BASF: Successful Start to 2006.LUDWIGSHAFEN Lud·wigs·ha·fen A city of southwest Germany on the Rhine River opposite Mannheim. Founded as a fortress in the early 17th century, it is now a leading center of the country's chemical industry. Population: 162,000. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). -- BASF BASF Bar Association of San Francisco (since 1872; San Francisco, California) BASF Badische Anilin und Soda Fabrik (German chemical products company) BASF Builders Association of South Florida (NYSE NYSE See: New York Stock Exchange :BF)(FWB (Fixed Wireless Broadband) See fixed wireless. :BAS BAS abbr. 1. Bachelor of Agricultural Science 2. Bachelor of Applied Science )(LSE LSE - Language Sensitive Editor :BFA BFA abbr. Bachelor of Fine Arts BFA abbr BFA, B.F.A Bachelor of Fine Arts; first degree in Fine Arts. ): --Further increase in volumes, sales climb 24 percent --EBIT before special items rises 19 percent --Positive outlook for 2006: --Significantly higher sales --Increase in EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). before special items In the first quarter of 2006, BASF continued its success story with another top performance. "Our declared goal is to create sustainable value Sustainable Value Sustainable Value is an approach to measure and manage sustainability performance. The concept was developed by researchers who are working today for Queen's University Belfast by implementing our strategy," said BASF chairman Dr. Juergen Hambrecht in his presentation of BASF's first-quarter results at the company's 54th Annual Meeting on May 4, 2006. At EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 12.5 billion, first-quarter sales were 24 percent higher than in the same period of 2005. Growth was driven above all by considerably higher volumes and price increases in the chemical businesses and in the Oil & Gas segment. Disregarding dis·re·gard tr.v. dis·re·gard·ed, dis·re·gard·ing, dis·re·gards 1. To pay no attention or heed to; ignore. 2. To treat without proper respect or attentiveness. n. currency effects, in particular due to the appreciation of the U.S. dollar, sales increased by 20 percent. Income from operations (EBIT) before special items rose by 19 percent compared with the first quarter of 2005 to EUR 1.9 billion. In the Chemicals segment, significantly higher raw materials and energy prices could not be completely passed on to the market in the form of higher sales prices. Earnings in the Plastics segment rose as a result of higher volumes and improved margins in the global polyurethanes polyurethanes (pŏl'ēy  r`əthānz), group of plastics that may be either thermosetting or thermoplastic. Polyurethane can be made into both flexible and rigid foams. business. The Performance Products segment posted higher earnings thanks
in particular to strong volume growth and stable margins in the Coatings
division. First-quarter earnings in the Agricultural Products division
were negatively impacted by the difficult market environment in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. and higher research costs. The profitability of the products lysine lysine (lī`sēn), organic compound, one of the 20 amino acids commonly found in animal proteins. Only the l-stereoisomer appears in mammalian protein. and
vitamin C vitamin Cor ascorbic acid Water-soluble organic compound important in animal metabolism. Most animals produce it in their bodies, but humans, other primates, and guinea pigs need it in the diet to prevent scurvy. remained unsatisfactory in the Fine Chemicals division. Higher prices and expansion of the natural gas trading business led to very good earnings in the Oil & Gas segment. First-quarter EBIT after special items rose by 23 percent to EUR 1.8 billion. Special items were related to income from the ongoing portfolio optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. measures in the Agricultural Products division and expenses for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , which are recorded under "Other" until they are implemented in the course of the year. The financial result declined by EUR 24 million to EUR 21 million. In the first quarter of 2005, the financial result still contained earnings from BASF's stake in the Basell joint venture, which was sold in the third quarter of 2005. Income before taxes and minority interests rose by 21 percent to EUR 1.9 billion. The tax rate was 46 percent compared with 40 percent in the first quarter of 2005. This increase was due to the higher contribution to earnings from the Oil & Gas segment. Taxes for oil production that are noncompensable with German corporate income tax amounted to EUR 272 million compared with EUR 198 million in the same period of 2005. Net income increased 10 percent to EUR 950 million. Earnings per share were EUR 1.87 compared with EUR 1.60 in the same period of the previous year. Positive outlook for full-year 2006 Hambrecht's outlook for full-year 2006 is confident, based on global economic growth of more than 3 percent. In 2006, BASF expects an average oil price of $60 per barrel of Brent crude Brent Crude is one of the major classifications of oil consisting of Brent Crude, Brent Sweet Light Crude, Oseberg and Forties. Brent Crude is sourced from the North Sea. The Brent Crude oil marker is also known as Brent Blend, London Brent and Brent petroleum. and an average euro/dollar exchange rate of $1.25 per euro. Hambrecht formulated for·mu·late tr.v. for·mu·lat·ed, for·mu·lat·ing, for·mu·lates 1. a. To state as or reduce to a formula. b. To express in systematic terms or concepts. c. his optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op prognosis prognosis /prog·no·sis/ (prog-no´sis) a forecast of the probable course and outcome of a disorder.prognos´tic prog·no·sis n. pl. prog·no·ses 1. as follows: "Our business has developed very positively since the beginning of 2006, and the level of orders remains extremely robust. We have seen two strong years in a row, and we are confident that we will continue our successful performance in 2006. We aim to continue to grow faster than the market. Above all, though, we want to achieve profitable growth. We expect to post higher EBIT before special items compared with the previous year's strong level. This depends, of course, on a stable geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. environment and the development of the crude oil price." Growth in Europe Europe (y r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and AsiaIn Europe, sales by location of company increased by 28 percent in the first quarter of 2006. EBIT before special items rose by EUR 286 million to EUR 1.4 billion. The higher sales and earnings were primarily due to the contribution of the Oil & Gas segment. First-quarter sales by location of company in North America rose by 7 percent in dollar terms. The sales growth was due in particular to the Chemicals and Plastics segments. EBIT before special items increased by EUR 27 million to EUR 298 million. In Asia Pacific, we increased sales in local currencies by 19 percent. EBIT before special items rose EUR 28 million to EUR 115 million. Growth in the Chemicals segment was due especially to the Verbund Verbund is the largest producer and transporter of electricity in Austria, and one of the largest in Europe. The company produced in 2006 around 28.1 billion kWh mainly from hydropower plants (85%), thermal plants (10%) and eco power plants (5%). site in Nanjing Nanjing (nän`jĭng`) or Nanking (năn`kĭng`) [southern capital], city (1994 est. pop. 2,224,200), capital of Jiangsu prov., E central China, in a bend of the Chang (Yangtze) River. , China, which started operations in the second quarter of 2005. Sales by location of company in South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , Africa, Middle East declined by 11 percent in local currency terms. EBIT before special items was EUR 39 million lower than in the same period of 2005 because of the difficult market environment in the agricultural products business in Brazil. The Coatings division recorded strong business, in particular with decorative paints. BASF is the world's leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics, performance products, agricultural products and fine chemicals to crude oil and natural gas. As a reliable partner to virtually all industries, BASF's intelligent system solutions and high-value products help its customers to be more successful. BASF develops new technologies and uses them to open up additional market opportunities. It combines economic success with environmental protection and social responsibility, thus contributing to a better future. In 2005, BASF had approximately 81,000 employees and posted sales of more than EUR 42.7 billion. