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Research Tree provides access to ongoing research coverage, media content and regulatory news on BASF SE. We currently have 10 research reports from 1 professional analysts.
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Strong profitability push
24 Feb 17
BASF reported Q4 figures which were above our moderate profitability expectations. Sales rose +7% (Vol.: +6%; p: +1%) to €14,846m and the gross profit margin rose strongly from 29.9% to 31.0% in Q4. EBITDA also strongly increased by +31% to €2,487m and net income attributable to shareholders doubled to €689m. Despite the stronger operating performance, FY operating CF declined 18% to €7,177m, hit by the swing in NWC from €1,011m to €-630m primarily due to higher inventories and receivables. Investing CF increased +24% to €6,490m, unburdened by lower capex but hit by the Chemetall acquisition. Financing CF saw some relief (€-2,160m after €-3,673m) primarily helped by the swing from net gross debt proceeds (€-933m) to net gross debt repayments (€579m). Management proposes a €0.10 higher dividend of €3.00 (€2.90) per share at the AGM on 12 May 2017. For 2017, management expects sales to grow considerably (>11%) and sees a slight growth (1-10%) in the group’s EBIT.
Lower NWC, lower capex, FCF sustained
27 Oct 16
Q3 sales dropped 20% (v: +4%; p: -5%; FX: -1%; portfolio: -18%) to €14,013m but the gross profit margin strongly improved (31.0% after 26.2%) despite the decline of the numerator. EBITDA went down 15% to €2,437m and net profit attributable to shareholders came in 27% weaker at €888m. Operating CF clearly dropped 25% to €2,501m, facing a significant decline in the positive NWC (€652m after €1,623m), which was partly offset by lower miscellaneous items (€50m after €-465m). Investing CF more than halved (€-788m after €-1,624m) seeing roughly 40% lower capex (€-936m after €-1,542m), a weaker income from divestments (€161m after €242m) and deteriorated financial investments (€-13m after €-324m). The FCF remained fairly unchanged at €1,713m. Financing moved from €-2,471m to €-84m) as changes in net gross debt came down from €-2,372m to €-107m. Management confirmed the 2016 outlook, expecting sales to be considerably below 2015 (due to the divestment and lower oil & gas prices) and EBIT before one-offs to be slightly below the previous year, which is confirmation of what had been given earlier.
12 Oct 16
BASF published preliminary Q3 figures. Sales clearly dropped 20% to €14.0bn and EBIT before one-offs declined 5% to €1.5bn, whereas EBIT (unchanged at €1.5bn) strongly fell by 23%. Management confirmed its outlook for 2016, seeing a considerable sales decline (divesture of gas trading and storage business) and EBIT before one-offs at a level slightly below 2015’s.
Slightly higher volumes, but operating CF suffers
27 Jul 16
Q2 sales clearly droped 24% to €14,483m, but the gross profit margin rose strongly from 26.3% to 32.3%. EBITDA weakened by 7% to €2,790m and net profit attributable to shareholders declined 14% to €1,092m. Operating CF came down 17% to €2,293m, seeing lower NWC inflow (€203m after €568m) due to lower receivables. Investing CF dropped from €-1,829m to €-730m, facing lower capex and a swing in financial investments. Financing CF soared up from €-633m to €-3,811m, primarily from the scaling back of the US dollar commercial paper programme, which had been expanded in the previous year’s quarter. Management confirmed the 2016 outlook, expecting sales to be considerably below 2015 (due to the divestment and the lower oil & gas prices) and EBIT before one-offs to be slightly below the previous year’s.
