BASF Posts Very Strong Results in Second Quarter Of 2007.* Volume demand remains strong: Second-quarter sales climb to EU14.7 billion (up 19 percent) * EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). before special items reaches EU2.0 billion (up 6 percent) * Further portfolio measures: Strategic options under review for parts of styrenics business * Outlook for 2007 confirmed: Significantly higher sales, EBIT before special items to at least match the previous year's record level LUDWIGSHAFEN, Germany -- 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 - The Chemical Company -(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. ) remains in top form: In the second quarter and first half of 2007, the company again exceeded the record results posted in the same periods of the previous year. In the second quarter, BASF increased sales by 19 percent and income from operations (EBIT) before special items by 6 percent. Cumulative sales in the first half of 2007 amounted to EU29.3 billion, or 18 percent more than in the same period of 2006. In the first half of this year, EBIT before special items rose by approximately 10 percent to EU4.1 billion. "Our significant earnings growth demonstrates that BASF has reached a higher level of sustainable earnings," said Dr. Jurgen Hambrecht, Chairman of the Board of Executive Directors of BASF Aktiengesellschaft when presenting BASF's latest results. BASF has entered the second half of 2007 in stronger form than ever. The demand for chemical products is high, and there are no signs of a summer slowdown. BASF confirms optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op forecast for full-year 2007 Hambrecht expects the economy to continue to develop positively. For 2007, he anticipates global economic growth of approximately 3.5 percent, although with large variations from region to region. BASF's chairman expects an average euro/dollar exchange rate of $1.35 per euro in 2007. Due to the rise in oil prices, the company has increased its assumption 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 2007 to $65 per barrel. Risks are seen as lying in the renewed significant rise in the price of oil, the weak U.S. dollar, and tension in conflict areas around the world. "In our outlook for 2007 we confirm our optimistic expectations: We are confident that we will grow faster than the chemical market. In 2007, we expect significantly higher sales than in 2006. Scheduled plant turnarounds, in particular in the Petrochemicals division, are likely to reduce earnings by EU150 million in the second half of 2007. In addition, we plan to further increase spending on research and development. We nevertheless expect full-year EBIT before special items to at least match the previous year's record level," said Hambrecht. BASF's Chief Financial Officer, Dr. Kurt 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 , commented on the positive development of cash provided by operating activities: "Cash provided by operating activities developed very positively in the second quarter. The cumulative value for the first half was in excess of EU2.7 billion compared with EU2.2 billion in the first half of 2006." Sales in the Chemicals segment rise by 50 percent Second-quarter sales in the Chemicals segment climbed 50 percent due to higher sales volumes and prices and the contribution from the acquired catalysts business. EBIT before special items also rose significantly by more than 70 percent, with a considerable contribution from the Petrochemicals division. In the Plastics segment, sales increased by 10 percent in the second quarter thanks to higher volumes and sales prices. Earnings rose by 15 percent. This was due to significantly higher earnings in the Styrenics division. In the Performance Products segment, strong sales growth of 37 percent and earnings growth of 24 percent was due primarily to the inclusion of activities acquired in the previous year. The Construction Chemicals division grew very strongly in Europe. In the Agricultural Products & Nutrition segment, sales increased by 3 percent compared with the second quarter of 2006; EBIT before special items rose by more than 44 percent. Higher sales volumes in the Agricultural Products division more than compensated for negative currency effects. The Fine Chemicals division posted a significant increase in EBIT before special items, in particular due to a reduction of 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). . Sales and earnings in the Oil & Gas segment declined compared with the very high level of the second quarter of 2006 due to lower prices and currency effects. Double-digit growth in all regions BASF's sales increased in all regions in the first half of 2007. The strongest growth in percentage terms was seen 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 and in Asia. In Europe, companies posted total sales of EU17.4 billion in the first half. This corresponds to an increase of 14 percent. EBIT before special items rose by 6 percent to EU3.1 billion. This was due to the acquired businesses and organic growth in the chemical businesses, in particular in Petrochemicals. Companies 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. increased sales by 26 percent in dollar terms and by 18 percent in euro terms in the first half. EBIT before special items declined by 3 percent to EU544 million. This was due to the 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 TDI TDI - Transport Driver Interface plant in Geismar, Louisiana, for a number of weeks, as well as currency effects and the impact of divestitures in the Agricultural Products division. The acquired businesses and strong earnings in the Petrochemicals division were unable to offset this fully. Growth remains strong in Asia Pacific, where BASF increased sales by 34 percent in local currency terms and by 27 percent in euro terms. EBIT before special items also rose considerably by 58 percent to EU380 million. The investments in the Verbund sites in Kuantan, Malaysia, and Nanjing, China, are paying off. In Africa and the Middle East, sales rose in particular thanks to the contribution of the Catalysts and Construction Chemicals divisions. The region South America, Africa, Middle East also made a positive contribution. Here, BASF increased sales by 57 percent in local currency terms and by 51 percent in euro terms. EBIT before special items rose almost threefold. This was due primarily to the agricultural products business in South America. In Africa and the Middle East, sales rose in particular thanks to the contribution of the Catalysts and Construction Chemicals divisions. 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 high-value products and intelligent system solutions help its customers to be more successful. BASF develops new technologies and uses them to meet the challenges of the future and open up additional market opportunities. It combines economic success with environmental protection and social responsibility, thus contributing to a better future. BASF has approximately 95,000 employees and posted sales of EU52.6 billion in 2006. BASF shares are currently traded on the stock exchanges in Frankfurt (BAS), London (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 at www.basf.com. On August 1, 2007, 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 (from 10:30 a.m. CEST) corporate.basf.com/pcon (English) corporate.basf.com/pk (German) Speech Dr. Jurgen Hambrecht/Dr. Kurt Bock - print version (from 10:30 a.m. CEST) corporate.basf.com/pcon (English) corporate.basf.com/pk (German) Live Transmission-Telephone Conference for Analysts (from 3:00 p.m. CEST) corporate.basf.com/share (English) corporate.basf.com/aktie (German) Photos (from 7:30 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) 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 Posts Very Strong First-Half Results in 2007 Interim Financial Statements January - June 2007 Published on August 1, 2007 BASF Group First-Half Results 2007 [TABLE OMITTED] 1 Property, plant and equipment and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ; previous year's values adjusted following purchase price allocation for Engelhard Corp. 2 Property, plant and equipment and intangible assets 3 Property, plant and equipment, intangible assets, inventories and business-related receivables [TABLE OMITTED] News from Our Innovation Centers Self-cleaning effect for textiles: The innovative finishing material Mincor([R]) TX TT provides technical textiles The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. for awnings, sunshades, sails and tents with a self-cleaning effect based on nanostructured surfaces. Nature's lotus effect The lotus effect in material science is the observed self-cleaning property found with lotus plants. In some Eastern cultures, the lotus plant is a symbol of purity. Although lotuses prefer to grow in muddy rivers and lakes, the leaves and flowers remain clean. shows that it is not the smoothest possible surfaces that are most effective at repelling dirt and water, but those with structures in the nanometer One billionth of a meter. Nanometers are used to measure the wavelengths of light. See angstrom and metric system. range. The principle sounds simple, but its practical implementation on textiles posed a challenge to BASF's nanotechnologists. The solution they came up with is a composite material composite material or composite, any material made from at least two discrete substances, such as concrete. Many materials are produced as composites, such as the fiberglass-reinforced plastics used for automobile bodies and boat hulls, but the in which nanoparticles are firmly embedded Inserted into. See embedded system. in a carrier matrix. Tiny nubs on the surface of the leaves of the lotus plant keep water droplets and dirt at bay. On textiles finished with Mincor TX TT, innumerable embedded particles measuring less than 100 nanometers have the same function. Because of the minimal contact that is confined con·fine v. con·fined, con·fin·ing, con·fines v.tr. 1. To keep within bounds; restrict: Please confine your remarks to the issues at hand. See Synonyms at limit. to the outmost out·most adj. Farthest out; outermost. Adj. 1. outmost - situated at the farthest possible point from a center outermost tips of the particles, the 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. forces that would otherwise cause a droplet droplet very small drop of fluid. droplet nuclei the finite particles of matter which are transmitted from animal to animal. to spread are very weak. Surface tension causes the droplet to form a spherical spher·i·cal adj. Having the shape of or approximating a sphere; globular. globule globule /glob·ule/ (glob´ul) 1. a small spherical mass or body. 2. a small spherical drop of fluid or semifluid substance. 