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 13, 2003
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 Third-Quarter Results 2003
LUDWIGSHAFEN, Germany--(BUSINESS WIRE)--Nov. 13, 2003--
Difficult third quarter - BASF (NYSE: BF; FWB: BAS; LSE: BFA)
proceeds with its restructuring measures
-- Sales increase slightly despite negative currency effects
-- EBIT before special items below the previous year's good level
-- Significant improvement in Agricultural Products & Nutrition
-- Oil & Gas makes largest contribution to income
-- Outlook for full-year 2003: EBIT before special items below
previous year's level
In a business environment characterized by high raw material
prices, margin pressure and a weak U.S. dollar, BASF
Aktiengesellschaft increased its sales in the third quarter of 2003 by
2.1 percent to EUR7.7 billion compared with the same period in 2002.
Excluding negative currency translation effects, sales increased by
7.6 percent. Price increases contributed 2.1 percent to sales, but
prices still remain at an unsatisfactory level. Sales volumes were up
4.5 percent.
"The latest figures for our ongoing business give grounds for hope
that we have now reached the bottom of the downturn. However, there
has still not yet been a real breakthrough. 2003 remains a difficult
year, as demonstrated by the weak third quarter," said Dr. Jurgen
Hambrecht, Chairman of the Board of Executive Directors of BASF
Aktiengesellschaft, at a press conference to present BASF's
third-quarter results.
Third-quarter income from operations (EBIT) before special items
fell 31.8 percent to EUR403 million compared with 2002. This
unsatisfactory operating result is due mainly to continuing pressure
on margins in the Chemicals, Plastics and Performance Products
segments. High oil prices kept purchasing prices for naphtha and
natural gas high. BASF's chemicals operations remain burdened by
overcapacities, especially in the United States and in Europe. Prices
could therefore not be increased to the extent necessary.
EBIT after special items declined 20 percent to EUR374 million.
Special charges related mainly to restructuring measures in the NAFTA
region and integration costs for the crop protection business acquired
by BASF.
Net income in the third quarter fell 51 percent to EUR120 million.
In the third quarter of 2002, the financial result contained tax-free
gains from the sale of marketable securities. The absence of these
tax-free gains in 2003 led to a significant increase in the tax rate
compared with the previous year.
Third-quarter earnings per share were EUR0.21 compared with
EUR0.43 in 2002.
In the first nine months of 2003, BASF posted cumulative sales of
EUR24.8 billion - slightly more than in the same period in 2002.
Excluding currency effects, sales would have amounted to EUR26.7
billion, 10.2 percent more than in 2002. At EUR2.2 billion, EBIT
before special items in the first nine months was 2.3 percent lower
than in 2002.
Cash provided by operating activities is a good indicator of
BASF's financial strength: At just over EUR3.5 billion, the figure for
the first three quarters was already significantly higher than the
full-year value for 2002 of EUR2.3 billion.
Outlook: Full-year EBIT before special items lower than in 2002
"In the summer, it was already clear that major efforts would be
needed to match the previous year's earnings level. But our own
efforts are not enough if there is not a sustainable improvement in
the economic climate. We saw no signs of such an improvement in the
third quarter," said Hambrecht. "Although there are currently initial
signs of an economic recovery, high raw material costs, unsatisfactory
margins in some areas of our chemicals businesses and the weak U.S.
dollar will continue to put pressure on our business in the fourth
quarter," he continued. Based on a slight increase in sales, BASF
expects EBIT before special items to be lower than in the previous
year in both the fourth quarter and for the full year.
Hambrecht also remains realistic when it comes to assessing future
economic developments: "Even though more and more indicators are
positive and pointing upward, we have to rely on facts rather than
moods." He therefore stated that it is too soon to be able to predict
when an economic recovery will set in, how strong it will be and how
long it will last.
BASF is therefore focusing on its extensive Group-wide programs
and initiatives to optimize its portfolio, reduce costs and
restructure its organization. "The success of such measures lies
primarily in our own hands," said Hambrecht.
Share buy-back program to be implemented as planned in 2003
In the first nine months of 2003, BASF shares have outperformed
the EURO STOXX 50 index and have been included in the Dow Jones
Sustainability Index for the third year in succession. BASF aims to
implement its share buy-back program as planned in 2003, buying buy
back shares for a total of EUR500 million. The company intends to
continue its share buy-back program in 2004.
Performance of the segments in the third quarter of 2003
Agricultural Products & Nutrition and Oil & Gas posted significant
increases in sales compared with the strong third quarter of 2002.
Chemicals and Plastics maintained sales at the level of the previous
year despite the weak dollar. Sales were slightly down in Performance
Products.
