On February 23, 2024, we will present the new CapEx budget for the planning period from 2024 to 2028. We are continuing to broaden the foundation for BASF’s future profitable growth. In this context, let me provide you with an update on our Verbund site project in Zhanjiang. The project execution is on time and in budget. Last month, the second downstream plant for thermoplastic polyurethane, in short TPU, successfully started up. We are stepping up our construction activities according to plan, and there are currently more than 15,000 construction workers on the site every day. The photo of the side shows the impressive progress that our team in China has achieved. We are taking advantage of the attractive financing conditions in China and are financing the Zhanjiang Verbund site with a combination of 20% equity and 80% debt.
The equity is funded by dividends from the BASF existing group companies in China. The debt financing will be based on the Chinese capital market and local bank financing. We are proud that BASF is able to independently execute such a megaproject in these challenging economic times. With that, Dirk, back to you for an update on Wintershall Dea.
Dirk Elvermann: We continue to pursue our strategic goal of selling BASF’s 72.7% share in Wintershall Dea and are working monetization options. Wintershall Dea is currently in the process of legally separating its Russia-related business. The separation is planned to be completed by mid-2024 and marks an important milestone in the overall process. Significant federal investment guarantees are in place for the Russian assets. Related claims are not accounted for as receivables in our balance sheet. They provide an upside potential. For the business year 2022, BASF already received around €290 million as common dividend from Wintershall Dea. We do not expect any other dividend payments this year. Wintershall Dea has adjusted its corporate strategy to reflect the changes in the energy sector and particularly, its exit from Russia.
Currently, Wintershall Dea is reorganizing its company structure with a target of reducing administration costs by around €200 million per year. In the future, the Management Board will comprise three instead of five members. As part of the restructuring, the company plans to reduce around 500 positions. And now finally, back to Martin.
Martin Brudermüller: Thank you, Dirk. Before we continue with the outlook, I will add a few more comments on our portfolio management. A few weeks ago, you may have noticed some media articles speculating about planned divestitures of parts of BASF Group during my term. Let me be clear about the specific businesses that were referred to. We have a clearly defined and known position on Wintershall Dea, which Dirk just reiterated. We are very satisfied with the carve-out of ECMS, BASF Environmental Catalyst and Metal Solutions, which was successfully completed in July. The standalone structure prepares the business for the upcoming changes in the internal combustion engine market. This allows strategic options in the future, but we have no intention to sell this business at this time.
We are particularly satisfied with the currently very strong performance of our Coatings division and have no plans to divest this business or any parts of it. As far as the Illertissen site is concerned, we have confirmed that we are examining strategic options for this rather small food ingredients business that has only limited synergies with the rest of our portfolio. The optimization of our site footprint with around 240 production sites worldwide is generally an ongoing task. Now, I will conclude with the outlook. In the fourth quarter of 2023, we expect global chemical production to further stabilize. However, in the current interest rate environment and in view of increasing geopolitical risks, the macroeconomic outlet remains extremely uncertain.
In particular, rising raw material prices would weigh on demand and margins since pricing power is limited in the times of low demand. As announced in July, we anticipate sales of between €73 billion and €76 billion as well as EBIT before special items of between €4.0 billion and €4.4 billion in 2023. We, meanwhile, expect sales and earnings at the lower end of these respective ranges. If chemical production does not further stabilize, there are risks from a further decline in volumes in the sharper-than-expected price reduction. We are maintaining the underlying assumptions for the global economic environment at the levels presented in July. Looking ahead, we do not expect an easy start to 2024. As soon as demand really picks up again, BASF will defend and expand its market shares with good competitiveness through leaner structures and good cost positions.
In this way, we will provide powerful support to our customers worldwide. To conclude, I would like to state once again, an attractive dividend is of high importance for the BASF Board. This holds true in challenging times. Therefore, our practice of keeping the dividend at least at the previous year’s level remains unchanged. Our strong balance sheet, high equity ratio, and good credit ratings give us the necessary financial strength in this regard. Thank you. And now, Dirk and I are glad to take your questions.
Stefanie Wettberg: Ladies and gentlemen, I would now like to open the call for your questions. [Operator Instructions] The first question now comes from Christian Faitz, Kepler Cheuvreux. Please go ahead.
Christian Faitz: Thank you, Stefanie and good morning also Dirk and Martin. First question, can you specify and also quantify the insurance payment in Agricultural Solutions? And then my second question, if I might sneak that in is, how do you currently, and also perhaps with a few into 2024, see the underlying demand/production volumes for the global automotive market? Thank you very much.
Dirk Elvermann: Christian, good morning. I’ll start with the insurance payment, what I can say here, so if we deduct the insurance payment from the Q3 results of Agricultural Solutions, we would be — would have been more in line with average analyst estimates, which are negative. So, overall, the slightly positive result that we get for Ag is on the back of this insurance payment. Insurance payment, as you might remember, related to a damage that was part of a third-party processing plant and reported natively in EBIT BSR in 2022 and now this is turned back and compensated in this regard. On Automotive, we stay positive. Automotive besides Ag, these are two businesses that really hold strong for us in the year 2023. And if you look into the stats in terms of units to be produced, you’ll see that with the unit order of magnitude of 88.5 million units, this is a strong sector and we are benefiting from that, particularly with our Coatings division.
