6-K UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
November 7, 2002
BASF AKTIENGESELLSCHAFT
(Exact name of Registrant as Specified in its Charter)
BASF CORPORATION
(Translation of Registrant's name into English)
Carl Bosch Strasse 38, LUDWIGSHAFEN, GERMANY 67056
(Address of Principal Executive Offices)
Indicate by check mark whether the Registrant files or will file annual
reports under cover Form 20-F or Form 40-F
Form 20-F X Form 40-F
--- ---
Indicate by check mark whether the Registrant by
furnishing the information contained in this Form
is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
Act of 1934.
Yes No X
--- ---
If "Yes" is marked, indicate below the file number assigned to the
Registrant in connection with Rule 12g3-2(b): 82- .
BASF Strengthens Its Outlook Despite Growing Economic Risks:
Significant Earnings Increase in 2002
LUDWIGSHAFEN, Germany--(BUSINESS WIRE)--Nov. 14, 2002--BASF (NYSE:BF)
- EBIT before special items climbs 80% in the third quarter
- Substantial improvement in the Chemicals, Plastics & Fibers
and Performance Products segments
- Cost-reduction measures taking effect
Despite an unfavorable environment, BASF is strengthening its
forecast for 2002.
"On the basis of a roughly similar level of sales, we aim to
increase EBIT before special items significantly over 2001," said Dr.
Jurgen F. Strube, Chairman of the Board of Executive Directors at BASF
Aktiengesellschaft, when presenting the company's results for the
third-quarter of 2002.
From July through September, BASF posted total sales of almost
EUR 7.6 billion, or 5.3% more than in the same quarter of 2001. In
July and August, sales were only at the weak level of the previous
year, and did not pick up until September. Cumulative sales for the
first nine months were more than EUR 24 billion, which corresponds to
a slight decline of 2.5% compared with the same period in 2001.
In contrast, third-quarter EBIT before special items of EUR 591
million exceeded the previous year's level by EUR 263 million. This
corresponds to an increase of 80%.
From January through September, BASF achieved EBIT before special
items of more than EUR 2.2 billion, which was EUR 190 million more
than in the same period in 2001.
With the exception of the seasonally weak business with
agricultural products, all of BASF's operating divisions were in the
black before special items in the third quarter. However, the company
is concerned that sales prices are increasingly coming under pressure.
Higher volumes are compensating for the decline in prices only to a
certain extent.
Earnings per share climb significantly to EUR 0.43
In the third quarter of 2002, BASF's earnings per share climbed
significantly from EUR 0.02 in 2001 to EUR 0.43. In 2002, the
performance of BASF shares is also better than that of the DAX and
EURO STOXX 50 indexes. In September, BASF shares were included in
another important index: the STOXX 50. The company has continued to
buy back shares and this year has so far repurchased shares for a
total of more than EUR 445 million.
For 2002 overall, Strube forecast an increase in EBIT before
special items of at least 15% compared to 2001 based on a similar
level of sales. Strube said: "Our confidence is based on the major
efforts that BASF and its employees have taken since the first signs
of an economic downturn were seen in early summer 2001. We are not
passively waiting for an upturn in the economy, but are taking active
measures to further develop BASF: From a position of financial
strength, we are pursuing a strategy of active portfolio management
and carrying our the necessary structural measures."
Turnaround in the United States despite difficult conditions
In all regions with the exception of Asia Pacific, the economic
recovery is proving to be weaker than was expected in the summer.
In Europe, BASF posted total sales in the third quarter of EUR 4
billion, or 4.3% more than in the same quarter of 2001. At EUR 509
million, third-quarter EBIT before special items in Europe was up EUR
74 million on the previous year. BASF's business with oil and gas
contributed 48% to these earnings.
Earnings in the NAFTA region were considerably higher than in the
previous years, although margins remain under pressure from high costs
for raw materials.
Strube noted that consumer confidence is the crucial factor that
will determine how growth in the NAFTA region will develop. Consumers
are apprehensive about falling share prices, increasing unemployment
and the threat of military action against Iraq, he said, and this has
led to cautious buying and slower growth in North America.
From July through September, sales in the NAFTA region were
EUR 1.8 billion, or EUR 117 million more than in the same period in
2001.
At minus EUR 13 million, EBIT before special items in the third
quarter was up EUR 170 million on the previous year.
