BASF Continues to Grow Profitably.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
-- Higher sales (plus 11 percent) and EBIT before special items (plus
13 percent)
-- Earnings impacted by high raw material prices and hurricanes in
the United States
-- Cost saving goals increased in North America
-- Outlook for full year 2005 improved further:
-- Significant increase in sales and EBIT before special items
-- Further increase in premium on cost of capital
BASF (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. ) continued on its growth path in the third quarter of 2005. This was confirmed by a further improvement in the figures presented at the company's Fall Press Conference in Ludwigshafen. The strong business performance seen in the first half of the year maintained its momentum in the third quarter. The summer lull was less pronounced than expected. With strong demand on the one hand, and very high and very volatile oil volatile oil n. A rapidly evaporating oil of plant derivation, especially an essential oil, that is capable of distillation and that does not leave a stain. Also called ethereal oil. prices on the other, necessary price increases could be passed on to the market only to a limited degree. Compared with the same quarter of 2004, sales increased by 11 percent to 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. 10.4 billion. Income from operations (EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ) before special items rose by 13 percent to more than EUR 1.3 billion. Cumulative sales for the first nine months of the year rose by more than 12 percent to EUR 31 billion. BASF's profitable growth is underlined by the fact that EBIT before special items increased by 26 percent to EUR 4.5 billion. Optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op outlook for the full year 2005 Demand for BASF's products remains strong. Further increases in raw materials and energy costs continue to put pressure on margins. For the full year 2005, Dr. Jurgen Jurgen regaining his lost youth, he has strange “adventures with a host of mythical persons. [Am. Lit.: Jurgen in Magill I, 464] See : Fantasy Jurgen Hambrecht, Chairman of the Board of Executive Directors of BASF Aktiengesellschaft Aktiengesellschaft (IPA: ['aktsiəngəzεlʃaft]; abbreviated AG) is a German term that refers to a corporation that is limited by shares, i.e., owned by shareholders. , expects significantly higher sales and EBIT before special items compared with the previous year's strong level. "We therefore expect to further increase the premium earned on our cost of capital," he said. In the fourth quarter of 2005, BASF does not anticipate earnings to reach the strong level posted in 2004. Reasons for this include: --Expected earnings impairments of EUR 120 million as a result of production losses due to the hurricanes in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . --The lack of gains of EUR 80 million posted in the fourth quarter of 2004 as a result of mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. accounting for derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. associated with the weak U.S. dollar. Necessary price increase in all chemical segments BASF's Chief Financial Officer, Dr. Kurt Kurt is a given name. Its principal English variant is Curt, while others include Cord, Curd, and Kort. It originated as a short form of Curtis, Konrad (Conrad), and Kunibert. Bock Noun 1. bock - a very strong lager traditionally brewed in the fall and aged through the winter for consumption in the spring bock beer lager beer, lager - a general term for beer made with bottom fermenting yeast (usually by decoction mashing); originally , took special note of the company's net income of EUR 808 million: "That is more than double the figure of EUR 366 million that we posted in the same quarter of 2004." At EUR 2.5 billion, net income in the first nine months of 2005 exceeded the strong level for full year 2004 by almost half a billion euros. The sales growth was primarily due to necessary and, in some cases, overdue OVERDUE. A bill, note, bond or other contract, for the payment of money at a particular day, when not paid upon the day, is overdue. 2. The indorsement of a note or bill overdue, is equivalent to drawing a new bill payable at sight. 2 Conn. 419; 18 Pick. price increases in all the company's chemical segments. With these price increases, BASF responded to massively higher raw material prices, which resulted in additional costs of more than EUR 1 billion in the first nine months of the year. After special items of EUR 65 million, third-quarter EBIT rose by 17 percent to EUR 1,262 million. The level of special items was comparable to that in previous quarters. Special items were related to 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). measures and programs to increase efficiency at a number of sites. The financial result increased by EUR 303 million to EUR 176 million. About two-thirds of this increase was due to special income from the sale of the stake in Basell, which was completed on August 1, 2005. The increase in earnings per share to EUR 1.55 from EUR 0.67 was due to the company's continued 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 and the associated reduction in the number of shares outstanding. In the third quarter of 2005, BASF bought back shares for EUR 250 million. From January January: see month. through to the end of October October: see month. 2005 (cutoff: October 27), the company bought back shares for EUR 1,228 million at an average share price of EUR 54.24. As a result, BASF has repurchased 19.3 percent of its shares since starting its share buyback program in 1999. At EUR 1,285 million, payments related to tangible and intangible fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → in the first nine months of 2005 were lower than in the same period of 2004 and, as planned, below the corresponding level of depreciation and amortization. Link between gas and oil prices reasonable and logical BASF board member Dr. John Feldmann John Feldmann, also goes by Feldy (born 1967) is an American musician and producer who is the lead singer of the band Goldfinger. He is known as an animal rights advocate and supporter of the Animal Liberation Front. noted in his remarks that it was both reasonable and logical to link gas prices to the price of oil. "Oil and gas compete with one another in their most common applications. Because oil is a globally traded commodity, its price is therefore the most suitable basis for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. gas contracts. Such long-term contracts are essential for ensuring supply security for Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). ." Furthermore, gas markets in which prices were not linked to the price of oil, such as the United Kingdom and the United States, demonstrated much greater volatility and higher average prices, said Feldmann Feldmann is the name of:
At the same time, Feldmann also stressed that BASF provides its customers with very flexible contracts via its WINGAS joint venture with the Russian Russian associated in some way with Russia. Russian blue a breed of cats with short, dense, silver-tipped blue-colored coat and vivid green eyes. gas company Gazprom JSC Gazprom (RTS:B>GAZP MICEX:B>GAZP LSE: OGZD; Russian: ОАО Газпром, sometimes transcribed as Gasprom[1] : "We offer different pricing formulas that include prices based on spot markets, for example in Zeebrugge Zeebrugge (zā`brŭ'gə), outer port of Bruges (Brugge), West Flanders prov., NW Belgium, on the North Sea. Zeebrugge was developed c.1900 to replace the silted-up port of Bruges; it is connected to Bruges by a 6-mi (9. , Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. , or fixed-price components as well as prices linked to the price of oil. The majority of our customers, however, opt for a link to the price of oil as the key pricing component." Higher sales in all regions In the third quarter of 2005, BASF recorded higher sales in all regions. Asia remained dynamic, and the economic environment in 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. was robust despite the hurricanes. In parts of 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). , however,
economic growth was weak, especially in Germany.BASF's chairman stressed the company's successful restructuring measures in North America, which, he said, were highlighted by the 25 percent increase in third-quarter EBIT before special items to EUR 110 million. BASF has also identified additional savings potential of $150 million per year in the region that is to be achieved by mid- mid- pref. Middle: midbrain. 2007. This would incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. costs of around $80 million, said Hambrecht. On top of this, the company has initiated steps to increase its EBIT in North America by $200 million per year by the end of 2007. It aims to use a Commercial Effectiveness program to increase the efficiency of its marketing activities and reduce the complexity of its business. This will be done by adjusting price structures, logistics, warehousing and business models to reflect altered market conditions. 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 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 2004, BASF had approximately 82,000 employees and posted sales of more than EUR 37 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. The following information is also available on the Internet at the addresses shown: Interim report (from 7:30 a.m. CET) www.basf.de/interimreport (English) www.basf.de/zwischenbericht (German) Press release (from 7:30 a.m. CET) www.basf.de/pressrelease (English) www.basf.de/pressemitteilungen (German) Live transmission of the press conference (from 10:30 a.m. CET) www.basf.de/pcon (English) www.basf.de/pk (German) Speech Dr. Jurgen Hambrecht/Dr. Kurt Bock/Dr. John Feldmann - printed version (from 10:30 a.m. CET) www.basf.de/pressconference (English) www.basf.de/pressekonferenz (German) Press photos (from 7:30 a.m. CET) www.basf.de/photos (English) www.basf.de/fotos (German) Information on BASF shares www.basf.de/share (English) www.basf.de/aktie (German) Live transmission of the analysts' conference (from 3:30 p.m. CET) www.basf.de/share (English) www.basf.de/aktie (German) 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. This release 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. We do not assume any obligation to update the forward-looking statements contained in this release.
