| Summary statement of cash flows | ||||
|---|---|---|---|---|
| 4th quarter 2024 |
4th quarter 2025 |
2024 | 2025 | |
| € million | € million | € million | € million | |
| EBITDA | 191 | 91 | 1,071 | 740 |
| Income taxes paid | (66) | (47) | (219) | (192) |
| Change in pension provisions | 74 | (14) | 47 | (26) |
| Gain on bargain purchase acquisition | – | (1) | – | (12) |
| (Gains)/losses on retirements of noncurrent assets | (52) | (30) | (65) | (76) |
| Change in working capital/other noncash items | 465 | 302 | 36 | 53 |
| Cash flows from operating activities | 612 | 301 | 870 | 487 |
| Cash outflows for additions to property, plant, equipment and intangible assets | (359) | (214) | (781) | (770) |
| Free operating cash flow | 253 | 87 | 89 | (283) |
| Cash flows from investing activities | (111) | (825) | (423) | (1,295) |
| Cash flows from financing activities | (542) | 572 | (565) | 968 |
| Change in cash and cash equivalents due to business activities | (41) | 48 | (118) | 160 |
| Cash and cash equivalents at beginning of period | 539 | 604 | 625 | 509 |
| Change in cash and cash equivalents due to exchange rate movements | 11 | (4) | 2 | (21) |
| Cash and cash equivalents at end of period | 509 | 648 | 509 | 648 |
Net cash flows from operating activities amounted to €487 million in fiscal 2025 (previous year: €870 million). The main reason for this reduction was a drop in EBITDA. A decline in cash inflows from operating activities, despite lower cash outflows for additions to property, plant, equipment, and intangible assets of €770 million (previous year: €781 million), led to an overall decrease in free operating cash flow to €–283 million (previous year: €89 million).
Additional information on the calculation of indicators is available in “Management System.”
Net cash outflows for investing activities in fiscal 2025 totaled €1,295 million (previous year: €423 million). This was primarily attributable to cash outflows of €770 million for additions to property, plant, equipment and intangible assets (previous year: €781 million), net outflows for short-term bank deposits of €546 million (previous year: net inflows of €252 million), and net purchases of money market fund units of €100 million. This was offset mainly by cash inflows from sales of property, plant, equipment and other assets of €78 million (previous year: €76 million), which resulted in particular from the sale of intangible assets amounting to €65 million.
| Cash outflows for additions to property, plant, equipment and intangible assets | ||
|---|---|---|
| 2024 | 2025 | |
| € million | € million | |
| Performance Materials | 496 | 496 |
| Solutions & Specialties | 254 | 232 |
| Others/Reconciliation | 31 | 42 |
| Covestro Group | 781 | 770 |
Capital expenditures in fiscal 2025 were targeted at new capacity as well as maintenance and improvement of existing plants in both segments. In the Performance Materials segment, there were capital expenditures on new capacity at the Antwerp (Belgium) site and on maintenance, especially at our Krefeld-Uerdingen (Germany) site. In the Solutions & Specialties segment, capital expenditures involved new capacity at the Newark (United States) site and the construction of the company’s largest plant for thermoplastic polyurethane (TPU) in Zhuhai (China), which is planned to reach an annual capacity of 120,000 metric tons of TPU per year in the future.
For information on other financial commitments, see note 25 “Contingent Liabilities and Other Financial Commitments.”
In fiscal 2025, net cash inflows for the Covestro Group’s financing activities totaled €968 million (previous year: net cash outflows of €565 million). They were predominantly attributable to the capital increase of €1,172 million, after deduction of transaction costs, implemented in December 2025. As part of the investment agreement signed between Covestro AG and XRG in October 2024, the Board of Management and Supervisory Board of Covestro AG resolved that, on completion of the transaction, the capital stock of the company was to be increased by 10% (18,900,000 shares).
Other cash inflows were above all due to proceeds of €1,081 million from incurring new current liabilities to banks in China, the issuance of commercial paper of €404 million under the European Commercial Paper Program (ECCP), and a loan of €200 million raised from the European Investment Bank (EIB).
Repayments of current liabilities to banks in China of €677 million and of commercial paper of €443 million were the main items with an offsetting effect. At the same time, the repayment of Schuldschein loans of €240 million and the repayment of loans from the EIB of €225 million also resulted in cash outflows. The settlement of lease liabilities of €161 million (previous year: €155 million) and interest paid in an amount of €132 million (previous year: €150 million) also triggered cash outflows.
| Dec. 31, 2024 | Dec. 31, 2025 | |
| € million | € million | |
| Bonds | 1,492 | 1,494 |
| Liabilities to banks | 870 | 967 |
| Lease liabilities | 736 | 674 |
| Liabilities from forward exchange contracts (recognized assets / liabilities)1 |
17 | 5 |
| Other financial debt | 41 | 1 |
| Receivables from forward exchange contracts (recognized assets / liabilities)1 |
(6) | (29) |
| Gross financial debt | 3,150 | 3,112 |
| Cash and cash equivalents | (509) | (648) |
| Current financial assets | (23) | (668) |
| Net financial debt | 2,618 | 1,796 |
1 Derivatives that do not qualify for hedge accounting.
In comparison with December 31, 2024, the Covestro Group’s gross financial debt decreased by €38 million to €3,112 million as of December 31, 2025 (previous year: €3,150 million). This is mainly due to the decline in lease liabilities by €62 million and in other financial debt by €40 million, resulting above all from the issuance and repayment of commercial paper described in the “Cash Flows from Financing Activities” section. This was offset in particular by an increase in liabilities to banks of €97 million.