Third-quarter sales in South America declined 24.2% compared with
the same period in 2001. EBIT before special items exceeded the
previous year's figure by 41% or EUR 21 million, primarily as the
result of the stable contribution from the Oil & Gas segment. In
addition, there were no further devaluation losses in Argentina.
As long as the economic crisis continues in South America, BASF
will continue to pursue a cautious business policy in the region.
In the Asia Pacific region, sales increased by 21.9% to more than
EUR 1.3 billion. EBIT before special items was just below the figure
for the third quarter of 2001. In coming years, Asia - led by China -
is expected to provide an engine for growth at BASF. The company's
capital expenditures at its sites in Nanjing and Caojing, China, and
Kuantan, Malaysia, will contribute to this.
Confident approach to tasks in 2003
With regard to the coming year, BASF's chairman sees 2003 as a
year in which the company will again be faced with demanding tasks.
"Optimistic estimates predict that the gross domestic product will
grow by more than 2% in Western Europe and by almost 3% worldwide,
although growth in the chemical industry is likely to be stronger.
However, this growth associated with a number of uncertainties such as
the possibility of military action against Iraq. Should this occur, we
can expect another significant increase in oil prices, even heavier
pressure on margins and much lower economic growth," said Strube.
"However, it is in such difficult and uncertain times that BASF
derives its success from its drive and decisiveness," Strube
continued. "With our financial strength, the right global position and
a portfolio focused on key markets, we will face the tasks of the
coming months and the year 2003 with determination and confidence."
BASF is the world's leading chemical company. It aims to increase
and sustain its corporate value through growth and innovation. BASF
offers its customers a range of high-performance products, including
chemicals, plastics, coatings systems, dispersions, agricultural
products, fine chemicals as well as crude oil and natural gas. BASF's
distinctive approach to integration, known in German as "Verbund," is
its strength. It enables the company to achieve cost leadership and
gives it a decisive competitive advantage in the long term.
BASF acts in accordance with the principles of Sustainable
Development. In 2001, BASF had sales of EUR 32.5 billion (circa $29
billion) and over 90,000 employees worldwide. BASF shares are traded
on the stock exchanges in Frankfurt (BAS), London (BFA), New York
(BF), Paris (BA) and Zurich (BAS). Further information on BASF is
available on the Internet at www.basf.com.
The following information will be available on the Internet from
today (November 14, 2002) from the times shown:
Interim Report (from 7:30 a.m. CET)
www.basf.de/interimreport (English)
www.basf.de/zwischenbericht (German)
Press Release (from 7:30 a.m. CET)
www.basf.de/pressrelease (English)
www.basf.de/presseinformation (German)
Speeches by Dr. Jurgen F. Strube/Peter Oakley - live transmission
(from 10:00 a.m. CET)
www.basf.de/pcon (English)
www.basf.de/pk (German)
Speeches by Dr. Jurgen F. Strube/Peter Oakley - printed versions
(from 11:00 a.m CET)
www.basf.de/pressconference (English)
www.basf.de/pressekonferenz (German)
Photos (from 7:30 a.m. CET)
www.basf.de/pressphotos (English)
www.basf.de/fotos (German)
Forward-looking statements
This release contains forward-looking statements under the U.S.
Private Securities Litigation Reform Act of 1995. These statements are
based on current expectations, estimates and projections of BASF
management and currently available information. They are not
guarantees of future performance, involve certain risks and
uncertainties that are difficult to predict and are based upon
assumptions as to future events that may not prove to be accurate.
Many factors could cause the actual results, performance or
achievements of BASF to be materially different from those that may be
expressed or implied by such statements. Such factors include those
discussed in BASF's Form 20-F filed with the Securities and Exchange
Commission. We do not assume any obligation to update the
forward-looking statements contained in this release.
CONTACT: BASF
Michael Grabicki, +49 621 60-99938
Fax: +49 621 60-20129
michael.grabicki@basf-ag.de
Third-Quarter Results
November 14, 2002
BASF strengthens its outlook despite growing economic risks:
Significant earnings increase in 2002
EBIT before special items climbs 80% in the third quarter
Substantial improvement in the Chemicals, Plastics & Fibers and Performance
Products segments
Agricultural Products continues to face difficult conditions
Cost-reduction measures taking effect
BASF Group
3rd Quarter Jan.-Sept.
