BASF Se

For the first half of 2026, BASF reported EBITDA before special items of EUR 4.8 billion, up EUR 715 million year over year. Q2 EBITDA before special items rose 54% to EUR 2.4 billion. H1 net income improved by EUR 4.2 billion to EUR 5.1 billion, including the EUR 3.5 billion after-tax gain from the Coatings transaction. H1 free cash flow was minus EUR 1.6 billion; Q2 operating cash flow was EUR 524 million and Q2 free cash flow was minus EUR 189 million. Cash fixed costs in H1 declined around 4% to EUR 7.9 billion. BASF now expects 2026 EBITDA before special items of EUR 6.9 billion-EUR 7.7 billion, with free cash flow still guided at EUR 1.5 billion-EUR 2.3 billion; capital expenditures are expected to come in below the EUR 3.4 billion full-year forecast, and the forecast range is unchanged at EUR 800 million due to geopolitical uncertainty.

Markus Kamieth said the quarter showed BASF is executing its Winning Ways strategy, with broad-based volume growth, better pricing and strong operational resilience, especially in a volatile geopolitical backdrop. He emphasized progress on restructuring, portfolio actions and competitiveness, including the Zhanjiang ramp-up, a leaner Ludwigshafen footprint and further core-business integration under CoreShift. His tone was confident but guarded: he stressed the company is benefiting from volatility, while still watching macro and geopolitical risks closely.

Dirk Elvermann highlighted that H1 EBITDA before special items increased to EUR 4.8 billion and that cash fixed costs fell around 4% to EUR 7.9 billion. He said Q2 operating cash flow was pressured by higher receivables, higher inventories from raw-material inflation and around EUR 200 million of transformation spending, while CapEx payments were EUR 713 million in the quarter. He also noted net debt fell to EUR 17 billion, equity ratio improved to 44.6%, BASF kept its single-A rating, and the company remains committed to deleveraging, buybacks and keeping CapEx below depreciation until 2028. On capital returns, he cited a EUR 1 billion buyback tranche to be executed between August 2026 and April 2027, within the at least EUR 4 billion buyback plan through 2028.

Analysts focused on the Middle East disruption, Europe’s drought/Rhine logistics, the pace of petrochemical price pass-through, Ag Solutions pricing and the implications of the updated EU ETS proposal. Management said Rhine water levels are again very low, but BASF is much better prepared than in 2018 thanks to specialized ships and contingency transport measures, so disruption risk is lower than in the past. On prices and demand, they said the market has adjusted to a “new normal” in the Middle East and that Q2-related prebuying is fading, but they have not seen demand destruction so far. On Q3, management said Ag Solutions should meet or exceed last year’s Q3 earnings, though weather, pharma income and commodity prices remain headwinds, and BASF expects Q3 at least to match last year’s level overall.