International. "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 developments in recent years: "Since 2012, our income from operations before depreciation, amortization and special items has grown on average by 8% per year, considerably faster than the 3% increase in costs per year." BASF's earnings growth also exceeded the 3.7% annual increase in global chemical production. In addition, 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 aim of being faster and more flexible, the company will significantly simplify structures and processes, fine-tune its portfolio and strengthen Verbund. "We will transform our organization to be more agile and customer-centric," Brudermüller said.
The Asian market, where BASF is already well established, plays an important role in its growth strategy. With a global market share of more than 40%, China is the largest chemical market and drives the growth of global chemical production. "By 2030, China's share of the market will increase to almost 50% and we want to participate in this growth," Brudermüller said. "Our new Verbund site in Zhanjiang in Guangdong Province and the expansion of the site in Nanjing will significantly enhance our growth in this dynamic market."
With its new strategy, BASF pursues ambitious goals, financial and non-financial. "We want to grow more than 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 aims for an increase in EBITDA before special items of 3% to 5% per year. "In addition, 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 true added value," Engel said.
BASF also wants to be a leader in the eyes of its investors and aims to provide them with above-average value compared to the chemical industry. "Accordingly, we want to increase our dividend per share each year, supported by strong free cash flow," Engel said.