Change Change
Million euro 2002 2001 in % 2002 2001 in %
Sales 7,581 7,199 5.3 24,199 24,817 (2.5)
Income from operations
before special items 591 328 80.2 2,231 2,041 9.3
Income from
operations (EBIT) 467 314 48.7 2,098 1,407 49.1
Income from operations
before depreciation and
amortization (EBITDA) 1,080 919 17.5 3,923 3,359 16.8
Extraordinary income - 111 - - 6,121 -
Income before taxes
and minority interests 455 315 44.4 2,118 7,157 (70.4)
Net income 247 123 100.8 1,305 6,327 (79.4)
Earnings per share
- ordinary (euro) 0.43 0.02 . 2.24 0.57 293.0
- extraordinary (euro) - 0.18 - - 9.83 -
Sales and earnings
Sales: Sales in the third quarter increased by 5.3% compared with the same
period in 2001. Consistently high volume demand more than compensated for a
further decline in prices. Sales were significantly reduced by an increase
in the exchange rate of the euro against the U.S. dollar and the Japanese
yen as well as the devaluation of South American currencies.
Cumulative sales in the first nine months of 2002 were 2.5% lower than in
the same period in 2001.
Factors influencing sales in comparison with previous year
in % 3rd Quarter Jan.-Sept.
Volumes +15.0 +7.7
Prices (4.7) (7.4)
Currency (5.3) (2.0)
Acquisitions/divestitures* +0.3 (0.8)
Total +5.3 (2.5)
*) Including discontinued operations
Earnings: Third-quarter income from operations before special items climbed
80% compared with the same period in the previous year. Higher earnings
were posted in the Chemicals, Plastics & Fibers and Performance Products
segments. High capacity utilization rates in the Petrochemicals division and
the Plastics & Fibers segment positively affected earnings. Earnings were
also improved as a result of the structural measures implemented in 2001.
Due to a much stronger third quarter compared with the weak period in 2001,
cumulative earnings for the first three quarters were 9% higher than in
2001. Special items of euro 124 million including a provision of euro
100 million for the settlement of claims for damages relating to the
vitamins business burdened income from operations in the third quarter.
Despite these special items, third-quarter income from operations after
special items was significantly higher than in the same period of 2001;
cumulative earnings in the first three quarters were almost 50% higher than
in 2001.
Although the financial result for the third quarter was negative at minus
euro 12 million, this was an improvement of euro 98 million compared with
the same quarter of 2001. Among other things, this change was due to special
income of euro 130 million from the sale of securities and higher income
from financial assets. Excluding special income, the interest result
declined as a result of higher financial indebtedness and charges related to
the valuation of financial instruments.
Income before taxes and minority interests net of special items was twice as
high in the third quarter and 20% higher in the first nine months compared
with the same periods in 2001. The average tax rate was 44% in the third
quarter and 36% in the first nine months.
At euro 247 million, net income in the third quarter was twice as high as
in the same quarter of 2001. Ordinary earnings per share climbed from euro
0.02 to euro 0.43.
Special items
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Million euro 2002 2001 2002 2001 2002 2001 2002 2001
Special items
- in income
from operations (4) (173) (5) (447) (124) (14) (442)
- in financial
result 114 - - - 130 (5) (68)
Total 110 (173) (5) (447) 6 (19) (510)
Outlook
In view of the generally stable demand in the Chemicals, Plastics & Fibers
and Performance Products segments, we expect fourth-quarter sales at the
same level as in 2001 and a considerable increase in income from operations
before special items.
For 2002 overall, we currently expect significantly higher income from
operations before special items than in 2001 based on a similar level of
sales. Risks lie in the somewhat difficult economic situation in some
important customer markets, uncertainty regarding monetary and financial
policy in South America and the threat of military escalation in the Middle
East.
Segments
Sales Income from Income from
operations before operations
special items
Change Change Change
Million euro 2002 2001* in % 2002 2001* in % 2002 2001* in %
3rd Quarter
Chemicals 1,352 1,114 21.4 195 119 63.9 177 119 48.7
Plastics &
Fibers 2,159 1,944 11.1 182 15 . 182 14 .
Performance
Products 2,027 1,993 1.7 204 97 110.3 204 87 134.5
Agricultural
Products &
Nutrition 902 1,059 (14.8) (152) (114) (33.3) (254) (121) .
