LUDWIGSHAFEN, Germany -- For the first time in BASF's history, sales passed the EUR 50 billion mark in 2006, and income from operations (EBIT) before special items climbed to a new record of more than EUR 7.2 billion.

In 2006, BASF again earned a high premium of EUR 2.1 billion on its cost of capital and grew faster than the market. Sales increased by 23 percent to almost EUR 53 billion. The businesses acquired in 2006 contributed EUR 4.2 billion to this amount. EBIT before special items climbed 18 percent to more than EUR 7.2 billion.

BASF is making good progress in integrating the businesses it acquired in 2006 and is on track to largely complete the process as planned by the middle of 2007. The company expects to achieve full synergies of approximately EUR 290 million per year by 2010. This amount is significantly higher than expected.

For the full year, BASF expects significantly higher sales in 2007 compared with 2006. This will be driven by both the businesses acquired in 2006 as well as organic growth in the company's existing businesses.

BASF's Chief Financial Officer, Kurt Bock, noted that BASF improved earnings at all levels of the income statement compared with its strong performance in 2005.

"The company's financial strength - measured in terms of cash provided by operating activities - increased further. In combination with a solid balance sheet, this provides us with the financial leeway we need," he said. Bock also pointed out that BASF bought back shares for almost EUR 1 billion in 2006 and was planning to buy back additional shares in 2007 under the ongoing program.

Sales in the Agricultural Products & Nutrition segment were at approximately the previous year's level segment (minus 2 percent), while EBIT before special items declined (minus 37 percent).

Unfavorable weather conditions for the use of fungicides, low prices for agricultural produce and high energy costs negatively impacted BASF's business with crop protection products in important agricultural regions.

Chemicals segment posts record sales

The Chemicals segment posted record sales of EUR 11.6 billion. This 43 percent increase was due in particular to the first-time inclusion of the new Catalysts division. EBIT before special items reached a new high of EUR 1.7 billion.

Higher volumes and price increases led to an improvement in sales and EBIT before special items in the Plastics segment. Sales rose by 9 percent to EUR 12.8 billion, while EBIT before special items climbed 18 percent to EUR 1.2 billion.

Sales in the Performance Products segment rose by 23 percent to more than EUR 10 billion as a result of the newly acquired businesses. EBIT before special items declined, however, due to integration and restructuring costs and declining margins, in particular for acrylic monomers.

Sales and EBIT before special items rose in the Fine Chemicals division, but EBIT declined as a result of extensive restructuring measures.

BASF expects this segment's earnings to improve significantly in 2007 thanks to its portfolio of innovative crop protection products and its restructuring efforts in the Fine Chemicals division.

The increase in prices for crude oil and natural gas and the expansion of the gas trading business meant that sales and EBIT before special items in the Oil & Gas segment reached new record levels of EUR 10.7 billion and EUR 3.2 billion, respectively.

BASF will publish its Financial Report and Corporate Report on March 14, 2007.

BASF is the world's leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics, performance products, agricultural products and fine chemicals to crude oil and natural gas. BASF has more than 95,000 employees and posted sales of EUR 52.6 billion in 2006.

SOURCE: BASF via Business Wire.