5 – Reporting by Segment and Region The BASF Group’s business is operated by 11 divisions, grouped into six segments: Chemicals: Petrochemicals, Intermediates Materials: Performance Materials, Monomers Industrial Solutions: Dispersions & Pigments, Performance Chemicals Surface Technologies: Catalysts, Coatings Nutrition & Care: Care Chemicals, Nutrition & Health Agricultural Solutions: Agricultural Solutions The divisions are allocated to the segments based on their business models and according to their focal points, customer groups, the focus of their innovations, their investment relevance and sustainability aspects. The Chemicals segment comprises the Petrochemicals and Intermediates divisions and is the cornerstone of BASF’s Verbund structure. It supplies the other segments with basic chemicals and intermediates, contributing to the organic growth of our key value chains. Alongside internal transfers, customers include the chemical and plastics industries. The segment’s competitiveness is strengthened by technological leadership and operational excellence. The Materials segment is composed of the Performance Materials division and the Monomers division. The segment offers advanced materials and their precursors for new applications and systems. Its product portfolio includes isocyanates and polyamides as well as inorganic basic products and specialties for plastics and plastics processing. The Industrial Solutions segment consists of the Dispersions & Pigments and the Performance Chemicals divisions. The segment develops and markets ingredients and additives for industrial applications, such as polymer dispersions, pigments, resins, electronic materials, antioxidants and additives. Its customers come from key industries such as automotive, plastics and electronics. The Surface Technologies segment bundles chemical solutions for surfaces with the Catalysts and Coatings divisions. Its product spectrum includes catalysts and battery materials for the automotive and chemical industries, surface treatments, colors and coatings. The Nutrition & Care segment comprises the Care Chemicals division and the Nutrition & Health division. The segment produces ingredients and solutions for consumer applications in the areas of nutrition, home and personal care. Its customers include food and feed producers as well as the pharmaceutical, cosmetics, and the detergent and cleaner industries. The Agricultural Solutions segment consists of the division of the same name. As an integrated provider, its portfolio comprises fungicides, herbicides, insecticides and biological crop protection products, as well as seeds and seed treatment products. Furthermore, Agricultural Solutions offers farmers innovative solutions, including those based on digital technologies, combined with practical advice. Activities that are not allocated to any of the segments are recorded under Other. These include other businesses, which comprise commodity trading, engineering and other services, rental income and leases. Discontinued operations and certain activities remaining after divestitures are also reported here. The following activities are also presented under Other: The steering of the BASF Group by corporate headquarters. Cross-divisional corporate research, which includes plant biotechnology research, works on long-term topics of strategic importance to the BASF Group. Furthermore, it focuses on the development of specific key technologies, which are of central importance for the divisions. Results from currency translation that are not allocated to the segments; earnings from the hedging of raw materials prices and foreign currency exchange risks; and gains and losses from the long-term incentive programs (LTI programs). Remanent fixed costs resulting from organizational changes or restructuring; function and region-related restructuring costs not allocated to a division; idle capacity costs from internal human resource platforms; and consolidation effects that cannot be allocated to the divisions. (XLSX:) XLS Income from operations (EBIT) of Other (Million €) 2020 2019a Costs for cross-divisional corporate research –364 –397 Costs of corporate headquarters –214 –231 Other businesses 169 164 Foreign currency results, hedging and other measurement effects –59 –89 Miscellaneous income and expenses –735 35 Income from operations of Other –1,203 –518 a The 2019 figures have been restated to reflect the reclassification of income from non-integral companies accounted for using the equity method to net income from shareholdings. Income from operations of Other declined by €685 million year on year, from –€518 million to –€1,203 million. The costs for cross-divisional corporate research decreased by €33 million to –€364 million, and the costs of corporate headquarters were €17 million lower at –€214 million. Income from other businesses rose by €5 million to €169 million. The line item foreign currency results, hedging and other measurement effects improved by €30 million to –€59 million. In addition to currency