Financial Position

Equity rose by €4,636 million compared with December 31, 2020, to €39,034 million. This was driven by net income and higher other comprehensive income. The increase in other comprehensive income was mainly due to actuarial gains and translation effects. The equity ratio rose from 42.8% to 46.0%.

Noncurrent liabilities decreased by €2,926 million compared with the 2020 year-end to €26,688 million, primarily due to lower pension provisions as a result of higher interest rates in relevant currency zones. The decline in noncurrent financial indebtedness mainly reflected the reclassification of a eurobond with a carrying amount of €426 million from noncurrent to current financial indebtedness. Negative currency effects had an offsetting impact. Lower tax provisions also contributed to the decline in noncurrent liabilities.

Current liabilities rose by €2,831 million to €19,111 million, mainly as a result of the €1,317 million increase in current financial indebtedness compared with the 2020 year-end figure. This was largely attributable to the above-mentioned reclassification of a bond with a carrying amount of €426 million, as well as new short-term bank loans taken out for approximately €2 billion. The repayment of a €1 billion bond and the reduction in commercial paper at BASF SE had an offsetting effect. The €1,008 million increase in current provisions to €3,833 million was primarily due to higher provisions for discounts and bonuses.

Net debt¹ rose by €1,285 million compared with the 2020 year-end, mainly as a result of the €1,082 million increase in financial indebtedness.

Cash flows from operating activities amounted to –€525 million, an improvement of €505 million compared with the prior-year quarter. This development was mainly driven by the €833 million increase in net income. The increase in net working capital led to cash tied up of €2,773 million. This was largely attributable to trade accounts receivable, which rose by €2,852 million as a result of seasonal factors. In the prior-year quarter, cash of €3 billion was tied up, also primarily due to higher trade accounts receivable and the reduction in trade accounts payable.

Cash flows from investing activities amounted to –€435 million. Cash outflows were therefore €1,385 million lower than in the prior-year period. In the first quarter of 2020, the acquisition of Solvay’s integrated polyamide business led to payments of €1,245 million. Payments made for property, plant and equipment and intangible assets amounted to €456 million in the first quarter of 2021, down €113 million from the prior-year figure.

Cash flows from financing activities amounted to €710 million, mainly from the increase in financial and similar liabilities. Cash inflows rose more strongly in the prior-year quarter, by around €3.6 billion.

Free cash flow² improved by €618 million to –€981 million as a result of higher cash flows from operating activities in conjunction with lower payments made for property, plant and equipment and intangible assets.

BASF enjoys good credit ratings, especially compared with com­petitors in the chemical industry. On March 4, 2021, Standard & Poor’s confirmed its long and short-term ratings for BASF of A/A-1/outlook negative. Fitch confirmed its rating of A/F1/outlook stable on February 12, 2021. Moody’s confirmed its rating of A3/P-2/outlook stable on February 12, 2021, as well.