BASF Se

BASF reported Q2 2026 EBITDA before special items of EUR 2.4 billion, up 54% year over year, and first-half 2026 EBITDA before special items of EUR 4.8 billion, up EUR 715 million versus the prior year period. Net income for the first half improved by EUR 4.2 billion to EUR 5.1 billion, helped by a EUR 3.5 billion after-tax disposal gain from the Coatings transaction. Cash flow from operating activities in Q2 was EUR 524 million, free cash flow was minus EUR 189 million versus plus EUR 533 million in Q2 2025, and first-half free cash flow was minus EUR 1.6 billion. Management raised full-year 2026 EBITDA before special items guidance to EUR 6.9 billion-EUR 7.7 billion and kept free cash flow guidance at EUR 1.5 billion-EUR 2.3 billion. They also said cash CapEx is likely to come in below the EUR 3.4 billion previously forecast for the year.

Markus Kamieth framed the quarter as evidence that BASF’s Winning Ways strategy is working, citing progress on all three 2026 priorities: stronger market position, restructuring and portfolio actions. He emphasized that the new Zhanjiang Verbund site, local-for-local production and flexible feedstock sourcing helped BASF maintain supply and gain volume in volatile conditions. He also struck a confident but cautious tone on the outlook, saying the company is benefiting from current market volatility but remains mindful of geopolitical and macro uncertainty.

Dirk Elvermann focused on the financial mechanics behind the quarter: Q2 operating cash flow fell to EUR 524 million because of higher receivables, higher inventory value from rising raw-material prices, and around EUR 200 million of transformation spending. He reiterated the capital allocation framework, including a EUR 2.25 per share dividend for 2025, a new EUR 1 billion buyback tranche from August 2026 to April 2027, and at least EUR 4 billion of total buybacks by end-2028. He also highlighted balance-sheet strength, with net debt down to EUR 17 billion, an equity ratio of 44.6%, and continued single-A credit rating, while saying the company expects to stay below depreciation on CapEx through 2028.

Analysts pressed management on M&A, weather and Rhine river disruption, Middle East pricing, Q3 visibility, Ag Solutions pricing, and the treatment of carve-out and ERP costs. BASF said it is actively watching chemical-industry consolidation and sees M&A as a potential opportunity, but only if it supports value creation and the core strategy. On operations, management said Rhine low-water risk is much better managed than in 2018, that Q3 should at least match last year in Ag and likely meet or beat Q3 2025 group earnings, and that Ag pricing remains under pressure for the rest of the year. They also clarified that Ag Solutions IPO-related transformation and setup costs are largely kept within the segment, with special items used for restructuring-type costs.