BASF Report 2021 Management’s Report – Materials 77 Business review Segment data – Materials Million € At a glance 2021 2020 +/– Sales to third parties 15,214 10,736 41.7% ▪ Sales growth of 41.7% to €15,214 million, mainly driven by of which Performance Materials 7,292 5,635 29.4% higher prices Monomers 7,922 5,101 55.3% ▪ EBIT before special items of €2,418 million; considerable Intersegment transfers 1,250 720 73.6% increase as a result of higher earnings in both divisions Sales including transfers 16,464 11,456 43.7% Income from operations before depreciation, amortization and special items 3,208 1,714 87.2% The Materials segment increased sales to third parties by Income from operations before depreciation and amortization (EBITDA) 3,162 1,556 103.2% €4,478 million year on year to €15,214 million in 2021. This was due EBITDA margin % 20.8 14.5 − to considerable sales growth in both divisions. The Monomers Depreciation and amortizationa 817 1,665 –50.9% division increased sales by €2,821 million to €7,922 million. At Income from operations (EBIT) 2,345 –109 . €7,292 million, sales in the Performance Materials division were Special items –73 –944 92.3% €1,657 million above the prior-year figure. EBIT before special items 2,418 835 189.6% Factors influencing sales – Materials Return on capital employed (ROCE) % 22.8 –1.1 − Assets 11,286 9,118 23.8% Performance Materials Materials Monomers Investments including acquisitionsb 709 1,957 –63.8% Volumes 12.0% 14.1% 9.6% Research and development expenses 193 182 6.1% Prices 30.0% 16.2% 45.2% 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 Portfolio 0.7% 0.6% 0.9% Currencies –0.9% –1.5% –0.3% Sales 41.7% 29.4% 55.3% Volumes rose significantly as a result of strong demand and contrib- Portfolio effects from the acquisition of the integrated polyamide uted to sales growth. The Performance Materials division recorded business from Solvay, which closed as of January 31, 2020, had a higher sales volumes in the transportation and consumer goods slightly positive impact on sales. Sales growth was due mainly to significantly higher prices resulting industries, especially in Asia Pacific and Europe. In the second half from strong demand alongside low product availability and increased of 2021, volume development was however negatively impacted Currency effects, primarily relating to the U.S. dollar, had a slightly prices for raw materials. Production and supply chain disruptions by the semiconductor shortage in the automotive market and the negative impact on sales development in both divisions. associated with extreme weather conditions and raw material short- resulting production outages. Overall, sales volumes in the con- ages negatively impacted product market availability. The Mono- struction industry were slightly above the prior-year level. Higher mers division achieved higher prices primarily in isocyanates and volumes in Europe more than compensated for lower volumes in polyamides, while the Performance Materials division raised price North America. The Monomers division increased volumes, espe- levels mainly in polyurethane systems and engineering plastics. cially of polyamide 6.6 following the slight recovery in automotive production in 2021 after the weak prior year due to the pandemic. Sales volumes of methylene diphenyl diisocyanate (MDI) were also higher.