BASF Report 2021 Management’s Report – BASF Group 21 Organization of the BASF Group unit will continue to be globally positioned with research centers in Europe, North America and Asia Pacific. We take a differentiated approach to steering our businesses according to market-specific requirements and the competitive Five service units provide competitive services for the operating divi- environment. We provide a high level of transparency around the sions and sites: Global Engineering Services, Global Digital Services, results of our segments and show the importance of the Verbund Global Procurement, European Site & Verbund Management, Global and value chains to our business success. BASF aims to differen- Business Services (finance, human resources, environmental pro- tiate its businesses from their competitors and establish a high- tection, health and safety, intellectual property, communications, performance organization to enable BASF to be successful in an procurement, supply chain and inhouse consulting services). increasingly competitive market environment. Following the bundling of services and resources and the imple- The operating divisions, the service units, the regions and the corpo- mentation of a wide-ranging digitalization strategy, the number of rate center form the cornerstones of the BASF organization, in line employees in the Global Business Services unit worldwide will with the corporate strategy. As part of the implementation of our decline by up to 2,000 by the end of 2022 compared with base- strategy, we streamlined our administration, sharpened the roles line 2019. From 2023 onward, the division expects to achieve of services and regions, and simplified procedures and processes. annual cost savings of over €200 million. The organizational realignment created the conditions for greater customer proximity, increased competitiveness and profitable The Corporate Center supports the Board of Executive Directors in growth. steering the company as a whole. These include central tasks from the following areas: strategy, finance and controlling, compliance The divisions bear strategic and operational responsibility here and and law, tax, environmental protection, health and safety, human are organized according to sectors or products. They manage the resources, communications, investor relations and internal audit. 50 global and regional business units and develop strategies for 75 strategic business units. Our Excellence Program aimed to contribute €2 billion to EBITDA annually until the end of 2021 onward compared with baseline 2018. The regional and country units represent BASF locally and support We met this target in 2021. As planned, this was partly due to the the growth of business units with local proximity to customers. For reduction of more than 6,000 positions worldwide until the end of financial reporting purposes, we organize the regional divisions into 2021. This decrease resulted from the organizational simplification four regions: Europe, North America, Asia Pacific, and South America, and from efficiency gains in administration, the service units and the Africa and Middle East. operating divisions. For more information on the products and services offered by the segments, see pages 72, 76, 79, 82, Our research is currently divided into three global divisions: Process 85 and 88 onward Research & Chemical Engineering, Advanced Materials & Systems For more information on the segment structure, see Note 5 to the Consolidated Financial Statements from page 213 onward Research and Bioscience Research. To strengthen our innovation capabilities, we will reorganize our global research activities in 2022 and align them even more closely with the needs of our customers. To this end, we will integrate downstream research into the divisions and bundle activities with broad relevance in a research unit. This