Covestro continues on its trajectory for increased growth. Demand has continued to rebound in the first quarter of 2021 and has led to a significant upturn in business performance. As a result, core volume growth was up 5.3 percent compared to last year’s first quarter.

This is attributable mainly to a strong rebound in demand in the Asia-Pacific (APAC) region, where a massive drop in volumes was recorded in 2020’s first quarter due to the coronavirus pandemic. The Group's overall growth opportunities in the first quarter were however constrained by limited product availability resulting from unplanned weather-related production outages in the North American (NA) region as well as raw material bottlenecks. In the first quarter, Group sales increased 18.8 percent to EUR 3.3 billion, primarily on account of higher average selling prices.

Along with higher sales volumes and other factors, this led to an almost threefold increase in EBITDA to EUR 743 million (previous year: EUR 254 million). As a result, net income in the first quarter rose to EUR 393 million (previous year: EUR 20 million). Free operating cash flow (FOCF) increased to EUR 318 million, an increase of around EUR 600 million compared to the previous year (previous year: EUR – 249 million).

“Our start to 2021 was very successful, and we are optimistic about the upcoming year as a whole,” Dr. Markus Steilemann, CEO of Covestro, said. “We are taking this momentum into the implementation of our new strategy with our focus directed firmly toward the future. We are pro-actively working toward a circular economy, because I am convinced that a sustainable future is not possible without our materials.”

In February 2021, Covestro presented the new corporate strategy “Sustainable Future”, which has customer centricity and sustainable growth at its core. In the course of building this effort, the Group plans to reorganize its business into seven operating business entities as of July 1, 2021. The entities are organized according to their respective success factors and tailored to specific customer needs and market requirements. This enables the company to systematically align processes and products with customer needs while sharpening their focus on efficiency and sustainability. In the future, Covestro will distinguish between two business areas: “Performance Materials” and “Solutions and Specialties”.

Optimistic outlook for 2021

Given business performance exceeded expectations, on April 13, 2021 Covestro adjusted its outlook for fiscal year 2021 and revised its guidance upward. The Group now expects EBITDA to range between EUR 2.2 billion and EUR 2.7 billion. FOCF is projected to amount from EUR 1.3 billion up to EUR 1.8 billion, with ROCE between 12 percent and 17 percent. Core volume growth at Covestro is still anticipated to come in at between 10 percent to 15 percent. Around 6 percent of this total figure is attributable to the Resins & Functional Materials business (RFM), which is now being integrated into the company after the successful acquisition from DSM on April 1, 2021. In addition, rating agency Moody's confirmed Covestro's investment grade rating in March 2021 and raised the outlook to "stable". 

“We started the new year with a strong first quarter. Demand for our products remains high, and we have benefited from very good margins,” Covestro CFO Dr. Thomas Toepfer explained. “In fiscal year 2021, we will return to our growth trajectory in all regions and further reinforce our leading position.”