The situation is different with regard to EBIT before special
items. All segments with the exception of Agricultural Products &
Nutrition reported lower income compared with the good third quarter
of 2002. This segment improved by more than 36 percent thanks to
higher sales volumes as well as extensive cost-reduction measures. As
is typical in this sector, third-quarter income was negative due to
the seasonal nature of the business.
At EUR271 million, the largest contribution to income came from
the Oil & Gas segment. Sales increased 14.6 percent mainly due to
higher volumes in the natural gas trading business. Significantly
higher volumes of oil and gas were produced in the exploration and
production activities. A higher oil price compared with the same
period in 2002 led to an increase in sales, which, however, was
partially offset by the weaker U.S. dollar.
Income in the Chemicals segment was negatively impacted by
persistently high raw material costs coupled with competitive
pressure. Startup costs following conversion of part of the chlorine
production facilities at the Ludwigshafen site to a modern membrane
process reduced earnings, as did scheduled maintenance of key
production plants.
A fall in the price of polymers in Europe and the NAFTA region
reduced income in the Plastics segment. In addition, fiber
intermediates posted a loss. In September, however, the company was
able to implement initial price increases for important polymers. The
integration of the business acquired from Honeywell is proceeding as
planned and initial cost synergies have been realized.
Third-quarter income in the Performance Products segment also
failed to achieve the strong previous year's level. The weak dollar
reduced income in the Performance Chemicals and Coatings divisions.
The Functional Polymers division improved margins and income despite a
difficult market situation.
BASF is the world's leading chemical company, offering its
customers a range of high-performance products, including chemicals,
plastics, performance products, agricultural products, fine chemicals
as well as crude oil and natural gas. Its distinctive approach to
integration, known in German as "Verbund," is its strength. It enables
BASF to achieve cost leadership and gives the company a competitive
advantage. BASF conducts its business in accordance with the
principles of sustainable development. In 2002, BASF had sales of
about EUR32 billion (circa $34 billion) and over 89,000 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.
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.
You can also obtain further information from the Internet at the
following address:
www.basf.de/pcon (English)
www.basf.de/pk (German)
07:30 a.m. CET Third Quarter 2003 Interim Report
Press Release
Photos
11:00 a.m. CET Speeches by Dr. Jurgen Hambrecht and
Dr. Andreas Kreimeyer (live transmission)
11:00 a.m. CET Speeches by Dr. Jurgen Hambrecht and
Dr. Andreas Kreimeyer (printed versions)
Third-Quarter Results 2003
July - September 2003 (January - September 2003), published on
November 13, 2003
Overview
BASF Group
3rd
Quarter Change
Million euro 2003 2002 in %
Sales 7,740 7,581 2.1
Earnings before interest, taxes,
depreciation and amortization (EBITDA) 957 1,080 (11.4)
Income from operations before special items 403 591 (31.8)
Income from operations (EBIT) 374 467 (19.9)
Financial result (108) (12) -
Income before taxes and minority interests 266 455 (41.5)
Net income 120 247 (51.4)
Earnings per share (euro ) 0.21 0.43 (51.2)
EBIT before special items in % of sales 5.2 7.8 -
Cash provided by operating activities 1,677 1,205 39.2
Additions to fixed assets (a) 523 534 (2.1)
Amortization and depreciation (a) 583 613 (4.9)
Segment assets (end of period)(b) 26,483 26,300 0.7
Personnel costs 1,388 1,436 (3.3)
Number of employees (end of period) 88,045 91,122 (3.4)
(a) Tangible and intangible fixed assets (including acquisitions)
(b) Tangible and intangible fixed assets, inventories and business-
related receivables
BASF Group
January - September
Change
Million euro 2003 2002 in %
Sales 24,821 24,199 2.6
Earnings before interest, taxes,
depreciation and amortization (EBITDA) 3,801 3,923 (3.1)
Income from operations before special items 2,179 2,231 (2.3)
Income from operations (EBIT) 2,090 2,098 (0.4)
Financial result (299) 20 .
