In 2019, the sales volume will be 59.3 billion euros, and BASF will allocate 41% of its investment to the Asia Pacific region in the next five years

Recently, Dr Martin Bruderm ü ller, chairman of the Executive Board of BASF Europe, a global chemical giant, and Dr Hans Ulrich Engel, chief financial officer, jointly released their financial performance in 2019 In 2019, BASF achieved sales of 59.3 billion euros in the whole year, which was slightly reduced by 2% compared with last year due to sales volume and price EBIT excluding special items was EUR 4.5 billion, down 28% year-on-year, or EUR 1.7 billion, mainly due to lower earnings in the two business areas of materials and chemicals Cash flow from operating activities was EUR 7.5 billion, down 6% year on year, and free cash flow was EUR 3.7 billion "BASF hopes to increase its dividend by 0.10 euros per year compared with the previous year, and this proposal will pay a total of 3 billion euros to BASF shareholders," said Bo mule This amount is fully covered by free cash flow in 2019 BASF again offers an attractive 4.9% dividend yield " In the fourth quarter of 2019, BASF's sales decreased by 2% compared with the same period of 2018, to 14.7 billion euros Sales volume and price decreased by 1% respectively EBIT excluding special items increased by 23% BASF's transfer of papermaking and water treatment chemicals has a negative impact of 1% on Solis's product mix; a favorable exchange rate has a positive impact of 1% on sales 1 2019 is full of challenges and the global economy is against the wind, said Bo mule: "even in tough times, the company still performs well The global economy is against the wind, and 2019 is a challenging year " Trade frictions between China and the United States have had a negative impact on the global economy; growth in key sales markets has slowed down; and brexit has brought many uncertainties Industrial and chemical production growth slowed down significantly than expected The demand of many key industry customers, especially automobile industry customers, has declined significantly In the tough market environment, the company's revenue in all downstream business areas has improved However, this did not offset the decline in revenues in the basic chemicals business area EBIT for materials and chemicals, excluding special items, was EUR 1.8 billion, down EUR 2.2 billion The significant decrease of isocyanate price, the decrease of cracking product profit, and the scheduled maintenance of steam cracking unit have brought significant negative effects In contrast, BASF has achieved significant growth in the downstream business compared with 2018: the EBIT excluding special projects of two business units in the industrial solutions business area has increased significantly, mainly due to the decrease of fixed costs, favorable exchange rate factors and profit growth There was also a significant increase in EBIT excluding special items in the surface treatment technology business In the nutrition and nursing business area, EBIT excluding special projects increased slightly, mainly due to the significant growth of the nursing chemicals business department There was also a significant increase in EBIT excluding special projects in the business area of agricultural solutions "The assets and business performance acquired from Bayer are excellent, which has brought us a significant increase in sales and revenue," Mr Bo said In 2019, BASF Group's EBIT decreased from 6 billion euros to 4.1 billion euros Excluding special items, EBITDA decreased by 11% compared with 2018 to EUR 8.2 billion EBITDA was EUR 8 billion, compared with EUR 9 billion in 2018 Net income increased to EUR 8.4 billion, compared with EUR 4.7 billion in 2018, which includes about EUR 5.7 billion of book income from the DEA windershall merger 2 Streamline the structure 3100 jobs have been reduced globally BASF has reformed the organizational structure, reduced complexity, optimized management and streamlined processes Most of the functional services are embedded in business operations As of October 1, about 20000 BASF employees have completed the work transformation In addition, BASF has established lean corporate headquarters with about 1000 employees The new global business services division has also been in operation since January 1, 2020 The Department has about 8800 employees and provides demand-oriented internal services around the world, such as finance, internal control, procurement and supply chain This will further enhance BASF's business competitiveness BASF is accelerating the "excellence" project, which BASF expects to generate EUR 1.3 billion to EUR 1.5 billion in EBITDA this year One time investment is expected to be between 300 million and 400 million euros And accelerate the streamlining of organizational structure BASF announced that it would reduce 6000 jobs globally by the end of 2021 This target now looks set to be completed by the end of 2020 BASF lost 3100 jobs worldwide last year 3 The sales target in 2020 is 60-63 billion euros For 2020, BASF expects sales of 60-63 billion euros, excluding EBIT of special projects: 4.2-4.8 billion euros "All the key steps have been launched, and we still have a lot of concrete work to implement in 2020," Bo stressed BASF continued to promote the sustainable development goals and set a goal of maintaining the