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.

In general, 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 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.

The most important financial key performance indicators used for steering the BASF Group are 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 (for more information on the steering model, see the Combined Management’s Report).

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 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.

Explanation of segments

The composition of the Surface Technologies segment underwent several changes during the 2025 business year. Effective January 1, 2025, the former Catalysts division was split into two independent divisions: Environmental Catalyst and Metal Solutions (ECMS) and Battery Materials. At the same time, the Catalysts business with chemical and refining catalysts was allocated to the Performance Chemicals operating division within the Industrial Solutions segment. As of the beginning of the 2025 business year, the Surface Technologies segment therefore comprised the ECMS, Battery Materials and Coatings divisions. The prior-year figures were adjusted accordingly.

Furthermore, the Coatings division was affected by two significant portfolio measures in 2025, which will lead to its complete divestiture: First, the sale of the Brazilian decorative paints business to Sherwin-Williams, Cleveland, Ohio, was completed on October 1, 2025. Then, on October 10, 2025, an agreement was announced for the sale of the automotive OEM coatings, automotive refinish coatings and surface treatment businesses to Carlyle, Washington, D.C. This transaction is expected to close in the second quarter of 2026. In accordance with IFRS 5, these activities were allocated to the coatings business disposal group and are reported as discontinued operations as of September 30, 2025. Consequently, the sales and results of the disposal group are no longer reported as part of the sales and EBIT(DA) of the BASF Group and the Surface Technologies segment retroactively as of January 1, 2025. The prior-year figures were adjusted accordingly. Until the completion of the transaction with Carlyle, the coatings business disposal group’s income after taxes is presented as a separate item (income after taxes from discontinued operations) in BASF Group’s income after taxes. The 2024 figures were adjusted accordingly. The assets and liabilities of the coatings disposal group are allocated to Other in the segment reporting to ensure a consistent definition of the Surface Technologies segment for balance sheet and income statement figures. Due to this retroactive adjustment, the contributions of the Coatings division to the Surface Technologies segment in 2024 and 2025 include only the decorative paints business.

As of December 31, 2025, the BASF Group’s business comprised 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: ECMS, Battery Materials

• Agricultural Solutions: Agricultural Solutions

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, the Chemicals segment supplies the other segments with basic chemicals and intermediates, thereby contributing to the organic growth of BASF Group’s key value chains. 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 high-performance plastics and their precursors for new applications and systems. Its product portfolio includes isocyanates and polyamides as well as inorganic basic products and specialties for the plastics and plastics processing industries. In addition to specific technological knowledge, industry expertise and customer proximity, BASF’s products that contribute to the circular economy as well as sustainable production methods especially help to differentiate the company from its competitors in this segment.

The Industrial Solutions segment consists of the Dispersions & Resins and the Performance Chemicals divisions. They develop and market ingredients and additives for industrial applications, such as polymer dispersions, resins, chemical and refining catalysts, 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.

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

As a result of the changes described above, the Surface Technologies segment consists of the ECMS and Battery Materials divisions as of the end of 2025. Its product portfolio serves the automotive and chemical industries and includes emissions catalysts, battery materials, and precious and base metal services. An innovative technology portfolio and tailor-made solutions for customers are the basis for the success of this 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 following activities and transactions are presented under Other:

• Cross-divisional corporate research working on long-term topics of strategic importance to the BASF Group

• The BASF Group’s steering by corporate headquarters and centrally managed strategic projects

• Other businesses which include commodity trading, engineering and other services, rental income and leases, as well as renewable energy trading

• Certain activities remaining after divestitures as well as remanent fixed costs and one-time expenses resulting from organizational changes or restructuring that are not allocated to the operating divisions

• Assets and liabilities of discontinued operations, as well as any expenses and income arising in connection with the divestiture

• 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)

• Idle capacity costs from internal human resource platforms as well as consolidation effects that cannot be allocated to a division

EBITDA before special items of Other decreased compared with the previous year. This resulted mainly from higher expenses arising from the LTI program as well as lower earnings contributions from Other businesses. EBITDA in Other included special items amounting to -€1,128 million in 2025. This included special charges in the amount of €595 million relating to restructuring projects. Further expenses of €328 million were recorded in connection with the sale of BASF’s equity shares in the Nordlicht 1 and 2 wind farm projects.

In the United States, sales to third parties in 2025 amounted to €13,803 million (previous year: €14,502 million) according to location of companies and €13,134 million (previous year: €13,912 million) according to location of customers. On December 31, 2025, the carrying amounts of intangible assets, property, plant and equipment, and investments accounted for using the equity method in the United States amounted to €9,137 million (previous year: €10,975 million).

In China, sales to third parties in 2025 amounted to €7,827 million (previous year: €7,424 million) according to location of companies and €7,794 million (previous year: €7,333 million) according to location of customers. On December 31, 2025, the carrying amounts of intangible assets, property, plant and equipment, and investments accounted for using the equity method amounted to €10,370 million (previous year: €10,753 million) in China.