Coatings World - March 2015

Akzo Nobel N.V. has reported positive volume growth and an improvement in return on sales (ROS) for the full-year 2014. Excluding incidentals, ROS was 7. 5 percent (2013: 6.1 percent).

Operating income excluding incidentals grew 20 percent to €1,072 million (2013: €897 million), reflecting higher benefits from ongoing operational efficiency programs and lower restructuring charges, offset by higher adverse incidental items. Contrary to positive incidental items of € 61 million in 2013, mainly related to gain on divestments, the negative incidental items of € 85 million in 2014 relate to provisions for legacy items, an external fraud suffered by one of our subsidiaries in the US, and project costs related to a divestment. Net income attributable to shareholders was €546 million (2013: €724 million which includes exceptional items). Revenue for the full year declined 2 percent, with volume up 1 percent in all Business Areas, more than offset by negative currency effects and divestments.

CEO Ton Büchner said: “For the full year we achieved further improvements in our operational performance, visible in our return on sales and return on investment levels. The introduction of several commercial excellence initiatives will help us drive organic growth going forward.

“2014 was challenging, evidenced by negative currency effects, a continued lack of growth in Europe and a slowdown in some of the Asian and Latin American economies. During the year, we continued to build a solid foundation and remain on track to deliver on our 2015 target,” he added.

He concluded, “The year was also
notable for several key achievements. A
major highlight for us in 2014 was the
launch of our Human Cities initiative
and our partnership with 100 Resilient
Cities. We introduced the first carbon
credit methodology for the international
shipping industry, which allows ships to
generate income in the form of carbon
credits by reducing CO2 emissions. We
were also especially pleased to be ranked
first on the Dow Jones Sustainability
Index (in the Materials industry group)
for the third year in a row.”

BASF Increases Earnings in
4th Quarter and Full Year
2014

Dr. Kurt Bock, Chairman of the Board of
Executive Directors of BASF SE said at
the company’s Annual Press Conference
in Ludwigshafen: “We achieved our goal
for 2014. We increased earnings – de-
spite the disappointing economic devel-
opment in Europe. We grew profitably.
We further strengthened our chemicals
business and in turn improved our mar-
gins. We have our costs firmly under con-
trol. This is an outstanding achievement
of the entire BASF team.”
In the fourth quarter of 2014, BASF
Group sales of € 18.0 billion almost
matched the level of the previous year
(fourth quarter of 2013: € 18.1 billion).
Sales volumes increased by one percent.

The Catalysts division as well as the Agricultural Solutions and Oil & Gas segments mainly contributed to this increase. Positive currency effects (plus two percent) could not compensate for the mainly oil-price related decline in sales prices (minus four percent). Income from operations (EBIT) before special items rose by € 40 million to €1.5 billion (fourth quarter of 2013: €1.4 billion). EBIT before special items rose significantly in the Chemicals and Agricultural Solutions segments compared with the same period of the previous year.

At € 74. 3 billion, sales in 2014
matched the level of the previous year
(2013: € 74.0 billion). Sales volumes in-
creased in all segments in 2014. Overall
volumes grew by 4%. Prices decreased
by 3%, largely due to significant de-
creases in oil and gas prices. Negative
currency effects dampened sales in al-
most all divisions.

EBIT before special items grew by €280 million to € 7. 4 billion in 2014. This was primarily the result of a larger contribution from the chemicals business – comprising the Chemicals, Performance Products and Functional Materials & Solutions segments. EBIT was up €466 million from the previous year’s level and reached € 7. 6 billion. Net income amounted to € 5.2 billion, exceeding the previous year’s level of € 4. 8 billion. Earnings per share rose from € 5. 22 to € 5. 61. Adjusted earnings per share were € 5. 44 compared with € 5. 31 in the previous year.

At € 3. 7 billion, fourth-quarter sales in the Performance Products segment were slightly above the same period of the previous year. EBIT before special items was €217 million and thus at the same level as in the fourth quarter of 2013. For the full year, sales were down by 1% to € 15. 4 billion. Despite an increasingly gloomy market environment over the course of the year, BASF was able to increase sales volumes with stable prices and thus almost fully compensate for negative currency effects. EBIT before special items improved by € 90 million to €1.5 billion. This was mainly because of the reduction in fixed costs due to restructuring and other measures.

In the Functional Materials & Solutions segment, sales in the fourth quarter rose by eight percent to € 4. 4 billion due to higher volumes and positive currency effects. EBIT before special items decreased by € 18 million to €220 million. For the full year, sales rose three percent to € 17. 7 billion due to significantly higher sales volumes – especially of products for the automotive industry. The increase was curbed by negative currency effects. Prices were stable overall. EBIT before special items rose by €127 million to €1.2 billion through considerable increases in the Catalysts and