Outlook 2022

Half-Year Financial Report 2022

Economic development in the first half of 2022 was volatile. Following a subdued start to the first quarter of 2022 with wide regional variance (moderate growth in gross domestic product in the E.U. and Asia, slight decline in North America), the economy slowed in the second quarter of 2022. As a result, global gross domestic product largely stagnated in the second quarter compared with the previous quarter. Despite slowing growth momentum, global gross domestic product in the first half of 2022 was around 3.0% higher than in the first half of 2021.

A range of different effects contributed to the economic slowdown over the course of the first half of 2022: The temporary lockdowns in major Chinese cities reduced consumer demand in China and simultaneously led to supply shortfalls as a result of production shutdowns and disruptions to logistics chains. Moreover, prices for energy and raw materials rose sharply following the outbreak of the war of aggression on Ukraine. The U.S. Federal Reserve has already reacted to rising inflation rates with a significant tightening of monetary policy, which had a braking effect on industries such as construction. Declining share prices on the stock market and the resulting effects on wealth also curbed consumption in the United States. In the E.U. countries highly dependent on gas supplies from Russia, uncertainty among consumers and producers rose considerably.

Based on preliminary data as well as some estimates, global industrial production expanded by around 3.5% in the first half of 2022 compared with the prior-year period. Overall, the lockdowns in China in the second quarter dampened growth momentum in the manufacturing sector, as production slowed in China and other regions lacked intermediate goods from China. Demand varied in our customer industries. Global automotive production declined by around 1.8% year on year in the first half of the year. This was partially due to supply chain disruptions. The war in Ukraine restricted wire harness supplies for European automotive manufacturers. The global semiconductor shortage continued but the situation is gradually improving. In China, automotive demand was temporarily weakened by the lockdowns.

The production of consumables (health and nutrition, care products) and consumer durables (textiles, furniture) continued to grow compared with the previous year. Production also increased year on year in the electric and electronics industries. The picture was mixed in the construction industry, with growing demand in the E.U. but a downturn in the United States and China. Construction activity in the United States and E.U. was curbed by rising interest rates. Nevertheless, demand for construction materials remained high in the first half of 2022. Global agricultural output rose significantly, with the strong decline in output in Ukraine offset by higher volumes in other regions.

Global chemical production expanded by around 2.5% in the first half of 2022. Growth rates varied widely by region. In the E.U., chemical production declined slightly overall. By contrast, the United States recorded strong growth of 6.5% due to base effects following the restrictions to production caused by a winter storm in the prior-year period. In China, the world’s largest chemical market, chemical production rose by 4%.

The price of oil averaged $107 per barrel (Brent crude) in the first half of 2022, significantly above the average for the prior-year period ($65 per barrel). The war of aggression on Ukraine and the sanctions on Russia saw the average oil price jump from $87 per barrel in January to $122 per barrel in June. In Europe, average gas prices (TTF) rose from $7.76 per mmBtu in the first half of 2021 to more than quadruple this amount ($31.94 per mmBtu) in the first half of 2022. Average gas prices in the United States (Henry Hub) almost doubled in the same period, from $3.40 per mmBtu to $6.41 per mmBtu.

The assessment of the global economic environment in 2022 was adjusted as follows (previous assumptions from the BASF Report 2021 in parentheses; current growth assumptions are rounded):

  • Growth in gross domestic product: +2.5% (+3.8%)
  • Growth in industrial production: +3.0% (+3.8%)
  • Growth in chemical production: +2.5% (+3.5%)
  • Average euro/dollar exchange rate of $1.07 per euro ($1.15 per euro)
  • Average annual oil price (Brent crude) of $110 per barrel ($75 per barrel)

For the second half of the year, BASF anticipates a gradual cooling of economic development globally, but much more pronounced in Europe. This assumes that there are no severe restrictions resulting from new lockdowns in China and that natural gas shortages do not lead to production shutdowns in Europe.

Based on the very positive business development in the first half of 2022 and the above assumptions, the forecast for the BASF Group for the 2022 business year was adjusted as follows (previous forecast from the BASF Report 2021 in parentheses):

  • Sales growth to between €86 billion and €89 billion (between €74 billion and €77 billion)
  • EBIT before special items of between €6.8 billion and €7.2 billion (€6.6 billion and €7.2 billion)
  • Return on capital employed (ROCE) of between 10.5% and 11.0% (between 11.4% and 12.6%)
  • Reduction in CO2 emissions to between 18.4 million metric tons and 19.4 million metric tons (between 19.6 million metric tons and 20.6 million metric tons)

Current developments, mainly driven by the war in Ukraine and its impact on energy and raw materials prices and the availability of raw materials, especially in Europe, may lead to additional headwinds, deviating from the assumptions presented above. In particular, risks could arise from production stoppages at major European sites as a result of further restrictions to European gas supplies from Russia. In this case, the loss of European capacities could be partially compensated for by higher plant capacity utilization at sites outside of Europe. Further risks could arise from the future course of the coronavirus pandemic and new measures to contain the number of infections. Opportunities could arise from continued high margins, even in the case of an economic slowdown. We are responding to the economic slowdown with cost reduction measures.

For the remaining opportunity and risk factors, the statements made in the BASF Report 2021 continue to apply overall. According to the company’s assessment, neither existing individual risks nor the sum of individual risks pose a threat to the continued existence of the BASF Group.

