BASF plans greater autonomy for agricultural area

BASF plans to transform its agriculture, battery materials and coatings businesses into standalone units. The information is from the Reuters Agency. The objective is to increase profitability.

According to the material released, the company will create legally separate entities for the three units, the IGBCE union said in a statement this Thursday, which was confirmed by a company spokesperson.

However, "there is no intention to sell these businesses", said the CEO Martin Brudermueller (pictured) during an investor conference. He previously said that external investment partners could be brought on board to share the cost of expanding the battery business.

The renewal comes as Brudermueller prepares to retire from the company (April 2024). Markus Kamieth and Melanie Maas-Brunner are considered for the succession.

In this context, the company informed that it will emphasize cash generation in all its businesses. The following EBITDA margins before extraordinary items are targeted:

• Business Verbund: 17% over the cycle

• Battery materials: 30% or more (excluding metals) by 2030

• Coatings: 15% or more in the medium term

• Agricultural Solutions: 23% or more in the medium term

In line with these changes in the guidance approach, BASF will also adapt its external reports and forecasts. From the BASF Report 2023, to be published on 23 February 2024, BASF will forecast EBITDA before special items and free cash flow at Group level, rather than providing an outlook for sales, EBIT before special items specials and ROCE. Additionally, at a segment level, the company will also provide a forecast of EBITDA before extraordinary items and cash flow.