Bock: “We expect global economic growth to pick up only slightly in 2013. The chemical industry will increase production again compared to 2012 because the emerging markets are growing. However, we do not expect a straight-line trend. The market environment remains volatile.” Economic growth would be impaired by an intensification of the debt crises in the eurozone and the United States as well as by lower demand in Asia.
“We stand by our outlook for 2013: We continue to aim to exceed the 2012 levels in sales and EBIT before special items,” said Bock.
The Chemicals segment posted a decline in sales in the first quarter. This was mostly due to lower sales volumes, which were mainly attributable to plant shutdowns in the Petrochemicals division. Sales volumes in the Monomers and Intermediates divisions increased thanks to higher demand. As a result of better margins, earnings considerably surpassed the level of the first quarter of 2012.
Sales declined in the Performance Products segment, largely because of lower sales prices and negative currency effects. While sales in the Nutrition & Health division saw a portfolio-driven increase, they fell in the Dispersions & Pigments and Paper Chemicals divisions, especially as a result of lower sales volumes. Earnings did not match the level of the previous first quarter due mainly to lower margins resulting from higher raw material costs.
Sales in the Functional Materials & Solutions segment matched the level of the first quarter of 2012. Higher sales volumes compensated for negative currency effects. The Performance Materials division in particular posted an increase in volumes. By contrast, sales volumes declined in the Construction Chemicals division on account of weather conditions. Earnings for the segment decreased due to the lower contribution from the Catalysts division.
Sales rose significantly in the Agricultural Solutions segment. The very good start to the season in Europe and North America largely contributed to this. In addition to sharply increased sales volumes, sales growth was also boosted by higher prices as well as the acquisition of Becker Underwood. Earnings significantly increased thanks to higher volumes.
Despite lower crude oil prices, sales grew considerably in the Oil & Gas segment. This was mainly attributable to higher production and trading volumes. Pressure continued to rise on trading margins in the Natural Gas Trading business sector. Earnings for the segment therefore remained just below the level of the first quarter of 2012.
Sales in Other grew compared with the same quarter of the previous year. EBIT before special items improved, as well. This was essentially due to valuation effects for the long-term incentive program; provisions could be reversed in the first quarter of 2013 on account of BASF share price development.
Sales at companies located in Europe grew by 8%, driven primarily by sales volumes. In the Oil & Gas segment, production volumes increased considerably. Sales volumes were also significantly above the level of the previous first quarter in the Agricultural Solutions segment and the Catalysts division. EBIT before special items grew by €114 million to €1.5 billion. This was due to the successful business with crop protection products and lower expenses in Other.
In North America, sales fell by 2% both in U.S. dollars and in euro terms. Sales declined in the chemicals business (which comprises the Chemicals, Performance Products and Functional Materials & Solutions segments) mainly as a result of lower volumes. Plant shutdowns in the Petrochemicals division were largely responsible for this. However, volumes and sales significantly improved in the Agricultural Solutions segment. At €454 million, earnings surpassed the level of the previous first quarter by €88 million, thanks primarily to higher contributions from the Chemicals and Agricultural Solutions segments.
Sales in Asia Pacific grew by 6% in local-currency terms and by 4% in euro terms. Volumes were up in all segments compared with the first quarter of 2012. Negative currency effects and slightly declining sales prices weakened sales growth in the region. Earnings rose by €43 million to €245 million. This was mainly due to the significantly increased contribution from the Chemicals segment that resulted from better margins for basic products.
In South America, Africa, Middle East, sales improved by 2% in local currency terms, while they fell by 6% in euro terms. Higher sales prices could only partly offset negative currency effects and lower sales volumes. Particularly in the Catalysts division and the Agricultural Solutions segment, sales declined considerably. At €38 million, earnings were €41 million below the level of the previous first quarter. This was mainly due to lower contributions from the Agricultural Solutions and Performance Products segments.
