Outlook 2026

Quarterly Statement Q3 2026

In the third quarter of 2026, global gross domestic product (GDP) grew by nearly 2.5% versus the same quarter of the previous year, according to the latest estimates. The global economy thus remained robust overall, though regional developments varied considerably. Headwinds from high energy prices and trade conflicts contrasted with impetus from technology investments and relatively stable demand for services.

In the EU, growth of slightly above 1% still significantly lagged the global average. Germany’s economy likely grew at a pace similar to that of the EU as a whole due to a weak prior-year baseline, even though low water levels on the Rhine dampened industrial production.

The U.S. economy remained dynamic in the third quarter of 2026, with forecast growth of more than 2% compared with the previous year. Expansion was driven primarily by private consumption and by investments, especially in the IT sector. By contrast, industrial activity was still mixed; residential construction continued to be held back by high financing costs.

In China, GDP growth of 4.5% in the third quarter of 2026 was somewhat slower than the pace recorded in the first half of the year. The economy was buoyed by exports and the production of technology and electronics goods, while consumer spending, the real estate sector and private investment remained weak.

Global industrial production developed only moderately overall in the third quarter of 2026. Growth was concentrated in electronics, semiconductors and AI infrastructure, while traditional industries remained weak in many cases. In the EU, manufacturing output largely stagnated according to the latest available data, while in the United States it increased only slightly despite the robust economy as a whole. In Asia, IT-related industries in China, Japan and South Korea boosted global industrial production. In China, manufacturing growth remained generally strong at nearly 6%.

Global automotive production declined overall. In China, production slowed noticeably against the backdrop of weak domestic demand despite strong exports. A considerable downturn also occurred in North America. In the EU, production output nearly stagnated compared with the prior-year quarter.

In the consumer goods sector, demand for durable goods in particular remained subdued. Higher energy prices and continued cautious consumer sentiment weighed especially on interest-rate-sensitive and larger purchases. Food production was relatively steady. The market for personal care products saw a decline in the United States, sideways movement in the EU and growth in China.

In the building sector, rising construction costs dampened demand, as did the persistently high and stillrising interest rates. The picture in the EU was heterogeneous, with Germany recording an uptick in construction activity in infrastructure and finishing trades. In the other major EU countries, however, production declined. In the United States, high interest rates acted as a drag on residential construction. In China, housing construction still significantly lagged the level of the prior-year quarter.

In the agricultural sector, the overall picture was mixed. Weather-related and geopolitical supply risks, together with robust demand, led to higher prices for agricultural commodities. At the same time, rising costs for energy and fertilizers had a negative impact on farmers’ profitability.

Global chemical production largely stalled in the third quarter of 2026 versus the strong prior-year quarter. In China, production grew only slightly compared with the expansive development in the prioryear period. Outside of China, development was weak: In the EU, chemical production declined following an increase in the second quarter of 2026. In the United States, production dropped off by 4.5%.

Exceptionally strong fluctuations in the oil price were seen in the third quarter of 2026. The price for Brent North Sea crude was around $72 per barrel at the beginning of the quarter and rose to more than $100 per barrel by the end of the reporting period as a result of renewed military escalations in the Middle East, restricted deliveries through the Strait of Hormuz and the need to use alternative supply routes.

Given the continuing uncertainty surrounding further geopolitical and global economic developments, we maintain the macroeconomic assumptions published in the Half-Year Financial Report 2026:

• Growth in gross domestic product: 2.5%
• Growth in industrial production: 2.0%
• Growth in chemical production: 1.8%
• Average euro/dollar exchange rate of $1.17 per euro
• Average annual oil price (Brent crude) of $80 per barrel

As the business year has progressed and we have gained greater visibility regarding the expected earnings development, we are able to provide a more specific forecast range for BASF Group’s EBITDA before special items for the 2026 business year than was published in the BASF Half-Year Financial Report 2026. Compared with our previous forecast, we have raised the lower end of the EBITDA before special items range and slightly increased the upper end (previous forecast from the Half-Year Financial Report 2026 is in parentheses):

