Basf profits grow in 2021, despite the high prices

Basf Group significantly increased sales and earnings in the 2021 business year. “It was a strong and successful year for Basf,” said Chairman of the Board of Executive Directors, Martin Brudermüller. “We increased sales prices by 25% and volumes by 11%. All segments achieved price and volume growth in 2021,” said Brudermüller. Basf Group sales amounted to 78.6 billion euros in 2021, 33% higher than in the previous year. Basf positive earnings development was mainly driven by the Chemicals and Materials segments. The Surface Technologies and Industrial Solutions segments also contributed considerably to the strong recovery.

Basf automotive-related businesses continued to be negatively impacted by the semiconductor shortage. In 2021 and particularly in the fourth quarter, higher raw materials prices and increased energy and logistics costs also burdened the earnings development in all segments. For Basf European sites, the additional costs due to further increased natural gas prices in 2021 amounted to around 1.5 billion euros. The fourth quarter of 2021 alone accounted for 0.8 billion euros of this amount. Brudermüller announced: “We will implement further substantial price increases in the coming months to pass on the significantly higher costs and improve our margins in the downstream businesses.” The established pricing procedures in these businesses lead to a delay in passing on costs.

Basf Group sales in the fourth quarter of 2021 rose by 24% versus the prior-year quarter to reach 19.8 billion euros. “Despite the comparison with the strong prior-year quarter, Basf was able to increase volumes in all segments except for Materials in the fourth quarter of 2021”, said Chief Financial Officer Hans-Ulrich Engel.

Basf aims to reduce its absolute CO2 emissions by 25 percent by 2030 compared with the baseline 2018. In 2021, the CO2 emissions amounted to 20.2 million metric tons - a decrease from the 20.8 million metric tons emitted in 2020. “This decline is remarkable given the strong growth in volumes,” said Brudermüller. Much earlier than planned, Basf achieved its target of 22 billion euros in sales by 2025 with products that make a substantial sustainability contribution in the value chain. Sales of these Accelerator products amounted to €24.1 billion in 2021. “We will therefore adjust this portfolio steering target in the course of 2022,” Brudermüller said.

“We have had a very strong start to the year, with January 2022 figures above the prior-year month,” said Martin Brudermüller looking ahead to the current business year. Basf expects global economic growth of 3.8% to be somewhat more moderate in 2022 following the very strong recovery in 2021. “As order backlogs in industry are high, we expect global industrial production to grow by 3.8% and chemical production by 3.5 percent,” Brudermüller said. Based on these assumptions, Basf is forecasting sales of between 74 billion and 77 billion euros for 2022.