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Management’s Report The BASF Group business year — Regional results 
BASF Report 2015
Regional results
Regions (in million €)
Sales
by location of company
Sales
by location of customer
Income from operations
before special items1
2015
2014
Change
in %
2015
2014
Change
in %
2015
2014
Change
in %
38,675
42,854
(10)
36,897
40,911
(10)
4,527
4,759
(5)
28,229
32,241
(12)
13,483
15,126
(11)
2,038
1,994
2
North America
15,665
15,467
1
15,390
15,213
1
1,425
1,566
(9)
Asia Pacific
11,712
11,643
1
12,334
12,341
0
409
614
(33)
4,397
4,362
1
5,828
5,861
(1)
378
418
(10)
70,449
74,326
(5)
70,449
74,326
(5)
6,739
7,357
(8)
Europe
Thereof Germany
South America, Africa, Middle East
1
By location of company
Europe
North America
▪▪ At €38,675 million, sales down by 10% from level of
previous year
▪▪ Ludwigshafen Verbund site strengthened by further
investments
▪▪ Sales rise by 1% to €15,665 million compared with
previous year
▪▪ Startup of dispersions plant in Freeport, Texas, and
formic acid production in Geismar, Louisiana
At €38,675 million, sales at companies headquartered in the
region Europe in 2015 were 10% below the level of 2014. This
was largely due to lower sales prices in addition to the asset
swap with Gazprom completed at the end of September,
through which the the natural gas trading and storage business in particular ceased its contributions to the Oil & Gas
segment in the fourth quarter of 2015.
The Chemicals segment saw a mainly price-related decline
in sales. With volumes stable, sales in the Performance Products segment were slightly below the previous year’s level. In
the Functional Materials & Solutions segment, we were able to
compensate for lower prices through higher demand and
positive currency effects. Sales rose slightly in the Agricultural
Solutions segment. This was primarily the result of positive
price developments.
Income from operations before special items amounted to
€4,527 million, a decrease of 5% compared with 2014. This
was mainly because of the significantly lower contribution from
the Oil & Gas segment on account of the lower price of oil as
well as considerably lower earnings in Other. The sharp earnings improvement in the chemicals business1 could only partly
offset this.
We want to continue expanding our position on the market
and with our customers through investments and innovations.
For this reason, we strengthened the Ludwigshafen Verbund
site with further investments. A multiple-product facility for
special amines with multifaceted applications began production in 2015, and the new TDI complex gradually started
opera­tions beginning in November 2015.
Sales at companies headquartered in North America grew by
1% year-on-year to €15,665 million. In local currency terms,
they fell by 15% in the region. The sales increase was essentially due to positive currency effects in all divisions, which
more than compensated for raw material cost-related price
drops in the chemicals business – especially in the Petrochemicals division – as well as an overall slight decline in sales
volumes.
In 2015, income from operations before special items fell
to €1,425 million and therefore decreased by 9% compared
with the previous year, mainly as a result of unfavorable sales
and margin developments in the Chemicals segment. A lower
contribution came from the Performance Products segment,
as well. Considerable earnings improvement in the Functional
Materials & Solutions segment and a slight increase in Agricultural Solutions partially offset the decrease.
In this region, we continue to focus on innovation, attractive market segments and cross-business initiatives in order to
ensure profitable growth. At the same time, we are enhancing
our operational excellence through ongoing improvements.
Attractive growth prospects in North America and cost-­
effective raw material prices are strengthening our investment
plans in the region. At our site in Freeport, Texas, we commenced operations at a new dispersions plant and began
construction of a new ammonia plant together with Yara.
Our production facility for formic acid started up in Geismar,
Louisiana, making us the first formic acid producer in North
America. We are explor­
ing an investment in a world-scale
methane-to-propylene complex on the U.S. Gulf Coast.
1
Our chemicals business comprises the Chemicals, Performance Products and Functional Materials & Solutions segments.
BASF Report 2015 Management’s Report The BASF Group business year — Regional results
Sales by region
(Location of company)
Income from operations before special items
by region
5
1
Germany
40%
2
Europe (excl. Germany)
15%
3
North America
22%
4
Asia Pacific
17%
5
South America, Africa, Middle East
6%
4
4
1
€70,449 million
3
1
Germany
30%
2
Europe (excl. Germany)
37%
3
North America
21%
4
Asia Pacific
6%
5
South America, Africa, Middle East
6%
5
1
3
2
€6,739 million
2
Asia Pacific
South America, Africa, Middle East
▪▪ Sales grow by 1% to €11,712 million
▪▪ Local production bolstered by startup of several
plants in China
▪▪ Sales grow by 1% to €4,397 million
▪▪ New production complex for acrylic acid and
­superabsorbents inaugurated in Camaçari, Brazil
With decelerating market growth, sales at companies headquartered in the Asia Pacific region rose by 1% to €11,712 million. In local currency terms, sales declined by 12%.
Considerable sales increases, primarily in the Catalysts,
Coatings and Care Chemicals divisions, were able to more
than compensate, in particular, for declines in the Petrochemicals and Monomers divisions as well as in Other. Currency
effects posi­tively influenced sales, especially in the first half of
the year. In the Chemicals segment in particular, lower raw
material costs and higher production capacities on the market
resulted in falling prices. Sales were furthermore weighed
down by the disposal of our shares in the Ellba Eastern Private
Ltd. joint opera­tion in Singapore and by the divestiture of our
textile chemicals business.
Income from operations before special items fell by 33% to
€409 million. Significant factors here were higher fixed costs
stemming from the startup of new plants and from lower plant
capacity utilization, which was mainly attributable to several
scheduled maintenance shutdowns in the first half of the year.
As part of our regional strategy, we are striving to further
raise the proportion of sales coming from local production in
Asia Pacific in the years ahead. We once again made progress
toward this goal: In China, we started operations at new production sites and plants in Chongqing, Nanjing, Maoming and
Shanghai. Further investment projects are currently in the
construction phase, as planned. The continuing expansion of
our Innovation Campus Asia Pacific in Shanghai, China,
strengthens the presence of this growth region within the
global Research Verbund. To improve profitability in Asia
­Pacific, we intensified our measures to increase efficiency and
effec­tiveness.
Sales at companies headquartered in the region South America,
­Africa, Middle East grew by 1% to €4,397 million compared
with 2014. In local currency terms, sales were up by 7%.
Gross domestic product shrank in South America as a
consequence of the recession in Brazil and the deteriorating
economic environment in other countries in the region. Our
sales declined slightly under these conditions. We were only
partly able to offset negative currency effects, especially from
the depreciation of the Brazilian real, by raising prices. Sales
decreased in the chemicals business but rose in the crop
protection business and in the Oil & Gas segment.
Companies in Africa and in the Middle East showed considerable sales growth, driven by volumes and currencies. In
Africa, we raised sales primarily in the Functional Materials &
Solutions segment. In the Middle East, substantially increased
demand in the Construction Chemicals division had a positive
effect on sales.
Income from operations before special items declined by
10% to €378 million, essentially because of higher fixed costs
in the Petrochemicals and Care Chemicals divisions from
starting up the acrylic acid and superabsorbent production
complex in Camaçari, Brazil, in the second quarter of 2015.
In addition to our growth strategy, we implemented a
­series of structural measures in South America that increase
our productivity and sharpen the focus on our customers’
needs. With operations beginning at the production complex
in Camaçari, Brazil, we are well positioned to take part in the
­region’s growing demand, viewed over the long term.
We continued to expand our local presence in Africa in
2015 with a range of measures. This included inaugurating a
production plant for concrete additives in Lagos, Nigeria, in
October 2015.
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