Ludwigshafen, Germany — BASF sales in 2020 were almost unchanged from 2019 at EUR 59.1 m.
Despite asset write downs across the portfolio, the company plans to pay a bonus. Return on capital employed, the measure used to calculate the bonus, fell below the threshold value.
Brudermuller: thanking staff for 2020 efforts
We want to acknowledge the huge effort put in by the BASF team in the pandemic year 2020,' said CEO Martin Brudermuller.
Sales in the company's materials business fell 6.4% to EUR 11 bn in 2020 period. EBIT in the division fell 110%, with a loss of EUR109m in the year. This is despite strong price performance in the final quarter of 2020. Here, BASF singled out isocyanates as a strong price performer, and the company was able to expand margins for the material.
Looking across the company, EBIT decreased from €4.2bn in 2019 to minus €191m in 2020. Overall, special items in EBIT amounted to minus €3.8bn, compared with minus €442m in 2019. This is because the company believes the value of its plant, equipment and intangible accounting items such as goodwill fell in value in 2020. This reflecting BASF’s belief that these assets will be less profitable in future than predictions at the end of 2019 suggested. The increase in special charges mainly resulted from non-cash-effective impairments of property, plant and equipment and intangible assets in the third quarter of 2020.
Assets in the materials segment, which includes polyurethanes, were reduced in value on the books by EUR748m, and in the upstream chemicals business by EUR500m.
Despite these financial changes, Brudermuller was upbeat. Taking the company as a whole, he said, in the final quarter the company increased volumes in all regions in the fourth quarter of 2020. ‘In Greater China, we continued to see double-digit volumes growth. Sales volumes rose in almost all segments in the final quarter of the year,’ he added.
