BASF Half-Year Report: Chemicals Drag Sales Down by 15.8 Billion

In the second quarter of 2025, BASF generated approximately €1.8 billion in adjusted EBIT. Dr. Markus Kamieth, Chairman of the Board of Executive Directors, stated: “The Agricultural Solutions segment recorded a significant increase in earnings and achieved a remarkable 21% volume growth compared to the same period last year.” Together with Chief Financial Officer Dr. Dirk Elvermann, he presented the quarterly figures. Earnings in the Surface Technologies and Nutrition & Care segments increased slightly. In the basic chemicals business, profit margins remain under pressure due to ample product supply in the market.

BASF Group's sales for the second quarter of 2025 amounted to 15.8 billion euros, a decrease of 342 million euros compared to the same period last year. This development was mainly driven by negative exchange rate effects and price declines. The price decline was primarily attributed to the Chemicals segment, while the Surface Technologies and Nutrition & Care segments saw price improvements. Positive volume growth in the Agricultural Solutions, Surface Technologies, and Materials segments partially offset the sales decline.

Compared with the same period last year, operating income before depreciation, amortization and special items (EBITDA before special items) decreased by 1.85 billion euros to 1.8 billion euros. This was mainly due to a significant decline in earnings in the Chemicals segment, primarily as a result of lower margins. Earnings also decreased in the Industrial Solutions and Materials segments. In contrast, the Agricultural Solutions segment, especially the Surface Technologies segment, achieved earnings growth. Earnings in the Nutrition & Care segment also increased. EBITDA before special items in Other segments declined significantly compared with the same period last year. The EBITDA margin before special items fell to 11.2%, compared with 12.1% in the same period last year.

EBITDA reached 1.5 billion euros, compared to 1.6 billion euros in the same period last year. In the second quarter of 2025, EBITDA included special items of -297 million euros. These special expenses mainly stemmed from structural measures related to the cost-saving program. EBIT reached 494 million euros, 22 million euros lower than the quarterly figure for the same period last year. Net investment income declined by 112 million euros, primarily due to negative earnings contributions from Wintershall Dea GmbH and Harbour Energy plc. Financial results improved by 520 million euros compared to the same period last year, reaching -106 million euros. Profit before tax amounted to 316 million euros, 820 million euros lower than the quarterly figure for the same period last year. Net income was 790 million euros, compared to 430 million euros in the same period last year.

The development of cash flow in the second quarter of 2025

The cash flow from operating activities totaled 1.6 billion euros in the second quarter, a decrease of 365 million euros compared to the same period last year. The main reason for the decrease was changes in trade payables. Cash flow from investing activities improved by 1 billion euros compared to the same period last year, reaching -1.1 billion euros. This was primarily due to a reduction in payments for the purchase of fixed assets and intangible assets, which decreased by 428 million euros to 1.1 billion euros. Free cash flow, which is the cash flow from operating activities minus payments for property, plant, and equipment as well as intangible assets, was 533 million euros in the second quarter of 2025, an increase of 620 million euros compared to the same period last year.

Business Development of BASF Group in the First Half of 2025

Compared with the first half of 2024, BASF Group's sales in the first half of 2025 decreased by 493 million euros to 33.2 billion euros. The decline was due to negative price developments in four out of six business segments, especially in the Chemicals segment. Prices in the Nutrition & Care and Surface Technologies segments increased. All business segments were negatively affected by currency effects. Volumes increased, mainly in the Surface Technologies and Agricultural Solutions segments.

In the first half of 2025, BASF Group's EBITDA before special items decreased by 272 million euros, reaching 4.4 billion euros. This was mainly due to a decline in the chemicals segment. EBITDA stood at 3.7 billion euros, compared to 4.2 billion euros in the same period last year. EBIT reached 1.7 billion euros, a decrease of 515 million euros compared to the same period last year. Net income was 887 million euros, whereas it was 1.8 billion euros in the same period last year.

BASF has revised its global GDP growth forecast for 2025 down from 2.6% to 2.0%-2.5%, with industrial production growth lowered from 2.4% to 1.8%-2.3%, and chemical production growth expectations narrowed accordingly to 2.5%-3.0%. This adjustment reflects the reality of a sluggish global economic recovery: although energy costs in Europe have dropped by 40% from their 2022 peak, they remain higher than those in the United States and the Middle East, undermining the competitiveness of basic chemicals. Meanwhile, China’s manufacturing PMI has hovered around the threshold for three consecutive months, and the growth rate in emerging sectors such as new energy vehicles has slowed, directly impacting demand for engineering plastics.

The cost structure has changed significantly.

Exchange rate fluctuations: The average exchange rate of the euro against the US dollar has been raised from 1:1.05 to 1:1.15, which is expected to bring BASF an exchange gain of approximately 500 million euros, but it may also undermine the price competitiveness of European products in exports.

Crude oil prices: The average price forecast for Brent crude oil has been lowered from $75/barrel to $70/barrel, easing the cost pressure on petrochemical feedstocks, but at the same time reflecting the reality of weak global industrial demand.

The cost of energy transition: The continuous investment in Europe's "hydrogen island" project and the green electricity supply at the Zhanjiang site has adjusted BASF's 2025 CO₂ emissions target to 16.7-17.7 million tons, a decrease of about 5% compared to 2024, but it also increases short-term capital expenditure pressure.