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. (BFA), New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (BF) and Zurich (AN). Further information on BASF is available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.basf.com. On May 4, 2006, you can obtain further information from the Internet at the following addresses: Interim Report (from 7:30 a.m. CEST) corporate.basf.com/interimreport (English) corporate.basf.com/zwischenbericht (German) Press release (from 7:30 a.m. CEST) corporate.basf.com/pressrelease (English) corporate.basf.com/pressemitteilungen (German) Live-Transmission - Speech Dr. Juergen Hambrecht (from 10:00 a.m. CEST) corporate.basf.com/shareholdermeeting (English) corporate.basf.com/hauptversammlung (German) Speech Dr. Juergen Hambrecht - print version (from 11:00 a.m. CEST) corporate.basf.com/pressconference (English) corporate.basf.com/pressekonferenz (German) Photos (from 7:30 a.m. CEST) corporate.basf.com/photos (English) corporate.basf.com/fotos (German) Photos from the Annual Shareholder Meeting (from 11:30 a.m. CEST) corporate.basf.com/photos (English) corporate.basf.com/fotos (German) Information about BASF shares corporate.basf.com/share (English) corporate.basf.com/aktie (German) Live-Transmission Telephone Conference for Analysts (from 8:30 a.m. CEST) corporate.basf.com/share (English) corporate.basf.com/aktie (German) This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . All statements contained in this press release that are not clearly historical in nature or that necessarily depend on future events are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. 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 SEC. Successful start to 2006 BASF sets course for future success First-Quarter Results 2006 January January: see month. - March 2006 published on May 4, 2006 BASF Group
1st Quarter
Million EUR Change
2006 2005 in %
Sales 12,515 10,083 24.1
Income from operations before interest,
taxes, depreciation and amortization
(EBITDA) 2,401 2,019 18.9
Income from operations (EBIT) before
special items 1,865 1,563 19.3
Income from operations (EBIT) 1,849 1,499 23.3
Financial result 21 45 (53.3)
Income before taxes and minority interests 1,870 1,544 21.1
Net income 950 861 10.3
Earnings per share (EUR) 1.87 1.60 16.9
EBIT before special items in percent of
sales 14.9 15.5 -
Cash provided by operating activities 1,448 1,104 31.2
Additions to fixed assets(a) 600 362 65.7
Excluding acquisitions 473 362 30.7
Amortization and depreciation(a) 552 520 6.2
Segment assets (end of period)(b) 29,680 27,374 8.4
Personnel costs 1,392 1,277 9.0
Number of employees (end of period) 79,926 81,335 (1.7)
(a) Tangible and intangible fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → (b) Tangible and intangible fixed assets, inventories and business-related receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed The interim financial statements have not been audited.
1 BASF Group Business BASF shares
Review and Outlook 1st Quarter Full Year
4 Chemicals 2006 2005
5 Plastics Share price
(end of period)(a)(EUR) 64.70 64.71
6 Performance Products High(a)(EUR) 65.95 65.33
7 Agricultural Products Low(a)(EUR) 61.65 50.11
& Nutrition
8 Oil & Gas Average daily
trade (million shares)(a) 3.01 2.70
9 Regions BASF share
performance(b) 0.0% 26.2%
10 Consolidated Statements of DAX 30
Income performance(b) 10.4% 27.1%
11 Consolidated Balance EURO STOXX 50
Sheets performance(b) 7.9% 24.3%
12 Consolidated Statements Market
capitalization
(end of period)
of Cash Flows (billion EUR) 33.33 33.33
13 Consolidated Statements Number of shares
(end of period)
of Recognized Income and
Expense (million shares)(c) 515.06 515.06
14 Consolidated Statements (a) XETRA trading
of Stockholders' Equity (b)With dividends
reinvested
15 Segment Reporting (c)Including bought-back shares
intended for cancellation
Cover photo: Antonio Antonio lends money gratis. [Br. Lit.: Merchant of Venice] See : Generosity Antonio schemes against his brother Prospero. [Br. Lit.: The Tempest] See : Treachery Germani, delegate A person who is appointed, authorized, delegated, or commissioned to act in the place of another. Transfer of authority from one to another. A person to whom affairs are committed by another. A person elected or appointed to be a member of a representative assembly. from BASF Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. and Director Special Projects Pharma Solutions, and Verena Saint Verena of the Theban Legion died on the 4th day of Thout (September 14). She was brought up in the 3rd century in the Theban region (modern day Luxor in Upper Egypt) in a noble Christian family, who handed her over to Bishop Sherimon, Bishop of Beni Suef, who in turn Bertgen, laboratory assistant at BASF's Competence Center Polymer Research in Ludwigshafen News from our innovation centers Environmentally friendly Environmentally friendly, also referred to as nature friendly, is a term used to refer to goods and services considered to inflict minimal harm on the environment.[1] processing of cellulose cellulose, chief constituent of the cell walls of plants. Chemically, it is a carbohydrate that is a high molecular weight polysaccharide. Raw cotton is composed of 91% pure cellulose; other important natural sources are flax, hemp, jute, straw, and wood. BASF and the University of Alabama The University of Alabama (also known as Alabama, UA or colloquially as 'Bama) is a public coeducational university located in Tuscaloosa, Alabama, USA. Founded in 1831, UA is the flagship campus of the University of Alabama System. cooperate on the use of ionic i·on·ic adj. Of, containing, or involving an ion or ions. ionic pertaining to an ion or ions. ionic medication iontophoresis. liquids BASF has set up a research partnership with the University of Alabama to study the dissolution Act or process of dissolving; termination; winding up. In this sense it is frequently used in the phrase dissolution of a partnership. The dissolution of a contract is its Rescission by the parties themselves or by a court that nullifies its binding force and reinstates each and processing of cellulose by means of ionic liquids. The two partners will further develop practical uses for this innovative application. Cellulose is the commonest organic compound and is a constituent CONSTITUENT. He who gives authority to another to act for him. 1 Bouv. Inst. n. 893. 2. The constituent is bound with whatever his attorney does by virtue of his authority. of virtually all plant cell walls. Of the 40 billion tons formed by nature every year, only 100 million tons is used as a feedstock feed·stock n. Raw material required for an industrial process. Noun 1. feedstock - the raw material that is required for some industrial process raw material, staple - material suitable for manufacture or use or finishing for further processing. A more widespread use of cellulose as a renewable raw material has to date been prevented by its poor solubility solubility Degree to which a substance dissolves in a solvent to make a solution (usually expressed as grams of solute per litre of solvent). Solubility of one fluid (liquid or gas) in another may be complete (totally miscible; e.g. . By means of ionic liquids, however, solutions of cellulose can now be produced for the first time at technically useful concentrations. BASF is in the process of evaluating a variety of ideas that might improve the use of cellulose. The use of ionic liquids can significantly simplify the production of cellulose fibers, for example. "We believe ionic liquids have a promising future," says Dr. Matthias Matthias, 1557–1619, Holy Roman emperor (1612–19), king of Bohemia (1611–17) and of Hungary (1608–18), son of Holy Roman Emperor Maximilian II. He was appointed governor of Austria (1593) by his brother, Holy Roman Emperor Rudolf II. Maase, who works in the New Business Development unit of BASF's Intermediates division. "Their properties will open up completely new applications in addition to classical chemical uses. Examples include fluids used in engineering, optical devices, electronic components and heat transfer." BASF has several years of experience in the fairly recent field of ionic liquids. At its Ludwigshafen site, the company operates the world's first large-scale large-scale adj. 1. Large in scope or extent. 2. Drawn or made large to show detail. large-scale Adjective 1. wide-ranging or extensive 2. industrial process that uses ionic liquids. The process allows fast and simple removal of the acids from the desired product, and the ionic liquids employed can be almost completely recycled. BASF sells its ionic liquids under the brand name Basionics(TM), while the corresponding processes are marketed under the name Basil(TM). Renewable raw materials: Turning cellulose into fibers. BASF markets its portfolio of ionic liquids under the brand name Basionics. The current portfolio consists of 19 different ionic liquids. News from our innovation centers Polyurethane polyurethane Any of a class of very versatile polymers that are made into flexible and rigid foams, fibres, elastomers (elastic polymers), surface coatings, and adhesives. composite protects imperiled dikes The innovative covering of small stones and the Elastocoast polyurethane system is elastic elastic Of or relating to the demand for a good or service when the quantity purchased varies significantly in response to price changes in the good or service. and porous porous /por·ous/ (por´us) penetrated by pores and open spaces. po·rous adj. 1. Full of or having pores. 