Compound statement

BASF: Q1 2022 Quarterly Statement

Quarterly statement

Q1 2022

Q1 BASF Group 22 Quarterly statement

On the cover and this page:

Together with our customers, we develop innovative products that accelerate the transformation to electromobility and enable more sustainable production. An example is the cathodic electrocoat (e-coat) CathoGuard®, which BASF has improved and refined using numerical methods. It allows application at lower temperatures, reducing CO2 emissions while maintaining the same product properties. Additionally, the technology meets established sustainability standards as it is free of tin and hazardous air pollutants and contains only a low level of volatile organic compounds. The photo shows Hendré Swart, head of the simulation/automation development laboratory. He analyzes customer samples to assess the damage caused by 3D stone chips.

For more information on durable solutions, see basf.com/research-press-conference

BASF Group – Q1 2022

Content

In short

Key figures: BASF Group Q1 2022 4

Sales – Q1 2022

Sales by segment and Other – Q1 2022

Company review 5

BASF Group 5

Milestones 5

Operating results 6

Net assets 7

Financial situation 7

Outlook 9

Chemicals 10

Materials 11

Industrial Solutions 12

Surface Technologies 13

Nutrition & Care 14

Agricultural Solutions 15

Other 16

Regions 17

Selected financial data 18

Income statement 18

Review 19

Statement of cash flows 21

€23.1 billion

(Q1 2021: €19.4 billion)

EBIT before special items – Q1 2022

€2.8 billion

(Q1 2021: €2.3 billion)

Sales by region – Q1 2022

Outlook

Outlook as of February 25, 2022, maintained for the 2022 financial year:

  • Sales: 74 billion euros to 77 billion euros

  • EBIT before exceptional items: €6.6 billion to €7.2 billion

  • Return on capital employed (ROCE): 11.4% to 12.6%

  • CO2 emissions: 19.6 million metric tons to 20.6 million metric tons

(Q1 2021: €0.8 billion)

BASF Group – Q1 2022Key figures

Key figures

BASF Group Q1 2022

Sales

Operating profit before depreciation and special items

Operating profit before depreciation and amortization (EBITDA)

EBITDA margin

Depreciation and amortization

Operating result (EBIT)

Special items

EBIT before special items

income before taxes

Income after taxes

Net revenue

Earnings per share

Adjusted earnings per share

Research and development costs

Personal expenses

Employees (March 31)

Active (March 31)

Investments including acquisitionsEquity ratio (March 31)

Net debt (March 31)

Cash flow from operating activities

Free cash flow

a Depreciation of property, plant and equipment and intangible assets (including depreciation and reversal of depreciation)

  • b Due to the ongoing share buyback program, the weighted average number of shares outstanding in the first quarter of 2022 was 912,885,116.

  • vs Additions to tangible and intangible assets

2022

Sales

Million €

23,083

19,400

19.0%

Operating profit before depreciation and special items

Million €

3,743

3,181

17.7%

Operating profit before depreciation and amortization (EBITDA)

Million €

3,709

3,176

16.8%

EBITDA margin

%

16.1

16.4

Depreciation and amortizationa

Million €

924

865

6.8%

Operating result (EBIT)

Million €

2,785

2,311

20.5%

Special items

Million €

-34

-ten

-237.1%

EBIT before special items

Million €

2,818

2,321

21.4%

income before taxes

Million €

1,878

2,247

-16.4%

Income after taxes

Million €

1,321

1,810

-27.0%

Net revenue

Million €

1,221

1,718

-28.9%

Earnings per shareb

1.34

1.87

-28.3%

Adjusted earnings per shareb

2.70

2.00

35.0%

Research and development costs

Million €

569

511

11.4%

Personal expenses

Million €

3,067

2,947

4.1%

Employees (March 31)

110,828

110,261

0.5%

Active (March 31)

Million €

93,983

84,833

10.8%

Investments including acquisitionsvs

Million €

741

545

36.0%

Equity ratio (March 31)

%

45.3

46.0

Net debt (March 31)

