BASF SE

Quarterly Report • May 5, 2021

Quarterly Statement Q1 2021

BASF with strong start to 2021 business year

• Sales growth of 16% to €19.4 billion
• EBIT before special items increases 42% to €2.3 billion
• 2021 outlook for EBIT before special items raised to between €5.0 billion and €5.8 billion (previously: between €4.1 billion and €5.0 billion)

On the cover:

The new acetylene plant at the Ludwigshafen site in Germany has an annual capacity of 90,000 metric tons. Around 20 plants at the site use acetylene as a chemical building block and starting material for manufacturing many everyday products, including pharmaceuticals, plastics, solvents, electronic chemicals and highly elastic textile fibers. BASF customers use these products in the automotive, pharmaceutical, construction, consumer goods and textile industries. The integration of the plant into BASF's Verbund system offers advantages such as efficient use of resources, excellent production synergies and short supply routes.

	Key Figures: BASF Group Q1 2021	3
Contents	Business Review	4
	BASF Group	4
	Significant events	4
	Results of operations	4
	Net assets	5
	Financial position	5
	Outlook	7
	Chemicals	8
	Materials	9
	Industrial Solutions	10
	Surface Technologies	11
	Nutrition & Care	12
	Agricultural Solutions	13
	Other	14
	Regions	15
	Selected Financial Data	16
	Statement of Income	16
	Balance Sheet	17

Statement of Cash Flows 19

Key Figures BASF Group Q1 2021

2021 2020 +/– Sales million € 19,400 16,753 16% Income from operations before depreciation, amortization and special items million € 3,181 2,579 23% Income from operations before depreciation and amortization (EBITDA) million € 3,176 2,428 31% EBITDA margin % 16.4 14.5 − Depreciation and amortizationa million € 865 972 –11% Income from operations (EBIT) million € 2,311 1,456 59% Special items million € –10 –184 95% EBIT before special items million € 2,321 1,640 42% Income before income taxes million € 2,247 1,200 87% Income after taxes from continuing operations million € 1,810 881 105% Income after taxes from discontinued operations million € − 22 − Net income million € 1,718 885 94%
Earnings per share € 1.87 0.97 93%
Adjusted earnings per share € 2.00 1.26 59%
Research and development expenses million € 511 494 3%
Personnel expenses million € 2,947 2,826 4%
Employees (March 31) 110,261 118,276 –7%
Assets (March 31) million € 84,833 92,355 –8%
Investments including acquisitionsb million € 545 2,136 –74%
Equity ratio (March 31) % 46.0 47.0 −
Net debt (March 31) million € 15,962 18,794 –15%
Cash flows from operating activities million € –525 –1,030 49%
Free cash flow million € –981 –1,599 39%

a Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments)

b Additions to property, plant and equipment and intangible assets

BASF Group

Business Review BASF Group

Significant events

At a Capital Markets Day on March 26, 2021, BASF presented its roadmap to climate neutrality: BASF is setting itself even more ambitious goals than in the past and wants to achieve net zero emissions by 2050. Based on the most recent progress in developing low-emission and CO2-free technologies, the company is also significantly raising its medium-term 2030 target for reductions in greenhouse gas emissions: BASF now wants to reduce its greenhouse gas emissions worldwide by 25% compared with 2018 – and to achieve this despite targeted growth and the construction of an integrated Verbund site in Zhanjiang, China. Excluding the effects of the planned growth, this means cutting CO2 emissions in half in the current business by the end of this decade. Overall, BASF plans to invest up to €1 billion by 2025 to reach its new climate target and a further €2 billion to €3 billion by 2030.

Results of operations

Sales rose by €2,647 million compared with the first quarter of 2020 to €19,400 million. This was mainly due to higher prices and volume growth. Prices rose significantly in the Surface Technologies, Chemicals and Materials segments. All segments increased sales volumes. Negative currency effects had an offsetting impact.

Factors influencing BASF Group sales in Q1 2021

Compared with the prior-year quarter, EBIT before special items1 rose by €681 million to €2,321 million. This was primarily attributable to considerably higher earnings contributions from the Materials and Chemicals segments. The Surface Technologies segment also recorded considerable growth in EBIT before special items. By contrast, EBIT before special items declined considerably in Other and in the Nutrition & Care segment, and decreased slightly in the Industrial Solutions segment. In the Agricultural Solutions segment, EBIT before special items was on a level with the prior-year quarter.

Special items in EBIT amounted to –€10 million in the first quarter of 2021, compared with –€184 million in the prior-year quarter.

EBIT2 rose by €855 million compared with the first quarter of 2020 to €2,311 million. Income from operations before depreciation, amortization and special items (EBITDA before special items)3 increased by €602 million to €3,181 million and EBITDA3 rose by €748 million to €3,176 million in the same period.

