Statement of Cash Flows
Cash flows from operating activities amounted to €7,709 million, compared with €7,245 million in the previous year. The improvement was primarily due to lower cash tied up in net working capital as well as to higher depreciation and amortization. Net income declined by €6,150 million year on year to –€627 million. The loss is mainly attributable to the negative equity-accounted earnings contribution from Wintershall Dea AG (–€4,853 million), which is eliminated as a noncash effect in miscellaneous items. Depreciation and amortization of property, plant and equipment and intangible assets was €514 million above the prior-year figure.
The €935 million decrease in cash tied up in net working capital in 2022 is partly due to the reduction in trade accounts receivable, which had increased significantly in the previous year. In addition, less cash was tied up in inventories in the year under review than in 2021. Dividend payments from shareholdings accounted for using the equity method and other shareholdings recognized under other receivables rose by €946 million. By contrast, the reduction in other provisions led to an outflow of cash. In particular, bonus payments to employees in 2022 were significantly higher than in the previous year. Moreover, the increase in trade accounts payable in the year under review was not as strong as in the previous year.
Cash flows from investing activities totaled –€3,778 million in 2022, after –€2,622 million in the previous year. Payments made for property, plant and equipment and intangible assets rose by €843 million to €4,375 million, mainly due to investments in the new Verbund site in Zhanjiang, China. Payments received from divestitures in the amount of €691 million resulted primarily from the sale of shares in the Hollandse Kust Zuid wind farm and the sale of the kaolin minerals business. These were partially offset by cash outflows of €13 million for a subsequent purchase price adjustment from the acquisition of Solvay’s polyamide business. In 2021, payments received for divestitures amounted to €1,030 million and mainly related to the sale of the global pigments business. An offsetting effect in 2021 was the €600 million payment made for the acquisition of 51% of BASF Shanshan Battery Materials Co., Ltd. In addition, the sale of our shares in Solenis led to cash inflows in the previous year.
Cash flows from financing activities amounted to –€4,013 million. In addition to the payment of dividends in the amount of €3,248 million (2021: €3,312 million), BASF bought back own shares worth €1,325 million. This was partially offset by net additions to financial and similar liabilities of €565 million (2021: net disposal of €3,145 million).
Free cash flow, which remains after deducting payments made for property, plant and equipment and intangible assets from cash flows from operating activities, represents the financial resources remaining after investments. It amounted to €3,333 million in 2022 after €3,713 million in the previous year.
|
2022 |
2021 |
---|---|---|
Net income |
–627 |
5,523 |
Depreciation and amortization of property, plant and equipment and intangible assets |
4,200 |
3,687 |
Changes in net working capital |
–632 |
–1,566 |
Miscellaneous items |
4,767 |
–398 |
Cash flows from operating activities |
7,709 |
7,245 |
|
|
|
Payments made for property, plant and equipment and intangible assets |
–4,375 |
–3,532 |
Acquisitions/divestitures |
678 |
430 |
Changes in financial assets and miscellaneous items |
–81 |
480 |
Cash flows from investing activities |
–3,778 |
–2,622 |
|
|
|
Capital increases/repayments and other equity transactions |
–1,331 |
− |
Changes in financial and similar liabilities |
565 |
–3,145 |
Dividends |
–3,248 |
–3,312 |
Cash flows from financing activities |
–4,013 |
–6,457 |
|
|
|
Cash-effective changes in cash and cash equivalents |
–83 |
–1,834 |
Changes in cash and cash equivalents from foreign exchange rates and changes in the scope of consolidation |
–25 |
123 |
Cash and cash equivalents at the beginning of the year |
2,624 |
4,335 |
Cash and cash equivalents at the end of the year |
2,516 |
2,624 |
|
2022 |
2021 |
---|---|---|
Cash flows from operating activities |
7,709 |
7,245 |
– Payments made for property, plant and equipment and intangible assets |
4,375 |
3,532 |
Free cash flow |
3,333 |
3,713 |