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BASF sales decline in all regions, demand rises in Asia
31 Jul '09
5 min read
Extensive restructuring measures are necessary to fully exploit the potential of the combined businesses. This will include a reduction of approximately 3,700 positions worldwide by 2013. BASF expects the restructuring to bring synergies of at least €400 million per year, which corresponds to at least 10 percent of Ciba's 2008 sales. This target is to be reached by the end of 2012, with three-quarters of the amount, i.e., €300 million per year, already being achieved by the end of 2010.
The synergies are associated with corresponding integration costs: BASF expects total cash costs of approximately €550 million. The major portion thereof is severance costs. In addition to cash costs, BASF expects non-cash costs of about €500 million. The final amount will depend on the extent of the measures necessary, in particular the number of sites to be closed.
Agricultural Solutions posts higher sales and earnings
In the Chemicals segment, BASF posted a drop in sales of 41 percent due to lower volumes and prices. Although EBIT before special items was 32 percent lower than in the second quarter of 2008, all divisions improved significantly compared with the first quarter of 2009.
Sales in the Plastics segment fell by 30 percent due to weak demand from almost all customer industries. EBIT before special items was halved. In contrast to the first quarter of 2009, both divisions posted positive earnings thanks to a slight improvement in capacity utilization and strict cost management.
In the Performance Products segment, sales increased by 17 percent as a result of the acquisition of Ciba. Despite lower fixed costs and higher margins, EBIT before special items dropped by 64 percent. This was mainly due to the fact that the acquired Ciba businesses posted a significant loss due to the tough business environment and integration costs.
As a result of the continued weak demand in the automotive industry, sales in the Functional Solutions segment declined by 30 percent. This particularly affected the Catalysts division, which was additionally impacted by a significant decline in precious metal prices. EBIT before special items in this segment fell by 57 percent compared with the same quarter of the previous year, but was again positive following a loss in the first quarter of 2009.
After a lightning start in terms of sales and earnings in the first quarter, second-quarter sales in the Agricultural Solutions segment were only slightly higher than in the same period of 2008. This was the result of delayed planting in North America and parts of Europe, as well as the drought in Argentina. EBIT before special items rose by 1 percent, mainly due to higher prices in North America and Europe, as well as positive currency effects.
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The synergies are associated with corresponding integration costs: BASF expects total cash costs of approximately €550 million. The major portion thereof is severance costs. In addition to cash costs, BASF expects non-cash costs of about €500 million. The final amount will depend on the extent of the measures necessary, in particular the number of sites to be closed.
Agricultural Solutions posts higher sales and earnings
In the Chemicals segment, BASF posted a drop in sales of 41 percent due to lower volumes and prices. Although EBIT before special items was 32 percent lower than in the second quarter of 2008, all divisions improved significantly compared with the first quarter of 2009.
Sales in the Plastics segment fell by 30 percent due to weak demand from almost all customer industries. EBIT before special items was halved. In contrast to the first quarter of 2009, both divisions posted positive earnings thanks to a slight improvement in capacity utilization and strict cost management.
In the Performance Products segment, sales increased by 17 percent as a result of the acquisition of Ciba. Despite lower fixed costs and higher margins, EBIT before special items dropped by 64 percent. This was mainly due to the fact that the acquired Ciba businesses posted a significant loss due to the tough business environment and integration costs.
As a result of the continued weak demand in the automotive industry, sales in the Functional Solutions segment declined by 30 percent. This particularly affected the Catalysts division, which was additionally impacted by a significant decline in precious metal prices. EBIT before special items in this segment fell by 57 percent compared with the same quarter of the previous year, but was again positive following a loss in the first quarter of 2009.
After a lightning start in terms of sales and earnings in the first quarter, second-quarter sales in the Agricultural Solutions segment were only slightly higher than in the same period of 2008. This was the result of delayed planting in North America and parts of Europe, as well as the drought in Argentina. EBIT before special items rose by 1 percent, mainly due to higher prices in North America and Europe, as well as positive currency effects.
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