BASF continues to grow profitably
Third-Quarter Results
July - September 2005, published on November 2, 2005
Overview BASF Group
3rd Quarter January - September
Change Change
Million EUR 2005 2004 in % 2005 2004 in %
Sales 10,361 9,314 11.2 31,025 27,679 12.1
Income from operations
before interest, taxes
amortization and
depreciation (EBITDA) 1,843 1,679 9.8 6,011 5,108 17.7
Income from operations
(EBIT) before special
items 1,327 1,172 13.2 4,547 3,613 25.9
Income from operations
(EBIT) 1,262 1,076 17.3 4,348 3,401 27.8
Financial result 176 (127) . 139 (155) .
Income before taxes and
minority interests 1,438 949 51.5 4,487 3,246 38.2
Net income 808 366 120.8 2,447 1,600 52.9
Earnings per share (EUR) 1.55 0.67 131.3 4.63 2.90 59.7
EBIT before special items
in percent of sales 12.8 12.6 - 14.7 13.1 -
Cash provided by
operating activities 1,929 1,579 22.2 4,010 3,785 5.9
Additions to fixed
assets* 408 491 (16.9) 1,620 1,475 9.8
Excluding acquisitions 408 466 (12.4) 1,252 1,390 (9.9)
Amortization and
depreciation* 581 603 (3.6) 1,663 1,707 (2.6)
Segment assets (end of
period)** 28,106 27,371 2.7 - - -
Personnel costs 1,419 1,388 2.2 4,089 4,048 1.0
Number of employees (end
of period) 80,695 84,784 (4.8) - - -
* Tangible and intangible fixed assets (including acquisitions)
** Tangible and intangible fixed assets, inventories and
business-related receivables
Starting from January 1, 2005, the accounting and reporting of the
BASF Group is performed according to International Financial Reporting
Standards (IFRS). The previous year's figures have been restated in
accordance with IFRS.
Contents
1 BASF Group Business Review and Outlook
2 Chemicals
4 Plastics
5 Performance Products
6 Agricultural Products & Nutrition
7 Oil & Gas
8 Regions
9 Consolidated Statements of Income
10 Consolidated Balance Sheets
11 Consolidated Statements of Cash Flows
13 Consolidated Statements of Equity
14 Segment Reporting
BASF shares 3rd Jan. -
Quarter Sept.
2005 2005
Share price (end of period)* (EUR) 62.50 -
High* (EUR) 62.50 62.50
Low* (EUR) 53.80 50.11
Average daily trade (million shares)* 2.76 2.74
BASF share performance** +13.6% +21.9%
DAX 30 performance** +10.0% +18.5%
EURO STOXX 50 performance** +8.0% +18.9%
Market capitalization (end of period)
(billion EUR) 33.2 -
Number of shares (end of period)
(million shares)*** 531.7 -
News from our innovation centers
Functional coatings for modern pharmaceuticals
BASF supports pharmaceutical manufacturers worldwide with a full range of excipients excipients, n.pl all the constituents of a remedy that lack medicinal properties. See also adjuvant, auxiliary substance, and vehicle. The coating of tablets can fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. a variety of purposes, such as masking mask·ing n. 1. The concealment or the screening of one sensory process or sensation by another. 2. An opaque covering used to camouflage the metal parts of a prosthesis. a bitter taste, delaying active ingredient An active ingredient, also active pharmaceutical ingredient (or API), is the substance in a drug that is pharmaceutically active. Some medications may contain more than one active ingredient. release, enhancing consumption or modifying color. Besides sugar solutions or 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. derivatives, innovative polymers are mainly used to coat tablets - such as those from BASF's Kollicoat(R) family. Apart from offering the possibility of creating special functions In mathematics, special functions are particular functions such as the trigonometric functions that have useful or attractive properties, and which occur in different applications often enough to warrant a name and attention of their own. through modifications, these molecule chains have one decisive advantage: The coating with Kollicoat in modern drum coaters now requires just a few hours. The latest member of the product family is Kollicoat IR, an instant-release film coating based on a new polymer developed by BASF. In August 2005, Kollicoat IR was approved by the German authorities. Thanks to its excellent properties, the innovative tablet See digitizer tablet and tablet computer. TABLET - A query language. ["Human Factor Comparison of a Procedural and a Non-procedural Query Language", C. Welty et al, ACM Trans Database Sys 6(4):626-649 (Dec 1981)]. coating helps our customers to save up to 30 percent on their production costs. "BASF offers pharmaceutical manufacturers a full range of excipients to help turn promising active agents into successful medications," explains Dr. Jan-Peter Mittwollen of Strategic Marketing for Pharmaceuticalexcipients at BASF. Even a simple headache headache Pain in the upper portion of the head. Episodic tension headaches are the most common, usually causing mild to moderate pain on both sides. They result from sustained contraction of face and neck muscles, often due to fatigue, stress, or frustration. tablet can contain several BASF products. There are four types of excipients that can be distinguished: --Binders (e.g., Kollidon(R) 30) help in the manufacturing of tablets, so that for example a tablet can still be made out of active ingredients that are difficult to compress. --Disintegrants (e.g., Kollidon CL) ensure through high swelling swelling /swell·ing/ (swel´ing) 1. transient abnormal enlargement of a body part or area not due to cell proliferation. 2. an eminence, or elevation. that the tablet disintegrates quickly, allowing the active ingredient to be rapidly released. --Coatings (e.g., Kollicoat IR) protect the tablets and make them easier to swallow swallow, common name for small perching birds of almost worldwide distribution. There are about 100 species of swallows, including the martins, which belong to the same family. Swallows have long, narrow wings, forked tails, and weak feet. . In addition, the film coatings control the release of the active ingredient from the tablet. --Solubilizers (e.g., Solutol(R) HS 15) make it possible for a human body to accept an active ingredient that is not easily soluble soluble /sol·u·ble/ (sol´u-b'l) susceptible of being dissolved. sol·u·ble adj. Capable of being dissolved, especially easily dissolved. in water. Each active ingredient places different demands on pharmaceutical technology: Acid-sensitive drugs, for example, have to be protected against aggressive gastric juices gastric juice, thin, strongly acidic (pH varying from 1 to 3), almost colorless liquid secreted by the glands in the lining of the stomach. Its essential constituents are the digestive enzymes pepsin and rennin (see rennet), hydrochloric acid, and mucus. . Other active ingredients, such as antihypertensive drugs Antihypertensive Drugs Definition Antihypertensive drugs are medicines that help lower blood pressure. Purpose The overall class of antihypertensive agents lowers blood pressure, although the mechanisms of action vary greatly. , need to be released smoothly and continuously over 24 hours. Research and innovation are not only part of the development of a new active ingredient. On average, about 15% of the price of a pharmaceutical product account for the techniques that deliver the active ingredients to their targets in the body. News from our innovation centers Harnessing nature to make plants healthier F 500 sets new standards and brings researchers nomination for prestigious German Future Prize Farmers around the world now rely on products based on BASF's innovative fungicide fungicide (fŭn`jəsīd', fŭng`gə–), any substance used to destroy fungi. Some fungi are extremely damaging to crops (see diseases of plants), and others cause diseases in humans and other animals (see fungal infection). F 500(R) to protect their crops from pathogenic path·o·gen·ic or path·o·ge·net·ic adj. 1. Having the capability to cause disease. 2. Producing disease. 