Research Update: BASF Outlook Revised To Stable From Neg On A Rebound In Operating Performance; 'A/A-1' Ratings Affirmed

The German chemicals group BASF delivered stronger-than-expected performance in the first half of 2021, and announced a significant increase in its financial guidance for the full year. We now forecast revenue will rise more than 25% to above €74 billion in 2021, with S&P Global Ratings-adjusted EBITDA strengthening about 60% to €10.5 billion-€11.0 billion from €6.7 billion in 2020. We therefore revised our outlook on BASF to stable from negative, and affirmed the ratings at 'A/A-1'. The stable outlook indicates that current solid market conditions, combined with BASF's continuous strict cost and capital-spending control, should help it improve credit metrics such that S&P Global Ratings-adjusted funds from operations (FFO) to debt sits comfortably above 35% by 2021. We also expect

...- The German chemicals group BASF delivered stronger-than-expected performance in the first half of 2021, and announced a significant increase in its financial guidance for the full year. - We now forecast revenue will rise more than 25% to above 74 billion in 2021, with S&P Global Ratings-adjusted EBITDA strengthening about 60% to 10.5 billion-11.0 billion from 6.7 billion in 2020. - We therefore revised our outlook on BASF to stable from negative, and affirmed the ratings at 'A/A-1'. - The stable outlook indicates that current solid market conditions, combined with BASF's continuous strict cost and capital-spending control, should help it improve credit metrics such that S&P Global Ratings-adjusted funds from operations (FFO) to debt sits comfortably above 35% by 2021. We also expect discretionary cash flow (DCF) will turn positive this year....

Research Update