Q1 EBITDA before special items

Million €
	2021	2020
EBIT	2,311	1,456
– Special items	–10	–184
EBIT before special items	2,321	1,640
+ Depreciation and amortization before special items	859	934
+ Impairments and reversals of impairments on property, plant and equipment and intangible assets before special items	1	5
Depreciation, amortization, impairments and reversals of impairments on property, plant and equipment and intangible assets before special items	860	939
EBITDA before special items	3,181	2,579

Q1 EBITDA

Million €
	2021	2020
EBIT	2,311	1,456
+ Depreciation and amortization	859	960
+ Impairments and reversals of impairments on property, plant and equipment and intangible assets	6	12
Depreciation, amortization, impairments and reversals of impairments on property, plant and equipment and intangible assets	865	972
EBITDA	3,176	2,428

1 For an explanation of this indicator, see page 34 of the BASF Report 2020, Value-Based Management

2 The calculation of income from operations (EBIT) is shown in the Statement of Income on page 16 of this quarterly statement.

3 For an explanation of this indicator, see page 58 of the BASF Report 2020, Results of Operations

BASF Group

At €68 million, net income from shareholdings improved by €236 million compared with the prior-year quarter. This is primarily attributable to the positive earnings contribution of €51 million from Wintershall Dea GmbH, after –€165 million in the first quarter of 2020. The non-integral equity-accounted shareholding in Solenis also contributed to the increase in net income from shareholdings, with €28 million (Q1 2020: –€1 million).

The financial result declined by €44 million to –€132 million, mainly from a lower other financial result due to expenses in connection with bonds in foreign currency and the corresponding hedging instruments. In the prior-year period, income arose from this item. This was partially offset by an improved interest result due to lower interest expenses for financial indebtedness.

Income before income taxes rose to €2,247 million, compared with €1,200 million in the first quarter of 2020. The tax rate decreased from 26.6% to 19.4%, due among other factors to the higher earnings contribution from equity-accounted shareholdings.

Compared with the first quarter of 2020, income after taxes increased by €907 million to €1,810 million. Of this amount, €1,718 million was attributable to shareholders of BASF SE. Noncontrolling interests accounted for €92 million after €18 million in the prior-year quarter, primarily as a result of improved earnings contributions from BASF PETRONAS Chemicals Sdn. Bhd., Kuala Lumpur, Malaysia; Shanghai BASF Polyurethane Company Ltd., Shanghai, China; and BASF TOTAL Petrochemicals LLC, Port Arthur, Texas.

Earnings per share in the first quarter of the year were €1.87, compared with €0.97 in the prior-year quarter. Earnings per share adjusted1 for special items and amortization of intangible assets amounted to €2.00 (Q1 2020: €1.26).

Q1 adjusted earnings per share

Million €
	2021	2020
Income after taxes	1,810	903
– Special items	–10	–184
+ Amortization, impairments and reversals of impairments on intangible assets	157	171
– Amortization, impairments and reversals of impairments on intangible assets contained in special items	−	26
– Adjustments to income taxes	46	74
– Adjustments to income after taxes from discontinued operations	−	–19
Adjusted income after taxes	1,931	1,177
– Adjusted noncontrolling interests	92	17
Adjusted net income	1,839	1,160
Weighted average number of outstanding shares in thousands	918,479	918,479
Adjusted earnings per share €	2.00	1.26

Net assets

At €84,833 million, total assets increased by €4,541 million compared with December 31, 2020, and declined by €7,522 million compared with March 31, 2020.

Noncurrent assets remained at the 2020 year-end level. The slight increase in property, plant and equipment and intangible assets primarily resulted from currency effects. Other receivables and miscellaneous assets rose compared with December 31, 2020, largely due to the increase in defined benefit assets. Offsetting effects were the decline in deferred taxes due to lower pension provisions, as well as the lower carrying amounts of non-integral investments accounted for using the equity method, mainly as a result of dividends at Wintershall Dea GmbH in the amount of €488 million.

Current assets rose by €4,756 million to €34,624 million. This was primarily due to the €3,056 million increase in trade accounts receivable. All segments contributed to the increase, especially the Agricultural Solutions segment as a result of seasonal effects. At €5,932 million, other receivables and miscellaneous assets were €1,259 million above the prior year-end figure, mainly due to higher precious metal trading items and higher fair values of derivatives. Cash and cash equivalents declined by €203 million.

Financial position

Equity rose by €4,636 million compared with December 31, 2020, to €39,034 million. This was driven by net income and higher other comprehensive income.

BASF Group

The increase in other comprehensive income was mainly due to actuarial gains and translation effects. The equity ratio rose from 42.8% to 46.0%.

Noncurrent liabilities decreased by €2,926 million compared with the 2020 year-end to €26,688 million, primarily due to lower pension provisions as a result of higher interest rates in relevant currency zones. The decline in noncurrent financial indebtedness mainly reflected the reclassification of a eurobond with a carrying amount of €426 million from noncurrent to current financial indebtedness. Negative currency effects had an offsetting impact. Lower tax provisions also contributed to the decline in noncurrent liabilities.

Current liabilities rose by €2,831 million to €19,111 million, mainly as a result of the €1,317 million increase in current financial indebtedness compared with the 2020 year-end figure. This was largely attributable to the above-mentioned reclassification of a bond with a carrying amount of €426 million, as well as new short-term bank loans taken out for approximately €2 billion. The repayment of a €1 billion bond and the reduction in commercial paper at BASF SE had an offsetting effect. The €1,008 million increase in current provisions to €3,833 million was primarily due to higher provisions for discounts and bonuses.

