BASF Report 2021

Business Review

At a glance

  • Sales growth of 41.7% to €15,214 million, mainly driven by higher prices
  • EBIT before special items of €2,418 million; considerable increase as a result of higher earnings in both divisions

The Materials segment increased sales to third parties by €4,478 million year on year to €15,214 million in 2021. This was due to considerable sales growth in both divisions. The Monomers division increased sales by €2,821 million to €7,922 million. At €7,292 million, sales in the Performance Materials division were €1,657 million above the prior-year figure.

Factors influencing sales – Materials

 

Materials

Performance Materials

Monomers

Volumes

12.0%

14.1%

9.6%

Prices

30.0%

16.2%

45.2%

Portfolio

0.7%

0.6%

0.9%

Currencies

–0.9%

–1.5%

–0.3%

Sales

41.7%

29.4%

55.3%

Sales growth was due mainly to significantly higher prices resulting from strong demand alongside low product availability and increased prices for raw materials. Production and supply chain disruptions associated with extreme weather conditions and raw material shortages negatively impacted product market availability. The Monomers division achieved higher prices primarily in isocyanates and polyamides, while the Performance Materials division raised price levels mainly in polyurethane systems and engineering plastics.

Volumes rose significantly as a result of strong demand and contributed to sales growth. The Performance Materials division recorded higher sales volumes in the transportation and consumer goods industries, especially in Asia Pacific and Europe. In the second half of 2021, volume development was however negatively impacted by the semiconductor shortage in the automotive market and the resulting production outages. Overall, sales volumes in the construction industry were slightly above the prior-year level. Higher volumes in Europe more than compensated for lower volumes in North America. The Monomers division increased volumes, especially of polyamide 6.6 following the slight recovery in automotive production in 2021 after the weak prior year due to the pandemic. Sales volumes of methylene diphenyl diisocyanate (MDI) were also higher.

Portfolio effects from the acquisition of the integrated polyamide business from Solvay, which closed as of January 31, 2020, had a slightly positive impact on sales.

Currency effects, primarily relating to the U.S. dollar, had a slightly negative impact on sales development in both divisions.

Segment data – Materials (Million €)

 

 

2021

2020

+/–

Sales to third parties

 

15,214

10,736

41.7%

of which Performance Materials

 

7,292

5,635

29.4%

Monomers

 

7,922

5,101

55.3%

Intersegment transfers

 

1,250

720

73.6%

Sales including transfers

 

16,464

11,456

43.7%

Income from operations before depreciation, amortization and special items

 

3,208

1,714

87.2%

Income from operations before depreciation and amortization (EBITDA)

 

3,162

1,556

103.2%

EBITDA margin

%

20.8

14.5

Depreciation and amortizationa

 

817

1,665

–50.9%

Income from operations (EBIT)

 

2,345

–109

.

Special items

 

–73

–944

92.3%

EBIT before special items

 

2,418

835

189.6%

Return on capital employed (ROCE)

%

22.8

–1.1

Assets

 

11,286

9,118

23.8%

Investments including acquisitionsb

 

709

1,957

–63.8%

Research and development expenses

 

193

182

6.1%

a

Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments)

b

Additions to property, plant and equipment and intangible assets

Materials – sales

By division

Materials – sales (pie chart)

Income from operations (EBIT) before special items rose by €1,583 million compared with 2020 to €2,418 million. Both divisions considerably increased EBIT before special items. Earnings growth in the Monomers division was primarily due to higher margins in isocyanates and polyamides. In the Performance Materials division, EBIT before special items was above the prior-year level, mainly driven by positive volume development.

EBIT rose by €2,454 million year on year to €2,345 million. Special items amounted to –€73 million in 2021, after –€944 million in 2020. The special charges in the previous year were primarily attributable to impairments.

Division sales by region (Location of customer)

Divisions

Europe

North America

Asia Pacific

South America,
Africa,
Middle East

Total
(million €)

Performance Materials

36%

20%

39%

5%

7,292

Monomers

47%

19%

29%

5%

7,922