Income from operations

• 32 % increase in EBIT before special items to €8,328 million
• Considerable growth in EBIT and EBIT after cost of capital

Income from operations (EBIT) before special items rose by €2,019 million to €8,328 million, thanks in particular to the contribution from the Chemicals segment. Earnings generated by the Oil & Gas segment and Other also improved considerably. In the Agricultural Solutions segment, EBIT before special items was only slightly below the prior-year figure after a strong fourth quarter of 2017. The Performance Products and Functional Materials & Solutions segments recorded a considerable decrease. This was due to lower margins resulting from the increase in raw materials prices and fixed costs from factors such as the startup of new plants.

EBIT before special items (million €)

Special items in EBIT totaled €194 million in 2017, compared with minus €34 million in the previous year.

Various restructuring measures led to special items of minus €133 million, after minus €394 million in 2016.

At €52 million, integration costs for acquired businesses exceeded the prior-year level (2016: €27 million), largely as a result of the integration of Chemetall.

Divestitures in 2017 resulted in an earnings contribution of €145 million compared with €431 million in the previous year. This was mainly due to the transfer of our leather chemicals business to the Stahl group in the Performance Products segment, which contributed €195 million.

The special items recognized in other charges and income amounted to €234 million in 2017. This figure included reversals of impairments and impairments totaling €197 million in the Oil & Gas and Functional Materials & Solutions segments. In the previous year, other charges and income amounted to minus €44 million.

At €8,522 million, EBIT for the BASF Group in 2017 was considerably higher than the previous year’s level (2016: €6,275 million). Included in this figure is income from companies accounted for using the equity method, which rose from €307 million to €571 million.

EBIT (million €)

We once again earned a significant premium on our cost of capital in 2017. EBIT after cost of capital amounted to €2,727 million, compared with €1,136 million in the previous year. The cost of capital rose by €364 million year-on-year. This was primarily attributable to the increase in noncurrent assets since the acquisition of Chemetall in December 2016, as well as the higher level of capital tied up in trade accounts receivable as a result of sales growth.

EBIT after cost of capital (million €)