total amount of carbon dioxide emissions by 2030 BASF expects emissions to return to 2018 levels in 2020, in part due to the planned reduction in maintenance times and the acquisition of Solvay's polyamide business At the BASF Ludwigshafen base, the production department is using digital chemicals to manage the production units in coordination BASF believes that the acquisition of Bayer related businesses in the agricultural solutions business area has been a success "Business consolidation has been completed in less than a year," Engel said In 2019, the sales volume of the acquired business reached 2.2 billion euros, contributing more than 500 million euros to the EBIT income excluding special projects By 2025, we hope the acquisition will generate hundreds of millions of euros in additional sales We are confident that we will achieve this goal " It is understood that on January 31, 2020, BASF completed the acquisition of Solvay polyamide business The purchase price is EUR 1.3 billion "Our customers will benefit from this: BASF will provide a more comprehensive product portfolio, stronger regional influence and more reliable product supply," said Hans Ulrich Engel BASF has reached an agreement with the lone star fund to divest its chemical building materials division for 3.17 billion euros, with the transaction expected to be completed in the third quarter of 2020 BASF's global pigment business is becoming part of DIC, a Japanese fine chemicals company, with an acquisition price of 1.15 billion euros, and the deal is expected to be completed in the fourth quarter of 2020 In addition, the merger of winershall and DEA was completed last year, creating a leading independent exploration and production company in Europe BASF owns 72.7% of windershall DEA and letterone owns 27.3% "The merger is well underway and will be completed in December 2020," Engel said We expect that by 2022, the merger will have a synergistic effect of at least 200 million euros per year An initial public offering is expected to take place as early as the second half of 2020, depending on market conditions " 4 The impact of the epidemic will last for a whole year, said Bo: "in the first two months of this year, we have encountered a high degree of uncertainty in the global economy The novel coronavirus, which is popular in the early years, has become a new factor that hinders economic growth to a large extent, especially in China The prevention and control measures taken to prevent the spread of the epidemic have led to a decline in demand and production disruption in many industries " BASF predicts that the novel coronavirus will have a major impact worldwide, especially in the first, second quarter of 2020 This forecast does not take into account that once the virus spreads globally, it will not only have a significant adverse impact on the global economy in the first half of the year "We think the impact of this outbreak will last for a whole year," said Bo BASF therefore forecasts that global economic growth will be 2.0%, significantly slower than 2.6% in 2019 The company forecasts that the growth rate of global chemical production is 1.2%, significantly lower than the level of 1.8% in 2019 This will be the lowest increase since the 2008 / 09 financial crisis BASF predicts that the average price of Brent crude oil will be $60 per barrel, and the exchange rate will be 1 euro to 1.15 US dollars "In spite of the challenging and highly uncertain environment, we will try to increase our sales to between 60 billion euros and 63 billion euros," Mr Bo said BASF Group's EBIT excluding special projects is expected to be between EUR 4.2 billion and EUR 4.8 billion (2019: EUR 4.5 billion) Return on capital (roce) is expected to be between 6.7% and 7.7% (2019: "We expect a slight increase in most customer sectors, but we expect production to continue to decline," Mr Bo said BASF's outlook for 2020 is based on the following prediction: the trade conflict between the United States and its trading partners will not be further eased, and the UK will not have a significant impact on the economy during the transition period of brexit 5 In the next five years, 41% of the investment will be allocated to the Asia Pacific region, and the future investment is also prospected BASF plans to spend 23.6 billion euros on capital over the next five years More than a third of this will be allocated between 2020 and 2024 to key growth areas, namely, two large projects in Asia - the integrated base in Guangdong, China, the chemical industry cluster in mondra, India, and investment plans for the battery materials business Around the world, BASF is carrying out research on innovative anode materials for high-performance lithium-ion batteries to promote the realization of electric transportation, said Bo mule: "this means that our investment focus will be shifted regionally In the next five years, we will allocate 41% of our investment to the Asia Pacific region and 34% to Europe " In contrast, investment in the Asia Pacific region accounted for 27% of the total in the five-year planning period 2019-2023, compared with 43% in Europe BASF plans to spend 3.4 billion euros on capital in 2020 (increase in real estate, plant and equipment, investment in it, recovery obligations and use right assets due to leasing, excluding acquisitions) Capex in 2019 is EUR 3.3 billion.