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BASF posts strong EBIT before special items despite persistently high commodity and energy prices

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EBIT before special items of €1.3 billion, down €517 million from the third quarter of the prior year

Intercompany Drafting09/11/2022

“Despite persistently high energy and raw material prices, BASF posted solid earnings in the third quarter,” said Martin Brudermller, Chairman of the Board of Directors of BASF. BASF SE presenting the results for the third quarter of 2022 together with the CFO, Hans-Ulrich Engel.

At 21.9 billion euros, sales were 12% higher than in the same period of the previous year. This sales growth was mainly driven by strong price increases in practically all segments. Only the Surface Technologies segment recorded lower price levels as a result of declining precious metal prices. Currency effects generated a positive impact in all segments. The increase in sales was also reinforced by portfolio effects. The evolution of sales was notably dampened by the reduction in volumes in all segments, with the exception of Agricultural Solutions.

Operating profit (EBIT) before special items decreased by €517 million compared to the third quarter of 2021, to €1.3 billion. Our end-product segments Surface Technologies, Agricultural Solutions, Nutrition & Care, and Industrial Solutions increased their profits considerably, Brudermller noted. However, earnings in the Chemicals and Materials segments decreased significantly compared to very high levels in the same period last year.

At €1.3 billion, EBIT was considerably lower than in the third quarter of the previous year (€1.8 billion). This figure includes the result of integrated companies accounted for using the equity method, with a decrease of €124 million to €76 million, mainly due to the lower earnings contribution from BASF-YPC Company Ltd., Nanjing, China.

Compared to the third quarter of 2021, operating profit before depreciation, amortization and special items (EBITDA before special items) decreased by €446 million to €2.3 billion and EBITDA fell by €474 million to €2.3 billion. millions of euros.

Net income per share rose by €16 million compared to the same period last year to €102 million. The result of non-integrated companies accounted for using the equity method included special impairment charges of approximately €740 million recognized associated with damage to the pipelines of the Nord Stream 1 gas pipeline, in which BASF holds an indirect interest through of Wintershall Dea AG. Wintershall Dea’s operating profit (after tax) attributable to BASF grew by €533 million compared to the third quarter of 2021 to €630 million.

In total, pre-tax results decreased by €538 million compared to the same period last year to €1.2 billion in the third quarter of 2022. Net income decreased by €344 million compared to the third quarter of 2022. 2021 to stand at 909 million euros.

Operating cash flows reached 2.3 billion euros in the third quarter of 2022, that is, 405 million euros more than during the same quarter of the previous year. Free cash flow amounted to €1.3 billion in the third quarter of 2022, €218 million more than in the same quarter of the previous year.

Announcement of a cost savings program of 500 million euros per year

Coinciding with the publication of its provisional figures on October 12, 2022, BASF also announced a cost savings program. These cost-saving measures will run until the end of 2024. Once completed, the program is expected to generate €500 million of annual cost savings.


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