BASF in top shape; Record sales in the first quarter; Strong rise in earnings.Business Editors MOUNT OLIVE Mount Olive is the name of several places: United States of America Cities and towns
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 has made an excellent start to 2000. First-quarter sales, at (euro) 8.4 billion, were the highest in the company's history. This corresponds to a 25 percent improvement over the same quarter of the previous year. Income from operations rose to (euro) 967 million, surpassing the - admittedly weak - year-ago quarter by more than 69 percent. "BASF is a top company in top shape," said Dr. F. 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 Strube, Chairman of the Board of Executive Directors, at the 48th Annual Meeting in 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. . "Our operating business in 1999 was excellent, and is going to be even better in 2000," Strube told shareholders. All operating divisions contributed to the increase in sales. Sales volumes rose about 11 percent. Price increases and currency effects also had a positive impact. The Plastics & Fibers segment recorded particularly significant growth of 47 percent. Oil & Gas and Chemicals each increased sales by 36 percent. In natural gas trading, the knock-on effect knock-on effect Noun the indirect result of an action or decision Noun 1. knock-on effect - a secondary or incidental effect Britain, Great Britain, U.K. from the oil price had a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. influence and led to a significant rise in sales. Income from operations, which rose 41 percent before special items, was even more positive than sales. The Oil & Gas segment achieved the most significant increase in earnings due to the high price of crude oil. In the first quarter, income from operations jumped fivefold fivefold Adjective 1. having five times as many or as much 2. composed of five parts Adverb by five times as many or as much Adj. 1. to (euro) 240 million. The plastics business was also extraordinarily successful. All divisions grew, earning a total of (euro) 220 million, which is almost twice the figure for the year-ago period. Business climate continues to remain healthy For the rest of the year, BASF assumes that the business climate will continue to remain healthy, but to be somewhat calmer in the second half. Rates of increase will also be more moderate, because they will be measured against a strong year-ago period. Strube said, "A crucial factor for our earnings will be whether we can raise our selling prices, thus passing on the increases in raw material costs and improving our margins. The brisk Brisk as a proper name may refer to:
Income to increase at least 10 percent every year BASF has set itself ambitious goals for the next three years: "This year and over the next two years, we plan to increase our income from operations on a comparable basis by an average of at least 10 percent annually. The prospects of doing so are highly promising," said Strube. The increasing use of new media will also contribute to meeting these goals, by strengthening our cooperation with customers and suppliers. By 2005, e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. is expected to account for more than 50 percent of BASF's sales. To broaden its investor base 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. and to raise its profile there, BASF is planning to list its American Depositary Receipts American Depositary Receipt (ADR) Certificates issued by a US depository bank, representing foreign shares held by the bank, usually by a branch or correspondent in the country of issue. on 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. on June June: see month. 7, 2000. BASF is a return-focused global company generating 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. growth and profitability from its activities in chemicals, health and nutrition, and oil and gas. The company's product range includes high-value chemicals, plastics, dyestuffs dyestuffs npl → colorants mpl dyestuffs dye npl → Farbstoffe pl dyestuffs npl → coloranti , dispersions, automobile and 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. , crop protection products, pharmaceuticals, fine chemicals, crude oil and natural gas. BASF's approach to integration, known in German as "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%). ," is one of the company's particular strengths and provides a unique competitive advantage. With sales in 1999 of (euro) 29.5 billion (about $29.5 billion) and a workforce of 105,000 employees, BASF is one of the world's top chemical companies. BASF's Internet address There are two kinds of addresses that are widely used on the Internet. One is a person's e-mail address, and the other is the address of a Web site, which is known as a URL. Following is an explanation of Internet e-mail addresses only. For more on URLs, see URL and Internet domain name. is www.basf.com. Note for editors: Dr. Strube's speech will be transmitted today, April 27, 2000, at 10 a.m. 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 : www.basf.de/hauptversammlung. The English 1. English - (Obsolete) The source code for a program, which may be in any language, as opposed to the linkable or executable binary produced from it by a compiler. The idea behind the term is that to a real hacker, a program written in his favourite programming language is version of the speech can be accessed from 10 a.m. at the following address: www.basf.de/pressconference.
