EBITDA before special items of €11.3 billion in 2021 increased by €3.9 billion and EBITDA of €11.4 billion exceeded the prior year figure by 4, 9 billion euros.
“It was a solid and successful year for BASF,” said Dr. Martin Brudermüller, Chairman of the Board of Directors, who presented the BASF Report 2021 with Chief Financial Officer Dr. Hans-Ulrich Engel. “We have increased sales prices by 25% and volumes by 11%. All segments recorded price and volume growth in 2021.”
At €7.8 billion, operating profit (EBIT) before exceptional items more than doubled compared to 2020. This represents a 67% increase compared to 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 significantly to the strong recovery.
BASF’s automotive business continued to be negatively impacted by the shortage of semiconductors. In 2021 and in particular in the fourth quarter, the increase in raw material prices and the increase in energy and logistics costs also weighed on the evolution of profits in all segments.
For BASF’s European sites, the additional costs due to the further increase in natural gas prices in 2021 amounted to around 1.5 billion euros. The fourth quarter of 2021 alone accounted for 0.8 billion euros of this amount.
“We will implement further substantial price increases in the coming months to pass on significantly higher costs and improve our margins in the downstream business,” Brudermüller said.
Cash flow from operating activities in 2021 amounted to €7.2 billion, compared to €5.4 billion the previous year. This strong growth is mainly due to the improvement in net income, which amounted to 5.5 billion euros. Free cash flow increased to €3.7 billion in 2021 from €2.3 billion the previous year.
In the fourth quarter of 2021, cash flow from operating activities increased by €1.2 billion to €3.3 billion. Free cash flow amounted to 1.8 billion euros, up 84% compared to the fourth quarter of 2020.
Sales of the BASF Group in the fourth quarter of 2021 increased by 24% compared to the quarter of the previous year to reach 19.8 billion euros.
“Despite the comparison to the strong prior year quarter, BASF was able to increase volumes in all segments except Materials in the fourth quarter of 2021,” Engel said. EBITDA amounted to 2.3 billion euros, compared to 2.0 billion euros in the fourth quarter of 2020.
BASF Group outlook for 2022
“We have had a very good start to the year, with January 2022 figures higher than the previous year,” Brudermüller said looking ahead to the current financial year.
BASF expects global economic growth of 3.8% to be somewhat more subdued in 2022 after the very strong recovery in 2021.
“As industrial order books are high, we expect global industrial production to grow by 3.8% and chemical production by 3.5%,” Brudermüller said.
BASF anticipates an average oil price of $75 for a barrel of Brent and an exchange rate of $1.15 per euro. Based on these assumptions, BASF forecasts a turnover of between 74 and 77 billion euros for 2022.