2. Admitting the passage of gas or liquid through pores. . As a result, it can withstand the force of the water masses particularly well. Flexible covering with BASF's Elastocoast withstands even harsh storms During the coming century, scientists predict that global warming global warming, the gradual increase of the temperature of the earth's lower atmosphere as a result of the increase in greenhouse gases since the Industrial Revolution. will cause a rise in the sea level and increased flooding from rivers. More than ever before, innovative solutions are needed to provide effective and stable coastal protection and river dikes. One of them is a specially developed elastomer elastomer (ĭlăs`təmər), substance having to some extent the elastic properties of natural rubber. The term is sometimes used technically to distinguish synthetic rubbers and rubberlike plastics from natural rubber. polyurethane system from BASF's subsidiary Elastogran: Under the name Elastocoast(R), the company is offering a novel plastic for reinforcing stone ballast bal·last n. 1. Heavy material that is placed in the hold of a ship or the gondola of a balloon to enhance stability. 2. a. Coarse gravel or crushed rock laid to form a bed for roads or railroads. b. revetments for dikes. These coverings represent the first line of defense, for example, against the sea. They protect the dike Dike, in Greek religion and mythology Dike: see Horae. dike, in technology dike, in technology: see levee. dike Bank, usually of earth, constructed to control or confine water. by absorbing the force of the breaking waves and slowing down the water masses. Elastic and porous - these two properties are the secret of Elastocoast: The ability to yield slightly protects the revetment Revetment A facing or veneer of stone, concrete, or other materials constructed on a sloping embankment, dike, or beach face to protect it against erosion caused by waves or currents. against the brute force (programming) brute force - A primitive programming style in which the programmer relies on the computer's processing power instead of using his own intelligence to simplify the problem, often ignoring problems of scale and applying naive methods suited to small problems directly of the water masses crashing down upon them; the interconnecting cavities between the stones absorb their energy. Rigid and solid revetments made from the conventional "adhesives" concrete or asphalt asphalt (ăs`fôlt, –fălt), brownish-black substance used commonly in road making, roofing, and waterproofing. Chemically, it is a natural mixture of hydrocarbons. , on the other hand, are often broken down by the pounding force of the waves: starting from an initial, tiny defect defect - bug , the breakers gradually make deeper and deeper inroads inroads Noun, pl make inroads into to start affecting or reducing: my gambling has made great inroads into my savings inroads npl to make inroads into [+ into the revetment. It could hardly be easier to use: The liquid two-component special plastic polyurethane is stirred on site and then mixed - for example in a concrete mixer mixer, either of two electronic devices in which two or more signals are combined. In the type of mixer used in radio receivers, radar receivers, and similar systems, a signal is translated upward or downward in frequency. - with the crushed stone which it envelops like a thin, transparent film. With relatively little effort, the finished mix of materials can be applied in covering layers about 15 to 30 centimeters thick. The mixture even hardens underwater Underwater 1. The condition a call option is in when its strike price is higher than the market price of the underlying stock. 2. The condition a put option is in when its strike price is lower than the market price of the underlying stock. . Elastocoast also provides benefits for nature: Flora Flora, in Roman religion, goddess of flowers and fertility. Her festival, the Floralia, Apr. 28–May 1, was celebrated with great gaiety and licentiousness. and fauna fauna All the species of animals found in a particular region, period, or special environment. Five faunal realms, based on terrestrial animal species, are generally recognized: Holarctic, including Nearactic (North America) and Paleartic (Eurasia and northern Africa); can find new habitats in the porous structure of the cover layers. Following its successful use in the redevelopment of a jetty jetty: see coast protection. on the bank of the River Elbe Elbe (ĕl`bə), Czech Labe, a major river of central Europe, c.725 mi (1,170 km) long, rising in the Krknoše Mts., NW Czech Republic, and traversing NW Czech Republic in a wide arc. in Hamburg Hamburg, city, Germany Hamburg (häm`b rkh), officially Freie und Hansestadt Hamburg (Free and Hanseatic City of Hamburg), city (1994 pop. , Elastocoast is now facing its biggest
challenge on the island of Sylt Sylt (zĭlt, Ger. zült), island (1994 pop. 5,543), 36 sq mi (93 sq km), Schleswig-Holstein, N Germany, in the North Sea. It is the largest of the North Frisian Islands and is connected by a causeway to the mainland; the two main towns are . Especially in winter, the North Sea
gnaws away at the island. In September September: see month. 2005, a revetment made of
Elastocoast has been protecting part of the particularly exposed
northern part of the island. Dr. Marcus Marcus, in the Bible: see Mark, Saint. Leberfinger, project manager for
maritime applications at Elastogran, is very satisfied with the results
achieved in the first winter: "Even in the breaker zone breaker zonen. The nearshore zone between the outermost breakers and the area of the wave uprush. Also called surf zone. breaker zone of the open coast of Sylt, the revetment reliably withstood with·stand v. with·stood , with·stand·ing, with·stands v.tr. 1. To oppose with force or resolution. 2. To be successful in resisting. See Synonyms at oppose. v.intr. the high dynamic stresses caused by wave impact, salt water and the effects of frost." A similar pilot project has also been completed on Hamburger Hallig A Hallig (plural Halligen) is one of the ten small German islands without protective dikes in the North Frisian Islands on Schleswig-Holstein's Wadden Sea-North Sea coast in the district of Nordfriesland. to the north of the German town of Husum Husum (h  `zm), city (1994 pop. 21,280), Schleswig-Holstein, NW Germany, a port on the North Sea. .BASF Group Business Review and Outlook -- Further increase in volumes, sales climb 24% -- EBIT before special items rises 19% -- Agreement reached on acquisition of Degussa's construction chemicals business -- Positive outlook for 2006: -- Significantly higher sales -- Increase in EBIT before special items Sales At EUR12.5 billion, first-quarter sales were 24% higher than in the same period of 2005. Growth was driven above all by considerably higher volumes and price increases in our chemical businesses and in the Oil & Gas segment. Disregarding currency effects, in particular due to the appreciation of the U.S. dollar, sales increased by 20%. Factors influencing sales in comparison with previous year % of sales 1st Quarter Volumes 7 Prices 12 Currencies 4 Acquisitions/divestitures 1 Total 24 Sales increased in all segments. Volumes in the Chemicals segment rose in particular due to the startup (STARTing UP) "At startup" means when the computer is first turned on or when a program is first loaded. See Startup folder. of the Verbund site in Nanjing, China, in 2005. The electronic chemicals business, which was acquired in April last year, also contributed to the significant increase in sales. In the Plastics and Performance Products segments we also posted higher volumes while adjusting sales prices to reflect increased raw material costs. Sales by segment, 1st Quarter 2006
Chemicals 2006 2,239 23%
2005 1,822
Plastics 2006 3,091 10%
2005 2,800
Performance 2006 2,147 13%
Products 2005 1,908
Agricultural
Products 2006 1,376 2%
& Nutrition 2005 1,354
Oil & Gas 2006 2,985 62%
2005 1,840
In the Agricultural Products & Nutrition segment, the Fine Chemicals division recorded higher sales thanks to an increase in volumes and the acquisition of Orgamol Group's pharmaceutical contract manufacturing business in the fourth quarter of 2005. Sales in the Agricultural Products division declined slightly compared with the first quarter of 2005 due to lower sales volumes in South America. With a sales increase of more than EUR1.1 billion, the Oil & Gas segment accounted for 11 percentage points of the BASF Group's sales growth. This was a consequence of the high oil price and increased sales volumes in the natural gas trading business.
