Results of Operations

We increased sales by €477 million compared with the first quarter of 2018 to €16,177 million. This was mainly driven by portfolio effects in the Agricultural Solutions segment as a result of the acquisition of significant businesses and assets from Bayer in August 2018. Currency effects also had a positive impact on sales in all segments. Lower volumes, particularly in the Chemicals and Materials segments, had an offsetting effect. In addition, sales development was dampened by lower prices, especially in the Materials and Chemicals segments.

Factors influencing BASF Group sales in Q1 2019

Income from operations (EBIT) before special items¹ declined by €549 million to €1,732 million, mainly due to the significantly lower contributions from the Materials segment, Other and the Chemicals segment. EBIT before special items also decreased considerably in the Nutrition & Care segment. In the Surface Technologies segment, EBIT before special items was on a level with the prior-year quarter. By contrast, the Agricultural Solutions and Industrial Solutions segments recorded a considerable improvement in earnings.

At €26 million, special items in EBIT were positive overall in the first quarter of 2019, compared with minus €18 million in the prior-year quarter. Special income from divestitures in the Agricultural Solutions and Industrial Solutions segments exceeded integration costs, special charges from restructuring measures and other charges.

EBIT² declined by €505 million compared with the first quarter of 2018 to €1,758 million.

Compared with the prior-year quarter, income from operations before depreciation, amortization and special items (EBITDA before special items)³ decreased by €350 million to €2,663 million and EBITDA³ by €206 million to €2,789 million.

The financial result declined by €15 million compared with the first quarter of 2018 to minus €196 million. This was driven by the €51 million decrease in the interest result, mainly due to higher interest expenses for financial indebtedness, as well as by the €19 million decline in net income from shareholdings. By contrast, the other financial result rose by €55 million, primarily as a result of lower expenses for hedging our bonds and U.S. dollar commercial paper.

Income before income taxes decreased by €520 million to €1,562 million. The tax rate increased from 24.1% to 25.4%.

Income after taxes from continuing operations declined by €415 million to €1,166 million.

Income after taxes from discontinued operations, which comprise BASF’s oil and gas activities, rose by €97 million to €274 million. This was largely attributable to significant volumes growth, especially in Russia, as well as the suspension of depreciation and amortization since the recognition of the disposal group in the third quarter of 2018. The price of a barrel of Brent crude oil averaged $63 in the first quarter of 2019 (first quarter of 2018: $67). Gas prices on the European spot markets fell significantly compared with the prior-year quarter.

Noncontrolling interests decreased by €45 million to €34 million.

Net income declined by €273 million to €1,406 million.

Earnings per share amounted to €1.53 in the first quarter of 2019 (first quarter of 2018: €1.83). Earnings per share adjusted⁴ for special items and amortization of intangible assets amounted to €1.65 (first quarter of 2018: €1.93).