Outlook 2026

Half-Year Financial Report 2026

In the second half of the year, global gross domestic product is expected to grow at a similar pace as in the first half-year. According to current estimates, growth in global industrial production will also hold steady at roughly the level seen in the first half-year. For chemical production, we expect an acceleration in China and the United States but a moderate slowdown for the EU. The U.S. dollar will be supported by the interest rate spread to the eurozone; the exchange rate will likely be below the previously expected level of $1.20 per euro. For the oil price, we forecast an annual average level of $80 per barrel, in line with expectations on futures markets.

Accordingly, BASF has adjusted its assumptions regarding the global economic environment for 2026 as follows (previous assumptions from the BASF Report 2025 are in parentheses):

• Growth in gross domestic product: 2.5% (2.7%)
• Growth in industrial production: 2.0% (2.3%)
• Growth in chemical production: 1.8% (2.4%)
• Average euro/dollar exchange rate of $1.17 per euro ($1.20 per euro)
• Average annual oil price (Brent crude) of $80 per barrel ($65 per barrel)

The development of the global economy and regional chemical markets in the second half of 2026 remains highly uncertain. It depends to a considerable degree on the developments in the Middle East conflict, particularly the access to and use of the Strait of Hormuz for the transport of energy and petrochemical feedstocks from the Middle East. A prolonged closure of this trade route would weigh significantly on economic activity. Conversely, a rapid agreement on a reliable framework arrangement would provide additional momentum for economic growth.

The BASF Group’s forecast for the 2026 business year published in the BASF Report 2025 has been adjusted in light of the better-than-expected business development (previous forecast from the BASF Report 2025 is in parentheses):

• EBITDA before special items of between €6.9 billion and €7.7 billion (€6.2 billion to €7.0 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 opportunity and risk factors, the statements contained in the BASF Report 2025 remain fundamentally valid. The forecast risks associated with higher raw material costs did materialize in some cases in the first half of 2026, while price and volume trends were positive. We are closely monitoring the opportunities and risks relating to the conflict in the Middle East and will leverage opportunities and mitigate risks. Given the rapidly changing situation – especially with regard to energy and raw material prices as well as potential disruptions to global supply chains – it is currently impossible to reliably quantify or assess the resulting effects.

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.