BASF Report 2021 Management’s Report – Results of Operations 56 Results of Operations Salesa, b recorded considerably lower EBIT before special items. The decline Million € in earnings in the Nutrition & Care segment was mainly attributable The global economy recovered much more strongly than we to lower margins on the back of higher raw materials and energy expected in 2021 following the severe slump in the previous 2021 78,598 prices, as well as an increase in fixed costs. EBIT before special year due to the effects of the coronavirus pandemic. Many 2020 59,149 items was lower in the Agricultural Solutions segment, largely due to governments’ aid programs and rising vaccination rates were 2019 59,316 higher fixed costs, higher raw materials prices and logistics costs, key contributing factors to this. In this market environment, 2018 60,220 and a low-margin product mix. The segment’s earnings were addi- growth in global industrial production and in the global 2017 61,223 tionally weighed down by negative currency effects. chemical industry (excluding pharmaceuticals) was also For an explanation of the indicator EBIT before special items, see page 43 significantly above the prior-year level and the long-term a Sales for 2018 were reduced by the share attributable to construction chemicals activities due to their presentation as discontinued operations. Figures for 2017 have not been restated. average. BASF’s business also developed favorably: We b Sales for 2017 were reduced by the share attributable to oil and gas activities due to their presentation as discontinued operations. considerably increased sales and earnings. EBIT before special itemsa, b, c For more information on the development of Accelerator sales, see page 141 onward Million € Business reviews by segment can be found from page 69 onward For more information on the development of CO emissions, see page 127 2 2021 7,768 At a glance Factors influencing sales of the BASF Group 2020 3,560 2019 4,643 Change Change ▪ Sales and EBIT before special items considerably above in million € in % 2018 6,281 prior year Volumes 6,279 10.6 2017 7,645 ▪ Considerable increase in ROCE to 13.5% Prices 14,673 24.8 a EBIT for 2019 has been restated to reflect the reclassification of income from non-integral companies ▪ Net income from shareholdings improves by €1,116 million accounted for using the equity method to net income from shareholdings. Figures for the years 2017 Currencies –1,439 –2.4 and 2018 have not been restated. b EBIT before special items for 2018 was reduced by the share attributable to construction chemicals ▪ Earnings per share of €6.01; adjusted earnings per share Acquisitions 431 0.7 activities due to their presentation as discontinued operations. Figures for 2017 have not been restated. of €6.76 c EBIT before special items for 2017 was reduced by the share attributable to oil and gas activities due to Divestitures –495 –0.8 their presentation as discontinued operations. Changes in the scope of consolidation –1 0.0 Sales rose by €19,449 million compared with the previous year to €78,598 million in 2021. This was mainly driven by higher prices and Total change in sales 19,449 32.9 Special items in EBIT totaled –€91 million in 2021, compared with volumes in all segments. Price levels increased in the Chemicals, –€3,751 million in the previous year, which was strongly impacted by Surface Technologies and Materials segments in particular. Sales Income from operations (EBIT) before special items rose by impairments on property, plant and equipment and intangible assets volumes grew primarily in the Surface Technologies and Materials €4,208 million to €7,768 million, largely due to considerably higher in the total amount of around €2.9 billion. In 2021, restructuring segments. Currency effects, mainly relating to the U.S. dollar, had an earnings in the Chemicals and Materials segments. Earnings devel- measures gave rise to expenses of €99 million (2020: expenses of offsetting effect. Sales performance was also weighed down by opment in the Chemicals segment was primarily driven by higher €952 million), mainly in the Agricultural Solutions and Materials negative portfolio effects, especially in the Industrial Solutions seg- margins, higher sales volumes and an improvement in equity- segments and in Other. The release of provisions in connection with ment following the divestiture of the global pigments business. This accounted income. Earnings growth in the Materials segment was the restructuring of the Global Business Services unit had an off- could only be partly offset by positive portfolio effects, mainly from mainly attributable to higher margins in isocyanates and polyamides, setting effect. Integration costs amounted to €85 million (2020: inte- the acquisition of a majority shareholding in BASF Shanshan Battery as well as positive volume development. EBIT before special items gration costs of €157 million) and primarily related to the integration Materials Co., Ltd. in the Surface Technologies segment. also improved considerably in the Surface Technologies and Indus- of the acquired BASF Shanshan companies and the polyamide trial Solutions segments, largely as a result of higher volumes. By business acquired from Solvay in 2020. Divestitures, which also contrast, the Nutrition & Care and Agricultural Solutions segments included the disposal of the global pigments business, gave rise to