Chemicals

Q2 2022

Sales1 in the Chemicals segment rose considerably compared with the second quarter of 2021. Both operating divisions contributed to the increase.

Factors influencing sales in Q2 2022 – Chemicals

 

Chemicals

Petrochemicals

Intermediates

Volumes

–3.9%

–2.2%

–8.4%

Prices

24.9%

23.6%

28.2%

Portfolio

–0.1%

–0.1%

–0.1%

Currencies

6.4%

6.1%

6.9%

Sales

27.2%

27.4%

26.6%

Sales growth was primarily driven by significantly higher prices in both divisions, mainly due to the passing on of increased prices for raw materials and energy amid continued strong demand. The Petrochemicals division raised prices in all business areas, especially for steam cracker products, styrene monomers and in the propylene and butadiene value chains. The Intermediates division achieved higher price levels across all business areas.

Sales performance was supported by positive currency effects, mainly relating to the U.S. dollar.

Overall, sales volumes were slightly lower than in the prior-year quarter. This was primarily attributable to coronavirus lockdowns in China and the resulting supply chain disruptions. Consequently, the Intermediates division recorded considerably lower sales volumes in the butanediol and derivatives business in particular. The slight decline in volumes in the Petrochemicals division mainly related to steam cracker products, styrene monomers and acrylics.

Income from operations (EBIT) before special items1 remained at a high level but was considerably below the exceptionally strong earnings in the prior-year quarter. This was primarily due to considerably lower earnings in the Petrochemicals division, mainly from higher fixed costs as a result of the increase in energy prices and currency effects. Lower income from investments accounted for using the equity method also contributed to the decrease. By contrast, the earnings development in the division was positively impacted by continued strong margins. EBIT before special items declined slightly in the Intermediates division. Higher margins in North America on the back of continued strong demand were not able to fully compensate for lower margins and volumes in the Asia Pacific region resulting from the lockdowns, and for higher fixed costs from turnarounds, especially in Ludwigshafen, Germany.

1 For sales, “slight” represents a change of 0.1%–5.0%, while “considerable” applies to changes of 5.1% and higher. “At prior-year level” indicates no change (+/–0.0%). For earnings, “slight” means a change of 0.1%–10.0%, while “considerable” is used for changes of 10.1% and higher. “At prior-year level” indicates no change (+/–0.0%).

Segment data – Chemicals (Million €)

 

Q2

H1

 

2022

2021

+/–

2022

2021

+/–

Sales to third parties

4,349

3,419

27.2%

8,353

6,155

35.7%

of which Petrochemicals

3,143

2,467

27.4%

5,906

4,404

34.1%

Intermediates

1,206

952

26.6%

2,447

1,751

39.7%

Income from operations before depreciation, amortization and special itemsa

1,050

1,196

–12.1%

2,098

1,961

7.0%

Income from operations before depreciation and amortization (EBITDA)a

1,048

1,189

–11.9%

2,095

2,002

4.6%

Depreciation and amortizationb

197

181

9.0%

386

360

7.3%

Income from operations (EBIT)a

851

1,010

–15.7%

1,708

1,643

4.0%

Special items

–3

–9

71.9%

–4

38

.

EBIT before special itemsa

853

1,018

–16.1%

1,712

1,604

6.7%

Assets (June 30)a

11,705

9,051

29.3%

11,705

9,051

29.3%

Investments including acquisitionsc

314

243

29.1%

542

371

46.1%

Research and development expenses

25

25

–1.4%

50

51

–2.5%

a

BASF’s ethylene value chain was reorganized internally as of January 1, 2022. In this connection, the polyolefins and styrenics businesses of the joint venture BASF-YPC Company Ltd., Nanjing, China, which were previously reported under Other, were allocated to the Petrochemicals division. The prior-year figures have been adjusted. This reduced income from integral companies accounted for using the equity method, EBITDA before special items, EBITDA, EBIT and EBIT before special items in Other by €28 million in the first quarter of 2021 and increased these indicators in the Petrochemicals division accordingly (rounding differences are possible). The effect was €28 million in both the second and third quarters of 2021 and €34 million in the fourth quarter of 2021. The effect in full-year 2021 was €118 million. The operating assets were also reallocated as part of the reorganization and increased the Chemicals segment’s assets by €114 million as of December 31, 2021.

b

Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments)

c

Additions to property, plant and equipment and intangible assets