Oil & Gas 809 921 (12.2) 298 331 (10.0) 298 331 (10.0)
Other** 332 168 97.6 (136) (120) (13.3) (140) (116) (20.7)
thereof
exploratory/
biotechnology
research costs - - - 50 64 (21.9) 50 64 (21.9)
7,581 7,199 5.3 591 328 80.2 467 314 48.7
Jan. - Sept.
Chemicals 3,953 3,399 16.3 467 349 33.8 447 324 38.0
Plastics &
Fibers 6,377 6,257 1.9 491 178 175.8 488 151 223.2
Performance
Products 6,087 6,192 (1.7) 529 349 51.6 533 140 280.7
Agricultural
Products &
Nutrition 3,939 4,670 (15.7) 212 350 (39.4) 104 254 (59.1)
Oil & Gas 2,914 3,345 (12.9) 874 1,085 (19.4) 874 1,085 (19.4)
Other** 929 954 (2.6) (342) (270) (26.7) (348) (547) 36.4
thereof
exploratory/
biotechnology
research costs - - - 149 175 (14.9) 149 175 (14.9)
24,199 24,817 (2.5) 2,231 2,041 9.3 2.098 1,407 49.1
*) Previous years figures adjusted to take account of organizational
changes.
**) Includes gains/losses (in quarter -5, previous year -45; cumulative -89,
previous year -21) from foreign currency financial indebtedness which is
not allocated to the segments as well as currency positions which are
macro-hedged. These losses have offsetting unrealized gains from
currency hedges.
Chemicals
Sales growth continued in this segment, with sales climbing 21.4% in the
third quarter (volumes +25.6%, prices/currency -7.6%). The high volume
demand in the markets resulted in higher capacity utilization of our plants.
The new steam cracker in Port Arthur, Texas, which started up at the end of
2001, provided the main increase in volumes.
Third-quarter income from operations before special items exceeded the level
of earnings in the first two quarters of 2002 and was euro 76 million or
63.9% higher than in the same period of 2001.
Sales in the Inorganics division in the third quarter were 7% lower than in
2001 as a result of weak business growth in important customer industries
such as the wood products industry; earnings increased further.
In particular, business in inorganic specialties improved.
In the Petrochemicals division, sales and earnings increased in the third
quarter due to stable demand for cracker products and an improved
plasticizers business. In addition, the Petrochemicals division was no
longer burdened with start-up costs from the steam cracker in Port Arthur,
Texas, as it was in 2001.
In the Intermediates division, sales in the third quarter rose 7.5%;
compared with the same period in 2001, earnings improved only slightly due
to start-up costs for new plants and continuing pressure on margins.
Sales by division
3rd Quarter 1st Half
Change Change
Million euro 2002 2001* in % 2002 2001* in %
Inorganics 172 185 (7.0) 523 562 (6.9)
Petrochemicals 749 528 41.9 2,125 1,545 37.5
Intermediates 431 401 7.5 1,305 1,292 1.0
*) Previous years figures adjusted to take account of organizational
changes.
Plastics & Fibers
Sales in the Plastics & Fibers segment increased 11.1% in the third quarter
(volumes +20.6%, prices/currency -10.0%).
Compared with the weak third quarter of 2001, income from operations before
special items increased significantly by euro 167 million to euro
182 million in the third-quarter of 2002. This was due in particular to the
high capacity utilization of production plants and the implementation of
cost-reduction measures in 2001.
Sales in the Styrenics division increased by 13.5% in the third quarter,
above all as the result of a significant increase in sales volumes; earnings
in the division improved considerably compared with the very weak third
quarter in 2001.
In the Performance Polymers division, third-quarter sales rose 9.4%.
Business improved in almost all product lines, contributing to improved
earnings. An incident at the site in Freeport, Texas, burdened earnings
through production losses and higher procurement costs.
Third-quarter sales in the Polyurethanes division climbed 9.4%, in particular
as the result of higher sales volumes of basic materials in Asia and the
nafta region. The Ellba Eastern joint venture in Singapore started operations
as planned in the third quarter, resulting in a better regional supply of
propylene oxide and achieving a further important step in extending our
polyurethanes business in Asia. Although sales prices for basic materials
were increased to compensate for higher raw material costs, this has not yet
resulted in any fundamental improvement in margins. Earnings were slightly
lower than in the third quarter of 2001.
