Covestro continued its successful start to the current fiscal year in the second quarter of 2022. The Group’s sales increased by 18.9 per cent compared with the prior-year quarter to EUR 4.7 billion, in particular on the back of higher average selling prices. EBITDA fell in the second quarter by 33.0 per cent to EUR 547 million. This was mainly due to significantly higher raw material and energy prices, which were partially offset by a higher selling price level, and lower volumes sold. The free operating cash flow (FOCF) fell to EUR –462 million. That is mainly attributable to an increase in funds tied up in working capital, especially due to the payment of short-term variable compensation for fiscal 2021, and to lower EBITDA. Net income in the second quarter of 2022 fell by 55.7 per cent compared to the very strong prior-year quarter and was EUR 199 million.
“We can look back at what was overall a solid second quarter, and we even slightly surpassed our EBITDA forecast. Nevertheless, we are looking ahead to an increasingly challenging second half of the year. The current geopolitical situation shows us all too clearly that there is no alternative to the transformation toward a sustainable, fossil-free industry landscape,” said Dr Markus Steilemann, CEO of Covestro. “With our vision of becoming fully circular and our ambitious climate targets, we are underscoring our position as a forerunner on the path toward a climate-neutral future.”
Full-year guidance 2022 adjusted
The Russian war against Ukraine has fundamentally changed the geopolitical situation and caused extensive consequences for the global economy. The Group, therefore, expects continued impacts on global supply chains, very high energy price levels, high inflation and weaker growth in the global economy.
As a consequence of a recent significant further increase in energy costs and a further weakening global economy, Covestro adjusted its outlook for the current fiscal year on July 29, 2022. The Group anticipates that EBITDA will be between EUR 1.7 billion and EUR 2.2 billion and ROCE above WACC between minus two and two percentage points. The FOCF is now expected to be between EUR 0 million and EUR 500 million. Covestro expects greenhouse gas emissions to fall to between 5.3 million and 5.8 million metric tons. The Group anticipates EBITDA for the third quarter of 2022 will be EUR 300 million to EUR 400 million.
Continued focus on the circular economy and climate neutrality
Covestro has implemented further measures to drive its vision of becoming fully circular and achieving climate neutrality by 2035. In May 2022, for example, the company launched “CQ” – “Circular Intelligence”, a new concept that makes circular solutions in the product portfolio even more visible to customers.
In June 2022, Covestro also opened a new Wind Technology Center in Leverkusen, where the company is conducting research into material solutions for sustainable energy generation from wind power. The focus is on faster and more cost-effective production of rotor blades and optimization of their blade properties.