Special items
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Million EUR 2006 2005 2006 2005 2006 2005 2006 2005
Special items in:
Income from
operations (16) (64) (70) (65) (109)
Financial result - - - 222 -
Income before taxes
and minority
interests (16) (64) (70) 157 (109)
Earnings Compared with the first quarter of 2005, we increased income from operations (EBIT) before special items by 19% to EUR1,865 million. In the Chemicals segment, significantly higher raw material and energy prices could not be completely passed on to the market in the form of higher sales prices. It was therefore not possible to match the previous year's very strong first-quarter earnings, in particular in the Petrochemicals division. Earnings in the Plastics segment rose as a result of higher volumes and improved margins in the global polyurethanes business. The Performance Products segment posted higher earnings thanks in particular to strong volume growth and stable margins in the Coatings division. First-quarter earnings in the Agricultural Products division were negatively impacted by the difficult market environment in Brazil and higher research costs. The profitability of the products lysine and vitamin C remained unsatisfactory in the Fine Chemicals division. Higher prices and expansion of the natural gas trading business led to very good earnings in the Oil & Gas segment. First-quarter EBIT after special items rose by 23% to EUR1,849 million. Special items in income from operations were related to income from the ongoing portfolio optimization measures in the Agricultural Products division and expenses for restructuring, which are recorded under "Other" until they are implemented in the course of the year. The financial result declined by EUR24 million to EUR21 million. In the first-quarter of 2005, the financial result still contained earnings from our stake in the Basell joint venture, which was sold in the third quarter of 2005.
Chemicals 2006 317 (26)%
2005 426
Plastics 2006 332 23%
2005 269
Performance 2006 248 10%
Products 2005 225
Agricultural
Products 2006 224 (24)%
& Nutrition 2005 296
Oil & Gas 2006 848 75%
2005 484
Income before taxes and minority interests rose by 21% to EUR1,870 million. The tax rate was 46% compared with 40% in the first quarter of 2005. This increase was due to the higher contribution to earnings from the Oil & Gas segment. Taxes for oil production that are noncompensable with German corporate income tax amounted to EUR272 million compared with EUR198 million in the same period of 2005. Net income increased 10% to EUR950 million. Earnings per share were EUR1.87 compared with EUR1.60 in the same period of the previous year. Outlook We expect the following conditions in 2006: -- Average oil prices (Brent Brent, outer borough (1991 pop. 226,100) of Greater London, SE England. The area is a rail and industrial center. Its manufactures include automobile parts, clocks and watches, and electrical equipment. ) of about $60/barrel -- An average euro/dollar exchange rate of $1.25 per euro and moderately higher interest rates -- Global economic growth of more than 3% On this basis, we expect that our business will continue to develop positively in the further course of the year. We plan to increase our sales prices to counter the pressure on margins caused by rising raw material prices. Risk factors continue to be the political situation in regional hotspots and the development of the crude oil price. The good start in the first quarter confirms our positive outlook for the full year. We expect to post significantly higher sales and higher EBIT before special items compared with the previous year's strong level. Significant events On February February: see month. 28, 2006, BASF reached an agreement with Degussa AG, Duesseldorf, to acquire Degussa's construction chemicals business. The purchase price for equity is just under EUR2.2 billion. As a result, the transaction value for BASF is EUR2.7 billion including debt. Subject to approval by the relevant authorities, the transaction is expected to close by the middle of 2006. We will place Degussa's construction chemicals business in a new operating division - Construction Chemicals - in our Performance Products segment. On April 27, 2006, BASF and Gazprom JSC Gazprom (RTS:B>GAZP MICEX:B>GAZP LSE: OGZD; Russian: ОАО Газпром, sometimes transcribed as Gasprom[1] agreed on a swap of assets of equivalent value. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with this agreement, BASF's subsidiary Wintershall Wintershall AG is the largest crude oil and natural gas producer in Germany. The company is based in Kassel, Germany. Wintershall is a wholly owned subsidiary of BASF, based in Ludwigshafen. will receive a total interest of 35% less one share in the Yuzhno Russkoye gas field. In return, Gazprom is to increase its interest in WINGAS GmbH GmbH Gesellschaft mit Beschränkter Haftung (German: limited liability company; business entity) to 50% less one share. In addition, Gazprom will receive a share in a Wintershall subsidiary with interests in exploration and production activities in Libya as well as a 50% share in a company that will be responsible for expanding gas marketing activities in Europe (excluding Germany). On May 1, 2006, BASF announced that it extended the expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. of its cash offer to acquire all outstanding shares in Engelhard Corporation until Monday, June 5, 2006. At the same time, the tender offer was increased to $38 per share. BASF is confident that Engelhard's shareholders will accept this offer. Further information is available on the Internet at corporate.basf.com/tender-offer and on the SEC's website at www.sec.gov Chemicals -- Strong sales growth in all operating divisions -- Pressure on margins due to high raw material and energy prices -- First-quarter earnings below previous year's very high level
Overview Chemicals 1st Quarter
Million EUR Change
2006 2005 in %
Sales 2,239 1,822 23
Thereof Inorganics 306 207 48
Petrochemicals 1,374 1,136 21
Intermediates 559 479 17
EBITDA 452 544 (17)
EBIT before special items 317 426 (26)
EBIT before special items in percent of
sales 14.2 23.4 -
EBIT 317 426 (26)
Sales in the Chemicals segment increased significantly in the first quarter (volumes 11%, portfolio 3%, prices 4%, currencies 5%). This was due in particular to the volumes from our Verbund site in Nanjing, China, as well as from the electronic chemicals business acquired in April 2005. Higher raw material and energy prices could not be passed on fully to the market in the form of higher prices. Earnings were below the previous year's very strong level. Inorganics Sales of electronic chemicals developed very positively, in particular in Asia. We also posted higher sales of inorganic inorganic /in·or·gan·ic/ (in?or-gan´ik) 1. having no organs. 2. not of organic origin. in·or·gan·ic n. 1. specialties, catalysts and glues
This is a list of various types of glue. Historically, the term "glue" only referred to protein colloids prepared from animal flesh. The meaning has been extended to refer to any fluid adhesive. and impregnating resins resins, n.pl complex, insoluble, sticky substances secreted by plants. Used as astringents, antimicrobials, and antiinflammatories, and are burned as incense. Can cause oral ulcers and epidermal irritations. . The division's earnings declined slightly. Margins in the basic products business in particular were adversely affected by high raw material and energy costs. Petrochemicals Sales rose thanks to strong demand worldwide. High crude oil prices resulted in significantly higher purchase prices for our main feedstock, naphtha naphtha (năp`thə, năf`–), term usually restricted to a class of colorless, volatile, flammable liquid hydrocarbon mixtures. , and impaired margins for cracker (1) A person who breaks into a computer system without authorization, whose purpose is to do damage (destroy files, steal credit card numbers, plant viruses, etc.). Because a cracker uses low-level hacker skills to do cracking, the terms "cracker" and "hacker" have become products in particular in Europe, but also in Asia. In addition, earnings were negatively impacted by scheduled plant turnarounds as well as by production losses at the cracker in Port Arthur, Texas Port Arthur is a city in Jefferson County within the Beaumont-Port Arthur metropolitan area and is situated in southeast Texas. As of the 2000 U.S. Census, the city had a total population of 57,755. . Earnings were therefore significantly lower than in the first quarter of 2005. Raw material prices are expected to continue to rise in the second quarter. Sales and earnings in the second quarter will also be impaired by the scheduled turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. of the crackers in Port Arthur Port Arthur, city, Canada Port Arthur: see Thunder Bay, Ont., Canada. Port Arthur, city, China Port Arthur: see Lüshun, China. and Ludwigshafen, and by the temporary shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of the cracker at the site in Antwerp, Belgium, as the result of a power outage Noun 1. power outage - equipment failure resulting when the supply of power fails; "the ice storm caused a power outage" power failure equipment failure, breakdown - a cessation of normal operation; "there was a power breakdown" . Intermediates Sales increased in all regions and product lines, in particular due to higher volumes. Considerably higher raw material costs put margins under pressure, especially at our new THF THF tetrahydrofolic acid. THF tetrahydrofolic acid. plant in Caojing, China. Earnings declined as a result. The THF and PolyTHF(R) plants in Yokkaichi, Japan, were closed in the first quarter of 2006 as announced last year. Plastics -- Segment earnings increase significantly -- Polyurethanes business continues to perform well -- Integrated isocyanate i·so·cy·a·nate n. Any of a family of nitrogenous chemicals that are used in industry and can cause respiratory disorders, especially asthma, if inhaled. site in Caojing, China, to start operations in mid- mid- pref. Middle: midbrain. 2006
