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BASF’s full-year sales in 2020 were 59.1 billion euros (approximately RMB 464.3 billion), almost the same as in 2019. Price increases and positive product mix effects almost offset unfavorable currency and volume effects.
Earnings before interest, taxes, depreciation and amortization before special items were 7.4 billion euros, down 11% from the previous year. Earnings before interest, taxes, depreciation and amortization were €6.5 billion, compared with €8.2 billion in 2019.
Earnings before interest and tax before special items for the full year 2020 were 3.6 billion euros, a decrease of 23% from the previous year. Affected by the epidemic, except for the EBIT before special items in the industrial solutions business area, which was the same as in 2019, income in all business areas declined.
This is mainly due to the significant decline in the contribution of the upstream business – chemicals business area and materials business area. The sharp decline in demand from the automotive industry in 2020 also had an adverse impact on the revenue of the surface treatment technology business area.
Earnings before interest and tax for the full year 2020 were negative 191 million euros, compared with 4.2 billion euros in 2019. Overall, special items in EBIT amounted to -€3.8 billion, compared with -€442 million in 2019. The increase in special items was primarily due to impairments of property, plant, equipment and intangible assets with no cash flow impact in the third quarter of 2020.
BASF’s cash flow from operating activities for the full year of 2020 was 5.4 billion euros, compared with 7.5 billion euros for the full year of 2019.
Sales in the fourth quarter of 2020 increased by 8% compared with the same period in 2019, to 15.9 billion euros, with sales volume increasing by 7%; sales prices also increased by 7%, mainly due to surface Dealing with price increases in the Technology business area, the Agricultural Solutions business area and the Materials business area. The acquisition of Solvay’s polyamide business contributed 1% to the portfolio effect. Unfavorable exchange rates had a negative impact on sales of 7%.
Earnings before interest, taxes, depreciation and amortization before special items in the fourth quarter of 2020 increased by 15% to 2.1 billion euros. Earnings before interest, taxes, depreciation and amortization were 2 billion euros, compared with 1.6 billion euros in the fourth quarter of 2019; EBIT before special items in the fourth quarter increased by 32% to 1.1 billion euros. This growth was mainly due to significant increases in earnings in the Materials, Chemicals and Industrial Solutions business areas. This not only fully offsets the negative impact from other business areas, but also made a positive contribution.
Special items in EBIT totaled negative €181 million, compared with negative €263 million in the fourth quarter of 2019. Earnings before interest and taxes in the fourth quarter of 2020 increased by 61% compared with the same period in 2019, to 932 million euros.
BASF expects the global economy to recover in 2021 from the sharp decline caused by the COVID-19 epidemic. However, future developments remain highly uncertain. Therefore, the company’s forecasts need to consider many factors, including the risk of another major disruption to the global supply chain and the resulting negative impact on the entire economy. Brudermüller said: “If the above negative factors do not occur, we are confident that we can achieve higher returns within the forecast range.”
BASF forecasts growth in assumed customer industries, particularly the automotive industry. Compared with 2020, the global economy will achieve a significant growth of 4.3%. Global chemical product production is expected to grow at 4.4%, much higher than the previous year. The company forecasts that the average price of Brent crude oil per barrel will be US$50, with an exchange rate of US$1.18 per euro.
Based on these assumptions, BASF aims to increase sales to 61 billion to 64 billion euros. BASF Group’s earnings before interest and taxes excluding special items are expected to be between 4.1 billion and 5 billion euros. The expected return on capital (ROCE) is expected to be 8.0%~9.2%.
BASF predicts that by 2021, sales of “transcendence products” will be between 18 billion and 19 billion euros. It is expected that by 2021, the company’s carbon emissions will stabilize at 20.5 million to 21.5 million tons.
Basf’s planned capital expenditures from 2021 to 2025 are expected to total 22.9 billion euros. Asia-Pacific will account for 41% of investments, and Europe 39%. BASF plans to invest 3.6 billion euros overall in 2021.
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Source: BASF, China Chemical Information Weekly, etc.
