Operating activitites
2nd Quarter

All divisions in the Chemicals segment recorded a substantial decline in sales due to lower volumes and prices. Plant utilization levels were low, especially in Europe and North America. Although earnings declined substantially compared with the same quarter of the previous year, they improved in all divisions compared with the first quarter of 2009.

Sales in the Plastics segment fell significantly due to weak demand from almost all customer industries; earnings were halved. In contrast to the first quarter of 2009, earnings in both divisions were positive thanks to our strict cost management.

In the Performance Products segment, sales increased considerably as a result of the acquisition of Ciba. Despite lower fixed costs and higher margins, overall earnings declined significantly. This was mainly due to the fact that the acquired Ciba businesses posted a significant loss due to the tough business environment and integration costs.

As a result of the continued weak demand in the automotive industry, there was a substantial decrease in sales in Functional Solutions. This particularly affected the Catalysts division, which was additionally affected by a significant decline in precious metal prices. The segment’s earnings fell substantially compared with the same quarter of the previous year, however following a loss in the first quarter of 2009, were again positive. In Construction Chemicals, we increased earnings compared with the second quarter of 2008 due to the reduction of fixed costs.

In Agricultural Solutions, sales were only slightly higher than in the second quarter of 2008 as a result of delayed planting in North America and parts of Europe. Our business with crop protection agents in South America declined, partly due to the severe drought in Argentina. The segment’s earnings rose slightly, to some extent due to positive currency effects.

The sharp decline in oil prices and lower natural gas volumes were responsible for the significant drop in sales and earnings in the Oil & Gas segment compared with the second quarter of 2008. As a result of the delayed adjustment of sales prices to purchase prices, we recorded slightly higher margins in the Natural Gas Trading business sector, but this was not sufficient in order to compensate for the decline in volumes.

Sales in Other decreased due to lower demand in Styrenics and Fertilizers. Styrenics recorded higher earnings thanks to improved margins and reduced fixed costs. Overall however, earnings declined, the main reasons for this being currency losses as well as expenses from the BASF option program due to the higher share price. In the same quarter of the previous year, a high level of unrealized earnings from raw materials hedging was recorded.

Special items of minus €368 million (second quarter of 2008: minus €49 million) primarily arose from the integration of Ciba, among other things as a result of the use of inventory revalued at market prices at the time of the acquisition and of the partial writedown of the Ciba IT system.

Compared with the second quarter of 2008, EBIT dropped 67% to €772 million, while EBITDA decreased by 48% to €1,576 million.