BASF Report 2021 Management’s Report – Outlook 2022 148 Outlook 2022 We expect global economic growth to be somewhat more moderate in 2022 following the very strong recovery in 2021. Global growth should be supported by the gradual containment of the coronavirus pandemic. Nevertheless, a full recovery of the market environment is still not yet expected in 2022 as uncertainty remains exceptionally high. Our CO emissions are expected to be between 19.6 million metric the Industrial Solutions and Surface Technologies segments. The At a glance 2 tons and 20.6 million metric tons in 2022 (2021: 20.2 million metric Agricultural Solutions and Nutrition & Care segments plan to consid- ▪ Forecast sales of between €74 billion and €77 billion tons). No forecast has been made for the previous Accelerator erably increase EBIT before special items. ▪ Expected EBIT before special items of between €6.6 billion and sales target as we plan to update our portfolio steering target in €7.2 billion 2022. Based on the forecast for global economic development and expected ▪ Projected ROCE of between 11.4% and 12.6% For more information on our expectations for the economic environment in 2022, see page 145 onward business development in the BASF Group in 2022, we expect a For more information on our opportunities and risks, see page 151 onward ROCE of between 11.4% and 12.6%. Compared with the previous ▪ Capex of around €4.6 billion planned for 2022 year, we anticipate a considerable decrease in ROCE in the Chemi- cals, Materials and Surface Technologies segments. The Agricultural Sales, earnings and ROCE forecast for the BASF Group1 Solutions and Nutrition & Care segments are expected to consid- Our forecast assumes moderate growth in the majority of our cus- erably increase ROCE, while the Industrial Solutions segment will see tomer industries, while the automotive industry is expected to see a The BASF Group is expected to generate sales of between €74 billion a slight increase. stronger recovery. Our forecast range takes into account uncertainty and €77 billion in 2022. Contributing factors will include the volume resulting in particular from the effects of ongoing supply chain dis- growth expected in all segments and slightly positive portfolio effects ruptions, the further course of the coronavirus pandemic and the from the formation of BASF Shanshan Battery Materials Co., Ltd. We CO emissions forecast for the BASF Group 2 development of energy prices. The global economy is expected to anticipate lower price levels, mainly from lower commodity and pre- grow by 3.8% in 2022 (2021: 5.8%). As order backlogs in industry cious metal prices, which will lead to a significant decrease in sales in CO emissions are expected to be between 19.6 million metric tons 2 are high, we expect global industrial production to grow by 3.8% the Surface Technologies and Chemicals segments. We expect and 20.6 million metric tons in 2022. We will take specific emission (2021: 6.5%) and chemical production by 3.5% (2021: 6.1%). We slightly lower sales in the Industrial Solutions segment due to negative reduction measures to limit the additional emissions from moderate anticipate an average oil price of $75 for a barrel of Brent crude and portfolio effects from the sale of the pigments and kaolin businesses. growth and the expected higher capacity utilization of the ammonia an exchange rate of $1.15 per euro. By contrast, we are forecasting considerable sales growth in the plants following low capacity utilization in 2021. These include mea- Agricultural Solutions and Nutrition & Care segments following signifi- sures to increase energy efficiency and process optimization, as well Based on these assumptions, we are forecasting sales of between cant price increases. We expect slightly higher sales in the Materials as the continued shift to renewable energy. In addition, the reductions €74 billion and €77 billion (2021: €78.6 billion). The BASF Group’s segment and in Other. in emissions from divestitures, including the agreed sale of the kaolin income from operations (EBIT) before special items is expected to business, will slightly more than compensate for the additional emis- be between €6.6 billion and €7.2 billion (2021: €7.8 billion). ROCE The BASF Group’s EBIT before special items is expected to decline to sions from the formation of BASF Shanshan Battery Materials Co., should be between 11.4% and 12.6% (2021: 13.5%). between €6.6 billion and €7.2 billion. We anticipate significantly lower Ltd. in 2022. contributions from the Chemicals and Materials segments and from Other. We are forecasting slightly lower EBIT before special items in 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%). At a cost of capital percentage of 9% for 2022, we define a change in ROCE of 0.1 to 1.0 percentage points as “slight,” a change of more than 1.0 percentage points as “considerable” and no change (+/–0.0 percentage points) as “at prior-year level.”