Last Update: 03/11/2010
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Part of the audited Consolidated Financial Statements and Management´s Analysis

Care Chemicals

  • Sales declined as a result of weak demand
  • With sales prices largely stable, margins increased despite lower sales volumes
  • Earnings were below the strong 2008 level partly due to integration costs
  • Outlook 2010: higher sales and considerable improvement in earnings as a result of economic recovery

Care Chemicals – Sales by region
(location of customer)

Performance Products – Care Chemicals – Sales by region (pie chart)

The Care Chemicals division posted sales to third parties of €3,405 million, a decrease of €188 million compared with the previous year (volumes –9%, prices –3%, portfolio 5%, currencies 2%). Portfolio measures included the integration of Ciba businesses into the division, and the closure of the formulated vitamin-C manufacturing site in Wilmington, North Carolina, in 2009.

Our business performance proved cyclically resilient in a difficult market environment. Despite lower sales volumes, prices largely remained stable and we were able to raise margins, in particular in the business sectors Detergents & Formulators, Aroma Chemicals and Personal Care Ingredients. Sales in the Nutrition business were below the very good level seen in 2008 due in large part to the weak demand for vitamins, but exceeded our expectations due to stable margins and lower fixed costs. Demand in the Care Chemicals division declined overall, but began a steady recovery from the second quarter on.

Income from operations was negatively impacted by costs resulting from the integration of Ciba businesses. Furthermore, the impairment of intangible assets adversely affected earnings, which were below the previous year’s strong level. Thanks to the rapid integration of Ciba activities into existing BASF structures, we were already able to take advantage of synergies from the combined portfolio for market development purposes in 2009.

We strengthened cooperation with our strategically important customers: We created a new global unit to bundle our key account business in the fields of cleaning, personal care, hygiene and cosmetics worldwide. This will lead to an even stronger focus on the market and our customers’ needs.

We expect a demand-driven rise in sales and generally stable margins in 2010, supported by economic recovery in our key customer industries. We expect considerably higher earnings. The incorporated Ciba businesses will make a contribution to this improvement through greater synergies, lower integration expenses and higher sales in comparison with 2009.

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