BASF Raises Earnings Guidance

BASF has raised its earnings guidance for 2026 after reporting stronger-than-expected second-quarter performance, with higher prices, increased sales volumes and improved earnings across most of its businesses supporting the upgrade. The German chemicals major now expects EBITDA before special items of €6.9 billion to €7.7 billion for the full year, compared with its previous forecast of €6.2 billion to €7.0 billion.

BASF Upgrades 2026 Earnings Outlook

The revised guidance reflects a stronger operating performance during the first half of 2026.

BASF's second-quarter sales increased 16% year on year to €17.2 billion, compared with €14.8 billion in the same period of 2025. The increase was mainly driven by higher prices and volumes, while currency and portfolio effects partly offset the gains.

EBITDA before special items reached €2.4 billion in the second quarter, significantly above the €1.6 billion recorded in the same quarter a year earlier. BASF said earnings increased across all segments except Surface Technologies.

Stronger Performance Across Key Businesses

The Materials, Industrial Solutions and Agricultural Solutions segments performed particularly strongly against analyst expectations, while Nutrition & Care also slightly exceeded expectations. Chemicals and Surface Technologies, however, remained below the average analyst estimates for the quarter.

BASF's second-quarter EBIT before special items was €1.5 billion, compared with €0.7 billion in the prior-year quarter. Group EBITDA was approximately €2.0 billion, up from €1.3 billion a year earlier.

Coatings Sale Boosts Net Income

BASF also reported a substantial increase in net income during the quarter.

Net income reached approximately €4.1 billion, compared with just €79 million in the second quarter of 2025. The sharp increase was largely attributable to a €3.9 billion pretax disposal gain from the sale of BASF's coatings business to Carlyle, which was completed on June 30, 2026.

The disposal gain is separate from BASF's underlying operating performance and therefore does not directly determine the company's EBITDA-before-special-items guidance.

Free Cash Flow Outlook Remains Unchanged

While BASF raised its earnings forecast, the company maintained its existing 2026 free cash flow expectation.

BASF continues to forecast free cash flow of €1.5 billion to €2.3 billion for the full year, compared with €1.3 billion in 2025. The company said higher capital tied up as a result of increased raw-material prices is among the factors affecting cash flow.

Second-quarter free cash flow was approximately minus €0.2 billion, compared with positive free cash flow of €0.5 billion in the same quarter of 2025.

Cost Savings Support Earnings Growth

BASF's stronger earnings also come as the company continues its restructuring and cost-saving initiatives.

The company has been implementing measures aimed at lowering fixed costs and improving its cost structure. Its first-half performance showed the impact of higher contribution margins, increased volumes and lower cash fixed costs.

BASF's restructuring and portfolio measures remain an important part of its efforts to strengthen profitability while navigating challenging conditions in the global chemicals industry.

Economic Conditions Remain Uncertain

Despite the higher earnings guidance, BASF continues to highlight uncertainty surrounding the global economic and chemicals markets.

For 2026, BASF's updated assumptions include 2.5% global GDP growth, 2.0% industrial production growth and 1.8% chemical production growth. The company also assumes an average Brent crude oil price of $80 per barrel and an average euro-dollar exchange rate of $1.17 per euro.

BASF expects chemical production conditions to remain challenging in the European Union, where weak demand and high import pressure continue to affect the industry. The company also points to geopolitical developments and energy and petrochemical feedstock transportation risks as important uncertainties for the second half of 2026.

BASF's 2026 Outlook

With the revised guidance, BASF now expects:

• EBITDA before special items: €6.9–7.7 billion

• Previous EBITDA guidance: €6.2–7.0 billion

• 2025 EBITDA before special items: €6.6 billion

• Free cash flow: €1.5–2.3 billion

• 2026 sales: not specifically guided in the revised outlook

The higher earnings range reflects the company's better-than-expected business development during the first half of the year, although BASF continues to flag significant uncertainty surrounding global economic conditions and geopolitical developments.

Outlook for BASF

BASF's raised earnings guidance marks an improvement in its expectations for 2026 operating performance. Stronger pricing, higher volumes, cost savings and improved results in several business segments have contributed to the revised forecast.

At the same time, BASF continues to operate against a challenging backdrop of weak European chemical demand, global competition, raw-material costs and geopolitical uncertainty. The company's performance during the remainder of 2026 will therefore depend on how these market conditions develop.