Overview Plastics 1st Quarter
Million EUR Change
2006 2005 in %
Sales 3,091 2,800 10
ThereofStyrenics 1,151 1,136 1
Performance Polymers 750 689 9
Polyurethanes 1,190 975 22
EBITDA 456 380 20
EBIT before special items 332 269 23
EBIT before special items in percent of
sales 10.7 9.6 -
EBIT 331 268 24
In the Plastics segment, sales rose thanks to higher volumes, increased sales prices and positive currency effects (volumes 3%, prices 2%, currencies 5%). The significant increase in earnings was primarily due to the Polyurethanes division. Styrenics Volumes remained unchanged and sales and earnings increased slightly compared with the first quarter of 2005. The temporary loss of production at the styrene sty·rene n. A colorless oily liquid from which polystyrenes, plastics, and synthetic rubber are produced. Also called vinylbenzene. plant in Ludwigshafen and persistently high raw material prices prevented a significant increase in earnings. To strengthen this division, we plan to acquire Lanxess' business with styrene-acrylonitrile (SAN) copolymers in Europe and South America. The transaction is subject to approval by the relevant antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. authorities. Performance Polymers Although sales increased due to higher volumes, earnings were below the high level posted in the first quarter of 2005. This was due to higher raw material costs, which we were unable to pass on to our customers to a sufficient extent. In addition, earnings were impacted by the startup of the PBT PBT Provider Backbone Transport (networking technology adding determinism to ethernet) PBT Polybutylene Terephthalate PBT Profit Before Tax PBT Paper Based Test (education) plant in Kuantan, Malaysia, which was constructed in a joint venture with Toray Industries Toray Industries, Inc. (東レ株式会社 Tōre Kabushiki-gaisha , Inc. Leuna Miramid GmbH, which was acquired in November 2005, made a positive contribution to earnings. Polyurethanes The strong business performance recorded in the previous year continued in all regions in the first quarter of 2006. We significantly increased sales and earnings thanks to higher volumes worldwide and higher sales prices. In Geismar, Louisiana Louisiana (ləwē'zēăn`ə, l ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , we acquired a production plant for DNT DNT Document & Network TechnologiesDNT Dinitrotoluene DNT Dynamic Network Technologies DNT Do Not Type DNT Dodonu Ni Taukei Party (Fiji political party) DNT Do Not Touch DNT Dialed Number Trigger DNT Do Not Translate - precursor precursor /pre·cur·sor/ (pre´kur-ser) something that precedes. In biological processes, a substance from which another, usually more active or mature, substance is formed. In clinical medicine, a sign or symptom that heralds another. for polyurethanes - from Air Products and Chemicals Inc., Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York . The integrated isocyanate site in Caojing, China, is scheduled to start operations in mid-2006 as planned. Performance Products -- Strong sales growth in all operating divisions -- Earnings rise due to strong business with coatings -- Agreement with Degussa on the acquisition of the construction chemicals business
Overview Performance Products 1st Quarter
Million EUR Change
2006 2005 in %
Sales 2,147 1,908 13
ThereofPerformance Chemicals 764 694 10
Coatings 591 472 25
Functional Polymers 792 742 7
EBITDA 329 304 8
EBIT before special items 248 225 10
EBIT before special items in percent of sales 11.6 11.8 -
EBIT 247 224 10
In the Performance Products segment, we recorded significantly higher sales in all divisions as a result of an increase in volumes, higher prices and positive currency effects (volumes 4%, portfolio 1%, prices 3%, currencies 5%). We also posted a further increase in earnings compared with the same period of the previous year. This was due in particular to strong business in the Coatings division. We reached an agreement with Degussa AG to acquire Degussa's construction chemicals business. Thanks to this forward integration, we will further improve BASF's strong position as a partner to the construction industry. Our goal is to expand the highly profitable construction chemicals business, which is both very innovative and cyclically resilient See resiliency. . We expect the transaction to close by the middle of 2006. Performance Chemicals Sales rose in particular due to strong business with performance chemicals for the automotive and oil industry and for detergents and formulators. All regions contributed to this sales growth. Earnings improved further despite higher raw material costs. Coatings We increased sales and earnings considerably thanks to strong business with automotive (OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and ) and automotive refinish re·fin·ish tr.v. re·fin·ished, re·fin·ish·ing, re·fin·ish·es To put a new finish on (furniture). re·fin coatings, in particular in Asia and North America, and with industrial coatings An industrial coating is a paint or coating defined by its protective, rather than its aesthetic properties, although it can provide both. The most common use of industrial coatings is for corrosion control of steel or concrete. in Europe and decorative paints in South America. We benefited from the upturn in the automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. . We also gained new customers in the automotive refinish coatings business. Functional Polymers Functional polymers are polymers with advanced optic and/or electronic properties. Advantages of functional polymers are low cost, ease of processing and a range of attractive mechanical characteristics for functional organic molecules. The increase in sales was due primarily to higher sales volumes of superabsorbents and products for the adhesives and construction industry. Earnings were slightly lower than in the strong first quarter of 2005. With raw material prices remaining high, acrylic acrylic, artificial fiber made from a special group of vinyl compounds, primarily acrylonitrile. Acrylic fibers are thermoplastic (i.e., soften when heated, reharden upon cooling), have low moisture regain, are low in density, and can be made into bulky fabrics. monomers were subject to increased price pressure. The business was also negatively impacted by restructuring among customers in the paper industry. Agricultural Products & Nutrition -- Earnings down on previous year's quarter despite a slight increase in sales -- Portfolio optimization continues in the Agricultural Products division -- Fine Chemicals demonstrates growth in aroma chemicals aroma chemical, n an odorous chemical with useful properties that is also legal and safe to use as a flavor or fragrance. and fat-soluble vitamins Fat-soluble vitamins Fat-soluble vitamins can be dissolved in oil or in melted fat. Mentioned in: sub> Deficiency
Overview Agricultural Products 1st Quarter
Million EUR Change
2006 2005 in %
Sales 928 959 (3)
EBITDA 333 332 -
EBIT before special items 213 276 (23)
EBIT before special items in percent of sales 23.0 28.8 -
EBIT 280 284 (1)
