(Bloomberg) -- BASF SE is tempering expectations for the remainder of the year as sales decline in China and demand from automotive clients remains subdued.
The chemicals maker said Wednesday it expects to reach the low end of its annual operating earnings forecast, which it confirmed at between €8 billion ($8.7 billion) and €8.6 billion. Analysts guided for a €7.92 billion result.
Chief Executive Officer Markus Kamieth is streamlining the German manufacturer to grow returns at its main chemicals, industrial and nutrition businesses, and is considering asset sales at its other units including agriculture and battery materials.
Income from operations before depreciation, amortization and special items rose 5% to €1.62 billion in the third quarter as the CEO’s efficiency push showed first results. BASF said it’s on track to cut €2.1 billion in annual costs by the end of 2026, adding that it achieved a savings run rate of around €800 million at the end of September — three months earlier than planned.
Still, a slowdown in greater China, where BASF’s sales fell 10.5% in the third quarter — as well as waning demand from automotive clients that struggle to sell electric vehicles — are holding back growth.
Revenue from BASF’s Surface Technologies segment, which makes products including coatings and paints used by carmakers, slumped 19% in the period. Sales to automotive clients accounted for more than a fifth of the company’s total last year.
(Updates with details on China performance in fifth paragraph.)
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