BASF off to a dynamic start in 2000
15 March 2000
BASF off to a dynamic start in 2000
Business Editors
LUDWIGSHAFEN, Germany--March 15, 2000--
-- Sets ambitious growth target for 2000-2002
-- e-commerce to play increasingly important role
-- 1999 sales up 6.6 percent, ncome from operations before special
items up 15.6 percent
NOTE: E = EURO DOLLAR
BASF Aktiengesellschaft announced today that it has set ambitious
growth targets for the coming years and intends to become one of the
leading chemical companies in e-commerce.
"Our goal is to increase income from operations on a comparable
basis by an average of at least 10 percent annually between 2000 and
2002," said Dr. Jurgen F. Strube, Chairman of the Board of Executive
Directors of BASF Aktiengesellschaft, at the company's annual news
conference in Ludwigshafen.
BASF also intends to become one of the leading chemical companies
in e-commerce and make intensive use of new media for purchasing and
selling products and services. In as little as two years, BASF's goal
is to handle a considerable proportion of its sales of standard
products through new media.
For BASF, 1999 was a dynamic year that provided a powerful start
to the emerging upturn in the global economy. The company improved its
performance in all regions as well as segments. Total sales rose 6.6
percent to E 29.5 billion and income from operations before special
items climbed 16 percent to E 2.9 billion. After a very difficult
first half to 1999, BASF's sales increased month by month. The company
achieved the highest successive sales figures in October, November and
December in BASF's history.
BASF's business was driven by very good sales volumes. BASF sold
some six percent more products in 1999 that were valued at nearly E
1.6 billion. Foreign exchange rate factors also contributed to the
upturn in sales, particularly due to the dollar. Additions to the
scope of consolidation also helped. Sales prices, however, fell 3.9
percent over 1998.
Income from operations before special items rises
BASF's dynamic performance is also illustrated by its income from
operations before special items, which increased significantly. Income
before taxes and special items rose nearly nine percent, and income
from operations before special items climbed 15.6 percent. All
operating divisions made positive contributions to income from
operations before special items.
The excellent performance in day-to-day business was burdened by
substantial special items. BASF had to pay significant fines for
violations of antitrust laws in its vitamins business and took
provisions to settle lawsuits. At the same time, however, BASF
received substantial special income, particularly from the sale of
non-strategic businesses.
With the exception of Chemicals, all of BASF's segments achieved
higher income from operations before special items. The clear leader
was the company's Oil & Gas segment, which more than doubled its
income from operations by E 346 million. The Plastics & Fibers segment
boosted its income from operations before special items by almost 23
percent. Income from operations before special items in the Colorants
& Finishing Products segment was marked by a significant increase
achieved by the Colorants division. The Dispersions and Coatings
divisions both nearly matched their high performance of 1998. The
Chemicals segment suffered an earnings decline in 1999, but still
remained the largest contributor to BASF's earnings. Special items
imposed the heaviest burden on income from operations in the Health &
Nutrition segment. When excluding these special items, the segment
also increased earnings.
The outlook for 2000 is very promising. Said Dr. Strube: "Our
business is continuing on the high level of the last quarter of 1999
and we are convinced that we will make this year another successful
one for BASF."
BASF is a return-focused global company generating long-term
growth and profitability from its activities in chemicals, health and
nutrition, and oil and gas. The company's product range includes
high-value chemicals, plastics, dyestuffs, dispersions, automobile and
industrial coatings, crop protection agents, pharmaceuticals, fine
chemicals, crude oil and natural gas. BASF's approach to integration,
known in German as "Verbund," is one of the company's particular
strengths and provides a unique competitive advantage. With sales in
1999 of E 29.5 billion (about $29.5 billion) and a workforce of
105,000 employees, BASF is one of the world's top chemical companies.
BASF's Internet address is www.basf.com
Note to editors: Photos from the 1999 Annul Report as well as photos
of the members of BASF's Board of Executive Directors are available on
the Internet under http://www.basf.de/photos
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Some important figures from our 1999 Annual Report
BASF Group
Million (E) 1999 1998 Change
in %
----------------------------------------------------------------------
Sales 29,473 27,643 6.6
Income from operations
before special items 2,950 2,553 15.6
Income from operations 2,009 2,624 -23.4
Income before taxes
and special items 2,795 2,572 8.7
Income before taxes
and minority interests 2,606 2,771 -5.9
Net income 1,237 1,699 -27.1
Cash provided by operating
activities 3,255 3,744 -13.0
Capital expenditures 3,253 3,722 -12.6
Research and development
expenses 1,333 1,309 1.8
Dividend of BASF
Aktiengesellschaft 702 693 1.3
Dividend per share(E) 1.13 1.12 0.9
Number of employees 104,628 105,945 -1.2
(December 31)
Segments
Sales in million(E) 1999 1998 Change
in %
----------------------------------------------------------------------
Chemicals 4,393 4,255 3.2
Plastics & Fibers 8,533 7,573 12.6
Colorants & Finishing
Products 6,395 6,188 3.3
Health & Nutrition 5,602 5,097 9.9
Oil & Gas 3,051 2,685 13.6
Other(A) 1,499 1,845 -18.7
Total 29,473 27,643 6.6
Income from operations
Million(E) 1999 1998 Change
in mill.(E)
----------------------------------------------------------------------
Chemicals 698 922 -224
Plastics & Fibers 640 539 101
Colorants & Finishing
Products 608 642 -34
Health & Nutrition -588 383 -971
Oil & Gas 741 276 465
Other(A) -90 -138 48
Total 2,009 2,624 -615
(A) Sales and earnings of fertilizers business and of other businesses
as well as expenditures, earnings and assets not allocated to the
segments.
Health & Nutrition: Sales and earnings
Sales Income from Income from
operations operations
before
special items
----------------------------------------------------------------------
Million(E) 1999 1998 1999 1998 1999 1998
----------------------------------------------------------------------
Pharmaceuticals 2,483 2,091 11 66 175 70
Fine Chemicals 1,374 1,256 -794 114 35 112
Crop Protection 1,745 1,750 195 203 198 209
----- ----- ---- ----- ------ -----
Total 5,602 5,097 -588 383 408 391
Regions (location of customer)
Sales in million(E) 1999 1998 Change
in %
----------------------------------------------------------------------
Europe 17,041 16,672 2.2
- Thereof Germany (7,147) (7,011) (1.9)
North America (NAFTA) 6,765 6,249 8.2
South America 1,837 1,640 12.0
Asia, Pacific Area,
Africa 3,830 3,082 24.2
------ ------ ------
Total 29,473 27,643 6.6
Capital expenditures by region
Sales in million(E) 1999 1998 Change
in %
----------------------------------------------------------------------
Europe 1,950 2,214 -11.9
- Thereof Germany (1,595) (1,840) (-13.3)
North America (NAFTA) 1,105 1,092 1.2
South America 83 69 20.3
Asia, Pacific Area,
Africa 115 347 -66.9
------ ------ ------
Total 3,253 3,722 -12.6
Key BASF share data
1999 1998
Number of shares on December 31
(in millions) 621(A) 624
Per share in (E)
Dividend 1.13 1.12
Dividend with tax credit 1.61 1.60
Earnings per share 2.00 2.73
Earnings per share according to U.S.
GAAP(b) 2.14 2.84
Cash provided by
operating activities 5.27 6.02
Stockholders' equity 22.26 20.71
Year-end share price 51.90 32.49
High 52.20 47.50
Low 30.19 29.81
(a) Number of share still to be issued for the exercise of stock
warrants: 9 million.
(b) Subject to review by the U.S. Securities and Exchange
Commission (SEC).
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