Wednesday 11 March 2015

BASF annual report 2014

BASF, annual report, 2014, front page

Share price dropped by around -3% on the day it was published. I have now managed to read it and I am not unhappy with the result, I am not at all unhappy and since I bought BASF the share price development has been satisfactory. What was then in it?

The report in full can be found here and for my previous summary click on BASF report Q3 2014 and to find out more about BASF then click on analysis of BASF 2014.

I did not find that much in the report and therefore this summary gets very short. I guess that short for me very often means that I am not annoyed so that on its own should be good news.

Below is the data that were given for the different segments of BASF, unfortunately it did not become so nice when I bunked it together in one picture but hopefully the message is understood. Three of the segments Chemical, Performance and Materials showed excellent earnings even though the revenue were pretty flat. The oil and gas showed a poor results but much better than what I would have expected and the big surprise to me was agriculture that seemed to have had a very tough year however that is also the smallest segment BUT with a very nice margin so the impact is still felt.

BASF, annual report, 2014, segments, results

It was a very thick annual report and for instance I found this which I find to be a very good initiative! I do like that they are in some cases making significant decreases on their environmental impact but I would like to see some kind of benchmark or comparison with a competitor or anything. I know that BASF is doing a very good job at decreasing their waste, energy consumption etc. due to their huge integrated plants sites so I do believe these figures to be good but please compare it to something!

BASF, annual report, 2014, environmental impact

Now to the highlight of the report which actually becomes the highlight as they published it since it did contain everything that I find of interest to report on. The revenue turned overall out pretty flat but they managed to grow their earnings with as much as 8% and that is excellent! With remained decreased oil prices I hope that this increased margin effect will remain for another couple of quarters. The earnings per share increased by almost 8% to 5.61 € and they propose to pay out a dividend of 2.80 € which I will happily accept as it then gives me a yield of cost (YOC) of 4.3%.

BASF, 2014, annual report, highlight

Conclusion: BASF is a diversification on their own. Not only based on their business segments but also due to their global market presence. Unless BASF gets insane expensive (I hope it does not) then I have also no intention of ever selling these shares and I hope to be able to increase my holding when the share price drops like it did last autumn.

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