Net debt1 rose by €1,285 million compared with the 2020 year-end, mainly as a result of the €1,082 million increase in financial indebtedness.

Net debt

Million €
		Mar. 31, 2021 Dec. 31, 2020
Noncurrent financial indebtedness	15,584	15,819
+ Current financial indebtedness	4,712	3,395
Financial indebtedness	20,296	19,214
– Marketable securities	207	207
– Cash and cash equivalents	4,127	4,330
Net debt	15,962	14,677

Cash flows from operating activities amounted to –€525 million, an improvement of €505 million compared with the prior-year quarter. This development was mainly driven by the €833 million increase in net income. The increase in net working capital led to cash tied up of €2,773 million. This was largely attributable to trade accounts receivable, which rose by €2,852 million as a result of seasonal factors. In the prior-year quarter, cash of €3 billion was tied up, also primarily due to higher trade accounts receivable and the reduction in trade accounts payable.

Cash flows from investing activities amounted to –€435 million. Cash outflows were therefore €1,385 million lower than in the prioryear period. In the first quarter of 2020, the acquisition of Solvay's integrated polyamide business led to payments of €1,245 million. Payments made for property, plant and equipment and intangible assets amounted to €456 million in the first quarter of 2021, down €113 million from the prior-year figure.

Cash flows from financing activities amounted to €710 million, mainly from the increase in financial and similar liabilities. Cash inflows rose more strongly in the prior-year quarter, by around €3.6 billion.

Free cash flow2 improved by €618 million to –€981 million as a result of higher cash flows from operating activities in conjunction with lower payments made for property, plant and equipment and intangible assets.

Q1 free cash flow

Million €
	2021	2020
Cash flows from operating activities	–525	–1,030
– Payments made for property, plant and equipment and intangible assets	456	569
Free cash flow	–981	–1,599

BASF enjoys good credit ratings, especially compared with competitors in the chemical industry. On March 4, 2021, Standard & Poor's confirmed its long and short-term ratings for BASF of A/A-1/ outlook negative. Fitch confirmed its rating of A/F1/outlook stable on February 12, 2021. Moody's confirmed its rating of A3/P-2/ outlook stable on February 12, 2021, as well.

2 For an explanation of this indicator, see page 65 of the BASF Report 2020, Financial Position

¹ For an explanation of this indicator, see page 64 of the BASF Report 2020, Financial Position

BASF Group

Outlook

Early economic indicators have risen over the past few months, signaling a stronger recovery in macroeconomic activity than we previously assumed. However, the renewed rise in infection rates in many countries and ongoing restrictions on economic activity mean that the economic situation is still extremely fragile. In addition, disruptions to global supply chains could temporarily impact industry growth. Against this background, the assumptions presented in the BASF Report 2020 for growth in global gross domestic product and industrial and chemical production have been raised moderately. Expectations for oil prices have also been revised.

The assessment of the global economic environment in 2021 has been adjusted as follows (previous forecast from the BASF Report 2020 in parentheses):

• Growth in gross domestic product: 5.0% (4.3%)
• Growth in industrial production: 5.0% (4.4%)
• Growth in chemical production: 5.0% (4.4%)
• Average euro/dollar exchange rate of \$1.18 per euro (unchanged)
• Average annual oil price (Brent crude) of \$60 per barrel (\$50 per barrel)

Some of the opportunities for higher volumes and margins presented in the BASF Report 2020 have materialized and led to considerable year-on-year earnings growth in the first quarter of 2021, especially in the Materials, Chemicals and Surface Technologies segments. These were offset in part by risks that materialized as a result of higher raw materials prices.

Based on the development of sales and earnings in the first quarter of 2021, the stronger-than-expected recovery of the global economy and much higher raw materials prices than planned, the forecast for the BASF Group presented in the BASF Report 2020 was revised as follows (previous forecast from the BASF Report 2020 in parentheses):

• Sales growth to between €68 billion and €71 billion (between €61 billion and €64 billion)
• EBIT before special items of between €5.0 billion and €5.8 billion (between €4.1 billion and €5.0 billion)
• Return on capital employed (ROCE) of between 9.2% and 11.0% (between 8.0% and 9.2%)
• Increase in Accelerator sales to between €19.0 billion and €20.0 billion (between €18.0 billion and €19.0 billion)
• Stabilization of CO2 emissions at between 20.5 million metric tons and 21.5 million metric tons (unchanged)

For more information, see the outlook for 2021 on page 155 onward of the BASF Report 2020

However, the market environment continues to be dominated by a high level of uncertainty. Risks could arise if restrictions on macroeconomic activity continue for longer than expected as a result of measures to fight the coronavirus pandemic. Opportunities could arise from a faster vaccination rate and a more rapid recovery of the economy as a whole, as well as a continuation of the positive margin trend.

For the remaining opportunity and risk factors, the statements made in the BASF Report 2020 continue to apply overall.

According to the company's assessment, there continue to be no individual risks that pose a threat to the continued existence of the BASF Group. The same applies to the sum of individual risks, even in the case of another or an intensification of the global economic crisis.

For more information, see Opportunities and Risks on page 158 onward of the BASF Report 2020

Chemicals

Chemicals

Q1 2021

Segment data – Chemicals

Compared with the first quarter of 2020, sales1 in the Chemicals segment rose considerably as a result of sales growth in both divisions.

