In 2007, BASF earned their highest ever premium of €2.9 billion on cost of capital and again grew profitably and faster than the market. Sales rose by more than 10%. The operational integration of the acquired businesses is now complete and the activities contributed approximately €3.6 billion to sales in 2007. Overall, EBIT before special items grew by approximately 5%.
At €5.8 billion, cash provided by operating activities reached the previous year’s very high level. ‘This solid operating cash flow and our healthy balance sheet are two of BASF’s key strengths’, said Dr Kurt Bock, BASF’s chief financial officer.
In the fourth quarter of 2007, BASF slightly increased sales by almost 2%. EBIT declined by just over 3%, primarily due to low capacity utilisation rates as a result of turnarounds of key plants that lasted longer than scheduled. Volume demand and the level of orders remained strong in the fourth quarter of 2007.
‘The first weeks of 2008 have run on smoothly from the past year for BASF. The level of orders remains strong and the capacity utilisation rates of our plants are high. We therefore expect that BASF’s business will also develop positively in 2008′, said Hambrecht.
BASF are basing their business planning on the following assumptions:

  • A moderate slowdown in global economic growth and global chemical production (excluding pharmaceuticals) to 2.8%
  • Declining interest rates in the US in the course of 2008 with moderate knock-on effects in Europe
  • An average euro/dollar exchange rate of $1.45 per euro
  • An average oil price of $78 per barrel for Brent crude in 2008

The company sees possible risks posed by:

  • continuing uncertainty due to the global credit crisis
  • unfavourable developments in customer industries, in particular in the construction and automotive industries
  • an increasing imbalance in exchange rates
  • economic risks due to the continuing high prices of raw materials, in particular oil
  • an aggravation of geopolitical tensions.

BASF will therefore continue to rigorously implement measures to optimise their portfolio, increase efficiency and reduce costs. In 2008, it remains the declared goal to improve the productivity of the BASF Group in order to ensure the competitiveness of the company in the long term.
‘Assuming that there are no changes to our portfolio, we aim to increase sales and improve income before special items slightly in 2008. We aim to grow faster than the chemical market each year, and we are convinced that BASF will earn at least its cost of capital in any given year’, said Hambrecht.
In Europe, sales by location of company rose by 9%. Sales in North America rose 13% in local currency terms and by 5% in euro terms. The Chemicals and Performance Products segments posted significantly higher sales. This was due in particular to the contribution of the activities acquired in 2006.
BASF remains very dynamic growth in Asia Pacific: Sales rose by more than 25% in local currency terms and by 18% in euro terms. The greatest contribution was made by the Chemicals segment, in particular due to the new Catalysts division. New plant startups in the Plastics and Performance Products segments benefited from the above-average growth in the Asian markets. Income from operations amounted to €828 million and was thus more than four times higher than in the previous year. This was due to strong earnings growth in the Chemicals and Plastics segments as well as significantly lower special items.
In the region South America, Africa, Middle East, sales increased by 28% in local currency terms and by 24% in euro terms. Income from operations rose by 45% to €311 million. This was due in particular to higher volumes and prices for agricultural products in South America, especially in Brazil.