At a Capital Market Update in Antwerp, BASF reaffirmed its financial targets for 2028 and explained the implementation of its “Winning Ways” strategy. Chairman of the Board of Executive Directors Dr. Markus Kamieth emphasized the focus on portfolio management, disciplined capital allocation and integrated value chains as key success factors. The company believes it is on track to grow profitably in a challenging environment.
Developments in standalone businesses of BASF
- BASF plans to retain its activities in the Environmental Catalyst and Metal Solutions (ECMS) business sector for the longer term. In 2024, the sector generated sales of €7 billion, and cash flows of around €4 billion are expected by 2030.
- In the Battery Materials segment, which generated sales of €0.6 billion in 2024, fixed costs and capital expenditures were reduced. Contracts with customers such as Catl ensure that existing capacities are fully utilized.
- The Coatings business area underwent a change with the sale of the Brazilian architectural coatings business to Sherwin-Williams for a purchase price of $1.15 billion. BASF is also reviewing options for the automotive production coatings, automotive refinish coatings and surface technology business units, which generated sales of €3.8 billion in 2024.
- A partial IPO of Agricultural Solutions is being prepared for 2027. The division generated sales of just under €9.8 billion in 2024 and is in the process of being legally spun off.
Financial targets until 2028
The chemical company confirms EBITDA before special items of between €10 billion and €12 billion in 2028. In addition, cumulative free cash flow of more than €12 billion is to be generated from 2025 to 2028. A return on capital employed (ROCE) of around 10 percent is targeted. Dividend payments of at least €2.25 per share per year and share buybacks of at least €4 billion between 2027 and 2028 are planned.
Portfolio measures strengthen BASF's balance sheet
Chief Financial Officer Dr. Dirk Elvermann emphasizes: “Our successful portfolio measures will enable us to strengthen our balance sheet and potentially accelerate share buybacks.” Revenues from the sale of the architectural coatings business and Food and Health Performance Ingredients are already flowing in. “We will continue to capture value from oil and gas assets and are exploring strategic options for our Coatings activities. Furthermore, we are preparing for a partial IPO of our Agricultural Solutions business."
Investments and capital allocation at BASF
Expected capital expenditures for property, plant and equipment and intangible assets have been reduced to €16 billion for the period 2025 to 2028. Investments at the Zhanjiang Verbund site in China are below plan at around €8.7 billion. Most of the plants are scheduled to go into operation by the end of 2025.
Strengthening the core businesses
The core businesses Chemicals, Materials, Industrial Solutions and Nutrition & Care generated sales of around €40.3 billion in 2024. They are integrated into multi-stage value chains such as ethylene oxide or polyurethanes. “This integration and the application of various technologies provide BASF with advantages in terms of cost position, competitiveness and favorable product carbon footprints,” CEO Kamieth concludes. Measures such as the closure of unprofitable plants and the commissioning of new capacities are expected to increase earnings by around €400 million by 2028.