Factors influencing sales in Q1 2021 – Chemicals

		Chemicals Petrochemicals	Intermediates
Volumes	7%	6%	9%
Prices	15%	19%	7%
Portfolio	–1%	–1%	0%
Currencies	–5%	–6%	–4%
Sales	16%	18%	12%

The sales increase was primarily due to significantly higher price levels. The Petrochemicals division increased prices for steam cracker products, styrene monomers, acrylics and oxo alcohols in particular. This mainly reflected the passing on of higher raw materials prices. The Intermediates division also achieved higher prices, especially in Asia, mostly in the butanediol and derivatives and the acids and polyalcohols businesses.

Sales volumes increased significantly as well due to a recovery in demand. In the Petrochemicals division, volumes were higher for steam cracker products and acrylic monomers in particular. Volumes rose significantly in the Intermediates division, especially in the butanediol and derivatives business. In both divisions, sales volumes were negatively impacted by plant shutdowns in North America due to the cold weather as well as production outages and raw material bottlenecks.

Million €
	Q1
	2021	2020	+/–
Sales to third parties	2,736	2,350	16%
of which Petrochemicals	1,937	1,639	18%
Intermediates	799	711	12%
Income from operations before depreciation, amortization and special items	737	391	88%
Income from operations before depreciation and amortization (EBITDA)	784	386	103%
EBITDA margin %	28.7	16.4	−
Depreciation and amortizationa	179	216	–17%
Income from operations (EBIT)	605	170	256%
Special items	47	–4
EBIT before special items	558	174	221%
Assets (March 31)	8,400	9,226	–9%
Investments including acquisitionsb	128	360	–64%
Research and development expenses	26	25	4%

a Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments)

b Additions to property, plant and equipment and intangible assets

Sales performance was weighed down by negative currency effects, mainly relating to the U.S. dollar.

Income from operations (EBIT) before special items1 rose considerably compared with the first quarter of 2020 in both divisions, especially in the Petrochemicals division. Earnings development in both divisions was driven by higher margins as a result of a recovery in demand, an improvement in income from equity-accounted companies, and lower fixed costs.

EBIT included special income from the sale of the condensate splitter in Port Arthur, Texas, to Total Petrochemicals & Refining USA, Inc. in the first quarter of 2021.

1 For sales, "slight" represents a change of 1%–5%, while "considerable" applies to changes of 6% and higher. "At prior-year level" indicates no change (+/–0%). For earnings, "slight" means a change of 1%–10%, while "considerable" is used for changes of 11% and higher. "At prior-year level" indicates no change (+/–0%).

Materials

Materials

Q1 2021

Segment data – Materials

In the Materials segment, sales in both divisions were considerably higher than in the prior-year quarter.

Factors influencing sales in Q1 2021 – Materials

	Materials	Performance Materials	Monomers
Volumes	9%	12%	6%
Prices	12%	4%	22%
Portfolio	3%	2%	3%
Currencies	–4%	–5%	–3%
Sales	20%	13%	28%

The sales increase was mainly attributable to significantly higher prices and volumes.

In the Monomers division, price levels rose for isocyanates in particular. The Performance Materials division recorded higher prices, especially for polyurethane systems, due to higher raw materials prices.

Volume growth was primarily driven by a recovery in demand. The Performance Materials division increased volumes in Asia in particular. Here, the prior-year quarter was negatively impacted by a collapse in demand as a result of the pandemic, especially in China. Sales volumes also rose in Europe compared with the prior-year quarter, largely due to stronger demand from the transportation and construction industries. Volumes also rose in the Monomers division, particularly for methylene diphenyl diisocyanate (MDI). Plant shutdowns in North America due to the cold weather led to significant

Million €
	Q1
	2021	2020	+/–
Sales to third parties	3,447	2,874	20%
of which Performance Materials	1,732	1,531	13%
Monomers	1,715	1,343	28%
Income from operations before depreciation, amortization and special items	863	415	108%
Income from operations before depreciation and amortization (EBITDA)	843	325	159%
EBITDA margin	% 24.5	11.3	−
Depreciation and amortizationa	195	206	–5%
Income from operations (EBIT)	648	119	445%
Special items	–24	–90	73%
EBIT before special items	672	209	222%
Assets (March 31)	9,696	10,642	–9%
Investments including acquisitionsb	105	1,419	–93%
Research and development expenses	42	45	–7%

a Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments)

b Additions to property, plant and equipment and intangible assets

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 in both divisions was weighed down by currency effects.

Income from operations (EBIT) before special items rose considerably. This was mainly driven by a considerably higher earnings contribution from the Monomers division due to improved isocyanate margins on the back of higher prices. EBIT before special items rose slightly in the Performance Materials division. Volume growth more than offset lower margins from higher raw materials prices.

As in the prior-year quarter, EBIT included special charges from the integration of the polyamide business acquired from Solvay.

Industrial Solutions

Q1 2021

Sales in the Industrial Solutions segment were at the level of the prior-year quarter. Slightly higher sales in the Dispersions & Pigments division were offset by a slight decrease in the Performance Chemicals division.