3. a little globe or pellet, as of medicine. , and the water simply rolls off. Specks of dirt, which, because of the embedded particles, also have hardly any contact with the treated textile, are carried along by the water droplets and washed away. Last year, polyester polyester, synthetic fiber, produced by the polymerization of the product formed when an alcohol and organic acid react. The outstanding characteristic of polyesters is their ability to resist wrinkling and to spring back into shape when creased. awning fabrics finished with Mincor TX TT successfully made the transition from the laboratory to practical application. Treated fabrics for sunshades and sails are now also undergoing trials. This type of finishing is an ideal solution for fabrics that are continuously exposed to the elements. The next shower or a quick spray from the garden hose simply washes off the dirt. Polyester fabrics finished with Mincor TX TT are the first products to meet the stringent standards for self-cleaning textiles established by the Denkendorf Institute of Textile and Process Engineering (ITV (1) See interactive TV. (2) (iTV) The code name for Apple's video media hub (see Apple TV). ). They have therefore received the ITV quality seal "Selfcleaning inspired by nature." [TABLE OMITTED] The next generation of lighting: Organic light-emitting diodes Noun 1. organic light-emitting diode - a self-luminous diode (it glows when an electrical field is applied to the electrodes) that does not require backlighting or diffusers OLED open up new design possibilities for lighting systems and consume considerably less energy than conventional alternatives. Color emitters for the production of OLEDs are purified in special glass tubes. The temperature declines continuously from one end of the tube to the other. The individual components of the organic mixture condense con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. from the gas phase at different points in the tube. Further processing steps follow this separation. Organic light-emitting diodes (OLEDs) are luminescent lu·mi·nes·cent adj. Capable of, suitable for, or exhibiting luminescence. [Latin l  men, l components
composed of organic semiconducting materials. Once assembled, OLEDs are
as thin as a film of plastic and are thus suitable for making flexible
lighting elements - a real revolution in the lighting industry. For
example, they can be used in the form of transparent lighting tiles,
wall covering and even curtains. Such systems are expected to consume
less than half as much electricity as conventional energy-saving bulbs
and should also last longer.
BASF has extensive know-how in the area of dyes and in synthesizing and manufacturing complex organic compounds. Our Research Verbund also offers a broad spectrum of analytical techniques An analytical technique is a method that is used to determine the concentration of a chemical compound or chemical element. There are a wide variety of techniques used for analysis, from simple weighing (gravimetric) to titrations (titrimetric)to very advanced techniques using . In the area of OLEDs, we have strengthened our patent position with regard to dark blue phosphorescent phos·pho·res·cence n. 1. Persistent emission of light following exposure to and removal of incident radiation. 2. Emission of light without burning or by very slow burning without appreciable heat, as from the slow oxidation of emitters. Together with partners from industry, universities and research institutes, experts from BASF conduct research into new materials for OLED (Organic Light Emitting Device, Organic Light Emitting Diode) A thin film light-emitting technology that is expected to compete with LCD and plasma TVs as well as LCD monitors and readouts. applications for the lighting segment at the Joint Innovation Lab (JIL JIL Jesus Is Lord JIL Jobs in Locations JIL Joint Intelligence Laboratory (USJFCOM Joint Transformation Command-Intelligence) ) at our site in Ludwigshafen. BASF Future Business GmbH, a subsidiary of BASF, manages the development of these organic semiconductors, which consist of thin layers measuring 5 to 150 nanometers. With our technology partners Osram and Philips, we aim to present initial lighting prototypes by the end of 2009. [TABLE OMITTED] BASF First-Half Results 2007 Contents [TABLE OMITTED] Front cover: Overview 2nd Quarter and 1st Half 2007 | News from Our Innovation Centers Back cover: Important Dates | Contacts Cover photo: Lourival Batista Filho (left) and Cleiton Luiz dos Santos Santos (sän`t  s), city (1996 pop. 412,288), São Paulo state, SE Brazil, on the island of São Vicente in the Atlantic just off the mainland. , production employees,
at the BASF S. A. coatings plant in Sao Bernardo do Campo São Ber·nar·do do Cam·po A city of southeast Brazil, an industrial suburb of São Paulo. Population: 740,000. Noun 1. Sao Bernardo do Campo - a city in southeastern Brazil; an industrial suburb of Sao Paulo , Brazil. [TABLE OMITTED] BASF Group Business Review 2nd Quarter 2007 Sales Compared with the second quarter of 2006, sales rose by 19% to approximately EU14.7 billion. All segments posted higher sales with the exception of Oil & Gas. In addition to the acquired businesses, this was due above all to higher sales volumes. Sales prices were increased, in particular in the Chemicals and Plastics segments. 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, primarily due to the depreciation of the U.S. dollar, sales increased by 22%. Factors influencing sales [TABLE OMITTED] The Chemicals segment posted the strongest sales growth, in particular due to the catalysts and Materials Services business acquired last year. All divisions achieved higher sales volumes and prices. In the Plastics segment too, all divisions contributed to the rise in sales. Sales prices and volumes increased especially in the Styrenics division. The strong sales growth in the Performance Products segment was due mainly to acquisitions in 2006. The Construction Chemicals division grew strongly, in particular in Europe. Both divisions in the Agricultural Products & Nutrition segment recorded higher sales. The Agricultural Products division benefited especially from strong 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 in Europe and for insecticides insecticides, chemical, biological, or other agents used to destroy insect pests; the term commonly refers to chemical agents only. Chemical Insecticides in South America. In the Fine Chemicals division, higher sales from the acquired personal care business more than offset the decline in the 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 premix premix a finite mixture of nutritional supplements such as minerals and vitamins, usually combined with a carrier and ready for mixing with a total ration. businesses. In the Oil & Gas segment, sales were lower than in the very strong second quarter of 2006 due to the lower oil price and the weaker dollar. Second-quarter segment sales [TABLE OMITTED] [TABLE OMITTED] Earnings Compared with the second quarter of 2006, we increased income from operations (EBIT) before special items by approximately 6% to EU2,030 million. All segments posted significantly higher earnings with the exception of Oil & Gas. Earnings growth was strongest in the Chemicals segment. All divisions, in particular Petrochemicals, contributed to this. Second-quarter earnings also increased in the Plastics segment. Earnings were especially improved in the Styrenics division. In the Performance Products segment, earnings rose considerably due to the contribution from the acquired businesses, above all Construction Chemicals. The earnings growth was achieved despite a decline in 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. Both divisions in the Agricultural Products & Nutrition segment posted significantly higher EBIT before special items, among other things due to cost reductions. In the Agricultural Products division, earnings also grew thanks to the expansion of the business. In the Fine Chemicals division, 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 proved successful. In the Oil & Gas segment, earnings declined compared with the very strong second quarter of 2006 due to the lower oil price, the weak dollar and a decline in margins in the gas trading business. Earnings of "Other" declined by EU150 million to EU(166) million, in particular due to BASF's stock option program (BOP). These charges, which were due to the rise in BASF's share price, will be assigned to the segments in the second half of the year. Higher research and development expenses in our growth clusters also reduced the earnings of "Other." Foreign currency