BASF Group's third quarter earnings before interest and tax, net of special items, fell 24% from a year earlier, confirming its full-year 2019 outlook.

BASF Group's third quarter EST before special items decreased by 24% compared to the same period last year, confirming its full-year 2019 outlook:
sales were EUR 15.2 billion
(-2%);
Results in the surface treatment technology, agricultural solutions, industrial solutions and nutrition and care business areas increased significantly
confirmed its full-year 2019 outlook: EST earnings before special items are expected to fall by up to 30% compared to last year
BASF Group's third quarter 2019 sales were EUR 15.2 billion, down slightly from the same period last year. This was mainly due to lower prices in the two main business areas of materials and chemicals. Market uncertainty and prudent buying by customers also contributed in part to this decline

. Demand in key customer areas has yet to recover. However, BASF has strongly maintained sales at the same level as the same period last year, thanks to higher sales in its agricultural solutions and surface treatment technology businesses.
sliding through third-quarter sales across its business areas: earnings before interest and tax on
, net of special items, were EUR 1.1 billion, down 24% from the same period last year, mainly due to a significant decrease in earnings in the materials and chemicals business. As expected, isocyanate prices have fallen sharply, and in addition, steam cracking units have been overhauled as planned and profits from lysate products have fallen. All of these factors have a significant negative impact on the earnings of the two main business areas of materials and chemicals. Dr. Dr. Bo, Chairman of BASF Europe's Executive Board of Directors, "The company's downstream business units have achieved significant results in tough market conditions compared to the same period last year," Martin Brudermüller said at the company's third quarter 2019 financial results presentation. In
industrial solutions business, EST, which does not include special items, increased significantly due to lower fixed costs. In the surface treatment technology business area, the three business units have significantly increased earnings before interest and tax, not counting special items. In the Nutrition and Care business, the Care Chemicals division experienced a significant increase in profits, resulting in a significant increase in EST earnings, net of special items, in the business area. In the Agricultural Solutions business, sales rose and earnings before interest and tax, not counting special items, also increased significantly, thanks in part to seasonal gains in South America.
earnings before interest, tax, depreciation and amortization rose to 2.3 billion euros, compared with 2.2 billion euros a year earlier. Earnings before interest, tax, depreciation and amortization, net of special items, fell 8 per cent to 2.1 billion euros.
earnings before interest and tax on special items were EUR 1.4 billion, essentially the same as in the same period in 2018. Special items in third quarter EST totalled EUR 257 million, compared with EUR 75 million for the same period in 2018. This is mainly due to the significant revenue generated by BASF's sale of its stake in the Klybeck base in Basel, Switzerland, offsetting the special costs of restructuring the company, consolidating Bayer's acquisition business and divestitures.
net income was EUR 911 million, from EUR 1.2 billion in the third quarter of 2018.
per share fell to 1 euro from 1.31 euros a year earlier. Adjusted earnings per share were 0.86 euros, compared with 1.51 euros per share a year earlier.
cash flow from operating activities was EUR 2 billion, from EUR 2.9 billion in the third quarter of 2018. Free cash flow fell to EUR 1.1 billion, mainly due to a decrease in cash flow from operating activities.
basing THE rapid and systematic implementation of the new strategy
the global geopolitical environment will continue to challenge BASF. "In particular, trade frictions between China and the U.S. will have an impact on our business, " He added. The uncertainty also stems from the Uk's 'Brexit' process. All of these factors are slowing growth, not just in export-oriented European countries, but also in the U.S. economy. The Chinese market is still growing, albeit at a slower pace. Global auto industry production continued to decline from the already low first half of the year.
: "The unfavourable environment is beyond our control. But we know exactly what to do inside BASF. We are firmly and quickly moving forward. BASF is systematically and rapidly adapting its organizational structure with the goal of creating a streamlined, customer-centric architecture. "
2019 is a turning point for BASF. "We used this year to quickly implement our corporate strategy with full energy and enthusiasm, " says Mr Bo. We are streamlining the administrative structure, centralizing service functions and regional responsibilities, and streamlining processes. We have made good progress in restructuring our organization. BASF
rapidly advancing the corporate strategy announced last year. Most functional services are embedded in business operations. As of October 1, approximately 20,000 BASF employees had completed their job transformation.Dr Hans-Ulrich Engel, Executive Vice Chairman and Chief Financial Officer of BASF Europe, said
:
Accelerate progress on the 'Excellence' project to meet our target of contributing EUR 2 billion per year in EBITDA to BASF by the end of 2021 and is progressing well. This year's 'Excellent' project will bring in approximately EUR 500 million in earnings before interest, tax, depreciation and amortization. However, BASF expects the project to generate a one-time investment of a corresponding order of magnitude. BASF expects the project to contribute between 1 billion and 1.3 billion euros in earnings before interest, tax, depreciation and amortization by 2020. The one-off investment is expected to be between 200 million and 300 million euros.
contribution to the "Excellence" project will come from the production, logistics and planning sectors. Engel: "In addition, we are streamlining our organizational structure. As of September 2019, BASF has shed 1,800 jobs worldwide.
BASF Group's 2019 Outlook
bomometer confirmed BASF's full-year 2019 outlook, i.e. BASF's full-year sales are expected to decline slightly; earnings before interest and tax, not including special items, are expected to fall by up to 30%; and full-year return on capital (ROCE) for 2019 will be significantly lower than last year.
slightly adjusted its underlying forecast for oil prices: BASF expects average crude oil prices (Brent) to be $65 a barrel (previously $70) in 2019.
other projections for the global economic environment remain unchanged (GDP growth: 2.5 per cent; industrial production growth: 1.5 per cent; chemical production growth: 1.5 per cent; average euro/dollar exchange rate of $1.15 per euro).
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