We're delighted to be able to welcome you back in person here at the Rosengarten following last Annual Shareholder Meeting. Thank you. Well, that seems to be very popular with you, too, and I'm pleased about that. This year too, we are also broadcasting the Annual Shareholders' Meeting in full via the online service for shareholders. As Chair, I would like to open the ASM and according to Article 18, 1 of the Articles of Association, I take the Chair. This brings me to the people up here on stage. All the members of the Supervisory Board are present today, with the exception of Mr. Vassiliadis. He is attending the Annual General Meeting of [RWE], which is also taking place today.
The Board of Executive Directors is present in full, and I would like also to welcome Mary Kurian and Livio Tedeschi, who have been appointed as new members to the Executive Board as effect from 1st of May, 2026. You can see them both in the front row of the audience. Maybe the camera can pan to make them visible for a minute. Yes, here they are. Maybe a few words on these two appointments. Mary Kurian has a PhD in Material Businesses in the United States and looks back on 20 years in the chemical industry in the United States mostly. Since 2020, she has been with BASF, first of all in North America, and she leads petrochemicals there, and for three years now in Germany for care chemicals.
She will take over the areas of Petrochemicals, Intermediates, Nutrition & H ealth, and Care Chemicals operating divisions. Livio Tedeschi, he started in 2003, after studies in Italy, France, Italy, and also in his PhD in Aachen. He also is trained as a concert pianist, which is helpful for his activities in the Board of Executive Directors, but not strictly necessary. He has been working in crop protection mostly, also in the U.S., North America, and in England. He will take Agricultural Solutions, which will also be part of today's discussion and which is being prepared for a partial IPO. This is necessary because Mike Heinz, after this ASM, will leave the Board of Executive Directors.
For Mr. Heinz after 15 years, that means after 15 years in the Board of Executive Directors and 42 years of BASF, a farewell. Let me say a few words to you, Mike. You were a Trainee to the Board of Executive Directors. Trainees, that's what they were called in 2011, so that's 15 years ago that you entered the Board of Executive Directors. You went into the world, Ecuador, U.S.A., and Mexico, North America too. We counted almost half of your professional time you spent in North and South America for BASF, and there too, you found a second home in a way. Half of your professional life you spent for Agricultural Solutions for crop protection, serving in different positions very successfully.
Even last, Mr. Heinz, two years ago, three years ago, you took the responsibility for Agricultural Solutions or crop protection here in the Board to prepare the business, it was very successful in doing so. From the point of view of the Supervisory Board and also from the point of view of the Board of Executive Directors, Mike Heinz can be used everywhere, really. Successful everywhere. He has been successful for the last 42 years. Mr. Heinz. Thank you very much. Mr. Heinz, apart from everything, he plays water polo. He is a coach, too, and if you know what water polo sports is, know that it is very athletic, target-oriented.
You want to score goals, but 100% of the action actually takes place underwater, which can mean that you might expect that Mr. Heinz is maybe rather a trickier person, you know, acting in secret, not being very open with what he has to deal with. Actually, Mike, the contrary is the case. Fairness, openness, trust, and entrepreneurship, that have been your strength in BASF. With that, at BASF and with your colleagues, with everybody working for BASF, with line managers, you have earned much trust and confidence over the last 42 years. That also goes for employee representatives who also sit up here on stage today. The discussions in the works council and also in the Supervisory Board have always been very constructive and confidence-building under the leadership of Mr. Heinz.
He also took the task of as Labor Director for a while here in BASF. Labor director means that you're responsible for everything taking place in the Ludwigshafen site, and that has been a special experience in your career. Dear Mike, we would like to personally thank you. Me in particular, we have cooperated very closely for many, many years. It was very constructive. It was always great fun too. Thank you very much. On behalf of the Supervisory Board, all the best for you and your family and for the future. Thank you. You can give him another hand if you want to. That brings me to the formalities and the management report or the Supervisory Board report. That takes a while, but we will get through it.
The notice convening Annual Shareholder Meeting was published in the Federal Gazette on 19th of March 2026. A copy of the notice shall be included in the notarial minutes. I hereby declare Annual Shareholder Meeting has been duly convened. Before we begin dealing with the individual items on today's agenda, may I ask you to please stand. As we do every year, we shall remember all our employees and retired staff who have passed away since the last Annual Shareholders' Meeting. Thank you very much for standing. Ladies and gentlemen, I shall now turn to the organization and procedure of the Annual General Meeting. You have received your ASM card, which you will need to request the floor, grant proxies, and cast your votes. Voting will all again be conducted electronically this year.
I will explain the details later in the course of the Annual Shareholders' Meeting. All registered shareholders may cast their votes for today's Annual Shareholders' Meeting via the online service, either by electronic postal vote or by authorizing the company's proxy representatives all through the Annual Shareholders' Meeting until the start of voting. I will announce when voting begins. Until voting begins, you may also amend your votes and instructions to the proxies via the online service. Information on voting can be found in the notice convening today's Annual Shareholders' Meeting. The proxies will vote on the individual agenda items in accordance with your instructions. We will also take into account the postal votes received by the deadline and the votes cast via electronic or postal voting when counting the votes. The list of shareholders present or represented at the Annual Shareholders' Meeting is currently being compiled.
Once the list of attendees has been finalized and before the first round of questions is answered, I will inform you of the attendance of today's Annual Shareholders' Meeting. The list of attendees will be available in electronic form next to the speaker's desk and can be viewed on the screen there. If you leave the meeting before it ends, please hand in your ASM card at the exit control point. Alternatively, you may grant proxy to another participant or a third- party. If you have any questions, BASF staff at the special counter will be happy to assist you. The notary, Ms. [Zila], will carry out the certification required under the German Stock Corporation Act. From your perspective, she will be seated on the right-hand side of the hall.
We would like to ask all shareholders and shareholder representatives who wish to speak at the Annual Shareholders' Meeting to register at one of the two registration desks located inside and outside of the main hall presenting your ASM card. Please register as soon as possible so that we have a rough idea of how many speakers to expect. In addition to the main hall, you will be able to follow the proceedings of the Annual General Meeting via video and audio transmission in the rooms adjacent, as well as in the other adjacent rooms. Private audio or video recordings of the Annual Shareholders' Meetings are not permitted. That concludes the introductory remarks and the key formalities of today's Annual Shareholders' Meeting, and let me now turn to the Supervisory Board report.
