“BASF has earned a premium on its cost of capital over the last three years and expects to at least earn its cost of capital in any given year, even if there is a downturn in economic conditions,” said Hambrecht.
BASF is also striving to earn its cost of capital in all of its business segments in any given year. In addition, the company expects to grow sales by an average of 2 percentage points per year above the chemical market, aided by investments totaling €10.7 billion between 2007 and 2011.
Shareholders are also set to benefit from BASF's strong performance and cash flow generation. The company has increased its dividend in 10 of the last 12 years and aims to further increase its annual pay-out in the future, or at least maintain it at the previous year's level. In addition, BASF plans to buy back shares for a total of €3 billion in 2007 and 2008.
Other highlights in the presentations held at the Investor Day included an overview of BASF's five growth clusters: energy management, nanotechnology, white (industrial) biotechnology, plant biotechnology and raw material change.
In its research strategy, BASF concentrates major technology-driven issues of particular relevance to the future in these clusters. Between 2006 and 2008, more than €900 million will be allocated for the research activities pursued within the five growth clusters.
BASF's Catalysts division was also presented to investors. Following its €3.8 billion acquisition of Engelhard last year, BASF has established itself as the number one supplier of catalysts worldwide, and expects to grow sales by 7 percent per year in the medium term – faster than the market.
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