BASF Analyst Conference Q1 2011

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Charts accompanying the 1Q2011 Conference Call for investors and analysts on May 6, 2011

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BASF Analyst Conference Q1 2011

  1. 1. Powerful start to 2011 BASF remains on growth track First Quarter 2011 Financial highlights May 6, 2011BASF 1st Quarter 2011 Analyst Conference Call 1
  2. 2. Forward-looking statementsThis presentation includes forward-looking statements that are subject to risks anduncertainties, including those pertaining to the anticipated benefits to be realized from theproposals described herein. This presentation contains a number of forward-lookingstatements including, in particular, statements about future events, future financialperformance, plans, strategies, expectations, prospects, competitive environment,regulation and supply and demand. BASF has based these forward-looking statements onits views with respect to future events and financial performance. Actual financialperformance of the entities described herein could differ materially from that projected in theforward-looking statements due to the inherent uncertainty of estimates, forecasts andprojections, and financial performance may be better or worse than anticipated. Given theseuncertainties, readers should not put undue reliance on any forward-looking statements.Forward-looking statements represent estimates and assumptions only as of the date thatthey were made. The information contained in this presentation is subject to change withoutnotice and BASF does not undertake any duty to update the forward-looking statements,and the estimates and assumptions associated with them, except to the extent required byapplicable laws and regulations.BASF 1st Quarter 2011 Analyst Conference Call 2
  3. 3. Powerful start to 2011First quarter highlights Business performance Q1’11 vs. Q1’10 Sales €19.4 billion +25% EBITDA €3.4 billion +28% EBITDA margin 17.4% 17.0% EBIT before special items €2.7 billion +40% EBIT €2.6 billion +39% Net income €2.4 billion +134% EPS €2.62 +134% Adjusted EPS €1.94 +47% Excellent sales and earnings growth in the chemical activities Cognis contributed significantly to the good results in Performance Products Agricultural Solutions started with strong sales and earnings Higher sales and earnings in Oil & Gas despite lower volumes from LibyaBASF 1st Quarter 2011 Analyst Conference Call 3
  4. 4. Important milestones in Q1 2011 MDI project in Chongqing Gas for Europe Strategy Fertilizer activities Project approved Two Memoranda of 10.3% stake in K+S sold Construction already started Understanding signed – Capital gain before taxes with Gazprom €887 million Completion in 2014 – Development of two Plan to sell major part of the World-scale capacity of additional sites of Achimov 400,000 metric tons fertilizer assets: deposits in Russia Total investment – Sales: Mid three-digit million – Acquisition of 15% stake in ~€860 million South Stream – Capacity: 2.5 million tonsBASF 1st Quarter 2011 Analyst Conference Call 4
  5. 5. ChemicalsRecord earningsQ1’11 segment sales (million €) vs. Q1’10 EBIT before special items (million €)Intermediates Inorganics 800 765 353 687709 617+22% +25% 537 600 461 €3,276 400 +27% 200 Petrochemicals 2,214 0 +28% Q1 Q2 Q3 Q4 Q1 2010 2011Sales development Period Volumes Prices Portfolio Currencies Q1’11 vs. Q1’10 4% 21% 0% 2%BASF 1st Quarter 2011 Analyst Conference Call 5
