Covestro’s business performance in the second quarter was, as expected, significantly impacted by the further spread of the coronavirus pandemic in Europe and North America.
“As anticipated, the global coronavirus pandemic had a significant impact on our results in the second quarter,” said Dr. Markus Steilemann, CEO of Covestro. “We took the right measures in timely fashion to protect our employees, maintain production and supply chains, and ensure continuous supply to our customers. We have managed to accomplish that very successfully to date and will continue to steer Covestro resolutely through this crisis.”
The company confirmed the full-year guidance it had revised in April. However, the uncertainties associated with the consequences of the coronavirus pandemic for economic development remain high. Covestro also took further financing measures in the second quarter to sustainably strengthen its liquidity position. The company placed Eurobonds with a total volume of EUR 1.0 billion in the capital markets on June 5, 2020. The bonds will be maturing in February 2026 and June 2030 and pay a coupon of 0.875% and 1.375% respectively.
Covestro presented its new long-term vision in May 2020. The company intends to fully align its entire production, its product and solution portfolio and all areas in the long term to the circular concept. The strategic program, which was already launched in 2019, aims to anchor circularity in all areas of the company in a holistic approach. It is now being successively implemented and backed up with concrete and measurable goals. It focuses in particular on the four topics of alternative raw materials, innovative recycling, joint solutions and renewable energies.
Inevitably the figures for the first half of 2020 were significantly impacted by the effects of the coronavirus pandemic. Core volumes decreased by 13.6%, and Group sales fell by 22.7% to around EUR 4.9 billion (previous year: EUR 6.4 billion). That is mainly attributable to lower total volumes and a decline in the level of selling prices. EBITDA consequently dropped by 57.9% to EUR 379 million, while net income totaled EUR –32 million (previous year: EUR 368 million). FOCF in the first half of 2020 declined to EUR –225 million (previous year: EUR –100 million).