Factors influencing sales in Q1 2021 – Industrial Solutions

	Industrial Solutions	Dispersions & Pigments	Performance Chemicals
Volumes	5%	8%	3%
Prices	–1%	0%	–3%
Portfolio	0%	0%	0%
Currencies	–4%	–4%	–5%
Sales	0%	4%	–5%

The segment's sales were positively impacted by higher volumes. In the Dispersions & Pigments division, sales volumes rose in almost all business areas. In the Performance Chemicals division, volume growth was mainly driven by the plastic additives business.

Sales performance was weighed down by negative currency effects, mainly relating to the U.S. dollar.

Sales were also reduced by lower prices in the Performance Chemicals division, especially in the fuel and lubricant solutions business and in the plastic additives business. Prices in the Dispersions & Pigments division were on a level with the prior-year quarter.

Segment data – Industrial Solutions

Million €
			Q1
		2021	2020	+/–
Sales to third parties		2,108	2,098	0%
of which Dispersions & Pigments		1,349	1,301	4%
Performance Chemicals		759	797	–5%
Income from operations before depreciation, amortization and special items		350	343	2%
Income from operations before depreciation and amortization (EBITDA)		343	335	2%
EBITDA margin	%	16.3	16.0	−
Depreciation and amortizationa		84	95	–12%
Income from operations (EBIT)		259	240	8%
Special items		–7	–33	79%
EBIT before special items		266	273	–3%
Assets (March 31)		6,855	7,202	–5%
Investments including acquisitionsb		62	67	–7%
Research and development expenses		44	45	–2%

a Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments)

b Additions to property, plant and equipment and intangible assets

Income from operations (EBIT) before special items was slightly below the prior-year quarter. Considerably higher earnings in the Dispersions & Pigments division were unable to completely offset the significantly lower earnings contribution from the Performance Chemicals division. This was mainly due to lower margins as a result of increased raw materials prices and negative currency effects.

The increase in earnings in the Dispersions & Pigments division was primarily attributable to lower fixed costs and volume growth. The division's earnings were weighed down by negative currency effects.

Surface Technologies

Surface Technologies

Q1 2021

Segment data – Surface Technologies

Sales in the Surface Technologies segment rose considerably compared with the first quarter of 2020. The Catalysts division recorded considerable sales growth, while the Coatings division saw a slight increase.

Factors influencing sales in Q1 2021 – Surface Technologies

	Surface Technologies	Catalysts	Coatings
Volumes	16%	18%	12%
Prices	31%	37%	1%
Portfolio	0%	0%	0%
Currencies	–10%	–10%	–8%
Sales	37%	45%	5%

The sales increase was largely attributable to higher price levels in the Catalysts division as a result of higher precious metal prices. This led to a considerable increase in sales in precious metal trading to €2,904 million (Q1 2020: €2,278 million). In the Coatings division, prices were above the prior-year quarter in almost all business areas.

Significantly higher volumes in both divisions also contributed to the development of sales. In the Catalysts division, higher sales volumes for mobile emissions and chemical catalysts more than compensated for lower volumes in the refining catalysts business. Volume growth in the Coatings division was primarily driven by a recovery in automotive production in Asia following the pandemic-related

Million €
			Q1
		2021	2020	+/–
Sales to third parties		5,947	4,328	37%
of which Catalysts		5,110	3,532	45%
Coatings		837	796	5%
Income from operations before depreciation, amortization and special items		470	338	39%
Income from operations before depreciation and amortization (EBITDA)		466	334	40%
EBITDA margin	%	7.8	7.7	−
Depreciation and amortizationa		110	117	–6%
Income from operations (EBIT)		356	217	64%
Special items		–4	–3	–33%
EBIT before special items		360	220	64%
Assets (March 31)		13,349	12,403	8%
Investments including acquisitionsb		73	83	–12%
Research and development expenses		67	55	22%

a Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments)

b Additions to property, plant and equipment and intangible assets

collapse in the prior-year quarter. This resulted in significantly higher volumes, especially in the automotive OEM coatings business. Sales volumes of decorative paints and automotive refinish coatings also rose considerably in response to stronger demand. Volumes rose slightly in the surface treatment business.

This was partially offset by currency effects, mainly in North America and Europe.

Income from operations (EBIT) before special items rose con siderably compared with the first quarter of 2020. This was largely driven by volume growth in both divisions. The positive development in earnings was supported by lower fixed costs, especially in the Catalysts division.

Nutrition & Care

Q1 2021

Segment data – Nutrition & Care

Sales in both divisions of the Nutrition & Care segment declined slightly compared with the prior-year quarter.

Factors influencing sales in Q1 2021 – Nutrition & Care

	Nutrition & Care		Care Chemicals Nutrition & Health
Volumes	3%	2%	4%
Prices	–1%	0%	–3%
Portfolio	0%	0%	0%
Currencies	–5%	–5%	–5%
Sales	–3%	–3%	–4%

The development of sales primarily reflected negative currency effects, mainly relating to the U.S. dollar.

