Financial Position

Equity and liabilities

Equity declined by €1,159 million compared with the previous year to €40,923 million. Retained earnings were €4,912 million below the figure as of December 31, 2021. This was due to the negative net income, share buybacks in the amount of €1.3 billion and dividend payments for 2021 of €3.1 billion. By contrast, other comprehensive income rose by €3,683 million, mainly from actuarial gains and currency effects.

At 48.4%, the equity ratio was at the prior-year level (48.2%).

Noncurrent liabilities declined by €2,110 million compared with the 2021 year-end. This was primarily attributable to the €3,351 million decrease in provisions for pensions and similar obligations, mainly as a result of higher interest rates in all relevant currency zones.

The €133 million decrease in other provisions largely resulted from lower provisions for interest on tax risks and for personnel expenses.

In addition, tax provisions decreased by €85 million.

The €1,407 million increase in noncurrent financial indebtedness primarily reflected the issue of new euro-denominated bonds with a total volume of €3,484 million. This was partially offset by the reclassification of three bonds with an aggregate carrying amount of €2,035 million from noncurrent to current financial indebtedness.

Deferred tax liabilities rose slightly compared with the prior year-end to €1,543 million.

Other noncurrent liabilities were on a level with the previous year, at €1,606 million.

Current liabilities rose by €359 million to €20,440 million, primarily as a result of the €609 million increase in trade accounts payable. In addition, current financial indebtedness was €424 million above the figure as of December 31, 2021. This was attributable to the above-mentioned reclassification of three bonds in the aggregate amount of around €2.1 billion from noncurrent to current financial indebtedness, including interest and currency effects, as well as to the €406 million increase in commercial paper at BASF SE. This was partially offset by the scheduled repayment of three bonds totaling around €2 billion.

Other liabilities declined by €312 million year on year, mainly due to lower liabilities from precious metal trading and lower negative fair values of derivatives.

Tax liabilities decreased by €166 million.

Furthermore, current provisions were €136 million below the prior-year figure, largely as a result of lower provisions for bonus payments as well as for restructuring; higher provisions for rebates had an offsetting effect.

Net debt rose by €1,916 million compared with December 31, 2021, to €16,268 million.

• For more information on the composition and development of individual asset items, see the Notes to the Consolidated Financial Statements
• For more information on the development of the balance sheet, see the Ten-Year Summary

Off-balance sheet obligations

Off-balance sheet obligations mainly relate to long-term purchase obligations for raw materials and long-term supply agreements for electricity from renewable sources. In addition, obligations exist in connection with initiated or planned investment projects (2022: €13,982 million). In 2022, new obligations of this type arose pri­marily in connection with the construction of the new BASF Verbund site in Zhanjiang, China.

For more information, see the Consolidated Financial Statements and the forecast:

• Note 25
• Forecast