BASF Full-Year Report 2023
Results of Operations
Continued high inflation and higher interest rates as well as increasing geopolitical tensions led to economic uncertainty and dampened demand in many sectors. As a result, the global economy as well as global industrial and chemical production grew in part at a considerably more moderate pace than in the previous year. In this market environment, BASF’s business also largely fell short of expectations: Sales, EBIT before special items and ROCE declined considerably overall compared with the 2022 business year. By contrast, the Agricultural Solutions and Surface Technologies segments increased their EBIT before special items considerably and slightly, respectively, in this challenging market environment.
Sales amounted to €68,902 million in the 2023 business year – a decrease of €18,424 million compared with the previous year. This sales development was mainly driven by considerably lower prices and volumes. Lower raw materials prices in particular led to lower prices in almost all segments. Considerable price increases in the Agricultural Solutions segment were unable to compensate for this. Sales volumes fell significantly in all segments as a result of weak demand from many of our customer industries. Currency effects, mainly relating to the Chinese renminbi, also weighed down sales performance. Portfolio effects, mainly in the Industrial Solutions segment and especially due to the sale of the kaolin minerals business as of September 30, 2022, also had a negative impact on sales.
Income from operations (EBIT) before special items declined by €3,072 million compared with the prior-year figure, to €3,806 million, primarily due to a considerably lower earnings contribution from Chemicals and Materials. EBIT before special items decreased in the Chemicals segment, primarily due to lower margins and volumes, as well as lower contributions from shareholdings accounted for using the equity method. Earnings were lower in the Materials segment, largely as a result of lower polyamide and ammonia margins. The Nutrition & Care and Industrial Solutions segments’ EBIT before special items was considerably lower than the prior-year figure, mainly as a result of lower volumes and margins. Conversely, the Agricultural Solutions segment strongly increased EBIT before special items, primarily as a result of price increases and a one-time payment that was received. The slight