3. Relating to pathogenesis. fungi Fungi (fŭn`jī), kingdom of heterotrophic single-celled, multinucleated, or multicellular organisms, including yeasts, molds, and mushrooms. The organisms live as parasites, symbionts, or saprobes (see saprophyte). . F 500 combats fungal diseases fungal diseases or mycoses Diseases caused by any fungus that invades the tissues. Superficial fungal infections (e.g., athlete's foot) are confined to the skin. such as Asian 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. , scabby scab·by adj. 1. Having, consisting of, or covered with scabs. 2. Affected with scab or scabies. in apple trees or mildew mildew, name for certain fungi and protists, for the diseases they cause in various crops, and for the discoloration (and sometimes the weakening and disintegration) they cause in such materials as leather, fabrics, and paper. in wine. What's special about F 500 is that it also makes crops healthier and more vital due to its positive metabolic met·a·bol·ic adj. Of, relating to, or resulting from metabolism. Metabolic Refers to the chemical processes of an organ or organism. impact. This increases yield and quality. "If we succeed in making plants healthier, this will be a great step forward for agriculture," says Hans HANS Head and Neck Support/System (brace worn by motor sport drivers; trademark of Hubbard/Downing, Inc.) HANS Health Action Network Society HANS Heavy Aromatic Naphtha Solvent W. Reiners, president of BASF's Agricultural Products division. The nomination of two BASF scientists, Dr. Hubert Hubert may refer to:
v. t. 1. To fry lightly and quickly, as meat, by turning or tossing it over frequently in a hot pan greased with a little fat. n. 1. Psalter. and Klaus Klaus is a German given name and surname. It originated as a short form of Nikolaus, a German form of the given name Nicholas. Notable persons whose family name is Klaus
v. cov·et·ed, cov·et·ing, cov·ets v.tr. 1. To feel blameworthy desire for (that which is another's). See Synonyms at envy. 2. To wish for longingly. See Synonyms at desire. prize are not only of outstanding scientific value, but also ripe for successful application. This year, the prize will be awarded on November November: see month. 11 in Berlin. The first strobilurin Strobilurins are a group of chemical compounds used in agriculture as fungicides. They are part of the larger group of QoI inhibitors, which act to inhibit the respiratory chain at the level of Complex III. fungicide was launched in 1996. In 2002, BASF set a new standard in this exciting class of chemistry with F 500. Sales of products containing this active ingredient have risen steadily since then. The most recent successes were achieved in the fight against Asian rust 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. . F 500 is the result of BASF's systematic research and development work. The strobiliurins derive from a chemical compound produced by a small forest mushroom mushroom, type of basidium fungus characterized by spore-bearing gills on the underside of the umbrella- or cone-shaped cap. The name toadstool is popularly reserved for inedible or poisonous mushrooms, but this classification has no scientific basis. , the pinecone cap (Strobiluris tenacellus), to prevent other types of mushrooms from moving in and stealing its food. This natural fungicide, strobilurin A, could not be used in agriculture because it was too sensitive to light and air. Therefore, chemists This is a list of famous chemists: (alphabetical order) : Top - 0–9 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A
In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. ways to change its structure without reducing the biological activity. This is how the new chemical class of strobilurins was developed, a substance with an unparalleled spectrum of activity against pathogenic fungi and a very positive environmental profile. BASF Group Business Review and Outlook
-- Profitable growth
-- Sales: +11 %
-- EBIT before special items: +13%
-- Growth impetus from new Verbund site in Nanjing, China
-- Earnings impacted by high raw material prices and hurricanes in
the United States
-- Outlook for full year 2005 improved further:
-- Sales and EBIT before special items significantly higher than
in 2004
-- Further increase in premium on cost of capital
Sales Compared with the same period of 2004, we increased sales in the third quarter of 2005 by 11 % to EUR 10.4 billion. This was due to higher sales prices in our chemical businesses, higher oil prices and increased sales volumes. Factors influencing sales in comparison with previous year % of sales 3rd Quarter Jan. - Sept. Volumes 4 2 Prices 6 11 Currencies 2 (1) Acquisitions/divestitures (1) . Total 11 12 The strong sales growth in the Chemicals segment resulted from higher sales volumes of petrochemicals and inorganics. The new 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, provided significant growth impetus Impetus is a stimulus or impulse, a moving force that sparks momentum. Impetus may also refer to:
In the Plastics segment, we achieved double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. sales growth in the Performance Polymers and Polyure-thanes divisions.
Sales by segment, 3rd quarter 2005
Million EUR
Chemicals 2005 2,063 14%
2004 1,811
Plastics 2005 2,957 5%
2004 2,827
Performance 2005 2,106 2%
Products 2004 2,068
2005 1,008 (3)%
Agricultural Products & Nutrition 2004 1,035
Oil & Gas 2005 1,630 40%
2004 1,163
Despite the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the printing systems business in November 2004, sales also rose in the Performance Products segment due to further price increases. Volumes declined slightly in the Agricultural Products segment. The Fine Chemicals division continued to suffer from low prices for 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 C or 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. . Sales in the Oil & Gas segment improved due to higher oil prices as well as higher sales volumes of oil and gas.
Special items
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Million EUR 2005 2004 2005 2004 2005 2004 2005 2004
Special items in
Income from
operations (64) (100) (70) (16) (65) (96) 175
Financial result - (21) - (1) 222 (16) (580)
Income before taxes
and minority
interests (64) (121) (70) (17) 157 (112) (405)
Earnings Compared with the same quarter of 2004, we increased income from operations (EBIT) before special items by 13% to EUR 1,327 million. In the Chemicals segment, earnings were below the strong level posted in the third quarter of 2004. Significantly higher raw material prices, in particular for petrochemicals, could not immediately be passed on to the market. The significant improvement in earnings in the Plastics segment was due primarily to a considerable increase in margins in the 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. division during the course of the year.In the Performance Products segment, earnings were at the same level as in the third quarter of 2004 despite the divestiture of the printing systems business. This was due mainly to the 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. division. The Agricultural Products business posted a loss due to the seasonal nature of its business. Margins in the Fine Chemicals division remained under pressure and performance is still unsatisfactory. In the Oil & Gas segment, the business sector exploration and production posted significantly higher earnings. Earnings in the natural gas trading sector were negatively impacted by lower margins. In the third quarter, EBIT after special items rose by 17% to EUR 1,262 million. Special items were related to restructuring measures and programs to increase efficiency at a number of sites. The financial result contains special income from the sale of our stake in Basell, which was completed on August 1, 2005.