Income before taxes and minority interests 1,791 2,118 (15.4)
Net income 757 1,305 (42.0)
Earnings per share (euro ) 1.34 2.24 (40.2)
EBIT before special items in % of sales 8.8 9.2 -
Cash provided by operating activities 3,555 2,028 75.3
Additions to fixed assets (a) 2,731 1,538 77.6
Amortization and depreciation (a) 1,711 1,825 (6.2)
Segment assets (end of period)(b) - - -
Personnel costs 4,192 4,441 (5.6)
Number of employees (end of period) - - -
(a) Tangible and intangible fixed assets (including acquisitions)
(b) Tangible and intangible fixed assets, inventories and business-
related receivables
Segments
Income from operations
before special items
Sales Change Change
Million
euro 2003 2002 in % 2003 2002 in %
3rd
Quarter
Chemicals 1,367 1,352 1.1 101 195 (48.2)
Plastics 2,135 2,159 (1.1) 67 182 (63.2)
Performance Products 1,930 2,027 (4.8) 144 204 (29.4)
Agricultural Products &
Nutrition 1,054 902 16.9 (97) (152) 36.2
Oil & Gas 927 809 14.6 271 298 (9.1)
Other (a) 327 332 (1.5) (83) (136) 39.0
Thereof costs of exploratory/
biotechnological
research - - - 44 50 (12.0)
7,740 7,581 2.1 403 591 (31.8)
January - September
Chemicals 4,319 3,953 9.3 380 467 (18.6)
Plastics 6,595 6,377 3.4 253 491 (48.5)
Performance Products 5,748 6,087 (5.6) 431 529 (18.5)
Agricultural Products &
Nutrition 3,855 3,939 (2.1) 349 212 64.6
Oil & Gas 3,338 2,914 14.6 953 874 9.0
Other (a) 966 929 4.0 (187) (342) 45.3
Thereof costs of exploratory/
biotechnological
research - - - 129 149 (13.4)
24,821 24,199 2.6 2,179 2,231 (2.3)
(a) "Other" includes the Fertilizers business and other businesses as
well as expenses, income and assets not allocated to the segments.
This item also includes foreign currency results from financial
indebtedness that are not allocated to the segments as well as from
currency positions that are macro- hedged (3rd quarter: euro (14)
million/previous year euro (5) million), cumulative: euro 2
million/previous year euro (89) million).
Segments
Income from operations (EBIT)
Change
Million euro 2003 2002 in %
3rd Quarter
Chemicals 99 177 (44.1)
Plastics 64 182 (64.8)
Performance Products 135 204 (33.8)
Agricultural Products & Nutrition (114) (254) 55.1
Oil & Gas 271 298 (9.1)
Other (a) (81) (140) 42.1
Thereof costs of exploratory/
biotechnological research 44 50 (12.0)
374 467 (19.9)
January - September
Chemicals 370 447 (17.2)
Plastics 240 488 (50.8)
Performance Products 414 533 (22.3)
Agricultural Products & Nutrition 303 104 191.3
Oil & Gas 953 874 9.0
Other (a) (190) (348) 45.4
Thereof costs of exploratory/
biotechnological research 129 149 (13.4)
2,090 2,098 (0.4)
(a) "Other" includes the Fertilizers business and other businesses as
well as expenses, income and assets not allocated to the segments.
This item also includes foreign currency results from financial
indebtedness that are not allocated to the segments as well as from
currency positions that are macro- hedged (3rd quarter: euro (14)
million/previous year euro (5) million), cumulative: euro 2
million/previous year euro (89) million).
BASF Group Business Review and Analysis
-- Slight increase in sales despite negative currency effects
-- EBIT before special items below the previous year's good level
-- Outlook for full-year 2003: EBIT before special items below
previous year's level
Sales: In the third quarter, sales increased by 2.1 % compared
with the same quarter of the previous year, in particular as a result
of higher volumes. Excluding currency effects, sales increased by 7.6
%. It was possible to increase prices only slightly, and they remain
unsatisfactory, especially in our chemicals businesses.
Factors influencing sales in comparison with previous year
% 3rd Quarter Jan. - Sept.
Volumes 4.5 6.1
Prices 2.1 3.1
Currencies (5.5) (7.6)
Acquisitions/divestitures 1.0 1.0
Total 2.1 2.6
Earnings: At euro 403 million, income from operations before
special items was 32 % lower than in the third quarter of 2002.
The Oil & Gas segment made the largest contribution to income. In
the Agricultural Products & Nutrition segment, income improved
significantly, mainly as a result of cost-reduction measures and
strong sales of crop protection products in South America.
The Chemicals, Plastics and Performance Products segments suffered
from high raw material prices, which could not be passed on to our
customers due to continuing oversupply in the market.
Restructuring measures in the NAFTA region and integration costs
for the fipronil crop protec-tion business resulted in special
charges.
Income from operations after special items declined 20 % to euro
374 million. The financial result fell to euro (108) million and
contains special charges related to restructuring measures at
non-consolidated companies, in particular to the closure of production
sites for printing inks in South America. In 2002, the financial
result contained tax-free gains from the sale of marketable
securities.
In the third-quarter of 2003, income before taxes and minority
interests fell by 42 % to euro 266 million compared with the previous
year.