• EBITDA before special items of between €7.4 billion and €7.8 billion (between €6.9 billion and €7.7 billion)
• Free cash flow of between €1.5 billion and €2.3 billion (unchanged)
• CO₂ emissions of between 17.2 million metric tons and 18.2 million metric tons (unchanged)

With regard to opportunities and risks, the statements made in the BASF Report 2025 continue to apply overall. Projected risks resulting from higher raw materials costs partially materialized in the first three quarters of 2026, while price and volume development were positive. Risks continue to arise in particular in connection with demand and market development, margins, regulatory conditions, as well as geopolitical and trade policy developments. Given the ongoing uncertainty relating to the geopolitical developments in the Middle East, the effects on energy and raw materials prices as well as global supply chains in particular still cannot be fully assessed. Opportunities may arise in particular from strongerthan- expected development in demand and margins, additional cost and efficiency improvements, as well as favorable developments in energy, raw materials and currency markets.

According to the company’s assessment, neither existing individual risks nor the sum of individual risks pose a threat to the continued existence of the BASF Group.

BASF Report 2025

Global economic development in 2026 will be determined by changes in trade policy conditions and ongoing geopolitical uncertainty. Temporary extraordinary effects from early orders and a corresponding buildup of inventories, which supported growth in the previous year, will not occur in 2026. The higher tariffs in the United States are redirecting the global flow of goods and leading to increasing competitive pressure in countries or regions with lower import barriers.

Against this background, we expect more subdued development of the global economy as well as industrial and chemical production in 2026. Our forecast for the BASF Group and its segments assumes that growth in global gross domestic product will be slightly lower and that of global industrial production will be significantly lower than the prior-year level. We expect a further decline in chemical production in the mature economies and weaker growth in the emerging markets. In China, growth will weaken but remain solid as demand from Chinese customer industries continues to grow, supported by exports. In the EU and the United States in particular, we expect a further decline in chemical production due to weak demand and, in the case of the EU, high import pressure. After automotive production increased significantly in 2025, we expect a slight decline in 2026.

Our planning was based on an average oil price of $65 for a barrel of Brent crude and an exchange rate of $1.20 per euro.

The BASF Group expects EBITDA before special items of between €6.2 billion and €7.0 billion in 2026 (2025: €6.6 billion). The Nutrition & Care and Chemicals segments are likely to increase their earnings significantly, while Industrial Solutions expects a slight increase in earnings. In the Materials and Agricultural Solutions segments, we forecast slightly lower earnings due to currency effects. Surface Technologies' EBITDA before special items is predicted to be significantly below the 2025 level, mainly due to the absence of one-off effects in the Environmental Catalyst and Metal Solutions (ECMS) division.

We expect the BASF Group’s free cash flow to be between €1.5 billion and €2.3 billion (2025: €1.3 billion). This is based on forecast cash flows from operating activities of between €4.9 billion and €5.7 billion, minus the expected payments made for property, plant and equipment and intangible assets in the amount of €3.4 billion.

CO₂ emissions forecast for the BASF Group

CO₂ emissions are expected to be between 17.2 million metric tons and 18.2 million metric tons in 2026. We expect higher emissions compared to the previous year mainly due to the startup of the Verbund site in Zhanjiang, China, while production volumes at other production sites will remain almost unchanged. We will counteract this increase with targeted measures to reduce emissions, such as further increasing energy efficiency, optimizing processes and continuing the shift to electricity from renewable energies.

¹ For EBITDA before special items and cash flow, “slight” represents a change of 0.1% to 10.0%, while “considerable” applies to changes of 10.1% and higher. “At prior-year level” indicates no change (+/-0.0%).

Disclaimer

This page contains forward-looking statements. These statements are based on current estimates and projections of the Board of Executive Directors and currently available information. Forward-looking statements are not guarantees of the future developments and results outlined therein. These are dependent on a number of factors; they involve various risks and uncertainties; and they are based on assumptions that may not prove to be accurate. BASF does not assume any obligation to update the forward-looking statements contained in this presentation above and beyond the legal requirements.