The Urethane Blog
July 12, 2023
BASF Group achieves Q2 2023 EBIT before special items in line with analyst consensus and adjusts outlook for 2023
Q2 2023:
- Sales of €17.3 billion
- EBIT before special items of €1.0 billion
Outlook 2023:
- Sales expected between €73 billion and €76 billion
(previously: €84 billion to €87 billion) - EBIT before special items expected between €4.0 billion and €4.4 billion (previously: €4.8 billion to €5.4 billion)
Ludwigshafen – July 12, 2023 – BASF has released preliminary figures for the second quarter of 2023. Sales declined by an expected 25% in the second quarter of 2023 to €17,305 million (Q2 2022: €22,974 million). This was mainly driven by considerably lower prices and volumes; negative currency effects also contributed to the sales decline. Sales were thus lower than average analyst estimates for the second quarter of 2023 (Vara: €19,355 million).
EBIT before special items of BASF Groupamounted to an expected €1,007 million, a decline of 57% compared with the strong prior-year quarter (Q2 2022: €2,339 million) but in line with analyst consensus for the second quarter of 2023 (Vara: €1,018 million). Compared with the prior-year quarter, the earnings contributions of the Chemicals and Materials segments were particularly weaker.
BASF Group’s EBIT amounted to an expected €974 million in the second quarter of 2023, below the figure for the prior-year quarter (Q2 2022: €2,350 million) and almost at the level of analyst consensus (Vara: €1,003 million).
Net income reached an expected €499 million, below the figure in the prior-year quarter (Q2 2022: €2,090 million) and below average analyst estimates for the second quarter of 2023 (Vara: €729 million).
Outlook for the full-year 2023
According to current estimates, global gross domestic product in the first half of 2023 grew stronger than previously expected (+2.4% instead of +1.6%). However, this development was solely driven by a global increase in the service sector. Growth in global industrial production, on the other hand, continued to slow. As a result, global chemical production declined perceptibly in the first half of 2023. For the second half of 2023, BASF does not expect any further weakening in demand at the global level, as inventories of chemical raw materials in customer industries have already been greatly reduced. However, BASF is assuming only a tentative recovery because global demand for consumer goods will be lower than previously assumed. With this, margins will also remain under pressure.
Against this background BASF adjusts its assumptions regarding the global economic environment in 2023 as follows (previous assumptions from the BASF Report 2022 in parentheses; current assumptions rounded):
- Growth in gross domestic product: 2.0% (1.6%)
- Growth in industrial production: 1.0% (1.8%)
- Growth in chemical production: 0.0% (2.0%)
- Average euro/dollar exchange rate of $1.10 per euro ($1.05 per euro)
- Average annual oil price (Brent crude) of $80 per barrel ($90 per barrel)
With this, BASF also expects a weaker sales and earnings development than previously forecast and adjusts its outlook for the full-year 2023. The company now anticipates sales of between €73 billion and €76 billion in 2023 (previous outlook 2023: €84 billion to €87 billion; analyst consensus 2023: €79,810 million; full year 2022: €87,327 million). EBIT before special items is now expected to reach between €4.0 billion and €4.4 billion in 2023 (previous outlook 2023: €4.8 billion to €5.4 billion; analyst consensus 2023: €4,883 million; full year 2022: €6,878 million).
Further information
The overview of analyst estimates, which is compiled monthly by Vara Research on behalf of BASF, can be found at: www.basf.com/analysts-estimates.
BASF will publish its Half-Year Financial Report 2023 on Friday, July 28, 2023, at 7:00 a.m. CEST and will comment on the figures in a conference call for journalists (from 8:00 a.m. CEST) and a conference call for analysts and investors (from 10:00 a.m. CEST).
About BASF
At BASF, we create chemistry for a sustainable future. We combine economic success with environmental protection and social responsibility. More than 111,000 employees in the BASF Group contribute to the success of our customers in nearly all sectors and almost every country in the world. Our portfolio comprises six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care and Agricultural Solutions. BASF generated sales of €87.3 billion in 2022. BASF shares are traded on the stock exchange in Frankfurt (BAS) and as American Depositary Receipts (BASFY) in the United States. Further information at www.basf.com.
July 10, 2023
Wanhua Chemical’s Polyether Polyols Capacity will Exceed 2 mtpa in 2024!
PUdaily | Updated: July 7, 2023
Wanhua Rongwei Co., Ltd is a subsidiary of Wanhua Chemical Group, specifically part of the Polyol Business Unit. Wanhua Chemical has three major production bases located in Yantai, Ningbo, and Foshan. It is the largest polyols supplier and service provider in terms of production capacity, with the most diverse product portfolio and a well-established industry supply chain. Wanhua is also the largest exporter of polyether polyols in China.
In order to fully leverage the synergies between polyether polyols and MDI/TDI, Wanhua Group aims to further expand its market share in polyether polyols, enhance its brand image, and consolidate its dominant position in the polyether polyols industry.
Against this background, leveraging the advantageous port location, public infrastructure, and industrial chain advantages of Ningbo Daxie Development Zone, Wanhua Chemical (Ningbo) Rongwei Polyurethane Co., Ltd. continues to expand its production capacity based on the operational experience of its existing polyether polyols plant. Its annual production capacity of polyether polyols will be increased from 110 ktpa to 280 ktpa through the expansion project, aiming to meet the demand for polyurethane raw materials and lead the industry’s long-term stability and development, while establishing a new brand presence for Wanhua in the polyurethane industry. Currently, Wanhua’s 280kt polyether polyols expansion and transformation project has been completed and the commissioning phase has begun, scheduled from July 1, 2023, to October 1, 2023.