The tax rate rose significantly due to the absence of tax-free
gains in the financial result. In the third quarter, income taxes for
oil production that are non-compensable with German taxes amounted to
euro116 million and were below the previous year's value of euro123
million.
Net income in the third quarter fell 51 % to euro 120 million.
Earnings per share were euro 0.21 compared with euro 0.43 in 2002.
1st 2nd 3rd January -
Special items Quarter Quarter Quarter September
Million euro 2003 2002 2003 2002 2003 2002 2003 2002
Special items
- in income from operations (2) (4) (58) (5) (29)(124) (89)(133)
- in financial result - 114 (3) - (27) 130 (30) 244
Total (2) 110 (61) (5) (56) 6 (119) 111
Outlook: Although there are initial signs of an economic recovery,
high raw material costs, unsatisfactory margins in our chemicals
businesses and the weak U.S. dollar will continue to put pressure on
our business in the fourth quarter. Based on a slight increase in
sales, we expect EBIT before special items to be lower than in the
previous year in both the fourth quarter and for the full year. We
will therefore continue to rigorously implement our measures to
increase efficiency and reduce costs.
BASF shares
Jan. - Sept. Full-year
Key data 2003 2002
Share price (end of period)(a) euro 37.70 euro 36.08
High (a) euro 43.05 euro 49.80
Low (a) euro 28.41 euro 32.90
Average daily trade (number of
shares) (a) 3.40m 3.09m
BASF share performance (b) + 8.3 % - 11.2 %
DAX 30 performance (b) + 12.6 % - 43.9 %
EURO STOXX 50 performance (b) + 2.7 % -36.1 %
(a) XETRA trading
(b) with dividends reinvested
Supervisory Board changes: An Audit Committee was established in
July. In August, employee representative Ralf Sikorski was appointed
as a new member of the Supervisory Board of BASF Aktiengesellschaft,
replacing Gerhard Zibell.
Chemicals
-- Sales up slightly on 2002 due to higher volumes
-- Margin pressure and startup costs for investment projects in
Asia burden income
-- Inorganics portfolio strengthened by acquisition
Overview
3rd Quarter January - September
Change Change
Million euro 2003 2002 in % 2003 2002 in %
Sales 1,367 1,352 1.1 4,319 3,953 9.3
Thereof Inorganics 181 172 5.2 548 523 4.8
Petrochemicals 764 749 2.0 2,444 2,125 15.0
Intermediates 422 431 (2.1) 1,327 1,305 1.7
EBITDA 215 319 (32.6) 718 835 (14.0)
EBIT before special items 101 195 (48.2) 380 467 (18.6)
EBIT 99 177 (44.1) 370 447 (17.2)
Additions to fixed assets 142 65 118.5 396 351 12.8
Assets (end of period) 4,913 5,064 (3.0) - - -
Third-quarter sales increased slightly (volumes 6.4 %,
prices/currency - 5.7%).
Income from operations before special items was lower than in 2002
in all three divisions, with the Inorganics division showing the most
stable performance.
In the Inorganics division, strong demand for glues and
impregnating resins as well as catalysts had a positive effect on
sales and income. However, the conversion of part of the chlorine
production facilities at the Ludwigshafen site to a modern membrane
process had a negative impact on income. We strengthened our inorganic
specialties business through the acquisition of the Callery Chemical
Division of the U.S. Mine Safety Appliances Company in September 2003.
In the Petrochemicals division, sales improved slightly thanks to
higher volumes. Income, however, fell noticeably as a result of the
decline in olefin prices as well as scheduled maintenance of important
production plants.
In the Intermediates division, sales of diols and organic acids
declined particularly. Sales of amines, however, increased. Income was
negatively impacted by declining margins as a result of persistent
competitive pressure as well as startup costs for investment projects
in Asia.
Plastics
-- Sales remain steady in a difficult market due to higher
volumes
-- Very weak margins for fiber intermediates reduce income
-- New TDI plant in South Korea already operating at high
capacity
Overview
3rd Quarter January - September
Change Change
Million euro 2003 2002 in % 2003 2002 in %
Sales 2,135 2,159 (1.1) 6,595 6,377 3 .4
Thereof Styrenics 850 890 (4.5) 2,738 2,520 8.7
Performance Polymers 547 570 (4.0) 1,667 1,739 (4.1)
Polyurethanes 738 699 5.6 2,190 2,118 3.4
EBITDA 185 317 (41.6) 602 885 (32.0)
EBIT before special items 67 182 (63.2) 253 491 (48.5)
EBIT 64 182 (64.8) 240 488 (50.8)
Additions to fixed assets 85 169 (49.7) 427 447 (4.5)
Assets (end of period) 5,964 6,375 (6.4) - - -
Sales in the third quarter almost attained the previous year's
level (volumes 8.0 %, prices/currency - 7.8 %).
