The development of the second half of 2014 has continued into the beginning of 2015: Oil and raw material prices are volatile, as are currencies; the emerging markets are growing more slowly; and the global economy is being dampened by geopolitical conflict. For 2015, we nevertheless anticipate somewhat stronger growth in the global economy, industrial production and the chemical industry than in 2014, partly as a consequence of the lower price of oil. This expectation assumes an average price for Brent crude oil ranging from $60 to $70 per barrel and an exchange rate of $1.20 per euro. The global economy will continue to face substantial risks. In this volatile and challenging environment, we aim to perform well and increase sales slightly in 2015. Income from operations before special items will likely match the level of 2014.
Sales and earnings forecast for the BASF Group
- Slight sales increase expected, due in part to sales growth in Functional Materials & Solutions and Performance Products segments
- Income from operations before special items likely to match level of 2014
BASF Group sales are expected to increase slightly in 2015, largely supported by the sales growth anticipated in the Functional Materials & Solutions and Performance Products segments. We want to raise our sales volumes overall, excluding the effects of acquisitions and divestitures. Income from operations before special items in 2015 will likely match the previous year’s level. We anticipate larger contributions from our chemicals and crop protection businesses1, whereas earnings in the Oil & Gas segment are expected to decrease considerably due to the lower price of oil.
We expect a slight decline in income from operations. In 2014, high levels of special income had arisen primarily from the disposal of our 50% share in Styrolution Holding GmbH. As a result, there is likely to be a considerable decline in EBIT after cost of capital.
The signiﬁcant risks and opportunities that could affect the attainment of our forecast are described in the Opportunities and risks report.
1 Our chemicals business comprises the Chemicals, Performance Products and Functional Materials & Solutions segments.