Financial Position

Equity rose by €1,020 million compared with December 31, 2019, to €43,370 million. The equity ratio declined slightly from 48.7% to 47.0% as a result of the increase in total assets. Noncurrent liabilities decreased by €1,269 million compared with the 2019 year-end to €26,727 million, largely due to lower pension provisions and lower noncurrent financial indebtedness. The reclassification of a eurobond with a carrying amount of around €1 billion to current financial indebtedness was the main driver here. This was partially offset by the increase in liabilities to banks, primarily from a new €380 million loan taken out from the European Investment Bank. Tax provisions, deferred taxes and other provisions also declined. The €184 million increase in other liabilities was primarily attributable to higher lease liabilities.

Current liabilities rose by €5,654 million to €22,258 million. All items except trade accounts payable contributed to the increase, in particular current financial indebtedness. This was mainly due to the €3,825 million increase in commercial paper at BASF SE, the above-mentioned reclassification of a bond with a carrying amount of €1 billion, and the new short-term loans taken out for a total of €250 million. The decline in trade accounts payable was more than offset by the increase in other provisions and tax liabilities.

Financial indebtedness rose by €4,589 million. Net debt1 increased by €3,288 million compared with the end of 2019.

1 For an explanation of this indicator, see Financial Position in the BASF Report 2019

Net debt (Million €)


March 31,

December 31,

Noncurrent financial indebtedness



+ Current financial indebtedness



Financial indebtedness



– Marketable securities



– Cash and cash equivalents



Net debt



Cash flows from operating activities amounted to minus €1,030 million, compared with €373 million in the prior-year quarter. Alongside the considerable decline in net income, this was primarily attributable to the €1,242 million increase in cash tied up in net working capital. This development was mainly driven by stronger growth in trade accounts receivable and precious metal trading items, as well as the increase in derivatives with positive fair values. The change in operating liabilities and other provisions increased cash inflows by €201 million overall compared with the prior-year quarter, despite a higher level of cash tied up from the decline in trade accounts payable. The change in miscellaneous items increased cash flows from operating activities in the first quarter of 2020. In the prior-year quarter, the reclassification of higher gains on the disposal of noncurrent assets to cash flows from investing activities led to cash tied up in miscellaneous items.

Cash flows from investing activities amounted to minus €1,820 million, around €1 billion below the figure for the prior-year quarter. This was mainly attributable to the payment of the purchase price for the polyamide business acquired from Solvay. By contrast, payments made for intangible assets and property, plant and equipment were €172 million lower year on year.

The significant increase in cash flows from financing activities, from €620 million in the first quarter of 2019 to €4,294 million, was primarily due to the creation of additional liquidity as a precautionary measure.

Free cash flow2 declined from minus €368 million in the prior-year quarter to minus €1,599 million as a result of lower cash flows from operating activities.

2 For an explanation of this indicator, see Financial Position in the BASF Report 2019

Q1 free cash flow (Million €)




Cash flows from operating activities



– Payments made for intangible assets and property, plant and equipment



Free cash flow



BASF enjoys good credit ratings, especially compared with competitors in the chemical industry. On March 25, 2020, Standard & Poor’s changed BASF’s rating from “A/A-1/outlook stable” to “A/A-1/CreditWatch negative.” On April 1, 2020, Moody’s adjusted its rating for BASF from “A2/P-1/outlook stable” to “A2/P-1/Review for downgrade.” The economic impact of the corona pandemic and the related uncertainty were cited as the main reasons for these changes.