BASF (OTCPK:BASF.Y) 2025 Capital Markets Day Transcript

BASF Capital Markets Day Summary Company Overview - Company: BASF (OTCPK:BASF.Y) - Event: 2025 Capital Markets Day - Date: October 02, 2025 - Location: Antwerp, Belgium Key Industry Insights - Chemical Industry Context: The chemical industry is facing significant macroeconomic challenges, but BASF remains confident in its strategic direction and initiatives despite these headwinds [10][26]. Core Business Strategy - Winning Ways Strategy: BASF launched a new strategy focusing on portfolio steering, capital allocation, and establishing a performance culture [9][11]. - Core vs. Standalone Businesses: BASF differentiates between core businesses (chemicals, materials, industrial solutions, nutrition and care) and standalone businesses, with a clear focus on enhancing the core [15][16]. - Financial Ambitions: The goal is to increase EBITDA from $5.4 billion to $7.9 billion by 2028 for core businesses [15]. Financial Performance and Targets - Midterm Financial Targets: BASF confirmed targets of €10 billion to €12 billion EBITDA before special items and cumulative free cash flow of €12 billion from 2025 to 2028 [26]. - Dividend Policy: BASF aims to maintain a dividend of at least €2.25 per share annually, with total shareholder distributions expected to reach at least €12 billion between 2025 and 2028 [27]. Operational Highlights - Antwerp Site: The Antwerp site is the second largest Verbund site for BASF, showcasing high energy integration and housing all eight core business units [5][6]. - Cost-Saving Initiatives: BASF is implementing a €2.1 billion cost-saving program targeting 10% of fixed costs, with a run rate savings of $1.6 billion expected by the end of the year [34][35]. Value Chain Focus - Polyurethanes and Ethylene Oxide: The conference highlighted the importance of the polyurethanes and ethylene oxide value chains, which represent significant portions of BASF's core business [7][57]. - Innovation and Sustainability: BASF emphasizes innovation in its core businesses, with 15% of sales coming from products launched in the last five years, driven by sustainability trends [52][53]. Standalone Business Updates - Automotive Catalyst Business: The internal carve-out of the automotive catalyst business is seen as a success, with expected cumulative cash flow contributions of approximately $4 billion from 2024 to 2030 [19]. - Battery Market Challenges: The battery market remains volatile, prompting BASF to reduce fixed costs and ramp down capital spending [20][21]. - Coatings Business Divestment: BASF successfully divested its decorative paints business in Brazil for $1.15 billion and is exploring options for the rest of its coatings business [22][23]. Future Outlook - IPO Readiness: BASF is preparing its agricultural solutions business for a potential IPO by 2027, reflecting confidence in its integrated business model [24][25]. - Market Positioning: BASF aims to leverage its strong market positions, with 75% of core businesses holding top three market positions in their respective markets [46]. Conclusion - BASF is committed to executing its strategic initiatives, focusing on core business growth, cost efficiency, and innovation while navigating a challenging macroeconomic environment. The company remains optimistic about its future performance and market positioning.