I shall now briefly outline the key areas of the Supervisory Board's work during the past business year 2025. The detailed written report of the Supervisory Board can be found on pages 437 to 445 of the BASF report 2025. Now to the details. In the 2025 business year, the Supervisory Board performed the duties incumbent upon it under the law and the Articles of Association with great diligence. It continuously monitored the management of the Board of Executive Directors and provided advisory support for strategic development of the company, as well as for significant individual measures. To this end, the Supervisory Board received regular and detailed briefings from the Board of Executive Directors. This took place both during and outside the meetings of the Supervisory Board and its committees through written and oral reports.
The Chairman of the Board of Executive Directors and I were also in regular contact outside Supervisory Board meetings. I was always informed promptly and comprehensively about current developments and significant matters. The entire Supervisory Board was involved at an early stage in decisions at significance importance. The Supervisory Board held a total of six meetings during the 2025 business year, all of which were attended by all members, with the exception of a two day meeting at which one member was absent for one day due to illness. The Supervisory Board's activities focused in particular on the implementation of the Winning Ways strategy introduced in 2024. The Supervisory Board dealt intensively with the further development of the core businesses and standalone businesses. The enhancement of the competitiveness of the European sites and significant portfolio measures were at the foreground.
Particular emphasis was placed on the divestment of the Coatings business, the sale of the Brazilian Decorative Paint business, and preparations for the legal hive- down of the Agricultural Solutions division in view of a potential partial IPO. In addition, issues relating to sustainability, governance, occupational and plant safety, as well as the political and regulatory framework were discussed in detail. Furthermore, important subjects were the phase commissioning of the Zhanjiang integrated site, the target vision and cost-saving program for the Ludwigshafen site, in particular, the strategy in emerging markets, and the updated medium-term financial planning. The Supervisory Board also addressed portfolio measures in the Battery Materials, Environmental Catalysts, and Metal Solutions divisions, as well as a possible earlier start of the share buyback program.
For further details on the topics discussed at the Supervisory Board meetings, please refer to the Supervisory Board's Report on pages 437 onwards of the annual report. Several decisions have been taken regarding the future composition of the Executive Board. These relate to the succession of Mike Heinz, who gets two successors. That's an exception at BASF, sometimes it happens. The appointment of new Board of Executive Directors members to oversee the Agricultural Solutions segment. In accordance with the recommendation of the Personnel Committee, the Supervisory Board has appointed Mary Kurian and Livio Tedeschi as members of the Board of Executive Directors with effect from 1st May , 2026. After these changes, BASF continues to meet the statutory quota for women on the Board of Executive Directors.
Further details, but let me just make one comment on that to the questions on how these decisions are made to appoint members of the Board of Executive Directors and how is the selection made. Mr. Tedeschi has been at BASF for 20 years now. He has always been under pressure, tested well, tried and tested, so to speak, and we are very happy for his readiness to take a very responsible task here. Mary Kurian has joined BASF six years ago, and I mention that because time and again, people ask us whether it's not possible to have members onto the Board of Executive Directors from outside of BASF. We found somebody from outside, and we like her very much. We thought maybe she might be a member of the Board of Executive Directors.
We didn't tell Mary when she was employed, but we had the idea that this might work. Then we sent her in competition with other internal candidates. These six years were a good time to be tested, to get to know each other. Do we fit together? Might that work out? Is there a chance for success so that the member or the new member of the Board of Executive Directors might be successful? I think BASF has chosen a good way of testing external candidates, but every candidate has to go through the process of going through different positions and, well, prove right. This is how we make sure that diversity in the Board of Executive Directors is guaranteed, and diversity is, goes much further than just selecting its personal history, its careers, curriculum vitae.
They have to be differing up to very differing personalities, which is also very important to have a joint, strong team and a good leadership of BASF. So far for this subject, it's really close to my heart to mention that because these are, well, central tracks that we lay and that we have to make as a Board of Executive Directors. That brings me to the subject of the individual committees. During the last year, there were no changes in the number of Supervisory Board committees. The Audit Committee reviewed the financial and Consolidated Financial Statements of BASF SE as well as the combined management report and the Compensation Report on its meeting on February 24 and discussed them with the auditors. On this basis, the Supervisory Board approved and adopted the Annual Financial Statements.
There were no objections to the results of the auditors' review. Now on to the composition of the Supervisory Board. 2025 was a year of continuity for the Supervisory Board. There have been no changes in personnel since the last Annual Shareholders' Meeting. However, Liming Chen will step down from the Supervisory Board at the close of this Annual Shareholders' Meeting. This necessitates the election scheduled for today's Annual Shareholders' Meeting. Mark Garrett is to succeed Liming Chen, who has resigned from the Supervisory Board at his own request, with effect from the close of today's Annual Shareholders' Meeting. Mr. Chen has been a member of the Supervisory Board of BASF SE since October 2020, and Mr. Garrett, Dear Liming, let me also say a few words on that.
Liming Chen joined us in the, well, throes of the COVID pandemic, and I start with this story because it says something about his personality. During COVID-19, there were many virtual meetings, but at BASF, we also tried to meet in person as often as possible because we believe that it is important to have everybody in one room together. We offered Liming Chen that he can dial in from Beijing if he wanted, because it's a very long trip from Beijing to here. He came every time. He came every time.
That sounds very trivial, but first of all, there were no flights to and from, so it was logistically very difficult to get him here. Secondly, he had then go into quarantine for two or three weeks. He spent 13 weeks in China in a hotel room where he had to stare at the wall. It was fitted with books. There was a skipping rope and instant noodle soup so that he can stay fit. I think he was allowed to have a telephone, too. He took something upon him which goes much further than what is usually done and expected from a member of the Supervisory Board.
That shows really his enthusiasm for BASF. He shows his commitment, too, and it also shows how closely he is connected to chemistry and connected to us. Liming Chen came to the Supervisory Board because he covered three segments. China, very important because of the big investments into China. Chemistry, because he has a background in the chemical industry. He was also broadly set up there. He knows the industry very well. He was also the Chief of IBM in China, so he has a great knowledge about chips. That was something that we could really use very well. He was very loyal and very competent during turbulent times.
