BASF is realigning its corporate strategy: "We will focus even more strongly on cash generation. We will emphasize capital discipline through lower capital expenditure and continue our cost-saving programs," summarizes CFO Dr. Dirk Elvermann.
Share buybacks totaling 4 billion euros
In the medium term, BASF aims to maintain the total payout to shareholders at the level of previous years through a combination of dividends and share buybacks. The total dividend payout of around €8 billion over a period of four years will be supplemented by share buybacks. These will be targeted from 2027 at the latest and are expected to amount to around EUR 4 billion.
The company presented its new strategy based on four strategic levers: 'Focus', 'Accelerate', 'Transform' and 'Win'. 'Focus' means that a clearer distinction is to be made between core and standalone businesses that serve specific sectors such as Environmental Catalyst and Metal Solutions. These and Battery Materials will be integrated into the Surface Technologies segment as separate divisions from January 2025.
Stringent portfolio management
BASF's Coatings divisiongenerates high earnings and cash contributions. BASF therefore intends to examine strategic options for value generation and prepare the divestment of the architectural coatings business in Brazil. AgriculturalSolutionsholds a leading position in the agricultural market and has a strong pipeline of innovations. By 2027, the separation of the business into separate companies with their own ERP (Enterprise Resource Planning) system should be completed and the business floated on the stock exchange. Battery Materials is characterized by high market and technology risks. BASF plans to mitigate these risks by utilizing existing capacities and exploring opportunities for cooperation along the entire value chain.
Strengthening business and increasing personal responsibility
With the 'Accelerate' leverlever, BASF's new strategy aims to increase the speed of value generation and simplify the corporate organization. The Group wants to strengthen its businesses through leaner and more differentiated Group management. A performance management system will create a closer link between incentives and divisional performance. The company is also simplifying and streamlining its organization.
Designing a sustainable product portfolio
With 'Transform', the Group is focusing on driving forward the green transformation. BASF is taking a step-by-step approach and, in a second phase, will increasingly secure renewable raw materials and increase the quantities of products with sustainable properties in line with customer needs. By 2050, the company is aiming for net-zero greenhouse gas emissions for production (Scope 1), energy procurement (Scope 2) and raw material sourcing (Scope 3.1).
Cultural change required
The aim of "Win" is to increase personal responsibility, speed and performance orientation throughout the company. "We have to change so that employees take on more personal responsibility, make decisions more quickly and we can improve our performance," says BASF CEO Dr. Markus Kamieth.