Covestro saw a strong end to an exceptional year in 2020 and benefited, especially in the second half, from its consistent crisis prevention measures and a recovery in demand.  Despite the very successful fourth quarter, the Group could not fully compensate the massive, pandemic-related cut-backs that arose in the first six months.

In 2020, the Group's core volumes sold were down by 5.6% over the prior-year period. Group sales also declined, falling 13.7% year over year to approximately EUR 10.7 billion. By implementing extensive cost-saving measures, Covestro was able to limit the year-over-year decline in EBITDA to 8.2%, finishing fiscal 2020 as forecasted at approximately EUR 1.5 billion (previous year: approx. EUR 1.6 billion). Net income reached EUR 459 million (–16.8%), while free operating cash flow (FOCF) increased to EUR 530 million (+12.1%). 

“We were able to successfully navigate through this highly exceptional year and maintained our ability to act at all times. We took a broad range of measures to protect our employees, keep supply chains running, and expand our strong liquidity position,” Dr. Markus Steilemann, CEO, Covestro, said. “In fiscal 2020, we therefore were able to actively pursue our strategic goals. We defined our vision to become fully circular and took a major step in this direction with the announced acquisition of the Resins & Functional Materials business from DSM.”

Earlier in 2020, Covestro announced to become fully circular. To fulfill this long-term vision and embed circularity into all areas of its business activities, the Group decided to focus on four topics: alternative raw materials, innovative recycling, joint solutions, and renewable energies.

“The decisive measures we took early on helped considerably in delivering strong results. Backed by a significant recovery in demand from mid-year, we returned to our growth trajectory in the second half of the year and generated earnings that almost reached prior-year level,” Dr. Thomas Toepfer, CFO, said. “In an environment that is still characterized by uncertainty, we remain cost-conscious and continue to strengthen our efficiency. In addition, we are focusing even more explicitly on our customers in order to create value.” 

Covestro is combining the consistent alignment of products and processes with its customers’ needs with an even sharper focus on addressing sustainability in a profitable way. In the future, the Group will apply sustainability criteria even more stringently when undertaking investments, acquisitions, and R&D activities. As part of its transition towards a circular economy, Covestro is also expanding its portfolio of circular products. 

“Our vision to become fully circular is charting the direction of our new Group strategy. The new structure is creating an optimal starting point for the future and will position us to become significantly more competitive,” according to Steilemann. “This will enable us to better meet our customers’ needs, make our company more efficient and effective, and generate sustainable growth. We are truly driving forward the transformation towards a circular economy."

For fiscal 2021, Covestro expects core volume growth of between 10% and 15%. Around 6 percentage points of this figure are attributable to the planned acquisition of the Resins & Functional Materials (RFM) business from DSM, that the Group announced. Moreover, Covestro forecasts FOCF at between EUR 900 million and EUR 1.4 billion, with ROCE between 7% and 12%. The Group's EBITDA for full-year 2021 is anticipated to come in at between EUR 1.7 billion and EUR 2.2 billion. In the first quarter of 2021, the EBITDA range is projected to be EUR 700 million to EUR 780 million.