Sales in the Agricultural Products division declined compared with the first quarter of 2005 (volumes -4%, portfolio -1%, prices/currencies 2%). This was due mainly to subdued sub·due tr.v. sub·dued, sub·du·ing, sub·dues 1. To conquer and subjugate; vanquish. See Synonyms at defeat. 2. To quiet or bring under control by physical force or persuasion; make tractable. 3. demand for fungicides This page aims to list well-known chemical compounds, to stimulate the creation of Wikipedia articles. This list is not necessarily complete or up to date – if you see an article that should be here but isn't (or one that shouldn't be here but is), please update the page to combat soybean rust Soybean rust, also known as Asian soybean rust, is a disease that affects soybeans and other legumes. It is caused by two types of fungi, Phakopsora pachyrhizi and Phakopsora meibomiae. P. in Brazil and North America. The appreciation of the real and low prices for agricultural products are putting pressure on our customers in Brazil. Our herbicides business developed positively, especially in North America and Europe. In Asia and Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. , we posted higher sales in all indications. Income from operations before special items declined as a result of lower sales volumes of fungicides, higher research costs, and higher expenses associated with the development of new market segments. Our ongoing portfolio optimization measures resulted in special income. In March 2006, we sold the generics business of Micro Flo Company LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , Memphis, Tennessee For the ancient Egyptian capital, see . Memphis is a city in the southwest corner of Tennessee, and the county seat of Shelby County. Memphis rises above the Mississippi River on the 4th Chickasaw Bluff just below the mouth of the Wolf River. , to Arysta LifeScience North America Corporation.
Overview Fine Chemicals 1st Quarter
Million EUR Change
2006 2005 in %
Sales 448 395 13
EBITDA 40 50 (20)
EBIT before special items 11 20 (45)
EBIT before special items in percent of sales 2.5 5.1 -
EBIT 10 20 (50)
Sales volumes increased, in particular for aroma chemicals and vitamins A and E for animal nutrition. Orgamol Group's contract manufacturing business, which was acquired in October 2005 also contributed to the rise in sales (volumes 7%, portfolio 6%, prices -5%, currencies 5%). Declining prices for lysine and vitamin C and significantly higher raw material costs, for example for crude sugar, increased pressure on margins. Fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). in the vitamin C business declined due to the closure of the plant in Grenaa, Denmark, as well as a number of restructuring measures carried out in 2005. Overall, earnings were below the previous year's level but were nevertheless significantly higher than in the fourth quarter of 2005. Oil & Gas -- Sales and earnings rise significantly -- Exploration and production benefits from higher oil prices -- Volumes and margins improve considerably in natural gas trading
Overview Oil & Gas 1st Quarter
Million EUR Change
2006 2005 in %
Sales 2,985 1,840 62
ThereofExploration and production 1,081 693 56
Natural gas trading 1,904 1,147 66
EBITDA 953 590 62
ThereofExploration and production 707 459 54
Natural gas trading 246 131 88
EBIT before special items 848 484 75
ThereofExploration and production 638 386 65
Natural gas trading 210 98 114
EBIT before special items in percent of
sales 28.4 26.3 -
ThereofExploration and production 59.0 55.7 -
Natural gas trading 11.0 8.5 -
EBIT 848 484 75
ThereofExploration and production 638 386 65
Natural gas trading 210 98 114
Sales increased significantly due to a considerable rise in the price of oil, a slight increase in natural gas production and the expansion of the natural gas trading business (volumes 11%, prices/currencies 51%). These factors resulted in a strong increase in earnings. Natural gas production was increased in the exploration and production business sector. Crude oil production declined slightly as a result of scheduled maintenance work at production facilities. Compared with the same quarter of 2005, the average price of Brent crude rose by $14/barrel to $62/barrel. In euro terms, this corresponds to an increase of EUR15/barrel to EUR51/barrel. The natural gas trading business sector recorded high volumes, in particular because of the long, cold winter in Europe. Compared with the same period of the previous year, sales prices were significantly higher and margins improved. Earnings more than doubled. Debottlenecking of the STEGAL long-distance gas pipeline through the German regions of Saxony Saxony (săk`sənē), Ger. Sachsen, Fr. Saxe, state (1994 pop. 4,901,000), 7,078 sq mi (18,337 sq km), E central Germany. Dresden is the capital. and Thuringia was completed at the end of March 2006, further increasing our east-west transport capacities. Regions -- Europe: Strong increase in earnings thanks to the Oil & Gas segment -- North America (NAFTA NAFTA in full North American Free Trade Agreement Trade pact signed by Canada, the U.S., and Mexico in 1992, which took effect in 1994. Inspired by the success of the European Community in reducing trade barriers among its members, NAFTA created the world's ): Positive earnings trend continues -- Asia: Growth due to Nanjing Verbund site -- South America: Difficult market environment in the agricultural products business
Overview Regions Sales Sales
(location of company) (location of customer)
---------------- ---------------------- --------------------------
Change Change
Million EUR 2006 2005 in % 2006 2005 in %
1st Quarter
Europe 7,786 6,102 28 7,415 5,851 27
Thereof
Germany 5,757 4,310 34 2,972 2,201 35
North America
(NAFTA) 2,637 2,265 16 2,617 2,243 17
Asia Pacific 1,648 1,299 27 1,777 1,366 30
South America,
Africa, Middle
East 444 417 6 706 623 13
12,515 10,083 24 12,515 10,083 24
Overview Regions EBIT before
special items
---------------- ----------------------
Change
Million EUR 2006 2005 in %
1st Quarter
Europe 1,420 1,134 25
Thereof
Germany 1,015 742 37
North America
(NAFTA) 298 271 10
Asia Pacific 115 87 32
South America,
Africa, Middle
East 32 71 (55)
1,865 1,563 19
In Europe, sales by location of company increased by 28% in the first quarter of 2006. EBIT before special items rose by EUR286 million to EUR1,420 million. The higher sales and earnings were primarily due to the contribution of the Oil & Gas segment. First-quarter sales by location of company in North America rose by 7% in dollar terms. The sales growth was due in particular to the Chemicals and Plastics segments. EBIT before special items increased by EUR27 million to EUR298 million. In the Chemicals segment, earnings were negatively impacted by the temporary shutdown of the cracker in Port Arthur, Texas. The Plastics segment benefited from strong demand for polyurethanes. We further optimized our portfolio in the Agricultural Products & Nutrition segment by selling the generics business of Micro Flo Company LLC, Memphis, Tennessee. In Asia Pacific, we increased sales in local currencies by 19%. EBIT before special items rose EUR28 million to EUR115 million. Growth in the Chemicals segment was due especially to the Verbund site in Nanjing, China, which started operations in the second quarter of 2005. The Performance Products segment additionally benefited from the strengthened Coatings business following the acquisition of remaining shares in a joint venture in Japan in 2005. Sales by location of company in South America, Africa, Middle East declined by 11% in local currency terms. EBIT before special items was EUR39 million lower than in the same period of 2005 because of the difficult market environment in the agricultural products business in Brazil. The Coatings division recorded strong business, in particular for decorative paints. Consolidated Statements of Income
1st Quarter Full
Year
Million EUR Change
2006 2005 in % 2005
Sales 12,515 10,083 24.1 42,745
Cost of sales 8,888 6,845 29.8 29,567
Gross profit on sales 3,627 3,238 12.0 13,178
Selling expenses 1,103 1,004 9.9 4,330
General and administrative
expenses 186 164 13.4 780
Research and development expenses 305 250 22.0 1,064
Other operating income 250 126 98.4 601
Other operating expenses 434 447 (2.9) 1,775
Income from operations 1,849 1,499 23.3 5,830
(Expenses)/income from financial
assets 15 71 (78.9) 348
Interest result (48) (40) (20.0) (170)
Other financial result 54 14 285.7 (82)
Financial result 21 45 (53.3) 96
Income before taxes and minority
interests 1,870 1,544 21.1 5,926
Income taxes 853 622 37.1 2,758
Net income before minority
interests 1,017 922 10.3 3,168
Minority interests 67 61 9.8 161
Net income 950 861 10.3 3,007
Earnings per shares (EUR ) 1.87 1.60 16.9 5.73
Number of shares, in million
(weighted) 509 537 (5.2) 525
The interim financial statements have not been audited. The previous year's figures have been adjusted as follows: Expenses in the Oil & Gas segment related to exploration for oil and gas deposits and to dry holes are now recorded as other operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. rather than as research and development expenses. In association with the change to standard IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. 19, actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin gains and losses from the valuation of pension obligations are recognized against retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. in the reporting period in which they occur. Consolidated Balance Sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm.
