Outlook

The global economy will likely grow by 2.8% in 2015, somewhat faster than in 2014 (+2.5%). Yet the risks remain high. We confirm our outlook for the full year: We aim to perform well and slightly increase sales in a volatile and challenging environment. Income from operations before special items will likely match the level of the previous year.

Opportunities and risks

  • Overall economic development as well as exchange rate and margin volatility present both opportunities and risks

In 2015, opportunities may arise for us from the continued growth of the global economy and from the development of key customer industries, as well as through exchange rate and margin volatility.

We also see opportunities in the implementation of our “We create chemistry” strategy and in further improving our operational excellence, as well as strengthening research and development. We will continue to concentrate on expanding our business in growth markets as well as on innovations, portfolio optimization, restructuring and increasing efficiency. For example, our excellence program, STEP, serves to strengthen our competitiveness and profitability. Starting at the end of 2015, STEP is expected to contribute around €1.3 billion to earnings each year. STEP comprises over 100 individual projects and is running right on schedule.

Yet there are also risks to the development of our business. These include an economic slowdown in China and uncertainty as to growth in Europe. Risks can also lurk in exchange rate and margin volatility as well as in the development of our key customer industries.

The statements on opportunities and risks made in the BASF Report 2014 remain valid.

More detailed information can be found in the BASF Report 2014, in the Opportunities and Risks Report

Forecast

  • Slight sales increase expected for 2015
  • Income from operations before special items likely to match level of 2014

Our expectations for the global economic environment in 2015 remain unchanged:

  • Growth of gross domestic product: 2.8%
  • Growth in industrial production: 3.6%
  • Growth in chemical production: 4.2%
  • An average euro/dollar exchange rate of $1.20 per euro
  • An average oil price for the year of $60 to $70 per barrel

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 businesses, 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 arose 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.