BASF SE (BASFY) Q3 2025 Earnings Call Transcript

Oct. 29, 2025 6:11 AM ETBASF SE (BASFY) Stock, BFFAF StockBASFY, BFFAF

BASF SE (OTCQX:BASFY) Q3 2025 Earnings Call October 29, 2025 3:30 AM EDT

Company Participants

Stefanie Wettberg – Senior Vice President of Investor Relations
Markus Kamieth – CEO & Chairman of the Board of Executive Directors
Dirk Elvermann – Member of the Board of Executive Directors, CFO & Chief Digital Officer

Markus Kamieth
CEO & Chairman of the Board of Executive Directors

Yes. Thank you, Stefie. Good morning, everyone. Dirk and I welcome you to our Q3 conference call. In the third quarter of 2025, market dynamics for the chemical industry continued to be challenging. Upstream margins were still under pressure and customer buying behavior in almost all industries and regions remained cautious. Even in this demanding environment, BASF earnings came in slightly above market expectations and only slightly below the level of the prior year quarter.

Let’s start with a closer look at the sales performance of BASF Group compared with the prior year quarter. Overall, sales declined slightly on account of strong currency headwinds and lower prices. We were, however, able to achieve slightly higher volumes due to growth in the Surface Technologies, Chemicals and Materials segments.

From a regional perspective, we recorded 12% volume growth in China, slightly — slight volume growth in South America and fairly flat volume development in Europe. In North America, volumes were slightly down.

Compared with the prior year quarter, prices declined in 4 out of our 6 segments, particularly in Chemicals. In the Surface Technologies and Nutrition & Care segments, we managed to achieve price increases. Currency effects dampened sales in all divisions and were mainly related to the strong depreciation of the U.S. dollar, Chinese RMB and the Indian rupee. Portfolio effects slightly supported sales growth. Reflecting this underlying sales development, EBITDA before special items came in at over EUR 1.5 billion compared with EUR 1.6 billion in the prior year quarter.

Here is a snapshot of how the markets and our segments’ volumes and specific margins developed in the third quarter. Due to a continued imbalance between supply and demand and the resulting pressure on margins, the business environment in our upstream segments remained challenging. Despite these market headwinds, the Chemicals segment achieved solid volume growth in both divisions. However, the segment faced significantly lower prices and sharply reduced specific margins.

The Materials segment recorded slightly higher volumes despite the difficult market environment due to higher volumes in Monomers and stable volume development in Performance Materials. Prices declined in both divisions. However, our overall margins in the segments were lower driven by the Monomers division.

I will now give a short update on our Verbund side in South China. Let me begin with what we communicated at the recent Capital Market Update in Antwerp. We will complete this mega project with capital expenditures around EUR 1.3 billion lower than originally planned. We achieved this CapEx reduction through tight budgetary discipline, scope changes and excellence in procurement.

As a result of the currently long markets in China, we will have a slower-than-anticipated ramp-up of the overall earnings contributions. In the coming years, we expect most markets and value chains to rebalance. We, therefore, confirm the targeted EBITDA before special items of EUR 1 billion to EUR 1.2 billion by 2030.

Now this slide illustrates the impressive progress the Zhanjiang team has achieved since May. This includes the successful mechanical completion of the steam cracker and downstream petrochemical plants. The infrastructure and utility plants are already in steady operation. Additionally, we have safely and successfully started up various downstream plants, including butyl acrylate, 2-ethylhexyl acrylate, formaldehyde, neopentyl glycol and glacial acrylic acids with more start-ups to come. Thus, we are transitioning the project from construction to operational readiness. These achievements mark steady progress towards the site’s full operational start-up at the end of 2025.

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