On Thursday, BASF announced a significant overhaul of its strategic direction, establishing new financial targets while committing a minimum of 12 billion euros in dividends and share buybacks over the next four years, leading up to 2028. This shift is aimed at prioritizing core business operations to enhance overall growth and profitability. The German chemical powerhouse has allocated at least 2 billion euros, or 2.25 euros per share, for annual dividends from 2025 to 2028.
This figure represents a decrease from the previous year's 3.40 euros per share. In conjunction with dividends, BASF plans to return an additional 4 billion euros to its shareholders through supplemental share buybacks starting in 2027. To support these distribution goals, BASF is also focusing on optimizing its balance sheet and cash flows.
Expected reductions in capital expenses will drop below depreciation levels, which is anticipated to commence from 2026, contingent on the operational start of the Zhanjiang Verbund site in China in 2025. The new financial framework from BASF also emphasizes its revised dividend policy. By 2028, the company expects EBITDA before special items to fall between 10 billion euros and 12 billion euros, situating them favorably in mid to upcycle market conditions.
Over the same period, BASF projects a cumulative free cash flow exceeding 12 billion euros from 2025 to 2028. Moreover, the company is redefining its operational strategy by delineating clear portfolio roles for its core businesses. In the coming years, BASF intends to pursue profitable growth within its primary sectors, which include chemicals, materials, industrial solutions, and nutrition & care.
Additionally, BASF aims to evaluate active portfolio options for its standalone businesses, which encompass environmental catalyst technologies, metal solutions, battery materials, coatings, and agricultural solutions. BASF is also positioned to gain 2 billion euros from the divestment of its oil and gas operations in 2024, prior to unloading its decorative paints division based in Brazil. Following this announcement, BASF shares witnessed a decline of 3% during morning trading, with current pricing at $44.13, reflecting a change of $-1.3 or a decrease of 2.84%..