EBIT before special items, 3rd quarter 2005
Million EUR
Chemicals 2005 268 (27)%
2004 367
Plastics 2005 267 48%
2004 180
Performance 2005 216 -
Products 2004 216
2005 (23) .
Agricultural Products & Nutrition 2004 4
Oil & Gas 2005 594 29%
2004 459
Income before taxes and minority interests climbed 52% to EUR 1,438 million. The tax rate declined to 43% from 57% in the third quarter of 2004, mainly as a result of the tax-free tax-free adj. Not subject to taxation; tax-exempt. tax-free Adjective not needing to have tax paid on it: a tax-free lump sum Adj. 1. gain from the sale of the stake in Basell. Taxes for oil production that are noncompensable with German corporate income tax amounted to EUR 317 million in the third quarter of 2005 compared with EUR 197 million in the same period of 2004. Net income more than doubled to EUR 808 million. Earnings per share were EUR 1.55 compared with EUR 0.67 in the same period of the previous year. Outlook We continue to expect global chemical production to grow by approximately 3% in 2005. Growth is likely to be driven primarily by Asia, but also by North America. For 2005, we are forecasting an average dollar exchange rate of $1.25 per euro. We have adjusted our forecast for the average price 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. in 2005 from $50 to $55 per barrel. Demand for our products remains strong. Further increases in raw material and energy costs continue to put pressure on our margins. For the full year 2005, we are expecting significantly higher sales and EBIT before special items compared with the previous year's strong level (IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System ). We therefore expect to further increase the premium earned on our cost of capital. In the fourth quarter of 2005, we do not expect earnings to reach the strong level posted in 2004. Reasons for this include: --Expected earnings impairments of EUR 120 million as a result of production losses due to the hurricanes in the United States. --The lack of gains of EUR 80 million posted in the fourth quarter of 2004 as a result of mark-to-market accounting for derivatives associated with the weak U.S. dollar. Significant events On September September: see month. 28, BASF and SINOPEC officially inaugurated their Verbund site in Nanjing, China. BASF and SINOPEC now plan to invest in additional downstream From the provider to the customer. Downloading files and Web pages from the Internet is the downstream side. The upstream is from the customer to the provider (requesting a Web page, sending e-mail, etc.). plants and in expanding the capacity of the steam 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 at the new Nanjing site. On September 8, BASF, Gazprom and Eon signed a basic agreement on the construction of the North European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Gas Pipeline (NEGP NEGP North European Gas Pipeline NEGP National Education Goals Panel ) through the Baltic Sea Baltic Sea, arm of the Atlantic Ocean, c.163,000 sq mi (422,170 sq km), including the Kattegat strait, its northwestern extension. The Øresund, Store Bælt, and Lille Bælt connect the Baltic Sea with the Kattegat and Skagerrak straits, which lead to the . On October 14, BASF agreed with Gazexport to procure To cause something to happen; to find and obtain something or someone. Procure refers to commencing a proceeding; bringing about a result; persuading, inducing, or causing a person to do a particular act; obtaining possession or control over an item; or making a person nine billion cubic meters Noun 1. cubic meter - a metric unit of volume or capacity equal to 1000 liters cubic metre, kiloliter, kilolitre metric capacity unit - a capacity unit defined in metric terms of Russian natural gas per year for 25 years through the NEGP for Western European consumers starting in 2010 - this corresponds to more than 200 billion cubic meters of natural gas in total. On October 17, BASF announced that it will transfer about EUR 3.7 billion into a newly established CTA An abbreviation for cum testamento annexo, Latin for "with the will annexed." (Contractual Trust Arrangement) by the end of 2005 to finance pension obligations. The benefit levels for employees and pensioners of BASF Aktiengesellschaft remain unchanged. As a result of this measure, BASF is improving the international comparability of its financial reporting. BASF's financial and strategic flexibility will not be affected. Chemicals --Further significant increase in sales --Earnings impaired due to decline in cracker margins --Boost to sales from new plants in Nanjing, China
Overview Chemicals
3rd Quarter January - September
Change Change
Million EUR 2005 2004 in % 2005 2004 in %
Sales 2,063 1,811 14 5,892 5,141 15
ThereofInorganics 270 214 26 745 626 19
Petrochemicals 1,309 1,097 19 3,672 3,063 20
Intermediates 484 500 (3) 1,475 1,452 2
EBITDA 408 469 (13) 1,429 1,282 11
EBIT before special items 268 367 (27) 1,109 958 16
EBIT before special items in
percent of sales 13.0 20.3 - 18.8 18.6 -
EBIT 259 338 (23) 1,030 907 14
At over EUR 2 billion, sales reached a record high (volumes 9%, portfolio 3%, prices 2%). This was due primarily to higher sales volumes of petrochemicals and the expansion of our portfolio of inorganics. It was not possible to match the very strong levelof earnings posted in the same period of 2004 due to higher raw material prices and plant shutdowns as a result of the hurricanes in the United States. Inorganics The significant increase in sales was achieved thanks to the acquisition of the electronic chemicals business in April 2005 as well as higher sales volumes. Earnings were at the previous year's level. Higher purchasing costs for natural gas had a negative impact on the 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. business. Margins for basic 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. chemicals improved, however. Petrochemicals Sales were boosted by strong global demand for petrochemicals together with additional sales volumes from the new plants started up in Nanjing, China. In the course of the quarter, cracker margins declined to an unsatisfactory level due to significantly lower olefin olefin (ō`ləfĭn) or olefin series: see alkene. olefin or alkene Any unsaturated hydrocarbon containing one or more pairs of carbon atoms linked by a double bond (see prices, in particular in Europe, and a simultaneous increase in the cost of naphtha naphtha (năp`thə, năf`–), term usually restricted to a class of colorless, volatile, flammable liquid hydrocarbon mixtures. . In 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 ), earnings were negatively impacted by plant shutdowns made necessary by the hurricanes in the United States. Margins for plasticizers plasticizers mostly triaryl phosphates, such as tricresyl, triphenyl phosphates, which are poisonous. See also triorthocresyl phosphate. and solvents were maintained, and earnings for alkylene oxides and glycols improved. Our new world-scale plants in Nanjing, China, are operating at a high capacity utilization rate Capacity utilization rate The percentage of the economy's total plant and equipment that is currently in production. Usually, a decrease in this percentage signals an economic slowdown, while an increase signals economic expansion. . We are planning to expand the capacity of the steam cracker at our Verbund site in Antwerp Antwerp, city, Belgium Antwerp, Du. Antwerpen, Fr. Anvers, city (1991 pop. 467,518), capital of Antwerp prov., N Belgium, on the Scheldt River. , Belgium, to more than 1 million metric tons of ethylene ethylene (ĕth`əlēn') or ethene (ĕth`ēn), H2C=CH2, a gaseous unsaturated hydrocarbon. It is the simplest alkene. per year. Intermediates The rigorous implementation of our "value over volume" strategy enabled us to raise prices. Sales volumes were to some extent impaired by the textiles dispute between China, the United States and the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community . Overall, sales declined slightly. Lower capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. and higher raw material costs led to a decline in earnings. Plastics --Sales growth due to higher prices and increased sales volumes --Improved earnings in Polyurethanes and Performance Polymers --Globalexpansion of innovative and cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. HPPO technology