Sales by division
3rd Quarter 1st Half
Change Change
Million euro 2002 2001* in % 2002 2001* in %
Styrenics 890 784 13.5 2,520 2,487 1.3
Performance Polymers 570 521 9.4 1,739 1,744 (0.3)
Polyurethanes 699 639 9.4 2,118 2,026 4.5
*) Previous years figures adjusted to take account of organizational
changes.
Performance Products
Third-quarter sales in this segment were 1.7% higher than in the same period
in 2001 (volumes +12.5%, prices/currency -10.4%).
Income from operations before special items was euro 107 million higher than
in the weak third quarter of 2001. Compared with the same period in the
previous year, earnings improved in all
divisions. This improvement was due in particular to a better cost structure
and the focus on high-profit products.
In the Performance Chemicals division, sales increased by 1.9% in the third
quarter, and earnings were significantly higher. Business developed
positively in almost all product lines. Good growth rates were achieved in
Asia with pigments for the coatings and plastics industry as well as
products for the leather industry. In Europe, business with products for the
detergents and cleansers industry improved compared with the previous year.
Third-quarter sales in the Coatings division declined 6.2%. Despite this,
there was a significant increase in earnings compared with the same period
in 2001. The main reasons for this were a better cost structure and a more
profitable product mix. The improvements to the cost structure had a
particularly positive effect in the industrial coatings business, although
this business remains difficult.
Sales in the Functional Polymers division increased 8.7% in the third
quarter. Growth was seen in business with the construction and adhesives
industries in the main market Europe, as well as in sales volumes for
superabsorbents. Cost reductions as a result of restructuring measures and
a solid level of business during the vacation period led to a significant
improvement in earnings.
Sales by division
3rd Quarter 1st Half
Change Change
Million euro 2002 2001* in % 2002 2001* in %
Performance Chemicals 839 823 1.9 2,543 2,542 0.0
Coatings 527 562 (6.2) 1,625 1,729 (6.0)
Functional Polymers 661 608 8.7 1,919 1,921 (0.1)
*) Previous years figures adjusted to take account of organizational changes.
Agricultural Products & Nutrition
Sales Income from Income from
operations operations
before
special items
Change Change Change
Million euro 2002 2001 in % 2002 2001 in % 2002 2001 in %
3rd Quarter
Agricultural
Products 411 530 (22.5) (187) (144) (29.9) (188) (148) (27.0)
Fine Chemicals 491 529 (7.2) 35 30 16.7 (66) 27 .
902 1,059 (14.8) (152) (114) (33.3) (254) (121) .
Jan. - Sept.
Agricultural
Products 2,452 2,800 (12.4) 134 274 (51.1) 133 187 (28.9)
Fine Chemicals 1,487 1,506 (1.3) 78 75 4.0 (29) 37 .
Pharmaceuticals* - 364 - - 1 - - 30 -
3,939 4,670 (15.7) 212 350 (39.4) 104 254 (59.1)
*) The pharmaceuticals business was sold to Abbott Laboratories on
March 2, 2001.
Agricultural Products: Compared with the third quarter of 2001, sales fell
by 22.5% and income from operations before special items was euro 43 million
lower at minus euro 187 million. Earnings were negatively impacted by the
strengthening of the euro and above all by weaker business in North America
due to unfavorable weather conditions as well as by the reduction of our
sales activities in Brazil. In view of the worsening financial crisis and
the devaluation of the Brazilian real, we have severely limited sales in
this country and actively repurchased inventory from the distribution
channel.
Fine Chemicals: Third-quarter sales declined 7.2%. An increase in sales
volumes was more than offset by negative currency effects - in particular
the weaker U.S. dollar - and some further weakening of prices for vitamins
and lysine. Sales of cosmetics raw materials and pharmaceutical active
ingredients increased compared with the same period of 2001.
Income from operations before special items increased 16.7% in the third
quarter. This increase was due in particular to the improved cost structure
and growth in business with pharmaceutical active ingredients. As a result
of increasing provisions for the settlement of claims for damages relating
to vitamins, income from operations after special items was negative for
both the third quarter and the first nine months.
Oil & Gas
In the Oil & Gas segment, sales in the third quarter declined 12.2% compared
with the same period in 2001 to euro 809 million (volumes +/- 0%, prices/
currency -12.2%). The main reasons for this decline were negative currency
effects in Argentina, the increase in the value of the euro against the U.S.
dollar (which offset the rise in oil prices) and a reduction in OPEC
production quotas. At almost $27 per barrel, the average oil price in the
third quarter was approximately $1.6 higher than in the same quarter of
2001. In the natural gas trading business, sales did not quite reach the
previous years level as a result of the time lag between changes in oil
prices and the price of natural gas.
