Covestro has started the fiscal year 2024 on a positive note. The company was able to increase its sales volumes, in particular within the EMLA and APAC regions, with the former benefiting from higher plant availability. Due to lower average selling prices associated with lower raw material prices being passed on to customers, sales fell slightly by 6.2% to EUR 3.5 billion (previous year: EUR 3.7 billion). EBITDA fell by 4.5% to EUR 273 million (previous year: EUR 286 million). This was primarily a result of lower margins, although the impact was somewhat mitigated by reductions in raw material and energy costs, partially offsetting the decline in selling price level. Net income fell by 34.6% to EUR –35 million (previous year: EUR –26 million) in the first quarter of 2024, whereas the free operating cash flow (FOCF) improved by 7.2% to EUR –129 million (previous year: EUR –139 million).
 
 “Our start to 2024 shows that we’re focusing on the right things,” says Dr Markus Steilemann, Chief Executive Officer of Covestro. “Our goal for the rest of the year is to further increase production, sales volumes and margins without losing sight of our costs. This balance drives our comprehensive transformation while solidifying the foundation for our commitment to becoming fully circular and climate neutral.” 


Despite a solid start and positive volume development in the first quarter, Covestro expects macroeconomic conditions to remain volatile throughout the remainder of the year. The company is thus confirming its full-year guidance and still expects EBITDA of between EUR 1.0 billion and EUR 1.6 billion. Covestro anticipates FOCF of between EUR 0 and EUR 300 million and ROCE above WACC of between –7% and –2%. The Group’s greenhouse gas emissions measured as CO2 equivalents are expected to range between 4.4 million metric tons and 5.0 million metric tons. Covestro anticipates EBITDA between EUR 270 million and EUR 370 million for the second quarter of 2024.
 
 “Our volumes have remained buoyant since the turn of the year and we’ve made a solid start to 2024 despite the current global challenges,” says Christian Baier, CFO of Covestro. “In view of the economic uncertainties, however, we remain cautious for the rest of the year. We continue to focus our efforts on creating a sustainable basis for growth through targeted capital expenditure and thus on strengthening Covestro’s future viability.”
 
Progress in Driving the Circular Economy and Climate Neutrality
The Group remains focused on driving its vision of becoming fully circular and achieving climate neutrality. Covestro presented climate neutrality targets for Scope 3 emissions at its Annual Press Conference in February 2024 and finalized its climate neutrality strategy: By 2035, the Group aims to decrease its Scope 3 emissions by 10 million metric tons of CO2 equivalents, using 2021 as baseline. Covestro likewise aims to make its operations climate neutral in terms of its Scope 1 and Scope 2 emissions by 2035 and to be completely climate neutral by 2050.

To achieve these goals, Covestro is focusing on expanding renewable energies and cross-industry partnerships for joint solutions along the value chain, among other things. The company is also committed to research and development. For instance, Covestro has produced a wide range of polycarbonate co-polymers on an industrial scale in a new plant at its site in Antwerp, Belgium, since March of this year. The new technology developed by Covestro allows for the integration of new functionalities and properties into existing materials, such as enhanced flame retardancy.
 
Another example of an innovative research success lies in the development of a new process for producing the chemical aniline entirely based on plant biomass, marking the first ever departure from traditional petroleum-based production. Covestro put a special pilot plant into operation for this purpose in February 2024. German Chancellor Olaf Scholz visited Covestro’s Asia-Pacific Innovation Center in Shanghai in April 2024 to witness the Group’s global innovativeness for himself. There, the company develops future-oriented, sustainable products, technologies and solutions geared towards future-important sectors, including electromobility, wind energy and photovoltaics, consumer electronics and construction.

Higher Sales Volumes in Both Segments Support Sales Development 

The Performance Materials segment posted a 5.7% decrease in sales to EUR 1.7 billion in the first quarter of 2024 (previous year: EUR 1.8 billion). In line with the overall company trend, this was attributable in particular to the decline in average selling prices associated with lower raw material prices being passed on to customers. However, the increase in volumes sold, especially in the APAC and EMLA regions, contributed positively to sales. The segment’s EBITDA fell by 40.5% from the prior-year quarter to EUR 103 million (previous year: EUR 173 million), whereas the free operating cash flow was EUR –73 million (previous year: EUR –57 million).

Sales in the Solutions & Specialties segment fell by 6.2% to EUR 1.8 billion (previous year: EUR 1.9 billion) in the first quarter of 2024, a reduction, mainly driven by lower selling price levels, yet there was an increase in sales volumes. The segment’s EBITDA rose to EUR 208 million, marking a 26.1% increase over last year’s first quarter (previous year: EUR 165 million). This increase was primarily driven by higher sales volumes. The free operating cash flow improved to EUR 22 million (previous year: EUR –48 million).