results that are not allocated to the segments declined and were negative in the second quarter. Compared with the second quarter of 2006, EBIT climbed 12% to EU2,007 million. Special items in income from operations were related to integration costs for the acquisitions made in 2006. The financial result declined by EU88 million to EU(65) million. Interest expenses rose in connection with the acquisitions made in mid-2006. The previous year's second quarter contained gains from the sale of securities. Income before taxes and minority interests rose by 7% to EU1,942 million. The tax rate declined from 48% to 45% as a result of the lower contribution to the BASF Group's earnings from the Oil & Gas segment. In the second quarter, foreign taxes for oil production that are noncompensable with German corporate income tax amounted to EU331 million compared with EU383 million in the same period of 2006. Net income rose by 11% to EU1,024 million. Earnings per share were EU2.08 compared with EU1.82 in the second quarter of 2006. Second-quarter EBIT before special items [TABLE OMITTED] [TABLE OMITTED] BASF Group Business Review 1st Half 2007 Sales Compared with the first half of 2006, first-half sales rose by 18% to EU29.3 billion. All segments contributed to the sales growth with the exception of the Oil & Gas segment. The increase in sales was due in particular to the acquisitions made toward the middle of 2006, as well as higher volumes and sales prices in the chemical businesses. Disregarding currency effects, primarily due to the depreciation of the U.S. dollar, sales increased by 21%. Factors influencing sales [TABLE OMITTED] Sales growth was highest in the Chemicals segment at more than 50%. This was due to the acquisition of the catalysts business in June 2006. Sales also rose in the other divisions, especially in Petrochemicals. All divisions in the Plastics segment posted higher sales. In particular, the Styrenics division achieved significantly higher sales prices and volumes. In the Performance Products segment, sales increased in all divisions. The strong sales growth was due in particular to the acquired businesses in Performance Chemicals and to the Construction Chemicals division. In the Agricultural Products & Nutrition segment, sales in the Agricultural Products division were at the same level as in the first half of 2006. In this division, stronger demand offset negative currency effects and the sales decline due to the divestitures in 2006. Higher volumes despite the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of the lysine business together with the contribution from the personal care business acquired from Engelhard led to sales growth in the Fine Chemicals division. Compared with the first half of 2006, sales in the Oil & Gas segment declined due to lower volumes and a decrease in oil prices. First-half sales by segment [TABLE OMITTED] [TABLE OMITTED] Earnings Compared with the first half of 2006, we increased income from operations (EBIT) before special items by 10% to EU4,146 million. Earnings in the Chemicals segment rose by more than 80%. This was due in particular to improved margins in the Petrochemicals division and the new Catalysts operating division. In the Plastics segment, earnings were higher than in the first half of 2006. This was due especially to improved earnings in the Styrenics division. The rise in earnings in the Performance Products segment was primarily due to the contribution from the new Construction Chemicals division; persistent pressure on margins for 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 in the Functional Polymers division had a negative impact on earnings. In the Agricultural Products & Nutrition segment, EBIT before special items rose significantly in both divisions. This was mainly the result of successful measures to reduce costs. Earnings declined in the Oil & Gas segment, but remained at a high level. The contribution from the exploration and production business decreased, primarily due to lower prices, while the contribution from natural gas trading rose thanks to a very strong first quarter. Earnings of "Other" declined by EU214 million to EU(334) million, in particular due to charges associated with BASF's stock option program (BOP). Higher research and development expenses in the growth clusters also reduced earnings. Foreign currency results that are not allocated to the segments declined and were negative in the first half. Compared with the first half of 2006, EBIT rose 10% to EU4,017 million. Special items in income from operations were related to integration costs for the acquisitions made in 2006 as well as costs for restructuring measures. The financial result declined by EU203 million to EU(159) million. Interest expenses rose in connection with the acquisitions made in mid-2006. The first and second quarters of 2006 contained gains from the sale of securities. Income before taxes and minority interests rose by 5% to EU3,858 million. The tax rate declined from 47% to 43% as a result of the acquisitions and the lower contribution to the BASF Group's earnings from the Oil & Gas segment. In the first half, foreign taxes for oil production that are noncompensable with German corporate income tax amounted to EU589 million compared with EU655 million in the same period of 2006. Net income rose by 10% to EU2,059 million. Earnings per share were EU4.16 compared with EU3.69 in the first half of 2006. First-half EBIT before special items [TABLE OMITTED] [TABLE OMITTED] BASF Shares [TABLE OMITTED] BASF shares perform very strongly BASF shares increased in value by 36% in the first half of 2007. As a result, our shares performed significantly better than the German and European stock markets, whose key DAX 30 and DJ EURO STOXX 50 indices rose by approximately 21% and 11%, respectively, in the same period. In the first half, BASF shares also outperformed the global industry indices DJ Chemicals and MSCI World The MSCI World is a stock market index of 'world' stocks. It is maintained by Morgan Stanley Capital International. The index includes a selection of stocks of all the developed markets in the world, as defined by MSCI. Chemicals, which increased by 19% and 17%, respectively. Inclusion in FTSE FTSE A company that specializes in index calculation. Although not part of a stock exchange, co-owners include the London Stock Exchange and the Financial Times. Notes: The FTSE is similar to Standard & Poor's in the United States. 4Good sustainability index In May, BASF was again included in the FTSE4Good Index. The index, which is published annually by the Financial Times and the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. , focuses on companies with good records with regard to commitment to environmental protection, promotion of dialogue with stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. , and compliance with safety, environmental and social standards. Further share buybacks In the second quarter of 2007, we bought back shares for EU372 million under the EU3 billion buyback program scheduled to run until the end of 2008. As a result, BASF repurchased 9.2 million shares for a total of EU753 million or an average price of EU81.86 per share in the first six months of the year. Together with an additional 1.4 million shares that were repurchased in 2006, these shares were cancelled in July 2007. The total number of shares thus declined to 490,485,000. The goal of the share buyback program is to increase earnings per share and further optimize optimize - optimisation our balance sheet structure. Awards for investor relations Investor relations The process by which the corporation communicates with its investors. In May, BASF was presented with the German Investor Relations Award 2007 in the category of DAX companies. In June, BASF took first place among EURO STOXX 50 companies in the Capital Investor Relations Prize 2007. > Up-to-date information on BASF shares is available on the Internet at www.corporate.basf.com/share. [TABLE OMITTED] Significant Events and Economic Environment Significant events * On April 26, the Annual Meeting of BASF Aktiengesellschaft approved the proposal of the Board of Executive Directors and the Supervisory Board Supervisory board The board of directors that represents stakeholders in the governance of the corporation. to transform BASF Aktiengesellschaft into a European Company (Societas Europaea, SE) with the name BASF SE. In the course of the transformation, the constituent assembly A constituent assembly is a body elected with the purpose of drafting, and in some cases, adopting a constitution. An example is the Russian Constituent Assembly, which was established in Russia in the wake of the October Revolution of 1917, which overthrew the Russian Provisional of the special negotiating body of employees was held on June 12 and elected Robert Oswald, chairman of the joint works council Noun 1. works council - (chiefly Brit) a council representing employer and employees of a plant or business to discuss working conditions etc; also: a committee representing the workers elected to negotiate with management about grievances and wages etc of the BASF Group, as its chairman. * On July 6, 2007, the Supervisory Board of BASF Aktiengesellschaft appointed two new members to the Board of Executive Directors: Dr. Harald Schwager and Dr. Wolfgang Buchele. The appointments will take effect on January 1, 2008 and were due to the retirement of three current members. Klaus-Peter Lobbe will retire for health reasons effective July 31, 2007. Peter Oakley Peter Oakley (born 20 August 1927) is a pensioner from Leicester, England. He is better known by his pseudonym geriatric1927 on the popular video sharing website YouTube. will leave