Million €

16,251

15,962

1.8%

Cash flow from operating activities

Million €

-290

-525

44.7%

Free cash flow

Million €

-893

-981

8.9%

2021

+/-

BASF Group – Q1 2022BASF Group

Activity Report

BASF Group

Importants events

On January 4, 2022, the Board of Directors of BASF SE decided on a share buyback program with a volume of up to 3 billion euros, which started on January 11, 2022 and must be completed by December 2023. The share buyback program is based on the authorization of the General Meeting of Shareholders of May 12, 2017. Around 13.5 million shares had already been bought back as of March 31, 2022. A new authorization to buy back treasury shares will be proposed to the General Meeting of Shareholders ‘ Meeting of April 29, 2022, which would authorize the continuation of the share buyback program already in progress.

For more information on the share buyback program, see basf.com/sharebuyback

Together with Heraeus, Hanau, Germany, BASF announced on February 11, 2022 the formation of a joint venture (BASF: 50%; Heraeus: 50%) to recover precious metals from spent automotive catalysts. Subject to the approval of the competent authorities, the creation of BASF HERAEUS (China) Metal Resource Co., Ltd., based in Pinghu, China, is planned for the first half of 2022. The construction of the recycling plant of the joint venture is expected to begin in 2022, with operations starting in 2023.

The following changes in the responsibilities of two departments of the Board of Directors (“Ressorts”) came into effect on March 1, 2022: – Saori Dubourg (Ressort IV) took over responsibility for the

Petrochemicals, Intermediates, Performance Materials and Monomers Divisions. She remains responsible for the Europe region.

– Michael Heinz (Spring V), based in Florham Park, New Jersey, took responsibility for the Care Chemicals, Nutrition & Health and Agricultural Solutions divisions. He remains responsible for the North America and South America regions.

Due to Russia’s war of aggression against Ukraine, BASF announced on March 3, 2022 that as of today it will only operate in Russia and Belarus to fulfill existing commitments in accordance with applicable international laws, regulations and rules. Businesses supporting food production are exempt from this ruling, as the war risks triggering a global food crisis. BASF is continuously evaluating these decisions and other issues related to this development and announced further measures on April 27 (see events after the reporting period).

As part of the sanctions imposed on the Nord Stream 2 gas pipeline project and its operating company, the board of directors of Wintershall Dea AG, Kassel/Hamburg, Germany, decided on March 2, 2022 to cancel its financing of Nord Stream 2 in the total amount of approximately 1 billion euros (BASF share: 729 million euros). In addition, Wintershall Dea recognized write-downs of around 550 million euros (BASF share: 373 million euros after tax) in connection with the war in Ukraine. The current situation is so dominated by uncertainty that BASF did not believe it was possible to reliably value Russian assets, even using scenarios. Accordingly, BASF has not recognized any impairment losses on the assets of Wintershall Dea beyond those recognized by Wintershall Dea. Wintershall Dea’s Russian operations represent approximately €2.6 billion of the book value of our stake. As of March 31, 2022, there were also no sufficient indicators of impairment for BASF’s other businesses in Russia and Ukraine, whose net assets are in the low three-digit range of $1 million. euros.

Events after March 31, 2022 (events after the reporting period)

On April 12, 2022, BASF and Allianz Capital Partners (on behalf of Allianz Insurance Companies) completed the purchase of 25.2% of the Hollandse Kust Zuid (HKZ) offshore wind farm by Allianz Capital Partners following the approval of competent authorities. BASF had acquired 49.5% of HKZ from Vattenfall in the third quarter of 2021. BASF will receive most of the electricity produced by its initially acquired 49.5% share of HKZ under a purchase agreement electricity at a long-term fixed price.

On April 27, 2022, BASF announced that it would end the company’s remaining business activities in Russia and Belarus by early July 2022. Food production support activities remain an exception. This decision is motivated by recent developments in the war in Ukraine and international law, including the EU’s fifth sanctions package. The effects of this decision on the recoverability of our assets are currently being assessed in detail. In 2021, Russia and Belarus accounted for approximately 1% of total BASF Group sales. Currently, 684 employees work for BASF in Russia and Belarus. The company has decided to continue supporting its employees in both countries until the end of 2022.