1st quarter report April 27, 2000
-- Quarterly sales at record level
-- Earnings significantly improved
-- Vigorous advances in the Plastics & Fibers segment
-- Oil & Gas segment again strong
BASF Group
1st quarter Change 4th quarter Change
Million (euro) 2000 1999 in % 1999 in %
Sales 8,470 6,773 +25.1 8,218 + 3.1
Income from
operations 967 571 +69.4 695 + 39.1
Income before taxes
and special items 888 637 +39.4 826 + 7.5
Income before taxes
and minority
interests 932 552 +68.8 1,384 - 32.7
Net income 464 323 +43.7 696 - 33.3
Earnings per share
in euro 0.75 0.52 +44.2 1.13 - 33.6
Number of employees 105,174 106,534 - 1.3 104,628 + 0.5
Overview Fantastic start to the year 2000: With the best quarterly sales in BASFs history, we started the year 2000 extremely successfully. Compared with the 1st quarter of 1999, sales rose 25 percent and income from operations almost 70 percent. We are also expecting large increases in sales and earnings in the 2nd quarter compared with the year-ago period. We are assuming that business in the 2nd half will continue to be good. 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. will, however, be lower in the 2nd half due to the base effect. Nevertheless, thanks to our good strategic position, we are confident of achieving significant gains in sales and earnings for the year as a whole. The Plastics & Fibers segment advanced particularly strongly in the 1st quarter, with sales rising 47.3 percent, while all the other segments significantly expanded their business as well. The region with the strongest growth in sales was Asia. In Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , we took
advantage of the economic upswing UpswingAn upward turn in a security's price after a period of falling prices. to expand our business. Sales volumes in the 1st quarter improved 11.1 percent. At the same time, we were able to pass along higher selling prices to the market. We relinquished re·lin·quish tr.v. re·lin·quished, re·lin·quish·ing, re·lin·quish·es 1. To retire from; give up or abandon. 2. To put aside or desist from (something practiced, professed, or intended). 3. sales of 129 million or 1.9 percent through portfolio changes, in particular from the sale of the Oil & Gas segments marketing and refinery business. Earnings considerably up: Earnings also improved in line with the higher sales. Adjusted for special items, income from operations was 923 million. Special income resulted, in particular, in the Plastics & Fibers segment, from the sale of a marginal business of Elenac, a joint venture with Shell. Income before taxes and special items at 888 million was 39.4 percent higher than in the 1st quarter of 1999 and exceeded the previous quarters figure by 7.5 percent. Net income was 464 million. This is about 44 percent more than in the year-ago quarter and is equivalent to earnings of 0.75 per share. The decline in income before taxes over the previous quarter can be attributed to the high special income in the financial result of the 4th quarter of 1999.
Factors influencing sales compared
with 1st quarter 1999
%
Volumes +11.1
Prices + 9.6
Currency + 6.3
Scope of consolidation - 1.9
Total +25.1
Earnings development
1st 2nd 3rd 4th
quarter quarter quarter quarter
Million (euro) 2000 1999 2000 1999 2000 1999 2000 1999
Income before
special items 888 637 708 624 826
Change in % +39.4 - 25.8 -12.6 +16.9 +123.2
Net special
items 44 - 85 - 328 - 334 558
Income before
taxes and
minority
interests 932 552 380 290 1,384
Segments Chemicals: By comparison with the 1st quarter of 1999, the sales increase amounted to 342 million or 36.1 percent. The Petrochemicals & Inorganics division almost doubled its sales, both as a result of higher selling prices and larger volumes. The other operating divisions also increased their sales significantly. However, the pressure on margins from higher raw material prices impacted earnings from chemical products at the beginning of value-adding chains of manufacturing. Plastics & Fibers: We raised sales 47.3 percent over the 1st quarter of 1999. In particular, the Styrenic Polymers division improved its sales 15 percent over the previous quarter and 73 percent over the 1st quarter of 1999. The segments income before special items almost doubled in comparison with the 1st quarter of 1999.