Compared with the same period of 2001, third-quarter income from operations
declined only euro 33 million or 10% to euro 298 million. The decline
affected the oil business and natural gas trading.
Foreign income taxes for oil production, which are non-compensable with
German taxes, amounted to euro 123 million in the third quarter
(2001: euro 131 million) and euro 306 million in the first nine months
(2001: euro 409 million). These are included in income tax.
Regions
Location of company Sales Income from Income from
operations before operations
special items
Change Change Change
Million euro 2001 2000 in % 2001 2000 in % 2001 2000 in %
3rd Quarter
Europe 4,380 4,142 5.7 509 435 17.0 409 439 (6.8)
- thereof
Germany 3,119 2,801 11.4 370 320 15.6 270 318 (15.1)
North America
(NAFTA) 1,836 1,642 11.8 (13) (183) 92.9 (37) (201) 81.6
South America 363 503 (27.8) 72 51 41.2 73 51 43.1
Asia,
Pacific Area,
Africa 1,002 912 9.9 23 25 (8.0) 22 25 (12.0)
7,581 7,199 5.3 591 328 80.2 467 314 48.7
Jan. - Sept.
Europe 14,106 14,878 (5.2) 1,955 2,186 (10.6) 1,854 1,967 (5.7)
- thereof
Germany 9,921 10,212 (2.8) 1,421 1,546 (8.1) 1,320 1,431 (7.8)
North America
(NAFTA) 6,217 6,027 3.2 92 (266) . 60 (458) .
South America 1,003 1,387 (27.7) 37 91 (59.3) 38 88 (56.8)
Asia,
Pacific Area,
Africa 2,873 2,525 13.8 147 30 390.0 146 30 386.7
24,199 24,817 (2.5) 2,231 2,041 9.3 2,098 1,407* 49.1
*) Including provisions for structural measures not yet allocated.
Sales based on location of customer
3rd Quarter 1st Half
Change Change
Million euro 2002 2001 in % 2002 2001 in %
Europe 4,011 3,845 4.3 13,004 13,781 (5.6)
- thereof
Germany 1,604 1,497 7.1 5,184 5,542 (6.5)
North America
(NAFTA) 1,783 1,666 7.0 6,122 5,945 3.0
South America 444 586 (24.2) 1,299 1,660 (26.0)
Asia,
Pacific Area,
Africa 1,343 1,102 21.9 3,844 3,431 12.0
7,581 7,199 5.3 24,199 24,817 (2.5)
In the third quarter, business with customers in Europe was up 4.3% compared
with the weak third quarter of 2001. The Plastics & Fibers and Performance
Products segments contributed to this improvement. Compared with the same
period in 2001, income from operations before special items increased euro
74 million or 17% to euro 509 million.
In the NAFTA region, sales in the third quarter rose 7%, primarily as the
result of higher sales in the Petrochemicals division following the startup
of the steam cracker in Port Arthur, Texas. Compared with the third quarter
of 2001, income from operations increased by euro 170 million but re-mained
negative at minus euro 13 million. In the first nine months, earnings were
euro 92 million, up euro 358 million compared with the same period in 2001.
In South America, sales declined by 24.2% in the third quarter, in
particular as a result of the devaluation of the Brazilian real. Because the
economic situation in Argentina and Brazil continues to remain tense, we
are deliberately restricting supplies, in particular in the Agricultural
Products division. Due to the contribution of the Oil & Gas segment and no
further devaluation losses in Argentina, earnings were 41.2% higher than in
2001.
Third-quarter sales in the Asia, Pacific Area, Africa region increased 21.9%
In particular, sales were higher in the Plastics & Fibers and Chemicals
segments. One reason for the increase in sales was the Ellba Eastern joint
venture, which recently started producing propylene oxide and styrene
monomer. Income from operations in the third quarter remained at the same
level as in 2001. At euro 147 million, earnings in the first nine months of
2002 were euro 117 million higher than in the same period of 2001.