  6. 6. PlasticsStrong volumes and prices lifted sales and earningsQ1’11 segment sales (million €) vs. Q1’10 EBIT before special items (million €)Polyurethanes 400 371 393 3491,479+21% 279 285 €2,788 200 +27% Performance Polymers 0 1,309 +34% Q1 Q2 Q3 Q4 Q1 2010 2011Sales development Period Volumes Prices Portfolio Currencies Q1’11 vs. Q1’10 14% 11% 0% 2%BASF 1st Quarter 2011 Analyst Conference Call 6
  7. 7. Performance ProductsAcquisitions are paying offQ1’11 segment sales (million €) vs. Q1’10 EBIT before special items (million €)Care Chemicals Performance 600 5541,376 Chemicals 500 471+117% 419 895 370 400 +23%Nutrition €3,982 300 294& Health469 +39% 200+27% 100 Dispersions Paper Chemicals & Pigments 0 393 849 Q1 Q2 Q3 Q4 Q1 - 6% +17% 2010 2011Sales development Period Volumes Prices Portfolio Currencies Q1’11 vs. Q1’10 3% 5% 29% 2%BASF 1st Quarter 2011 Analyst Conference Call 7
  8. 8. Cognis – integration objectivesTargets Achieve 20% EBITDA margin in the Performance Products segment by 2012 Acquisition accretive as of 2012Costs One-time integration costs of €290 million until end of 2013 Inventory step-up of €120 million Costs already incurred: − 2010: €80 million (thereof €60 million inventory step-up) − Q1/2011: €158 million (thereof €60 million inventory step-up)Synergies Generate €275 million of additional EBIT − €135 million growth synergies by the end of 2015 − €140 million cost synergies by the end of 2013BASF 1st Quarter 2011 Analyst Conference Call 8
  9. 9. Functional SolutionsStrong automotive demand drove sales and earningsQ1’11 segment sales (million €) vs. Q1’10 EBIT before special items (million €)Catalysts Construction 165 1581,677 Chemicals 150 142+58% 469 111 +9% €2,818 100 +35% 50 33 Coatings 672 0 +13% Q1 Q2 Q3 Q4 Q1 2010 2011Sales development Period Volumes Prices Portfolio Currencies Q1’11 vs. Q1’10 18% 13% 1% 3%BASF 1st Quarter 2011 Analyst Conference Call 9
  10. 10. Agricultural SolutionsStrong sales and earnings growthQ1’11 segment sales (million €) vs. Q1’10 EBIT before special items (million €)1,400 1,230 400 +7% 1,145 +7% 3431,200 3211,000 300 800 600 200 400 100 200 0 0 Q1 Q1 Q1 Q1 2010 2011 2010 2011Sales development Period Volumes Prices Portfolio Currencies Q1’11 vs. Q1’10 8% (2)% 0% 1%BASF 1st Quarter 2011 Analyst Conference Call 10
  11. 11. Oil & GasHigher oil and gas prices compensated for lower volumesQ1’11 segment sales (million €) vs. Q1’10 EBIT before special items / Net income (million €)Exploration & 800 744Production 629 1181,068 600 145+4% €3,455 400 +7% 626 Natural Gas 200 484 273 306 Trading 2,387 0 +9% Q1 Q1 2010 2011 EBIT bSI Natural Gas Trading Net income EBIT bSI Exploration & ProductionSales development Period Volumes Prices/Currencies Portfolio Q1’11 vs. Q1’10 (13)% 20% 0%BASF 1st Quarter 2011 Analyst Conference Call 11
  12. 12. Review of “Other” Million € Q1 2011 Q1 2010 Sales 1,812 1,338 thereof Styrenics 843 666 EBIT before special items (209) (266) thereof Corporate research (83) (82) Group corporate costs (55) (51) Currency results, hedges and other (78) (136) valuation effects Styrenics, fertilizers, other businesses 185 101 Special items (35) (34) EBIT (244) (300)BASF 1st Quarter 2011 Analyst Conference Call 12
  13. 13. Excellent operating cash flow in Q1 2011 Million € Q1 2011 Q1 2010 Cash provided by operating activities 2,255 1,368 thereof Changes in net working capital 260 (680) Cash provided by investing activities 257 (454) thereof Payments related to tangible / intangible assets (547) (392) Cash used in financing activities (1,200) (757) thereof Changes in financial liabilities (1,073) (679) Dividends (127) (78) First quarter 2011 Despite improved business activities net working capital decreased slightly Free cash flow at €1.7 billion Net debt reduced by €2.4 billion to €11.1 billion since December 31, 2010 €972 million proceeds from the sale of K+S stakeBASF 1st Quarter 2011 Analyst Conference Call 13
