Our goal is to maintain the financial flexibility needed to continually develop our business portfolio and take advantage of strategic opportunities. BASF’s equity ratio is above the average of the chemical industry.
Financial Management
The objectives of our financial management are to ensure liquidity, limit financial risks and optimize our cost of capital by means of an appropriate capital structure. Our financial activities are conducted in line with the needs of the operational business and the company’s strategic direction.
Dividends and share buybacks
Our shareholder-oriented buyback policy allows us to manage our equity ratio, reduce our capital costs and boost earnings per share. We aim to further increase our dividend annually and match the previous year’s level even in years in which the business environment is difficult.
Principles and objectives of our financial management
Financial management in the BASF Group is largely centralized and supported by regional competence centers. Our financing and investment policy is value-based, with risk management taking precedence over return. The risks associated with currencies, interest rate changes and creditworthiness are systematically analyzed and limited using modern processes and financial instruments. We manage the capital structure of BASF with efficient financial planning tools while taking into account selected financial ratios.
Information regarding the use of financial instruments can be found in Note 26 to the Consolidated Financial Statements.
|
Capital expenditures by region (%) |
||
|---|---|---|
|
|
2007 |
2006 |
|
Europe |
79.4 |
46.6 |
|
North America |
14.3 |
41.4 |
|
Asia Pacific |
4.2 |
7.0 |
|
South America, Africa, Middle East |
2.1 |
5.0 |
|
|
100.0 |
100.0 |
