Transcript
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BASF – The Chemical CompanyShaping the future in the crisis

11th Plenary Meeting of the Sector Social Dialogue Committee of the European Chemical Industry

4th May 2010

Mathias Schöttke

HR Governance BASF SE, Ludwigshafen

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Agenda

1. BASF at a glance

2. Impacts of the crisis

3. Measures in tough times

4. Conclusion

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BASF SE - Mathias Schöttke Shaping the future in the crisis 3

Agenda

1. BASF at a glance

2. Impacts of the crisis

3. Measures in tough times

4. Conclusion

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BASF – The Chemical CompanyThe world´s leading chemical company

� Chemistry is about every aspect of life.

� We are connected to deliverintelligent and sustainable solutions.

� Sales 2009: €50,693 mill.

� EBIT 2009: €3,677 mill.

� Employees (December 31, 2009): 104,779

� About 1,300 new patents filed

� 6 Verbund sites and about 380 production sites

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BASF Segments focusing on six different areas

Ch

emic

als

Pla

stic

s

PerformancePolymers

Polyurethanes

Crop Protection Oil & Gas

Per

form

ance

Pro

du

cts

Paper Chemicals

Dispersions& Pigments

Care Chemicals

PerformanceChemicals

Inorganics

Petrochemicals

IntermediatesF

un

ctio

nal

So

luti

on

s

ConstructionChemicals

Coatings

Catalysts

Ag

ricu

ltu

ral

So

luti

on

s

Oil

& G

as

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Europe – BASF’s home market with two Verbund sites

� Sales 2009:€28.5 billionby location of customer

� Employees:67,621as of December 31, 2009

� Regional facts: � BASF’s home market� Ludwigshafen –

site of the company’s global headquarters

� Verbund sites in Ludwigshafen, Germany and Antwerp, Belgium

Verbund site

ANTWERPLUDWIGSHAFEN

Selectedproduction site

Regional Headquarter

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Agenda

1. BASF at a glance

2. Impacts of the crisis

3. Measures in tough times

4. Conclusion

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The crash of the industrial production

80

90

100

110

120

130

2007 2008 2009 2010 2011 2012 2013 2014 2015

Industry production 2007 = 100Source: internal

Western Europe

North America

World Emerging Countriesin Asia

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Some figures illustrating the situation in 2009

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Agenda

1. BASF at a glance

2. Impacts of the crisis

3. Measures in tough times

4. Conclusion

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Crisis management and long term issues rely on strong labor relations

� Balancing crisis management and long term issues

� Enhancing strong labor relations

Long term issues

Crisis ManagementLabor relations

SustainabilityTrust

ReliabilityMotivation

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Gradual crisis management as part of our approach

Our approach: Gradual crisis management

Short-time work / Site Closures

Temporary personnel transfersTemporary transfer of employees in Antwerp and LudwigshafenQualification of employees

Flexible use of HR-instrumentsReduction of time accounts and annual leaveReduction of leased workers, contractors and employees with limited contract

Strict cost disciplineReduction in costs for catering, travelling, events etc.Reduction in provisions for residual leave and time accounts etc.

Adjust capacitiesPlant cutback and shutdownsReduction of stock levels

Reduce costs

Increase efficiency

Save employment

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�Reduction in costs for catering�Strict use of internal service providers�Reduction in expenditures on events �Reduction in expenditures on foregoing business trips

Personnel Measures

�Reduction in number of leased workers, contractors and employees with limited contract�Flexible use of working-time instruments (e.g. annual leave 2009, overtime) �Reduction of external hiring�Personnel transfers

Crisis Management at BASF SE in Ludwigshafen

Efficiency Measures

�Reduction in expenditures

�Reduction in provisions

�No losses of permanent jobs

�Short-time work

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Mio

. €

2008

2009

BASF SE Ludwigshafen37% lower expenditures on business trips in 2009

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BASF SE Ludwigshafen50% reduction in leased workers in 2009

Jan08

Mrz08

Mai08

Jul08

Sep08

Nov08

Jan09

Mrz09

Mai09

Jul09

Sep09

Nov09

Nu

mb

er o

f le

ased

wo

rker

s

Mar08

May08

Mar09

May09

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2007 2008 2009

20 % of total leave 19 % of total leave 4 % of total leave

Mio

. €BASF SE Ludwigshafen80% less provisions for residual leave in 2009

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BASF SE Ludwigshafen600 personnel transfers at the Verbund Site in 2009