Employees
Since the end of 2001, the number of employees has declined by 1,423. The
decline in the various regions was as follows: Europe 656; NAFTA 221; South
America 429; Asia, Pacific Area, Africa 117. Personnel costs declined in
the third quarter by 1.3% to euro 1,436 million and in the first nine months
of 2002 by 3.3% to euro 4,441 million.
Number of employees
3rd Quarter 1st Half Year 2001
2002 2001 2002 2001
End of period 91,122 93,276 91,122 93,276 92,545
Average 90,896 93,323 91,255 95,411 94,744
Finance
Compared with the same period in 2001, cash provided by operating activities
in the first nine months of 2002 climbed by 16.6% or euro 289 million to
euro 2,028 million, primarily due to the significant increase in earnings.
The item "Changes in net current assets" includes cash outflows for payments
for fines and claims for damages relating to antitrust violations in the
vitamins business which occurred several years ago, as well as for the
implementation of restructuring measures decided upon in 2001.
After accounting for proceeds from the sale of securities, cash used in
investing activities amounted to euro 1,433 million. We have reduced
expenditures for tangible assets as planned.
The net cash flow from financing activities was almost balanced. The share
buy-back program resulted in a cash outflow due to the purchase of 10.1
million shares for euro 390 million or an average of euro 38.73 per share.
Financial indebtedness increased, in particular through the issue of
commercial paper.
The equity ratio was 48.2% at the end of the third quarter (year-end 2001:
47.6%).
Retained earnings and other equity developed as shown below:
Million euro
As of December 31, 2001 12,754
Earnings January through September 1,305
Currency translation adjustments (620)
Dividends BASF AG (758)
Share buy-back (390)
As of September 30, 2002 12,291
Consolidated Statements of Cash Flow Jan.-Sept.
Million euro 2002 2001
Net income* 1,305 346
Depreciation of fixed assets 1,853 1,950
Changes in net current assets (715) (530)
Miscellaneous items (415) (27)
Cash provided by operating activities 2,028 1,739
Expenditures for tangible and
intangible fixed assets (1,543) (1.920)
Acquisitions/divestitures, net (42) 7.270
Financial investments and other items 152 (60)
Cash provided by (used in) investing activities (1,433) 5,290
Proceeds from capital increases (352) (784)
Changes in financial indebtedness 1,067 (4,762)
Dividends (811) (1,255)
Cash provided by (used in) financing activities (96) (6,801)
Net changes in cash and cash equivalents 499 228
Cash and cash equivalents as of
beginning of year and other changes 346 606
Cash and cash equivalents 845 834
Securities held as current assets 318 383
Liquid funds 1,163 1,217
*) Excluding extraordinary income in previous year
Forward-looking statements
This report contains forward-looking statements under the U.S. Private
Securities Litigation Reform Act of 1995. These statements are based on
current expectations, estimates and projections of BASF management and
currently available information. They are not guarantees of future
performance, involve certain risks and uncertainties that are difficult to
predict and are based upon assumptions as to future events that may not
prove to be accurate. Many factors could cause the actual results,
performance or achievements of BASF to be materially different from those
that may be expressed or implied by such statements. Such factors include
those discussed in BASFs Form 20-F filed with the Securities and Exchange
Commission. [The Annual Report on Form 20-F is available on the Internet
at www.basf.com.] We do not assume any obligation to update the forward-
looking statements contained in this report.
Financial Statement of BASF Group (abridged version)
Consolidated Statements of Income
3rd Quarter Change Jan.-Sept. Change
Million euro 2002 2001 in % 2002 2001 in %
Sales, net of
natural gas taxes 7,581 7,199 5.3 24,199 24,817 (2.5)
Cost of sales 5,159 4,914 5.0 16,172 16,679 (3.0)
Gross profit on sales 2,422 2,285 6.0 8,027 8,138 (1.4)
Selling expenses 1,154 1,199 (3.8) 3,596 3,868 (7.0)
General and
administrative expenses 170 167 1.8 518 488 6.1
Research and
development expenses 300 296 1.4 894 966 (7.5)
Other operating income 94 39 141.0 427 562 (24.0)
Other operating expenses 425 348 22.1 1,348 1,971 (31.6)
Income from operations 467 314 48.7 2,098 1,407 49.1
Expense/income from
financial assets 15 (24) . 92 (79) .
Interest result (27) (86) 68.6 (72) (292) 75.3
Financial result (12) (110) 89.1 20 (371) .
