17.03.2004 – 07:30
BASF expects moderate growth in 2004
- Sales rise substantially in 2003 despite negative currency
- EBIT before special items higher than in previous year
- Fourth quarter substantially better than expected
- Cash flow at record level
- Agricultural Products & Nutrition increases sales and earnings
BASF's figures for 2003 clearly show that the tremendous hard work
by the company's employees worldwide has been successful: BASF has
strengthened its position as the world's leading chemical company. In
a difficult market environment, sales increased by 3.6 percent to
EUR33.4 billion. Excluding currency effects, the growth would have
been substantially higher and sales would have reached EUR35.7
The forecast made last November for income from operations (EBIT)
before special items was exceeded: It increased in 2003 by about 4
percent to almost EUR3 billion. Cash provided by operating activities
reached a record level of EUR4.9 billion.
EBIT in 2003 contained special charges of EUR335 million. These
special charges were primarily related to restructuring measures
taken to increase efficiency as part of the Ludwigshafen Site
Sales and earnings increased substantially in the Agricultural
Products & Nutrition and Oil & Gas segments. In the Chemicals,
Plastics and Performance Products segments, earnings were below the
previous year's level, but sales in some divisions increased.
"Even in very challenging times, BASF is and will remain a company
that investors can count on for its financial strength, a strong
potential for innovation and its reliability," said Dr. Jürgen
Hambrecht, Chairman of the Board of Executive Directors of BASF
Aktiengesellschaft at the company's Annual Press Conference in
Ludwigshafen on March 17, 2004.
Fourth quarter substantially better than expected
Business has picked up since last October, and sales in the fourth
quarter increased 6.5 percent to EUR8.54 billion. Thanks to our
cost-savings program and improved capacity utilization, EBIT before
special items increased by more than 25 percent to EUR814 million.
Outlook: Moderate growth in sight for 2004
According to Hambrecht, the medium-term prospects for the global
economy are now somewhat more favorable: "Throughout the world, the
economy seems to have bottomed out. Upward movement is increasing;
the growth markets in Asia and the United States are fueling the
global recovery process."
The company's forecast for 2004 is based on the following
- An improved investment climate and a gradually improving
- an average oil price of $28/barrel in 2004, and
- a U.S. dollar that continues to be volatile and weak.
In parallel with the growing demand among industrial customers,
BASF expects that global economic activity in the chemicals industry
will pick up the pace somewhat. Once again, the main impulses will
come from Asia and to some extent from the United States. In general,
moderate growth is expected.
The figures for January and February 2004 indicate sales and EBIT
at the strong level seen in the previous year. Hambrecht said, "Based
on the conditions I have just mentioned, we expect slightly higher
sales and an increase in EBIT in 2004."
However, there are uncertainties in the future. For example, the
strong euro is acting as a noticeable brake on European exports. Oil
and raw material prices will remain at unexpectedly high levels and
will therefore also retard growth.
Hambrecht stated: "Nevertheless, instead of only seeing the
downside, we want to look ahead to the remainder of 2004 with
somewhat greater confidence. We will devote our fullest energies to
those areas that lie within our control. We will continue with our
measures to reduce costs and increase efficiency, as well as our
efforts to reduce operational assets. In 2004, as announced, we will
reduce capital expenditures to the level of depreciation."
BASF is the world's leading chemical company. Our goal is to grow
profitably and further increase the value of our company. We help our
customers to be more successful through intelligent system solutions
and high-quality products. BASF's portfolio ranges from chemicals,
plastics, performance products, agricultural products and fine
chemicals to crude oil and natural gas. Through new technologies we
can tap into additional market opportunities. We conduct our business
in accordance with the principles of sustainable development. In
2003, BASF had sales of more than EUR33 billion (circa $42 billion)
and over 87,000 employees worldwide. BASF shares are traded on the
stock exchanges in Frankfurt (BAS), London (BFA), New York (BF),
Paris (BA) and Zurich (AN). Further information on BASF is available
on the Internet at www.basf.com.
Information on the Annual Press Conference can be found on the
You can download photos of BASF from the Internet at:
This release contains forward-looking statements under the U.S.
Private Securities Litigation Reform Act of 1995. These statements
are based on current expectations, estimates and projections of BASF
management and currently available information. They are not
guarantees of future performance, involve certain risks and
uncertainties that are difficult to predict and are based upon
assumptions as to future events that may not prove to be accurate.
Many factors could cause the actual results, performance or
achievements of BASF to be materially different from those that may
be expressed or implied by such statements. Such factors include
those discussed in BASF's Form 20-F filed with the Securities and
Exchange Commission. We do not assume any obligation to update the
forward-looking statements contained in this release.
ots Original Text Service: BASF Aktiengesellschaft
Michael Grabicki Phone: +49 621 60-99938 Fax:+49 621 60-92693 firstname.lastname@example.org
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