Business Review
At a glance
- Considerable decline in sales mainly due to lower precious metal prices and volumes
- Increase in EBIT before special items as a result of considerable earnings growth in the Coatings division
Sales to third parties in the Surface Technologies segment declined by €5,079 million compared with the previous year to €16,204 million. The Catalysts division recorded a sales decrease of €5,245 million to €11,818 million. The increase in sales in the Coatings division, by €166 million to €4,387 million, could not compensate for this.
|
Surface Technologies |
Catalysts |
Coatings |
|---|---|---|---|
Volumes |
–9.6% |
–13.0% |
4.3% |
Prices |
–11.1% |
–15.2% |
5.5% |
Currencies |
–3.1% |
–2.4% |
–5.7% |
Portfolio |
–0.1% |
–0.1% |
–0.2% |
Sales |
–23.9% |
–30.7% |
3.9% |
Lower sales were mainly driven by lower prices and volumes in precious metal trading, mobile emissions catalysts and in battery materials in the Catalysts division. At €7,578 million, sales in precious metal trading and precious metal sales in the mobile emissions catalysts business1 were below the previous year (€12,336 million). Considerable price increases and a slight volume growth in the Coatings division only partially compensated for this. The Coatings division raised prices in all business areas, while sales volumes increased particularly in the automotive OEM coatings and surface treatment businesses. This was mainly driven by the higher level of automotive production as a result of resolved supply chain problems and an increase in inventories at car manufacturers.
Negative currency effects, largely relating to the Chinese renminbi, dampened the segment’s sales performance.
Portfolio effects, particularly in the Catalysts division as a result of the divestiture of the production site in De Meern, Netherlands, as of August 31, 2023, had a slightly negative impact on sales.
1 Sales, volume growth, EBITDA before special items and the EBITDA margin before special items excluding precious metals for the BASF Group and for the Surface Technologies segment are presented under Selected Key Figures Excluding Precious Metals
|
|
2023 |
2022 |
+/– |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sales to third parties |
|
16,204 |
21,283 |
–23.9% |
||||||||||
of which Catalysts |
|
11,818 |
17,062 |
–30.7% |
||||||||||
Coatings |
|
4,387 |
4,220 |
3.9% |
||||||||||
Intersegment transfers |
|
176 |
198 |
–10.9% |
||||||||||
Sales including transfers |
|
16,381 |
21,481 |
–23.7% |
||||||||||
Income from operations before depreciation, amortization and special items |
|
1,520 |
1,464 |
3.8% |
||||||||||
Income from operations before depreciation and amortization (EBITDA) |
|
1,351 |
1,264 |
6.9% |
||||||||||
EBITDA margin before special items |
% |
9.4 |
6.9 |
– |
||||||||||
Depreciation and amortizationa |
|
986 |
651 |
51.3% |
||||||||||
Income from operations (EBIT) |
|
366 |
612 |
–40.3% |
||||||||||
Special items |
|
–572 |
–290 |
–97.6% |
||||||||||
EBIT before special items |
|
938 |
902 |
4.0% |
||||||||||
Investments including acquisitionsb |
|
621 |
740 |
–16.2% |
||||||||||
Segment cash flow |
|
1,488 |
61 |
. |
||||||||||
Assets |
|
12,657 |
14,899 |
–15.0% |
||||||||||
Return on capital employed (ROCE) |
% |
2.7 |
3.9 |
– |
||||||||||
Research and development expenses |
|
304 |
335 |
–9.1% |
||||||||||
|
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Surface Technologies – sales
By division
The segment increased income from operations (EBIT) before special items by €36 million to €938 million. The considerable earnings growth in the Coatings division, which resulted mainly from price and volume-related margin increases, more than compensated for a considerable decrease in EBIT before special items in the Catalysts division. This was mainly a result of a sharp fall in lithium prices. In addition, lower contributions from precious metal trading reduced earnings in the division. Higher margins in the automotive and refining catalysts businesses could only partially offset this.
EBIT declined by €247 million compared with the previous year to €366 million. This included special charges amounting to €576 million. In the Catalysts division, these comprised impairments on property, plant and equipment, in particular in the battery materials business, as well as charges resulting from the carve-out of the BASF Environmental Catalyst and Metal Solutions unit. In the Coatings division, special charges arose in particular from measures to increase efficiency.
Divisions |
Europe |
North America |
Asia Pacific |
South America, Africa, Middle East |
Total (million €) |
|---|---|---|---|---|---|
Catalysts |
28.5% |
30.9% |
35.0% |
5.5% |
11,818 |
Coatings |
30.9% |
25.4% |
26.0% |
17.7% |
4,387 |