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.
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.

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.

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.

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

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.

Regions 2020 (Million €)

 

 

Europe

Of which Germany

North
America

Asia
Pacific

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.

Regions 2019a (Million €)

 

 

Europe

Of which Germany

North
America

Asia
Pacific

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.