BASF to cut costs in bid to lift earnings and offset slow profit growth
German company’s new strategy aims to create efficiencies as CEO says US-China trade rows mean 2019 will not be easy
German chemicals maker BASF said on Tuesday it would launch cost cuts to boost annual earnings by €2bn from 2021 to counter slower profit growth. Under the programme, BASF said it would aim for 3%-5% annual growth in earnings before interest, taxes, depreciation and amortisation (ebitda) after averaging 8% a year since 2012. Analysts said the target was disappointing. The group's share price slipped 2.3% to €67.45 at 12pm while the broader German market dipped 0.7%. It said the programme to shore up ebitda “will include measures focused on production, logistics, research and development as well as digitalisation and automation activities and organisational development”. CEO Martin Brudermueller, who took over in May, said the profit boost from the cost-cutting programme, dubbed “excellence”, would come mainly from efficiency gains. But he said there would also be some revenue growth. One-off costs associated with the programme would be €800m, the company said. Brudermueller said any...
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