BASF (BAS) CMD 2024 Day 2 summary

Surface Technologies / Environmental Catalyst and Metal Solutions (ECMS) / Battery Materials / Coatings

• ECMS completed an 18-month carve-out, now operating as a lean standalone entity targeting 3–4ppt above catalyst market CAGR, ~25% EBITDA bsi margin (excl. PGM), and ~€2.7 billion cumulative cash flow by 2028, with asset repurposing and local investments to secure #1 global position in mobile emissions catalysts.

• Battery Materials aims for >30% EBITDA bsi margin (excl. metals), focusing on leveraging existing assets, pausing major investments, and capital-light growth, with a long-term XEV market outlook and regional adoption uncertainties.

• Coatings achieved €4.4 billion sales in 2023, targets 16% EBITDA bsi margin and ~70% cash conversion by 2028, with a planned divestment of the decorative paints business starting Q1 2025.

• Strategic priorities across these businesses include cost efficiencies, asset optimization, sustainability, digitalization, and strong positions in automotive, refinish, and EV coatings.

• Sustainability and digitalization are key levers, with unique sustainable product portfolios and innovation driving growth and customer value.

Chemicals and Materials segments

• Chemicals segment leverages Verbund integration and the new Zhanjiang Verbund site in China to drive 25% sales growth and 150% EBITDA increase by 2028, with Zhanjiang expected to add €4–5 billion sales and €1–1.2 billion EBITDA by 2030.

• Materials segment targets €750–850 million EBITDA bsi increase by 2028 (+8% CAGR), focusing on profitable business models, cost leadership, and green transformation, with ~40% of sales from sustainable products.

• Both segments emphasize regional growth, especially in Asia, asset optimization in Europe, and innovation in sustainability-focused applications such as e-mobility and electronics.

• CapEx discipline is prioritized post-Zhanjiang ramp-up, with capex to peak in 2024–2025 and then fall below depreciation.

• Sustainability focus includes ~30% of sales from sustainable products by 2028 and a broad portfolio of low/zero PCF and recycled-content offerings.

Industrial Solutions segment

• Portfolio focuses on high-ROC, low CapEx additives and performance chemicals, with leading market positions and €8.0 billion sales in 2023.

• Targets €400–500 million EBITDA bsi increase by 2028, driven by GDP-plus markets, electronic materials, and productivity improvements.

• Strategic priorities include growth in electronic materials, cost efficiencies, and leveraging investments for capital efficiency.

• Capex to remain at ~80% of depreciation, with investments in growth markets and debottlenecking existing assets.

• Innovation targets sustainability and resource efficiency, leveraging technical expertise and regional R&D.