Q1 figures: a notch weaker than expected, but still OK
29 Apr 16
The negative effects from the asset swap with Gazprom displayed their full impact, but volatile raw material prices made the toppings. Q1 sales clearly dropped by 29% (to €14,208m), of which -22% stemming from divestments and -6% from lower sales prices. By contrast, the gross profit margin developed very positively (32.9% after 26.6%) despite unchanged volumes. EBITDA slightly weakened (-3% to €2,812m) and net profit attributable to shareholders rose +18% to €1,387m. Operating CF was hit by a €1.5bn swing in NWC (€-1,248m after €309m), forced by a seasonal build-up in receivables, whereas funds has been released due to inventory reduction, especially in gas storage, and higher liabilities and provisions in Q1 15 bringing the CF down to €1,046m from €2,390m. Investing CF came in at €-1,258m (€-1,502m) benefiting from lower capex, which was above D/A. Financing CF swung from €-400m to €1,997m primarily due to the higher utilisation of the USD commercial paper programme and the issuance of a €200m euro bond. For FY 2016, management expects sales to be considerably below 2015 (due to the divestment and the lower oil & gas prices) and EBIT before one-offs to be slightly below the previous year, which is confirmation of the previous guidance.
N+1 Singer - T. Clarke - Strong conclusion to FY16, record order book
28 Mar 17
After significant upgrades at the time of the full year update (PBT forecast +43% FY16; +14% FY17), today’s results are c.4% ahead of our expectations at the PBT level and show strong growth on the prior year (PBT +48%). All regions achieved positive growth in revenue. The outlook statement refers to a still growing order book (£350m at the end of February vs. £330m at the year end) and the strength of recent trading, with London & the South East and Scotland said to be particularly positive. The Group has reiterated its ambitions to improve margins, but we have not incorporated this into our forecasts at this stage. We have nudged up our FY’17 forecasts (PBT +5%) and introduced FY’18 forecasts that imply 2% PBT growth. Despite the well justified bounce in the share price, the shares still trade at a significant discount to the peer group (7.6x FY17 PE, 4% yield).
Panmure Morning Note 29-03-2017
29 Mar 17
We are cutting our recommendation to HOLD as we see little upside from current levels given the lack of positive surprises in today’s trading update. Multiples of 4.4x 2017 sales and 17x 2017 EBITDA imply an expectation of at least slightly exceeding expectations. We had assumed that acquisitions will provide the momentum until organic investments deliver. However, acquisitions are proving elusive and excess cash is diluting returns. Moreover, our forecast relies on at least one order in vehicle simulator market, which has yet to be announced. The management has shown that it can use the financial markets to raise equity but it now needs to show that it can deploy excess equity productively.
N+1 Singer - Severfield - Strong H2 drives upgrades; CEO temporarily steps down due to ill health
28 Mar 17
Severfield’s trading update highlights that trading during H2 was strong and the Group now expects results to be ahead of expectations. Cash flow performance has been similarly strong with net funds at the year end also expected to be ahead of expectations. The strong performance was driven by both a better than expected revenue performance and better than expected growth in the operating margin. We expect to increase our FY16 PBT forecasts by c.9% to around £19.5m. In addition, we are disappointed to see that Ian Lawson (CEO) has taken a temporary leave of absence due to physical ill health. John Dodds (non-executive Chairman) will step up to Executive Chairman on an interim basis and Alan Dunsmore (FD) has agreed to assume the role of CEO on a similar basis. This should ensure the continuity of the business whilst Ian is recovering. The outlook for Sevefield remains positive and the Group has reiterated its medium term target to double PBT from £13.2m in FY16 by FY20. We remain positive on Severfield (one of our best ideas for 2017) and continue to see clear potential for it to outperform its medium term targets.
28 Mar 17
ClearStar* (CLSU): Building a background for growth (CORP) | Sound Energy (SOU): TE-8 results (HOLD) | LiDCO* (LID): 2017 should be a transformative year (CORP) | Proteome Sciences* (PRM): FY 2016 in line. Moving towards breakeven (CORP) | Fulcrum (FCRM): Significant market potential, rising margins and a strong balance sheet (BUY) | Mortgage Advice Bureau (MAB1): Strong and growing intellectual property (BUY) | 7digital* (7DIG): Open offer result (CORP)