Collision repair shops that rely on BASF's Glasurit or R-M refinish brands are moving closer to an ownership change. BASF reported first-quarter 2026 net income of €927 million (approximately $1.1 billion) on April 30 — up from €808 million in the prior-year quarter — and confirmed on its earnings call for analysts and investors that the previously announced sale of its Coatings division to funds managed by The Carlyle Group, in partnership with the Qatar Investment Authority, remains on track to close in the second quarter of 2026.
CFO Dr. Dirk Elvermann presented the quarterly figures in advance of the BASF Annual Shareholders' Meeting in Mannheim on April 30. On the analyst call, Elvermann described the quarter as unfolding in two distinct phases: moderate growth in January and February, driven in part by China, followed by a sharp shift in market conditions in March after the escalation of the Middle East conflict and the closure of the Strait of Hormuz to seaborne transport of oil, gas, and chemicals.
Coatings Transaction on Track for Q2
The binding agreement between BASF, Carlyle, and QIA, announced in October 2025, values the Coatings business — which includes automotive OEM coatings, automotive refinish coatings, and surface treatment businesses — at approximately $9.0 billion (€7.7 billion). BASF will retain a 40% equity stake in the new company, with Carlyle becoming the majority owner.
Elvermann reiterated on the earnings call that BASF expects to receive pre-tax cash proceeds of approximately €5.8 billion (approximately $6.8 billion) upon closing, subject to customary regulatory approvals.
Q1 Financials at a Glance
EBITDA before special items for the first quarter came in at €2,356 million (approximately $2.8 billion), down €140 million from €2,500 million in the prior-year quarter. Currency effects — primarily from the U.S. dollar and the Chinese renminbi — reduced results across all segments.
Elvermann noted on the analyst call that without those currency headwinds of more than €100 million, EBITDA before special items would have matched the prior-year level. The EBITDA margin before special items declined to 14.7% from 15.1%.
EBIT reached €1,261 million (approximately $1.5 billion), up €102 million from the prior-year quarter. Earnings per share rose to €1.06 from €0.91. The Surface Technologies segment, which includes the Coatings business, posted year-over-year EBITDA improvement in the quarter.
Cash flows from operating activities improved €185 million year over year to negative €797 million, while free cash flow improved €423 million to negative €1,375 million. BASF noted that free cash flow is typically negative in the first quarter and improves over the course of the year, driven largely by the seasonal nature of the Agricultural Solutions business. BASF maintained its full-year 2026 guidance: EBITDA before special items of €6.2 billion to €7.0 billion (approximately $7.3 billion to $8.2 billion) and free cash flow of €1.5 billion to €2.3 billion (approximately $1.8 billion to $2.7 billion).
Shareholders Back Agricultural Spin-Off
The April 30 earnings release coincided with BASF's Annual Shareholders' Meeting. Shareholders voted to approve the hive-down and transfer of the Agricultural Solutions division into a legally independent subsidiary. Shareholders also approved a dividend of €2.25 per share for the 2025 business year, with payment scheduled for May 6.
Refinish Brand Transition on the Horizon
For collision repairers, the central development remains the pending transfer of majority ownership of BASF's refinish brands to Carlyle. Since BASF first disclosed it was exploring a sale of the Coatings unit in June 2025 and through the deal valued near $7 billion, the transaction has moved steadily toward completion.
