BASF (BAS) Q3 2024 (Media) earnings summary

Executive summary

• Q3 2024 sales reached €15.7 billion, flat year-over-year, with volume growth in most segments offset by lower prices and negative currency effects.

• EBITDA before special items increased 5% to €1.62 billion, driven by improved margins in core segments; net income was €287 million, rebounding from a loss in Q3 2023, aided by a €398 million gain from the Wintershall Dea asset transfer.

• Free cash flow dropped to €569 million from €1.5 billion, mainly due to lower operating cash flow and higher capex for the South China Verbund site.

• Completed divestiture of Wintershall Dea's E&P business, advancing exit from oil and gas.

• New strategy and financial targets announced, focusing on core and standalone businesses and updated dividend policy.

Financial highlights

• Sales: €15,739 million (flat vs. Q3 2023); EBITDA before special items: €1,622 million (+5%); EBIT before special items: €635 million (+10% YoY); EBIT: €250 million (-36.5%).

• Net income: €287 million (vs. -€249 million in Q3 2023); EPS: €0.32 (vs. -€0.28); Adjusted EPS: €0.32 (flat YoY).

• Free cash flow: €569 million (vs. €1.5 billion YoY); Operating cash flow: €2,052 million (-24%).

• Net debt increased to €19.7 billion, up €3.1 billion since year-end 2023; equity ratio at 45.4%.

• Cost savings run rate reached €800 million by September 2024, targeting €2.1 billion by 2026.

Outlook and guidance

• 2024 guidance maintained at the low end of the previously published EBITDA before special items range (€8.0–8.6 billion); free cash flow €0.1–0.6 billion; CO₂ emissions 16.7–17.7 million metric tons.

• New 2028 targets: EBITDA before special items €10–12 billion, cumulative free cash flow >€12 billion (2025–2028), ROCE ~10%.

• Dividend of at least €2.25/share annually from 2024, with share buybacks targeted from 2027.

• Q4 expected to be challenging, especially for Surface Technologies and Agricultural Solutions due to weak automotive and agri markets and currency headwinds.

• Force majeure in Nutrition and Health division expected to impact H2 EBITDA by a low triple-digit million euro amount, with a larger effect in Q4.