Outlook 2014

  • Somewhat faster growth expected for global economy despite continuing volatility
  • BASF business to perform well in market environment that remains challenging
  • Increase in sales volumes targeted, excluding effects of acquisitions and divestitures
  • Sales likely to be slightly below 2013 levels, due to divestiture of gas trading and storage business planned for middle of 2014
  • Slight increase in income from operations (EBIT) before special items targeted
  • EBIT expected to considerably exceed 2013 level thanks to special income from divestiture of gas trading and storage business
  • Considerable increase in EBIT after cost of capital forecasted

The world economy is expected to grow slightly faster in 2014 than in 2013, despite continuing volatility. For the global chemical industry, we anticipate growth rates comparable with the previous year’s level. We forecast somewhat higher growth in key customer industries such as the transportation, consumer goods and electronics industries. This will likely have a positive effect on our business.

Overall, we expect to perform well in a market environment that remains challenging in 2014. We aim to increase our sales volumes excluding the effects of acquisitions and divestitures. Nonetheless, sales are likely to decline slightly compared with 2013, due to the divestiture of the gas trading and storage business planned for the middle of 2014. We expect a slight increase in income from operations before special items, especially as a result of considerably higher contributions from the Performance Products and Functional Materials & Solutions segments. We aim to earn a high premium on our cost of capital once again in 2014.

As presented in detail in chapter Economic environment in 2014, we anticipate an increase in global economic growth (+2.8%) and industrial production (+3.7%) in 2014. For the chemical industry, we expect a growth rate of +4.4%, comparable with the level of 2013. We assume an average price for Brent crude oil of $110 per barrel and an average exchange rate of $1.30 per euro.

Sales and earnings forecast for the BASF Group

The divestiture of the gas trading and storage business planned for the middle of 2014 will presumably reduce BASF Group sales considerably in 2014. However, we only expect a slight decrease in sales overall as a result of the slight rise in sales anticipated for the chemicals business1 and significant sales growth in the Agricultural Solutions segment.

We want to slightly increase income from operations before special items. We anticipate a significant earnings improvement in the Performance Products and Functional Materials & Solutions segments.

We predict considerably higher income from operations for the BASF Group than in 2013. Special income arising from the planned divestiture of our gas trading and storage business is expected to make a significant contribution here. We aim to considerably increase income from operations after cost of capital and therefore earn a high premium on our cost of capital.

The significant risks and opportunities which could affect the attainment of our forecast are explained in the Opportunities and risks report.

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