BASF Group reports strong sales and earnings for 2021

Ludwigshafen, Germany – BASF Group significantly increased sales and earnings in the 2021 business year. “It was a strong and successful year for BASF,” said Chairman of the Board of Executive Directors, Dr. Martin Brudermüller, who presented the BASF Report 2021 together with Chief Financial Officer Dr. Hans-Ulrich Engel.

“We increased sales prices by 25 percent and volumes by 11 percent. All segments achieved price and volume growth in 2021,” said Brudermüller. BASF Group’s sales amounted to €78.6 billion in 2021, 33 percent higher than in the previous year.

EBITDA before special items of €11.3 billion in 2021 was higher by €3.9 billion and EBITDA of €11.4 billion exceeded the prior-year figure by €4.9 billion.
At €7.8 billion, income from operations (EBIT) before special items more than doubled compared with 2020. This represented an increase of 67 percent compared with the pre-pandemic level in 2019. BASF’s positive earnings development was mainly driven by the Chemicals and Materials segments. The Surface Technologies and Industrial Solutions segments also contributed considerably to the strong recovery.

Return on capital employed (ROCE) was 13.5 percent, after 1.7 percent in the previous year, and was significantly above the cost of capital rate of 9 percent. The increase in ROCE resulted mainly from the higher EBIT of €7.7 billion in 2021, which was considerably above the prior-year level.

BASF’s automotive-related businesses continued to be negatively impacted by the semiconductor shortage. In 2021 and particularly in the fourth quarter, higher raw materials prices and increased energy and logistics costs also burdened the earnings development in all segments. For BASF’s European sites, the additional costs due to further increased natural gas prices in 2021 amounted to around €1.5 billion. The fourth quarter of 2021 alone accounted for €0.8 billion of this amount.

Brudermüller announced: “We will implement further substantial price increases in the coming months to pass on the significantly higher costs and improve our margins in the downstream businesses.” The established pricing procedures in these businesses lead to a delay in passing on costs.

Cash flows from operating activities in 2021 amounted to €7.2 billion, compared with €5.4 billion in the previous year. The considerable increase was primarily due to the improvement in net income, which came in at €5.5 billion. Free cash flow increased to €3.7 billion in 2021 from €2.3 billion in the previous year.

In the fourth quarter of 2021, cash flows from operating activities increased by €1.2 billion to €3.3 billion. Free cash flow came in at €1.8 billion, an increase of 84 percent compared with the fourth quarter of 2020.

BASF Group’s sales in the fourth quarter of 2021 rose by 24 percent versus the prior-year quarter to reach €19.8 billion. “Despite the comparison with the strong prior-year quarter, BASF was able to increase volumes in all segments except for Materials in the fourth quarter of 2021,” said Chief Financial Officer Engel.

EBITDA before special items increased by around €100 million to €2.2 billion. EBITDA amounted to €2.3 billion, compared with €2.0 billion in the fourth quarter of 2020.

EBIT before special items was €1.2 billion, compared with €1.1 billion in the fourth quarter of 2020. EBIT came in at €1.2 billion in the fourth quarter of 2021, compared with €932 million in the fourth quarter of 2020.

At BASF’s Annual Shareholders’ Meeting this year, the Board of Executive Directors and the Supervisory Board will propose to pay a dividend of €3.40 per share, an increase of 10 cents. In total, BASF would pay out €3.1 billion based on the number of shares at the end of the year. “With our dividend proposal, the BASF share offers an attractive dividend yield of 5.5 percent based on the share price at the end of 2021,” Brudermüller said.