The Annual Press Conference 2024 of BASF ($BAS (+1,01 %) ) in Ludwigshafen provided detailed insights into the company's financial development, the new strategy "Winning Way" and the planned measures to increase efficiency and profitability.
Chairman of the Board of Executive Directors Marcus Camitto and Chief Financial Officer Dirk Elbermann presented the figures for 2024, answered questions on restructuring restructuring, investments and strategic realignment and and gave an initial forecast for the coming year.
Despite a challenging market environment, BASF was able to deliver solid results. Particularly noteworthy was the 18 percent increase in EBITDA pre exceptionals in the core business, driven by growth in thedriven by growth in the Nutrition & Care Nutrition & Care, Industrial Solutions, Chemicals and Materials segments. At the same time, the company recorded remarkable volume growth of 6 % in Europe. The Agriculture division performed strongly, while the Surface Technologies and Surface Technologies and Agricultural Solutions were under pressure.
The free cash flow of 750 million euros exceeded forecastsand the margin improved from 12.6 % to 13.1 %.. The net income rose significantly to 1.3 billion eurosafter amounting to only 225 million euros in the previous year. This growth was primarily driven by higher income from investments investments.
BASF invested 6.2 billion euros in property, plant and equipment and intangible assets, with a focus on the new on the new Verbund site in South China in southern China. At the same time, the company reduced its capital expenditure in other areas and announced that it would increase investments after the ramp-up of the Xinjiang further reduced.
The cost-cutting programs are fully on track: by the end of 2024, annual savings of annual savings of 1 billion euros have already been realizedThe long-term target is 2.1 billion euros by the end of 2026.
Particularly pleasing for investors: BASF is planning to distribute at least 12 billion euros to shareholders between 2025 and 2028of which 8 billion euros as dividends and 4 billion euros for share buybacks from 2027. For the 2024 financial year, the company is proposing a dividend of 2.25 euros per share per share.
For 2025, an EBITDA pre exceptionals of between 8 and 8.6 billion euros is is expected. While almost all segments are expected to contribute to growth, the Chemicals segment is expected to decline. The free cash flow is expected to be between 0.4 and 0.8 billion euros. range.
Another strategic goal is to reduction of CO₂ emissions. The Scope 1 and Scope 2 emissions remained stable at 17 million tonswhile the share of renewable energies in the electricity mix increased from 20 % to 26 % increased.
The subsequent question and answer session focused on key topics such as the Ludwigshafen site, energy costs in Europe, US tariffs and investments in new technologies. took center stage.
Ludwigshafen & job cuts: One analyst wanted to know how the planned cost savings will affect jobs in Ludwigshafen. Camitto emphasized that although no concrete figures can be given, a significant part of the savings will be achieved through staff reductions. through staff reductions will be achieved through job cuts. The restructuring is necessary to ensure the competitiveness of the site.
Energy costs and competitiveness in Europe: Another hotly debated topic was the future of energy-intensive production in Germany. Camitto conceded that high energy energy costs affect the competitiveness of some products. Nevertheless, he emphasized that this not mean the end of the chemical industry in Europe. in Europe. On the contrary, BASF will capacities and use existing plants more efficiently.
US tariffs & trade conflicts: In view of the geopolitical uncertainties, the topic of US tariffs was also addressed. Dirk Elbermann explained that BASF is less affected by local production capacities in various regions, BASF is less affected than some of its competitors. Camitto added that the overall impact on the company would remain manageable. remain manageable.
Mobile autonomous robotics & AI: One analyst asked about the use of automation and artificial intelligence to reduce costs. Camitto confirmed that BASF is using automation and automation and AI in various areas, but he does nothowever he does not expect revolutionary changes. The focus is on the gradual integration of efficient processes.
IPO of Agricultural Solutions: The IPO of Agricultural Solutions was also discussed. BASF first wants to demonstrate the demonstrate the full value of the businessbefore a part of the shares on the stock exchange. The exact amount of the placement depends on the the market situation and investor interest and investor interest.
The "Winning Way" strategy is showing initial success. Despite economic uncertainties, BASF was able to deliver solid results in 2024 and has clear plans for the coming years. The focus areas are clearly defined:
- Increased efficiency through cost reductions and digitalization
- Growth through targeted investments in core segments
- Reduction in capital expenditure following the ramp-up of the China site
- Progress in CO₂ reduction and sustainable production
- Attractive dividends for shareholders
How many of you have BASF in your portfolio? Are you hoping for share price gains or are you taking the solid dividends with you?
