BASF Report 2021 Management’s Report – Surface Technologies 83 Business review Segment data – Surface Technologies Million € At a glance 2021 2020 +/– Sales to third parties 22,659 16,659 36.0% ▪ Sales growth of 36.0% to €22,659 million, mainly as a result of of which Catalysts 19,219 13,570 41.6% significantly higher precious metal prices Coatings 3,440 3,089 11.4% ▪ EBIT before special items rises 65.3% to €800 million due to Intersegment transfers 171 203 –15.7% increase in the Catalysts division Sales including transfers 22,831 16,862 35.4% Income from operations before depreciation, amortization and special items 1,277 966 32.2% Sales to third parties in the Surface Technologies segment rose by Income from operations before depreciation and amortization (EBITDA) 1,243 900 38.1% €6,000 million compared with the previous year to €22,659 million. EBITDA margin % 5.5 5.4 − Both divisions contributed to the increase. The Catalysts division Depreciation and amortizationa 483 1,487 –67.6% recorded sales growth of €5,649 million to €19,219 million. The Income from operations (EBIT) 761 –587 . . Coatings division increased sales by €351 million year on year to Special items –39 –1,071 96.3% €3,440 million. EBIT before special items 800 484 65.3% Factors influencing sales – Surface Technologies Return on capital employed (ROCE) % 5.6 –4.8 − Assets 13,769 11,691 17.8% Surface Investments including acquisitionsb 1,469 585 151.2% Technologies Catalysts Coatings Volumes 12.2% 12.5% 10.7% Research and development expenses 296 246 20.4% Prices 25.3% 30.4% 3.2% 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 2.1% 2.6% –0.1% Currencies –3.6% –3.9% –2.4% ongoing shortage of semiconductors in the automotive market and Surface Technologies – sales Sales 36.0% 41.6% 11.4% production and supply chain disruptions. By division Sales growth was driven by the strong increase in precious metal Portfolio effects in the Catalysts division following the acquisition of prices in the Catalysts division. This also led to considerably higher our majority shareholding in BASF Shanshan Battery Materials sales in precious metal trading, at €10,376 million (2020: €7,612 mil- Co., Ltd. had a slightly positive impact on sales. €19,219 million €3,440 million lion). The Coatings division recorded slightly higher prices in all Catalysts €22,659 million Coatings Share of sales: 85% Share of sales: 15% business areas. Sales performance was weighed down by negative currency effects, mainly relating to the U.S. dollar. Considerably higher sales volumes on the back of the global economic recovery from the coronavirus pandemic and following stronger demand also contributed to the positive sales develop- ment. Both divisions increased volumes in all business areas. Volume development in the segment was dampened by the