  14. 14. Outlook 2011 Assumptions We are increasing our Brent oil price forecast from $90/bbl to $100/bbl We are assuming that oil production in Libya will not restart during 2011 → EBIT before special items from our Libyan oil production for the full year 2011 will be about €1 billion lower compared with 2010 (thereof about €700 million of non-compensable oil taxes) Targets 2011 We expect to generate significantly higher sales We aim to significantly exceed the 2010 EBIT before special items adjusted for non-compensable oil taxes (2010: €7.2 billion) We expect to achieve a high premium on our cost of capital Medium-term targets We aim to grow sales on average by two percentage points per year faster than chemical production growth We strive to grow our earnings further year by year, and to achieve an EBITDA margin of 18% by 2012BASF 1st Quarter 2011 Analyst Conference Call 14
  15. 15. BASF 1st Quarter 2011 Analyst Conference Call 15
  16. 16. Back-UpBASF 1st Quarter 2011 Analyst Conference Call 16
  17. 17. BASF Group Q1 2011Sales (billion €) EBIT before special items (billion €)20 19.4 3.0 2.7 16.2 15.8 16.4 15.5 2.5 2.2 2.216 2.0 2.0 1.812 1.5 8 1.0 4 0.5 0 0.0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2010 2011 2010 2011Sales developmentPeriod Volumes Prices Portfolio CurrenciesQ1’11 vs. Q1’10 5%* 13% 6% 1% * Volumes +9% (without Oil & Gas)BASF 1 st Quarter 2011 Analyst Conference Call 17
  18. 18. Financial highlightsStrong earnings improvement in Q1 Million € Q1 2011 Q1 2010 Δ% Q4 2010 Δ% Sales 19,361 15,454 +25% 16,424 +18% changes due to - volumes +5% - prices +13% - portfolio 6% - currencies +1% EBITDA 3,365 2,627 +28% 2,703 +25% EBIT before special items 2,732 1,954 +40% 1,765 +55% Special items (182) (114) . (78) . EBIT 2,550 1,840 +39% 1,687 +51% Net income 2,411 1,029 +134% 1,100 +119% EPS (€) 2,62 1,12 +134% 1,20 +118% Adjusted EPS (€) 1,94 1,32 +47% 1,39 +40%BASF 1st Quarter 2011 Analyst Conference Call 18
  19. 19. Balance sheet further strengthenedBalance sheet March 31, 2011 vs. end of 2010 (billion €) Proceeds from the sale of 60.2 60.2 BASF’s stake in K+S were 59.4 59.4 used to reduce debt Stock- Net debt decreased by €2.4 23.5 22.7 holders’ Long-term billion to €11.1 billion. Equity assets 32.7 Accounts receivable increased 34.5 by €0.9 billion due to the Financial 13.9 15.0 debt expansion of our business Inventories 8.7 8.7 Equity ratio at 39% (up 1 Accounts 22.8 percentage point) receivable 11.1 10.2 21.7 Other liabilities Other assets 4.9 4.5 Liquid funds 2.8 1.5 Mar 31 Dec 31 Mar 31 Dec 31 2011 2010 2011 2010BASF 1st Quarter 2011 Analyst Conference Call 19
  20. 20. Cognis integrationGenerating €275 million of growth and cost synergies Synergies (million €) Growth synergies Providing joint customer base with access to broader portfolio 300 Increasing solution capabilities 250 Extending innovation capabilities Leveraging regional set-up 200 135 150 Cost synergies Realizing procurement cost 100 savings 140 Consolidating of administrative 50 structures 0 Improving production efficiency Consolidating IT landscape Growth synergies (by the end 2015) Cost synergies (by the end of 2013)BASF 1st Quarter 2011 Analyst Conference Call 20

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