Significant Events

As part of the implementation of BASF’s corporate strategy, the operating divisions, cross-functional service units, the regions and a lean Corporate Center have formed the cornerstones of the new BASF organization since January 1, 2020. This organizational realignment has created the conditions for greater customer proximity, increased competitiveness and profitable growth.

Some of the investments accounted for using the equity method are not an integral part of the BASF Group. To increase reporting transparency, these have been classified as purely financial investments since the first quarter of 2020 and reported separately from the shareholdings that are integral to the main business activities of the BASF Group. Since then, income from non-integral companies accounted for using the equity method has no longer been presented in the BASF Group’s EBIT and EBIT before special items, but under net income from shareholdings. The statement of income for 2019 has been restated accordingly.

On January 31, 2020, BASF closed the acquisition of Solvay’s integrated polyamide business, which was announced in September 2017. The acquisition broadens BASF’s polyamide capabilities with innovative and well-known products such as Technyl^® and enhances access to growth markets in Asia as well as in North and South America. Through the backward integration into the key raw material adiponitrile (ADN), BASF now has production plants along the entire value chain for polyamide 6.6. The transaction includes production sites in Germany, France, China, India, South Korea, Brazil and Mexico; research and development centers and technical consultation centers; and shares in Butachimie SNC, a joint operation with Invista to produce ADN and hexamethylenediamine (HMD), and in Alsachimie S.A.S., a joint operation between BASF and Domo Chemicals to produce adipic acid. BASF acquired the polyamide business for a purchase price of €1.3 billion (on a cash and debt-free basis) and integrated it into the Performance Materials and Monomers divisions within the Materials segment.

As expected, the economic effects of the corona pandemic had a much stronger impact in the second quarter of 2020 than in the previous quarter. It has affected our customer industries to varying degrees. BASF was particularly negatively impacted by the collapse in demand from the automotive industry, while demand from the detergent and cleaner industry and the food industry was stable. We were able to continue production at all important sites worldwide. We are responding to the situation with a high level of flexibility in resource steering and allocation. Our priority is the health and safety of our employees, as well as the reliable supply of our customers.

BASF is involved in the fight against the spread of the coronavirus with numerous initiatives and contributions as part of the “Helping Hands” aid campaign. These include donations of hand sanitizer and protective face masks, as well as supporting academic research groups in their search for a suitable active ingredient against the virus. The related expenses are recorded as special items under Other.

On May 28, 2020, BASF successfully placed bonds with a total volume of €2 billion on the capital market. The first tranche has an issue volume of €1 billion, a term of three years and an annual coupon of 0.101% and will be used for general corporate financing purposes. With the second tranche, BASF issued its first green bond. This has a term of seven years, a volume of €1 billion and an annual coupon of 0.25%. The green bond is earmarked for financing dedicated products and projects that contribute to sustainable development. BASF was able to secure attractive conditions thanks to its solid financial structure and its leading sustainability position.

On June 15, 2020, BASF announced that preparations and construction of BASF’s battery materials plants in Europe are progressing as planned. Construction of a precursor plant for cathode active materials began in Harjavalta, Finland. In addition, construction permits were secured to begin building the new plant for cathode active materials in Schwarzheide, Germany. Despite the ongoing corona pandemic, the multi-step investment project remains on schedule for startup in 2022. With it, BASF will provide a reliable and sustainable local supply to cell producers and automotive manufacturers in Europe.

As planned, Dr. Jürgen Hambrecht resigned as Chairman and left the Supervisory Board on conclusion of the Annual Shareholders’ Meeting on June 18, 2020. The Supervisory Board elected Dr. Kurt Bock as the new chairman of the Supervisory Board of BASF SE following his election to the Supervisory Board of BASF SE by the Annual Shareholders’ Meeting as a shareholder representative. Bock’s term runs until the end of the Annual Shareholders’ Meeting in 2024.

On July 10, 2020, BASF provided advance notice that EBIT before special items was above market expectations at €226 million. At the same time, net income (minus €878 million) was considerably below analyst estimates and the figure for the prior-year quarter (€5,954 million) due to a non-cash-effective impairment of the shareholding in Wintershall Dea.