Frankfurt The chemical company BASF is preparing the generational change on the board – but cautiously. The board contract of company boss Martin Brudermüller, 61, has now been extended by one year until the end of the 2024 Annual General Meeting, as announced by BASF on Thursday. CFO Hans-Ulrich Engel, 63, whose contract expires in May 2023, will leave as planned. Dirk Elvermann, 51, is to take over his position.
With the personnel decisions, the Dax company avoids the two leading and most experienced representatives on the board resigning in one fell swoop in a particularly difficult economic phase. Brudermüller and Engel have been on the BASF board for well over a decade.
Brudermüller was promoted to the board in 2006 and has been CEO since 2018. Engel has been a member of the board since 2008 and has been its deputy chairman since 2018. His designated successor, Elvermann, is also established in the Group: He has been in charge of Corporate Finance since 2019 and was previously CFO of Wintershall Holding GmbH and Managing Director of BASF in Poland.
Two women and one man are among the favorites for CEO succession
“I am pleased that Martin Brudermüller will continue to lead the company with care and energy in these difficult times,” said Kurt Bock, Chairman of the Supervisory Board, on the extension of the contract.
Top jobs of the day
Find the best jobs now and
be notified by email.
There are two main candidates to be considered as Brudermüller’s successors: Firstly, the 51-year-old chemist Markus Kamieth, who has previously been on the Board of Management responsible for the dispersions, catalysts and coatings business and who also heads the important Asian business.
The supervisory board has extended the contract with the head of the group by one year.
(Photo: dpa)
On the other hand, the trained business economist and marketing expert Saori Dubourg. The 51-year-old currently manages BASF’s extensive business with plastics and basic products and was previously responsible for the agricultural division, among other things.
The chemist has so far been responsible for the dispersions, catalysts and coatings business on the BASF board.
Both have been on the board since 2017, so they already have some experience in top management at BASF and would theoretically be young enough to lead the group for another ten years from 2024.
Prospects for BASF are clouding over
Research director Melanie Maas-Brunner, 54, also brings a special area of responsibility into play. On the BASF Board of Management, she is also responsible for the Group’s major European sites. It thus plays a central role in the fight against high energy costs and in the switch to CO2-neutral manufacturing processes.
However, the trained chemist only moved up to the BASF board in 2021 and therefore has comparatively little experience at this management level. However, all candidates can still prove themselves until the decision on Brudermüller’s successor is made.
>> Read also: BASF reports slump in profits – chemical giant announces austerity program
There should be plenty of opportunities to do so – because difficult times are coming for BASF. The operating business was solid in the first half of 2022. However, sharply rising energy prices, possible failures in the gas supply and an impending recession are clouding the chemical giant’s prospects considerably. The failure of Russian gas supplies and the resulting cost increases could result in long-term disadvantages in global competition.
Only
909
million euros profit
made BASF in the third quarter – a quarter less than in the same period last year.
Rising energy and raw material costs and further write-downs on the majority stake in Wintershall Dea caused an unexpectedly strong decline in net profit in the third quarter. This fell by more than a quarter from 1.25 billion euros to 909 million euros.
Operating profit (EBIT) adjusted for special effects also fell sharply, by 28 percent to 1.35 billion euros. However, it was still slightly above market expectations. For the year as a whole, the group still only expects a decline in operating profit of around one tenth to 6.8 to 7.2 billion euros. Most analysts expect earnings to fall further next year.
In addition, there are strategic challenges such as the planned conversion of production to climate-neutral processes and the growing geopolitical tensions in the relationship between Western countries and China. BASF is currently heavily invested there.
BASF share: Weak valuation on the capital market
Problems on the capital market have long been reflected in weak valuations. Since the beginning of the year, the BASF share has lost around a third of its value, compared to its high of 2017 it is more than 50 percent.
In response to the increasingly difficult earnings situation in Europe, the chemical giant announced a few days ago a new cost-cutting program including job cuts with a volume of EUR 500 million. More than half of the savings are to be realized in the main plant in Ludwigshafen. Further cost reduction measures at other European locations are planned for the first quarter of 2023.
Not only for Brudermüller, but also for his potential successors this year and next, it will be very important how they prove themselves as crisis managers. Because it is considered very likely that BASF will continue with the previous practice of selecting the CEO from incumbent board members.
More: Recession could slow down the chemical industry’s green transition