Sales were negatively impacted by slightly lower price levels overall. This mainly resulted from lower prices in the Nutrition & Health division, especially in the aroma ingredients and animal nutrition businesses. In the Care Chemicals division, prices were on a level with the prior-year quarter. Higher prices in the oleo surfactants and fatty alcohols business compensated for lower prices in the other business areas.

Sales volumes were slightly above the prior-year quarter in both divisions. In the Care Chemicals division, higher volumes in the home care, industrial and institutional cleaning and industrial formulators business more than compensated for lower volumes in the other business areas. The Nutrition & Health division recorded significantly higher volumes in the aroma ingredients and pharmaceutical businesses. This was partially offset by significantly lower sales volumes in the animal nutrition business.

Million €
		Q1
	2021	2020	+/–
Sales to third parties	1,533	1,582	–3%
of which Care Chemicals	1,059	1,088	–3%
Nutrition & Health	474	494	–4%
Income from operations before depreciation, amortization and special items	316	357	–11%
Income from operations before depreciation and amortization (EBITDA)	313	352	–11%
EBITDA margin %	20.4	22.3	−
Depreciation and amortizationa	98	108	–9%
Income from operations (EBIT)	215	244	–12%
Special items	–3	–10	70%
EBIT before special items	218	254	–14%
Assets (March 31)	6,579	6,546	1%
Investments including acquisitionsb	100	102	–2%
Research and development expenses	40	37	8%

a Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments)

b Additions to property, plant and equipment and intangible assets

Income from operations (EBIT) before special items decreased

considerably compared with the prior-year quarter. The decline in earnings impacted both divisions and primarily reflected lower margins as a result of lower sales.

Agricultural Solutions

Q1 2021

Segment data – Agricultural Solutions

Million €

Sales in the Agricultural Solutions segment rose slightly compared with the first quarter of 2020. Volumes were above the prior-year quarter in all regions. Higher price levels also contributed to sales growth. Significantly negative currency effects had an offsetting impact.

Factors influencing sales in Q1 2021 – Agricultural Solutions

Sales	1%
Currencies	–8%
Portfolio	0%
Prices	2%
Volumes	7%

Sales in Europe declined slightly as a result of negative currency effects, especially in eastern Europe. By contrast, higher price levels had a positive impact on sales. Volumes were slightly above the prior-year quarter, especially for fungicides.

Sales in North America decreased slightly due to negative currency effects. Volumes rose, especially for field crop seeds and in particular for canola (oilseed rape) in Canada. Fungicide volumes also increased. Prices were on a level with the prior-year quarter.

In Asia, sales rose considerably as a result of higher sales volumes, especially of fungicides, primarily in China, India and Korea. Negative currency effects had an offsetting impact.

		2021	2020	+/–
Sales to third parties		2,846	2,819	1%
Income from operations before depreciation, amortization and special items		971	989	–2%
Income from operations before depreciation and amortization (EBITDA)		968	967	0%
EBITDA margin	%	34.0	34.3	−
Depreciation and amortizationa		164	180	–9%
Income from operations (EBIT)		804	787	2%
Special items		–3	–22	86%
EBIT before special items		807	809	0%
Assets (March 31)		16,546	17,997	–8%
Investments including acquisitionsb		48	65	–26%

Research and development expenses 216 207 4%

a Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments)

b Additions to property, plant and equipment and intangible assets

Sales rose considerably in the region South America, Africa, Middle East. This was mainly driven by increased volumes resulting from a late season. Higher price levels also had a positive impact on sales. Sales development was weighed down by significantly negative currency effects, mainly from the Brazilian real.

Income from operations (EBIT) before special items was on a level with the first quarter of 2020. Strong volume growth and lower fixed costs compensated for the negative currency effects.

Q1

Other

Other

Q1 2021

Financial data – Other

Sales in Other rose considerably compared with the first quarter of 2020. This was primarily the result of considerable sales growth in commodity trading.

Income from operations (EBIT) before special items declined considerably. This was mainly due to higher additions to provisions for variable compensation components (bonus) as a result of the strong first quarter. Expenses for the long-term incentive program also contributed to the decline in earnings, after positive valuation effects from the program in the prior-year quarter.

Million €
		Q1
	2021	2020	+/–
Sales	783	702	12%
Income from operations before depreciation, amortization and special items	–526	–254
Income from operations before depreciation and amortization (EBITDA)	–541	–271	–100%
Depreciation and amortizationa	35	50	–30%
Income from operations (EBIT)	–576	–321	–79%
Special items	–16	–22	27%
EBIT before special items	–560	–299	–87%
of which costs for cross-divisional corporate research	–69	–75	8%
costs of corporate headquarters	–58	–54	–7%
other businesses	30	27	11%
foreign currency results, hedging and other measurement effects	–53	54
miscellaneous income and expenses	–410	–251	–63%
Assets (March 31)b	23,408	28,339	–17%
Investments including acquisitionsc	29	40	–28%
Research and development expenses	76	80	–5%

a Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments)

b Contains assets of businesses recognized under Other as well as reconciliation to assets of the BASF Group

c Additions to property, plant and equipment and intangible assets

Regions

Key Figures Business Review Selected Financial Data

Regions

Regions

Million €
		Sales Location of company		Sales Location of customer			Income from operations Location of company
Q1	2021	2020	+/–	2021	2020	+/–	2021	2020	+/–
Europe	8,129	7,520	8%	7,831	7,211	9%	792	681	16%
of which Germany	3,109	3,273	–5%	1,814	1,688	7%	254	198	28%
North America	5,790	5,246	10%	5,558	4,985	11%	713	474	50%
Asia Pacific	4,722	3,295	43%	4,857	3,473	40%	770	286	169%
South America, Africa, Middle East	759	692	10%	1,154	1,084	6%	36	15	140%
BASF Group	19,400	16,753	16%	19,400	16,753	16%	2,311	1,456	59%