effects, the improvement was due mainly to earnings from hedging transactions. The line item miscellaneous income and expenses decreased by –€770 million from €35 million to –€735 million. This was due especially to expenses related to the realignment of the Global Business Services unit and to positive effects in 2019 primarily from adjustments to pension benefits in the United States and gains from the sale of BASF’s share of the Klybeck site in Basel, Switzerland. The same accounting rules are used for segment reporting as those used for the Group, which are presented in these Notes. Transfers between the segments are generally executed at adjusted market-based prices, taking into account the higher cost efficiency and lower risk of intragroup transactions. Assets, as well as their depreciation and amortization, are allocated to the segments based on economic control. Assets used by more than one segment are allocated based on the percentage of usage. Income from operations (EBIT) before special items is used for the internal steering of the segments and complements the key management indicator, ROCE. It is determined based on EBIT, which is calculated from gross profit on sales, selling expenses, general administrative expenses, research and development expenses, other operating income and expenses, and income from integral companies accounted for using the equity method. To calculate EBIT before special items, this figure is then adjusted for special items. Special items arise from the integration of acquired businesses, restructuring costs, certain impairments, gains or losses resulting from divestitures and sales of integral investments accounted for using the equity method, and other expenses and income that arise outside of ordinary business activities. EBIT and EBIT before special items are alternative performance measures that are not defined under IFRS and are to be considered as being complementary to the indicators defined by IFRS. (XLSX:) XLS Reconciliation of the assets of Other to the assets of the BASF Group (Million €) December 31,2020 December 31,2019 Segment assets 56,161 59,365 Assets of businesses included in Othera 2,251 2,780 Other financial assets and non-integral investments accounted for using the equity method 11,456 13,760 Deferred tax assets 3,386 2,887 Cash and cash equivalents / marketable securities 4,537 2,871 Defined benefit assets 126 123 Other receivables / prepaid expenses 2,375 2,429 Assets of the construction chemicals business disposal group (2019)b – 2,661 Other assets of the construction chemicals business disposal group (2019)b – 74 Assets of Other 24,131 27,585 Assets of the BASF Group 80,292 86,950 a The carrying amounts of non-integral investments accounted for using the equity method previously presented under “Assets of businesses included in Other” have been reclassified to “Other financial assets and non-integral investments accounted for using the equity method.” b For more information, see Note 2.5 of the BASF Report 2019. (XLSX:) XLS Reconciliation of segment income to income before income taxes (Million €) 2020 2019a EBIT before special items of the segments 4,329 5,224 EBIT before special items of Other –769 –581 EBIT before special items 3,560 4,643 Special items of the segments –3,317 –505 Special items of Other –434 63 Special items –3,751 –442 EBIT of the segments 1,012 4,719 EBIT of Other –1,203 –518 EBIT –191 4,201 Net income from shareholdings –909 –194 Financial result –462 –705 Income before income taxes –1,562 3,302 a The 2019 figures have been restated to reflect the reclassification of income from non-integral companies accounted for using the equity method to net income from shareholdings. (XLSX:) XLS Segments 2020 (Million €) Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions Other BASF Group Sales 8,071 10,736 7,644 16,659 6,019 7,660 2,360 59,149 Intersegment transfers 2,861 720 375 203 429 91 73 4,752 Sales including transfers 10,932 11,456 8,019 16,862 6,448 7,751 2,433 63,901 Income from integral companies accounted for using the equity method 46 16 17 55 4 – 82 220 Income from operations –192 –109 630 –587 688 582 –1,203 –191 Assets 7,896 9,118 6,402 11,691 6,214 14,840 24,131 80,292 of which goodwill 186 179 628 2,019 844 3,039 64 6,959 other intangible assets 53 698 197 1,018 453 3,716 51 6,186 property, plant and equipment 4,362 4,498 2,040 2,973 2,353 2,528 893 19,647 integral investments accounted for using the equity method 710 208 48 414 34 – 464 1,878 Liabilities 3,435 3,893 2,734 2,905 2,948 3,556 26,423 45,894 Research and development expenses 96 182 177 246 160 840 385 2,086 Additions to intangible assets and property, plant and equipment (including acquisitions) 871 1,957 331 585 510 459 156 4,869 Depreciation and amortization of intangible assets and property, plant and equipment 1,429 1,665 469 1,487 464 1,000 171 6,685 of which impairments 592 800 106 1,013 53 296 20 2,880 (XLSX:) XLS Segments 2019a (Million €) Chemicals Materials Industrial Solutions Surface Technologies Nutrition & Care Agricultural Solutions Otherb BASF Group Sales 9,532 11,466 8,389 13,142 6,075 7,814 2,898 59,316 Intersegment transfers 3,428 849 524 212 490 197 77 5,777 Sales including transfers 12,960 12,315 8,913 13,354 6,565 8,011 2,975 65,093 Income from integral companies accounted for using the equity method 99 22 – 26 5 – 113 265 Income from operations 622 973 889 663 644 928 –518 4,201 Assets 8,978 8,782 6,903 11,773 6,399 16,530 27,585 86,950 of which goodwill 201 172 649 2,912 884 3,219 68 8,105 other intangible assets 65 102 256 1,158 558 4,224 57 6,420 property, plant and equipment 5,117 4,999 2,226 3,078 2,347 2,938 1,087 21,792 integral investments accounted for using the equity method 763 235 37 388 43 – 419 1,885 Liabilities 3,507 3,603 2,886 3,152 2,897 3,251 25,304 44,600 Research and development expenses 108 193 192 214 161 879 411 2,158 Additions to intangible assets and property, plant and equipment (including acquisitions) 1,108 784 426 565 595 320 299 4,097 Depreciation and amortization of intangible assets and property, plant and equipment 923 718 438 457 545 719 346 4,146 of which impairments and reversals of impairmentsc 146 8 19 9 124 12 6 324 a The relevant 2019 figures have been restated to reflect the reclassification of income from non-integral companies accounted for using the equity method to net income from shareholdings. b Other includes assets and liabilities as well as amortization of intangible assets and depreciation of property, plant and equipment of the discontinued construction chemicals business. For more information, see Note 2.5 of the 2019 BASF Report. Until reclassification to the disposal group, additions to intangible assets and property, plant and equipment (including acquisitions) of the discontinued construction chemicals business, also included in Other, amounted to €176 million. c Impairments and reversals of impairments included reversals of impairments in the amount of €4 million in Other and €2 million in Industrial Solutions in 2019. (XLSX:) XLS Regions 2020 (Million €) Europe Of which Germany NorthAmerica AsiaPacific South America, Africa, Middle East BASF Group Location of customer Sales 23,129 5,510 15,709 15,406 4,905 59,149 Share % 39.1 9.3 26.6 26.0 8.3 100.0 Location of company Sales 24,223 10,296 16,440 14,895 3,591 59,149 Income from integral companies accounted for using the equity method 57 32 –2 165 – 220 Income from operations –1,005 –1,712 –201 768 247 –191 Assets 45,551 32,270 17,628 13,725 3,388 80,292 of which intangible assets 6,700 3,588 5,126 1,013 306 13,145 property, plant and equipment 9,550 6,192 5,275 4,220 602 19,647 integral investments accounted for using the equity method 423 391 105 1,350 – 1,878 Additions to intangible assets and property, plant and equipment (including acquisitions) 3,019 932 1,044 690 116 4,869 Amortization of intangible assets and depreciation of property, plant and equipment including impairments and reversals of impairments 3,306 2,305 2,124 1,133 122 6,685 In the United States, sales to third parties in 2020 amounted to €14,352 million (2019: €14,211 million) according to location of companies and €13,414 million (2019: €13,506 million) according to location of customers. In the United States, intangible assets, property, plant and equipment, and investments accounted for using the equity method amounted to €9,967 million on December 31, 2020, compared with €12,115 million in the previous year. In China, sales to third parties in 2020 amounted to €7,839 million (2019: €7,216 million) according to location of companies and €7,877 million (2019: €6,734 million) according to location of customers. In China, intangible assets, property, plant and equipment, and investments accounted for using the equity method amounted to €3,799 million on December 31, 2020, compared with €4,299 million in the previous year. (XLSX:) XLS Regions 2019a (Million €) Europe Of which Germany NorthAmerica AsiaPacific South America, Africa, Middle East BASF Group Location of customer Sales 23,827 6,123 15,948 14,203 5,338 59,316 Share % 40.2 10.3 26.9 23.9 9.0 100.0 Location of company Sales 25,706 14,049 16,420 13,384 3,806 59,316 Income from integral companies accounted for using the equity method 104 67 2 159 – 265 Income from operations 2,125 504 692 1,082 302 4,201 Assets 47,347 34,412 21,345 13,912 4,346 86,950 of which intangible assets 6,652 3,588 6,152 1,353 368 14,525 property, plant and equipment 9,857 6,928 6,467 4,644 824 21,792 integral investments accounted for using the equity method 393 360 125 1,367 – 1,885 Additions to intangible assets and property, plant and equipment (including acquisitions) 2,135 1,459 1,310 581 71 4,097 Amortization of intangible assets and depreciation of property, plant and equipment including impairments and reversals of impairments 1,896 1,235 1,501 599 150 4,146 a The relevant 2019 figures have been restated to reflect the reclassification of income from non-integral companies accounted for using the equity method to net income from shareholdings. back next