For the discussions in Supervisory Board, also for the big investments of BASF in China, it was really helpful to have somebody on board who was very authentic, who can report from his own experience and how the country is developing. Dear Li ming, I would like to say thank you very warmly. All the best for you and your family, and I hope we see each other again very soon. Thank you so much.
Successor of Li ming, the nomination committee suggested to the Supervisory Board to appoint Mark Garrett, and this is the proposal that the Supervisory Board is handing over to the ASM. We are convinced that with Mark Garrett we won over a candidate for the owners who really complies with all the requirements. You sit in the first row among the audience, and I'd like to ask Mark to rise and smile in a friendly way. Thank you.
Mr. Garrett has more than 30 years' experience in all areas of the chemical industry. He very successfully was a CEO of several companies and has a major experience as a Member and Chairman of Supervisory Boards of publicly listed and private companies. After positions in Australia, Switzerland, the U.S.A., and Austria, between 2020 and 2023 he also was a Chairman of the OMV AG Supervisory Board. Since 2023, he has been an Independent Member of the Board of Directors in Melbourne of Orica, and this goes to show that Mr. Garrett was born in Australia. Since more than 30 years, he has lived in Switzerland and he speaks German, what is even more important, also Swiss German, excellently. We are convinced that with his entrepreneurial experience and competency in the Supervisory Board, he can be very important.
In case of his election to the Supervisory Board, he is supposed to become a member of the Nomination Committee. Mr. Mark, we are very glad to have you as a candidate. The Supervisory Board also meets all the targets defined by itself regarding its independence and competence. Regarding further activities of the Supervisory Board, I refer to the detailed written report. The corporate governance report is found on pages 114 to 144. The remuneration report is to be found under basf.com/vergütungsbericht. This brings me to the end of my report. I'd like to mention that the Supervisory Board would like to thank the Board of Executive Directors for its exceptional performance and its constructive cooperation in a challenging year for BASF.
This gratitude also extends to all employees worldwide for their dedicated commitment and great performance in times of great uncertainty, difficult times. Thank you very much to the Board of Executive Directors and all employees of BASF. I think this deserves a round of applause. Thank you very much. Dear Markus, this brings us to the report of the Board of Executive Directors.
Dear shareholders, firm belief in one's own strengths, unwavering determination to shape the future. Yet there are many questions. Where is the world heading? What does all this mean for BASF?
This is how many of our BASF colleagues, and I guess many of you feel right now. With this, I'd like to extend a warm welcome to our ASM 2026 in times of great changes for BASF and for all of us. Every change brings new questions, and our task is to find matching answer to the question. Well, questions that reaches are questions, why am I supposed to invest in BASF? Is now the right time? Should I keep my investment? Very important for private investors is the share price development and dividend, but also our strategic development, what we changed at BASF. We just sent a post on the opening of the new site in China, and there are numerous comments. Well, what are the crucial topics? China, definitely. Also, what will happen to the Ludwigshafen site?
Where will we be 10 years from now? People writing to us, they want us to feel well and be well. When they criticize us, when we see negative comments, these are comments based on concerns. Of course, I notice this, and my colleagues do as well. I've been with BASF for 43 years now. One question that we all have in Ludwigshafen is, what will the future bring? The Ludwigshafen site is the very core. This is where the show is going on. In Germany and in Europe, there are so many things we can be proud of, but how can we make sure that we are at the front again?
Europe is in a very difficult situation right now. Well, I agree with that. I'm concerned that Europe has lost ground. The Commission really launched a ton of regulations. Now we are seeing a massive drop in competitiveness. It gives me hope to see that the European Union is once again focusing on its own industry. The question is, what is the simplification that we need that still has ambitions to protect human health and the environment, but that doesn't weigh as much on the competitiveness?
I think the issue of sustainability and innovation, these are two topics interlinked. Many solutions that are more sustainable require innovation. Well, compared to our competitors, I think innovation-wise, we are faring very well. How can we make sure we speed up the development from lab to production to the customer? Frequent questions are, can we make money in future with sustainable products? BASF is still a major player. BASF still is a shaping power in the chemical industry. We have so much to offer. How can we really make it work? How can we ensure our long-term success?
Dear shareholders, the rules of the game are changing dramatically. How states interact in global trade in terms of key technologies, we are all feeling this very clearly right now and very concretely. For a good eight weeks, the Iran conflict has once again thrown the world into a state of emergency. Old certainties are going away. New realities are emerging. As a result, the world has become less predictable and less stable in politics, but also for us as a company, and we all sense it. This time it's not just the usual economic ups and downs. We are experiencing structural upheaval, and this is radical and rapid. Of course, this has profound consequences and raises many questions, not only within our teams, but also for you, I guess. For me, one thing is clear, nothing will be like it was before.
Waiting is not an option. This is why at BASF we are striding into the future with courage and determination. There is one question that I ask myself time and again, is our strategy a good fit for the world still? For a world which has changed so fundamentally in such a period, short period of time. I'm convinced it is a good fit, and today I'll demonstrate to you why I'm confident about this and why such upheaval also offers many opportunities for BASF. Opportunities that we've already created with our Winning Ways strategy and that we will continue to pursue decisively. We are focusing on what we can influence ourselves. We do what is necessary in the short term and what is decisive in the long term.
This enabled us to stay on course in the 2025 business year despite slowdowns in key markets and strong geopolitical headwinds. We sold more to our customers. We continued to reduce our costs more significantly and faster than planned. We kept our EBITDA margin, i.e., the ratio of earnings to sales, nearly stable, and we achieved this despite lower sales prices and negative currency effects. Free cash flow, simply put the money that is left over after investments, was higher than expected. For you as shareholders, this all means our dividend proposal remains stable at EUR 2.25. We've outperformed many of our competitors. Nevertheless, we slightly missed our adjusted forecast for earnings. You know how important numbers are to me. They provide us with a clear target and show where we stand.
The entire BASF team is working hard to ensure that our transformation is also reflected positively in earnings. That is why we are not entirely satisfied with 2025. At the same time, these figures, tables and diagrams are a snapshot in time, a re-reflection of tense global situation. They therefore only partially show our progress. I see that progress most clearly where people step up and take responsibility in our labs, plants, and at our customers. These are the places where our teams tackle challenges every day. This is where I feel change is tangible and concrete. I want to take you along to some of the places where change happens. I will show you how we are driving BASF forward and building on our strengths to secure long-term success. Let's start in Münster and Limburgerhof.
