In the fourth quarter of 2017, BASF Group posted sales of €16.1 billion, which represents growth of 8% compared with the same quarter of 2016. Prices rose by 9%. BASF’s sales volumes increased by 4%; this was driven by all segments with the exception of Oil & Gas. By contrast, negative currency effects were significantly higher and reduced sales by 5%. Income from operations (EBIT) before special items in the fourth quarter was €1.9 billion, up by 58% from the same period of the prior year. The significantly higher earnings in the Chemicals, Agricultural Solutions and Oil & Gas segments as well as in Other compensated for lower earnings in the Functional Materials & Solutions and Performance Products segments.
Economic activity picked up in many countries worldwide in 2017. “We took advantage of this upturn and markedly increased our full-year 2017 sales and earnings compared with the previous year,” said Bock. Thanks to good demand, BASF sold greater volumes in all divisions and considerably increased its profitability. Higher prices, especially in the Chemicals segment, also contributed to this. Overall, BASF’s sales grew by 12% to €64.5 billion. One contributing factor was the Chemetall business acquired at the end of 2016, which offers tailor-made solutions for metals surface treatment.
BASF’s earnings rose even more sharply, by around one-third. The company achieved EBIT before special items of €8.3 billion, with a significant contribution coming from the Chemicals segment. Higher margins and volumes in the basic chemicals and intermediates businesses more than offset the lower margins in some of BASF’s specialties businesses. Earnings in the chemicals business – which comprises the Chemicals, Performance Products and Functional Materials & Solutions segments – were significantly higher than in the previous year. EBIT before special items in this business was €7.3 billion, up by 26% versus the
Earnings per share increased from €4.42 to €6.62, equivalent to a rise of 50%. Adjusted for special items and amortization of intangible assets, earnings per share amounted to €6.44, compared with €4.83 in the previous year.
Improved operating cash flowCash provided by operating activities improved by €1.1 billion year-on-year to €8.8 billion in 2017. This was due to the 50% increase in net income to €6.1 billion. In contrast with the previous year, the change in net working capital reduced cash flow. This was largely attributable to the higher level of cash tied up in inventories and trade accounts receivable for operational reasons.
Cash used in investing activities amounted to €4 billion in 2017 compared with €6.5 billion in 2016. Payments made for property, plant and equipment and intangible assets amounted to €4 billion, below the prior-year figure (€4.1 billion). At €4.8 billion, free cash flow was 34% above the level of the previous year. The equity ratio was 44.1% (2016: 42.6%). Net debt declined by €2.9 billion to €11.5 billion.