BASF Report 2021 Management’s Report – Industrial Solutions 80 Business review Segment data – Industrial Solutions Million € At a glance 2021 2020 +/– Sales to third parties 8,876 7,644 16.1% ▪ Sales of € 8,876 million; considerable growth mainly driven by of which Dispersions & Resins 5,681 4,869 16.7% higher volumes and prices Performance Chemicals 3,195 2,775 15.1% ▪ Considerable increase in EBIT before special items to Intersegment transfers 420 375 11.9% €1 ,006 million Sales including transfers 9,296 8,019 15.9% Income from operations before depreciation, amortization and special items 1,343 1,189 13.0% Sales to third parties in the Industrial Solutions segment rose Income from operations before depreciation and amortization (EBITDA) 1,344 1,099 22.3% by €1,232 million year on year to €8,876 million in 2021. This was EBITDA margin % 15.1 14.4 − attributable to considerably higher sales in both divisions. The Depreciation and amortizationa 380 469 –19.0% Dispersions & Resins division increased sales by €812 million to Income from operations (EBIT) 965 630 53.1% €5,681 million. Sales in the Performance Chemicals division Special items –42 –192 78.4% amounted to €3,195 million, €420 million above the prior-year figure. EBIT before special items 1,006 822 22.4% Return on capital employed (ROCE) % 15.2 9.3 − Sales influences – Industrial Solutions Assets 6,302 6,402 –1.6% Investments including acquisitionsb 361 331 9.1% Industrial Dispersions & Performance Solutions Resins Chemicals Research and development expenses 175 177 –1.1% Volumes 11.4% 11.4% 11.5% a Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments) b Additions to property, plant and equipment and intangible assets Prices 11.2% 14.5% 5.4% Portfolio –5.0% –7.9% 0.0% Currencies –1.5% –1.3% –1.8% Portfolio effects in the Dispersions & Resins division following the Industrial Solutions – sales disposal of the global pigments business as of June 30, 2021, had By division Sales 16.1% 16.7% 15.1% an offsetting impact. The positive sales performance was attributable to higher volumes Sales were also reduced by slightly negative currency effects in both €5,681 million €3,195 million and prices in both divisions. The increase in sales volumes mainly divisions, mainly relating to the U.S. dollar. Dispersions & Resins €8,876 million Performance Chemicals resulted from the global economic recovery from the coronavirus Share of sales: 64% Share of sales: 36% pandemic. Volume growth in the Dispersions & Resins division was mainly driven by the dispersions business. The Performance Chemi- cals division recorded higher sales volumes in all business areas. The higher price level was driven primarily by increased raw materi- als prices. Both divisions raised prices in almost all business areas and all regions.