Additional indicators for results of operations

  • EBITDA before special items and EBITDA considerably higher
  • Adjusted earnings per share increase from €4.83 to €6.44

Aside from EBIT, EBIT before special items and EBIT after cost of capital – key performance indicators drawn upon to steer the BASF Group – we also provide additional performance indicators in this report that are not defined by IFRS. They should not be viewed in isolation, but treated as supplementary information.

EBITDA before special items (million €)

 

 

2017

2016

EBIT

 

8,522

6,275

– Special items

 

194

(34)

EBIT before special items

 

8,328

6,309

+ Amortization, depreciation and valuation allowances on intangible assets and property, plant and equipment before special items

 

4,199

4,018

EBITDA before special items

 

12,527

10,327

EBITDA (million €)

 

 

2017

2016

EBIT

 

8,522

6,275

+ Amortization, depreciation and valuation allowances on intangible assets and property, plant and equipment

 

4,202

4,251

EBITDA

 

12,724

10,526

Income from operations before depreciation, amortization and special items (EBITDA before special items) and income from operations before depreciation and amortization (EBITDA) are indicators that describe operational performance independent of age-related amortization and depreciation of assets and extraordinary valuation allowances (impairments or reversals of impairments). Both figures are therefore particularly useful in cross-company comparisons. EBITDA before special items is also highly useful in making comparisons over time.

EBITDA before special items rose by €2,200 million year-on-year to €12,527 million in 2017. At €12,724 million, EBITDA exceeded the prior-year figure by €2,198 million.

Return on assets (million €)

 

 

 

2017

2016

Income before taxes and minority interests

 

 

7,800

5,395

+ Interest expenses

 

 

560

661

Income before taxes and minority interests and interest expenses

 

 

8,360

6,056

Total assets as of January 1

 

 

76,496

70,836

Total assets as of December 31

 

 

78,768

76,496

Average assets employed

 

 

77,632

73,666

 

 

 

 

 

Return on assets

 

%

10.8

8.2

We calculate return on assets as income before taxes and minority interests, plus interest expenses, as a percentage of average assets employed. This indicator reflects the return independently of capital structure.

The return on assets was 10.8%, compared with 8.2% in the previous year. The considerable increase in income before taxes and minority interests with a simultaneous decrease in interest expenses more than offset the rise in average assets employed.

Adjusted earnings per share (million €)

 

 

 

2017

2016

1

Income taxes in 2017 were also adjusted for the effects of the tax reform in the United States. Of this figure, €379 million related to deferred tax income and €27 million to current tax expenses.

Income before taxes and minority interests

 

 

7,800

5,395

– Special items

 

 

194

(34)

+ Amortization and valuation allowances on intangible assets

 

 

616

560

– Amortization and valuation allowances on intangible assets contained in special items

 

 

59

52

Adjusted income before taxes and minority interests

 

 

8,163

5,937

– Adjusted income taxes1

 

 

1,971

1,300

Adjusted income before minority interests

 

 

6,192

4,637

– Adjusted minority interests

 

 

277

197

Adjusted net income

 

 

5,915

4,440

 

 

 

 

 

Weighted average number of outstanding shares

 

in thousands

918,479

918,479

Adjusted earnings per share

 

6.44

4.83

Compared with earnings per share, this figure has been adjusted for special items as well as amortization of and valuation allowances (impairments and reversals of impairments) on intangible assets. Amortization of intangible assets primarily results from the purchase price allocation following acquisitions and is therefore of a temporary nature. The effects of these adjustments on income taxes and on minority interests are also eliminated. This makes adjusted earnings per share a suitable measure for making comparisons over time and predicting future profitability.

In 2017, adjusted earnings per share amounted to €6.44 compared with €4.83 in the previous year.