� 600 employees transferred in Ludwigshafen

� 160 production plants belonging to one legal entity

� Verbund Coordination Committee as decision-making body

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2117

3009

4424

2759

1220

97

3663

6696116

22132145

5782

1134

29301030

2127

2568

2066

3084

3662

4034

2673

1965

283

636

197

0

1000

2000

3000

4000

5000

6000

Feb March April May June July Aug Sept Okt Nov Dec Jan Feb

Europe, incl.Ciba

thereof Germany,incl. Ciba

thereof BASFSE

20102009

BASF Group in Europe Nearly 6000 employees in short-time work in 2009 / 2010

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Agenda

1. BASF at a glance

2. Impacts of the crisis

3. Measures in tough times

4. Conclusion

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Shaping the future in the crisis

� Measures to adjust capacities and increase efficiency are crucial to tackle economical crisis and have been implemented successfully at BASF.

� However, short-term measures must be in balance with a continuous and long-term oriented improvement of the structures in a company, such as flexible HR-instruments.

� Both – long term topics as well as short term measures in times of crisis – rely on strong labor relations which must be built up and fostered in the long run.

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Thank you for your attention

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Back Up

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Mio

. €

2008

2009

BASF SE LudwigshafenReduction in expenditures on foregoing business trips

60

40

20

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BASF SE LudwigshafenReduction in overtime work

0

50.000

100.000

150.000

200.000

250.000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Ho

urs

2008

2009

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432

562

700

210

365 340

667

0

100

200

300

400

500

600

700

800

Jan08

Mrz08

Mai08

Jul08

Sep08

Nov08

Jan09

Mrz09

Mai09

Jul09

Sep09

Nov09

Jan10

Mrz10

Mai10

An

zah

l Mit

arb

eite

r

IST- BJG *

IST- Leasing

* BASF Jobmarkt GmbH – Befristet Beschäftigte (BASF SE)

Entwicklung BJG & Leasing Monatsstände (Stand: 31.03.2010)

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0

10

20

30

40

50

60

2007 2008 2009

198.560 days= 20 % of total leave

187.216 days= 19 % of total leave

38.274 days= 4 % of total leave

Mio. €

BASF SE LudwigshafenReduction in provisions for residual leave

45,8 46,9

9,4

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0

40

80

120

160

200

240

280

320

27.1.

099.

2.09

24.2.

099.

3.09

30.3.

0915

.4.09

27.4.

0911

.5.09

25.5.

098.

6.09

22.6.

096.

7.09

20.7.

093.

8.09

31.8.

0928

.9.09

26.10

.09

14.12

.09

22.2.

10

Total number ofemployees to transfer

To transfer

Transfered

Return to homedivision

BASF SE LudwigshafenPersonnel transfers across divisions

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Effects of the crisis for BASFReduction of unsolicited applications at BASF SE

0

200

400

600

800

1000

01/20

0802

/2008

03/20

0804

/2008

05/20

0806

/2008

07/20

0808

/2008

09/20

0810

/2008

11/20

0812

/2008

01/20

0902

/2009

03/20

0904

/2009

05/20

0906

/2009

07/20

0908

/2009

09/20

0910

/2009

11/20

09

- 55%

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Our six values

� Sustainable Profitable Performance

� Innovation for the Success of Our Customers

� Safety, Health and Environmental Responsibility

� Personal and Professional Competence

� Mutual Respect and Open Dialogue

� Integrity

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Strong start to 2010

� Business recovery continues

� Considerably higher sales and earnings in the industrial business

� Sustainable increase in earnings in Performance Products

� Full year 2010: Sales growth and significantly improved earnings

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Sales and earnings: BASF Group 1st quarter 2010

� Sales rise by 26% to €15.5 billion

� Strong increase in sales volumes in almost all segments while prices generally lie marginally below the level of the first quarter of the previous year

EBIT before special items million €

12,219

15,454

1st quarter

Sales million €

� Earnings improve substantially by 98% to €1.9 billion

� Significantly higher earnings in almost all divisions

� Earnings in the Oil & Gas segment negatively impacted by lower natural gas prices

+ 26.5%

985

1,954

1st quarter

+ 98.4%

20102009

1st quarter 1st quarter

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6.9

4.9

1.5

4th quarter full year

62.3

14.3

50.7

13.2

4th quarter full year

20082009

20082009

Effects of the crisis for BASFReduction of sales and earnings

(-7.9%)

(-18.6%)

(+181.2%)

(-29.2%)

0.5

� Decline in earnings due to weak demand� High one-time expenses for Ciba integration

� Sales decline significantly� Lower prices and volumes due to crisis in key

customer industries

Salesbillion €

EBIT before special itemsbillion €


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