Overview Plastics
3rd Quarter January - September
Change Change
Million EUR 2005 2004 in % 2005 2004 in %
Sales 2,957 2,827 5 8,681 7,656 13
ThereofStyrenics 1,135 1,276 (11) 3,399 3,213 6
Performance Polymers 743 644 15 2,164 1,906 14
Polyurethanes 1,079 907 19 3,118 2,537 23
EBITDA 382 293 30 1,162 859 35
EBIT before special items 267 180 48 810 515 57
EBIT before special items in
percent of sales 9.0 6.4 - 9.3 6.7 -
EBIT 260 169 54 808 494 64
The sales growth (volumes 2%, portfolio -1 %, prices 2%, currencies 2%) was primarily the result of higher sales prices in the Polyurethanes division as well as higher sales volumes in the Performance Polymers division. The significant rise in earnings was mainly due to the improvement in the polyurethanes business and simultaneous cost reductions. The Performance Polymers division also posted higher earnings. Margins for styrenics, however, remained under pressure. Styrenics The decline in sales compared with the strong third quarter of 2004 was due to lower sales prices and sales volumes. This was essentially the result of weaker global demand and the divestiture of the polystyrene polystyrene (pŏl'ēstī`rēn), widely used plastic; it is a polymer of styrene. Polystyrene is a colorless, transparent thermoplastic that softens slightly above 100°C; (212°F;) and becomes a viscous liquid at around 185°C; business in the United States. High and volatile raw material prices continued to impact earnings. Performance Polymers Price increases to pass on higher raw material costs and higher sales volumes of polyamide polyamide material used in the creation of nonabsorbable, synthetic, nylon sutures. in all regions led to an increase in sales. In Asia, we further expanded our engineering plastics business and increased compounding capacities at our site in Pasir Gudang Pasir Gudang is a industrial town located 35 km east of Johor Bahru in Malaysia (LAT: ). It is the western end of the Johor Bahru metropolitan area. The population is around 70,000. , Malaysia Malaysia (məlā`zhə), independent federation (2005 est. pop. 23,953,000), 128,430 sq mi (332,633 sq km), Southeast Asia. The official capital and by far the largest city is Kuala Lumpur; Putrajaya is the adminstrative capital. . The growth in earnings was due mainly to higher volumes, since margins remained generally stable. In August this year, we acquired Leuna-Miramid GmbH GmbH Gesellschaft mit Beschränkter Haftung (German: limited liability company; business entity) to further extend our leading position in engineering plastics in Europe. Closing for this deal is expected in November 2005. Polyurethanes We increased sales in all regions thanks to significant price increases and slightly higher sales volumes. The TDI TDI - Transport Driver Interface business acquired from Huntsman in July July: see month. 2005 also contributed to the sales growth. Earnings rose significantly. In early 2006, BASF and Dow (Direct OverWrite) See magneto-optic disk. plan to start work on the construction of a propylene oxide propylene oxide a gas used to disinfect animal feeds. plant at BASF's Verbund site in Antwerp, Belgium. The new plant will employ the cost-effective, innovative HPPO technology. New plants are also planned in the United States and in Asia. Performance Products --Sales increase further despite divestiture --Earnings in Functional Polymers remain strong --High capacity utilization at new plants in Nanjing, China
Overview Performance Products
3rd Quarter January - September
Change Change
Million EUR 2005 2004 in % 2005 2004 in %
Sales 2,106 2,068 2 6,112 6,026 1
ThereofPerformance Chemicals 722 830 (13) 2,150 2,451 (12)
Coatings 561 516 9 1,588 1,541 3
Functional Polymers 823 722 14 2,374 2,034 17
EBITDA 299 307 (3) 969 922 5
EBIT before special items 216 216 - 713 659 8
EBIT before special items in
percent of sales 10.3 10.4 - 11.7 10.9 -
EBIT 209 214 (2) 715 647 11
Thanks to further price increases, sales rose despite the divestiture of the printing systems business in November 2004 (volumes -1 %, portfolio -5%, prices 6%, currencies 2%). Earnings remained at the previous year's level. The Functional Polymers division continued on its profitable growth path in the third quarter of 2005 and made a significant contribution to the segment's strong profitability. Performance Chemicals Sales from ongoing business were increased in all regions due to higher sales prices, although higher volumes were posted only for performance chemicals for the automotive and oil industry. The positive earnings trend for performance chemicals for detergents and formulators and for the automotive and oil industry was unable to offset fully the decline in earnings for performance chemicals for coatings, plastics and specialties, and for leather. Coatings Sales rose due to strong sales volumes of 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 ) coatings in Europe and North America (NAFTA) and thanks to brisk Brisk as a proper name may refer to:
tr.v. re·fin·ished, re·fin·ish·ing, re·fin·ish·es To put a new finish on (furniture). re·fin coatings in North America. Earnings declined because of further increases in raw material costs, which could not be passed on quickly, in particular in the automotive coatings business. To strengthen our portfolio of 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. , we agreed to acquire the coil coatings business of Rhenania Coatings GmbH in October 2005. The deal is expected to close by the end of this year. Functional Polymers We increased sales further in all regions, in particular due to the contribution from 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, adhesive adhesive, substance capable of sticking to surfaces of other substances and bonding them to one another. The term adhesive cement is sometimes used in place of adhesive, especially when referring to a synthetic adhesive. raw materials and dispersions for decorative paints. Sales grew faster than the market thanks to price increases. Compared with the same period of 2004, earnings rose significantly as a result of better margins and high capacity utilization. The integrated plant complex to produce acrylic acid acrylic acid /acryl·ic ac·id/ a readily polymerizing liquid used as a monomer for acrylic polymers. at the site in Nanjing, China, has been producing at a very high capacity utilization rate since it went on stream. Agricultural Products & Nutrition --Agricultural Products: Sales and earnings down slightly on 2004 --Fine Chemicals: Earnings affected by lysine
Overview Agricultural Products
3rd Quarter January - September
Change Change
Million EUR 2005 2004 in % 2005 2004 in %
Sales 576 591 (3) 2,578 2,645 (3)
EBITDA 43 45 (4) 726 653 11
EBIT before special items (24) (11) (118) 547 482 13
EBIT before special items in
percent of sales (4.2) (1.9) - 21.2 18.2 -
EBIT (12) (29) 59 563 440 28
Third-quarter sales (volumes-2%, prices/currencies -1 %) and earnings were lower than in the same period of 2004. In North America, soybean rust has spread to a lesser extent than was initially expected. Sales volumes declined slightly. We systematically increased spending on research and development. We further optimized our portfolio by selling our non-European business with the herbicide herbicide (hr`bəsīd'), chemical compound that kills plants or inhibits their normal growth. A herbicide in a particular formulation and application can be described as selective or nonselective. imazamethabenz to the Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. company Nufarm in September 2005. This resulted in special income. 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. , the business made a good start to the new season in the second half of the quarter.