Income from operations before special items was significantly
lower than in 2002, mainly due to the loss posted by fiber
intermediates.
In the Styrenics division, sales and income declined despite
slightly higher volumes. In particular, this decline was due to a fall
in the price of polymers in Europe and the NAFTA region. Initial price
increases were implemented in September.
Sales in the Performance Polymers division declined due to the
weak U.S. dollar and a low price level. Volumes of engineering
plastics increased despite a difficult market environment.
The integration of Honeywell's engineering plastics business is
proceeding as planned and initial cost synergies have been realized.
Income declined noticeably, however, as a result of the severe decline
in margins for intermediates for the textile and fibers industry.
Sales and income in the Polyurethanes division increased. In
particular, volumes increased significantly in Europe and Asia. Our
new Korean plant for TDI - a key component in the production of
polyurethanes - started operations in the third quarter and capacity
utilization is already high.
Performance Products
-- Sales decline due to currency effects
-- Income down on previous year's good level
-- Profitability of Functional Polymers increases
Overview
3rd Quarter January - September
Change Change
Million euro 2003 2002 in % 2003 2002 in %
Sales 1,930 2,027 (4.8) 5,748 6,087 (5.6)
Thereof Performance Chemicals 788 839 (6.1) 2,386 2,543 (6.2)
Coatings 500 527 (5.1) 1,509 1,625 (7.1)
Functional Polymers 642 661 (2.9) 1,853 1,919 (3.4)
EBITDA 247 328 (24.7) 726 907 (20.0)
EBIT before special items 144 204 (29.4) 431 529 (18.5)
EBIT 135 204 (33.8) 414 533 (22.3)
Additions to fixed assets 59 53 11.3 157 188 (16.5)
Assets (end of period) 4,909 5,394 (9.0) - - -
Third-quarter sales declined (volumes - 1.1 %, prices/currency -
4.0 %).
Income from operations before special items exceeded the previous
year's level only in the Functional Polymers division.
Sales in the Performance Chemicals division were impaired by the
weak U.S. dollar as well as pronounced seasonally lower demand in
Europe. Sales of performance chemicals for coatings, plastics and
specialties were affected to a lesser extent than products for the
textile and leather industry. Income was reduced due to a lower level
of capacity utilization.
In the Coatings division, lower sales were due entirely to the
decline of the U.S. dollar and the Brazilian real. Third quarter
income did not reach the same high level as in 2002. Our system
supplier concept for the automobile industry has proven its worth and
has been extended to other production sites of our customers.
Sales in the Functional Polymers division declined as a result of
sluggish demand, in particular in the NAFTA region. In Asia, however,
sales developed very positively. Prices and margins improved despite a
difficult economic environment. Income therefore exceeded the previous
year's level.
Agricultural Products & Nutrition
-- In Agricultural Products, sales increase and income improves
significantly
-- Fine Chemicals extends its value-adding chain for feed enzymes
Overview
3rd Quarter January - September
Change Change
Million euro 2003 2002 in % 2003 2002 in %
Sales 1,054 902 16.9 3,855 3,939 (2.1)
Thereof Agricultural Products 585 411 42.3 2,469 2,452 0.7
Fine Chemicals 469 491 (4.5) 1,386 1,487 (6.8)
EBITDA 17 (130) - 685 497 37.8
EBIT before special items (97) (152) 36.2 349 212 64.6
Thereof Agricultural Products (120) (187) 35.8 247 134 84.3
Fine Chemicals 23 35 (34.3) 102 78 30.8
EBIT (114) (254) 55.1 303 104 191.3
Thereof Agricultural Products (138) (188) 26.6 198 133 48.9
Fine Chemicals 24 (66) - 105 (29) .
Additions to fixed assets 51 57 (10.5) 1,237 151 719.2
Assets (end of period) 7,226 6,647 8.7 - - -
Sales in the Agricultural Products & Nutrition segment increased
significantly in the third quarter (volumes 7.1 %, prices/currency 1.7
%).
Agricultural Products: In the third quarter, sales improved
considerably compared with the same period in 2002. This was due
mainly to good sales at the start of the growing season in South
America, an upturn in demand for products used in forestry and the
fipronil business. Income was negative due to the seasonal nature of
the business but, despite negative currency effects, improved
significantly as a result of higher volumes and the cost-reduction
measures that have been implemented.