Income from
ordinary activities 455 204 123.0 2,118 1,036 104.4
Extraordinary income - 111 - - 6,121 -
Income before taxes
and minority interests 455 315 44.4 2,118 7,157 (70.4)
Income taxes 199 197 1.0 756 832 (9.1)
Minority interests 9 -5 . 57 (2) .
Net income 247 123 100.8 1,305 6,327 (79.4)
Earnings per share
- ordinary (euro) 0.43 0.02 . 2.24 0.57 293.0
- extraordinary (euro) - 0.18 - - 9.83 -
Number of shares
in millions (weighted) 578 603 (4.1) 582 608 (4.3)
Consolidated Balance Sheets
Assets Sept 30 Change Dec. 31 Change
Million euro 2002 2001 in % 2001 in %
Intangible assets 3,361 3,814 (11.9) 3,943 (14.8)
Property, plant
and equipment 13,443 13,865 (3.0) 14,190 (5.3)
Financial assets 3,394 3,375 0.6 3,360 1.0
Fixed assets 20,198 21,054 (4.1) 21,493 (6.0)
Inventories 4,681 4,904 (4.5) 5,007 (6.5)
Accounts receivable, trade 5,597 6,151 (9.0) 5,875 (4.7)
Miscellaneous receivables 2,596 2,847 (8.8) 2,384 8.9
Deferred taxes 1,241 1,283 (3.3) 1,373 (9.6)
Liquid funds 1,163 1,217 (4.4) 743 56.5
Current assets 15,278 16,402 (6.9) 15,382 (0.7)
Total assets 35,476 37,456 (5.3) 36,875 (3.8)
Stockholders' equity
and liabilities Sept 30 Change Dec. 31 Change
Million euro 2002 2001 in % 2001 in %
Subscribed capital
and capital surplus 4,408 4,408 0.0 4,408 0.0
Retained earnings
and other equity 12,291 13,351 (7.9) 12,754 (3.6)
Minority interests 394 375 5.1 360 9.4
Stockholders equity 17,093 18,134 (5.7) 17,522 (2.4)
Provisions for
pensions and similar
obligations 3,870 3,917 (1.2) 3,953 (2.1)
Provisions for taxes
and other provisions 5,215 5,910 (11.8) 6,188 (15.7)
Provisions 9,085 9,827 (7.6) 10,141 (10.4)
Financial indebtedness 3,515 2,883 21.9 2,835 24.0
Accounts payable, trade 2,402 2,444 (1.7) 2,491 (3.6)
Other liabilities 3,381 4,168 (18.9) 3,886 (13.0)
Liabilities 9,298 9,495 (2.1) 9,212 0.9
Total liabilities 18,383 19,322 (4.9) 19,353 (5.0)
Total stockholders
equity and liabilities 35,476 37,456 (5.3) 36,875 (3.8)
The interim financial statements have not been audited.
The valuation methods used in the Consolidated Financial Statements for 2001
remain unchanged. Changes in the scope of consolidation were negligible.
Publisher:
BASF Aktiengesellschaft
Corporate Department Communications
67056 Ludwigshafen
Germany
You can find HTML versions of this and other publications from BASF on our
homepage at www.basf.com.
You can also order reports:
- by telephone: +49 62160-0
- by fax: +49 6021 704-431
- by e-mail: medien-service@basf-ag.de
- on the Internet: www.basf.com
Important dates
March 18, 2003
Financial Results 2002
April 29, 2003
Interim Report
First Quarter 2003
May 6, 2003
Annual Meeting, Mannheim
August 7, 2003
Interim Report
Second Quarter 2003
November 13, 2003
Interim Report
Third Quarter 2003
Contacts
Corporate Media Relations:
Michael Grabicki
Phone: +49 621 60-99938
Fax: +49 621 60-20129
Investor Relations:
Carolin Weitzmann
Phone: +49 621 60-48230
Fax: +49 621 60-22500
General inquiries:
Phone: +49 621 60-0
Fax: +49 621 60-42525
Internet: www.basf.com
BASF Aktiengesellschaft
67056 Ludwigshafen
Germany
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BASF Aktiengesellschaft
Date: November 7, 2002 By: /s/ Elisabeth Schick
------------------------------------
Name: Elisabeth Schick
Title: Director Site Communications Ludwigshafen
and Europe
By: /s/ Christian Schubert
------------------------------------
Name: Christian Schubert
Title: Director Corporate Communications
BASF Group