Results of Operations

Sales declined slightly by €745 million to €13,811 million compared with the third quarter of 2019. This was mainly driven by negative currency effects in all segments, but especially in the Agricultural Solutions and Surface Technologies segments. Lower volumes, particularly in the Chemicals segment due to the unplanned outage at the steam cracker in Port Arthur, Texas, also contributed to the sales decrease. Higher price levels overall, primarily due to higher precious metal prices in the Surface Technologies segment, had an offsetting effect. Portfolio effects, especially in the Materials segment from the acquisition of Solvay’s integrated polyamide business, likewise had a positive impact on sales.

Compared with the second quarter of 2020, sales increased by €1,131 million.

Factors influencing BASF Group sales in Q3 2020

Income from operations (EBIT) before special items¹ declined considerably year on year, by €475 million to €581 million. This was mainly attributable to a considerably lower contribution from the Chemicals segment. EBIT before special items also declined considerably in the Nutrition & Care segment, Other, and in the Materials and Agricultural Solutions segments. The Industrial Solutions and Surface Technologies segments posted slight decreases.

By contrast, EBIT before special items rose considerably by €355 million compared with the previous quarter.

Special items in EBIT totaled minus €3,219 million in the third quarter of 2020. These primarily related to impairments in all segments due to the economic effects of the coronavirus pandemic and to restructuring measures. In addition, provisions of €313 million were recognized for the realignment of the Global Business Services unit. Special items of €280 million arose in the prior-year period, mainly as a result of income from the sale of BASF’s share of the Klybeck site in Basel, Switzerland.

EBIT² amounted to minus €2,638 million, considerably below the prior-year quarter (€1,336 million). This figure includes income from integral companies accounted for using the equity method, which declined from €73 million to €56 million.

Compared with the third quarter of 2019, income from operations before depreciation, amortization and special items (EBITDA before special items)³ decreased by €438 million to €1,542 million. EBITDA³ declined by €1,215 million to €1,044 million.

At minus €47 million, net income from shareholdings was down €49 million from the prior-year quarter. This is primarily attributable to the lower earnings contribution from the non-integral equity-accounted shareholding in Solenis (minus €18 million; Q3 2019: €18 million), as well as to impairments on several shareholdings. The earnings contributed by Wintershall Dea, Kassel/Hamburg, Germany, improved by €6 million to minus €3 million.

The financial result amounted to minus €101 million, compared with minus €161 million in the prior-year quarter. This development was largely attributable to the €44 million improvement in the interest result, mainly due to lower interest expenses for financial indebtedness.

Income before income taxes decreased from €1,177 million in the previous year to minus €2,786 million.

Income after taxes from continuing operations declined from €917 million to minus €2,177 million.

Income after taxes from discontinued operations, which comprised the construction chemicals business that was divested on September 30, 2020, amounted to €13 million in the third quarter of 2020, compared with €18 million in the prior-year period.

Noncontrolling interests amounted to €42 million, compared with minus €24 million in the third quarter of 2019. The change was due in particular to negative earnings contributions from BASF Petronas Chemicals Sdn. Bhd., Kuala Lumpur, Malaysia, due to impairments, and from BASF TOTAL Petrochemicals LLC, Port Arthur, Texas, owing to the unplanned outage at the steam cracker.

Net income decreased to minus €2,122 million, compared with €911 million in the prior-year quarter.

Earnings per share amounted to minus €2.31 in the third quarter of 2020 (Q3 2019: €1.00). Earnings per share adjusted³ for special items and amortization of intangible assets amounted to €0.60 (Q3 2019: €0.89).