Discontinued Construction Chemicals Business

On December 21, 2019, BASF and an affiliate of Lone Star, a global private equity firm, signed an agreement on the sale of BASF’s construction chemicals business. The signing of the agreement has an immediate effect on the reporting of BASF Group. Retroactively as of January 1, 2018, sales and earnings of the former Construction Chemicals division are no longer included in sales, EBITDA, EBIT and EBIT before special items of the BASF Group. Until closing, the income after taxes of the construction chemicals business will be presented in the income after taxes of BASF Group as a separate item (“Income after taxes from discontinued operations”). The assets and liabilities of the construction chemicals business were reclassified to a disposal group as of the end of the fourth quarter of 2019, and will be presented under Other until closing of the transaction, which is expected in the third quarter of 2020, subject to the approval of the relevant competition authorities.

Sales in the construction chemicals business rose by €98 million compared with 2018 to €2,553 million. The increase was attributable to positive currency effects and higher prices, especially for the former construction systems business. This was partly offset by slightly lower sales volumes due to a decrease in the construction systems business.

In North America, sales rose considerably due to positive currency effects and higher prices. Sales rose slightly in Europe, primarily as a result of higher prices. We also improved sales slightly in Asia Pacific. This was driven by favorable currency developments and higher sales volumes. Sales in South America, Africa, Middle East rose slightly. Higher prices and positive currency effects more than offset the significant decline in volumes.

Income from operations (EBIT) before special items was €130 million, €57 million above the 2018 figure. This was mainly attributable to margin growth on the back of higher prices. EBIT declined by €7 million to €52 million. Income after taxes of the discontinued construction chemicals business decreased by around €10 million to €24 million. The decrease was mainly driven by special items in connection with the planned divestiture.