Q1 2021

Sales at companies located in Europe rose by 8% compared with the first quarter of 2020. This was primarily driven by higher prices, especially in the Surface Technologies and Materials segments. Sales were lifted by volume growth in almost all segments. By contrast, sales performance was reduced by currency effects. Income from operations (EBIT) improved by €111 million to €792 million. This was the result of significantly higher contributions from the Materials and Chemicals segments. By contrast, EBIT declined in Other and in the remaining segments.

In North America, sales rose by 10% in euros and 20% in local currency terms compared with the prior-year quarter. The sales increase was primarily attributable to higher price levels, mainly from higher precious metal prices in the Surface Technologies segment. Higher volumes, especially in the Agricultural Solutions and Surface Technologies segments, also supported the sales performance. Currency effects had an offsetting impact in all segments. EBIT rose by €239 million to €713 million. All segments recorded an improvement in earnings, especially the Chemicals segment.

Sales in Asia Pacific rose by 43% in euros and 49% in local currency terms. The development of sales was mainly driven by significantly higher volumes in all segments, especially the Surface Technologies segment. Sales were boosted by higher prices, particularly in the Surface Technologies and Materials segments. Portfolio effects in the Materials segment from the acquisition of Solvay's integrated polyamide business had a positive impact on sales. Negative currency effects had an offsetting impact. EBIT rose by €484 million to €770 million. All segments recorded a considerable increase in EBIT, especially the Materials and Chemicals segments.

In the region South America, Africa, Middle East, sales rose by 10% in euros and 38% in local currency terms. This was largely attributable to higher prices and volumes in all segments. Portfolio effects from the acquisition of Solvay's integrated polyamide business had a positive impact on sales development. Currency effects had an offsetting impact. At €36 million, EBIT was up €21 million from the first quarter of 2020. This resulted from a considerable improvement in earnings contributions from the Agricultural Solutions, Materials, Surface Technologies and Chemicals segments.

Key Figures Business Review Selected Financial Data Statement of Income

Selected Financial Data Statement of Income

Statement of income

2021 Sales revenue 19,400 Cost of sales –14,302 Gross profit on sales 5,098 Selling expenses –1,908 General administrative expenses –326 Research and development expenses –511 Other operating income 336 Other operating expenses –516 Income from integral companies accounted for using the equity method 138 Income from operations (EBIT) 2,311 Income from non-integral companies accounted for using the equity method 82 Income from other shareholdings 12 Expenses from other shareholdings –26 Net income from shareholdings 68 Interest income 38 Interest expenses –123 Interest result –85 Other financial income 15 Other financial expenses –62 Other financial result –47 Financial result –132 Income before income taxes 2,247	Q1 2020 16,753 –12,226 4,527
		+/–
		16%
		–17%
		13%
	–1,971	3%
	–324	–1%
	–494	–3%
	500	–33%
	–788	35%
	6
	1,456	59%
	–166
	12	−
	–14	–86%
	–168
	46	–17%
	–150	18%
	–104	18%
	88	–83%
	–72	14%
	16
	–88	–50%
	1,200	87%
Income taxes –437	–319	–37%
Income after taxes from continuing operations 1,810	881	105%
Income after taxes from discontinued operations −	22	−
Income after taxes 1,810	903	100%
of which attributable to shareholders of BASF SE (net income) 1,718	885	94%
attributable to noncontrolling interests 92	18	411%
Earnings per share from continuing operations € 1.87	0.95	97%
Earnings per share from discontinued operations € −	0.02	−
Basic earnings per share € 1.87	0.97	93%
Diluted earnings per share € 1.87	0.97	93%

Balance Sheet

Balance Sheet

Assets

Million €
	March 31, 2021	December 31, 2020	+/–	March 31, 2020	+/–
Intangible assets	13,299	13,145	1%	15,245	–13%
Property, plant and equipment	19,814	19,647	1%	22,203	–11%
Integral investments accounted for using the equity method	2,031	1,878	8%	1,873	8%
Non-integral investments accounted for using the equity method	10,555	10,874	–3%	12,894	–18%
Other financial assets	557	582	–4%	655	–15%
Deferred tax assets	2,826	3,386	–17%	2,223	27%
Other receivables and miscellaneous assets	1,127	912	24%	1,254	–10%
Noncurrent assets	50,209	50,424	0%	56,347	–11%
Inventories	10,596	10,010	6%	11,233	–6%
Accounts receivable, trade	12,531	9,466	32%	11,390	10%
Other receivables and miscellaneous assets	5,932	4,673	27%	5,056	17%
Marketable securities	207	207	−	343	–40%
Cash and cash equivalentsa	4,127	4,330	–5%	3,829	8%
Assets of disposal groups	1,231	1,182	4%	4,157	–70%
Current assets	34,624	29,868	16%	36,008	–4%
Total assets	84,833	80,292	6%	92,355	–8%

a For a reconciliation of the amounts in the statement of cash flows with the balance sheet item cash and cash equivalents, see page 19 of this quarterly statement.