Assets
March March Dec.
31, 31, Change 31, Change
Million EUR 2006 2005 in % 2005 in %
Long-term assets
Intangible assets 3,662 3,543 3.4 3,720 (1.6)
Property, plant and
equipment 13,976 13,202 5.9 13,987 (0.1)
Investments accounted for
using the equity method 267 1,165 (77.1) 244 9.4
Other financial assets 866 930 (6.9) 813 6.5
Deferred taxes 1,046 1,211 (13.6) 1,255 (16.7)
Other long-term assets 521 585 (10.9) 524 (0.6)
20,338 20,636 (1.4) 20,543 (1.0)
Short-term assets
Inventories 5,364 4,964 8.1 5,430 (1.2)
Accounts receivable,
trade 7,529 6,589 14.3 7,020 7.3
Other receivables and
miscellaneous short-term
assets 1,694 2,224 (23.8) 1,586 6.8
Liquid funds 3,115 3,007 3.6 1,091 185.5
17,702 16,784 5.5 15,127 17.0
Total assets 38,040 37,420 1.7 35,670 6.6
Stockholders' equity
March March Dec.
31, 31, Change 31, Change
Million EUR 2006 2005 in % 2005 in %
Stockholders' equity
Subscribed capital 1,301 1,371 (5.1) 1,317 (1.2)
Capital surplus 3,118 3,043 2.5 3,100 0.6
Retained earnings 12,525 12,533 (0.1) 11,928 5.0
Other comprehensive
income 680 11 696 (2.3)
Minority interests 478 413 15.7 482 (0.8)
18,102 17,371 4.2 17,523 3.3
Long-term liabilities
Provisions for pensions
and similar obligations 1,419 4,133 (65.7) 1,547 (8.3)
Other provisions 2,788 2,315 20.4 2,791 (0.1)
Deferred taxes 640 831 (23.0) 699 (8.4)
Financial indebtedness 3,629 1,966 84.6 3,682 (1.4)
Other long-term
liabilities 1,033 1,064 (2.9) 1,043 (1.0)
9,509 10,309 (7.8) 9,762 (2.6)
Short-term liabilities
Accounts payable, trade 2,770 2,879 (3.8) 2,777 (0.3)
Provisions 3,046 2,547 19.6 2,763 10.2
Tax liabilities 1,252 1,110 12.8 887 41.1
Financial indebtedness 1,719 1,455 18.1 259 .
Other short-term
liabilities 1,642 1,749 (6.1) 1,699 (3.4)
10,429 9,740 7.1 8,385 24.4
Total stockholders'
equity and liabilities 38,040 37,420 1.7 35,670 6.6
Consolidated Statements of Cash Flows January - March Million EUR 2006 2005 Net income 950 861 Depreciation and amortization of long-term assets 552 521 Changes in net working capital 61 (175) Miscellaneous items (115) (103) Cash provided by operating activities 1,448 1,104 Payments related to tangible and intangible assets (493) (393) Acquisitions/divestitures (7) 139 Financial investments and other items 195 38 Cash using in investing activities (305) (216) Proceeds from capital increases/repayments (377) (264) Changes in financial liabilities 1,407 143 Dividends (85) (19) Cash used in financing activities 945 (140) Net changes in cash and cash equivalents 2,088 748 Cash and cash equivalents as of beginning of year and other changes 911 2,094 Cash and cash equivalents 2,999 2,842 Marketable securities 116 165 Liquid funds 3,115 3,007 At EUR1,448 million, cash provided by operating activities was EUR344 million higher than in the first quarter of 2005. This was due to higher earnings as well as a reduction in net working capital. Cash used in investing activities amounted to EUR305 million compared with EUR216 million in the same period of 2005. Payments related to tangible and intangible fixed assets were below the level of depreciation and amortization on fixed assets. We spent EUR396 million on share buybacks. Of this amount, EUR339 million was associated with the EUR1.5 billion share buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program that was completed in mid-February 2006. EUR57 million was associated with the new EUR500 million program that is scheduled to run until the Annual Meeting in 2007. In the first quarter, a total of 6.3 million shares were bought back for an average price of EUR63.20 per share. Liquid funds rose by EUR2,024 million to EUR3,115 million. At EUR5,348 million, financial indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. was EUR1,407 million higher than on December 31, 2005. Net debt declined by EUR617 million to EUR2,233 million. The equity ratio at the end of the first quarter was 47.6%. Consolidated Statements of Recognized Income and Expense
Income and expense items
January - March
Million EUR 2006 2005
Net income before minority interests 1,017 922
Fair value changes in available-for-sale securities 56 (15)
Cash-flow hedges 16 16
Change in foreign currency translation adjustments (83) 77
Actuarial gains/losses from pensions and other
obligations 55 39
Deferred taxes (14) (22)
Minority interests (5) 11
Total income and expenses recognized in equity 25 106
Total income and expense for the period 1,042 1,028
Thereof BASF 979 956
Thereof minority interests 63 72
Development of income Retained earnings Other comprehensive income
and expense recognized
directly in equity
Actuarial Foreign Fair value
gains/losses currency changes in
translation available-
adjustment for-
sale
securities
Million EUR
As of January 1, 2006 (894) 475 258
Additions 55 - 56
Releases - (83) -
Deferred taxes (9) 2 (1)
As of March 31, 2006 (848) 394 313
As of January 1, 2005 (234) (226) 193
Additions 39 77 -
Releases - - (15)
Deferred taxes (15) (1) -
As of March 31, 2005 (210) (150) 178
Development of income Other Total
and expense compre- income and
recognized hensive expense
directly in equity income recognized
directly in
equity
Cash- Total of
flow other
hedges comprehen-
sive income
Million EUR
As of January 1, 2006 (37) 696 (198)
Additions 16 72 127
Releases - (83) (83)
Deferred taxes (6) (5) (14)
As of March 31, 2006 (27) 680 (168)
As of January 1, 2005 (27) (60) (294)
Additions 16 93 132
Releases - (15) (15)
Deferred taxes (6) (7) (22)
As of March 31, 2005 (17) 11 (199)
Consolidated Statements of Stockholders' Equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets.
