We expect global economic growth to be somewhat more moderate in 2022 following the very strong recovery in 2021. Global growth should be supported by the gradual containment of the coronavirus pandemic. Nevertheless, a full recovery of the market environment is still not yet expected in 2022 as uncertainty remains exceptionally high.
At a glance
- Forecast sales of between €74 billion and €77 billion
- Expected EBIT before special items of between €6.6 billion and €7.2 billion
- Projected ROCE of between 11.4% and 12.6%
- Capex of around €4.6 billion planned for 2022
Our forecast assumes moderate growth in the majority of our customer industries, while the automotive industry is expected to see a stronger recovery. Our forecast range takes into account uncertainty resulting in particular from the effects of ongoing supply chain disruptions, the further course of the coronavirus pandemic and the development of energy prices. The global economy is expected to grow by 3.8% in 2022 (2021: 5.8%). As order backlogs in industry are high, we expect global industrial production to grow by 3.8% (2021: 6.5%) and chemical production by 3.5% (2021: 6.1%). We anticipate an average oil price of $75 for a barrel of Brent crude and an exchange rate of $1.15 per euro.
Based on these assumptions, we are forecasting sales of between €74 billion and €77 billion (2021: €78.6 billion). The BASF Group’s income from operations (EBIT) before special items is expected to be between €6.6 billion and €7.2 billion (2021: €7.8 billion). ROCE should be between 11.4% and 12.6% (2021: 13.5%).
Our CO2 emissions are expected to be between 19.6 million metric tons and 20.6 million metric tons in 2022 (2021: 20.2 million metric tons). No forecast has been made for the previous Accelerator sales target as we plan to update our portfolio steering target in 2022.
Sales, earnings and ROCE forecast for the BASF Group1
The BASF Group is expected to generate sales of between €74 billion and €77 billion in 2022. Contributing factors will include the volume growth expected in all segments and slightly positive portfolio effects from the formation of BASF Shanshan Battery Materials Co., Ltd. We anticipate lower price levels, mainly from lower commodity and precious metal prices, which will lead to a significant decrease in sales in the Surface Technologies and Chemicals segments. We expect slightly lower sales in the Industrial Solutions segment due to negative portfolio effects from the sale of the pigments and kaolin businesses. By contrast, we are forecasting considerable sales growth in the Agricultural Solutions and Nutrition & Care segments following significant price increases. We expect slightly higher sales in the Materials segment and in Other.
The BASF Group’s EBIT before special items is expected to decline to between €6.6 billion and €7.2 billion. We anticipate significantly lower contributions from the Chemicals and Materials segments and from Other. We are forecasting slightly lower EBIT before special items in the Industrial Solutions and Surface Technologies segments. The Agricultural Solutions and Nutrition & Care segments plan to considerably increase EBIT before special items.
Based on the forecast for global economic development and expected business development in the BASF Group in 2022, we expect a ROCE of between 11.4% and 12.6%. Compared with the previous year, we anticipate a considerable decrease in ROCE in the Chemicals, Materials and Surface Technologies segments. The Agricultural Solutions and Nutrition & Care segments are expected to considerably increase ROCE, while the Industrial Solutions segment will see a slight increase.
CO2 emissions forecast for the BASF Group
CO2 emissions are expected to be between 19.6 million metric tons and 20.6 million metric tons in 2022. We will take specific emission reduction measures to limit the additional emissions from moderate growth and the expected higher capacity utilization of the ammonia plants following low capacity utilization in 2021. These include measures to increase energy efficiency and process optimization, as well as the continued shift to renewable energy. In addition, the reductions in emissions from divestitures, including the agreed sale of the kaolin business, will slightly more than compensate for the additional emissions from the formation of BASF Shanshan Battery Materials Co., Ltd. in 2022.
The material opportunities and risks that could affect our forecast are described under Opportunities and Risks.
1 For sales, “slight” represents a change of 0.1%–5.0%, while “considerable” applies to changes of 5.1% and higher. “At prior-year level” indicates no change (+/–0.0%). For earnings, “slight” means a change of 0.1%–10.0%, while “considerable” is used for changes of 10.1% and higher. “At prior-year level” indicates no change (+/–0.0%). At a cost of capital percentage of 9% for 2022, we define a change in ROCE of 0.1 to 1.0 percentage points as “slight,” a change of more than 1.0 percentage points as “considerable” and no change (+/–0.0 percentage points) as “at prior-year level.”