Goal Achievement in 2018

We carry out our corporate purpose, “We create chemistry for a sustainable future,” by pursuing ambitious goals along our entire value chain. In this way, we aim to achieve profitable growth and take on social and environmental responsibility. This also helps to achieve the United Nations’ Sustainable Development Goals (SDGs).1 We are focusing on issues where we as a company can make a significant contribution, such as sustainable consumption and production, climate protection or fighting hunger.

Goal areas along the value chain

Goal areas along the value chain (graphic)

1 Sustainable Development Goals (SDGs): SDG 1 – No poverty, SDG 2 – Zero hunger, SDG 3 – Good health and well-being, SDG 4 – Quality education, SDG 5 – Gender equality, SDG 6 – Clean water and sanitation, SDG 7 – Affordable and clean energy, SDG 8 – Decent work and economic growth, SDG 9 – Industry, innovation and infrastructure, SDG 10 – Reduced inequalities, SDG 11 – Sustainable cities and communities, SDG 12 – Responsible consumption and production, SDG 13 – Climate action, SDG 14 – Life below water, SDG 15 – Life on land, SDG 16 – Peace, justice and strong institutions, SDG 17 – Partnerships for the goals

Procurement

 

 

2020 goal

Status at end of 2018

SDGs

More on

2

Our suppliers are evaluated based on risk due to the size and scale of our supplier portfolio. We define relevant suppliers as Tier 1 suppliers showing an elevated sustainability risk potential as identified by our risk matrices and our purchasers’ assessments. We also use further sources of information to identify relevant suppliers such as evaluations from Together for Sustainability (TfS), a joint initiative of chemical companies for sustainable supply chains.

Assessment of sustainability performance of relevant suppliers2; development of action plans where improvement is necessary

 

70%

60%

SDG 8, 12, 16, 17

more

Growth and profitability

As determined in 2015, our aim was, on average, to grow sales slightly faster and EBITDA considerably faster than global chemical production (excluding pharmaceuticals; 2018: 2.7%; average change since 2015: 3.3%), and to earn a significant premium on our cost of capital. Another goal was to achieve a high level of free cash flow each year, either raising or at least maintaining the dividend at the prior-year level.

 


2018

Change
since 2017

Average change since 20154

3

The average change was calculated using the changes in the non-adjusted figures from 2015 to 2017 and the change in the adjusted figures from 2018 to 2017. This gives an approximate average change on a comparable basis in each case. However, the figures does not take into account the structural decline in sales and EBITDA due to the classification of the oil and gas business as a discontinued operation.

4

Baseline 2015: excluding the gas trading and storage business transferred to Gazprom

Sales3

 

€62.7 billion

2.4%

3.3%

EBITDA3

 

€9.2 billion

(14.9%)

3.8%

Dividends per share paid out

 

€3.10

€0.10

 

Premium on cost of capital

 

€0.8 billion

 

 

Free cash flow

 

€4.0 billion

 

 

Employees

 

 

2021 goal

Status at end of 2018

SDGs

More on

5

The term “senior executives” refers to leadership levels 1 to 4, whereby level 1 denotes the Board of Executive Directors. In addition, individual employees can attain senior executive status by virtue of special expertise.

Proportion of women in
leadership positions with
disciplinary responsibility

 

22–24%

21.7%

SDG 5, 16

more

 

 

Long-term goals

 

 

 

International representation among senior executives5

 

Increase in proportion of
non-German senior executives
(baseline 2003: 30%)

40.4%

 

more

Senior executives with
international experience

 

Proportion of senior executives with
international experience over 80%

85.4%

 

more

Safety in production

 

 

2025 goal

Status at end of 2018

SDGs

More on

Reduction of worldwide lost-time injury rate
per 200,000 working hours

 

≤0.1

0.3

SDG 3, 8

more

Reduction of worldwide process safety incidents
per 200,000 working hours

 

≤0.1

0.3

SDG 3, 12, 15

more

 

 

Annual goal

 

 

 

Health Performance Index

 

>0.9

0.96

SDG 3, 8

more

Product stewardship

 

 

2020 goal

Status at end of 2018

SDGs

More on

Risk assessment of products that we sell in quantities of more than one metric ton per year worldwide

 

>99%

91%

SDG 3, 12

more

Energy and climate protection

 

 

2020 goal

Status at end of 2018

SDGs

More on

1

The selection of relevant sites is determined by the amount of primary energy used and local energy prices; figures relate to BASF operations including the discontinued oil and gas business.

Coverage of our primary energy demand by certified energy management systems (ISO 50001) at all relevant sites1

 

90%

73.0%

SDG 7, 12, 13, 14, 15

more

Reduction of greenhouse gas emissions per metric ton of sales product (excluding the oil and gas business, baseline 2002)

 

(40%)

(34.2%)

SDG 12, 13, 14, 15

more

Water

 

 

2025 goal

Status at end of 2018

SDGs

More on

Introduction of sustainable water management at all production sites in water stress areas and at all Verbund sites (excluding the oil and gas business)

 

100%

50.0%

SDG 3, 6, 12, 14, 15

more

Products and solutions

 

 

2020 goal

Status at end of 2018

SDGs

More on

Increase the proportion of sales generated by products that make a substantial contribution to sustainable development (Accelerator products)

 

28%

27.7%

SDG 3, 8, 9, 12, 13

more

Business expansion in emerging markets

Sales2 in emerging markets
Sales in emerging markets (bar chart)

2 Percentage of BASF Group sales by location of customer

Overall, growth in the emerging markets declined slightly in 2018. We define the emerging markets as Greater China, the ASEAN countries,3 India, Pakistan and Bangladesh; Central and South America; eastern Europe; the Middle East, Turkey and Africa. Momentum eased slightly in eastern Europe. The eastern E.U. countries continued to post dynamic growth, albeit slower than in the previous year. Russia’s output rose faster than in the previous year, buoyed by the comparatively high oil price and strong growth in the construction sector. In the emerging markets of Asia, which account for over 60% of the gross domestic product (GDP) of all emerging economies, growth declined slightly. The Chinese economy noticeably cooled, while India and Thailand saw stronger increases in economic output compared with the previous year. In South America, the economy darkened significantly as Argentina fell back into recession. Brazil continued its moderate recovery despite political uncertainty ahead of the presidential elections and production outages caused by strikes in the spring. Although growth slowed significantly in Turkey, the Middle East as a whole only recorded a slight decline. The oil-producing states benefited from rising oil prices. Growth remained more or less stable in Africa, too. The weaker trend in South Africa was offset by a marked upturn in Nigeria.

Compared with 2017, sales at our companies located in emerging markets rose by 2% to €17,144 million, largely as a result of higher sales prices and volumes. Measured by location of customer, we increased sales in the emerging markets by 1% to €21,799 million. This brought sales to customers in emerging markets to around 35% of total sales in 2018.

3 Brunei, Indonesia, Malaysia, Myanmar, Cambodia, Laos, the Philippines, Singapore, Thailand, Vietnam