BASF (BAS) CMD 2024 Day 2 summary

Strategic direction and value creation priorities

• New strategy emphasizes profitable growth, capital discipline, and value creation, prioritizing cash generation and cost savings across all segments.

• Core businesses (Chemicals, Materials, Industrial Solutions, Nutrition & Care) are prioritized for organic growth and value-accretive acquisitions, while standalone businesses (ECMS, Battery Materials, Coatings, Agricultural Solutions) have increased flexibility and may undergo divestments or IPOs.

• Decorative paints business in Brazil is being prepared for divestment, with the broader deco divestment process starting Q1 2025; Agricultural Solutions is being readied for a potential minority IPO after legal and ERP separation by 2027.

• All segments emphasize sustainability, digitalization, and regional asset optimization to drive competitiveness and future readiness.

• Ongoing asset and cost structure adjustments at Ludwigshafen site, including plant closures and targeted annual cost savings of €2.1 billion by end of 2026.

Financial guidance and investment plans

• EBITDA before special items targeted at €10–12 billion in 2028 under mid to upcycle conditions, with cumulative free cash flow for 2025–2028 expected to exceed €12 billion and ROCE targeted at around 10%.

• At least €12 billion to be distributed to shareholders between 2025 and 2028, combining dividends and share buybacks; annual dividend set at a minimum of €2.25 per share, totaling around €8 billion over four years.

• Coatings expects to outgrow the market with 4% sales growth, record EBITDA in 2023, and further margin and cash conversion improvements over the next four years.

• Battery Materials will not allocate significant CapEx to new projects until after 2028, focusing on filling existing capacity and maintaining a 30% EBITDA margin (excluding metals).

• ECMS targets 3–4% above-market growth, mid-20s EBITDA margin, and over €2 billion cash generation in four years, with CapEx 35% below the previous five-year average.

Business developments and innovation

• Coatings leverages digital tools and sustainable product lines to enhance customer value and environmental performance, with leading positions in automotive, refinish, and surface treatment.

• Battery Materials builds on global JVs, state-of-the-art plants, and a strong R&D network, focusing on NCM technology, recycling, and capital-light growth.

• ECMS capitalizes on PGM recycling, new circular metal brands, and technology-driven catalyst solutions, with a focus on regional growth and operational excellence.

• Industrial Solutions and Materials segments focus on sustainability, electrification, and green transformation, with significant sales from sustainable products and innovation partnerships.

• Chemicals segment benefits from the Zhanjiang Verbund site, AI adoption, and a broad portfolio of low/zero PCF and recycled-content offerings.