✓ audited

Sales and income from operations

Sales

+7%

Sales rise, thanks especially to good business development in Agricultural Solutions segment, higher sales volumes in Oil & Gas segment and positive currency effects

Income from operations

+5%

  • Earnings improve compared with previous year
  • Significant increase, particularly in Agricultural Solutions and Oil & Gas segments
Sales (million €)
Sales (bar chart)Enlarge image
Income from operations (million €)
Income from operations (bar chart)Enlarge image

Economic development in 2012 was significantly weaker overall than in the previous year. Nevertheless, we increased our sales by 7.1%; significant contributing factors here were higher demand in the Agricultural Solutions segment and the Natural Gas Trading business sector as well as the continuous production of crude oil in Libya. By contrast, we posted a 3% decline in volumes in the chemicals business1. Currency effects led to sales increases in all operating divisions. The rise in income from operations was also primarily attributable to developments in the Agricultural Solutions and Oil & Gas segments. The divestiture of our fertilizer and styrenic plastics businesses led to a decline in sales in Other. Further acquisitions and divestitures had only a minor influence on the development of our sales and earnings.

1 Our chemicals business includes the Chemicals, Plastics, Performance Products and Functional Solutions segments.

  Download (xls, 18 kB)

Factors influencing sales BASF Group

 

Change in million €

Change in %

Volumes

2,437

3

Prices

490

1

Currencies

2,751

4

Acquisitions and changes in the scope of consolidation

364

Divestitures

(810)

(1)

Total change in sales

5,232

7

Sales in the Chemicals segment increased mainly as a result of portfolio measures and positive currency effects. Lower volumes and sales prices reduced this increase. While sales volumes declined in the Petrochemicals division, the Inorganics and Intermediates divisions were able to raise volumes. Lower margins and plant shutdowns both led to a decline in income from operations.

We posted a sales increase in the Plastics segment. This was mainly the result of positive currency effects. Despite high demand from the automotive industry – especially in the first half of the year – sales volumes declined overall. We raised prices in some business areas, particularly in the Polyurethanes division; however, especially in polyamide precursors, we were not able to fully pass on increased raw material costs to the customer. This prevented income from operations in the Performance Polymers division from matching the level of the previous year. Significantly higher earnings in the Polyurethanes division were only partly able to compensate for this decline.

Sales in the Performance Products segment were above the level of 2011. With prices stable, positive currency effects more than offset reduced volumes. Income from operations did not match the level of the previous year, chiefly owing to lower plant capacity utilization and increased spending on research and development.

Sales rose in the Functional Solutions segment, predominantly as a result of positive currency effects and portfolio effects. While sales volumes fell overall, demand was high for our automotive coatings and mobile emissions catalysts. The sales contribution from precious metal trading declined. Income from operations for the segment rose, due in part to slightly decreased special charges.

Business was very successful in the Agricultural Solutions segment. We raised our sales and earnings once again compared with the record levels of the previous year. This considerable sales growth is especially attributable to increased sales volumes in all regions and indications (fungicides, herbicides, insecticides and other). Positive currency effects and price increases also boosted sales. Despite the worldwide expansion of our business activities and the costs associated with it, we significantly improved income from operations.

Sales in the Oil & Gas segment increased significantly, driven by volumes and prices. Sales rose in the Exploration and Production business sector mainly as a result of the continuous production of crude oil in Libya. Volumes and sales prices also increased in the Natural Gas Trading business sector. Income from operations for the segment considerably exceeded the level of the previous year.

Sales in Other declined by €1,482 million to €4,793 million. This was primarily attributable to the contribution of the styrenic plastics business to the Styrolution joint venture, which is accounted for using the equity method, as well as to the divestiture of our fertilizer business. Income from operations in Other amounted to minus €267 million compared with €178 million in 2011. A lower currency result and the missing earnings contribution from the styrenic plastics business both contributed to this decline, along with the €174 million increase in expenses for the long-term incentive program. A positive earnings contribution of €645 million resulted from disposal gains on our fertilizer business, which were reported as a special item; in 2011, the contribution of our styrenic plastics business to the Styrolution joint venture resulted in disposal gains of €593 million.

EBIT after cost of capital amounted to €1,534 million. This means we once again earned a significant premium on our cost of capital.