Following sale of coatings division, BASF says focus is now on ‘core businesses’

BASF CEO and Board of Executive Directors Chairman Markus Kamieth told investors during the company’s Q2 earnings call that BASF’s focus moving forward is on its core businesses, including Chemicals, Materials, Industrial Solutions, and Nutrition and Care.

He also shared that the disposal gain after taxes following the completed transaction with Carlyle for BASF Coatings amounted to €3.5 billion and is reflected in net income and earnings per share of the BASF Group in Q2.

BASF Coatings launched as Surventis in July. In October, BASF said that it would hold a 40% equity stake and receive pre-tax cash proceeds of €5.8 billion at closing, slated for Q2 2026. The enterprise value of the transaction was listed as €7.7 billion. Kamieth confirmed those numbers during the July 29 earnings call.

The businesses include automotive OEM and refinish coatings as well as applied surface treatments for metal, plastic, and glass substrates in a wide range of industries.

“We now hold a 40% equity share in the company, Surventis. Through this equity stake, we will continue to participate in the future value creation of the coatings business while sharpening BASF’s strategic focus,” Kamieth said. “This successful closing marks a key milestone in the swift execution of our ‘Winning Ways’ strategy to unlock the value of BASF standalone businesses.”

Kamieth also noted that BASF has “accelerated the sell-down” of its participation in Harbour Energy, which since March has generated cash proceeds of more than €800 million for the company.

“…with the standalone businesses on their own successful paths, our core has become more focused and coherent,” he said. “This creates new opportunities for our core businesses to unlock synergies and to work more effectively together across BASF. As announced in May, we aim to operate the core businesses at up to 20% lower net-cash-fixed costs by 2029 compared with the 2024 baseline.

“In the first half of 2026, our ongoing measures to improve competitiveness already led to a 4% reduction in net cash fixed costs in the core compared with the prior year period. There was strong positive momentum in the second quarter. This figure relates to BASF’s core businesses and other, and is adjusted for currency, portfolio, and one-time effects, making it comparable.”

Kamieth added that cash fixed costs of BASF Group declined by around 4% to €7.9 billion in Q2.

“This was the result of the ongoing restructuring efforts, particularly in our core businesses, and favorable currency effects,” he said. “Net income improved by €4.2 billion and came in at €5.1 billion. This includes the disposal gain of €3.5 billion after tax from the coatings transaction with Carlyle. Free cash flow decreased and came in at -€1.6 billion.”

A press release on Q2 earnings from BASF echoes some of what Kamieth explained during the earnings call — that the company increased its earnings in nearly all segments, with stronger prices and higher volumes contributing to the rise.

“We further strengthened BASF’s position in the market and achieved major progress with our restructuring as well as portfolio measures,” said Kamieth, according to the release.

On July 15, 2026, BASF pre-released preliminary figures for Q2. This was because EBITDA before special items of €2.4 billion “significantly exceeded average analysts’ expectations,” the release states. BASF also raised its earnings outlook for full-year 2026.

The release states that BASF has adjusted its assumptions regarding the global economic environment for 2026 as follows, with previous assumptions from the BASF Report 2025 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)

During the call, Kamieth said increased earnings in nearly all segments were also due to lower cash fixed costs.

“We thus further strengthened BASF’s position in the market and made major advances with our restructuring as well as portfolio measures,” he said. “We have reduced our costs. We have brought down our capital expenditures. We have increased capacity utilization at our plants. Our team in Zhanjiang successfully ramped up the new Verbund site. The sale of our coatings activities marks an important step forward with our value-enhancing portfolio measures.”

Regarding “geopolitical developments,” Kamieth said declining prices of key raw materials at the beginning of the year, such as naphtha and natural gas, resulted in lower sales prices.

“Following the escalation of the conflict in the Middle East and the blockade of the Strait of Hormuz, this trend reversed in the second quarter of 2026,” he said. “In response, we successfully implemented significant price increases, particularly in our upstream businesses. We also achieved considerable volume growth throughout the first half of 2026. This was supported by the startup of our new Verbund site in China.

“Another decisive factor was our ability to maintain uninterrupted supply by leveraging our local-for-local production footprint… BASF’s unique setup did and does provide a clear competitive advantage. Volume growth accelerated significantly in March. The high uncertainty in the markets led customers to secure supply through some advance purchases.”

Volumes continued to grow considerably compared with the prior year months, particularly in the core businesses, Kamieth added.

When asked about BASF’s acquisition plans, Kamieth responded that the company is interested mainly in strengthening its core businesses.

“Restructuring and consolidation in the chemical industry is an opportunity for us,” he said. “Given the current environment where markets are getting tighter, the outlook regarding margins, especially in commodities, becomes more difficult. I would put it this way: the relative attractiveness of acquisitions compared to investments, especially major investments, is shifting at the moment. This is why we are looking around in the current environment to find out what are the opportunities of strengthening our core businesses?”

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