Related entities as defined in IAS 24 (Related Party Disclosures) are legal entities that are subject to the control, joint control, or significant influence of Covestro AG or its subsidiaries, over which Covestro AG or its subsidiaries can exercise control, joint control, or significant influence, or that are controlled by a related person or a close family member of such a person.
On December 10, 2025, Covestro AG announced the successful implementation of its strategic partnership with XRG P.J.S.C. (formerly ADNOC International Limited, together with its subsidiaries hereinafter “XRG”), Abu Dhabi (United Arab Emirates). Covestro AG has been controlled by XRG since then. XRG is a company under the control of the Government of the Emirate of Abu Dhabi. Control over Covestro AG is exercised indirectly via Abu Dhabi National Oil Company (ADNOC) P.J.S.C., Abu Dhabi (United Arab Emirates).
Since December 10, 2025, entities that are also controlled, jointly controlled, or significantly influenced by the Government of the Emirate of Abu Dhabi have been considered related parties within the meaning of IAS 24. For these entities, Covestro AG takes advantage of the disclosure exemptions provided by IAS 24.25 et seq.
Covestro AG implemented a €1.17 billion capital increase in December 2025. In this context, 18,900,000 new no-par value bearer shares were issued exclusively to ADNOC International Germany Holding AG, Munich (Germany), a related party, and shareholders’ legal subscription rights were disapplied. The issue price was €62.00 per share.
Under the investment agreement, Covestro was given a commitment by Abu Dhabi National Oil Company (ADNOC) P.J.S.C., for the provision or arrangement of financial resources for refinancing existing lines of credit or other financial liabilities of the Covestro Group, if they become due as a result of change-of-control clauses. The financing will be provided or arranged on the same or more favorable conditions than the existing financing agreements, and there is no obligation for Covestro to use it.
The balances outstanding with companies related to the Government of the Emirate of Abu Dhabi as of December 31, 2025 are presented in the overview below.
| Receivables from and liabilities to related companies in accordance with IAS 24.25 et seq. | ||
|---|---|---|
| Dec. 31, 2025 | ||
| Receivables | Liabilities | |
| € million | € million | |
| Entities related to the Government of the Emirate of Abu Dhabi | 2 | 40 |
The sales and purchases of goods and services to/from these companies in the period from December 10, 2025 to December 31, 2025 are listed in the overview below.
| Sales and purchases of goods and services to/from related companies in accordance with IAS 24.25 et seq. | ||
|---|---|---|
| Dec. 10, 2025 to Dec. 31, 2025 | ||
| Sales of goods and services |
Purchases of goods and services |
|
| € million | € million | |
| Entities related to the Government of the Emirate of Abu Dhabi | 1 | 27 |
The other disclosures on related parties in accordance with IAS 24 that existed prior to the change of control remain unchanged for the entire fiscal year 2025.
| Receivables from and liabilities to related companies | ||||
|---|---|---|---|---|
| Dec. 31, 2024 | Dec. 31, 2025 | |||
| Receivables | Liabilities | Receivables | Liabilities | |
| € million | € million | € million | € million | |
| Nonconsolidated subsidiaries and associates | – | 3 | 3 | 6 |
| Associates accounted for using the equity method | 7 | 5 | 4 | 3 |
| Post-employment benefit plans | 64 | – | 64 | – |
Receivables from and payables to related companies mainly relate to leases and financing arrangements, supply and service relationships, and other transactions. No impairment losses were recognized on receivables from related companies in the reporting year or in the previous year.
Receivables from pension plans (excluding interest) with a fair value of €64 million as of December 31, 2025 (previous year: €64 million) resulted from initial funding loans granted. Covestro AG has agreed to provide Bayer-Pensionskasse VVaG, Leverkusen (Germany), with an interest-bearing initial funding loan of up to €208 million and Rheinische Pensionskasse VVaG, Leverkusen (Germany), with an interest-bearing initial funding loan of up to €11 million, both at their request. The pension funds are entitled to draw down amounts necessary to meet their regulatory solvency requirements at any time up to the amounts disclosed. The outstanding receivables are subject to a five-year interest rate adjustment mechanism. The loan commitments to the pension funds are recognized as other financial commitments.
| Sales and purchases of goods and services to/from related companies | ||||
|---|---|---|---|---|
| 2024 | 2025 | |||
| Sales of goods and services | Purchases of goods and services |
Sales of goods and services | Purchases of goods and services | |
| € million | € million | € million | € million | |
| Nonconsolidated subsidiaries and associates | 44 | 68 | 38 | 64 |
| Associates accounted for using the equity method | 25 | 755 | 12 | 658 |
The goods and services received from associates accounted for using the equity method mainly resulted from the ongoing business operations with PO JV, LP, Houston, Texas (United States). Covestro benefits from fixed long-term supply quotas/volumes of propylene oxide (PO) from this company’s production.
Related persons as defined in IAS 24 include the corporate officers of Covestro AG, who are the members of the Board of Management and Supervisory Board.
The compensation for corporate officers of Covestro AG in fiscal 2025 amounted to €14,171 thousand (previous year: €15,932 thousand), including the compensation of the Supervisory Board amounting to €2,378 thousand (previous year: €2,523 thousand).
This compensation is shown below:
| Compensation of the corporate officers according to IFRSs | ||
|---|---|---|
| 2024 | 2025 | |
| € thousand | € thousand | |
| Total short-term compensation | 7,410 | 6,320 |
| Total share-based compensation (long-term incentive) | 7,046 | 6,359 |
| Service cost for pension entitlements earned in the respective year | 1,476 | 1,492 |
| Aggregate compensation (IFRSs) | 15,932 | 14,171 |
Aggregate compensation of the members of the Board of Management according to the German Commercial Code (HGB) amounted to €8,220 thousand (previous year: €8,826 thousand).
Since the year 2016, members of the Board of Management have been eligible to participate in the Prisma long-term incentive program as long as they are employed by the Covestro Group. The fair value of the long-term compensation (Prisma) granted to the Board of Management in fiscal 2025 was €4,278 thousand (previous year: €3,939 thousand).
Sucheta Govil’s term of office on the Board of Management ended on July 31, 2025. A liability of €382,000 was recognized for the portion of the non-compete compensation payable to Sucheta Govil in 2026.
Provisions of €15,368 thousand were recognized for the long-term variable cash compensation for the members of the Board of Management serving during fiscal 2025 (short- and long-term variable compensation in the previous year: €13,038 thousand). At the end of the year, the present value of the defined benefit pension obligations for the current members of the Board of Management was €7,199 thousand (previous year: €7,960 thousand). For former members of the Board of Management, provisions of €5,221 thousand (previous year: €2,699 thousand) were recognized for long-term share-based cash compensation. The present value of the defined benefit pension obligations for former members of the Board of Management was €11,976 thousand (previous year: €11,727 thousand).
Supervisory Board compensation is exclusively non-performance-related. In addition to their compensation as members of the Supervisory Board, those employee representatives who are employees of Covestro Group companies receive compensation unrelated to their service on the Supervisory Board. The total amount of such compensation was €653 thousand (previous year: €671 thousand). Pension obligations for employee representatives on the Supervisory Board amounted to €1,890 thousand (previous year: €2,258 thousand). Pension obligations for employee representatives who had left the Supervisory Board and the company totaled €1,442 thousand (previous year: €1,108 thousand).
As in the previous year, the company did not grant any advances or loans to members of the Board of Management or the Supervisory Board in fiscal 2025.
For further information, please refer to the Compensation Report