Outlook

Growth in industrial production fell short of our expectations in the third quarter of 2018, primarily due to developments in the automotive industry in September in particular. The introduction of new emission standards had an impact in Europe. The effects of the trade conflict between the United States and China are also showing. This is leading to a slowdown in economic growth in Asia in particular, mainly in China.

We have therefore adjusted our assessment of the global economic environment in 2018 as follows (forecast from the BASF Half-Year Financial Report 2018 in parentheses):

• Growth in gross domestic product: 3.0% (3.0%)
• Growth in industrial production: 3.1% (3.2%)
• Growth in chemical production: 3.1% (3.4%)
• Average euro/dollar exchange rate of $1.20 per euro ($1.20 per euro)
• Average Brent blend oil price for the year of $70 per barrel ($70 per barrel)

The signing of the definitive transaction agreement on the merger of Wintershall and DEA reduces the BASF Group’s sales and EBIT by the contribution of its oil and gas activities – retroactively as of January 1, 2018, and with the prior-year figures restated – due to their presentation as discontinued operations.¹ This was explained in the BASF Report 2017.² Furthermore, the risk of a growth slowdown has increased. Otherwise, the statements on opportunities and risks made in the BASF Report 2017 continue to apply overall. According to our assessment, there continue to be no individual risks that pose a threat to the continued existence of the BASF Group. The same applies to the sum of individual risks, even in the case of another global economic crisis.