BASF Report 2021 Management’s Report – Results of Operations 58 Net income from shareholdings, financial result and income Income after taxes in the amount of €5,982 million (2020: is also highly useful in making comparisons over time. The EBITDA after taxes –€1,075 million) included €5,523 million attributable to shareholders margin is a relative indicator and is calculated as the ratio of EBITDA of BASF SE (2020: –€1,060 million). Noncontrolling interests to sales revenue, enabling operational performance to be compared Net income from shareholdings was above the prior-year figure, amounted to €459 million, after –€15 million in the prior year. This independent of the size of the underlying business. rising by €1,116 million to €207 million in 2021 (2020: –€909 million). mainly resulted from a higher earnings contribution from BASF The increase was mainly due to special income from the sale of our TotalEnergies Petrochemicals LLC in Port Arthur, Texas, and a EBITDA before special items rose by €3,913 million year on year to shares in Solenis (€589 million) as well as the improved earnings positive earnings contribution fr om BASF Petronas Chemicals Sdn. €11,348 million in 2021. At €11,355 million, EBITDA was €4,861 mil- contribution from Wintershall Dea AG (–€344 million). This included Bhd. Petaling Jaya, Malaysia, where earnings in the prior year had lion above the prior-year figure. The EBITDA margin was 14.4% in impairments in the amount of €581 million, less than in the prior been impacted by impairments. 2021, compared with 11.0% in the previous year. year. In 2021, earnings per share amounted to €6.01, compared with The financial result amounted to –€436 million, compared with –€1.15 in the previous year. EBITDA before special items –€462 million in the previous year. The interest result improved by For more information on the items in the statement of income, see the Notes to the Consolidated Million € €59 million overall, due in part to lower interest expenses for financial Financial Statements from page 200 onward 2021 2020 indebtedness. The other financial result amounted to –€122 million For more information on the tax rate, see Note 12 to the Consolidated Financial Statements from EBIT 7,677 –191 page 231 onward after –€89 million in 2020, primarily driven by higher net expenses in – Special items –91 –3,751 connection with bonds in foreign currency and the corresponding EBIT before special items 7,768 3,560 hedging instruments. Lower write-downs on securities and loans, as Additional indicators for results of operations + Depreciation and amortization 3,534 3,805 well as a lower net interest expense from pension plans and similar + Impairments and reversals of impairments obligations had an offsetting effect. We also use alternative performance measures (APMs) to steer the on property, plant and equipment and intangible 45 70 BASF Group. Investors, analysts and rating agencies use them to assets before special items Income before income taxes amounted to €7,448 million in 2021, assess our performance. These are not defined by IFRS. As such, Depreciation, amortization, impairments and after –€1,562 million in 2020. the methods of calculation can differ from those used by other reversals of impairments on property, plant and 3,580 3,875 equipment and intangible assets before special companies. Alternative performance measures for the results of items Income tax expenses were €1,430 million, after the negative pre-tax operations are EBIT before special items, EBITDA before special EBITDA before special items 11,348 7,435 result had led to tax income of €91 million in the previous year. items, EBITDA, the EBITDA margin and adjusted earnings per share. 1 1 Other APMs are net debt, free cash flow and capital expenditure 2 Compared with 2020, income after taxes from continuing opera- (capex). tions rose by €7,489 million to €6,018 million. Income after taxes from discontinued operations amounting to –€36 million resulted Income from operations before depreciation, amortization and from purchase price adjustments for the divestiture of the construc- special items (EBITDA before special items) and income from tion chemicals business. The prior-year figure of €396 million operations before depreciation and amortization (EBITDA) are included the book gain from the sale of the former Construction indicators that describe operational performance independent of Chemicals division and its operating income after taxes until age-related depreciation and amortization of assets and any impair- divestiture. ment or reversal of impairment. Both figures are therefore particularly useful in cross-company comparisons. EBITDA before special items 1 For more information on these indicators, see the Financial Position from page 63 onward 2 For more information on capex, see Our Steering Concept on page 43 and Material Investments and Portfolio Measures on page 38