Overview Fine Chemicals
3rd Quarter January - September
Change Change
Million EUR 2005 2004 in % 2005 2004 in %
Sales 432 444 (3) 1,249 1,358 (8)
EBITDA 34 41 (17) 96 189 (49)
EBIT before special items 1 15 (93) 28 95 (71)
EBIT before special items in
percent of sales 0.2 3.4 - 2.2 7.0 -
EBIT 1 3 (67) 2 82 (98)
Sales volumes increased for numerous products, including fat-soluble vitamins Fat-soluble vitamins Fat-soluble vitamins can be dissolved in oil or in melted fat. Mentioned in: sub> Deficiency , organic acids and aroma chemicals aroma chemical, n an odorous chemical with useful properties that is also legal and safe to use as a flavor or fragrance. . The Fine Chemicals division nevertheless continued to suffer from low market prices for the important products lysine and vitamin C. This had a negative impact on sales (volumes 5%, portfolio -2%, prices -7%, currencies 1%) and earnings. Earnings were also affected by a further increase in raw material costs. The acquisition of the Swiss fine chemical company Orgamol successfully closed on October 1, 2005. This transaction will strengthen our pharma contract manufacturing business. Oil & Gas --Exploration and production: Higher oil price and increased production --Natural gas trading: Strong sales growth, but margins impacted by higher import prices
Overview Oil & Gas 3rd Quarter January - September
Change Change
Million EUR 2005 2004 in % 2005 2004 in %
Sales 1,630 1,163 40 5,120 3,647 40
Thereof Exploration and
production 904 643 41 2,459 1,754 40
Natural gas trading 726 520 40 2,661 1,893 41
EBITDA 697 582 20 1,973 1,454 36
Thereof Exploration and
production 644 463 39 1,712 1,118 53
Natural gas trading 53 119 (55) 261 336 (22)
EBIT before special items 594 459 29 1,657 1,141 45
Thereof Exploration and
production 572 371 54 1,491 898 66
Natural gas trading 22 88 (75) 166 243 (32)
EBIT before special items in
percent of sales 36.4 39.5 - 32.4 31.3 -
Thereof Exploration and
production 63.3 57.7 - 60.6 51.2 -
Natural gas trading 3.0 16.9 - 6.2 12.8 -
EBIT 594 459 29 1,657 1,148 44
Thereof Exploration and
production 572 371 54 1,491 905 65
Natural gas trading 22 88 (75) 166 243 (32)
In the third quarter, a record average price for Brent crude of $61.63 per barrel and higher production volumes caused sales to rise significantly (volumes 4%, prices/currencies 36%), as did an expansion in natural gas trading. Earnings before oil production taxes included in tax expense increased by EUR 135 million. In the exploration and production business sector, the significant increase in sales and earnings was primarily due to the significant increase in crude oil prices. The average price of Brent crude was approximately $20 (EUR 17) higher per barrel compared with the same period of 2004. Furthermore, production of oil, condensate condensate, matter in the form of a gas of atoms, molecules, or elementary particles that have been so chilled that their motion is virtually halted and as a consequence they lose their separate identities and merge into a single entity. and natural gas was raised. The pipeline through the North Sea linking the Mittelplate drilling and production island to the Dieksand land station in Germany started operations as scheduled in September 2005. We succeeded in increasing sales volumes and sales in the natural gas trading business sector. However, margins and earnings were significantly lower compared with the same period of 2004 because the terms of sales Terms of sale Conditions under which a firm proposes to sell its goods or services for cash or credit. contracts did not allow sales prices to be adjusted immediately to reflect constantly increasing import prices for natural gas. In 2004, third-quarter earnings also contained a one-time payment from an arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the settlement. In September, we signed a basic agreement with our Russian partner Gazprom and Eon on the construction of the North European Gas Pipeline (NEGP) through the Baltic Sea. Furthermore, in October BASF agreed with Gazexport to procure a totalof 200 billion cubic meters of natural gas through the NEGP over a period of 25 years starting in 2010. Regions --Sales growth in all regions --North America: Additional measures to improve earnings --Asia: New Verbund site in Nanjing, China, exceeds ambitious goals
Overview Regions Sales Sales
(location of company) (location of customer)
Change Change
Million EUR 2005 2004 in % 2005 2004 in %
3rd Quarter
Europe 5,802 5,370 8 5,436 5,058 7
Thereof Germany 3,927 3,610 9 2,097 1,728 21
North America (NAFTA) 2,291 2,042 12 2,266 2,058 10
Asia Pacific 1,645 1,323 24 1,820 1,413 29
South America, Africa,
Middle East 623 579 8 839 785 7
10,361 9,314 11 10,361 9,314 11
January - September
Europe 18,082 16,563 9 17,116 15,625 10
Thereof Germany 12,378 11,141 11 6,351 5,515 15
North America (NAFTA) 7,141 6,164 16 7,097 6,207 14
Asia Pacific 4,395 3,590 22 4,746 3,907 21
South America, Africa,
Middle East 1,407 1,362 3 2,066 1,940 6
31,025 27,679 12 31,025 27,679 12
Overview Regions EBIT before special items
Change
Million EUR 2005 2004 in %
3rd Quarter
Europe 1,015 889 14
Thereof Germany 703 623 13
North America (NAFTA) 110 88 25
Asia Pacific 113 106 7
South America, Africa, Middle East 89 89 -
1,327 1,172 13
January - September
Europe 3,348 2,739 22
Thereof Germany 2,217 1,928 15
North America (NAFTA) 732 391 87
Asia Pacific 295 272 8
South America, Africa, Middle East 172 211 (18)
4,547 3,613 26
Third-quarter sales by location of company in Europe increased by 8%. EBIT before special items rose by EUR 126 million to EUR 1,015 million. The Oil & Gas segment was mainly responsible for the sales and earnings growth. In North America, sales by location of company improved by 12% in dollar terms, and EBIT before special items improved by EUR 22 million to EUR 110 million. Production losses due to the hurricanes negatively impacted sales and earnings. In addition to the cost savings of $250 milion we have already achieved, we are now working to save a further $150 million in the region by mid-2007. In the same period, we are planning to increase EBIT by $200 million by means of even more effective market activities. In Asia Pacific, companies increased sales in local currencies by 21 %. EBIT before special items rose EUR 7 million to EUR 113 million. This was due to the new Verbund site in Nanjing, China, and the successful polyurethanes business in Korea. In South America, Africa, Middle East, sales by location of company declined 8% in local currency terms. EBIT before special items was unchanged at EUR 89 million. The Agricultural Products division made a good start to the new season in the second half of the quarter. In the Performance Products segment, we increased sales and earnings thanks to substantially higher sales volumes of decorative paints.
Consolidated Statements of Income
3rd Quarter January - September
Change Change
Million EUR 2005 2004 in % 2005 2004 in %
Sales 10,361 9,314 11.2 31,025 27,679 12.1
Cost of sales 7,277 6,423 13.3 21,205 18,784 12.9
Gross profit on sales 3,084 2,891 6.7 9,820 8,895 10.4
Selling expenses 1,083 1,128 (4.0) 3,172 3,385 (6.3)
General and administrative
expenses 194 180 7.8 551 528 4.4
Research and development
expenses 326 309 5.5 901 850 6.0
Other operating income 96 64 50.0 278 271 2.6
Other operating expenses 315 262 20.2 1,126 1,002 12.4
Income from operations 1,262 1,076 17.3 4,348 3,401 27.8
(Expenses)/income from
financial assets 219 (2) . 332 56 492.9
Interest result (40) (50) 20.0 (131) (159) 17.6
Other financial results (3) (75) 96.0 (62) (52) (19.2)
Financial result 176 (127) . 139 (155) .
