Good start for BASF in 2018
At €16.2 billion, full-year sales in the Performance Products segment were €659 million above the prior-year figure. This is mainly attributable to volume growth in all divisions. Higher sales prices in the Care Chemicals and Dispersions & Pigments divisions also had a positive impact on sales. Portfolio measures and negative currency effects in all divisions reduced sales slightly. EBIT before special items declined by €361 million year-on-year to €1.4 billion. This was largely due to lower margins, primarily as a result of higher raw materials prices that could not be fully passed on via sales prices.
In the Functional Materials & Solutions segment, sales were up considerably by 7% in the fourth quarter. Primarily as a result of higher prices, sales reached €5.3 billion. Higher raw material costs led to lower margins, causing EBIT before special items to fall 42% to €267 million. Furthermore, higher fixed costs negatively impacted earnings.
In the full year 2017, sales increased by €2 billion to €20.7 billion. This was due to higher prices and volumes as well as the Chemetall business, which was acquired from Albemarle in December 2016; sales were slightly reduced by currency effects. The volumes growth was largely attributable to higher demand for BASF products for the automotive and construction industries. At €1.6 billion, EBIT before special items was down €329 million on the 2016 figure, primarily due to lower margins and higher fixed costs. Special charges in 2017 mainly related to integration costs in connection with the Chemetall acquisition as well as the acquisition of the western European building material business for professional users from the Henkel group.
Sales in the Agricultural Solutions segment rose by 4% in the fourth quarter to €1.3 billion. Significantly higher volumes more than compensated for declining prices and negative currency effects. Compared with the same quarter of the previous year, EBIT before special items grew by 162%, rising by €128 million to €207 million.
Full-year sales in the Agricultural Solutions segment rose by €127 million to €5.7 billion as a result of higher sales volumes. In an ongoing difficult market environment for crop protection products, sales growth was negatively impacted by price declines, especially in South America, and negative currency effects. EBIT before special items was €1 billion, down €54 million on the prior-year figure. The slight decline was mainly due to the lower average margins from a different product mix and the difficult market situation in Brazil. Earnings were also negatively impacted by the shutdowns of production facilities in Beaumont, Texas, and Manatí, Puerto Rico, because of the hurricanes. Fixed costs rose slightly.
In the Oil & Gas segment, fourth-quarter 2017 sales declined by 7% to €862 million as a result of lower volumes. However, higher prices for oil and gas had a positive effect on earnings. EBIT before special items increased by €97 million to €260 million.