BASF Open to Shed Noncore Assets to Streamline Portfolio

By Helena Smolak

BASF is open to divest its noncore businesses, starting off with its Brazil decorative paints unit, in an effort to streamline its portfolio, the latest in a string of Chief Executive Officer Markus Kamieth's restructuring measures.

The German chemical giant said Thursday ahead of its capital markets day that as part of its new corporate strategy for 2028 it will focus on its chemicals, materials, industrial solutions and nutrition and care segments as its core business. It is open to pursue active portfolio options for its environmental catalyst and metal solutions, battery materials, coatings and agricultural units, which it considers standalone businesses.

It expects to receive a total cash inflow of approximately 2 billion euros ($2.23 billion) from its exit from the oil and gas business due to earlier portfolio management measures, it said.

BASF plans to issue shareholder distributions of at least 12 billion euros between 2025 and 2028. It targets an annual dividend of at least 2.25 euros a share between 2025 and 2028 and foresees an aggregate dividend payment of around 8 billion euros in the four-year period, while buybacks are expects to amount to around 4 billion euros.

The company expects its earnings before interest and taxes, depreciation and amortization before special items--the company's preferred key metric--between 10 billion euros to 12 billion euros in 2028. It projects its cumulative free cash flow of more than 12 billion euros between 2025 and 2028. It aims to bring down cap expenditures below depreciation from 2026 onward, the company said.

Write to Helena Smolak at helena.smolak@wsj.com

(END) Dow Jones Newswires

September 26, 2024 02:23 ET (06:23 GMT)

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