Here you see how we are dealing with the new reality in our industry, increasing specialization. You all know BASF as a large company with a broad portfolio. There is no doubt that this setup has its advantages. Size means economies of scale. A broad portfolio provides stability, and this is something that many investors still appreciate about BASF, especially in turbulent times. There is one downside, which is complexity. The larger a company is, the more diverse its portfolio, the harder it is to act with focus and agility, and this is a drawback. Companies today must be fast and flexible. In this new world, those who cut complexity will win, those who simplify and sort things more clearly. That is why we are creating strong standalone businesses where it is advantageous. Where specialization enables greater focus, faster decision-making, and closer proximity to customers.
This also benefits capital market participants because specialized companies are simply easier to value, and this valuation is then often higher. This can be seen in Münster. From here, we steer our business with automotive coatings and surface technologies, a highly specialized business, innovative and a global leader. With Carlyle, it will soon have a new majority owner. This is a major change, and it's proof that we are rapidly and decisively sharpening our portfolio, which benefits you as shareholders. The value of the transaction with Carlyle is EUR 7.7 billion, thus significantly higher than the valuation that Coatings currently has as part of BASF. We are therefore separating this successful business from the BASF Group because the Coatings team will be in an even better position to capitalize on its strengths with its independence and Carlyle's experience.
BASF, however, will still profit from its success because we will continue to hold a 40% stake in the new world-class company. As you can see, the right setup makes a strong business even stronger, and the same goes for Limburgerhof. This is the home of Agricultural Solutions, one of the world's leading suppliers for the agriculture sector, from crop protection and seeds to digital applications. All its offerings help to improve efficiency and sustainability on the field and in the greenhouse. This too is a highly specialized business. With earnings of around EUR 2.1 billion in the past year, it is also a highly profitable business with great potential. It has a well-filled innovation pipeline for the coming years with a peak sales potential worth EUR 7.5 billion.
However, all this is not currently reflected in how the capital market values Agricultural Solutions as part of BASF. Here as well, acting independently will lead to new freedom for the team and more transparency for you and the capital market. Right now, the leadership team is creating the legal and organizational structures for a standalone business. We are making swift progress here. Our aim is IPO readiness in 2027 with Frankfurt as the envisaged listing location and BASF as the majority shareholder. Münster and Limburgerhof. These are two very different places where big changes are happening, but they are linked by one common goal of value creation and more profitable growth with a clearer profile. We are giving our businesses the setups they need to achieve this. This also raises an important question for you as well.
If Coatings and Ag Solutions, strong both in sales and earnings, are taking their own independent paths, what will be left of BASF? My answer is clear. We will still have the core of BASF, the thing we have always been known for, chemistry. This is not a leftover, it is our backbone. These are businesses that optimally complement each other. They enable our customers green transformation and combined, these businesses generate around EUR 40 billion in sales. We have worked hard for many decades to establish our strong market position. Now we'll be able to concentrate even more on this. To represent the focus on our core business, I want to show you the next place where change is happening, Geismar, Louisiana in the U.S.
Here, I will show you something we do at all our Verbund sites and that almost no one else does as well as BASF, chemistry in long, integrated value chains. It may sound complicated, but it's easy to explain. This is a network of plants and processes that are closely interlinked like the gears of clock, encompassing everything from raw materials to highly sophisticated specialty chemicals with efficient processes and technology expertise every step of the way. It provides many levers for the green transformation of our production towards more climate-friendly raw materials and lower CO2 emissions. The most important thing, our output, the products we sell to nearly all industries, from the goods you'd use daily to the technologies of the future. The Verbund is our strength and our advantage. It increases our efficiency, and it reduces costs.
It makes us an attractive partner for many customers, that is exactly what we need in this new world because the competition in our industry is fiercer than ever. This is why we are making our core even stronger. This is the next step in our Winning Ways strategy. In a nutshell, to unlock even more synergies, simplify the organization, and become faster and more profitable. At the same time, we are investing in growth. You also get a sense of this in Geismar. You see some impressions from our MDI expansion there. It's an impressive project that is clearly changing the Geismar site. At around $1 billion, this is the largest single investment BASF has ever made in the U.S. MDI is an important building block for polyurethane, a plastic with a wide range of applications. Accordingly, the market potential is huge.
You can find it in the insulation in your fridge or in the upholstery of your car. There is another reason why Geismar exemplifies that we have the right strategy. Worldwide, there is a growing trend of tariffs and trade protectionism. More and more governments want to protect domestic industries and strengthen local value creation. In this new world order, companies that produce locally for their customers have a clear advantage, and we adhere to this principle everywhere, and this is nothing new. Local production for local customers, backed by a largely local raw materials base. This is the reason why we are more resilient and often one step ahead of our competitors, including where the economy is growing fastest, in Asia. This brings us to the next place where change is happening, to China, the world's largest chemicals market. More specifically to Zhanjiang, our new Verbund site.
It's our seventh worldwide. It may be around 9,000 km from here and yet an integral part of BASF. Our team there has achieved something incredible. They transformed a piece of empty land into the world's most modern chemical production site. They did not do so alone, but in collaboration with colleagues from around the world. It took only six years from the first groundbreaking until the official inauguration four weeks ago. Everything on schedule and below budget. Zhanjiang is more than just a new site for BASF. It's something we can all be proud of, something that almost no other chemical company can do in this form. Simultaneously, Zhanjiang is a fitness test. It will show whether we can expand quickly into a changed market, and that is a question for our long-term success.
That is why I'm especially happy to have two guests here today, Jennifer Han and [Haryono] Lim. Jennifer and Hary came from Zhanjiang to Mannheim. I'm very pleased to have you here today. Hello. Let's start with you, Hary. Hary, you have been with BASF for 27 years, and on 1st of July, you will take overall responsibility for our business in China, and you have established Zhanjiang from the very beginning. What is the moment that you remember most?
Thank you very much, Markus, that you invited us and also for the introduction. There were many, many beautiful moments in Zhanjiang, but the commissioning of our plants has always been special. Before every commissioning, we had been very excited, and we expected great things. The most marking moment was really the commissioning of our steam cracker. Steam cracker is always something which is special. It's the core, the heart of a site. We made it on the 1st of January to successfully commission and ramp up the steam cracker, and that was really very punctual according to our time plan, and that was perfect for BASF as a start for entering 2026. I've been at BASF for 27 years, as you said, and I have seen a lot, but for me, Zhanjiang is a special project indeed.
