Covestro confirms full-year guidance despite sales and income drop in Q2

For the second quarter, Covestro achieved its EBITDA to EUR 385 million, which meets the guidance of EUR 330 million to EUR 430 million amid a continuing weak economic landscape.

Notably, mainly due to a demand-related decline in the selling price level and a drop in volumes sold, group sales decreased year-on-year by 20.9% to EUR 3.7 billion. Net income was EUR 46 million, a year-on-year fall of 76.9%.

Specifically, sales in the Performance Materials segment fell by 27.3% to EUR 1.8 billion, and the Solutions & Specialties segment posted a 13.5% fall in sales to EUR 1.9 billion in the second quarter.

“The second quarter of the year was characterized by continued economic weakness and weak demand worldwide. Nevertheless, we achieved our targets for the quarter and are confirming our full-year guidance,” says Dr. Markus Steilemann, CEO of Covestro.

For the first half of the year, Covestro’s sales decreased by 20.5% to EUR 7.5 billion, and the Group’s EBITDA fell by 50.4% to EUR 671 million.

Covestro achieved its EBITDA-guidance and confirms the guidance for the full year.

The challenging environment impacted both business segments of Covestro.

Full-year guidance for 2023 confirmed

Despite the headwind, Covestro is confirming its guidance for fiscal 2023, with the expectation that results to be rather in the lower half of the specified ranges for all key performance indicators.

In this April, the Group announced that it expects EBITDA to be between EUR 1.1 billion and EUR 1.6 billion. The Group anticipates free operating cash flow of between EUR 0 million and EUR 500 million and ROCE above WACC of between –6.0 percentage points and –2.0 percentage points.

“The second quarter was in line with our expectations, but we still face a challenging economic environment,” says Dr. Thomas Toepfer, Covestro’s CFO and Labor Director. “We currently still do not anticipate an economic recovery in the remainder of the year.”

Covestro anticipates EBITDA for the third quarter of 2023 to be between EUR 240 million and EUR 340 million.

Sustainable development on track

Covestro’s GHG emissions measured as CO2 equivalents are projected to be between 4.2 million metric tons and 4.8 million metric tons for 2023. The company is committed to using renewable energies, and it is aiming to increase the global demand for electricity from renewable sources from 12% as end of 2022 to 18% in 2023.

The Group recently developed an app for calculating the carbon footprint of its products. It can currently be calculated for about 50,000 intermediate and finished products. Covestro is now validating the results in order to make them gradually available to customers from 2024 onward.