Information on Q2 2021: BASF Group

Sales increased by €7,073 million compared with the second quarter of 2020 to €19,753 million. This was largely attributable to higher prices and volumes in all segments. Price levels in Surface Technologies, Chemicals and Materials in particular increased, while volumes grew primarily in Surface Technologies, Materials and Industrial Solutions. Negative currency effects had an offsetting impact.

Factors influencing BASF Group sales in Q2 2021

Compared with the prior-year quarter, income from operations (EBIT) before special items¹ increased by €2,129 million to €2,355 million. This was mainly attributable 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 in Other and in the Nutrition & Care and Agricultural Solutions segments decreased considerably.

Special items in EBIT totaled –€39 million in the second quarter of 2021, compared with –€167 million in the prior-year quarter. Gains on divestitures totaled €93 million, primarily from the sale of the production site in Kankakee, Illinois, and the sale of BASF’s global pigments business. These were overcompensated by expenses mainly from restructuring measures in connection with streamlining the global glufosinate-ammonium production network, and from measures relating to our excellence program.

EBIT² increased by €2,257 million to €2,316 million. This figure includes income from integral companies accounted for using the equity method, which rose by €155 million to €183 million. This was due in particular to the considerable improvement in the earnings contribution of BASF-YPC Company Ltd., Nanjing, China, which had been negatively affected by a scheduled turnaround in the prior-year quarter.

Q2 sales

Million €, relative change

Q2 EBIT before special items

Million €, absolute change

Income from operations before depreciation, amortization and special items (EBITDA before special items)³ increased by €1,988 million to €3,217 million and EBITDA³ by €2,129 million to €3,199 million in the second quarter of 2021.

Net income from shareholdings improved by €744 million to –€44 million compared with the second quarter of 2020. This figure in the prior-year period included the €819 million impairment of the shareholding in Wintershall Dea. Solenis’ earnings contribution in the second quarter of 2021 was –€2 million (Q2 2020: –€11 million).

The financial result amounted to –€83 million, compared with –€194 million in the prior-year quarter. This was primarily due to the €77 million increase in other financial result from higher gains on fair values of derivatives. The interest result improved by €34 million over the prior-year period, due mainly to lower interest expenses for financial indebtedness.

Compared with the second quarter of 2020, income before income taxes increased by €3,112 million to €2,189 million. The tax rate was 18.0%.

Income after taxes increased by €2,668 million to €1,794 million. Of this amount, €1,654 million was attributable to shareholders of BASF SE (Q2 2020: –€878 million). Noncontrolling interests amounted to €140 million after €4 million in the prior-year period. The increase was mainly due to higher earnings contributions from BASF TOTAL Petrochemicals LLC, Port Arthur, Texas, and BASF PETRONAS Chemicals Sdn. Bhd., Petaling Jaya, Malaysia.

Earnings per share increased to €1.80 in the second quarter of 2021, after –€0.96 in the prior-year period. Earnings per share adjusted⁴ for special items and amortization of intangible assets amounted to €2.03 (Q2 2020: €0.25).

Cash flows from operating activities amounted to €2,537 million in the second quarter of 2021, €295 million above the figure for the prior-year quarter. A primary driver of the improvement was the increase in net income. The €1,181 million decrease in cash released from the change in net working capital negatively impacted cash flows from operating activities. The decrease was mainly due to a slight rise in trade accounts receivable, whereas in the second quarter of the previous year, a decline in this item bolstered operating cash flows. Furthermore, income from companies accounted for using the equity method, which was eliminated through miscellaneous items, increased by €921 million.

Cash flows from investing activities amounted to €323 million in the second quarter of 2021, which reflects an improvement of €1,028 million compared with the second quarter of 2020. This was mainly due to payments received for divestitures in the amount of €1,125 million. Payments made for property, plant and equipment and intangible assets were slightly above the prior-year figure at €767 million.

At –€4,144 million, cash flows from financing activities decreased by €4,517 million compared with the second quarter of 2020. Repayment of financial and similar liabilities exceeded additions by €999 million; while in the prior-year quarter, net additions in the amount of €3,470 million increased financing cash flows. Dividend payments totaling €3,145 million, of which €3,031 million were made to shareholders of BASF SE, were slightly above the prior year quarter.

Free cash flow⁵ increased by €254 million to €1,770 million compared with the second quarter of 2020.