I had the possibility to build an entirely new Verbund site and start it even, and even a such a big one. I think as a chemical engineer, you only get this chance once in a lifetime. Also, at the beginning of the cracker, I wasn't there, but you can imagine that on the 1st of January, after New Year's Eve, there was the news the cracker in Zhanjiang has successfully commissioned.
That was a highlight of the beginning of the year 2026 for me too. Jennifer, you work in site management at our new Verbund site. What was your personal highlight over the past months, and why?
Thank you, Markus. My personal highlight is the official opening of our Verbund site in Zhanjiang. That has been or was end of March.
It was a special day for us, during which many people came together again. We have the common and joint target to show how a chemical site of the future looks like. At peak times, during the construction phase, we had more than 30,000 people at the construction site at the same time, and we could show very well how we can be speedy and also teamwork—have teamwork at the highest point. All this makes Zhanjiang so special for me. We are really, really proud, not only for what we have built in Zhanjiang, but also for being part of the global BASF family. During the high time of the construction phase, I went to Zhanjiang and looking at a construction site where 30,000 people have to go in and out, that's even logistically very challenging.
Hary, the market in China has become more challenging over time. What has changed, and why are you nevertheless confident for Zhanjiang?
Well, Markus means challenging means that there's more competition. You described it correctly. The Chinese market is a fitness test for every company. We have also observed how the Chinese economy has not grown as strongly as in the past. In some areas we even have overcapacities. BASF is well set up. Over the last year, we had a volume growth of 13% in China. That is a huge performance of the BASF China team. Furthermore, there are many other factors that BASF and Zhanjiang can achieve in China. Let me just name a few factors. First of all, our Verbund site in Zhanjiang. That's close to industrial customers.
Secondly, we have the most modern plants. We use 100% green electricity, green power, so we can be very efficient. We can produce super sustainable product. The environmental standards in China get higher and higher. If you are cost efficient and if you have a low carbon footprint in producing your products, well, you have a great advantage in China. The last factor is the core of BASF, which is innovation. BASF is the innovation motor in the chemical industry. With this innovation, of course, it opens up many doors at BASF to cooperate with customers.
Yes, that's very impressive indeed. Jennifer, the Zhanjiang project was complex and complicated. I think over the last years we have learned all about teamwork in international works, but particularly also between China and Germany. What can China and Germany learn from each other?
Well, I studied both in China and in Germany, and I worked in both countries. I could also have a look at both working culture. In China, often you see a lot of pragmatism, and you see speed when decisions are made, and in Germany, there's a lot of expertise when it comes, for example, to standardizing process and efficient processes. The real strength is really the combination of the two approaches, which means that we want to be fast but not hectic and to be thorough but not slow. That is exactly what we could show in Zhanjiang.
Yeah. Super. Yeah. I think that is a wish for every one traveling through the world. We would like to combine cultures better. We could be better. For both of you, a question: What's your focus for the next month?
Focus number one for me is a stability in operations. We have a brand new Verbund site, so to produce safely, reliably, and we also, of course, have a lot of homework to do to optimize the site. My second focus is to more consistently imply or implement our Winning Ways strategy. We already have a very good customer basis in China, and with the new Verbund site, we have the possibility to convince existing customers and new customers even more of BASF. Last but not least, of course, we want to earn money with it. Our target is, of course, that starting 2027 with Zhanjiang, we want to make a positive contribution to BASF's earnings. Jennifer?
Well for me, the focus is the teamwork and the cooperation to transfer that in everyday work. We want to strengthen it so that we can keep up the speed. Just as Hary just said, if the operations run stably and if customers are on board, and what's also very important, if the team works, then Zhanjiang can work also in a challenging environment reliably.
Super. Thank you very much to the both of you. Thank you for having come from Zhanjiang, particularly here today.
Dear shareholders, over the past years, we have invested a lot of money in new capacities. Going forward, this amount will decrease significantly because we are now well-positioned in all regions. Moreover, the chemical industry is currently undergoing change. This means that acquisitions might also offer attractive growth opportunities for our core business.
Zhanjiang shows what we are capable of and where the chemical industry is growing. At the same time, here in Germany, many people are wondering, "Is BASF making itself too dependent? Will production be relocated to China? And what about the political risks?" Well, I do understand these questions very well, and I would like to answer them now. Firstly, on the topic of dependencies. Last year, BASF generated sales of around EUR 8 billion in China. By comparison, sales in the United States were nearly double, and sales in Europe were almost three times that amount. Looking ahead, we want our China business to reach a similar size to our U.S. business. This will not be a dependency on one single market. It merely reflects the reality in our sector.
China already accounts for around half of the global chemical market, it will continue to grow. That is why our presence there is so important. Secondly, the topic of risks. Are there geopolitical risks? Yes, there are, of course. If you ask me, there are stronger risks coming from other parts of the world just now. It is vital not to be naive. We should seize our opportunities while carefully assessing risks, and we do this all the time, and also in China. Third, the topic of relocation. Will our production be shifted from Germany to China? Well, from me, I can tell you clearly, no. We produce in China for China and not for exports to Europe. If we close plants in Germany, then these decisions are mainly to do with the development of markets and competitiveness in Europe.
The fact is China's industry today is already on par with ours in many areas. In key future sectors, such as e-mobility and green technology, it is actually one step ahead. In Europe, we may not like this catch-up and shifting balances. It challenges our self-image. Is that a reason to ignore the growth market in China with all the potential it offers to BASF? Retreat does not lead to growth and competitiveness, nor does ignoring unpleasant truths and new realities, and neither does protectionism. Instead, Europe must face the competition and work hard to become even better. This is also our aspiration at BASF everywhere in the world. Nowhere is the pressure as strong as it is here in Europe, and especially at our Ludwigshafen site, the next place where change is happening. Ludwigshafen is our largest site and the birthplace of BASF.
It is key to our future. That is why it is so important that change succeed here. Many of you come from this region and feel closely connected to BASF in Ludwigshafen. You all have followed the headlines over recent weeks. The number of employees at BASF SE in Ludwigshafen has been reduced by around 2,800 since the beginning of 2024. There will be further reductions across all units. We will increasingly offer certain services from hubs in India. For example, in human resources, finance, and digitalization. Some of you have probably thought, "This doesn't feel like the BASF I used to." I hear that again and again also when I'm talking to employees.
