Material | November 02, 2006

Acquisitions strengthen BASF's profitable growth

BASF - The Chemical Company is continuing on its profitable growth path: The third quarter of 2006 is the thirteenth quarter in succession in which the company has posted an increase in sales.
"We have achieved a new earnings level, and in doing so, three things are important: First, our chemicals businesses were again very successful in the third quarter. Second, the newly acquired businesses have met our expectations. And third, we are continuously improving our sites and business processes," said Dr. Jürgen Hambrecht, Chairman of the Board of Executive Directors of BASF Aktiengesellschaft.

The third quarter of 2006 followed on seamlessly from BASF's strong performance in the first half of the year. Demand for its high-value products and system solutions continued unabated. In its chemicals businesses, BASF again recorded higher sales volumes compared with last year's already high level. Despite high and very volatile raw material prices, the company was largely successful in passing on necessary price increases to the market.

Sales climbed 28 percent to €13.3 billion. The newly acquired businesses - Engelhard, Degussa Construction Chemicals and Johnson Polymer - contributed €1.8 billion to this dynamic growth.

Income from operations (EBIT) before special items rose by 22 percent to €1.6 billion in the third quarter.

Cumulative sales in the first nine months of 2006 increased by 23 percent to more than €38 billion. EBIT before special items increased by 19 percent to €5.4 billion in the same period.

BASF confirms optimistic outlook for full-year 2006

In the fourth quarter, BASF expects demand for its products to remain strong. Despite an easing in the oil price, raw material costs remain high and margins are therefore still under pressure. Geopolitical tensions and regional conflicts are continuing to result in highly volatile raw material prices, which are now also impacting agricultural products.

For full-year 2006, Hambrecht continues to expect sales to increase to more than €50 billion and higher EBIT before special items compared with the previous year's strong level.


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