he added, before going on to say that he intends to increase the value of the world's largest chemical company through growth and innovation.
Portfolio actively restructured
By rapidly and precisely restructuring its portfolio in recent years, BASF has set the stage for further growth. Important measures in 2000 included:
- The acquisition of the superabsorbents manufacturer Chemdal has made BASF the clear number one in this large growth market.
- Following the purchase of the crop protection business of American Home Products, BASF has become the world's number three company in agricultural products.
- In vitamins, BASF has significantly strengthened its position as number two in the world by acquiring the vitamins business of Takeda.
- By combining its polyolefins business with that of Shell in the Basell joint venture and its textile dye business in DyStar, BASF has strengthened its concentration on the core business of innovative chemistry.
- Through the sale of its pharmaceuticals activities to Abbott, BASF has made a gain of Euro 6 billion and has thus significantly expanded its financial potential.
On the basis of its future-oriented portfolio BASF intends to adhere to its stated aim of increasing its income from operations before special items in 2000, 2001 and 2002 by an average of at least 10 percent. In achieving this goal, the company will receive important support from its oil and gas business. "In this segment we were able to more than double our earnings in 2000. We were thus able to compensate for high raw material costs that put margins in our chemicals businesses under pressure. This compensatory mechanism is not just pure chance, but rather a deliberate strategic instrument," explained Strube.
Growth in all segments and regions
2000 was a year of pronounced growth for BASF. It posted double-digit sales growth in all segments. In each quarter, the company raised sales volumes by an average of 6.5 percent. Unlike many of its competitors, BASF also achieved double-digit growth in sales in the last quarter of 2000. However, the slowdown of the U.S. economy made it more difficult to pass on increases in the prices of raw materials to customers. In the fourth quarter therefore, income from operations before special items was at the previous year's level.
Double-digit sales growth was achieved in all regions. In particular, BASF has expanded its position in the growth regions Asia and South America, where it increased sales by 28 percent and 36 percent, respectively. In North America, BASF also grew faster than the market, increasing sales by 24 percent.
All operating divisions made a positive contribution to income from operations with the exception of Agricultural Products, which is still burdened by the costs of integrating the recently acquired crop protection business. However, the integration process is running smoothly and is expected to achieve annual cost savings of approximately $250 million, with half the amount being achieved in 2001.
In addition to growth, innovations are the other half of BASF's formula for adding value. The company's innovative strength is based on continually renewing products and processes, its creative system solutions, and the broad potential of the chemistry it uses. "We are continually improving our products and developing new ones. New agricultural products such as our latest fungicide F 500(r) are extremely effective, environmentally friendly and offer very promising returns," said Strube.
Chemical business in 2001: Solid with more activity in the second half-year BASF's Chairman expects chemical business to be solid in 2001, although there will be differences between the main economic regions. The company will use its global position to balance these differences and thus achieve good results for the year in total. Strube anticipates the first half-year will be somewhat subdued for BASF and the industry as a whole, but that business will pick up momentum in the third and fourth quarters. "In general, we are positioning ourselves for the upturn in the chemical market expected in 2002 in the United States and the world markets. To coincide with this, important large-scale plants like our cracker in Port Arthur will go on stream to profit from this growth. Our corporate strategy is paying off, and we are confident that following a successful year 2000, we will also be successful in facing the challenges of 2001," he explained.
BASF is a transnational chemical company that aims to increase and sustain its corporate value through growth and innovation. The company's product range includes high-value chemicals, plastics, colorants and pigments, dispersions, automotive and industrial coatings, agricultural products and fine chemicals as well as crude oil and natural gas. BASF's approach to integration, known in German as "Verbund," is one of its particular strengths, ensuring cost leadership and a unique competitive advantage. With sales in 2000 of about Euro 36 billion (circa $34 billion) and a workforce of 103,000 employees, BASF is one of the world's leading chemical companies. BASF acts in accordance with the principles of Sustainable Development. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA) and New York (BF). The company's Internet address is www.basf.com.
