BASF (BAS) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales were €15.7 billion, flat year-over-year, with group volumes up 7% excluding metals and strong core business performance offset by currency headwinds and lower prices.

• EBITDA before special items rose 5% to €1.62 billion, driven by higher volumes and margins in core businesses.

• Net income improved to €287 million from a loss of €249 million in Q3 2023, aided by a €389 million disposal gain from the Wintershall Dea asset transfer.

• Cost savings programs are progressing, achieving an €800 million run rate by Q3, with a target of €2.1 billion annual savings by 2026.

• Significant events included the closure of glufosinate-ammonium production, a fire at Ludwigshafen, further plant closures in Germany, and the completion of the Wintershall Dea E&P business sale.

Financial highlights

• EBITDA margin before special items increased to 10.3% from 9.8% year-over-year.

• EBIT before special items was €635 million, up 10% year-over-year; EBIT fell 36.5% to €250 million.

• Free cash flow declined to €569 million from €1.5 billion in Q3 2023, mainly due to lower cash inflows from net working capital.

• Net debt rose to €19.7 billion, with a solid equity ratio of 45.4%.

• Credit ratings remain strong (S&P A-, Moody's A3, Fitch A).

Outlook and guidance

• 2024 guidance unchanged: EBITDA before special items €8.0–8.6 billion, free cash flow €0.1–0.6 billion, with expectations to reach the low end of the range.

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

• Dividend policy: at least €2.25/share annually, with total shareholder distribution of €12 billion (2025–2028), including buybacks from 2027.

• Q4 is expected to be challenging, with continued headwinds in automotive and agricultural sectors, significant FX impacts, and force majeure in nutrition and health impacting H2 EBITDA.

• Risks for Q4 include potential price declines and lower volume growth; opportunities from improved demand and margins.