Income before taxes and
minority interests 1,438 949 51.5 4,487 3,246 38.2
Income taxes 622 537 15.8 1,941 1,534 26.5
Net income before minority
interests 816 412 98.1 2,546 1,712 48.7
Minority interests 8 46 (82.6) 99 112 (11.6)
Net income 808 366 120.8 2,447 1,600 52.9
Earnings per share (EUR ) 1.55 0.67 131.3 4.63 2.90 59.7
Number of shares, in
million (weighted) 521 546 (4.6) 528 551 (4.2)
The interim financial statements have not been audited. From January 1, 2005, the financial statements were prepared 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 International Financial Reporting Standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). (IFRS); the previous year's figures have been restated. The transition in accounting and valuation methods and the reconciliation to IFRS for the 2004 figures are described on page 15 ff of the Interim Report for the first quarter of 2005. As of the second quarter of 2005, we record the current expenses or income from combined interest rate and currency swaps Currency Swap A swap that involves the exchange of principal and interest in one currency for the same in another currency. Notes: Currency swaps were originally done to get around the problem of exchange controls. in the interest result rather than under other financial results. The previous year's figures have been restated to allow comparison.
Consolidated Balance Sheets
Assets Sept. 30, Sept. 30, Change Dec. 31, Change
Million EUR 2005 2004 in % 2004 in %
Long-term assets
Intangible assets 3,710 3,840 (3.4) 3,610 2.8
Property, plant and
equipment 13,659 13,580 0.6 13,007 5.0
Investments accounted for
using the equity method 241 1,684 (85.7) 1,092 (77.9)
Other financial assets 936 931 0.5 941 (0.5)
Deferred taxes 1,088 1,080 0.7 1,067 2.0
Other long-term assets 616 600 2.7 598 3.0
20,250 21,715 (6.7) 20,315 (0.3)
Short-term assets
Inventories 5,354 4,716 13.5 4,645 15.3
Accounts receivable, trade 6,306 6,126 2.9 5,861 7.6
Other receivables and
miscellaneous short-term
assets 1,804 1,964 (8.1) 2,073 (13.0)
Liquid funds 4,311 1,582 172.5 2,291 88.2
17,775 14,388 23.5 14,870 19.5
Total assets 38,025 36,103 5.3 35,185 8.1
Stockholders' equity and liabilities
Million EUR Sept. 30, Sept. 30, Change Dec. 31, Change
2005 2004 in % 2004 in %
Stockholders' equity
Subscribed capital 1,330 1,396 (4.7) 1,384 (3.9)
Capital surplus 3,078 3,016 2.1 3,022 1.9
Retained earnings 12,579 12,028 4.6 12,154 3.5
Other comprehensive income 572 5 . (166) .
Minority interests 444 371 19.7 347 28.0
18,003 16,816 7.1 16,741 7.5
Long-term liabilities
Provisions for pensions and
similar obligations 3,930 3,949 (0.5) 3,866 1.7
Other provisions 2,455 2,391 2.7 2,385 2.9
Deferred taxes 991 656 51.1 817 21.3
Financial indebtedness 3,561 1,888 88.6 1,845 93.0
Other liabilities 954 1,020 (6.5) 1,043 (8.5)
11,891 9,904 20.1 9,956 19.4
Short-term liabilities
Accounts payable, trade 2,332 2,739 (14.9) 2,372 (1.7)
Provisions 2,896 2,626 10.3 2,508 15.5
Tax liabilities 969 886 9.4 644 50.5
Financial indebtedness 318 1,533 (79.3) 1,453 (78.1)
Other liabilities 1,616 1,599 1.1 1,511 6.9
8,131 9,383 (13.3) 8,488 (4.2)
Total stockholders' equity
and liabilities 38,025 36,103 5.3 35,185 8.1
Consolidated Statements of Cash Flows
January
-September
Million EUR 2005 2004
Net income 2,447 1,600
Depreciation and amortization of long-term
assets 1,663 1,739
Changes in net working capital 199 505
Miscellaneous items (299) (59)
Cash provided by operating activities 4,010 3,785
Payments related to tangible and intangible
fixed assets (1,285) (1,425)
Acquisitions/divestitures 1,017 5
Financial investments and other items 109 (298)
Cash used in investing activities (159) (1,718)
Proceeds from capital increases/(decreases) (1,115) (548)
Changes in financial indebtedness 230 (220)
Dividends (945) (825)
Cash used in financing activities (1,830) (1,593)
Net changes in cash and cash equivalents 2,021 474
Cash and cash equivalents as of beginning of
year and other changes 2,125 539
Cash and cash equivalents 4,146 1,013
Marketable securities 165 569
Liquid funds 4,311 1,582
The previous year's figures were restated due the transition to IFRS.
There were no significant changes.
At EUR 4,010 million, cash provided by operating activities in the first three quarters was EUR 225 million higher than in the same period of 2004. This was due primarily to higher earnings. Net working capital decreased even though we expanded our business. Cash used in investing activities led to a cash outflow of EUR 159 million compared with EUR 1,718 million in the first nine months of 2004. At EUR 1,285 million, payments related to tangible and intangible fixed assets were below the previous year's level and were significantly lower than the level of depreciation and amortization on fixed assets. The net effect of acquisitions and divestitures rose to EUR 1,017 million due to the sale of our stake in Basell. In cash used in financing activities, share buybacks and dividend payments led to a cash outflow of EUR 2.1 billion. In the first nine months of 2005, we bought back 21 million shares for EUR 1,124 million or an average of EUR 53.77 per share. Liquid funds increased by EUR 2,020 million since the end of 2004 to EUR 4,311 million, and at EUR 3,879 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 EUR 581 million higher than on December 31, 2004. As of September 30, 2005, net liquidity was EUR 432 million compared with net debt of EUR 1,007 mil An Internet address domain name for a military agency. See Internet address. (networking) mil - The top-level domain for entities affiliated with US armed forces. lion at the end of 2004. The equity ratio was 47%.
