“The corona pandemic is still a huge challenge for all of us,” said Dr. Martin Brudermüller, chairman of the Board of Executive Directors of BASF, who presented the second-quarter figures together with CFO Dr. Hans-Ulrich Engel.
“This situation is a catalyst for change and a chance to do many things differently. At BASF, we have quickly adapted to new processes. Everyone is very open to virtual communication, internally and with our customers.”
Sales in the second quarter decreased by 12% to €12.7 billion. This was primarily attributable to lower sales volumes of -11%. Prices decreased by 1%, mainly due to lower prices for upstream chemicals. Considerably higher prices in the Surface Technologies segment and slightly higher prices in the Agricultural Solutions segment could only partially offset this.
Income from operations (EBIT) before special items came in at €226 million, 77% below the level of the second quarter of 2019. With the exceptions of Nutrition & Care and Other, which increased earnings, and Agricultural Solutions, where earnings nearly matched the level of the prior-year quarter, all other segments posted lower earnings. This was the result of the pronounced drop in demand in most of BASF’s customer industries. The Chemicals and the Materials segments accounted for 70% of the earnings decline.
Cash flows from operating activities increased from €1.9 billion to €2.2 billion in the second quarter of 2020. The increase was primarily due to cash released from net working capital, which rose by €336 million. Free cash flow rose by more than €500 million compared with the second quarter of 2019 and amounted to €1.5 billion.