The annual report season is coming. Recently, international chemical giants have also released their overall operating results for 2020. In the context of the raging new crown pneumonia epidemic, the overall revenue and profits of chemical companies have shown a steady decline in the past 20 years. However, with the promotion of vaccines and the operation of the economic cycle, the performance of the giants in the fourth quarter improved, and the market in 2021 Full of confidence.
01
BASF: 2020 sales remain flat year-on-year, and revenue drops 11%
2020 performance briefing
BASF's annual sales in 2020 were 59.1 billion euros, almost the same as in 2019. Price increases and the positive product mix effect almost offset the adverse exchange rate and sales impact.
Earnings before interest, taxes, depreciation and amortization excluding special items were 7.4 billion euros, a decrease of 11% from the previous year. Earnings before interest, taxes, depreciation and amortization were 6.5 billion euros, compared with 8.2 billion euros in 2019. Earnings before interest and taxes excluding special items for the full year of 2020 were 3.6 billion euros, a decrease of 23% from the previous year. Affected by the epidemic, except for the pre-interest and tax earnings excluding special items in the industrial solutions business sector, which was the same as in 2019, the earnings of all business sectors have declined. This is mainly due to the significant decline in the contribution of the upstream business-the chemical business field and the material business field. The sharp decline in demand in the automotive industry in 2020 will also adversely affect the income of the surface treatment technology business area.
BASF's outlook for 2021
BASF's forecast assumes that customer industries will grow, especially the automotive industry. Compared with 2020, the global economy will achieve a significant growth of 4.3%. The global chemical product production growth rate is expected to be 4.4%, much higher than the previous year's level. The company predicts that the average price of Brent crude oil per barrel is US$50, and the exchange rate is 1 Euro to US$1.18.
Based on these assumptions, BASF's goal is to increase sales to between 61 billion euros and 64 billion euros. The pre-interest and tax earnings of the BASF Group excluding special items are expected to be between 4.1 billion euros and 5 billion euros. The expected return on capital (ROCE) is expected to be between 8.0% and 9.2%.
02
Bayer: 2020 sales of 41.4 billion euros, basically the same year-on-year
Bayer Group sales of 41.400 billion euros were adversely affected by the exchange rate of 1.941 billion euros (adjusted by exchange rate and asset portfolio, an increase of 0.6%)
Earnings before interest, taxes, depreciation and amortization excluding special items were the same as the previous year, at 11.461 billion euros (down 0.1%)-strict cost management offset the exchange rate impact
The Crop Science Division and the Prescription Drug Division have stable business operations, and the Consumer Health Products Division has strong growth
Core earnings per share of 6.39 euros (increased by 0.2%)
Affected by litigation reserves and impairment, earnings per share were negative 10.68 euros (2019: positive 4.17 euros)
Net financial debt decreased by 11.8% to 30.41 billion euros
The proposed dividend per share is 2.00 Euros (2019: 2.80 Euros)
Enhanced asset portfolio and innovation capabilities
03
Arkema: Sales of 7.9 billion euros in 2020, down 8% year-on-year
Sales in 2020 reached 7.9 billion euros, a slight decrease of 8% year-on-year at a constant exchange rate, reflecting the impact of the new crown pneumonia epidemic on global demand
In 2020, EBITDA reached 1.182 billion euros (down 18.9%), and the EBITDA margin was 15%. Demonstrates the good toughness of specialty materials (EBITDA dropped by 12%, EBITDA margin shrank by 100 basis points to 15.8%)
Adjusted net income for 2020 is 391 million euros, and earnings per share is 5.11 euros
Free cash flow is as high as 651 million euros, which is comparable to the level of 2019, reflecting the excellent management of working capital (11.8% of sales as of December 31, 2020) and strict control of capital expenditures
Net debt, including hybrid debt, dropped significantly to 1.910 billion euros (2.331 billion euros as of December 31, 2019), which is equivalent to 1.6 times 2020 EBITDA
2021 goals and outlook
EBITDA growth in 2021 will be concentrated in specialty materials (82% of group sales in 2020). In the still turbulent environment, excluding the large-scale rebound of the new crown pneumonia epidemic, Arkema's goal is to achieve an increase of about 10% in the EBITDA of specialty materials compared with 2020 at a constant exchange rate, and the EBITDA of intermediates in a constant range And the exchange rate (5) calculation remains stable (PMMA business divestiture is expected to be completed in mid-2021).