Fine Chemicals: Volumes increased in the third quarter, but sales
declined because of currency effects. Sales of lysine, carotenoids and
vitamin C as well as cosmetic raw materials, however, climbed. The
decline in income was primarily the result of the currency effects
already mentioned. We have further reduced inventories as planned. In
the future, we will conduct our business with feed enzymes such as
phytase on the basis of our own production, thus extending our
value-adding chain in this business.
Oil & Gas
-- Significant increase in sales, in particular in natural gas
trading
-- Largest contribution to income of the BASF Group
-- Successful entry into the Belgian gas market
Overview
Change Change
Million
euro 2003 2002 in % 2003 2002 in %
Sales 927 809 14.6 3,338 2,914 14.6
EBITDA 342 363 (5.8) 1,178 1,077 9.4
EBIT before special
items 271 298 (9.1) 953 874 9.0
EBIT 271 298 (9.1) 953 874 9.0
Additions to fixed
assets 73 63 15.9 170 132 28.8
Assets (end of period) 3,471 2,820 23.1 - - -
Sales in the Oil & Gas segment increased significantly in the
third quarter (volumes 8.2 %, prices/currency 3.6 %).
The increase in sales was due mainly to higher volumes in our
natural gas trading business. Successful entry into the Belgian gas
market was secured through supply contracts that will ensure a 6 %
share of the market by 2005. In our exploration and production
activities, we produced significantly higher volumes of oil and gas. A
higher oil price compared with the same period in 2002 led to an
increase in sales, which was, however, partially offset by the weaker
U.S. dollar.
Income from operations remained at a high level. The decline in
income was due primarily to currency effects in our exploration and
production activities.
In July 2003, BASF founded a joint venture with its Russian
partner Gazprom to develop the Achimov formation in the Urengoi gas
field in western Siberia, thus further extending this cooperation.
Furthermore, an agreement was signed with the Romanian company Romgaz
S.A. to produce natural gas in central Romania.
Regions
-- Europe weaker, NAFTA unsatisfactory
-- Further improvement in South America
-- Income in Asia more than doubled
Sales (location of Sales (location of
Overview customer) company)
Change Change
Million euro 2003 2002 in % 2003 2002 in %
3rd Quarter
Europe 4,225 4,011 5.3 4,522 4,380 3.2
Thereof Germany 1,513 1,604 (5.7) 3,145 3,119 0.8
North America (NAFTA) 1,637 1,783 (8.2) 1,656 1,836 (9.8)
South America 537 444 20.9 461 363 27.0
Asia, Pacific Area, Africa 1,341 1,343 (0.1) 1,101 1,002 9.9
7,740 7,581 2.1 7,740 7,581 2.1
January - September
Europe 14,104 13,004 8.5 15,027 14,106 6.5
Thereof Germany 5,161 5,184 (0.4)10,413 9,921 5.0
North America (NAFTA) 5,573 6,122 (9.0) 5,595 6,217 (10.0)
South America 1,227 1,299 (0.2) 1,021 1,003 1.8
Asia, Pacific Area, Africa 3,917 3,844 1.9 3,178 2,873 10.6
24,821 24,199 2.6 24,821 24,199 2.6
Overview
EBIT before special items
(location of company)
Change
Million euro 2003 2002 in %
3rd Quarter
Europe 288 509 (43.4)
Thereof Germany 210 370 (43.2)
North America (NAFTA) (22) (13) (69.2)
South America 77 72 6.9
Asia, Pacific Area, Africa 60 23 160.9
403 591 (31.8)
January - September
Europe 1,812 1,955 (7.3)
Thereof Germany 1,352 1,421 (4.9)
North America (NAFTA) 59 92 (35.9)
South America 160 37 332.4
Asia, Pacific Area, Africa 148 147 0.7
2,179 2,231 (2.3)
In the third quarter, sales by location of company in Europe
increased 3.2 %. In particular, sales were higher in the Agricultural
Products & Nutrition and Oil & Gas segments. Income from operations
before special items fell by euro 221 million to euro 288 million.
In the NAFTA region, sales by location of company declined by 9.8
% in the third quarter as a result of the weaker U.S. dollar. In
dollar terms, sales increased 3 %, in particular in the Chemicals and
Agricultural Products & Nutrition segments. Income from operations
before special items declined to euro (22) million primarily due to
increased raw material costs. Our further intensified program of
restructuring and cost-reduction measures in the NAFTA region is being
rigorously implemented.
In South America, third-quarter sales by location of company
climbed 27 %, in particular due to higher sales of crop protection
products. Income from operations before special items rose to euro 77
million.
Third-quarter sales by location of company in the Asia, Pacific
Area, Africa region increased 9.9 %; excluding currency effects, sales
increased by 23 %. Income from operations before special items more
than doubled to euro 60 million.
