I would like to welcome you very cordially to this year's annual stockholders' meeting. To begin my remarks, I would first like to take a look at the macroeconomic conditions that have significantly shaped the past year. 2024 has again massively challenged the German economy. We were once again faced with a recession. For the second time in a row, gross domestic product shrank, this time by 0.2%. This sustained period of weakness hit the chemical industry, and therefore us, particularly hard. Last year, we were once again confronted with a weak environment across the entire spectrum of our customer industries. The construction, agricultural, and automotive industries are all still having to contend with economic and, in some cases, structural problems. Unfortunately, the location factors here in Germany, which are crucial for our and our customers' industries' global competitiveness, have not changed for the better.
In most regions of the world, the desired recovery failed to materialize. Even China, the world's largest chemical market, failed to generate positive economic impetus. Nor have geopolitical tensions decreased in the past year. On the contrary, they have intensified further. The good news is that despite the massive headwinds, we have managed to stay on course and increase our earnings through our own efforts. We took action against the global weakness in demand at an early stage. With foresight and consistency, we launched our FORWARD! action plan in the early summer of 2023. This paid off for us last year, as we made significant cost savings and improved the capacity utilization of our plants. I will go into this in more detail in a moment. We have also made strategic progress and successfully completed our portfolio transformation with the sale of our Urethane Systems business.
Today, we are a company that is clearly focused on specialty chemicals. We are in a more stable position, and this makes us more resistant to global turbulence and creates a good basis for future growth. In the current rough waters, however, it is not just the right lineup that is needed, but also the right team with the right spirit. My special thanks go to our employees all over the world. Their great flexibility and dedication have played a key role in overcoming the massive challenges of recent months and quarters. Without their support and commitment, it would not have been possible to keep our LANXESS ship on course. Many thanks to the global LANXESS team. Ladies and gentlemen, let's now take a closer look at business development in 2024.
As already mentioned, we have managed to keep a firm grip on the helm and stay on course despite stormy seas worldwide. We significantly increased our operating result. Even though sales fell slightly by 5%, we increased EBITDA pre-exceptionals by 20% to EUR 614 million. Our earnings were therefore at the upper end of our forecast range. This success is primarily due to two factors: higher capacity utilization of our plants and significantly lower costs, thanks to our Forward action plan. Forward has played a key role in making us leaner and more efficient. Originally, we had set ourselves the target of saving around EUR 90 million by 2024. Today, we can report that we have exceeded this target. At the end of last year, the savings already amounted to over EUR 110 million, and we are resolutely pursuing this course.
By the end of 2025, we aim to reduce our costs by a further EUR 40 million. Ladies and gentlemen, we have also further strengthened our financial position in 2024. Our forward-looking financial strategy and consistent cost-cutting measures have helped us to reduce debt and generate an attractive cash flow at the same time. Net financial debt fell by 5% from EUR 2.5 billion to EUR 2.4 billion. Free cash flow amounted to EUR 188 million. Dear shareholders, I'm proud that we can present solid earnings for the crisis-plagued year 2024. We have shouldered a lot in the past few months and made good progress, but we are not there yet. Further strengthening of our financial base remains our top priority for 2025, especially in these volatile times. The Board of Management and the Supervisory Board are therefore proposing a stable dividend of EUR 0.10 per share.
This corresponds to a total dividend payout of EUR 8.6 million. Ladies and gentlemen, we are also a company that has made further strategic progress in the past financial year. In the recent years, we have stringently restructured our portfolio through targeted acquisitions and disposals to create a specialty chemicals company with an increasingly sustainable product range. We have achieved leading market positions in almost all businesses. For example, in flame retardant additives or protective products for consumer-related markets such as cosmetics, food, and beverages. We have withdrawn from the volatile polymer business. We initiated the final step in this portfolio transformation in October of last year with the sale of the Urethane Systems business to the Japanese UBE Corporation and successfully completed this transaction on the 1st of April of this year.
We will use the purchase price to proceed to further reduce debt and thus continue to strengthen our financial position. Ladies and gentlemen, we thus now have a specialty chemicals portfolio based on the three pillars of intermediates, additives, and consumer protection. We do deliver more than just chemistry. We also deliver solutions, solutions that help to master the challenges of today and tomorrow. Our products provide answers to important human issues: nutrition, sustainable mobility, health, climate change, or a safe living space. Let me now show you a few examples. We are helping to make the energy transition a success because we produce high-quality lubricants for wind turbines that ensure long-lasting and reliable gearboxes. Our ion exchangers not only purify water, no, they are also increasingly being used in technologies to filter, for example, CO2 from the air.
In the paint industry, our pigments contribute to sustainable and long-lasting paints and coatings because they contain a high proportion of recycled raw materials. Our additives also contribute to sustainability, for example, by reducing the ecological footprint of car tires. I think you can see that sustainability is a strength of ours. We deliver solutions. For us, sustainability is the key to long-term success. You know that we have set ourselves ambitious sustainability targets that we are continuously working to attain. Since LANXESS was founded, we have reduced our Scope 1 and Scope 2 greenhouse gas emissions from an initial 6.5 million metric tons of CO2 to 1.9 million metric tons in 2024. This corresponds to a massive reduction of around 70% compared to the base year 2004. We have also achieved remarkable success with Scope 3 emissions.
