Results of Operations

Sales rose by €3,683 million compared with the first quarter of 2021 to €23,083 million. Sales growth was mainly driven by higher prices, especially in the Chemicals and Materials segments. Positive currency effects in all segments supported sales performance. Sales were positively impacted by portfolio effects in the Surface Technologies segment following the acquisition of a majority shareholding in BASF Shanshan Battery Materials Co., Ltd. This more than compensated for negative portfolio effects in the Industrial Solutions segment, mainly from the sale of the global pigments business. Slightly lower sales volumes overall had an offsetting effect. Volumes growth in the Agricultural Solutions, Industrial Solutions, Materials, Nutrition & Care and Chemicals segments was unable to fully offset the decline in volumes in the Surface Technologies segment.

Factors influencing BASF Group sales in Q1 2022

Income from operations (EBIT) before special items¹ increased by €497 million to €2,818 million. This was largely attributable to considerable earnings growth in the Chemicals segment. The Industrial Solutions, Materials and Nutrition & Care segments also significantly increased EBIT before special items. The Agricultural Solutions segment recorded slightly higher EBIT before special items. EBIT before special items in the Surface Technologies segment declined considerably, primarily as a result of much weaker demand from the automotive industry. Earnings in Other rose considerably.

Special items in EBIT amounted to –€34 million in the first quarter of 2022, compared with –€10 million in the prior-year quarter. Special charges resulted mainly from restructuring measures.

EBIT² rose by €474 million compared with the first quarter of 2021 to €2,785 million. Income from operations before depreciation, amortization and special items (EBITDA before special items)³ increased by €562 million to €3,743 million and EBITDA³ rose by €533 million to €3,709 million in the same period.

Net income from shareholdings declined by €865 million compared with the prior-year quarter to –€797 million. This is due to impairment charges recognized by Wintershall Dea, which BASF included in net income from shareholdings on a proportional basis (72.7%) as a special charge of around €1.1 billion. These impairments were triggered by the war in Ukraine and the related political consequences and concerned, in addition to the Nord Stream 2 loan, assets in Russia and in the gas transportation business. Excluding these impairments, the after-tax earnings attributable to BASF improved from €51 million in the prior-year quarter to €309 million in the first quarter of 2022.

• For more information on the impairment charges recognized by Wintershall Dea in connection with the war in Ukraine, see Significant Events in this quarterly statement

The financial result amounted to –€110 million, compared with –€132 million in the prior-year period. This was primarily due to an improvement in the other financial result, owing among other factors to lower expenses in connection with foreign currency bonds and the corresponding hedging instruments. The interest result improved slightly by €6 million to –€79 million.

The €369 million decrease in income before income taxes to €1,878 million was largely attributable to the above impairments at Wintershall Dea. These were recognized in equity-accounted income and as such, reduced income before taxes but did not affect the tax expense; as a result, the tax rate rose from 19.4% to 29.6%.

Income after taxes declined by €489 million to €1,321 million. At €100 million, noncontrolling interests were slightly above the figure for the prior-year quarter (€92 million). Positive earnings contributions from the BASF Shanshan companies, which were not included in the prior-year quarter, compensated for lower contributions from BASF TotalEnergies Petrochemicals LLC, Port Arthur, Texas. As a result, net income amounted to €1,221 million.

Earnings per share in the first quarter of the year were €1.34, compared with €1.87 in the first quarter of 2021. Earnings per share adjusted⁴ for special items and amortization of intangible assets amounted to €2.70 (Q1 2021: €2.00).