at the beginning of 2008 and Eggert Voscherau will retire following the Annual Meeting on April 24, 2008. The contracts of Dr. Kurt Bock and Dr. Andreas Kreimeyer were extended until the Annual Meeting in 2012. The Board of Executive Directors has decided to reassign responsibilities within the Board with a series of changes that will be made stepwise stepwise incremental; additional information is added at each step. stepwise multiple regression used when a large number of possible explanatory variables are available and there is difficulty interpreting the partial regression until the Annual Meeting on April 24, 2008. Effective August 1, 2007, Chief Financial Officer Dr. Kurt Bock will be permanently appointed Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of BASF Corporation 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. in addition to his current duties. * On July 17, BASF Aktiengesellschaft announced that it is evaluating strategic options for selected parts of its styrenics activities. BASF has received an initial offer for these activities and has started discussions with the interested party. BASF's activities under consideration include its styrene sty·rene n. A colorless oily liquid from which polystyrenes, plastics, and synthetic rubber are produced. Also called vinylbenzene. monomer monomer (mŏn`əmər): see polymer. monomer Molecule of any of a class of mostly organic compounds that can react with other molecules of the same or other compounds to form very large molecules (polymers). (SM), 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; (PS), styrene butadiene butadiene (by t'ədī`ēn), colorless, gaseous hydrocarbon. There are two structural isomers of butadiene; they differ in the location of the two carbon-carbon double bonds in the copolymer copolymer: see polymer. (SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. ) and acrylonitrile
butadiene styrene Acrylonitrile butadiene styrene, or ABS, (chemical formula (C8H8· C4H6·C3H3N)n) is a common thermoplastic used to make light, rigid, molded products such as piping, musical instruments (most (ABS (Automatic Backup System) See backup program. ) businesses with plants in Antwerp, Belgium;
Altamira, Mexico; Sao Jose dos Campos São José dos Cam·pos A city of southeast Brazil east-northeast of São Paulo. It is a major center of Brazil's aircraft industry. Population: 600,000. Noun 1. , Brazil; Ulsan, South Korea; and Dahej, India. These activities posted sales of about EU3.2 billion in 2006 and have approximately 1,000 employees. * BASF Aktiengesellschaft has decided to file for voluntary delisting Delisting When the stock of a company is removed from a stock exchange. Notes: Reasons for delisting include violating regulations and/or failure to meet financial specifications set out by the stock exchange. of its ADSs (American Depositary Shares American Depositary Share (ADS) Foreign stock issued in the US and registered in the ADR system. ) from the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. (NYSE) and deregistration deregistration removal of right to practice by local registering body, usually as a disciplinary measure because of professional misconduct, possibly because of inability to perform because of psychiatric problem. and termination of its reporting obligations under the Securities and Exchange Act of 1934. The decision by the Board of Executive Directors was announced on July 30. Economic environment The global economy in mid-2007 remains robust despite further increases in raw material prices, in particular oil prices. Interest rates have also risen, but are still at a relatively low level. We expect the economic growth to continue in the second half of the year. In the first half of 2007, the global gross domestic product grew slightly slower at approximately 3.5% (2006: 4.0%). Global industrial production growth also slowed slightly to about 4% compared with 5.3% in 2006. This was mainly due to slower growth in the industrialized in·dus·tri·al·ize v. in·dus·tri·al·ized, in·dus·tri·al·iz·ing, in·dus·tri·al·iz·es v.tr. 1. To develop industry in (a country or society, for example). 2. countries, in particular in the United States, but was largely offset by strong production growth in developing and transition countries, especially in China. Demand for industrial goods industrial goods npl → bienes mpl de producción remains high in Asia and Europe. [TABLE OMITTED] Chemicals [TABLE OMITTED] Sales in the Chemicals segment climbed 50% (volumes 12%, prices 8%, portfolio 34%, currencies -4%). In addition to higher sales volumes and prices, this was due in particular to the acquired catalysts business. Earnings increased significantly. Inorganics Strong demand, especially in Europe and Asia, resulted in higher volumes and sales, in particular for 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, glues and impregnating resins, as well as basic inorganic chemicals. Earnings increased significantly thanks to higher volumes and improved margins. Catalysts Sales amounted to over EU1.2 billion due to stable demand and high prices for precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. . We achieved higher sales of emission-control catalysts in Asia and Europe. Sales of process catalysts were negatively impacted by weaker demand for polyolefin catalysts. The business with oil refinery catalysts and adsorbents developed positively. Before and after special items, the division contributed significantly to earnings. Petrochemicals Higher prices and volumes led to significantly higher sales. Cracker products benefited from strong demand and higher margins in Europe. In almost all regions, demand for solvents and plasticizers plasticizers mostly triaryl phosphates, such as tricresyl, triphenyl phosphates, which are poisonous. See also triorthocresyl phosphate. was robust and margins increased. Overall, the division's earnings rose significantly. Starting in the third quarter, the crackers 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. , and Antwerp, Belgium, will be shut down temporarily for scheduled maintenance and to expand capacity in Antwerp. Intermediates The division posted higher sales in almost all product lines thanks to strong growth in demand, in particular in Asia. Earnings rose significantly as a result of improved margins and restructuring measures. [TABLE OMITTED] Chemicals [TABLE OMITTED] In the first half of 2007, sales rose by more than 50% (volumes 9%, prices 5%, portfolio 43%, currencies -4%). This was due above all to the acquired catalysts business in addition to higher sales volumes and prices. Earnings increased significantly, in particular thanks to the contribution from the Petrochemicals division. Inorganics Volumes and sales rose, in particular for inorganic specialties as well as glues and impregnating resins. In Asia especially, sales of electronic chemicals were negatively impacted by the appreciation of the euro. Overall, earnings increased considerably thanks to higher margins. Catalysts In the first half, sales amounted to more than EU2.4 billion as a result of stable demand and high prices for precious metals. Sales of emission-control catalysts grew in Europe and Asia. In the process catalysts business, demand was weaker for polyolefin catalysts, but stronger for refinery catalysts. Even after special items, the division contributed to the significant rise in the segment's earnings. Petrochemicals Higher prices and volumes led to an increase in sales. Demand was strong both for cracker products as well as for solvents and plasticizers. Earnings rose significantly thanks to higher margins. In the second half, earnings will be negatively impacted by the scheduled turnarounds of the crackers in Port Arthur, Texas, and Antwerp, Belgium. Intermediates In the first half of 2007, sales increased worldwide in almost all product lines compared with the same period of 2006. Strong demand made it possible to increase prices and improve margins for a number of products. Earnings rose significantly. Lower fixed costs as a result of restructuring measures contributed significantly to the increase in earnings. [TABLE OMITTED] Plastics [TABLE OMITTED] Second-quarter sales in the Plastics segment were higher than in the same period of 2006 thanks to higher volumes and prices (volumes 8%, prices 6%, currencies -4%). Earnings increased compared with the second quarter of the previous year. This was due to significantly improved earnings in the Styrenics division. Styrenics Higher volumes and prices resulted in double-digit sales growth. In Europe, demand for foams was strong, especially for thermal insulation The term thermal insulation can refer to materials used to reduce the rate of heat transfer, or the methods and processes used to reduce heat transfer. Heat is transferred from one material to another by conduction, convection and/or radiation. applications. Second-quarter sales were also higher compared with the same period of 2006 in Asia and South America. Earnings were significantly higher compared with the weak second quarter of 2006, in particular due to the positive business development in Europe. Performance Polymers Sales increased compared with the same period of 2006. This was due in particular to higher volumes in Europe and Asia. In addition, prices were increased in some product lines. Earnings were at the same level as in the second quarter of 2006 as a result of currency effects and high raw material costs. On May 18, BASF inaugurated a world-scale compounding plant for engineering plastics in Shanghai, China. This plant will enable us to strengthen our position as a leading supplier of engineering plastics in the Asian growth markets. 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.