January - March 2006 Number of Subscribed Capital
subscribed capital surplus
shares
outstanding
Million EUR
As of January 1, 2006 514,379,000 1,317 3,100
Share buy-back and cancellation
of own shares including own
shares intended to
be cancelled (6,259,000) (16) 18
Capital injection by minority
interests - - -
Dividends paid - - -
Net income - - -
Income and expense recognized
directly
in equity - - -
Change in scope of consolidation
and
other changes - - -
As of March 31, 2006 508,120,000 1,301 3,118
January - March 2006 Retained Other com- Minority Stock-
earnings prehensive interests holders'
income equity
Million EUR
As of January 1, 2006 11,928 696 482 17,523
Share buy-back and
cancellation of own shares
including own shares
intended to
be cancelled (398) - - (396)
Capital injection by minority
interests - - 18 18
Dividends paid - - (85) (85)
Net income 950 - 67 1,017
Income and expense recognized
directly
in equity 46 (16) (5) 25
Change in scope of
consolidation and
other changes (1) - 1 -
As of March 31, 2006 12,525 680 478 18,102
January - March 2005 Number of Subscribed Capital Retained
subscribed capital surplus earnings
shares
outstanding
Million EUR
As of January 1, 2005 540,440,410 1,384 3,028 11,923
Share buy-back and
cancellation of own
shares including own
shares intended to
be cancelled (5,091,410) (13) 15 (276)
Capital injection by
minority interests - - - -
Dividends paid - - - -
Net income - - - 861
Income and expense
recognized directly
in equity - - - 24
Change in scope of
consolidation and
other changes - - - 1
As of March 31, 2005 535,349,000 1,371 3,043 12,533
January - March 2005 Other com- Minority Stock-
prehensive interests holders'
income equity
Million EUR
As of January 1, 2005 (60) 328 16,603
Share buy-back and
cancellation of own
shares including own
shares intended to
be cancelled - - (274)
Capital injection by
minority interests - 10 10
Dividends paid - (19) (19)
Net income - 61 922
Income and expense
recognized directly
in equity 71 11 106
Change in scope of
consolidation and
other changes - 22 23
As of March 31, 2005 11 413 17,371
Segment Reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four
Segments Sales EBITDA
Million EUR
1st Quarter 2006 2005 in % 2006 2005 in %
Chemicals 2,239 1,822 22.9 452 544 (16.9)
Plastics 3,091 2,800 10.4 456 380 20.0
Performance Products 2,147 1,908 12.5 329 304 8.2
Agricultural
Products &
Nutrition 1,376 1,354 1.6 373 382 (2.4)
Agricultural
Products 928 959 (3.2) 333 332 0.3
Fine Chemicals 448 395 13.4 40 50 (20.0)
Oil & Gas 2,985 1,840 62.2 953 590 61.5
Other(1) 677 359 88.6 (162) (181) 10.5
12,515 10,083 24.1 2,401 2,019 18.9
Segments Income from operations Income from
before special items operations (EBIT)
Million EUR
1st Quarter 2006 2005 in % 2006 2005 in %
Chemicals 317 426 (25.6) 317 426 (25.6)
Plastics 332 269 23.4 331 268 23.5
Performance Products 248 225 10.2 247 224 10.3
Agricultural Products &
Nutrition 224 296 (24.3) 290 304 (4.6)
Agricultural Products 213 276 (22.8) 280 284 (1.4)
Fine Chemicals 11 20 (45.0) 10 20 (50.0)
Oil & Gas 848 484 75.2 848 484 75.2
Other(1) (104) (137) 24.1 (184) (207) 11.1
1,865 1,563 19.3 1,849 1,499 23.3
Segments Research and Assets(b)
development expenses
1st Quarter
-------------------- ------------------------------------------------
Chemicals 31 27 14.8 6,198 5,416 14.4
Plastics 41 34 20.6 6,894 6,530 5.6
Performance Products 60 50 20.0 4,936 4,711 4.8
Agricultural
Products &
Nutrition 97 86 12.8 6,854 6,700 2.3
Agricultural
Products 80 68 17.6 5,365 5,402 (0.7)
Fine Chemicals 17 18 (5.6) 1,489 1,298 14.7
Oil & Gas - 1 - 4,798 4,017 19.4
Other(1) 76 52 46.2 8,360 10,046 (16.8)
305 250 22.0 38,040 37,420 1.7
Segments Additions to Amortization and
fixed assets(c) depreciation(c)
1st Quarter
------------------------------------------------------------------
Chemicals 162 88 84.1 135 118 14.4
Plastics 218 82 165.9 125 112 11.6
Performance Products 81 54 50.0 82 80 2.5
Agricultural Products &
Nutrition 37 31 19.4 83 78 6.4
Agricultural Products 15 12 25.0 53 48 10.4
Fine Chemicals 22 19 15.8 30 30 0.0
Oil & Gas 75 94 (20.2) 105 106 (0.9)
Other(1) 27 13 107.7 22 26 (15.4)
600 362 65.7 552 520 6.2
(a) "Other" includes the fertilizers business and other businesses as well as expenses, income and assets not allocated to the segments. This item also includes foreign currency results from financial indebtedness that are not allocated to the segments, hedging of forecasted sales as well as from currency positions that are macro-hedged {EUR55 million in the first quarter (first quarter 2005 EUR(45) million)}. (b) The assets of "Other" includes the assets of the fertilizers business and other businesses as well as assets that are not allocated to the segments (financial assets Financial assets Claims on real assets. , liquid funds, financial receivables, deferred taxes; first quarter 2006: EUR6,685 million, first quarter 2005: EUR8,388 million). (c) Tangible and intangible fixed assets Forward-looking statements This report contains forward-looking statements under the U.S. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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. {The Annual Report on Form 20-F is available on the Internet at corporate.basf.com/20-f-report.} We do not assume any obligation to update the forward-looking statements contained in this report.
- Important Dates -- Contacts
- August 2, 2006 -- Corporate Media Relations:
Interim Report Second Quarter Michael Grabicki
2006 Phone: +49 621 60-99938
Fax: +49 621 60-92693
- November 2, 2006
Interim Report Third Quarter -- Investor Relations:
2006 Magdalena Moll
Phone: +49 621 60-48230
Fax: +49 621 60-22500
-- General inquires:
Phone: +49 621 60-0
- Annual Meetings Fax: +49 621 60-42525
- May 4, 2006, Mannheim -- Internet: corporate.basf.com
- April 26, 2007, Mannheim -- BASF Aktiengesellschaft
67056 Ludwigshafen
Germany
You can find this and other publications from BASF on the Internet at corporate.basf.com. You can also order the reports --by telephone: +49 621 60-91827 -- by fax: +49 621 60-20162 -- on the Internet: corporate.basf.com/mediaorders |
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