• IFRS 10 and 11 and IAS 19 (revised) applied since January 1, 2013;
• New segment structure effective January 1, 2013;
• Restated figures for fiscal year 2012; financial targets for 2015 and 2020 adjusted accordingly;
• Outlook for 2013 unchanged.
The company has applied these standards since January 1, 2013. BASF is publishing restated figures for 2012 in order to provide a basis for comparison for its first-quarter interim report 2013 which will be published on April 26, 2013. The restated figures also reflect the changes in the company’s segment structure which also took effect January 1, 2013. BASF thus has 14 instead of 15 operational divisions, which are aggregated into five instead of six segments.
The application of IFRS 10 and 11 leads to a change in the scope of consolidation at BASF. From January 1, 2013, four companies which were previously fully consolidated and several which were proportionally consolidated will now be accounted for in the BASF Group Financial Statements using the equity method. Overall, the application of IFRS 10 and 11 does not impact net income, but leads to lower reported sales and income from operations (EBIT), especially in the Oil & Gas segment. Net income will be slightly reduced by the application of IAS 19 (revised), which concerns the accounting for employee benefits.
Key restated figures for 2012:
• Sales: €72,129 million (previously reported: €78,729 million)
• Income from operations before depreciation and amortization (EBITDA): €10,009 million (previously reported: €12,516 million)
• EBIT before special items: €6,647 million (previously reported: €8,881 million)
• EBIT: €6,742 million (previously reported: €8,976 million)
• Net income: €4,819 million (previously reported: €4,879 million)
• Earnings per share (EPS): €5.25 (previously reported: €5.31)
Financial targets for 2015 and 2020 adjusted accordingly
BASF announced in November 2011 sales and earnings targets for 2015 and 2020 as part of its “We create chemistry” strategy. BASF aims to grow on average two percentage points above chemical production per year. Based on the changes of IFRS 10 and 11, BASF is adjusting the absolute values of its targets as follows:
• Sales: €80 billion (previously: €85 billion)
• EBITDA: €14 billion (previously: €15 billion)
• EPS: €7.50 (unchanged)
• Sales: €110 billion (previously: €115 billion)
• EBITDA: €22 billion (previously: €23 billion)
Premium on cost of capital: at least €2.0 billion on average per year (previously: €2.5 billion)
These adjustments do not take into account the planned asset swap with Gazprom, which is expected to close by the end of 2013. This transaction includes the divestiture of BASF’s natural gas trading and storage business as well as a share in exploration and production activities in the North Sea. Together these activities contributed about €10 billion to sales and roughly €500 million to EBITDA of BASF Group in 2012.
Outlook for 2013 unchanged
Excluding the effects of acquisitions and divestitures, BASF strives to increase its sales volumes in 2013. The company aims to exceed the 2012 restated levels in sales and EBIT before special items. The expected increase in demand, together with measures to improve operational excellence and raise efficiency, will contribute to this. BASF aims to earn a high premium on cost of capital once again in 2013.
BASF (basf.com) is the world’s leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. We combine economic success with environmental protection and social responsibility. Through science and innovation, we enable our customers in nearly every industry to meet the current and future needs of society. Our products and solutions contribute to conserving resources, ensuring nutrition and improving quality of life. We have summed up this contribution in our corporate purpose: We create chemistry for a sustainable future. BASF had sales of €72.1 billion in 2012 and more than 110,000 employees as of the end of the year. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA) and Zurich (AN).