BASF SE (PNK:BASFY) Q1 2024 Earnings Call Transcript

BASF SE (PNK:BASFY) Q1 2024 Earnings Call Transcript April 25, 2024

BASF SE isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Stefanie Wettberg: Good morning, ladies and gentlemen. On behalf of BASF, I would like to welcome you to our conference call on the First Quarter 2024 Results. Throughout today's recorded presentation, all participants will be in listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions]. This presentation contains forward-looking statements. These statements are based on current estimates and projections of the Board of Executive Directors and currently available information. Forward-looking statements are not guarantees of the future developments and results outlined therein. These are dependent on a number of factors. They involve various risks and uncertainties, and they are based on assumptions that may not prove to be actual.

Such risk factors include those discussed in opportunities and risks of the BASF report 2023. BASF does not assume any obligation to update these forward-looking statements contained in this presentation above and beyond the legal requirements. With me on this early morning call today are Martin Brudermuller, Chairman of the Board of Executive Directors; and Dirk Elvermann, Chief Financial Officer. Please be aware that we have already posted the speech on our website at basf.com/Q12024. Now I would like to hand over to Martin Brudermuller.

Martin Brudermuller: Good morning, ladies and gentlemen. Dirk Elvermann and I welcome you to our analyst conference call. Today, we will provide you with details regarding our business development in the first quarter of 2024. Let's start with the development of chemical production by region. Based on the currently available data, global chemical production grew by 5.4% in Q1 2024 compared with the prior year quarter on account of a strong growth in China. As in previous quarters, the growth in China was driven by recovering domestic demand and exports. However, this volume growth in China was still associated with low sales prices and is influenced by positive base effects. In North America, our chemical production was essentially flat.

A scientist in a lab working on a beaker of chemicals used in biopharmaceuticals.

While in the European Union, production increased slightly compared with the weak prior year quarter. And in Asia, excluding China, production decreased slightly. To sum up, the volume recovery continued, but slowly this trend is also seen in a sequential comparison as volumes increased slightly in Q1 2024 compared with Q4 2023. Still, we cannot yet confirm a fundamental turnaround in industry dynamics. For this, we will need to see the current positive trend continuing in the coming quarters. We now move on to BASF's performance in the first quarter of 2024 compared with the previous -- the prior year quarter. Overall, BASF Group sales were 12% lower at EUR 17.6 billion. This was mainly due to lower sales prices, which declined across almost all segments.

Prices predominantly decreased on account of lower raw material prices. In Agricultural Solutions, we were able to slightly increase prices. Currency headwinds dampened sales in all divisions. Volumes of BASF Group increased by 0.5%. Excluding pressures and base metals, volume increased by 2.1% compared with the prior year quarter. In terms of earnings development, we had a solid start to the year. EBIT before -- EBITDA before special items amounted to EUR 2.7 billion. This is slightly below the figure of the prior year quarter and slightly ahead of analyst consensus. Higher earnings in the Nutrition & Care, Materials, Industrial Solutions and Chemicals segments more than compensated for the decline in other Agricultural Solutions and Service Technologies.

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To continue reading the Q&A session, please click here.