Sales by divisions, 1st quarter 2000
Mill. (euro) Change
in %
Petrochemicals & Inorganics 272 +90.2
Industrial Chemicals 228 +39.9
Intermediates 407 +17.6
Specialty Chemicals 383 +29.0
Sales by divisions, 1st quarter 2000
Mill. (euro) Change
in %
Styrenic Polymers 635 +73.0
Engineering Plastics 406 +53.2
Polyurethanes/PVC 630 +24.8
Fiber Products 376 +40.8
Polyolefins 676 +51.9
Segments, 1st quarter
Income from
Income from operations before
Sales operations special items
Million (euro) Change Change Change
2000 1999 in % 2000 1999 in % 2000 1999 in %
Chemicals 1,290 948 +36.1 151 166 - 9.0 156 195 - 20.0
Plastics &
Fibers 2,723 1,849 +47.3 263 100 +163.0 220 112 + 96.4
Colorants &
Finishing
Products 1,689 1,516 +11.4 171 137 + 24.8 167 161 + 3.7
Health &
Nutrition 1,510 1,387 + 8.9 151 143 + 5.6 153 155 - 1.3
Oil & Gas 854 626 +36.4 240 47 +410.6 240 47 +410.6
Other 404 447 - 9.6 - 9 -22 + 59.1 -13 -14 + 7.1
----- ----- ----- --- --- ------ --- --- ------
8,470 6,773 +25.1 967 571 + 69.4 923 656 + 40.7
Colorants & Finishing Products: Sales of Colorants & Finishing Products rose 11.4 percent over the 1st quarter of 1999. The segments income from operations before special items was up 3.7 percent due to a considerably higher contribution to earnings by the Colorants division. Health & Nutrition: The Pharma division raised sales and earnings. Provisions for structural measures were offset by income from portfolio adjustments such as the transfer of the collagenase collagenase /col·la·ge·nase/ (kah-laj´e-nas) an enzyme that catalyzes the hydrolysis of peptide bonds in triple helical regions of collagen. col·lag·e·nase n. business to a British pharmaceutical company. In the Fine Chemicals division, sales rose particularly in the food, cosmetics cosmetics, preparations externally applied to change or enhance the beauty of skin, hair, nails, lips, and eyes. The use of body paint for ornamental and religious purposes has been common among primitive peoples from prehistoric times (see body-marking). and carotenoids Carotenoids Carotenoids are yellow to deep-red pigments. Mentioned in: Vitamin A Deficiency carotenoids (k businesses. The Crop Protection division improved its sales 2.3 percent due to stronger business in Asia. Earnings declined slightly, especially as the result of price pressure 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. . Oil & Gas: The increased price of crude oil is the main reason for the 36.4 percent improvement in sales compared with the 1st quarter of 1999. In natural gas trading as well, the knock-on effect from the oil price began to have a favorable influence and increased sales and earnings significantly. The decline over the previous quarter can be attributed to the sale of our Oil & Gas segments marketing and refinery business at the end of 1999.
Sales by divisions, 1st quarter 2000
Change
Mill. (euro) in %
Colorants 580 + 9.2
Coatings 511 +13.3
Dispersions 598 +12.0
Divisions, 1st quarter 2000
Income from
operations
Income from before special
Sales operations items
Mill. Change Mill. Change Mill. Change
(euro) in % (euro) in % (euro) in %
Pharmaceuticals 614 +13.1 40 +122.2 40 +110.5
Fine Chemicals 354 +12.7 8 - 42.9 10 - 50.0
Crop Protection 542 + 2.3 103 - 7.2 103 - 11.2
Regions, 1st quarter
Sales based on Sales based on
location of location of Income from
customer company operations(a)
Million (euro) Change Change Change
2000 1999 in % 2000 1999 in % 2000 1999 in %
Europe 5,035 4,065 +23.9 5,565 4,495 +23.8 722 416 + 73.6
-- Thereof
Germany 2,049 1,650 +24.2 3,537 2,941 +20.3 493 226 +118.1
North America
(NAFTA) 1,866 1,573 +18.6 1,869 1,568 +19.2 125 142 - 12.0
South America 452 359 +25.9 363 285 +27.4 50 -10 .
