5. Reporting by Segment and Region

Accounting policies

The divisions are allocated to the segments based on their business models and according to their focal points, customer groups, the focus of their innovations, their investment relevance and sustainability aspects. Activities that are not allocated to any of the divisions are recorded under Other.

The same accounting rules are used for segment reporting as those used for the Group, which are presented in these Notes. Transfers between the segments are generally executed at adjusted market-based prices, taking into account the higher cost efficiency and lower risk of intragroup transactions. Assets, as well as their depreciation and amortization, are allocated to the segments based on economic control. Assets used by more than one segment are allocated according to the percentage of usage.

A new Differentiated Steering model was introduced at the beginning of 2024. Two new most important financial key performance indicators were established for the BASF Group’s steering: income from operations before depreciation, amortization and special items (EBITDA before special items) and free cash flow. Accordingly, all segments are also measured by their absolute contribution to EBITDA before special items. To manage cash flow at segment level, a specific indicator, segment cash flow, is used. It includes the elements of free cash flow that can be managed by the operating divisions. In addition, specific steering indicators were defined for selected segments.

EBITDA before special items is determined based on income from operations (EBIT), which is calculated from gross profit on sales, selling expenses, general administrative expenses, research and development expenses, other operating income and expenses, and income from integral companies accounted for using the equity method. EBIT is adjusted for special items that may arise from the integration of acquired businesses, from restructuring measures, gains or losses on divestitures and sales of investments, as well as other expenses and income that may arise outside of ordinary business activities. To determine EBITDA before special items, depreciation, amortization, impairments and reversals of impairments on property, plant and equipment and intangible assets are added to EBIT before special items, provided they do not represent special items.

EBIT and EBIT before special items as well as EBITDA before special items are alternative performance measures that are not defined under IFRS and are to be considered complementary to the indicators defined by IFRS (for more information on changes in the steering concept, see the Combined Management’s Report).

Explanation of segments

The BASF Group’s business is run by 11 divisions, structured in six segments:

• Chemicals: Petrochemicals, Intermediates
• Materials: Performance Materials, Monomers
• Industrial Solutions: Dispersions & Resins, Performance Chemicals
• Nutrition & Care: Care Chemicals, Nutrition & Health
• Surface Technologies: Catalysts, Coatings
• Agricultural Solutions: Agricultural Solutions

As part of its strategic portfolio management, BASF started differentiating between its core and standalone businesses with the introduction of the “Winning Ways” strategy in September 2024. The core businesses, including the Chemicals, Materials, Industrial Solutions and Nutrition & Care segments, benefit from their deep integration into the value chains and the Production Verbund. The standalone businesses comprise the Surface Technologies and Agricultural Solutions segments, serve specific industries and compete with pure-play competitors.

The Chemicals segment comprises the Petrochemicals and Intermediates divisions and is the cornerstone of BASF’s Verbund structure. The segment mainly serves customers in downstream industries, especially in the chemical and plastics industries. In addition, it supplies the other segments with basic chemicals and intermediates, thereby contributing to the organic growth of the BASF Group. The segment’s competitiveness is strengthened by process and product innovations as well as the development of sustainable technologies.

The Materials segment is composed of the Performance Materials and the Monomers divisions. The segment offers advanced materials and their precursors for new applications and systems. Its product portfolio includes isocyanates and polyamides as well as inorganic basic products and specialties for plastics and plastics processing. In addition to specific technological knowledge, industry expertise and customer proximity, particularly products that contribute to the circular economy as well as sustainable production methods help differentiate BASF from its competitors in this segment.

The Industrial Solutions segment consists of the Dispersions & Resins and the Performance Chemicals divisions. This segment develops and markets ingredients and additives for industrial applications, such as polymer dispersions, resins, additives, electronic materials and antioxidants. Its customers are located in various key industries, such as the automotive, plastics and electronics industries. The focus of research and development is on increasing efficiency in the use of resources and in production structures, as well as on developing more sustainable products and production processes. Since January 1, 2025, the chemical and refining catalysts business has been reported as part of the Performance Chemicals division in the Industrial Solutions segment. It was previously part of the Catalysts division in the Surface Technologies segment.

The Nutrition & Care segment comprises the Care Chemicals division and the Nutrition & Health division. This segment produces ingredients for consumer applications in the areas of nutrition, home and personal care. Its customers include food and feed producers as well as the pharmaceutical, cosmetics and the detergent and cleaner industries. The increasing demand for more sustainable consumer goods and digitalization are key growth drivers in the segment.

The Surface Technologies segment bundles chemical solutions for surfaces in the Catalysts and Coatings divisions. Its portfolio range serves the automotive and chemical industries and includes catalysts, battery materials, automotive OEM and refinish coatings, surface treatment, and precious and base metal services. An innovative technology portfolio and tailor-made solutions for customers are the basis for the segment’s targeted growth. Since January 1, 2025, the Battery Materials and Environmental Catalyst and Metal Solutions divisions, which were formerly part of the Catalysts division, have been reported as independent operating divisions within the segment alongside the Coatings division. As of the same date, the chemical and refining catalysts business, previously reported in the Catalysts division, was allocated to the Performance Chemicals division in the Industrial Solutions segment.

The Agricultural Solutions segment consists of the division of the same name. Its product portfolio is designed for different crop systems, combining seeds and traits, seed treatment products, and biological and chemical crop protection products. Agricultural Solutions offers farmers innovative and sustainable solutions supported by digital tools. The segment aims for innovation-driven growth and a targeted expansion of the portfolio through collaboration and acquisitions.

The following activities and transactions are presented under Other:

• Cross-divisional corporate research working on long-term topics of strategic importance to the BASF Group. Furthermore, it focuses on the development of specific key technologies which are of overarching importance for the divisions.
• The BASF Group’s steering by corporate headquarters.
• Other businesses which include commodity trading, engineering and other services, as well as rental income and leases. In addition, discontinued operations and certain activities remaining after divestitures as well as remanent fixed costs resulting from organizational changes or restructuring that are not allocated to the operating divisions are reported here.
• Foreign currency results not allocated to the segments and measurement effects from the hedging of raw materials price and foreign currency exchange risks as well as gains and losses from the long-term incentive programs (LTI programs).
• Trade with renewable energies as well as activities in the Net Zero Accelerator unit, in which company-wide projects to achieve climate protection targets were bundled until December 31, 2024.
• Idle capacity costs from internal human resource platforms as well as consolidation effects that cannot be allocated to a division.

Income from operations before depreciation, amortization and special items of Other decreased by €112 million to –€578 million in 2024. The reasons for the decrease were mainly foreign currency results, hedging and other measurement effects included in miscellaneous expenses as well as lower earnings contributions from Other businesses. EBITDA of Other included special items of –€601 million, mainly for the class settlement, which does not constitute any admission of liability, in connection with the AFFF multidistrict litigation in the United States (for more information, see Note 23).

In the United States, sales to third parties in 2024 amounted to €15,303 million (previous year: €16,128 million) according to location of companies and €14,714 million (previous year: €15,764 million) according to location of customers. On December 31, 2024, the carrying amounts of intangible assets, property, plant and equipment, and investments accounted for using the equity method in the United States amounted to €10,975 million (previous year: €10,362 million).

In China, sales to third parties in 2024 amounted to €8,202 million (previous year: €8,950 million) according to location of companies and €8,113 million (previous year: €8,893 million) according to location of customers. On December 31, 2024, the carrying amounts of intangible assets, property, plant and equipment, and investments accounted for using the equity method amounted to €10,753 million (previous year: €7,802 million) in China.