● Sales in the third quarter of 2023: 15.7 billion euros (same period last year: 21.9 billion euros)
● EBIT before special items in the third quarter of 2023: 600 million euros (same period last year: 1.3 billion euros)
● Cash flow from operating activities in the third quarter of 2023: 2.7 billion euros (same period last year: 2.3 billion euros)
● Full-year 2023 sales and EBIT before special items are expected to be at the lower end of the forecast range announced in July
BASF Group’s sales in the third quarter of 2023 were 15.7 billion euros, a decrease of 62% from the same period last year billion, mainly due to the sharp decline in prices, concentrated in the Materials, Chemicals and Surface Technology business areas. Price increases in the Agricultural Solutions business area boosted sales. In addition, sharp declines in sales across all business areas dragged down sales performance. Dr. Brudermüller, Chairman of the Executive Board of BASF AG. Martin Brudermüller) and Chief Financial Officer Dirk Elvermann "With the exception of the automotive industry, sales to all other customer industries were significantly lower than the same period last year," Doctor said when releasing quarterly results.
Earnings before interest and tax before special items in the third quarter were 575 million euros, a decrease of 772 million euros from the same period last year. This is in line with analyst VARA’s forecast for BASF in October 2023. The average analyst forecast for the month was 6.01 billion euros was basically unchanged. The decline in earnings was mainly due to a sharp decline in EBIT before special items in the Chemicals, Nutrition & Care, Industrial Solutions and Materials business areas. In the "other" business area, earnings also fell significantly. EBIT before special items increased significantly in the Agricultural Solutions business area and slightly in the Surface Technology business area.
Special items in EBIT in the third quarter of 2023 were negative €181 million due to restructuring initiatives. Earnings before interest and taxes were 394 million euros, significantly lower than the 1.3 billion euros in the same period last year.
Earnings before interest, taxes, depreciation and amortization before special items in the third quarter of 2023 were 1.5 billion euros, a decrease of 780 million euros from the same period last year. Earnings before interest, taxes, depreciation and amortization were €1.4 billion, down year-on-year 892 million euros.
Net income was negative 249 million euros, compared with net income of 909 million euros in the same period last year. In addition to lower EBIT before special items, Wintershall Dea's overall losses due to special items also contributed to the decline in net income.
As of September 30, 2023, the company's total assets reached 82.6 billion euros, a decrease of 1.9 billion euros from the end of 2022; net liabilities were 18.9 billion euros, an increase from the end of 2022 2.6 billion euros, but down 1.4 billion euros from the end of the second quarter of this year (June 30, 2023). The shareholders' equity ratio at the end of the third quarter of 2023 was 48.8%, slightly higher than that in 2022 End of the year. "Overall, this shows that BASF is financially strong with a strong balance sheet and a good credit rating," said Dr. Dirk Elvermann.
Cash flow from operating activities in the third quarter of 2023 was 2.7 billion euros, up from 2.3 billion euros in the same period last year. Dirk Elvermann "We achieved this significant improvement in cash flow despite a significant decline in net income," said Dr. Cash released from net working capital rose significantly by €1.2 billion to €19 compared with the third quarter of 2022. billion euros, an improvement mainly attributable to the reduction in inventory size. Free cash flow reached €1.5 billion in the third quarter of 2023, compared with €1.3 billion in the same period last year.
By2026the cost reduction plan will save 1.1billion euros per year
BASF has been working to improve its cost structure to increase competitiveness, especially in Europe. 2023 2 At the end of the month, the company announced a cost reduction plan with a focus on Europe and structural adjustments to its integrated base in Ludwigshafen.
BASF currently expects annual cost reductions of more than €600 million in non-production areas by the end of 2024, and more than €700 million per year by the end of 2026. billion euros. These include initiatives in Europe by Global Business Services and Global Digital Services. Additional measures taken by both services in other areas will further save 2 billion euros. Elvermann said: “Together with the 200 million euros reduction in structural adjustment measures at the integrated site in Ludwigshafen, we will end up with a reduction of approximately 11 billion euros per year by the end of 2026. total cost of €100 million."
BASF Group 2023 Full Year Outlook
BASF expects 2023 The output of the global chemical industry will further stabilize in the fourth quarter of this year. However, the macroeconomic outlook remains highly uncertain amid the current interest rate policy environment and rising geopolitical risks. In particular, rising raw material prices could weigh on demand and profit margins.
Nonetheless, BASF’s assessment of the global economic environment in 2023 remains unchanged (in line with BASF Group 2023 The forecasts in the First Half Performance Report remain consistent; values are rounded to one decimal place):
● Global GDP growth rate: 2.0%
● Industrial production growth rate: 1.0%
● Chemical production growth rate: 0.0%
● Average price of EURUSD��1 Euro to US$1.10
● Brent average price: $80 per barrel
BASF Group also maintained its previous full-year forecast for 2023 in its first-half 2023 results report.
● Sales expected to be between €73 billion and €76 billion
● EBIT before special items is expected to be between €4.0 billion and €4.4 billion
● Return on capital employed (ROCE) is expected to be between 6.5% and 7.1%
● CO2 emissions between 17 million and 17.6 million tons
"At the same time, we expect sales and EBIT before special items to be at the lower end of their respective ranges," Brudermüller said. If chemical production has not yet stabilized, there is potential for further production declines and deeper than expected price declines. risks of.
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