If it’s coming up and really we get a hockey stick, then we will have delivered more. So – but in that respect, we feel comfortably ambitious with our guidance.
Martin Evans: Thank you very much.
Stefanie Wettberg: I see Jaideep Pandya is back in the queue. So, please go ahead now.
Jaideep Pandya: Sorry. One first question is on your German plant on how much exports are you doing to China these days from Germany? Sort of just from [indiscernible] when your China cracker will be up and running, where will these flows go, or would you have to reduce capacities given we are in an overcapacity world for quite a few years? And then just apologies to ask this again, but on your Q1 guide or not guide, but on your Q1, should we think Q1 will be flattish year-on-year and you will make up for the 10% midpoint growth that you are alluding to for the year, or do you think that your start will be a bit soft, given it’s such a big ag-dominated quarter? Thanks.
Dirk Elvermann: Yes, I will start with the second question. Q1 had a, I would say, a solid start. Will this be possibly lower than Q1 2023, which was quite a strong quarter in the overall scheme, yes, this can be. And this would be on the back of the Agricultural Solutions business, as you rightfully spot. So, yes, I think its spot on. Decent start, solid start, but due to it can be that we are coming in a little bit lower. But we will have to see what also the rest of February and March is bringing there.
Martin Brudermuller: We cannot give you a detailed picture about exports into China, but it’s not such a big volume because we have also very much raised our capacities over there in China, so China for China. This is also what the whole Verbund site is. What we usually do, we use the global grid to do pre-marketing for capacities coming up, but that is also too early for Shanshan now. So, I would say, yes, some material flows out, but it’s not a dramatic one that I feel jeopardized that this is now especially attacked and we have to reduce, let’s say, production here in Ludwigshafen and Europe because of exports to China. So, I think it’s nothing which you should keep on your list of concern.
Jaideep Pandya: Thanks a lot.
Stefanie Wettberg: Okay. We still have five persons on the list. We will give it a try. But please short questions, short answers. So, now it’s Peter Clark, Société Générale.
Peter Clark: Yes. Good morning. I will keep it short then. You talked about tightening belts on the CapEx for the growth projects. And certainly on my calculation, it looks like the growth allocation for the CapEx ‘24 to ‘27 has come down substantially, over €10 billion, €207 billion. I know you already trimmed something you get in benefits of inflation being low. But has something fallen out of battery materials, because obviously, most of the spend on China is still happening? Thank you.
Dirk Elvermann: Yes. First, Peter, you are right, we are trimming the CapEx. And so the preponderance of the investment peak now is indeed for the China project. For batteries, we take a little bit of a longer view now and also looking into where can we de-risk with partnerships. So, you are right, the majority of the investment is in China batteries. We are fully committed, but we are slowing down here a little bit.
Peter Clark: Got it. Thank you.
Stefanie Wettberg: So now we have Andreas Heine, Stifel, and he will be followed by Oliver Schwarz.
Andreas Heine: Yes, very two quick ones. China, can you give an update what you on your own companies see? In the Q3 call, you said that your China plants are already running at normal load, but with very thin margins. And maybe an update on where you see the discussions about the state guarantees for the lost Russian assets?
Martin Brudermuller: So, I would say not so much news on what we said the last time. We definitely don’t see the dynamic China everyone would like to see because the topics are prevailing, like the real estate sector is still difficult. I would say maybe a little bit light on the tunnel in terms of consumer confidence, so people seem to be a little bit more better on that. So, we have a slight volume growth in a one-digit number now is basically in Q4. And I would say that’s the way it continued also. But let me say that January alone in China, you can have a value on because you have Chinese New Year, so you have usually to take January and February together. Too early to say because depending on whether it’s late or early, that has different patterns. But I would say nothing specifically about China that is shooting up or slowing.
Dirk Elvermann: And to me again on the Federal investment guarantees, so Wintershall Dea is pursuing these claims diligently. This is ongoing. I have to ask for understanding that we can’t come up with details here, disclose any details, but this is positively going on, I would say. And what is always worth mentioning is that these claims are not accounted for. So, whatever is gotten back from the Federal investment guarantees is a clear value upside compared to what you see in the financial statements of Wintershall Dea and also BASF.
