Good momentum in BASF’s core businesses has continued into the third quarter with the company increasing EBITDA before special items by €77 million ($83m) to €1.6 billion ($1.7bn).
At €15.7bn ($17bn), sales were on a level with the prior-year period. Volume growth in almost all segments compared with the third quarter of 2023 had a positive impact on sales performance. Volumes increased in the core businesses as well as in Agricultural Solutions.
Under its new strategy announced in late September 2024, BASF differentiates between its core businesses (Chemicals, Materials, Industrial Solutions and Nutrition & Care) and the standalone businesses that serve distinct industries.
“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. This increase was partially offset by a considerable earnings decline in the standalone businesses as well as in Other.
Chief financial officer Dr Dirk Elvermann provided an update on the cost saving programmes currently underway: “We are on track to achieve the targeted €2.1bn ($2.3bn) annual cost savings by the end of 2026. The implementation of the cost saving programmes announced in February 2023 is in full swing.”
As of the end of September 2024, BASF has already achieved a cost reduction run rate of around €800m ($870m). The associated one-time costs were around €500m ($543m). By the end of this year, the company expects to achieve a cost reduction run rate of more than €800m, with associated one-time costs of around €550m ($598m).
BASF is also moving forward as planned with the additional cost saving programme launched in 2024 that focuses on improving the competitiveness of the Ludwigshafen site. The units at the site have recently been informed about the contributions they are expected to deliver by the end of 2026. Based on current information, BASF expects to reach the low end of the EBITDA before special items forecast range for the full year 2024. For the fourth quarter of 2024, there are risks from potential declines in prices and lower volume growth than expected. Opportunities may arise from a positive development in demand and margins.
