BASF Report 2021 Consoli dated Financial Statements – Notes 222 Sales by division and by indication and sector 8 Functional costs Million € 2021 2020 Under the cost of sales method, functional costs incurred by the Petrochemicals 9,674 5,426 operating functions are determined on the basis of cost center Intermediates 3,904 2,645 accounting. The functional costs particularly contain the personnel Chemicals 13,579 8,071 costs, depreciation and amortization accumulated on the underlying Performance Materials 7,292 5,635 final cost centers as well as allocated costs within the cost Monomers 7,922 5,101 accounting cycle. Operating expenses that cannot be allocated to the functional costs are reported as other operating expenses. Materials 15,214 10,736 For more information on other operating expenses, see Note 9 from page 223 onward Dispersions & Resins 5,681 4,869 Performance Chemicals 3,195 2,775 Cost of sales Industrial Solutions 8,876 7,644 Catalysts 19,219 13,570 Cost of sales includes all production and purchase costs of the Coatings 3,440 3,089 company’s own products as well as merchandise that has been sold in the period, particularly plant, energy and personnel costs. Surface Technologies 22,659 16,659 Care Chemicals 4,439 3,989 Selling expenses Nutrition & Health 2,003 2,030 Nutrition & Care 6,442 6,019 Selling expenses primarily include marketing and advertising costs, Fungicides 2,449 2,267 freight costs, packaging costs, distribution management costs, commissions and licensing costs. Herbicides 2,526 2,464 Insecticides 926 825 General administrative expenses Seed Treatment 620 609 Seeds & Traits 1,641 1,495 General administrative expenses include the costs of the Corporate Agricultural Solutions 8,162 7,660 Center, of general management, the Board of Executive Directors Other 3,666 2,360 and the Supervisory Board. They also include the costs of managing operating divisions and business units as well as the costs of the BASF Group 78,598 59,149 supporting services in departments such as accounting, legal, taxes and controlling. Sales revenue of €59 million, that was included in contract liabilities Sales revenue for the 2021 fiscal year includes €234 million from as of January 1, 2021, was recognized in 2021. performance obligations fulfilled in prior periods in connection with sales and usage-dependent licenses.