Actual development compared with outlook for 2016

In 2016, BASF Group sales and EBIT before special items developed in line with our forecast: Sales declined considerably and EBIT before special items was slightly below the level of 2015. We just barely missed the volumes growth expected in all segments excluding the effects of acquisitions and divestitures: In the Agricultural Solutions segment, volumes were slightly down, while they rose as anticipated in the chemicals business¹ and the Oil & Gas segment. EBIT did not decline slightly as forecast, but rather matched the prior-year level. This was largely the result of special income from the divestitures completed in 2016 in the Functional Materials & Solutions segment. The earnings contribution from the chemicals business increased considerably in 2016, counter to our assumption that it would slightly decline. Mainly because of this, BASF Group EBIT after cost of capital rose considerably rather than decreasing considerably as we had expected.

Sales in the Chemicals segment fell considerably in 2016, whereas we had expected the decline to be slight. Increased volumes were able to partly offset for the sharp drop in prices, but less so than we had foreseen. For EBIT before special items, we observed only a slight, rather than considerable, year-on-year decline, essentially through the higher margins for isocyanates in the Monomers division.

Contrary to our expectations, sales in the Performance Products segment were slightly below the previous year’s level instead of matching it. Volumes growth was less able than we had anticipated to offset price declines and negative portfolio and currency effects. EBIT before special items rose not only slightly, but rather considerably, in the Performance Products segment. In addition to significantly reduced fixed costs thanks to restructuring measures and strict cost management, improved margins also contributed to this development.

In the Functional Materials & Solutions segment, we were able to raise sales volumes in all divisions in 2016, more than compensating for price and currency effects. As a result, sales were not at the same level of the previous year, as forecast, but rose slightly instead. EBIT before special items likewise exceeded our expectations, with a considerable rather than slight increase.

For the Agricultural Solutions segment, we had anticipated slight growth in both sales and EBIT before special items. Due especially to dampened demand for insecticides in South America and fungicides in Europe, however, we posted a slight decrease in sales volumes instead of the expected increase. Negative currency effects also dampened sales. Through strict cost management, EBIT before special items reached the prior year’s level despite the slight decline in sales.

In the Oil & Gas segment, sales and EBIT before special items fell considerably as expected. We expanded our production volumes in 2016 in line with our forecast.

Sales in Other declined considerably, corresponding to our expectations. EBIT before special items, however, was considerably below rather than considerably above the level of the previous year. This was largely attributable to valuation effects for our long-term incentive program.

In 2016, we invested a total of €3.9 billion in capital expenditures², less than the anticipated level of around €4.2 billion. Investments in the Oil & Gas and Performance Products segments in particular were below the values considered in our planning.