Andreas Heine: Thanks.
Stefanie Wettberg: Okay. So, now Oliver Schwarz, Warburg, and then two more, then Sebastian Bray and Alex Stewart. Now, we have Oliver Schwarz, please.
Oliver Schwarz: Yes. Good morning. Two questions on your free cash flow guidance. The €1.6 billion you expect as a one-off gain from the Wintershall Dea in Q4, is that included in the free cash flow guidance? And also the new efficiency program in Ludwigshafen, the related costs, are they part of the guidance, or are they likely more to hit early in 2025? Thank you.
Dirk Elvermann: Yes. On your first question, what we get from Wintershall Dea is not the proceeds. This is not part of the free cash flow for guidance. So, this is out. This is not accounted for in the free cash flow household. So, you have to see that separately in the investment cash flow. So, it’s not in. And your second question was on?
Oliver Schwarz: The related costs, are they part of the guidance, or is that likely to drop to free cash flow only by 2025?
Dirk Elvermann: So, this is a special items topic, and we are considering always both the benefits and also the cost and take the net perspective then.
Oliver Schwarz: Also on the free cash flow?
Dirk Elvermann: Also on the free cash flow.
Oliver Schwarz: Thank you, Drik.
Stefanie Wettberg: Okay. Now Sebastian Bray, Berenberg. Please go ahead.
Sebastian Bray: Hello. Thank you for taking my question. So, I would have one on gas, please. What is the guidance assuming in terms of gas price? And does the company reasonably hedged, how much did BASF spend on gas in ‘23 versus ‘24? We have been very focused on volume recovery. But even if that doesn’t materialize, I have the feeling that if gas prices keep dropping, that could be quite supportive for guidance. And a quick second one, if I can squeeze it in, what is going right versus your competition? It seems like – is there a boom in canola seeds? Are you taking market share in fungicides? Thank you.
Martin Brudermuller: Yes. So, on the guidance, so you note that we are not giving a guidance out for gas prices. You see where the gas prices are currently standing. I think many people have been a little bit surprised it stays so stable over the winter. It was certainly a mild winter. But I think what we have to take into consideration that in Europe, the industrial productivity was also very low. So, this explains it. So, is there, I would say, upside risk for gas prices compared to what we see today, there certainly is. But I think it remains to be seen a little bit crystal ball, a guidance on gas, we are not providing. On the question of the mix of ag, so what is special, as you know, we have quite a chemicals loaded business, but we also have strong seed businesses like the mentioned canola businesses with a position number one leading position in Canada, particularly.
And what I can say is there is no specific concern about any of our businesses in the ag business. And it seems like both in terms of business mix and also distributor landscape that we have, we are in a, let me say, comfortable position there.
Sebastian Bray: Just to check that, can you sell dicamba at the moment following U.S. ruling or that’s not possible?
Martin Brudermuller: Yes. So, there is SNE ruling, as you know, which we take very seriously. And for dicamba, the over-the-top application is not possible. And of course, we are observing any ruling there.
Sebastian Bray: Thank you.
Stefanie Wettberg: So, now to conclude, we have Alex Stewart, Barclays. Please go ahead.
Alex Stewart: Hi there. Good morning. You will be pleased to know it’s a very quick question. The €1.8 billion of one-time costs to deliver the savings, could you clarify for us how much of that is cash versus non-cash, would be very helpful. Thank you.
Martin Brudermuller: Too early, as I will have Dirk again, so I think too early to break that down. I mean a big part of the one-time costs are obviously severance payments, which eventually turn into cash. That is very clear. But how this will be staggered up over the next couple of years, we will have to see. There will be certainly some rollovers from 1 year to the other. I would also say that €1.8 billion as a cumulated number is on the conservative side of things.
Stefanie Wettberg: Okay. So, ladies and gentlemen, we are now at the end of today’s conference call. We will present our first quarter results on April 25 right before our Annual Shareholders Meeting on that day. We will again be hosting a physical shareholders’ meeting in the Congress Center Rosengarten in Mannheim. Should you have any further questions today, please do not hesitate to contact a member of the BASF IR team. Thank you very much for joining us today and goodbye for now.