Sales rose in the second quarter, in particular due to higher sales volumes in Europe and Asia. Earnings were at the excellent level of the previous year's second quarter, although high raw material costs and reduced plant availability negatively impacted earnings. On June 13, BASF opened its new site for 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. specialties in Shanghai, China. It comprises a polyurethane system house, a Technical Research & Development Center and a production plant for thermoplastic A polymer material that turns to liquid when heated and becomes solid when cooled. There are more than 40 types of thermoplastics, including acrylic, polypropylene, polycarbonate and polyethylene. polyurethanes (TPU TPU - Text Processing Utility ). [TABLE OMITTED] Plastics [TABLE OMITTED] In the first half of 2007, sales in the Plastics segment increased compared with the same period of the previous year due to higher volumes and prices (volumes 6%, prices 7%, currencies -4%). Earnings also increased thanks to significantly higher earnings in the Styrenics division. Styrenics Higher volumes and prices resulted in double-digit sales growth. The strongest increase was posted in Europe. Sales in Asia and South America were also higher than in the first half of 2006. The division's earnings increased significantly compared with the previous year's weak first half, with a major contribution being provided by the foams business. BASF is currently reviewing strategic options for parts of its styrenics business and has received an initial purchase offer. Performance Polymers Sales in the first half of 2007 rose thanks to higher sales volumes and prices. Earnings increased compared with the same period of 2006 despite significantly higher raw material costs. In order to optimize raw material supplies for the engineering plastic polyamide polyamide material used in the creation of nonabsorbable, synthetic, nylon sutures. 6,6, we will obtain adipodinitrile (ADN ADN Anchorage Daily News (Alaska newspaper) ADN Yemen (international vehicle registration) ADN Ácido Desoxirribonucleico ADN Acide Désoxyribonucléique (French: DNA) ) from INVISTA starting at the beginning of 2009. We plan to close the ADN plant at our site in Seal Sands Seal Sands (grid reference NZ529260) is a 294.37 hectare biological Site of Special Scientific Interest in Cleveland, England, notified in 1966. Source
Polyurethanes Sales increased compared with the first half of 2006 despite unscheduled unscheduled Adjective not planned or intended Adj. 1. unscheduled - not scheduled or not on a regular schedule; "an unscheduled meeting"; "the plane made an unscheduled stop at Gander for refueling" plant shutdowns, in particular for TDI (toluene diisocyanate Toluene diisocyanate (TDI) is an aromatic diisocyanate. It is produced for reaction with polyols to form polyurethanes. It exists in two isomers, 2,4-TDI (CAS: 584-84-9) and 2,6-TDI (CAS: 91-08-7). ) in North America. The excellent earnings level posted in the first half of the previous year was not achieved as a result of these shutdowns and due to significantly higher raw material costs. The capacity of the MDI (1) (Multiple Document Interface) A Windows function that allows an application to display and lets the user work with more than one document at the same time. (diphenylmethane diisocyanate) plant in Antwerp, Belgium, was expanded from 450,000 to 560,000 metric tons per year. BASF is considering the construction of a new MDI plant in Chongqing municipality MUNICIPALITY. The body of officers, taken collectively, belonging to a city, who are appointed to manage its affairs and defend its interests. , Western China. The startup is planned from 2010 onward on·ward adj. Moving or tending forward. adv. also on·wards In a direction or toward a position that is ahead in space or time; forward. , and the plant is expected to have a capacity of 400,000 metric tons per year of crude MDI. [TABLE OMITTED] Performance Products [TABLE OMITTED] The businesses acquired in June and July 2006 resulted in significant sales growth (volumes 3%, prices 1%, portfolio 35%, currencies -2%). Higher volumes and prices were offset to some extent by negative currency effects. Second-quarter earnings were higher than in the same period of 2006 as a result of the acquisitions. Construction Chemicals Second quarter sales were high at EU558 million. We achieved strong growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. , in particular in Europe. In North America, there were signs of an upturn in business following a weaker first quarter due to unfavorable weather conditions. The division contributed significantly to earnings, even after integration costs. The operational integration of the business is largely complete. Coatings Volumes and sales rose. The activities of the RELIUS group resulted in expansion of the 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. and architectural coatings businesses in Europe. In addition, we posted higher sales 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 China as well as architectural coatings in South America. In North America, business was weaker due to a decline in automobile production. Earnings were higher than in the second quarter of 2006. Functional Polymers Sales increased compared with the previous year's second quarter thanks to the contribution from the kaolin kaolin (kā`əlĭn): see china clay. pigment pigment, substance that imparts color to other materials. In paint, the pigment is a powdered substance which, when mixed in the liquid vehicle, imparts color to a painted surface. business acquired as part of Engelhard. High raw material costs and fierce competition, especially in Asia, put persistent pressure on margins for acrylic monomers, resulting in a significant decline in earnings. Performance Chemicals Double-digit sales growth in the second quarter was due above all to the acquired businesses with water-based resins and effect pigments. Earnings increased compared with the same period of 2006 thanks to higher margins, fixed cost reductions and a positive contribution to earnings from the acquired activities. [TABLE OMITTED] Performance Products [TABLE OMITTED] Strong sales growth in the first half of 2007 was due above all to the businesses acquired in mid-2006 (volumes 3%, prices 1%, portfolio 34%, currencies -4%). Earnings also rose as a result of the acquisitions, but were negatively impacted by persistent pressure on margins for acrylic monomers. Construction Chemicals First-half sales amounted to EU1.0 billion thanks to strong growth rates, in particular in Europe. Brisk Brisk as a proper name may refer to:
Coatings The activities of the RELIUS group, which is primarily active in Europe, are reported as part of the Coatings division since January 1, 2007. These activities with industrial and architectural coatings were acquired as part of Degussa's construction chemicals business. In addition, we posted higher sales of automotive (OEM) coatings, in particular in China, and architectural coatings in South America. Sales in North America were lower due to a decline in automobile production. Overall, earnings were at the same level as in the first half of 2006. Functional Polymers Sales were higher than in the same period of 2006 as a result of the acquisitions. High raw material costs and competitive pressure due to high capacities, in Asia especially, had a negative impact on margins for acrylic monomers. Earnings were significantly lower than in the first half of 2006. Performance Chemicals Sales rose in particular due to the acquired activities with water-based resins and effect pigments. The business with oilfield chemicals was also strengthened as a result of the acquisitions. Earnings were higher than in the same period of 2006 due to the acquisitions, higher margins and cost reductions. [TABLE OMITTED] Agricultural Products & Nutrition [TABLE OMITTED] Sales in the Agricultural Products division were higher than in the second quarter of 2006. Negative currency effects were more than offset by stronger demand, in particular for fungicides for specialty crops in Europe and for insecticides for sugar cane cane, walking stick cane, walking stick. Probably used first as a weapon, it gradually took on the symbolism of strength and power and eventually authority and social prestige. in Brazil (volumes 4%, prices 2%, currencies -2%). Sales in North America declined due to unfavorable weather conditions. Despite negative currency effects, second-quarter earnings improved considerably due to higher demand, an improved product mix and cost reductions. [TABLE OMITTED] Sales in the Fine Chemicals division increased slightly. Higher sales resulting from the inclusion of Engelhard's personal care business more than compensated for weaker business with premixes, the discontinuation of the lysine business as well as negative currency effects (volumes 2%, prices -1%, portfolio 4%, currencies -3%). EBIT before special items was significantly higher compared with the second quarter of 2006. This was primarily due to lower costs resulting from restructuring measures. The second quarter of 2006 contained special income of EU66 million resulting from the reduction of a fine imposed by the E.U. EBIT was therefore significantly lower. [TABLE OMITTED] Agricultural Products & Nutrition [TABLE OMITTED] First-half sales in the Agricultural Products division were at the same level as in 2006. Negative currency effects and divestitures in 2006 were offset by a rise in demand (volumes 5%, portfolio -2%, currencies -3%). The stronger demand resulted from better seasonal conditions as well as greater use of crop protection products as a result of increased