BASF's Q2 sales of 19.7 billion euros in 2021, a year-on-year increase of 55.8%

BASF released preliminary data for the second quarter of 2021. Sales in the second quarter of 2021 increased by 55.8% from the same period last year to 19.753 billion euros (the second quarter of 2020: 12.680 billion euros). This is mainly due to price increase (35%) and sales volume increase (28%), and unfavorable currency factors have a certain offsetting effect (-7%). On average, analysts previously forecast BASF Group’s sales of 17.157 billion euros in the second quarter of 2021.

According to reports, in the second quarter of 2021, BASF Group’s business operations maintained a strong growth momentum since the fourth quarter of 2020. Earnings before interest and taxes excluding special items are expected to be 2.355 billion euros, a significant increase from the same period last year (the second quarter of 2020: 226 million euros) that was mainly affected by the epidemic. Previous analysts' average forecast was 1.965 billion euros, which was significantly lower than the latest preliminary data.

In the second quarter of 2021, the EBIT excluding special items in the chemicals, materials, and industrial solutions business area significantly exceeded the analyst’s average forecast; the surface treatment technology business area’s EBIT excluding special items was slightly lower The average forecast of analysts; the EBIT of the two major business areas of agricultural solutions, nutrition and care, excluding special items, is significantly lower than the average forecast of analysts. Earnings before interest and taxes excluding special items in the "other" business areas were the same as analysts' average forecasts.

The BASF Group’s EBIT in the second quarter of 2021 is expected to be 2.316 billion euros, a significant increase from the same period last year (the second quarter of 2020: 59 million euros) affected by the epidemic. Earnings before interest and taxes in the second quarter of 2021 include tens of millions of euros expected from the divestiture of the pigment business. Analysts previously had a consensus forecast of EBIT for the second quarter of 2021 at 1.929 billion euros.

BASF Group's outlook for 2021

Based on the strong business development in the first half of 2021 (sales of 39.153 billion euros in the first half of 2021; EBIT of 4.676 billion euros excluding special items), BASF will increase its sales for the full year of 2021 and excluding special items. The outlook for earnings before interest and taxes.

For the full year of 2021, the BASF Group expects sales to reach 74 to 77 billion euros (previously forecasted to be 68 to 71 billion euros; analysts’ consensus forecast is 68.654 billion euros; for the full year of 2020, 59.149 billion euros). Earnings before interest and taxes for 2021 excluding special items are currently forecast at 7 to 7.5 billion euros (previously forecasted at 5 to 5.8 billion euros; analyst consensus forecast is 6.299 billion euros; for the full year of 2020, 3.560 billion euros). The substantial increase in expected earnings in the chemicals and materials business is the main reason for the improvement in the outlook for 2021.

The outlook is based on the following assumptions regarding the global economic environment in 2021:

· Global GDP growth: 5.5% (previously forecast 5.0%);

· Industrial production growth: 6.5% (previously forecast 5.0%);

· Global chemical production growth: 6.5% (previously forecast 5.0%);

· The average price of the euro against the US dollar: 1 euro to 1.20 US dollars (previously forecasted to be 1.18 US dollars);

· The average price of Brent crude oil is US$65 per barrel (previously forecasted to be US$60 per barrel).

The above forecast by BASF assumes that there will be no measures to strictly control economic activities in response to the new crown epidemic in the second half of 2021.