BASF’s financial strength supports proposed stable dividend of €3.40 per share for the 2023 business year

• EBITDA before special items of between €8bn and €8.6bn expected
• Free cash flow of between €0.1bn and €0.6bn expected due to temporarily higher capital expenditures
• Further programme for Ludwigshafen site announced, targeting annual cost savings of €1bn by the end of 2026

In a market environment shaped by economic uncertainty, BASF Group reported sales of €68.9bn  in the 2023 business year, compared with €87.3bn in the previous year. This sales development was mainly driven by considerably lower prices and volumes. Lower raw materials prices in particular led to lower prices in almost all segments.

Sales volumes fell in all segments as a result of weak demand from many customer industries. Nevertheless, BASF demonstrated economic strength with cash flows from operating activities rising 5.2 % yr-on-yr to reach €8.1bn.

The company had already released preliminary figures for the full year 2023 on January 19, 2024. Dr. Martin Brudermüller, Chairman of the Board of Executive Directors of BASF (pictured), and Dr. Dirk Elvermann, Chief Financial Officer, presented the 2023 business development in detail and announced a further programme for the Ludwigshafen site with additional annual cost savings of €1bn by the end of 2026. This is in addition to the existing cost savings programme in non-production units with a focus on Europe and the adaptation of production structures in Ludwigshafen.

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Earnings at Ludwigshafen site weaken further in 2023

In 2023, in an extremely difficult market environment with low demand, EBIT before special items declined by double-digit percentages in all regions. “In absolute terms, however, our teams delivered a positive earnings contribution in all significant countries – with the exception of Germany,” Brudermüller said. Results in Germany suffered due to substantially negative earnings at the largest production site in Ludwigshafen. There are two main reasons for this: The temporary low-demand environment is affecting the volume development in both the upstream and downstream businesses. And higher production costs due to structurally higher energy prices predominantly burden the upstream businesses.

Brudermüller noted: “On the one hand, this situation demonstrates the high competitiveness and health of BASF Group under challenging conditions at the global level. On the other hand, the negative earnings at our Ludwigshafen site show the urgent need for further decisive actions here to enhance our competitiveness.”

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