cultivation cultivation, tilling or manipulation of the soil, done primarily to eliminate weeds that compete with crops for water and nutrients. Cultivation may be used in crusted soils to increase soil aeration and infiltration of water; it may also be used to move soil to or of crops for energy production. Earnings improved due to cost reductions. EBIT increased only slightly because the previous year contained special income from 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 parts of the generics business in North America. [TABLE OMITTED] Sales rose in the Fine Chemicals division as a result of higher volumes, for example for 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 UV filters, as well as the contribution of the acquired personal care business (volumes 3%, prices -2%, portfolio 6%, currencies -3%). EBIT before special items more than doubled, in particular due to a reduction in fixed costs. EBIT declined compared with the first half of 2006, which contained special income resulting from the reduction of a fine imposed by the E.U. Lysine production in Gunsan, South Korea, was shut down in May as announced in the first quarter. [TABLE OMITTED] Oil & Gas [TABLE OMITTED] Segment sales declined due to a significantly lower oil price in euro terms and significantly lower sales prices in the natural gas trading business (volumes 3%, prices/currencies -12%). Due to the price effect, earnings were considerably lower than in the second quarter of 2006. Volumes in the exploration and production business were stable despite the withdrawal from oil production in Dubai. Compared with the second quarter of 2006, the average price of Brent crude declined by approximately $1/barrel to approximately $69/barrel. In euro terms, this corresponds to a decrease of more than EU4/barrel to EU51/barrel. Sales and earnings were therefore lower than in the second quarter of 2006. Sales in the natural gas trading business were negatively impacted, in particular by a decline in oil price-indexed sales prices. At the same time, purchase prices for natural gas rose compared with the same period of the previous year. Margins and earnings were therefore significantly below the very high level of the second quarter of 2006. [TABLE OMITTED] Oil & Gas [TABLE OMITTED] Segment sales were lower than in the very strong first half of 2006 due to a decline in volumes and prices (volumes -2%, prices/currencies -2%). Earnings remained high but declined compared with the first half of the previous year. Volumes declined in the exploration and production business. This was due in particular to lower volumes of natural gas produced in Germany as well as the withdrawal from oil production in Dubai. Compared with the first half of 2006, the average price of Brent crude declined by more than $2/barrel to approximately $63/barrel. In euro terms, this corresponds to a decrease of about EU6/barrel to approximately EU48/barrel. As a result, the contribution to earnings from the exploration and production business decreased, primarily due to price and currency effects. Volumes and sales in the natural gas trading business were lower than in the first half of 2006 due to the milder temperatures in Europe. Average sales prices and margins improved slightly compared with the same period of the previous year thanks to the extremely strong first quarter of 2007. The contribution of the natural gas trading business to earnings therefore increased overall in the first half of 2007. [TABLE OMITTED] Regions [TABLE OMITTED] Sales by location of company in Europe increased by 14% in the first half of 2007. EBIT before special items rose by EU178 million to EU3,111 million. The improvement was primarily due to the acquired businesses and organic growth in the chemical businesses, in particular in Petrochemicals. Companies in North America increased sales by 26% in dollar terms and by 18% in euro terms. EBIT before special items declined by EU17 million in the first half of 2007 to EU544 million. Earnings were negatively affected by the shutdown of the TDI plant in Geismar, Louisiana, for several weeks in the first quarter, as well as by currency effects and divestitures in the Agricultural Products division. The acquired businesses and strong earnings in the Petrochemicals division were unable to offset this fully. In Asia Pacific, we increased sales by 34% in local currency terms and by 27% in euro terms. EBIT before special items climbed by EU140 million to EU380 million. The Petrochemicals division made a significant contribution to the rise in earnings thanks to high capacity utilization rates 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. of the plants at our Verbund sites in Nanjing, China, and Kuantan, Malaysia. First-half sales in South America, Africa, Middle East rose by 57% in local currency terms and by 51% in euro terms. EBIT before special items increased by EU70 million to EU111 million. In particular, the Agricultural Products division's activities in South America contributed to the increase in sales and earnings in this region. Sales in Brazil rose above all due to stronger demand for insecticides for sugar cane, as well as a gradual recovery in the export-oriented market for soybeans. In Africa and the Middle East, sales rose in particular thanks to the contribution of the Catalysts and Construction Chemicals divisions. [TABLE OMITTED] Overview of Other Topics Research and development BASF and IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) have entered into an agreement to jointly develop electronic chemicals required to produce the most advanced high-performance chips based on 32-nanometer technology. The technology as well as its related chemicals and materials are expected to be commercialized by the semiconductor industry as early as 2010. A further cooperation in the area of semiconductors has been started by BASF Future Business GmbH with the U.S. company Polyera Corporation. The goal is to develop and commercialize new organic semiconductors and dielectrics for use in printed circuits. Typical applications of printed electronics will be RFID (Radio Frequency IDentification) A data collection technology that uses electronic tags for storing data. The tag, also known as an "electronic label," "transponder" or "code plate," is made up of an RFID chip attached to an antenna. (radio frequency identification See RFID. ) tags, memory units and flexible displays (e-paper). BASF and Bosch are cooperating in the area of organic photovoltaics. Together with Merck, Schott and the German Ministry of Education and Research, the two companies have launched an initiative to promote this technology by investing in research. The aim is to make the production of solar cells solar cell, semiconductor devised to convert light to electric current. It is a specially constructed diode, usually made of silicon crystal. When light strikes the exposed active surface, it knocks electrons loose from their sites in the crystal. more cost effective and to increase the number of applications. Last year, photovoltaic modules In the field of photovoltaics, a photovoltaic module is a packaged interconnected assembly of photovoltaic cells, also known as solar cells. An installation of photovoltaic modules or panels is known as a photovoltaic array. had a global market volume of EU8 billion. The segment is expected to grow by more than 20% annually until 2020. BASF is opening up new applications for nanotechnology, for example with our innovative nanobinder COL col (kol) a depression in the interdental tissues just below the interproximal contact area, connecting the buccal and lingual papillae. col n. .9[R]. This product forms the basis for a facade facade (fəsäd`), exterior face or wall of a building. The term implies ordered placement of its openings and other features and thus seems inapplicable to a wall without design. coating from Akzo Nobel Akzo Nobel is a multinational company, active in the fields of healthcare products, coatings and chemicals. Headquartered in Amsterdam, the Netherlands, the company has activities in more than 80 countries, and employs approximately 62,000 people. named Herbol-Symbiotec[TM]. The symbiosis symbiosis (sĭmbēō`sĭs), the habitual living together of organisms of different species. The term is usually restricted to a dependent relationship that is beneficial to both participants (also called mutualism) but may be extended to between organic and inorganic components makes the coating extremely dirt repellent re·pel·lent adj. Capable of driving off or repelling. n. A substance used to drive off or keep away insects. repellent able to repel or drive off; also, an agent that repels. Refers usually to insect repellent. . Our finishing product Mincor([R]) TX TT provides technical textiles with a self-cleaning effect based on nanostructured surfaces. In June, it received an innovation prize in the category "new applications" at the Techtextil International Trade Fair for Engineering Textiles and Nonwovens in Frankfurt. > You can find more detailed information about Mincor TX TT([R]) inside the front cover of this report. In the first half of 2007, we spent EU682 million on research and development compared with EU583 million in the same period of 2006. Employees Compared with the end of 2006, the number of BASF Group employees declined by 539 to 94,708 as of June 30, 2007. As of June 30, 2007, the regional distribution of BASF's employees was as follows: 64% in Europe; 16% in North America; 14% in Asia Pacific; and 6% in South America, Africa, Middle East. Compared with the same period of 2006, personnel costs in the first half of 2007 rose by 15.9% to EU3,272 million. This was primarily due to the effect