BASF agchem sales up 7% in 2015

Sales of BASF’s crop protection rose by 6.9% to €5,820 million in 2015, primarily due to higher sales prices. BASF observed decreased demand for crop protection products over the course of the year, as crop commodity prices remained at a low level. A volatile environment and the depreciation of local currencies, especially in the emerging markets, had a negative effect on the business. In this challenging environment, income from operations before special items declined by €19 million to €1,090 million. Income from operations fell by €25 million to €1,083 million.



BASF improved sales to third parties by €374 million to €5,820 million compared with the previous year. This was primarily attributable to higher contributions from the herbicide business in North America and from the fungicide business in Europe and South America. In the second half of the year, BASF was able to offset the depreciation of emerging-market currencies by raising prices (volumes 1%, prices 5%, and currencies 1%).

In Europe, sales rose by €61 million to €2,107 million, mainly through strong demand for fungicides as well as higher prices in the first half of the year. This allowed it to more than compensate for weaker demand in the second half of the year due to dry conditions in Western Europe. The business in Russia and Ukraine grew, despite a difficult political environment.

Sales in North America exceeded the previous year’s level by €296 million, reaching €1,870 million. Higher herbicide sales, especially of Kixor®, and positive currency effects from the U.S. dollar supported this growth. In the fungicides business, sales declined on account of lower crop commodity prices and unfavorable weather conditions.

At €525 million, sales in Asia matched prior-year levels as positive currency effects compensated for a sharp drop in volumes. Lower demand for soy herbicides in India was a major factor behindthe volumes decline, and was attributable to reduced soybean acreage, a very dry season, and increased competition from generic manufacturers.

Sales in South America grew by €18 million to €1,318 million, while the total South American crop protection market shrank in 2015. In this difficult environment, BASF considerably increased sales volumes of fungicides, especially Xemium®. In the second half of the year, price increases were unable to fully offset currency losses from the depreciation of the Brazilian real.

Income from operations before special items amounted to €1,090 million, which was €19 million below the level of the previous year. This slight decrease was attributable to higher fixed costs arising mainly from lower plant capacity utilization as a result of the startup of new capacities and inventory reduction at the same time.

Outlook

For 2016, BASF expects continued slow market growth and high exchange rate volatility in some of our key growth markets. Despite this difficult economic environment, it plans to increase sales volumes, especially of innovative herbicides. Through increased sales and continued strict cost management, BASF aims to slightly improve sales and income from operations before special items.