Since our first detailed report ten years ago, we have reduced emissions in the supply chain from 27 million tons to 10.3 million tons in 2024, a significant reduction of 60%. We are proud of these results and do not shy away from comparisons within the industry. I think we are an absolute front runner here, and our progress is also recognized and appreciated by international sustainability and rating agencies. We have achieved top positions in several sustainability indices and ratings, including the Dow Jones Best- in- Class Index and the ratings of MSCI, and EcoVadis. These awards confirm our resolute commitment to the environment, society, and good corporate governance. Because for us, sustainability is not just a goal, it is a business model. Ladies and gentlemen, let's now turn to the outlook for 2025.
With the start of the new U.S. administration, global turbulence has multiplied since the beginning of the year. With its disruptive measures, the new U.S. administration has unhinged the global trade order as we knew it and sent shockwaves through the financial markets. It is completely uncertain how this trade war will end. One thing is clear: trade barriers hang like the sword of Damocles over international relations. The uncertainties are enormous, and uncertainty is poison for investment, for growth, and for economic activity as a whole. Ladies and gentlemen, we cannot influence these framework conditions, but we can adapt to them. In these times, this means above all that we have to remain flexible, and we need to safeguard our entrepreneurial freedom of action.
I therefore believe it is crucial that we make targeted use of our strengths and consolidate our position in the international markets in order to remain successful even in turbulent times. In concrete terms, this means, for example, with regard to the customs policy, that we continuously analyze how customs duties change our position in relation to our competitors. As you know, we have significantly expanded our production base in North America over the past ten years. Today, 30% of our global sales and production take place in the USA This presence will help us to cushion the direct impact of the import tariffs introduced by the U.S. government. For products where we are in competition with imports from China to the USA, different levels of U.S. tariffs could even be an advantage for us. The indirect effects of U.S. economic policy are more difficult to grasp, however.
The entire global economy will be affected, especially if the trade dispute between the U.S. and China escalates. This will slow down global economic growth and could also severely affect our customer industries, such as the automotive industry. The EU Commission, apart from that, must also ensure that China does not flood the European market with its surplus capacities and dumping prices. This would place an enormous additional burden on the German economy and our chemical industry. All this shows that tariffs are poison for global trade and harm all sides. I very much hope that all parties involved will soon abandon this aberration. Ladies and gentlemen, the political landscape has also changed in Germany. A new government has been formed and has finally gotten to work. It will hopefully initiate the political change urgently needed to finally make Germany competitive again as a business hub.
The first few weeks after the election have been encouraging. Two huge special funds with a volume of EUR 1 trillion have been agreed. Half of the funds are earmarked for getting Germany back on its feet. The investments in infrastructure should significantly strengthen our competitiveness. With targeted financial support, the aim is to drive innovation and accelerate digitalization in order to modernize our economic system and make it efficient in the long term. If the investment packages are put together correctly, this will help us move forward overall. Ladies and gentlemen, yes, I am one of those who also have a positive view of the coalition agreement. It contains many of the right starting points to enable industry and the chemical industry in particular to compete more effectively in the global marketplace.
These include, for example, the planned Chemicals Agenda 2045, the acceleration of approved procedures, and the outlined reductions in energy costs. However, these words must be backed by action. Following the encouragingly swift coalition negotiations, it is now a matter of implementing these plans quickly and fully so that the announcements are followed by action, and we experience a genuine political and economic turnaround. We need to transition from a planned economy and ideological policy towards a pragmatic and balanced approach. In my view, and I do think I can say this on behalf of the majority of the entire German industry, the theme of better competitiveness must be a common thread in all of the government's political action. As the new German chancellor himself has said, the world is not waiting for us.
In the chemical industry, we experience this every day in competition with our global rivals, and that is why I hope that everyone in the new coalition will realize that swift and far-reaching action is needed. Be courageous. The German economy and its workforce are waiting for it. Ladies and gentlemen, what will the year 2025 hold for LANXESS? Despite all of the adversity, we got off to a good start and presented a significant earnings increase of approximately 32% for the first quarter at the beginning of May. However, the coming months will be anything but easy. The geopolitical tensions and trade policy measures taken by the USA are causing considerable uncertainty on the global markets and noticeably dampening growth expectations too. Where this will lead is very difficult to predict today.
Despite this high level of uncertainty in the global economy, we recently confirmed our forecast for the full year 2025 and continue to expect an EBITDA pre-exceptionals between EUR 600 million and EUR 650 million. Esteemed shareholders, 2025 will certainly be another challenging year for us and the entire chemical industry. It is also a special year for LANXESS as we are celebrating our 20th anniversary on the stock exchange. Right from the start, energizing chemistry has been our claim: to be fast, agile, resilient, and flexible. That is what we set out to do when we started, and we have proven time and again ever since that we are capable of achieving this. To succeed in highly dynamic markets and an increasingly complex world, fresh thinking and new approaches are always needed. With this DNA, LANXESS has reinvented itself several times over the past 20 years and mastered challenging situations.
This DNA is now helping us navigate safely through these stormy times. LANXESS is celebrating 20 years in business, and we have got what it takes to make the third decade another success story. Despite a difficult environment, we have set the right course for LANXESS. With our clear strategic focus, we are ideally equipped to get off to a strong start when the economy picks up again. We want to accompany our customers as partners in an increasingly dynamic environment and develop solutions together with innovative strength and a deep understanding of their industries and requirements. We are well- positioned to achieve this with the right products in the right markets. Our special thanks go to you, our shareholders, for your trust and support over the past 20 years, especially in these very challenging times. Your loyalty and commitment are the foundation of our success.
Let us keep pursuing this path together and develop LANXESS successfully so we can continue to demonstrate the truth of our claim, LANXESS Energizing Chemistry. Thank you very much.
Thank you very much, Mr. Zachert.