Finance
-- Cash provided by operating activities significantly exceeds
full-year 2002
-- Substantial cash released as a result of lower net current
assets
-- euro 400 million spent on share buybacks
Consolidated Statements of Cash Flows
January -
September
Million euro 2003 2002
Net income 757 1,305
Depreciation and amortization of fixed assets 1,769 1,853
Change in net current assets 798 (848)
Miscellaneous items 231 (282)
Cash provided by operating activities 3,555 2,028
Additions to tangible and intangible fixed assets (1,452) (1,543)
Acquisitions/divestitures, net (1,456) (42)
Financial investments and other items (229) 152
Cash used in investing activities (3,137) (1,433)
Proceeds from capital increases/(decreases) (400) (352)
Changes in financial indebtedness 1,442 1,067
Dividends (831) (811)
Cash provided by/(used in) financing activities 211 (96)
Net changes in cash and cash equivalents 629 499
Cash and cash equivalents as of beginning of year and
other changes 229 346
Cash and cash equivalents 858 845
Marketable securities 396 318
Liquid funds 1,254 1,163
At euro 3,555 million, cash provided by operating activities in
the first three quarters was already significantly higher than the
full-year amount for 2002 of euro 2,313 million. Substantial cash was
released as a result of lower net current assets.
Cash used in investing activities totaled euro 3,137 million.
Expenditures for acquisitions were primarily related to the fipronil
crop protection business and the purchase of Honeywell's engineering
plastics business. At euro 1,452 million, additions to tangible and
intangible fixed assets declined by 5.9 % and were lower than
depreciation and amortization.
Cash provided by financing activities was euro 211 million. In the
first nine months of 2003, we bought back 11.3 million shares for euro
400 million or an average of euro35.57 per share. For the full year, a
total of euro 500 million has been earmarked for share buybacks.
Liquid funds increased to euro 1,254 million and financial
indebtedness to euro 5,097 million, resulting in net debt of euro
3,843 million.
Interim Financial Statements of BASF Group
(abridged version)
The interim financial statements have not been audited. The
valuation methods used in the Consolidated Financial Statements for
2002 remained unchanged. Changes in the scope of consolidation were
negligible. The acquisition of crop protection products from Bayer on
March 21, 2003 is taken into account from this date onward. The sale
of the fibers business to Honeywell and the simultaneous acquisition
of their engineering plastics business is taken into account as of the
beginning of May 2003.
Consolidated Statements of Income
3rd Quarter January - September
Change Change
Million euro 2003 2002 in % 2003 2002 in %
Sales, net of natural gas
taxes 7,740 7,581 2.1 24,821 24,199 2.6
Cost of sales 5,502 5,159 6.6 17,255 16,172 6.7
Gross profit on sales 2,238 2,422 (7.6) 7,566 8,027 (5.7)
Selling expenses 1,122 1,154 (2.8) 3,366 3,596 (6.4)
General and administrative
expenses 173 170 1.8 509 518 (1.7)
Research and development
expenses 304 300 1.3 842 894 (5.8)
Other operating income 64 94 (31.9) 256 427 (40.0)
Other operating expenses 329 425 (22.6) 1,015 1,348 (24.7)
Income from operations 374 467 (19.9) 2,090 2,098 (0.4)
(Expense)/income from
financial assets (40) 15 - (93) 92 -
Interest result (68) (27) - (206) (72) -
Financial result (108) (12) - (299) 20 -
Income before taxes and
minority interests 266 455 (41.5) 1,791 2,118 (15.4)
Income taxes 143 199 (28.1) 995 756 31.6
Minority interests 3 9 (66.7) 39 57 (31.6)
Net income 120 247 (51.4) 757 1,305 (42.0)
Earnings per share (euro) 0.21 0.43 (51.2) 1.34 2.24 (40.2)
Number of shares in millions,
weighted 561 578 (2.9) 563 582 (3.3)
Consolidated Balance Sheets
Sept. Sept. Dec.