of last year's acquisitions. [TABLE OMITTED] Outlook Opportunities Four strategic guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. govern the way in which we act. Rigorous value-based management, a strong customer focus, the best team in industry and sustainable development Sustainable development is a socio-ecological process characterized by the fulfilment of human needs while maintaining the quality of the natural environment indefinitely. The linkage between environment and development was globally recognized in 1980, when the International Union form the foundations of our corporate strategy and offer major opportunities for BASF. Innovations are an important basis for BASF's profitable growth. We have therefore increased the budget for our five growth clusters - energy management, nanotechnology, white (industrial) biotechnology, plant biotechnology and raw material change - to more than EU900 million for the period 2006 through 2008. By 2015, we expect annual sales of between EU2 billion and EU4 billion from innovations based on research and development in these growth clusters. Investments in existing high-growth areas also open up opportunities for BASF. For example, we are considering the construction of a new plant for MDI (diphenylmethane diisocyanate) in Chongqing, China; startup is planned from 2010 onward. In addition, we are expanding existing Verbund sites. In Ludwigshafen we are expanding production capacity for our innovative insulation material Neopor([R]). We are also planning to expand the successful Verbund site in Nanjing, China, which we operate with our Chinese joint venture partner Sinopec Corp. By expanding global partnerships, BASF is in a position to respond flexibly in world markets. In Gazprom we have a reliable partner in the transport, storage and marketing of natural gas in Europe. In the area of plant biotechnology, the U.S. company Monsanto is our partner in the research, development and commercialization of stress tolerant and higher yielding crops. We will continue to optimize our portfolio through acquisitions, divestitures, restructuring measures and cost reduction programs. In our Fine Chemicals division, for example, we are implementing a program to increase efficiency that has already helped to significantly improve earnings. Risks The statements on risks made in the Financial Report 2006 remain valid. Based on currently available information, there are no significant individual risks at the present time or in the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future. Neither does the total sum of individual risks pose a threat to the continued existence of the BASF Group. > Detailed information is available on pages 72 to 75 of the Financial Report 2006, "Risk Management System and Risks of Future Development." Forecast Our forecast for 2007 is now based on the following conditions: - Global economic growth of 3.5% - An average oil price (Brent) of $65/barrel - An average dollar/euro exchange rate of $1.35/EU We want to continue to grow faster than the market. In 2007, we expect significantly higher sales than in 2006. Scheduled plant turnarounds, in particular in the Petrochemicals division, are likely to reduce earnings by EU150 million in the second half of 2007. In addition, we plan to further increase spending on research and development. We nevertheless expect full-year EBIT before special items to at least match the previous year's record level. [TABLE OMITTED] Interim Financial Statements Consolidated Statements of Income [TABLE OMITTED] 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. [TABLE OMITTED] [TABLE OMITTED] Consolidated Statements of Cash Flows [TABLE OMITTED] Cash provided by operating activities At EU2,743 million, cash provided by operating activities in the first half of 2007 was EU535 million higher than in the same period of 2006. The improvement in earnings and the higher depreciation and amortization of long-term assets Long-Term Assets 1. Reported on the balance sheet, it's the value of a company's property, equipment and other capital assets, less depreciation. 2. A stock, bond or other asset that you plan on holding in your portfolio for a lengthy period of time. contained therein contributed to the 24% increase. The considerable expansion of the business led to higher net working capital, in particular for trade accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying . In the first half of 2006, miscellaneous items primarily reflects the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of gains on the sale of securities as cash used in investing activities. Cash used in investing activities In the first six months of 2007, cash used in investing activities amounted to EU1,088 million. Thereof, EU1,080 million was spent on property, plant and equipment. The first half of 2006 contained expenditures of approximately EU7 billion for acquisitions. Cash provided by/used in financing activities Financing activities led to a cash outflow of EU1,765 million. Dividends amounting to EU1,484 million were paid to shareholders of BASF Aktiengesellschaft and EU84 million to minority shareholders in Group companies. We spent EU753 million on share buybacks in the first six months of 2007, thereof EU372 million in the second quarter. Cash and cash equivalents amounted to EU734 million as of June 30, 2007 compared with EU834 million at the end of 2006. In the same period, financial indebtedness rose by EU517 million to EU10.0 billion. Compared with year-end 2006, net debt increased by EU617 million to EU9,266 million. Compared with December 31, 2006, the equity ratio was unchanged at 41%. With an AA-/A-1+/outlook stable rating from Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index and an Aa3/P-1/outlook negative rating from Moody's, BASF has significantly stronger ratings than its competitors in the chemical industry. Consolidated Statements of Recognized Income and Expense [TABLE OMITTED] Development of income and expense recognized directly in equity [TABLE OMITTED] 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. [TABLE OMITTED] [TABLE OMITTED] 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 [TABLE OMITTED] [TABLE OMITTED] 1 "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 macrohedged [EU(17) million in the second quarter of 2007 (EU38 million in the second quarter 2006)]. 2 The assets of "Other" include 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. , cash and cash equivalents, financial receivables, deferred taxes; second quarter 2007: EU6,106 million, second quarter 2006: EU7,189 million). 3 Property, plant and equipment and intangible assets; previous year's values adjusted following the purchase price allocation for Engelhard Corp. 4 Property, plant and equipment and intangible assets Segment Reporting [TABLE OMITTED] [TABLE OMITTED] 1 "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 macrohedged [EU(14) million in the first half of 2007 (EU93 million in the first half of 2006)]. 2 The assets of "Other" include the assets of the fertilizers business and other businesses as well as assets that are not allocated to the segments (financial assets, cash and cash equivalents, financial receivables, deferred taxes; first half 2007: EU6,106 million, first half 2006: EU7,189 million). 3 Property, plant and equipment and intangible assets; previous year's values adjusted following the purchase price allocation for Engelhard Corp. 4 Property, plant and equipment and intangible assets Notes to the Interim Financial Statements 1. BASIS OF PRESENTATION The Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge of BASF Group for the year ended December 31, 2006 were prepared according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the 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 IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System ) valid as of the balance sheet date. The current interim financial statements as of June 30, 2007 were prepared using the same accounting policies. > BASF's Financial Report for fiscal 2006 is available on the Internet at corporate.basf.com/financial-report. The interim financial statements have not been audited. 2. SCOPE OF CONSOLIDATION The Consolidated Financial Statements include BASF Aktiengesellschaft, the parent company, as well as all material subsidiaries on a fully consolidated basis. Material jointly operated companies are proportionally consolidated. The number of fully and proportionally consolidated companies has developed as follows: [TABLE OMITTED] Fifteen companies, thereof 12 companies due to changes in the structuring of participating interests and three companies due to their increased importance, have been included in the scope of consolidation since January 1, 2007. Twenty companies have been deconsolidated since the beginning of 2007 because they were merged with other BASF companies or sold. Mergers of Group companies in the first half of 2007 were primarily associated with the integration of Engelhard Corp. and the construction chemicals business acquired in 2006. 3. FINANCIAL RESULT [TABLE OMITTED] Interest expenses rose due to the acquisitions that were made in mid-2006. > Detailed information on financial indebtedness is provided in Note 12. Income from companies accounted for using the equity method increased primarily due to the shares in associated companies associated company associate n → Partnerfirma f associated company n → società collegata resulting from the acquisition of Engelhard Corp. In the first and second quarters of 2006, the financial result contained proceeds from the disposal of securities. 