Asia, Pacific
Area, Africa 1,117 776 +43.9 673 425 +58.4 70 23 +204.3
----- ----- ----- ----- ----- ----- --- --- ------
8,470 6,773 +25.1 8,470 6,773 +25.1 967 571 + 69.4
(a) Based on location of company
Regions Europe: Compared with the first quarter of 1999, sales in Europe, our home market, rose almost 1 billion or just under 24 percent 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). in the Oil & Gas segment. We achieved powerful growth rates in 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). and other important markets for our products. In eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. , we boosted sales by 30 percent and were well above the level of economic growth in the region. In Europe, the Plastics & Fibers, Chemicals and Oil & Gas segments achieved growth rates of between 32 and 45 percent. Our European companies It may never be fully completed or, depending on its its nature, it may be that it can never be completed. However, new and revised entries in the list are always welcome. This is a list of companies from the countries in the European Union. made a substantial contribution to the Groups improved earnings. North America: The changes in currency exchange rates had a considerable influence on the increase in sales. In euro terms, we expanded our business by about 19 percent and, in dollar terms, by four percent. The Plastics & Fibers and Chemicals segments, in particular, accounted for this increase. In North America, earnings dropped particularly in the Health & Nutrition segment. Large-scale large-scale adj. 1. Large in scope or extent. 2. Drawn or made large to show detail. large-scale Adjective 1. wide-ranging or extensive 2. plants will come onstream OnStream Holdings of the Netherlands was spun off from Philips in 1998 and went bankrupt for a second time in 2003. [1] As a result of its first bankruptcy in 2001, the company was split into two parts, OnStream Data and OnStream MST. this year and next, having a lasting effect on our operations and continuing to strengthen our position in this region. 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. : We further expanded our sales, especially in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. and, through the oil and gas business, in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. . The segment with the strongest sales in this region is Colorants & Finishing Products, with an increase of 12.6 percent. The oil and gas business made a major contribution to the improved earnings in this region. Asia, Pacific Area, Africa: The increase in sales of 43.9 percent as compared with the 1st quarter of 1999 was considerably above the Group average. Our expansion strategy in this region is bearing fruit; our new plants in Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. and 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. will continue to benefit from the upswing in Asia. Adjusted for currency effects, however, we expanded our business by approximately 30 percent. We made particularly strong progress in Plastics & Fibers, Health & Nutrition and Chemicals segments. Our companies in the region tripled their earnings. Finance The increase in 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 arising from high sales in the 1st quarter of 2000 and the payment of fines for violations of antitrust laws antitrust laws n. acts adopted by Congress to outlaw or restrict business practices considered to be monopolistic or which restrain interstate commerce. The Sherman Antitrust Act of 1890 declared illegal "every contract, combination.... in the vitamins business led to a reduction in cash provided by operating activities in comparison with the 1st quarter of 1999. We had spent 243 million on our share buy-back program up to the end of March this year. Switch to the euro: The necessary preparations, fine-tuning In theoretical physics, fine-tuning refers to circumstances when the parameters of a model must be adjusted very precisely in order to agree with observations. Theories requiring fine-tuning are regarded as problematic in the absence of a known mechanism to explain why the and tests of BASFs in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. systems began back in the fourth quarter of 1998. Since January January: see month. 1, 1999, the euro has been used as an additional currency in relevant systems. The switch of the company's currency from DM to will take place at Easter 2000, i. e. after this report has been completed, with retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a effect to January 1, 2000. The test results obtained up to now do not suggest that there will be any difficulties. Statements of Cash Flows, 1st quarter Million (euro) 2000 1999 Net income 464 323 Depreciation of fixed assets 631 589 Changes in net current assets -1,123 - 473 Miscellaneous items 5 160 Cash provided by operating activities - 23 599 Additions to tangible and intangible fixed assets - 575 - 673 Acquisitions and divestitures, net - 115 - 236 Financial investments and other items 235 309 Cash used in investing activities - 455 - 600 Proceeds from capital increases - 243 - 256 Changes in financial indebtedness 458 384 Dividends paid - 9 - Cash used in financing activities 206 128 Changes in cash assets affecting liquidity - 272 127 Initial cash assets and other changes 1,027 757 Cash and cash equivalents 755 884 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 report contains certain forward-looking statements and information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc BASF Group based on current expectations, estimates and projections of its management and information currently available to the company. These statements reflect the current views of BASF with respect to future events, are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. In addition, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. We do not assume any obligation to update the forward-looking statements contained in this report.