The sufficient supply of natural gas in Europe remains the greatest uncertainty. A continuous supply of natural gas according to demand is essential to chemical production. Around 60% of the natural gas consumed by BASF in Europe is used to generate the energy (steam and electricity) needed for production. Around 40% of natural gas is used as a raw material to produce important basic chemicals and a wide range of products in the downstream value chains supplying almost all sectors of industry.

The consequences would vary depending on the duration and extent of supply restrictions, the existence of alternative supply sources and possible substitutions, as well as any optimization of production to reduce the use of natural gas. It is therefore not possible to quantify the risks with sufficient accuracy.

Report 2021

We expect global economic growth to be somewhat more moderate in 2022 following the very strong recovery in 2021. Global growth should be supported by the gradual containment of the coronavirus pandemic. Nevertheless, a full recovery of the market environment is still not yet expected in 2022 as uncertainty remains exceptionally high.

  • Forecast sales of between €74 billion and €77 billion
  • Expected EBIT before special items of between €6.6 billion and
    €7.2 billion
  • Projected ROCE of between 11.4% and 12.6%
  • Capex of around €4.6 billion planned for 2022

Our forecast assumes moderate growth in the majority of our customer industries, while the automotive industry is expected to see a stronger recovery. Our forecast range takes into account uncertainty resulting in particular from the effects of ongoing supply chain disruptions, the further course of the coronavirus pandemic and the development of energy prices. The global economy is expected to grow by 3.8% in 2022 (2021: 5.8%). As order backlogs in industry are high, we expect global industrial production to grow by 3.8% (2021: 6.5%) and chemical production by 3.5% (2021: 6.1%). We anticipate an average oil price of $75 for a barrel of Brent crude and an exchange rate of $1.15 per euro.

Based on these assumptions, we are forecasting sales of between €74 billion and €77 billion (2021: €78.6 billion). The BASF Group’s income from operations (EBIT) before special items is expected to be between €6.6 billion and €7.2 billion (2021: €7.8 billion). ROCE should be between 11.4% and 12.6% (2021: 13.5%).

Our CO2 emissions are expected to be between 19.6 million metric tons and 20.6 million metric tons in 2022 (2021: 20.2 million metric tons). No forecast has been made for the previous Accelerator sales target as we plan to update our portfolio steering target in 2022.

Sales, earnings and ROCE forecast for the BASF Group1

The BASF Group is expected to generate sales of between €74 billion and €77 billion in 2022. Contributing factors will include the volume growth expected in all segments and slightly positive portfolio effects from the formation of BASF Shanshan Battery Materials Co., Ltd. We anticipate lower price levels, mainly from lower commodity and precious metal prices, which will lead to a significant decrease in sales in the Surface Technologies and Chemicals segments. We expect slightly lower sales in the Industrial Solutions segment due to negative portfolio effects from the sale of the pigments and kaolin businesses. By contrast, we are forecasting considerable sales growth in the Agricultural Solutions and Nutrition & Care segments following significant price increases. We expect slightly higher sales in the Materials segment and in Other.

The BASF Group’s EBIT before special items is expected to decline to between €6.6 billion and €7.2 billion. We anticipate significantly lower contributions from the Chemicals and Materials segments and from Other. We are forecasting slightly lower EBIT before special items in the Industrial Solutions and Surface Technologies segments. The Agricultural Solutions and Nutrition & Care segments plan to considerably increase EBIT before special items.

Based on the forecast for global economic development and expected business development in the BASF Group in 2022, we expect a ROCE of between 11.4% and 12.6%. Compared with the previous year, we anticipate a considerable decrease in ROCE in the Chemicals, Materials and Surface Technologies segments. The Agricultural Solutions and Nutrition & Care segments are expected to considerably increase ROCE, while the Industrial Solutions segment will see a slight increase.


1 For sales, “slight” represents a change of 0.1%–5.0%, while “considerable” applies to changes of 5.1% and higher. “At prior-year level” indicates no change (+/–0.0%). For earnings, “slight” means a change of 0.1%–10.0%, while “considerable” is used for changes of 10.1% and higher. “At prior-year level” indicates no change (+/–0.0%).
At a cost of capital percentage of 9% for 2022, we define a change in ROCE of 0.1 to 1.0 percentage points as “slight,” a change of more than 1.0 percentage points as “considerable” and no change (+/–0.0 percentage points) as “at prior-year level.”

CO2 emissions forecast for the BASF Group

CO2 emissions are expected to be between 19.6 million metric tons and 20.6 million metric tons in 2022. We will take specific emission reduction measures to limit the additional emissions from moderate growth and the expected higher capacity utilization of the ammonia plants following low capacity utilization in 2021. These include measures to increase energy efficiency and process optimization, as well as the continued shift to renewable energy. In addition, the reductions in emissions from divestitures, including the agreed sale of the kaolin business, will slightly more than compensate for the additional emissions from the formation of BASF Shanshan Battery Materials Co., Ltd. in 2022.


The material opportunities and risks that could affect our forecast are described in the BASF Report 2021.


This page contains forward-looking statements. These statements are based on current estimates and projections of the Board of Executive Directors and currently available information. Forward-looking statements are not guarantees of the future developments and results outlined therein. These are dependent on a number of factors; they involve various risks and uncertainties; and they are based on assumptions that may not prove to be accurate. Such risk factors include those discussed in Opportunities and Risks of the BASF Report 2021. BASF does not assume any obligation to update the forward-looking statements contained in this outlook above and beyond the legal requirements.

Last Update July 27, 2022