Balance Sheet

Equity and liabilities

Million €
	March 31, 2021	December 31, 2020	+/–	March 31, 2020	+/–
Subscribed capital	1,176	1,176	−	1,176	−
Capital reserves	3,115	3,115	−	3,115	−
Retained earnings	39,628	37,911	5%	42,940	–8%
Other comprehensive income	–5,678	–8,474	33%	–4,709	–21%
Equity attributable to shareholders of BASF SE	38,241	33,728	13%	42,522	–10%
Noncontrolling interests	793	670	18%	848	–6%
Equity	39,034	34,398	13%	43,370	–10%
Provisions for pensions and similar obligations	6,016	8,566	–30%	7,066	–15%
Deferred tax liabilities	1,534	1,447	6%	1,647	–7%
Tax provisions	385	587	–34%	519	–26%
Other provisions	1,517	1,484	2%	1,239	22%
Financial indebtedness	15,584	15,819	–1%	14,394	8%
Other liabilities	1,652	1,711	–3%	1,862	–11%
Noncurrent liabilities	26,688	29,614	–10%	26,727	0%
Accounts payable, trade	5,354	5,291	1%	4,750	13%
Provisions	3,833	2,825	36%	3,335	15%
Tax liabilities	1,246	988	26%	963	29%
Financial indebtedness	4,712	3,395	39%	8,572	–45%
Other liabilities	3,599	3,440	5%	3,509	3%
Liabilities of disposal groups	367	341	8%	1,129	–67%
Current liabilities	19,111	16,280	17%	22,258	–14%
Total equity and liabilities	84,833	80,292	6%	92,355	–8%

Key Figures Business Review Selected Financial Data Statement of Cash Flows

Statement of Cash Flows

Statement of cash flows

Million €		Q1
	2021	2020
Net income	1,718	885
Depreciation and amortization of property, plant and equipment and intangible assets	865	999
Changes in net working capital	–2,773	–3,000
Miscellaneous items	–335	86
Cash flows from operating activities	–525	–1,030
Payments made for property, plant and equipment and intangible assets	–456	–569
Acquisitions/divestitures	–7	–1,245
Changes in financial assets and miscellaneous items	28	–6
Cash flows from investing activities	–435	–1,820
Capital increases/repayments and other equity transactions	–	1
Changes in financial and similar liabilities	717	4,329
Dividends	–7	–36
Cash flows from financing activities	710	4,294
Cash-effective changes in cash and cash equivalentsa	–250	1,444
Cash and cash equivalents at the beginning of the period and other changesb	4,382	2,421
Cash and cash equivalents at the end of the periodb	4,132	3,865

a In the first quarter of 2020, BASF SE transferred securities in the amount of €80 million to BASF Pensionstreuhand e.V., Ludwigshafen am Rhein, Germany. This transfer was not cash effective and therefore had no effect on the statement of cash flows.

b In 2021 and 2020, cash and cash equivalents presented in the statement of cash flows deviate from the figures in the balance sheet, as the relevant amounts were reclassified in the balance sheet to assets of disposal groups. The disposal group for the pigments business contained cash and cash equivalents of €5 million as of January 1, 2021, and March 31, 2021. As of January 1, 2020, cash and cash equivalents deviate from the figure in the balance sheet due to the reclassification of cash and cash equivalents to the disposal groups for the construction chemicals business (€21 million) and the pigments business (€7 million). As of March 31, 2020, €24 million was reclassified in the balance sheet to the disposal group for the construction chemicals business, and €12 million to the disposal group for the pigments business.

Half-Year Financial Report 2021

July 28, 2021

Quarterly Statement Q3 2021

October 27, 2021

BASF Report 2021

February 25, 2022

Quarterly Statement Q1 2022 / Annual Shareholders' Meeting 2022

April 29, 2022

Half-Year Financial Report 2022

July 27, 2022

Further information

Published on April 29, 2021 You can find this and other BASF publications online at basf.com/publications

Contact

General inquiries Phone: +49 621 60-0, email: global.info@basf.com

Media Relations Jens Fey, phone: +49 621 60-99123

Investor Relations Dr. Stefanie Wettberg, phone: +49 621 60-48002

Internet basf.com

Forward-looking statements and forecasts

This quarterly statement contains forward-looking statements. These statements are based on current estimates and projections of the Board of Executive Directors and currently available information. Forward-looking statements are not guarantees of the future developments and results outlined therein. These are dependent on a number of factors; they involve various risks and uncertainties; and they are based on assumptions that may not prove to be accurate. Such risk factors include those discussed in Opportunities and Risks on pages 158 to 166 of the BASF Report 2020. The BASF Report is available online at basf.com/report. We do not assume any obligation to update the forward-looking statements contained in this quarterly statement above and beyond the legal requirements.

BASF supports the chemical industry's global Responsible Care initiative. COMC 2106 E