Covestro has achieved its targets in a challenging market environment in fiscal year 2019. Core volumes increased by two per cent compared to the previous year.
Group sales fell by 15.1% to approximately €12.4bn as selling prices remained low. Consequently, EBITDA declined in line with forecasts to ~€1.6bn, and net income fell to €552m (-69.7).
Covestro
Covestro achieves challenging market targets
2019 Segment Results
Covestro now plans to distribute a dividend at the previous year’s level of €2.40 per share.
CEO Dr Markus Steilemann said: “2019 was marked by a number of geopolitical and macroeconomic uncertainties. Nevertheless, demand for our materials remains intact, which confirms our view that plastics are more valuable for the future than ever before. 2020 will remain challenging for us. However, we still see long-term demand for high-tech plastics to enable a more sustainable development.”
In the 2019 fiscal year, Covestro launched a global strategic programme to implement circular economy in all corporate divisions. The company aims to use alternative raw materials, develop innovative recycling, and establish broad-based co-operations and new business models.
Efficiency ensures ability
CFO Dr Thomas Toepfer added: “Covestro has a solid financial base, even though the operating result for fiscal 2019 was, as expected, below the record levels of previous years … Nevertheless, we still achieved our targets in this environment.”
Given the continuing challenging economic outlook for 2020, Covestro has accelerated the implementation of the multi-year effectiveness and efficiency programme launched in October 2018. That enabled Covestro to cut costs by around €150m in the past fiscal year. For 2020, the company aims to achieve savings of €250m, while the cumulated savings by the end of 2021 are expected to be around €350m annually.
Various short-term measures, such as more efficient cost management and reviewing existing and planned investments, were taken. This should result in additional savings of €200m in the current financial year. The focus in 2020 will remain on increasing efficiency.