Every time I answer, "Well, this is still your BASF, but it is changing, and this change is absolutely necessary." What has been established here in Ludwigshafen and at other sites, and the work that has been done over decades merits respect, no question about it. There is also no doubt that we all bear responsibility for what needs to be done now because nostalgia and inertia will not make us fit for the future. The market, our customers, and you, as shareholders, do not judge us by what BASF was like in the past. Instead, everyone looks at what we as a company will deliver in the future, and that is why we are taking action today. We are sharpening the focus of our core business. We are taking a more targeted approach to how we reallocate capital to create growth.
We are strengthening our competitiveness by rigorously reducing costs. We are doing this because BASF needs a strong heart, because we believe in this site and its strength. This is not an easy time for our team in Ludwigshafen. I am aware that the change is happening at a very abrupt place, there is media reports that you might not like. I can very well understand that it is not always easy to see the positive amid all this change, especially when paths part. With this new site agreement, we are providing orientation, prospects, and reliability. The name says it all, shaping the future for a strong site. Going forward, we will be investing at least EUR 1.5 billion annually in Ludwigshafen, not only in upkeep but also in new projects. I've brought along one example for you today.
It relates to semiconductors, chips. They are almost everywhere these days. In cars, smartphones, and in the data centers for artificial intelligence. In this new world, it is important that not only companies become less dependent, but also Europe as a whole. This includes robust and resilient chip production, and that only works with something that cannot be seen in a chip: ultra-high purity process chemicals. In Ludwigshafen, we are therefore building two new plants, one for sulfuric acid and one for ammonium hydroxide. We will produce both products in electronic grade, meaning extreme purity. This is one of the toughest tasks in chemistry, and this is what BASF excels at.
In all of Europe, there will be the only two plants of that kind that can supply this level of quality. This opens up a new growth area for us in Ludwigshafen. That is why we are investing a triple-digit million euro sum. You can see our chemistry from Ludwigshafen enables progress. Without a strong chemical industry in Europe, there is no industrial strength, no industrial or technological sovereignty. Well, in Berlin and Brussels, people have also understood. However, we are still waiting for bold moves to improve competitiveness. There has been some movement, for example, with regard to energy costs, emission trading, and trade agreements. BASF has been strongly advocating this in recent months, also I myself, in my new role as the new President of the European Chemicals Association, CEFIC.
Overall, there is not enough change, and it is happening too slowly. Other regions are gaining market shares while Germany and Europe keep losing ground. Many people think the decline is inevitable, but in reality, it is renewal that is inevitable. We don't need doomsayers, however, who want to use uncertainty to divide us, or those who claim to have simple answers for an increasingly complex world. We need people who courageously provide fresh impetus. What's more, we need a society that works together to lay a new foundation for growth and progress. It will require bold governance to tackle stalled reforms. Including those relating to the social safety net and the labor market. In some cases, this will result in resistant uncertainty and discontent. Yes, change requires great effort, and it may take a toll on popularity ratings.
Nevertheless, we must take this on as companies and as a society. I'm being very emphatic because it is no longer enough to do a bit of tweaking here and there. In some cases, there will be a required dramatic cutting, not just pruning. We need to cut back the overgrowth of inherited structures. We are talking about specific and decisive action. It means doing things truly differently than before, stepping beyond what we are used to, staying flexible and being pragmatic. That is how progress is made, and that is how something new is created. As we will see at the next place where change happens, the lab. In our new world, technologies are evolving rapidly. Requirements can change overnight. Those who want to stay ahead must also rethink innovation with a systematic approach starting from the market.
For us, this means not only new, but also to be more sustainable and to make an earnings contribution. Otherwise, innovation may be a nice idea, but the green transformation will not become a business, and we are therefore changing how we drive innovation. In the past, research ended at the doors of the lab. Today, it continues in our plants and at our customers. We bring our experts together for even closer cooperation. We link our wealth of data and our immense knowledge using artificial intelligence. We incorporate partners and customers into the development and production processes. As a result, we can develop new products faster and tailor them more closely to the needs of customers and consumers. Very often, you don't see it. BASF is rarely on the label, but our chemistry is often what makes a difference. Here you can see a picture of Usain Bolt.
The fastest man in the world is advertising a new product that promises fast just got better and keeps this promise. It is the most successful innovation of Unilever in decades. By now, it is on the shelves in 30 countries around the world. In Germany, it's called Coral Magic Wash. In other countries, Wonder Wash. Its development, however, is no wonder, but rather the result of close collaboration between Unilever and BASF. The jointly developed solution is designed for short cycles, it's therefore ideal for the lifestyle of many people. Instead of two hours, the washing machine only needs to run for 15- minutes. This benefits everybody, BASF, our customers, the environment, and you as consumers. Ladies and gentlemen, chemistry matters on a small scale in our day-to-day lives and on a big scale to tackle the challenges of our time.
There is a lot to do, and this will only succeed with people who want to enable this transformation, who look forward to the future and see change as an opportunity. In this volatile world, it will be decisive how quickly we learn and how well and flexibly we deal with changes. Yes, sometimes we have to accept that there is no immediate and conclusive answer to everything, that things are in flux. That is the theme for our final stop today. It's about something very fundamental, our attitude, behavior, culture. This is not a place you can find on a map. It's in our heads because this is where every change starts. Everywhere we went today, you got a sense of what is important to me, taking responsibility, focus, speed.
Our teams in Münster and Limburgerhof are not just waiting around. They are forging their own paths. In Geismar, the team is focused on BASF's core business, not getting lost in trivialities. In Zhanjiang, our colleagues swiftly and pragmatically established a new Verbund site, and with the same momentum, they are entering the most important growth market for chemicals. In Ludwigshafen, we see that our employees are not shying away from difficult decisions, and in the lab, our researchers are always striking out in new directions. It's in our heads where the strength of BASF is decided every day. That is why this place where change happens is so important to me. Our employees are taking the initiative. They are pursuing things with speed and focus. They are constantly developing their skills.