30, 30, Change 31, Change
Million euro 2003 2002 in % 2002 in %
Assets
Intangible assets 4,027 3,361 19.8 3,464 16.3
Property, plant and equipment 13,503 13,443 0.4 13,745 (1.8)
Financial assets 3,048 3,394 (10.2) 3,249 (6.2)
Fixed assets 20,578 20,198 1.9 20,458 0.6
Inventories 4,630 4,681 (1.1) 4,798 (3.5)
Accounts receivable, trade 5,123 5,597 (8.5) 5,316 (3.6)
Miscellaneous receivables 3,021 2,596 16.4 2,947 2.5
Deferred taxes 1,151 1,241 (7.3) 1,204 (4.4)
Liquid funds 1,254 1,163 7.8 363 245.5
Current assets 15,179 15,278 (0.6)14,628 3.8
Total assets 35,757 35,476 0.8 35,086 1.9
Stockholders' equity and liabilities
Suscribed capital and capital surplus 4,408 4,408 0.0 4,408 0.0
Retained earnings and other equity 11,350 12,291 (7.7)12,138 (6.5)
Minority interests 389 394 (1.3) 396 (1.8)
Stockholders' equity 16,147 17,093 (5.5)16,942 (4.7)
Provisions for pensions and similar
obligations 3,894 3,870 0.6 3,910 (0.4)
Provisions for taxes and other
provisions 5,319 5,215 2.0 5,087 4.6
Provisions 9,213 9,085 1.4 8,997 2.4
Financial indebtedness 5,097 3,515 45.0 3,610 41.2
Accounts payable, trade 2,161 2,402 (10.0) 2,376 (9.0)
Other liabilities 3,139 3,381 (7.2) 3,161 (0.7)
Liabilities 10,397 9,298 11.8 9,147 13.7
Total liabilities 19,610 18,383 6.7 18,144 8.1
Total stockholders' equity and
liabilities 35,757 35,476 0.8 35,086 1.9
Consolidated Statements of Changes in Stockholders' Equity January -
September 2003
Sub-
Number scribed Capital
Million euro of shares capital surplus
As of January 1, 2003 570,316,410 1,460 2,948
Net income
Share buy-back and cancellation
of own shares including own shares
intended to be cancelled (11,255,000) (28) 28
Dividends paid
(Decrease)/increase of foreign currency
translation adjustments
Capital injection by minority interests
Changes in scope of consolidation and
other changes
As of September 30, 2003 559,061,410 1,432 2,976
Consolidated Statements of Changes in Stockholders' Equity January -
September 2002
Sub-
Number scribed Capital
Million euro of shares capital surplus
As of January 1, 2002 583,401,370 1,494 2,914
Net income
Share buy-back and cancellation
of own shares including own shares
intended to be cancelled (10,080,500) (26) 26
Dividends paid
(Decrease)/increase of foreign currency
translation adjustments
Issuance of new stock from
conditional capital through the
of conversion rights of former
Wintershall stockholders 40
Capital injection by minority interests
Changes in scope of consolidation and
other changes
As of September 30, 2002 573,320,910 1,468 2,940
Consolidated Statements of Changes in Stockholders'
Equity January - September 2003
Currency Stock-
Retained translation Minority holders'
Million euro earnings adjustment interests equity
As of January 1, 2003 12,468 (330) 396 16,942
Net income 757 39 796
Share buy-back and
cancellation of own shares
including own shares intended
to be cancelled (400) (400)
Dividends paid (789) (42) (831)
(Decrease)/increase of foreign
currency
translation adjustments (345) (6) (351)
Capital injection by minority
interests
Changes in scope of
consolidation and
other changes (11) 2 (9)
As of September 30, 2003 12,025 (675) 389 16,147
Consolidated Statements of Changes in Stockholders'
Equity January - September 2002
Currency Stock-
Retained translation Minority holders'
Million euro earnings adjustment interests equity
As of January 1, 2002 12,222 532 360 17,522
Net income 1,305 57 1,362
Share buy-back and
cancellation of own shares
including own shares intended
to be cancelled (390) (390)
Dividends paid (758) (53) (811)
(Decrease)/increase of foreign
currency
translation adjustments (620) (7) (627)
Issuance of new stock from
conditional capital through
the
of conversion rights of former
Wintershall stockholders
Capital injection by minority
interests 38 38
Changes in scope of
consolidation and
other changes (1) (1)
As of September 30, 2002 12,379 (88) 394 17,093
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 BASF's 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.
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
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-- on the Internet: www.basf.com
Important dates
-- March 17, 2004
Financial Results
-- April 29, 2004
Annual Meeting, Mannheim
Interim Report First Quarter 2004
-- August 4, 2004
Interim Report Second Quarter 2004
-- November 11, 2004
Interim Report Third Quarter 2004
CONTACT: BASF A.G.
Corporate Media Relations:
Jennifer Moore-Braun
Phone: +49 621 60-20829
Fax: +49 621 60-92693
E-Mail: jennifer.moore-braun@basf-ag.de
or
Investor Relations:
Magdalena Moll
Phone: +49 621 60-48230
Fax: +49 621 60-22500
E-Mail: investorrelations@basf-ag.de
or
General inquiries:
Phone: +49 621 60-0
Fax: +49 621 60-42525
E-Mail: info.service@basf-ag.de
or
Internet: www.basf.com
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 13, 2003 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