BASF charts analyst conference call Q2 2016

14
150 years BASF: Considerably higher earnings in chemicals business, Oil & Gas significantly below prior-year quarter Analyst Conference Call Q2 2016 July 27, 2016

Transcript of BASF charts analyst conference call Q2 2016

Page 1: BASF charts analyst conference call Q2 2016

150 yearsBASF: Considerably higher earnings in

chemicals business, Oil & Gas

significantly below prior-year quarter

Analyst Conference Call

Q2 2016

July 27, 2016

Page 2: BASF charts analyst conference call Q2 2016

150 years

BASF Q2 2016 Analyst Conference Call, July 27, 2016 2

Cautionary note regarding

forward-looking statements

This presentation may contain forward-looking statements that are subject to risks and

uncertainties, including those pertaining to the anticipated benefits to be realized from the

proposals described herein. Forward-looking statements may include, in particular, statements

about future events, future financial performance, plans, strategies, expectations, prospects,

competitive environment, regulation and supply and demand. BASF has based these forward-

looking statements on its views and assumptions with respect to future events and financial

performance. Actual financial performance could differ materially from that projected in the

forward-looking statements due to the inherent uncertainty of estimates, forecasts and

projections, and financial performance may be better or worse than anticipated. Given these

uncertainties, readers should not put undue reliance on any forward-looking statements. The

information contained in this presentation is subject to change without notice and BASF does

not undertake any duty to update the forward-looking statements, and the estimates and

assumptions associated with them, except to the extent required by applicable laws and

regulations.

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150 years

BASF Q2 2016 Analyst Conference Call, July 27, 2016 3

Financial figures Q2 2016 Q2 2015 Change

Sales €14.5 billion €19.1 billion (24%)

EBITDA €2.8 billion €3.0 billion (7%)

EBIT before special items €1.7 billion €2.0 billion (16%)

EBIT €1.7 billion €2.0 billion (16%)

Net income €1.1 billion €1.3 billion (14%)

Reported EPS €1.19 €1.38 (14%)

Adjusted EPS €1.30 €1.49 (13%)

Operating cash flow €2.3 billion €2.8 billion (17%)

Sales development Volumes Prices Portfolio Currencies

Q2 2016 vs. Q2 2015 2% (7%) (16%) (3%)

Q2 2016: Financial figures for BASF Group

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BASF Q2 2016 Analyst Conference Call, July 27, 2016 4

Milestones in Q2 2016

Startup of a

specialty amines plant

in Nanjing, China

Agreement to acquire

global surface treatment

provider Chemetall

Completion of the

polyolefin catalysts

divestiture

Startup of a

PolyTHF® plant

in Korla, China

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ChemicalsHigher volumes, but continuing margin pressure

Intermediates

680

(8%)

Monomers

1,371

(13%)

Petrochemicals

1,322

(20%)

€3,373

(15%)

EBIT before special items

million €

548

633

249

465 467

0

200

400

600

800

Q2 Q3 Q4 Q1 Q2

Sales development Volumes Prices Portfolio Currencies

Q2 2016 vs. Q2 2015 4% (17%) 0% (2%)

20162015

Sales Q2 2016 vs. Q2 2015

million €

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Performance

Chemicals

958

(10%)

Care

Chemicals

1,178

(3%)

€3,846

(6%)Nutrition

& Health

497

(11%)

Dispersions

& Pigments

1,213

(3%)304 319

228

547503

0

200

400

600

Q2 Q3 Q4 Q1 Q2

Sales development Volumes Prices Portfolio Currencies

Q2 2016 vs. Q2 2015 2% (3%) (3%) (2%)

EBIT before special items

million €

20162015

Sales Q2 2016 vs. Q2 2015

million €

Performance ProductsSignificant increase in earnings driven by lower fixed costs,

improved margins and higher volumes

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BASF Q2 2016 Analyst Conference Call, July 27, 2016 7

Functional Materials & SolutionsConsiderable earnings increase supported by all divisions

Catalysts

1,508

(11%)

Coatings

800

(2%)

