“With our new strategy, we are setting BASF on a course for growth,” said Dr. Martin Brudermüller at the presentation of BASF’s new strategy in Ludwigshafen.
The Chairman of the Board of Directors highlighted the positive evolution in recent years: “Since 2012, our operating income before depreciation, amortization and special items has grown an average of 8% per year, considerably faster than the 3% increase. in costs per year ”. BASF’s earnings growth also outpaced the 3.7% annual increase in global chemical production. Furthermore, there was a strong development in free cash flow in recent years and a high return on capital employed (ROCE), most recently 15.4%. Above all, the new strategy aims to increase sales and volumes.
BASF focuses on growing organic businesses. To grow faster, BASF will focus even more on its customers and develop personalized offers for them. With the goal of being faster and more flexible, the company will significantly simplify structures and processes, refine its portfolio and strengthen Verbund. “We will transform our organization to be more agile and customer-centric,” said Brudermüller.
The Asian market, where BASF is already well established, plays an important role in its profitable growth strategy. With a world market share of over 40%, China is the largest chemical market and is driving the growth of world chemical production. “By 2030, China’s share of the market will increase to almost 50% and we want to participate in this growth,” said Brudermüller. “Our new Verbund site in Zhanjiang in Guangdong province and the expansion of the Nanjing site will significantly enhance our growth in this dynamic market.”
With its new strategy, BASF is pursuing ambitious financial and non-financial goals. “We want to outgrow the market and our goal is to increase our sales volumes above the growth of global chemical production,” said Chief Financial Officer and Vice Chairman of the Board of Directors, Dr. Hans-Ulrich Engel.
BASF also wants to further increase profitability and is targeting an increase in EBITDA before special items of 3% to 5% per year. “Furthermore, BASF aims to achieve a return on capital employed well above the cost of the percentage of capital each year. This means that we create real added value, “Engel said.
BASF also wants to be a leader in the eyes of its investors and aims to provide them with an above-average value compared to the chemical industry. “Consequently, we want to increase our dividend per share every year, supported by strong free cash flow,” Engel said.