Information on the Annual Press Conference can be found on the
Internet at:
English: www.basf.de/pcon
German: www.basf.de/pkYou can download photos of BASF from the Internet at: www.basf.de/pressphotos.
Forward-looking statements
This release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, 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 in BASF's Form 20-F filed with the Securities and Exchange Commission. We do not assume any obligation to update the forward-looking statements contained in this release.
Key figures from our 2000 Financial Report
BASF Group
Million Euro 2000 1999 Change
in %Sales 35,946 29,473 22.0
Income from Operations before special items 3,400 2,950 15.3
Income from Operations 3,070 2,009 52.8
Income before taxes and special items 3,024 2,795 8.2
Income before
taxes and minority
interests 2,827 2,606 8.5Net income 1,240 1,237 0.2
Cash provided by operating activities 2,992 3,255 -8.1
Capital expenditures 6,931 3,253 113.1
Research and development expenses 1,526 1,333 14.5
Dividend of BASF Aktiengesellschaft 1,215 695 74.8
Dividend per share (Euro) 2.00 1.13 77.0
Number of employees 103,273 104,628 -1.3 (December 31)
Sales in segments
in million Euro 2000 1999 Change
in %Chemicals 5,789 4,423 30.9 Plastics & Fibers 11,030 8,628 27.8 Colorants & Finishing Products 7,109 6,395 11.2 Health & Nutrition 6,717 5,602 19.9 Oil & Gas 3,957 3,051 29.7 Other* 1,344 1,374 -2.2
Total 35,946 29,473 22.0
Income from operations in segments
in million Euro 2000 1999 Change
in %Chemicals 713 737 -3.3 Plastics & Fibers 889 644 38.0 Colorants & Finishing Products 522 608 -14.1 Health & Nutrition -201 -588 65.8 Oil & Gas 1,310 741 76.8 Other* -163 -133 -22.6
Total 3,070 2,009 52.8
Capital expenditures in segments
in million Euro 2000 1999 Change
in %Chemicals 880 765 15.0 Plastics & Fibers 599 998 -40.0 Colorants & Finishing Products 1,260 324 289.0 Health & Nutrition 3,464 281 . Oil & Gas 267 524 -49.0 Other* 461 361 27.7
Total 6,931 3,253 113.1
* Sales and earnings of fertilizer business and of other businesses, as well as expenditures, earnings and assets not allocated to the segments.
Sales by regions (location of customer)
in million Euro 2000 1999 Change
in %Europe 20,103 16,996 18.3 - Thereof Germany (7,897) (6,934) (13.9) North America (NAFTA) 8,419 6,773 24.3 South America 2,500 1,842 35.7 Asia, Pacific Area, Africa 4,924 3,826 27.5
Total 35,946 29,473 22.0
Capital expenditures by region
in million Euro 2000 1999 Change
in %Europe 2,674 1,950 -37.1 - Thereof Germany (1,298) (1,595) (-18.6) North America (NAFTA) 3,294 1,105 198.1 South America 431 83 419.3 Asia, Pacific Area, Africa 532 115 362.6
Total 6,931 3,253 113.1
Key BASF share data
2000 1999Number of shares on December 31 607 621 (in millions)
Per share in Euro
Earnings per share 2.02 2.00
Earnings per share according to U.S. GAAP 2.37 2.14
Cash provided by operating activities 4.88 5.27
Dividend 2.00 1.13
Dividend with tax credit 2.86 1.61
Dividend yield excluding tax credit 4.2 % 2.2 %
Dividend yield including tax credit 5.9 % 3.1 %
Stockholders' equity 23.55 22.78
Year-end share price 48.17 51.90
Highes share price 50.68 52.20
Lowest share price 39.40 30.19
Contact:
Michael Grabicki
P 091e
Tel. (06 21) 60-9 99 38
Fax (06 21) 60-2 01 29
E-Mail: michael.grabicki@basf-ag.de
Original content of: BASF SE, transmitted by news aktuell