4. INCOME TAXES Income before taxes and minority interests is broken down into domestic and foreign income as follows: [TABLE OMITTED] Income taxes are broken down into domestic and foreign income taxes as follows: [TABLE OMITTED] On July 6, 2007 the Business Tax Reform 2008 was approved by the Federal Council of Germany. Among other things, as of the beginning of 2008, this tax reform will reduce corporate income tax to 15% and trade income tax will be treated as a non-deductible business expense. Taking into account all changes, the average corporate tax rate will be reduced to 29%. The tax reform will therefore also affect the calculation of the deferred taxes shown in the Consolidated Financial Statements. Because the tax reform was approved in July and hence after the end of the second quarter, deferred taxes will be recalculated in compliance with international accounting standards in the interim report for the third quarter of 2007. 5. MINORITY INTERESTS [TABLE OMITTED] Minority interests in profits related primarily to the Group companies engaged in natural gas trading as well as to the operating company operating company A business that engages in transactions with outsiders. for the steam cracker in Port Arthur, Texas. Minority interests in losses were mainly related to BASF Plant Science. 6. EARNINGS PER SHARE [TABLE OMITTED] The calculation of earnings per share is based on the weighted average number of common shares outstanding. The calculation of diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings per common share reflects all possible outstanding common shares and their effect on income. In the first half of 2007 and in the first half of 2006, the potentially dilutive instruments were antidilutive and should not be considered. 7. LONG-TERM ASSETS [TABLE OMITTED] Additions to property, plant and equipment in the first half of 2007 related to a number of capital expenditure projects. The most important were as follows: at the site in Antwerp, Belgium, the expansion of the steam cracker, plants for acrylic acid acrylic acid /acryl·ic ac·id/ a readily polymerizing liquid used as a monomer for acrylic polymers. and superabsorbents, as well as MDI production capacity, and the construction of an HPPO plant; in Geismar, Louisiana, the expansion of polyol production; in Port Arthur, Texas, investments to increase availability of the steam cracker; and in Freeport, Texas Freeport is a city in Brazoria County, Texas within the Houston–Sugar Land–Baytown Metropolitan Area and is situated in Southeast Texas. As of the 2000 U.S. Census, the city population was 12,708 and is about sixteen miles away from Angleton. , the startup of a plant for superabsorbents. Additions in the first half of 2006 were primarily related to the acquisition of Engelhard Corp. The purchase price allocations for Engelhard Corp. and for the construction chemicals business acquired from Degussa AG were completed in the first half of 2007. 8. INVENTORIES [TABLE OMITTED] Work-in-process and finished goods and merchandise are combined into one item due to the production conditions in the chemical industry. Services-in-process relate primarily to inventory not invoiced at the balance sheet date. Inventories are valued using the weighted average cost method. 9. STOCKHOLDERS' EQUITY [TABLE OMITTED] The Board of Executive Directors received approval at the Annual Meeting on April 26, 2007, to buy back BASF's shares to a maximum amount of 10% of subscribed capital subscribed capital n → capital m suscrito by October 25, 2008. The shares shall be purchased on the stock exchange or through a public purchase offer addressed to all shareholders. If BASF shares are purchased on a stock exchange, the price paid for the shares may not be higher than the highest market price on the buying day and may not be lower than 25% of that market price. In the case of a public purchase offer, the price offered by BASF may be a maximum of 10% higher than the highest market price on the third trading day In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. prior to the publishing of the public purchase offer. This authorization supersedes the prior authorization prior authorization, n See predetermination. prior authorization Health insurance A cost containment measure that provides full payment of health benefits only if the hospitalization or medical treatment has been to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. BASF shares granted by the Annual Meeting on May 4, 2006. The Board of Executive Directors is authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: to cancel the repurchased shares without the approval of a further resolution at the Annual Meeting. A sale of treasury shares is only authorized after a corresponding resolution at the Annual Meeting, except when, with the approval of the Supervisory Board, the shares are used to acquire companies, parts of companies or participations in companies in return for shares. In the first half of 2007, a total of 9,195,000 shares, or 1.84% of the issued shares, were acquired. The average purchase price was EU81.86 per share. BASF spent a total of EU753 million on the share buyback program in the first half of 2007. As of June 30, 2007, 10,605,000 shares of BASF stock were held by BASF Aktiengesellschaft. Therein were included 1,410,000 shares that were acquired in 2006. These shares were acquired for the purpose of cancellation. Therefore, these shares reduce the subscribed capital as of June 30, 2007. On July 10, 2007, the Board of Executive Directors of BASF Aktiengesellschaft approved the cancellation of 10,605,000 BASF shares. The shares were cancelled by the end of July 2007. The total number of outstanding shares thus declined to 490,485,000. [TABLE OMITTED] Changes in the scope of consolidation led to an increase in the legal reserves of EU3.1 million in the first half of 2007. Transfers from other 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. increased legal reserves by EU29.3 million. The offsetting of actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin gains and losses resulted in an increase in retained earnings of EU677.8 million. 10. PROVISIONS FOR PENSIONS The valuations using the projected unit credit method per 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 were carried out under the following assumptions: [TABLE OMITTED] [TABLE OMITTED] The assumptions regarding the overall expected long-term rate of return are based on the desired portfolio structure and forecasts of expected individual asset class returns. The forecasts are based on long-term historical average returns and take into consideration the current yield level and the inflation trend. In the first half of 2007, the interest rate was adjusted to take account of developments in the capital markets. The resulting actuarial gains led to a significant increase in other long-term assets and to a decline in provisions for pensions and similar obligations. 11. OTHER PROVISIONS [TABLE OMITTED] In natural gas trading provisions are established for outstanding invoices related to gas supplies that have not been priced as of the balance sheet date. These provisions declined in the first half of 2007 compared with December 31, 2006. Provisions for bonuses and severance payments declined in the first half of 2007 as a result of usage. On the other hand, provisions for BASF's stock option program (BOP) increased in the first half of 2007 due to the rise in BASF's share price. 12. LIABILITIES [TABLE OMITTED] [TABLE OMITTED] 13. RELATED-PARTY TRANSACTIONS Related-Party Transaction A business deal or arrangement between two parties who are joined by a special relationship prior to the deal. For example, a business transaction between a major shareholder and the corporation, such as a contract for the shareholder's company to perform Material supply relationships exist for the supply of oil and gas between companies of the BASF Group and the proportionally consolidated joint venture companies Wintershall Erdgas Handelshaus GmbH & Co. KG, Berlin, and Wintershall Erdgas Handelshaus Zug AG, Zug, Switzerland. These transactions are conducted at arm's length prices Arm's length price The price at which a willing buyer and a willing unrelated seller would freely agree to transact or a trade between related parties that is conducted as if they were unrelated, so that there is no conflict of interest in the transaction. and business terms. The unconsolidated portion of these supplies amounted to EU300.1 million in the first half of 2007 and EU388.3 million in the first half of 2006. Several members of the Supervisory Board and Board of Executive Directors also serve on the boards of executive directors or supervisory boards of companies with which BASF maintains business relations. These transactions are conducted at arm's length prices and business terms. BASF has not issued loans to members of the Board of Executive Directors or the Supervisory Board. Statement 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 Section 37y No. 1 of the German Securities Trading securities trading, financial activity involving transactions of property such as stocks, bonds, commodities, and currency (see securities). Although the trading of stocks and bonds dates back several centuries in many Western nations, the development of the Act To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the interim management report of the group includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group for the remaining months of the financial year. Ludwigshafen, July 30, 2007 BASF Aktiengesellschaft Board of Executive Directors 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 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. [TABLE OMITTED] |
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