In the third quarter, the EBITDA before special items for the BASF Group rose by €77 million to €1.6 billion due to significantly higher contributions from the core businesses Chemicals, Materials (high-performance plastics), Industrial Solutions and Nutrition & Care. “The positive earnings momentum in our core businesses was already visible in the first half of 2024 and continued in the third quarter, driven by higher volumes and margins,” said Dr. Markus Kamieth, Chairman of the Board of Executive Directors of BASF. At the same time, earnings declined significantly in business with specific industries and in Other units.
As part of its new strategy, BASF differentiates between core businesses and standalone businesses. The core businesses include the Chemicals, Materials, Industrial Solutions and Nutrition & Care segments. The Surface Technologies and Agricultural Solutions segments are managed as independent, industry-oriented businesses.
With €15.7 billion, sales were at the level of the same period of the previous year. Higher sales volumes in almost all segments had a positive impact on sales. Both the core businesses and Agricultural Solutions increased their sales volumes. Only the sales volumes of Catalysts in Surface Technologies declined due to weak demand in the automotive market. Negative currency effects, especially from the Argentine peso and the Brazilian real, weighed on sales. Lower prices in almost all segments, especially for precious metals and non-precious metals in Surface Technologies, additionally dampened the sales trend.
Provisions for production shutdowns impact EBITDA
EBITDA reached €1.3 billion, compared with €1.4 billion in the same period of the previous year. Special items reduced EBITDA by €345 million. In the Agricultural Solutions segment in particular, special charges were incurred for provisions related to the closure of the glufosinate-ammonium production facilities and related site closures, which were announced in July 2024.
The operating result (EBIT) of€250 million was down €144 million from the same quarter of the previous year. Depreciation and amortisation amounted to €1 billion, compared with €969 million in the second quarter of 2019.
Quarterly net income rises to €287 million
Income after taxes and non-controlling interests amounted to €287 million. In the same quarter of the previous year, a loss of €249 million was incurred. The significant increase resulted in particular from higher income from investments. This was mainly due to special income of €398 million from the contribution of Wintershall Dea's assets to Harbour Energy. In the same quarter of the previous year, special items at Wintershall Dea amounted to minus €291 million.
Development of BASF's business segments Chemicals, Materials and Industrial Solutions
- Chemicals: The Chemicals segment posted sales of €2.7 billion. This corresponds to growth of almost 12 percent compared with the same quarter of the previous year (€2.4 billion). EBITDA before special items rose by as much as 35.5 percent to €342 million.
- Materials: In the Materials segment, the Engineering Plastics business generated sales of €3.4 billion in the reporting period, an increase of almost two percent. EBITDA before special items increased by 34.5 percent to €484 million.
- Industrial Solutions: The Industrial Solutions segment achieved sales of around €2.1 billion, an increase of more than seven percent. EBITDA before special items increased by 45.3 percent to €301 million.
Cost-cutting programmes on the right track
Commenting on the implementation of the ongoing cost-saving programmes, BASF's Chief Financial Officer Dr. Dirk Elvermann says: “We are on track to achieve the targeted €2.1 billion annual cost savings by the end of 2026. The implementation of the cost savings programs announced in February 2023 is in full swing.”
By the end of September 2024, BASF has already achieved ongoing cost savings of around €800 million. The one-time costs amount to approximately €500 million. By the end of this year, the company expects ongoing cost savings of more than €800 million per year and related one-time costs of approximately €550 million.
BASF Group outlook for 2024 unchanged
BASF is adhering to its economic assumptions for the entire year 2024, such as the development of gross domestic product, domestic production or the oil price. The Group outlook for 2024 published in the BASF Report 2023 also remains unchanged. According to this outlook, the company expects EBITDA before special items to be between €8 billion and €8.6 billion. From today's perspective, the lower end of the forecast range will be achieved. CO2 emissions are expected to be between 16.7 and 17.7 million tonnes.
