Additional Indicators For Results of Operations
We also use alternative performance measures (APMs) to steer the BASF Group. Investors, analysts and rating agencies use them to assess our performance. These are not defined by IFRS. As such, the methods of calculation can differ from those used by other companies. Alternative performance measures for the results of operations are EBIT before special items, EBITDA before special items, EBITDA, the EBITDA margin and adjusted earnings per share. Other APMs are net debt,1 free cash flow1 and capital expenditures (capex).2
Income from operations before depreciation, amortization and special items (EBITDA before special items) and income from operations before depreciation and amortization (EBITDA) are indicators that describe operational performance independent of age-related depreciation and amortization of assets and any impairment or reversal of impairment. Both figures are therefore particularly useful in cross-company comparisons. EBITDA before special items is also highly useful in making comparisons over time. The EBITDA margin is a relative indicator and is calculated as the ratio of EBITDA to sales revenue, enabling operational performance to be compared independently of the size of the underlying business.
EBITDA before special items in 2022 was €585 million below the 2021 figure at €10,762 million; EBITDA decreased by €607 million to €10,748 million. The EBITDA margin was 12.3% in 2022 compared with 14.4% in the previous year.
|
2022 |
2021 |
|---|---|---|
EBIT |
6,548 |
7,677 |
– Special items |
–330 |
–91 |
EBIT before special items |
6,878 |
7,768 |
+ Depreciation and amortization |
3,827 |
3,534 |
+ Impairments and reversals of impairments on property, plant and equipment and intangible assets before special items |
57 |
45 |
Depreciation, amortization, impairments and reversals of impairments on property, plant and equipment and intangible assets before special items |
3,885 |
3,580 |
EBITDA before special items |
10,762 |
11,348 |
|
|
2022 |
2021 |
|---|---|---|---|
EBIT |
|
6,548 |
7,677 |
+ Depreciation and amortization |
|
3,827 |
3,534 |
+ Impairments and reversals of impairments on property, plant and equipment and intangible assets |
|
373 |
144 |
Depreciation, amortization, impairments and reversals of impairments on property, plant and equipment and intangible assets |
|
4,200 |
3,678 |
EBITDA |
|
10,748 |
11,355 |
Sales revenue |
|
87,327 |
78,598 |
EBITDA margin |
% |
12.3 |
14.4 |
|
|
2022 |
2021 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Income after taxes |
|
–391 |
5,982 |
|||||||||
– Special itemsa |
|
–6,637 |
–181 |
|||||||||
+ Amortization, impairments and reversals of impairments on intangible assets |
|
652 |
614 |
|||||||||
– Amortization, impairments and reversals of impairments on intangible assets contained in special items |
|
0 |
0 |
|||||||||
– Adjustments to income taxes |
|
372 |
116 |
|||||||||
– Adjustments to income after taxes from discontinued operations |
|
− |
–36 |
|||||||||
Adjusted income after taxes |
|
6,526 |
6,695 |
|||||||||
– Adjusted noncontrolling interests |
|
248 |
483 |
|||||||||
Adjusted net income |
|
6,278 |
6,212 |
|||||||||
Weighted average number of outstanding shares (in thousands)b |
|
901,754 |
918,479 |
|||||||||
Adjusted earnings per share |
€ |
6.96 |
6.76 |
|||||||||
|
||||||||||||
Compared with earnings per share, adjusted earnings per share is firstly adjusted for special items. Amortization, impairments and reversals of impairments on intangible assets are then eliminated. Amortization of intangible assets primarily results from the purchase price allocation following acquisitions and is therefore of a temporary nature. The effects of these adjustments on income taxes and on noncontrolling interests are also considered. This makes adjusted earnings per share a suitable measure for making comparisons over time and predicting future profitability.
In 2022, adjusted earnings per share amounted to €6.96 compared with €6.76 in the previous year.
1 For more information on these indicators, see the Financial Position
2 For more information on capex, see Our Steering Concept and Material Investments and Portfolio Measures