Outlook 2010
The stabilization of the global economy, which started in the second half of 2009, is expected to continue in 2010. However, economic recovery in 2010 will likely be slow and uneven. After a very difficult year in 2009, we expect higher sales in 2010 and a significant increase in income from operations. These expectations are based on the change in the economic environment, further cost savings, and cost synergies from the integration of Ciba. In 2010, we expect to once again earn a premium on our cost of capital.
Planned capital expenditures by segment 2010–2014
Following a significant downturn in the first half of 2009, the global economy recovered slightly over the course of the year. The same was true for the chemical industry, which stabilized from a low level. In 2010, we expect the economy to recover further, but the recovery is likely to be slow and uneven. Risks are associated, for example, with ongoing overcapacities, the winding down of national stimulus programs and rising unemployment, especially in Europe.
After a very difficult year in 2009, we expect higher sales and a significant increase in earnings in 2010. Overall, we expect to earn a premium on our cost of capital again.
Forecast
Following a severe recession, the world economy stabilized in the second half of 2009. In 2010, we anticipate a slow and uneven economic recovery. Worldwide, both general industrial production and chemical production will grow. Nevertheless, risks remain, for example, significant overcapacities in the chemical industry. The rise in industrial production will be more pronounced in emerging economies than in industrialized countries.
More on the forecast for the economic environment in 2010
Planned capital expenditures by region 2010–2014
Based on our forecast for the economic environment, we expect our sales to grow again in 2010 and outpace global chemical production. We expect improved capacity utilization, a relatively stable U.S. dollar, and oil prices around the level seen at the end of 2009. As the economic situation is still weak, we will maintain our cost discipline and will continue to adjust our investment plans to the current market conditions. We will continue to rigorously implement our efficiency and restructuring programs.
We expect a significant increase in income from operations, mainly due to increasing volumes and cost synergies from the Ciba integration. Furthermore, costs related to the integration of Ciba will be considerably lower in 2010 than they were in 2009. In 2010, we expect to earn a premium on our cost of capital again.
More on the outlook for sales and earnings in the individual segments and divisions
Assuming that the global economy continues to recover once national stimulus programs have expired, we expect BASF’s sales, income from operations and the premium on our cost of capital to grow further in 2011.
Dividend
Even in very difficult economic times, we aim to offer our shareholders an attractive dividend yield. We aim to increase our dividend each year, or at least maintain it at the previous year’s level.