€4,703

(4%)

Performance

Materials

1,766

(1%)

458

371 389

456

535

0

200

400

600

Q2 Q3 Q4 Q1 Q2

Construction

Chemicals

629

+1%

EBIT before special items

million €

Sales development Volumes Prices Portfolio Currencies

Q2 2016 vs. Q2 2015 5% (6%) 0% (3%)

20162015

Sales Q2 2016 vs. Q2 2015

million €

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BASF Q2 2016 Analyst Conference Call, July 27, 2016 8

Agricultural SolutionsDecrease in sales and earnings due to lower volumes and

currency headwinds

1,678 1,459

3,576 3,239

0

1,000

2,000

3,000

4,000

Q2 2015 Q2 2016 H1 2015 H1 2016

(9%)

365320

939 911

0

200

400

600

800

1,000

Q2 2015 Q2 2016 H1 2015 H1 2016

(12%)

Sales

Q2 2016 vs. Q2 2015/H1 2016 vs. H1 2015

million €

EBIT before special items

Q2 2016 vs. Q2 2015/H1 2016 vs. H1 2015

million €

(13%)

Sales development Volumes Prices Portfolio Currencies

Q2 2016 vs. Q2 2015 (8%) 1% 0% (6%)

(3%)

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Oil & GasSignificantly lower sales and earnings

Natural Gas Trading

Exploration & Production

Net income

Sales development Volumes Prices/Currencies Portfolio

Q2 2016 vs. Q2 2015 2% (3%) (82%)

143

288

94

250

1000

200

400

600

Q2 2015 Q2 2015 Q2 2016 Q2 2016

EBIT before special items, net income

million €

Sales Q2 2016 vs. Q2 2015

million €

431

2,964

617

704

0

1,000

2,000

3,000

4,000

5,000

Q2 Q2

20162015

Sales

million €

(83%)

3,668

704

Natural Gas Trading

Exploration & Production

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Review of “Other”

million € Q2 2016 Q2 2015

Sales 485 757

EBIT before special items (212) (63)

Thereof Corporate research costs (88) (102)

Costs of corporate headquarters (56) (64)

Foreign currency results, hedging and

other measurement effects(116) 151

Other businesses 33 30

Special items 65 (20)

EBIT (147) (83)

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Cash flow in 1st half 2016

million € H1 2016 H1 2015

Cash provided by operating activities 3,339 5,143

Thereof changes in net working capital (1,045) 877

miscellaneous items (122) (32)

Cash used in investing activities (1,988) (3,331)

Thereof payments related to tangible/intangible assets (1,979) (2,845)

acquisitions/divestitures 51 (15)

Cash used in financing activities (1,814) (1,033)

Thereof changes in financial liabilities 944 1,723

dividends (2,768) (2,803)

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Strong balance sheet

Total assets increased by

€1.3 billion on higher trade

accounts receivable and

deferred taxes

Inventories were stable at

€9.7 billion

Provisions for pension

obligations increased by

€3.3 billion

Net debt at €14.1 billion

Equity ratio: 40%

24.127.3

15.215.9

31.529.0

Dec 31,2015

June 30,2016

2.2 1.83.1 3.6

9.5 10.6

9.7 9.7

46.3 46.5

Dec 31,2015

June 30,2016

Liquid funds

Accountsreceivable

Long-termassets

Inventories

Other assets

70.8 72.2 70.8 72.2

Otherliabilities

Financialdebt

Equity

Balance sheet June 30, 2016 vs. December 31, 2015

billion €

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Outlook 2016 for BASF Group confirmed

Outlook 2016

Sales will be considerably below prior year due to the divestiture of the natural gas trading

and storage activities and the lower oil and gas prices.

We expect EBIT before special items to be slightly below the previous year level due to

significantly lower earnings in Oil & Gas.

Assumptions 2016

GDP growth: +2.3%

Growth in industrial production: +2.0%

Growth in chemical production (excl. pharma): +3.4%

Exchange rate: $1.10 per euro

Oil price (Brent): $40 per barrel

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