"The global economy will continue to face substantial risks. In this volatile and challenging environment, we want to perform well and increase sales slightly in 2015," said Bock. EBIT before special items in 2015 will likely match the previous year's level. The company expects considerably larger contributions from Performance Products, Functional Materials & Solutions and Agricultural Solutions. EBIT before special items in the Chemicals segment is likely to decline slightly because of expenses for starting up several plants. The earnings contribution of the Oil & Gas segment is expected to decrease considerably due to the lower price of oil.
"Through the largest investment program in decades, we are laying the foundation for future growth. We have strengthened our Production Verbund over the past years. We are investing in emerging markets. We are investing to take advantage of shale gas in the United States, and we are investing in the competitiveness of our European sites. A whole range of new plants will start up operations in 2015 – plants that will keep producing for the next 10, 20 or 30 years," said Bock. As examples he named plants for polyurethane basic chemicals in Ludwigshafen (TDI) and in Chongqing, China (MDI) as well as a production complex for acrylic acid and superabsorbent polymers in Camaçari, Brazil. Following the conclusion of major projects, the company will invest substantially less in 2015. In the Oil & Gas segment, investment levels will be lower than in the year before. BASF plans total capital expenditures of €4.0 billion, compared with €5.1 billion in 2014.
In order to remain competitive, BASF continuously improves its operational excellence. "Our excellence program, STEP, is also contributing to this. Starting at the end of 2015, we now expect the more than 100 individual projects to contribute around €1.3 billion to our earnings each year, compared with baseline 2011. As of the end of 2014, we have already achieved an earnings contribution of €1 billion compared with the beginning of the program," said Bock.
In the Chemicals segment, fourth-quarter sales declined by 3% to €4.1 billion due to lower prices and volumes. EBIT before special items rose by €70 million to €580 million due to higher contributions from the Petrochemicals division. For the full year, sales in the Chemicals segment were €17.0 billion and matched the level of the previous year. Falling prices in all divisions were offset by higher sales volumes, especially in the Petrochemicals division. At €2.4 billion, EBIT before special items surpassed the level of 2013 by €185 million. This was predominantly on account of substantially larger contributions from the Petrochemicals and Intermediates divisions. The Monomers division, however, posted a considerable, margin-related decline in earnings.
At €3.7 billion, fourth-quarter sales in the Performance Products segment were slightly above the same period of the previous year. EBIT before special items was €217 million and thus at the same level as in the fourth quarter of 2013. For the full year, sales were down by 1% to €15.4 billion. Despite an increasingly gloomy market environment over the course of the year, BASF was able to increase sales volumes with stable prices and thus almost fully compensate for negative currency effects. EBIT before special items improved by €90 million to €1.5 billion. This was mainly because of the reduction in fixed costs due to restructuring and other measures.
BASF increases earnings in full year 2014