Other Reports
1st half 2000 August 8, 2000
3rd quarter, 2000 November 9, 2000
Year 2000 March 14, 2001
1st quarter 2001/
Annual meeting April 26, 2001
Financial Statement of the BASF Group (abridged version)
Consolidated Statements of Income Million (euro)
1st quarter Change 4th quarter Change
2000 1999 in % 1999 in %
Sales, net of
petroleum and
natural gas taxes 8,470 6,773 + 25.1 8,218 + 3.1
Cost of sales 5,411 4,119 + 31.4 5,321 + 1.7
Gross profit on sales 3,059 2,654 + 15.3 2,897 + 5.6
Selling expenses 1,343 1,201 + 11.8 1,532 - 12.3
General and
administrative
expenses 162 189 - 14.3 166 - 2.4
Research and
development
expenses 343 346 - 0.9 318 + 7.9
Other operating
income 257 199 + 29.1 581 - 55.8
Other operating
expenses 501 546 - 8.2 767 - 34.7
Income from
operations 967 571 + 69.4 695 + 39.1
Financial result - 35 - 19 - 84.2 689 .
Income before taxes
and minority
interests 932 552 + 68.8 1,384 - 32.7
Income taxes 458 229 +100.0 681 - 32.7
Minority interests 10 - . 7 +42.9
Net income 464 323 + 43.7 696 - 33.3
Earning per shares
in (euro) 0.75 0.52 + 44.2 1.13 - 33.6
Consolidated balance sheets Million (euro)
Assets March 31 Change Dec. 31 Change
2000 1999 in % 1999 in %
Fixed assets 16,530 15,493 + 6.7 16,070 + 2.9
Inventories 4,316 3,818 +13.0 4,028 + 7.1
Receivables 8,575 6,855 +25.1 7,178 +19.5
Deferred taxes 1,265 1,018 +24.3 1,225 + 3.3
Cash and cash
equivalents 1,197 1,450 -17.4 1,508 - 20.6
Current assets 15,353 13,141 +16.8 13,939 +10.1
Total assets 31,883 28,634 +11.3 30,009 + 6.2
Stockholders equity and liabilities
March 31 Change Dec. 31 Change
2000 1999 in % 1999 in %
Suscribed capital
and capital surplus 4,265 4,165 + 2.4 4,265 .
Retained earnings
and other equity 9,921 9,141 + 8.5 9,551 + 3.9
Minority interests 473 340 +39.1 329 +43.8
Stockholders equity 14,659 13,646 +7.4 14,145 + 3.6
Provisions 9,065 8,200 +10.5 8,638 + 4.9
Financial
indebtedness 1,685 1,853 - 9.1 1,294 +30.2
Miscellaneous
liabilities 6,474 4,935 +31.2 5,932 +9.1
Liabilities 17,224 14,988 +14.9 15,864 + 8.6
Equity and
liabilities 31,883 28,634 +11.3 30,009 + 6.2
The interim balance has not been audited.
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