Actual development compared with outlook for 2015

For 2015, we had anticipated a slight increase in sales and posted a slight decline. This was predominantly an effect of the sharp drop in oil prices as well as the divestiture of the gas trading and storage business at the end of September 2015. We were able to raise our sales volumes excluding the effects of acquisitions and divestitures, as predicted. Income from operations before special items did not match the previous year’s level as expected, but rather decreased slightly. It was especially down in the Performance Products segment, although earnings in the Agricultural Solutions segment and in Other were also weaker than anticipated. The impairments in the Oil & Gas segment made necessary by our reduced oil and gas price forecast particularly contributed to a significant – and therefore unexpectedly sharp – decline in income from operations. The considerably lower EBIT after cost of capital corresponds to our forecast.

Declining considerably rather than slightly, sales in the Chemicals segment lagged behind our expectations. This was largely the result of an even lower level of oil and gas prices than we had assumed, which led to a sharp drop in prices in some business areas. Income from operations before special items was slightly below prior-year levels, as predicted.

Sales grew slightly in the Performance Products segment, and thus somewhat below our expectations. With positive currency effects and lower sales prices, volumes declined slightly, contrary to our assumptions. Contributing factors here included intense competition in the pigments business; the significant, oil-price-related decrease in demand for oilfield chemicals; and the sale of parts of our pharmaceutical ingredients and services business as well as of our textile chemicals business. The considerable rise expected in income from operations before special items could not be achieved; we posted a slight decline. Earnings were particularly below our expectations in the Care Chemicals and Nutrition & Health divisions.

In the Functional Materials & Solutions segment, we raised sales by 5%, which was just below the considerable growth we had predicted. Higher demand, primarily from the automotive industry, was unable to offset lower sales in precious metal trading. Weighed down by the price of oil, prices in the Performance Materials division also put a strain on sales. We achieved a considerable increase in income from operations before special items, as planned.

Sales in the Agricultural Solutions segment grew considerably, in line with our expectations. With income from operations before special items slightly below 2014 levels, we did not achieve our ambitious aim of considerable improvement. Dampened demand and higher fixed costs from decreased plant capacity utilization and simultaneous inventory reductions had a more negative impact on our business than expected.

We had anticipated a slight sales decline in the Oil & Gas segment. Our 2015 planning had not included the asset swap with Gazprom. The completion of the asset swap at the end of September 2015 resulted in the discontinuation of contributions mainly from the natural gas trading and storage business as of the fourth quarter of 2015, which is usually a seasonally strong quarter. Sales therefore fell considerably. The considerably lower level of income from operations before special items conforms to our expectations.

Sales in Other decreased considerably, as predicted. Contrary to our expectations, income from operations before special items declined considerably, owing to a lower currency result not allocated to the segments.

We invested a total of €5.2 billion¹ in property, plant and equipment in 2015, exceeding the forecasted amount of around €4.0 billion. This higher level of investment is partly attributable to currency effects and to expenditures on non-BASF-operated field development projects in the Oil & Gas segment.