We all step up with the right attitude and concentrate on the things that we have the power to change. For this, I want to sincerely thank all BASF employees for their performance, their openness, and their willingness to resolutely do what needs to be done. Dear shareholders, today you got to know just a small part of BASF, and you will recall the question: Is our strategy a good fit for this new world? After everything you've seen today, it's clear, yes, our strategy is a good fit. It's the right answer to the structural upheaval we are seeing right now. That is why we are implementing it with determination. Are we already in the place where we want to be?
No, not yet, because we know that our change must become more clearly evident in our figures, and this is what we are working on every day. We know our strengths. We know that we are on the right path, and that is why we look to the future with confidence, and we are grateful for your trust in team BASF.
BASF is chemistry. For over 160 years. Our transformation is everywhere. From initial breakthroughs in the lab t o solutions driving progress today. What defines us, our products. What makes us strong? Our teams. How we work is our path to success. We take responsibility. Move fast. Act bold. We never stop learning. We push past our limits. We don't wait for change, we create it. In research, i n our plants, s ide by side with our customers. All around the world. With curiosity that never slows down. Determined, even when the going gets tough. That's what connects us, across generations. That's how experience becomes energy for tomorrow. That's how chemistry becomes a promise for the future. With people who see change as an opportunity e very day, t hat is BASF.
BASF is chemistry. Has been for more than 160 years. Our change, ubiquitous. From the first breakthroughs in the lab t o solutions that drive progress today. What we stand for, our products. What makes us strong? Our teams. How we work, this is our path to success. We take responsibility. We act quickly. We are courageous. We keep learning. We grow beyond our capacities. We do not wait for change, we live change. In research, i n our plants, t ogether with our customers. Everywhere in the world. With an ever-growing curiosity. In a determined way, also if we have headwind. This is what links us, has linked us for generations. This turns experience into energy for the future. This turns chemistry into a promise for the future. With people who see change as an opportunity e very day. This is what BASF stands for.
This is the end of my presentation, but one thing must not be missing today. BASF is a place where change happens, and this is true for our company as well as for our Board of Executive Directors. Today's ASM is also Mike Heinz's last day of work. Mike, after 42 years with BASF, you are entering retirement, and if one were to sum up your career in just a few words, it would be this: From the region to the world. Born in Mannheim, trained in Ludwigshafen, you joined BASF at the age of 20, and just five years later, you went out into the world. The Die Rheinpfalz newspaper called you an exceptional board member some weeks ago. To me, you are, above all, an exceptional person.
For you, results have always mattered, but so has the team, and this is what all of us appreciate about you. Down-to-earth, warm-hearted, open, and always close to people. Well, what remains for me today is a heartfelt thank for you, for 40 years spent with BASF and nine years together in the Board of Executive Directors. Mike, we wish you all the very best from the bottom of our hearts for the future. Well, what remains for me today, dear Mary, dear Livio, for you, things really get going on the Board from tomorrow. We very much look forward to working with both of you and, of course, with the entire BASF team. Thank you very much.
Dear [ Kamieth], Mr. Kamieth, dear Markus, thank you very much for the report of the Board of Executive Directors that showed what kind of change we are facing, what pressure this change means, and that BASF is tackling changes with a good team and with a decisive mind. This brings me to Agenda Item 5. This is reading out the individual items on the agenda that I'd like to explain. This is very formal.
Agenda Item 1, the Annual Financial Statements of BASF SE and the approved Consolidated Financial Statements of the BASF Group for 2025, as well as the Combined Management Report of BASF SE and BASF Group for 2025, including the explanatory reports pursuant to Sections 289a, 315 a of the German Commercial Code, the report of the Supervisory Board, and the proposal for the appropriation of net income have been published on the internet in accordance with legal requirements, along with other documents, and were and are available for inspection there. This was only one sentence. The Annual Financial Statements of BASF SE and the Consolidated Financial Statements of the BASF Group, as well as the Combined Management Report of BASF SE and the BASF Group, have been audited by the appointed auditor and issued with an unqualified audit opinion.
The Annual Financial Statements of BASF SE and the Consolidated Financial Statements of BASF Group have been approved by the Supervisory Board. The Annual Financial Statements of BASF SE have thus been adopted. No resolution by the ASM is required on this agenda item. As already announced in the notice convening the ASM under Agenda Item 2, the Board of Executive Directors and the Supervisory Board are submitting a proposal to the ASM regarding the appropriation of retained earnings, which provides for a dividend of EUR 2.25 per share. The remaining retained earnings are to be transferred to retained earnings. Agenda Items 3 and 4 concern the resolutions on the discharge of the members of the Supervisory Board and of the Board of Executive Directors for the past fiscal year.
Agenda Item 5 includes, in addition to the election of the auditor and the election of the auditor for the review of the 2026 interim financial report, the precautionary appointment of an auditor for sustainability reporting for the 2026 fiscal year. The legislator has still not transposed the EU Directive on Sustainability Reporting, which provides for the appointment of an auditor for sustainability reporting into German law. I think this has been going on for two or three years. Therefore, the election of an auditor for sustainability reporting is being conducted as a precautionary measure in the event that following the transposition of the Directive into German law, an explicit election of an auditor for sustainability reporting by the ASM should be required.
The Supervisory Board, based on the recommendation of its Audit committee, proposes to elect Deloitte GmbH Wirtschaftsprüfungsgesellschaft as the auditor for the Annual Financial Statements and as a precautionary measure for sustainability reporting as well. Agenda Item 6 concerns the resolution on the approval of the remuneration report pursuant to Section 162 of the German Stock Corporation Act. Agenda Item 7 concerns the resolution on the approval of the hive-down and acquisition agreement between BASF SE and BASF Agricultural Solutions Deutschland GmbH. Agenda Item 8 concerns the resolution on the revocation of the existing authorization and the granting of a new authorization to acquire treasury shares pursuant to Section 71, Part 1, Sentence 8 of the German Stock Corporation Act and on their use with the possible exclusion of subscription and sell-back rights.
Regarding Agenda Item 7 and 8, I expressly refer to the respective written reports of the Board of Executive Directors, which have been available on the company's website since the convening of the Annual Shareholders' Meeting and are available for inspection here on-site. I'd like to ask Mr. Elvermann, CFO, to provide an oral explanation of Agenda Item 7. The floor is yours.
