BASF, Dow, DuPont and Other Chemical Giants Release Earnings, New Market Trend Forecast

Recently, BASF, Dow, DuPont, Henkel, Arkema, LG Chem and other global chemical giants have announced their 2021 annual financial reports one after another, and many companies have achieved new highs in performance, with new energy and new materials sustainable economy still being the top priority.

Sales:€78.6 billion, a 33% improvement over 2020

EBIT excluding special items:€7.8 billion, up 118% year-on-year and 67% compared to 2019 pre-epidemic levels.

BASF's positive profit performance was driven by the Chemicals business area and the Materials business area, with the Surface Technologies business area and the Industrial Solutions business area also contributing to the strong recovery.

BASF's automotive-related businesses continued to be negatively affected by the shortage of semiconductors, and in 2021, especially in the fourth quarter, higher raw material prices and increased energy and logistics costs also had a negative impact on earnings in all business areas. For BASF's European sites, further increases in natural gas prices in 2021 result in additional costs of around €1.5 billion, amounting to €800 million in the fourth quarter of 2021 alone.

In 2021, Dow reported full-year sales of $55 billion, operating EBIT of $9.5 billion, increased margins in all operating segments, operating cash flow of $7.1 billion and an annual return on capital of more than 22 percent. In the fourth quarter, the company reported net sales of $14.4 billion, up 34 percent year-over-year; operating EBIT was $2.3 billion, up $1.2 billion year-over-year.

Dow's plans to decarbonize its assets while increasing earnings enabled the company to continue to deliver more than $3 billion in underlying earnings growth while enhancing its position of strength in sustainability. 2022 will also see Dow further advance key sustainability programs while meeting growing customer demand for low-carbon and circular economy solutions.

Arkema Group sales for 2021 are €9.5 billion, up 25.9% compared to 2020. Sales volume growth of 7.3%.

This came in large part from the impact of strong market-driven demand for sustainable solutions with high technological content, particularly in the areas of batteries, 3D printing, consumer goods and more environmentally friendly coatings. Full-year sales price growth of 18.6% reflected the Group's aggressive actions in offsetting the surge in raw material and energy prices, the improvement in product mix and the tightness of upstream acrylic acid.

Against a backdrop of impacted operations and high raw material and energy costs, earnings before interest, taxes, depreciation and amortization (EBITDA) reached a record high of €1,727 million, up 46.1% compared to 2020.

LG Chem's 2021 results reached a record high, with the company achieving sales of 42.6547 trillion won (approximately US$35.5 billion), up 41.9% year-on-year, and operating profit of 5.255 trillion won (approximately US$4.4 billion), up 178.4% year-on-year. In the fourth quarter, sales increased 23.0% year-on-year to 10.9487 trillion won (approximately $9.1 billion), and operating profit increased 521.2% year-on-year to 748.4 billion won (approximately $600 million).

LG Chem is targeting sales (excluding LG New Energy) of 27 trillion won (approximately $22.4 billion) in 2022, up 4 percent year-on-year. LG Chem will accelerate investment in its three new growth engines, with environmental materials, battery materials and innovative new global drugs as the core. By strengthening petrochemical high value-added products, expanding cathode materials and diaphragm business, promoting biosimilar business in Japan and medical beauty products sales business in China, in order to achieve sustainable growth of the company's performance.

LG Chem CEO Hak-Chul Shin said that its battery materials business will generate double-digit operating margins in the future.

DuPont announced fourth quarter and full year 2021 results:

Achieved net sales of approximately $16.7 billion in 2021, up 16 percent from the prior year, operating EBITDA of $4.2 billion, up 21 percent from the prior year, and full-year adjusted earnings per share of $4.30.

Net sales for the fourth quarter totaled $4.3 billion, up 14 percent from the same period last year. Operating EBITDA was $973 million, up 5 percent from the prior year.

Strong global customer demand throughout the year in long-term growth areas such as electronics and water, as well as a recovery in the automotive, construction and industrial sectors amid the COVID-19 pandemic, were reported as one of the key factors in the sales increase. Higher local prices primarily reflected actions taken to offset higher raw material costs.

The company's Electronics and Industrial segment achieved full-year net sales of $5.6 billion and reported a 19 percent earnings growth rate, with volume growth as the primary driver. Net sales increased 10 percent in the quarter through the July 1, 2021, acquisition of Laird Performance Materials.

Henkel Group 2021:

Sales of 20.1 billion euros, up 7.8%; operating profit to 2.7 billion euros, up 4.2%; EBIT margin prior-year level:13.4%.

The Adhesive Technologies business unit achieved double-digit sales growth of 13.4%, mainly due to a significant recovery in industrial demand compared to the same period last year, which was heavily impacted by the COVID-19 pandemic. Sales in the Beauty Care segment increased 1.4 percent.

While the recovery in the hair salon business had a positive impact, the consumer beauty care business was particularly affected by the normalization of demand in the body care category and showed a downward trend. The Laundry and Home Care segment achieved strong sales growth of 3.9 percent.

Eastman delivers growth across all businesses in 2021 compared to 2020 consolidated financial results, driving sales revenue growth of 24%; strong revenue growth was driven by a 15% increase in selling prices and an 8% increase in volume/mix.

In the fourth quarter of 2021, the company's Specialty Materials business saw an 8 percent increase in volume/mix, driven by innovation and market development initiatives and strong end-market demand growth for specialty plastics. In addition, sales prices increased 7 percent, driven by double-digit growth in specialty plastics prices due to higher raw material, energy and distribution prices.

Eastman achieved record full-year sales revenue and adjusted earnings per share in 2021, demonstrating the benefits of the company's innovative growth model. Eastman expects further revenue growth in 2022, with adjusted earnings per share in the range of $9.50 to $10 and operating cash flow expected to exceed $1.6 billion.