As of 2023, Wanhua’s total capacity of polyether polyols reached 1.23 mtpa. Furthermore, Wanhua Chemical Group announced a 850 ktpa polyether polyols expansion project at the end of 2021. This includes a 120kt ordinary flexible slabstock polyols production line, a 120kt flexible high resilience polyols production line, a 72kt differentiated polyols production line, a 58kt PPG230 polyols production line, a 240kt polymer polyols (POP) production line, a 240kt continuous DMC polyols production line, as well as supporting public works and facilities for storage, transportation and environmental protection. With these expansions, Wanhua Chemical’s total production capacity of polyether polyols is expected to exceed 2 mtpa.
June 30, 2023
Now at $0.335lb
June 29, 2023
Serta Simmons Bedding Completes Financial Restructuring and Emerges from Chapter 11
Serta Simmons Bedding, LLC (“SSB” or the “company”), a leading global sleep company, today announced that it has concluded its financial restructuring and emerged from Chapter 11, marking the completion of a critical step in the company’s turnaround effort.
“The financial restructuring process we completed today signifies an important step forward that will enable us to accelerate our turnaround and strengthen our leadership position in the market,” said Shelley Huff, CEO, SSB. “The Serta and Beautyrest brands in our portfolio have a deep heritage in innovation and have played meaningful roles in the lives of consumers for generations. With our financial restructuring behind us, we are taking steps to drive growth by getting back to our innovation roots, reinvesting in our iconic brands, and nailing the fundamentals of our business with a focus on commercial and supply chain excellence.”
SSB, which has been executing on its strategic initiatives over the past 18 months, is advancing its turnaround across the following pillars:
- Leading with Product Innovation – The company is bringing significant newness to the market this year through the refresh of the vast majority of its product portfolio. Looking ahead, SSB will more frequently update its product mix to deliver consumer-driven innovations as well as high-value products across brands and price points.
- Brand Reinvigoration – Alongside SSB’s commitment to innovation, the company is increasing marketing investments and sharpening its brand positioning to create greater differentiation for the brands in its portfolio, as well as maximize the potential of each brand.
- Commercial Excellence – As it brings new products to market, SSB is focused on better supporting retail partners and their sales associates to drive sales growth. The company is also leveraging its direct-to-consumer platforms to test new shopping concepts and improve the omnichannel consumer experience.
- Operating a HighPerforming Supply Chain – The investments SSB continues to make in its supply chain are enabling the company to efficiently deliver quality products and excellent service levels to retail partners and sleepers. Supply chain enhancements include the implementation of new processes and technology as well as the optimization and upgrading of its manufacturing network.
“As we execute our turnaround, we will become an even stronger partner to retailers and will help them better serve their customers with our trusted brands and refreshed product portfolio,” added Huff.
As SSB emerges from Chapter 11, a new Board of Directors has been appointed to oversee the company. Previous board members Huff and Brandi Thomas (Group Vice President and Chief Audit Executive, General Electric) will continue to hold board positions. Established private equity investor Mark Genender (Managing Partner, Bristol Growth Capital, LLC), who previously sat on the Simmons Board, will serve as Chairman. The rest of the Board is made up of business leaders with relevant experience in manufacturing, consumer durables and retail, including Charlie Eitel (Former CEO, Simmons Bedding Company), Jim Fogarty (CEO, FULLBEAUTY Brands), Alan Shaw (Former President and CEO, North America, Electrolux), and an additional board member to be announced.
“I look forward to partnering with Shelley and the management team, as well as the rest of the Board of Directors and the company’s investors, to help advance SSB’s turnaround effort,” said Genender. “Serta and Beautyrest are among the most valuable brands in the industry. These brands, in combination with SSB’s strategic areas of focus, executive leadership, and investor support, will drive the next phase of growth for the company.”
SSB is emerging with ample liquidity and a more flexible capital structure that will enable it to execute its turnaround. As a result of the Chapter 11 process, SSB successfully reduced its funded debt from approximately $1.9 billion to approximately $315 million. The nearly $1.6 billion debt reduction lowers the company’s annual cash interest expense by more than $100 million, enabling more investments back into the business. In addition, in connection with emergence, SSB has obtained a $100 million revolving credit facility which, along with substantial cash on hand and cash generated from operations, will provide additional financial flexibility to support the company’s strategic initiatives.
During the Chapter 11 process, Weil, Gotshal & Manges LLP served as SSB’s legal counsel, Evercore Group L.L.C. served as SSB’s investment banker and FTI Consulting, Inc. served as SSB’s financial and restructuring advisor. Gibson, Dunn & Crutcher LLP served as legal counsel, and Centerview Partners served as financial advisor and investment banker, to an ad hoc group of SSB’s priority lenders.
June 29, 2023
We are deeply saddened by the recent unexpected passing of John E. Turnour.
John has been a key part of our US Team since 2008, in his multiple roles ranging from sales and continuing through being REPI LLC’s first General Manager in Gastonia. John was instrumental in REPI’s successes in the US, including the growth of the early years. His personality allowed him to make friends anywhere he visited and was very well respected throughout the polyurethane industry worldwide.
He will be missed.
http://repi.com/en/news/repi-communication-john-turnour/
John started his career in urethanes at Firestone, which later became Foamex. He then worked at Rebus and at Everchem, and later went full time at Rebus.
After that he joined Repi and worked there until retirement. He was a good friend and will be missed by everyone here at Everchem–Editor.
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