Thank you. Ladies and gentlemen, now two more formal aspects. First of all, on Agenda Item 7 and the report pursuant to Section 71, Part 3 of the German Stock Corporation Act. We propose that you approve the hive-down and acquisition agreement between BASF SE and BASF Agricultural Solutions Deutschland GmbH.
The Board of Executive Directors, with the approval of the Supervisory Board, has resolved to transfer the part of the Agricultural Solutions business area operated by BASF SE in Germany, including its holdings in direct subsidiaries, in short, the Ag business, to BASF Agricultural Solutions Deutschland GmbH. This GmbH is a wholly owned subsidiary of BASF SE. The Ag business comprises the operations based at the Ludwigshafen am Rhein and Limburgerhof sites. It develops solutions for the protection of crops across various cropping systems and helps to drive the sustainable transformation of agriculture. It brings together key research, production, and sales activities with about 2,500 employees. The hive-down is part of a global process to separate the Agricultural Solutions business unit from the BASF Group in order to strengthen its operational independence and prepare the business for IPO readiness.
BASF Beteiligungs-SE, or ListCo for short, a wholly owned subsidiary of BASF SE, is to serve as a listing vehicle. ListCo is to become the parent company of all companies assigned to the Ag Solutions business sector. ListCo is expected to be IPO-ready in 2027. The potential IPO, in which a minority stake in ListCo is to be floated on the stock market, is expected to take place on the Frankfurt Stock Exchange. On March 10th and 18th, 2026, BASF SE and BASF Agricultural Solutions Deutschland GmbH concluded the hive-down and acquisition agreement by means of notarized deeds. The Hive-down Agreement requires the approval of today's ASM and the Shareholders' Meeting of BASF Agricultural Solutions Deutschland GmbH, which has already given its approval on 21st of April, 2026.
The Hive-down Agreement provides that with the effect from 1st of January, 2026, that is, in retrospective, BASF SE will transfer all tangible and intangible assets attributable to the Ag Business to BASF Agricultural Solutions Deutschland GmbH. This includes, amongst other things, assets and liabilities with all rights and obligations, in detailed clauses described in clauses 4 and 18. The Hive-down Agreement governs the allocation of liability and costs as well as the conclusion of intragroup agreements to ensure that the services previously provided for the Ag Business are continued after the hive-down in order to maintain operational continuity. Furthermore, the Hive-down Agreement describes the consequences of the hive-down for the employees and their representatives. Thus, the employees of the Ag Business will be transferred to the new entity through a transfer of undertaking. BASF SE's codetermination status remains unchanged.
A Supervisory Board is to be formed at BASF Agricultural Solutions Deutschland GmbH in accordance with the provisions of the German Codetermination Act. In consideration for the transfer of the assets to be hived down, BASF SE as sole shareholder will receive 25,000 new shares in BASF Agricultural Solutions Deutschland GmbH with a nominal value of EUR 1 each. To effect the hive-down, the share capital will be increased from the current EUR 25,000 to EUR 50,000 in return for a contribution in kind. The transfer of the assets to be hived down generally will take place by way of partially universal succession. For individual assets, the Hive-down Agreement provides for alternative methods of transfer. The hive-down will take effect upon its entry in the commercial register for BASF SE. Subject to today's approval, we expect the entry to take place in early July of this year.
The effective date of the hive-down, as I said, is to be retroactively set as 1st of January, 2026, and the tax transfer date for the hive-down is 31st of December, 2025. The cost for preparing and implementing the hive-down amounts to just under EUR 2.5 million. Dear shareholders, the hive-down will not affect your legal status as a shareholder of BASF SE. You will retain an indirect interest in the assets to be hived down via BASF Agricultural Solutions Deutschland GmbH. Furthermore, the hive-down will have no impact on BASF SE's dividend capacity or dividend policy. The hive-down will also have no tax implications for you.
The Hive-down Agreement was filed with the commercial register of BASF SE in due time prior to the convening of this ASM, and the hive-down is explained from a legal and economic perspective in the joint hive-down report of the Board of Executive Directors of BASF SE and the Management Board of the BASF Agricultural Solutions Deutschland GmbH, dated 18th of March , 2026. The full hive-down and transfer agreement with all annexes, the Annual Financial Statements of both companies, and the Consolidated Financial Statements of BASF Group for the relevant financial years, including the Combined Management Reports, as well as the joint hive-down report, have been available on our website since the convening of the ASM and, as Mr. Bock said, are available for inspection here.
During the preparatory phase, the Board of Executive Directors of BASF SE considered in detail whether the hive-down of the Agricultural Solutions should take place in this manner or by other means and, in consultation with the Supervisory Board, concluded that the hive-down is the best solution from a legal, financial, and practical perspective. In the opinion of the Board of Executive Directors and the Supervisory Board, the conclusion of the Hive-down Agreement is advantageous for both BASF SE and BASF Agricultural Solutions Deutschland GmbH. With this, I will continue Agenda Item 8: report pursuant to Section 71, paragraph 3 of the German Stock Corporation Act on share buyback. Background information. The ASM last authorized the Board of Executive Directors to acquire own shares in 2022.
On the basis of this authorization, the Board of Executive Directors resolved on 28th of October, 2025, to implement a share buyback program with a volume of up to EUR 1.5 billion. This buyback program commenced in November 2025 and is scheduled to be completed by the end of June 2026. It forms part of the share buyback announced at the Capital Markets Day in September 2024, totaling at least EUR 4 billion by the end of 2028. The buyback of own shares returns available capital to shareholders, optimizes the company's capital structure, and increases earnings per share.
From the start of the share buyback program on 3rd of November, 2025, up to today's ASM, a total of 19,520,278 shares of the company, representing around 2.19% of the share capital and a corresponding amount of share capital of around EUR 25 million, were repurchased for a total consideration of around EUR 880 million. The average price of the treasury share repurchased during this period was EUR 45.1 per share. The treasury shares required are to be canceled.
Thank you very much, Mr. Elvermann, for your report on these two agenda items. For reasons of completion, agenda item concerns the election of Mark Garrett to the Supervisory Board, which I already explained.
The proposals of Board of Executive Directors and Supervisory Board are listed in the agenda. This brings us to today's discussion. I thank those of you who watched us via the internet. Thank you very much for your interest in BASF. This concludes the public webcast. Our shareholders can follow the remainder of the Annual Shareholders' Meeting live via the online service.