Consolidated Statements of Equity
January - September 2005 Number of
Million EUR subscribed
shares Subscribed Capital
outstanding capital surplus
As of January 1, 2005 540,440,410 1,384 3,022
Share buyback and cancellation of
shares including own shares intended
to be cancelled (20,902,229) (54) 56
Capital injection by minority
interests - - -
Dividends paid - - -
Net income - - -
Change in other comprehensive
income* - - -
Conditional capital: Exercise of
conversion rights by former
Wintershall shareholders 819 - -
Change in scope of consolidation
and other changes - - -
As of September 30, 2005 519,539,000 1,330 3,078
January - September 2005 Other Stock-
Million EUR Retained comprehensive Minority holders'
earnings income interests equity
As of January 1, 2005 12,154 (166) 347 16,741
Share buyback and
cancellation of shares
including own shares
intended to be cancelled (1,126) - - (1,124)
Capital injection by
minority interests - - 10 10
Dividends paid (904) - (41) (945)
Net income 2,447 - 99 2,546
Change in other
comprehensive
income* - 738 27 765
Conditional capital:
Exercise of conversion
rights by former
Wintershall shareholders - - - 0
Change in scope of
consolidation
and other changes 8 - 2 10
As of September 30, 2005 12,579 572 444 18,003
January - September 2004 Number of
Million EUR subscribed
shares Subscribed Capital
outstanding capital surplus
As of January 1, 2004 556,643,410 1,425 2,983
Share buyback and cancellation of
shares including own shares intended
to be cancelled (11,493,000) (29) 29
Capital injection by minority
interests - - -
Dividends paid - - -
Net income - - -
Change in other comprehensive
income* - - -
Change in scope of consolidation
and other changes - - 4
As of September 30, 2004 545,150,410 1,396 3,016
January - September 2004 Other Stock-
Million EUR Retained comprehensive Minority holders'
earnings income interests equity
As of January 1, 2004 11,673 28 403 16,512
Share buyback and
cancellation of shares
including own shares
intended to be cancelled (492) - - (492)
Capital injection by
minority interests - - (60) (60)
Dividends paid (774) - (51) (825)
Net income 1,600 - 112 1,712
Change in other
comprehensive
income* - (23) (66) (89)
Change in scope of
consolidation
and other changes 21 - 33 58
As of September 30, 2004 12,028 5 371 16,816
* Contains income-neutral changes in equity (in particular,
translation adjustments and changes in the market value of financial
instruments)
Segment Reporting
Segments
Million EUR Sales EBITDA
3rd Quarter 2005 2004 in % 2005 2004 in %
Chemicals 2,063 1,811 13.9 408 469 (13.0)
Plastics 2,957 2,827 4.6 382 293 30.4
Performance Products 2,106 2,068 1.8 299 307 (2.6)
Agricultural Products &
Nutrition 1,008 1,035 (2.6) 77 86 (10.5)
Agricultural Products 576 591 (2.5) 43 45 (4.4)
Fine Chemicals 432 444 (2.7) 34 41 (17.1)
Oil & Gas 1,630 1,163 40.2 697 582 19.8
Other* 597 410 45.6 (20) (58) 65.5
10,361 9,314 11.2 1,843 1,679 9.8
Research and
3rd Quarter development expenses Assets**
Chemicals 34 26 30.8 5,993 5,374 11.5
Plastics 33 35 (5.7) 6,440 6,426 0.2
Performance Products 55 61 (9.8) 4,864 5,082 (4.3)
Agricultural Products &
Nutrition 98 91 7.7 6,453 6,549 (1.5)
Agricultural Products 80 67 19.4 5,164 5,211 (0.9)
Fine Chemicals 18 24 (25.0) 1,289 1,338 (3.7)
Oil & Gas 58 49 18.4 4,356 3,940 10.6
Other* 48 47 2.1 9,919 8,732 13.6
326 309 5.5 38,025 36,103 5.3
Segments Income from Income from
Million EUR operations operations
before special items (EBIT)
3rd Quarter 2005 2004 in % 2005 2004 in %
Chemicals 268 367 (27.0) 259 338 (23.4)
Plastics 267 180 48.3 260 169 53.8
Performance Products 216 216 - 209 214 (2.3)
Agricultural Products &
Nutrition (23) 4 . (11) (26) 57.7
Agricultural Products (24) (11) . (12) (29) 58.6
Fine Chemicals 1 15 (93.3) 1 3 (66.7)
Oil & Gas 594 459 29.4 594 459 29.4
Other* 5 (54) . (49) (78) 37.2
1,327 1,172 13.2 1,262 1,076 17.3
Additions to fixed Amortization and
3rd Quarter assets*** depreciation***
Chemicals 77 114 (32.5) 149 131 13.7
Plastics 113 102 10.8 122 124 (1.6)
Performance Products 61 62 (1.6) 90 93 (3.2)
Agricultural Products &
Nutrition 33 60 (45.0) 88 112 (21.4)
Agricultural Products 22 22 - 55 74 (25.7)
Fine Chemicals 11 38 (71.1) 33 38 (13.2)
Oil & Gas 106 120 (11.7) 103 123 (16.3)
Other* 18 33 (45.5) 29 20 45.0
408 491 (16.9) 581 603 (3.6)
Segments
Million EUR Sales EBITDA
January - September 2005 2004 in % 2005 2004 in %
Chemicals 5,892 5,141 14.6 1,429 1,282 11.5
Plastics 8,681 7,656 13.4 1,162 859 35.3
Performance Products 6,112 6,026 1.4 969 922 5.1
Agricultural Products &
Nutrition 3,827 4,003 (4.4) 822 842 (2.4)
Agricultural Products 2,578 2,645 (2.5) 726 653 11.2
Fine Chemicals 1,249 1,358 (8.0) 96 189 (49.2)
Oil & Gas 5,120 3,647 40.4 1,973 1,454 35.7
Other* 1,393 1,206 15.5 (344) (251) (37.1)
31,025 27,679 12.1 6,011 5,108 17.7
Research and
January - September development expenses Assets**
Chemicals 89 78 14.1 5,993 5,374 11.5
Plastics 102 99 3.0 6,440 6,426 0.2
Performance Products 152 171 (11.1) 4,864 5,082 (4.3)
Agricultural Products &
Nutrition 276 258 7.0 6,453 6,549 (1.5)
Agricultural Products 223 191 16.8 5,164 5,211 (0.9)
Fine Chemicals 53 67 (20.9) 1,289 1,338 (3.7)
Oil & Gas 128 111 15.3 4,356 3,940 10.6
Other* 154 133 15.8 9,919 8,732 13.6
901 850 6.0 38,025 36,103 5.3
Segments Income from Income from
Million EUR operations operations
before special items (EBIT)
January - September 2005 2004 in % 2005 2004 in %
Chemicals 1,109 958 15.8 1,030 907 13.6
Plastics 810 515 57.3 808 494 63.6
Performance Products 713 659 8.2 715 647 10.5
Agricultural Products &
Nutrition 575 577 (0.3) 565 522 8.2
Agricultural Products 547 482 13.5 563 440 28.0
Fine Chemicals 28 95 (70.5) 2 82 (97.6)
Oil & Gas 1,657 1,141 45.2 1,657 1,148 44.3
Other* (317) (237) (33.8) (427) (317) (34.7)
4,547 3,613 25.9 4,348 3,401 27.8
Additions to fixed Amortization and
January - September assets*** depreciation***
Chemicals 534 432 23.6 399 375 6.4
Plastics 315 314 0.3 354 365 (3.0)
Performance Products 249 196 27.0 254 275 (7.6)
Agricultural Products &
Nutrition 97 171 (43.3) 257 320 (19.7)
Agricultural Products 48 58 (17.2) 163 213 (23.5)
Fine Chemicals 49 113 (56.6) 94 107 (12.1)
Oil & Gas 356 264 34.8 316 306 3.3
Other* 69 98 (29.6) 83 66 25.8
1,620 1,475 9.8 1,663 1,707 (2.6)
* "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 as well as
from currency positions that are macro-hedged (EUR 19 million in
the third quarter (previous year EUR 3 million) and EUR (120)
million in the first nine months (previous year EUR 1 million)).
** 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, liquid funds,
financial receivables, deferred taxes; 3rd quarter 2005: EUR 8,252
million, 3rd quarter 2004: EUR 7,155 million).
*** Tangible and intangible fixed assets
Forward-looking statements This report contains forward-looking statements under the U.S. 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. (The Annual Report on Form 20-F is available on the Internet at www.basf.com.) We do not assume any obligation to update the forward-looking statements contained in this report. --Important Dates --February 22, 2006 Financial Results 2005 --May 4, 2006 Annual Meeting, Mannheim Interim Report First Quarter 2006 --August 2, 2006 Interim Report Second Quarter 2006 --November 2, 2006 Interim Report Third Quarter 2006 You can find HTML versions of this and other publications from BASF on our homepage at www.basf.com. You can also order reports: -- by telephone: +49 621 60-91827 -- by fax: +49 621 60-20162 -- by e-mail: medien-service@basf-ag.de -- on the Internet: www.basf.de/mediaorders |
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