Covestro sales volumes grow in the third quarter despite difficult market conditions

In the third quarter of 2024, Covestro continued to increase its volumes sold, particularly in the EMLA and APAC regions. Compared to the same quarter of the previous year, Group sales remained stable at around 3.6 billion euros, as lower raw material prices led to lower selling price levels. Compared to the third quarter of 2023, the Group’s Ebitda increased by 3.6 percent to 287 million euros, thus falling within the expected range of 250 million euros to 350 million euros. Net income reached 33 million (previous year: -31 million euros). Free operating cash flow decreased to 112 million euros, primarily due to lower operating cash flows.

“We concluded the third quarter of the year with higher sales volumes and improved earnings,” said Markus Steilemann (in the picture below), CEO of Covestro. “Nevertheless, the current market environment remains challenging. Our focus is therefore clear: We continue to do our homework, focus on the levers we can control and consistently implement our “Sustainable Future” strategy. In doing so, we not only lay the foundation for future success and sustainable growth, but also make steady progress towards becoming fully circular.”

In the Performance Materials segment, Covestro increased its sales by 4.1 percent to 1.78 billion euro in the third quarter of 2024. This was primarily driven by higher volumes, especially in the EMLA region. These higher volumes contributed to a significant increase in Ebitda of 47.1 percent to 125 million euros. Free operating cash flow amounted to 111 million euros due to a significantly lower release of funds from working capital compared to the same quarter of the previous year.

In the Solutions & Specialties segment, sales in the third quarter of 2024 decreased by 2 percent to 1.77 billion euros. This was primarily due to a demand-related decline in average selling prices, which higher volumes were unable to offset fully. As a result, the segment's Ebitda fell 15.4 percent to 208 million euros. Free operating cash flow was 101 million euros, primarily due to cash being tied up in working capital, as opposed to a release of funds in the same quarter last year, and lower Ebitda.

In the first nine months of 2024, Covestro's sales remained largely stable at 10.8 billion euro compared to the same period of the previous year. The increase in volumes across the group did not offset the demand-related decline in average selling prices in the first nine months. That is also reflected in the Ebitda for the first nine months of 2024, which fell by 7.2 percent to 880 million euros. Net income fell to -74 million euros. Free operating cash flow for the nine-month period amounted to -164 million euros.

In the light of the difficult economic environment, Covestro has revised its 2024 Ebitda forecast downwards to between 1 and 1.25 billion euros. “Overall, global demand is intact but remains at a low level. We continue to face challenges in various industries and regions,” said Christian Baier, CFO of Covestro. “Nonetheless, we were able to slightly increase our EBITDA, indicating that our measures for efficiency and plant reliability are working. However, the economic environment remains challenging, and we have therefore narrowed our guidance for the full year accordingly.”