Results of Operations

Sales increased by €9,720 million compared with the first half of 2020 to €39,153 million. This was primarily driven by higher prices, especially in the Surface Technologies, Chemicals and Materials segments, as well as by increased sales volumes in all segments. Currency effects had a negative impact on sales.

Factors influencing BASF Group sales in H1 2021

Compared with the prior-year period, income from operations (EBIT) before special items¹ increased by €2,810 million to €4,676 million. This was due primarily to the considerable rise in EBIT before special items in the Chemicals and Materials segments. The Surface Technologies and Industrial Solutions segments also increased earnings considerably. By contrast, EBIT before special items declined considerably in Other and in the Nutrition & Care segment, and decreased slightly in the Agricultural Solutions segment.

Special items in EBIT amounted to –€49 million in the first half of 2021, compared with –€351 million in the prior-year period. Gains on divestitures totaled €134 million, primarily from the sale of the production site in Kankakee, Illinois, of the condensate splitter in Port Arthur, Texas, and of BASF’s global pigments business. Offsetting effects resulted primarily from expenses associated with restructuring measures in the amount of €118 million, mainly in connection with our excellence program and measures relating to streamlining the global glufosinate-ammonium production network. Further expenses in the amount of €65 million resulted from integration costs as well as other charges and income.

Income from operations (EBIT)² increased by €3,112 million compared with the first half of 2020 to €4,627 million. This figure includes income from integral companies accounted for using the equity method, which increased by €287 million to €321 million, primarily due to the earnings contribution of BASF-YPC Com­pany Ltd., Nanjing, China, which rose by €226 million.

Income from operations before depreciation, amortization and special items (EBITDA before special items)³ was €6,398 million compared with €3,808 million in the first half of 2020; and EBITDA³ was €6,375 million compared with €3,498 million.

Net income from shareholdings improved by €980 million to €24 million year on year. The contribution from Wintershall Dea improved by €970 million after an impairment of €819 million had been included in the previous year. Solenis’ earnings contribution was €26 million compared with –€12 million in the first half of 2020.

The financial result amounted to –€215 million, compared with –€282 million in the prior-year period. This mainly reflected the €53 million improvement in the interest result due to lower interest expenses on financial indebtedness. The other financial result also improved and was up €14 million from the first half of 2020. This was due primarily to gains on fair values of derivatives.

Income before taxes increased to €4,436 million (H1 2020: €277 million). The tax rate was 18.8%.

Net income was €3,604 million, compared with €29 million in the first half of 2020. Of this amount, €3,372 million was attributable to shareholders of BASF SE. Noncontrolling interests amounted to €232 million after €22 million in the prior-year period. The increase was mainly due to higher earnings contributions from BASF TOTAL Petrochemicals LLC, Port Arthur, Texas, BASF PETRONAS Chemicals Sdn. Bhd., Petaling Jaya, Malaysia, and Shanghai BASF Polyurethane Company Ltd., Shanghai, China.

Earnings per share rose to €3.67 in the first half of 2021, compared with €0.01 in the first half of 2020. Earnings per share adjusted⁴ for special items and amortization of intangible assets amounted to €4.03 (H1 2020: €1.51).

Segment sales and EBIT before special items

Compared with the first half of 2020, sales in the Chemicals segment increased considerably, mainly due to higher prices. Prices in the Petrochemicals division rose for cracker products and styrene monomers in particular, while the Intermediates division recorded higher prices especially in the butanediol and derivatives business and in the acids and polyalcohols business. Following the considerable burden the coronavirus pandemic put on the segment’s volume development in the prior-year period, the recovery in demand, in particular, led to increased volumes in both divisions in the first half of 2021. Volume development was negatively impacted by plant shutdowns in North America due to unseasonably low temperatures in the first quarter of 2021, as well as production outages and raw material bottlenecks. Negative currency effects dampened sales performance. EBIT before special items rose considerably, especially in the Petrochemicals division. The earnings increase in both divisions was mainly attributable to higher margins, improved income from shareholdings accounted for using the equity method, and lower fixed costs.

Sales in the Materials segment rose considerably compared with the prior-year period, particularly as a result of increased prices and volumes. Prices rose especially in the isocyanates business in the Monomers division. Volumes increased in particular due to a recovery in demand across all customer industries, especially in the Performance Materials division. Plant shutdowns in North America due to cold weather led to significant production outages and raw material bottlenecks, which dampened sales performance in both divisions. Portfolio effects from the acquisition of the integrated polyamide business from Solvay, which closed as of January 31, 2020, had a positive impact on sales. Sales performance was weighed down by currency effects. EBIT before special items increased considerably in both divisions. While the Monomers division recorded higher margins due mainly to prices, EBIT before special items in the Performance Materials division rose primarily as a result of sales volumes.

Sales in the Industrial Solutions segment increased considerably. Sales growth was mainly driven by higher volumes in nearly all business areas in both divisions. Considerably higher price levels in the Dispersions & Pigments division, especially due to increased raw materials prices, more than compensated for slightly lower prices in the Performance Chemicals division. Currency effects dampened sales performance. The segment’s EBIT before special items rose considerably. This was largely attributable to the considerable volume-related earnings increase in the Dispersions & Pigments division. The Performance Chemicals division recorded a slightly higher EBIT before special items, also due primarily to the development of sales volumes.

Sales in the Surface Technologies segment rose considerably due primarily to higher precious metal prices in the Catalysts division. The sales growth was supported by increased volumes in nearly all business areas in both divisions, resulting mainly from greater demand from the automotive industry. This segment’s sales volumes had been heavily impacted by the effects of the coronavirus pandemic in the prior-year period. Negative currency effects had an offsetting impact. EBIT before special items in both divisions was considerably above the level of the prior-year period, largely due to volume development. Additionally, earnings performance in the Catalysts division was helped by a considerably higher contribution from precious metal trading.

Compared with the first half of 2020, sales in the Nutrition & Care segment decreased slightly due to currency effects. Increased volumes in both divisions had a positive impact on sales performance. The Care Chemicals division increased its volumes mainly in the home care, industrial and institutional cleaning and industrial formulators businesses, while the Nutrition & Health division recorded higher volumes primarily in the pharmaceutical and aroma businesses. This more than offset lower volumes in the animal nutrition business, which resulted largely from reduced vitamin A availability due to the expansion of the plant. Prices were at prior-year level. Higher prices in the Care Chemicals division balanced out the lower price levels in Nutrition & Health. EBIT before special items declined considerably in both divisions compared with the first half of 2020. This was primarily attributable to lower margins and higher fixed costs, due in part to scheduled turnarounds and the expansion of the vitamin A plant.

Sales in the Agricultural Solutions segment were slightly up from the prior-year period. This was largely driven by volume growth in all regions. Higher price levels also contributed to sales growth. Sales performance was weighed down by currency effects. EBIT before special items declined slightly despite the sales growth, mainly as a result of negative currency effects.

Sales in Other increased considerably compared with the prior-year period primarily due to sales growth in commodity trading. EBIT before special items was considerably below the figure for the first half of 2020. This was mainly due to higher additions to provisions for variable compensation components (bonus) in the first half of 2021.

H1 EBIT before special items

Million €, absolute change