Net Assets and Financial Position

Net assets

At €96,972 million, total assets were €9,590 million higher than at the end of 2021, mainly due to the €8,300 million increase in current assets.

Noncurrent assets rose by €1,289 million. The €1,054 million increase in the carrying amount of non-integral shareholdings accounted for using the equity method compared with the prior year-end was primarily attributable to the interest in Wintershall Dea, mainly as a result of currency effects. This was offset by a €1,078 million decrease in deferred taxes due to lower pension provisions. Property, plant and equipment rose by €701 million compared with December 31, 2021, largely owing to positive currency effects. Additions were almost on a level with depreciation. Intangible assets rose by €272 million, also mainly due to currency effects. This was partly offset by amortization, which exceeded additions. The carrying amount of integral shareholdings accounted for using the equity method increased by €325 million compared with the figure as of December 31, 2021, primarily from the addition of the remaining 24.3% interest in the Hollandse Kust Zuid wind farm following the partial divestiture.

The €8,300 million increase in current assets to €43,351 million compared with the prior-year end was mainly attributable to trade accounts receivable, which were €3,832 million higher than the figure as of December 31, 2021. Inventories rose by €2,117 million, primarily as a result of higher raw materials prices. The increase in other receivables largely reflected the rise in precious metal trading items and higher fair values of derivatives. Cash and cash equivalents were €1,156 million above the prior year-end figure. Assets of disposal groups declined following the partial divestiture of the shareholding in the Hollandse Kust Zuid wind farm. As of June 30, 2022, these only included the assets of the kaolin minerals business, which is held for sale.

Financial position

Equity amounted to €46,373 million as of June 30, 2022, €4,291 million above the prior year-end figure. This was mainly due to translation adjustments and actuarial gains. Retained earnings declined by €836 million, primarily driven by share buybacks of around €1.1 billion. Net income had an offsetting effect and was €239 million higher than the dividends paid, which amounted to €3,072 million.

The equity ratio decreased slightly from 48.2% to 47.8%.

Noncurrent liabilities declined by €1,254 million compared with the 2021 year-end to €23,966 million, mainly due to the significant decline in pension provisions as a result of higher interest rates in relevant currency zones. The €1,847 million increase in noncurrent financial indebtedness primarily reflected the issue of new eurobonds with a total volume of €3.5 billion. This was partially offset by the reclassification of two bonds with an aggregate carrying amount of around €1.8 billion from noncurrent to current financial indebtedness.

Current liabilities rose by €6,552 million compared with December 31, 2021, to €26,633 million, primarily as a result of the €4,502 million increase in current financial indebtedness. This was mainly attributable to the placement of commercial paper amounting to around €2.4 billion by BASF SE, the above-mentioned reclassification of two bonds from noncurrent to current financial indebtedness, and current liabilities to banks, which rose by around €1 billion. The scheduled repayment of a USD bond and a GBP bond with an aggregate carrying amount of €739 million had an offsetting effect. Trade accounts payable were €1,242 million higher than at the end of the previous year. The increase in current provisions resulted mainly from higher provisions for rebates.

Net debt¹ rose by €5,195 million compared with December 31, 2021, to €19,546 million following the increase in financial indebtedness.

Cash flows from operating activities amounted to €938 million in the first half of 2022, a decrease of €1,074 million compared with the prior-year period. This was mainly attributable to bonus payments, which were around €1.2 billion higher. The €660 million increase in cash tied up in inventories was partially offset by reclassifications of equity-accounted income, which rose by €503 million.

Cash flows from investing activities amounted to –€1,218 million in the first half of 2022, after –€112 million in the prior-year period. Payments made for property, plant and equipment and intangible assets rose by €272 million compared with the first half of 2021 to €1,495 million. Payments received from divestitures declined by €726 million, from €1,118 million in the first half of 2021, mainly from the sale of the global pigments business, to €392 million in the first half of 2022, primarily from the sale of shares in the Hollandse Kust Zuid wind farm. Net payments made for financial assets and securities amounted to €102 million, €95 million above the prior-year level.

Cash flows from financing activities amounted to €1,299 million in the first half of 2022, compared with –€3,434 million in the first half of the previous year. The change was due to €3,976 million higher additions to and €1,875 million lower repayments of financial and similar liabilities. This was partially offset by payments of €1,075 million made for share buybacks in the first half of 2022. Dividend payments were €39 million higher than in the same period last year.

Free cash flow² was –€557 million in the first half of 2022 after €789 million in the prior-year period.

BASF enjoys good credit ratings, especially compared with competitors in the chemical industry. Moody’s most recently confirmed its rating of A3/P-2/outlook stable on May 6, 2022. Standard & Poor’s most recently confirmed BASF’s A/A-1/outlook stable rating on January 6, 2022. Fitch’s rating of A/F1/outlook stable from June 11, 2021, also remained unchanged.