BASF Report 2022

Business Review

At a glance

  • Sales increase of 25.2% mainly driven by higher prices
  • EBIT before special items 24.3% higher due to considerable earnings growth in the Care Chemicals division

Sales to third parties in the Nutrition & Care segment rose by €1,624 million to €8,066 million in 2022. This was primarily attributable to the Care Chemicals division, which recorded sales growth of €1,180 million to €5,619 million. In the Nutrition & Health division, sales rose by €444 million to €2,447 million.

Factors influencing sales – Nutrition & Care

 

Nutrition & Care

Care Chemicals

Nutrition & Health

Volumes

–1.4%

–4.1%

4.7%

Prices

23.3%

27.9%

13.1%

Portfolio

–1.2%

–1.2%

–1.3%

Currencies

4.5%

4.0%

5.7%

Sales

25.2%

26.6%

22.2%

The segment’s positive sales performance was mainly due to higher prices in all business areas, primarily resulting from cost increases for raw materials and energy.

Positive currency effects, largely relating to the U.S. dollar and the Chinese renminbi, had a positive impact on sales.

Volumes were slightly lower overall, dampening the segment’s sales performance. This was driven by the decline in volumes in the Care Chemicals division. Here, higher volumes in the personal care solutions business only partially compensated for the volumes decrease in the remaining business areas. The Nutrition & Health division increased volumes, especially in the animal nutrition and pharmaceutical business areas. Lower volumes in the aroma ingredients business had an offsetting effect.

Portfolio effects from the sale of the production site in Kankakee, Illinois, as of May 31, 2021, had a negative impact on sales in both operating divisions.

Segment data – Nutrition & Care (Million €)

 

 

2022

2021

+/–

Sales to third parties

 

8,066

6,442

25.2%

of which Care Chemicals

 

5,619

4,439

26.6%

Nutrition & Health

 

2,447

2,003

22.2%

Intersegment transfers

 

588

491

19.8%

Sales including transfers

 

8,654

6,933

24.8%

Income from operations before depreciation, amortization and special items

 

1,067

909

17.4%

Income from operations before depreciation and amortization (EBITDA)

 

1,055

967

9.1%

EBITDA margin

%

13.1

15.0

Depreciation and amortizationa

 

450

413

8.8%

Income from operations (EBIT)

 

605

554

9.3%

Special items

 

–13

57

.

EBIT before special items

 

618

497

24.3%

Return on capital employed (ROCE)

%

7.5

8.2

Assets

 

8,038

7,231

11.2%

Investments including acquisitionsb

 

642

654

–1.8%

Research and development expenses

 

172

172

–0.3%

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

Nutrition & Care – sales

By division

Nutrition & Care – sales (pie chart)

Income from operations (EBIT) before special items rose by €121 million to €618 million year on year. This was due to the strong increase in earnings in the Care Chemicals division, mainly from price-driven margin growth. Higher fixed costs, largely as a result of inflation and currency effects, was an offsetting factor. By contrast, EBIT before special items in the Nutrition & Health division was considerably below the prior-year level. This was primarily attributable to higher costs, largely from increased energy costs and turnarounds.

EBIT rose by €52 million compared with the previous year to €605 million. It included special charges for the restructuring of the Nutrition & Health division and for the discontinuation of our business activities in Russia. In the previous year, EBIT included special income from the sale of the production site in Kankakee, Illinois.

Division sales by region (Location of customer)

Divisions

Europe

North America

Asia Pacific

South America, Africa, Middle East

Total (million €)

Care Chemicals

53%

18%

20%

9%

5,619

Nutrition & Health

37%

19%

33%

11%

2,447

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