Cash and cash equivalents increased in comparison with the figure on December 31, 2024, by €139 million to €648 million. This rise was primarily attributable to cash inflows of €968 million from financing activities and cash flows from operating activities of €487 million. Conversely, in particular cash outflows of €770 million for additions to property, plant, equipment and intangible assets as well as cash outflows for short-term bank deposits of €546 million caused cash and cash equivalents to decline. The net cash outflows for short-term bank deposits were triggered mainly by the additional liquidity resulting from the capital increase implemented as part of the completion of the takeover by XRG.
The abovementioned net cash outflows for short-term bank deposits were the main contributors to the increase in current financial assets to €668 million.
As a result, net financial debt was down €822 million to €1,796 million in fiscal 2025 (previous year: €2,618 million).
The main purpose of financial management is to ensure solvency at all times, continuously optimize capital costs, and reduce the risks of financing measures. Financial management for the Covestro Group is performed centrally by Covestro AG.
Covestro AG operates a Debt Issuance Program with a total volume of €5.0 billion to facilitate obtaining flexible financing from the capital market. The company is thus in the position to issue fixed- and variable-rate bonds with different maturities as well as to undertake private placements. Covestro AG successfully placed several bonds from its Debt Issuance Program. The €1.0 billion in euro bonds placed in June 2020 consist of one €500 million euro bond with a fixed coupon of 0.875% maturing in February 2026, and another €500 million euro bond with a fixed coupon of 1.375% maturing in June 2030. All outstanding bonds have been assigned a Baa2 rating with stable outlook by Moody’s Investors Service, London (United Kingdom).
In addition, Covestro published a Green Financing Framework in May 2022, which enables green bonds or other debt instruments to be issued where the funds raised are tied to sustainable investments that we can use, e.g., to (re)finance products or projects with a clear benefit for the environment. The framework’s conformity to the Green Bond Principles of the International Capital Markets Association (ICMA) has been confirmed by the independent ESG rating agency ISS ESG. The first green euro bond was issued in November 2022 under the Green Finance Framework with a fixed coupon of 4.75% and a volume of €500 million, maturing in November 2028. All the proceeds from the bond issue were used to fund sustainable projects that contribute to the circular economy and originate in areas such as renewable energy, energy efficiency, and sustainable building.
For further information, please refer to: www.covestro.com/en/investors/debt/bonds
On October 7, 2022, Covestro for the first time issued Schuldschein loans with a total volume equivalent to around €650 million. The issue was denominated in U.S. dollars and euros. Linked to an environmental, social, governance (ESG) rating, these Schuldschein loans were issued in tranches comprising fixed and variable interest rates with terms of three, five, and seven years. In October 2023, Schuldschein loans in an equivalent amount of around €260 million had been repaid early, while Schuldschein loans in an amount of around €240 million were repaid as scheduled in October 2025.
In fiscal 2020, Covestro AG obtained a syndicated revolving credit facility totaling €2.5 billion with a term of five years. It included two options to extend the term by one year in each case and represents a back-up liquidity reserve. One option to extend was exercised in March 2021 to extend the term of the syndicated revolving credit facility to March 2026. Using the second of two agreed options, the term was extended in March 2022 by another year to March 2027. One feature of the credit line is its link to an ESG rating: The better (worse) the externally calculated ESG score is, the lower (higher) the interest component of the credit facility. The syndicated credit facility was unused as of December 31, 2025.
On August 26, 2022, Covestro additionally established a Euro Commercial Paper Programme (ECPP) with a potential total volume of €1.5 billion in order to allow the company to issue notes in different currencies and tenors of up to one year on a flexible basis. No commercial papers were outstanding under the ECPP as of December 31, 2025.
On April 28, 2025, Moody’s Investors Service, London (United Kingdom), confirmed Covestro’s Baa2 investment-grade rating with a stable outlook. Covestro intends to continue to maintain financing structures and financial ratios that support a solid investment-grade rating in the future.
The Covestro Group pursues a prudent debt management strategy to ensure flexibility, drawing on a balanced financing portfolio. This is based for the most part on bonds, syndicated credit facilities, and bilateral loan agreements.
As a company with international operations, Covestro is exposed to financial opportunities and risks. These are continuously monitored within the context of Covestro’s financial management activities. Instruments including derivatives are used to minimize risks.
The energy price risk for electricity and natural gas at Covestro’s German sites is hedged in advance for a portion of the projected electricity and natural gas requirements with a rolling time horizon of 18 months using derivatives. The energy price risk relating to natural gas is also hedged for the natural gas price component in the price paid for carbon monoxide and steam by Covestro Deutschland AG. The identifiability and measurability of the carbon monoxide and steam risk component are based on the existing relevant contractual arrangement.
For further information, please refer to note 24.2 “Financial Risk Management and Information on Derivatives” in the Notes to the Consolidated Financial Statements.
Since fiscal 2025, Covestro has been hedging a portion of its planned trade receivables and payables denominated in foreign currency using derivative financial instruments with a 12-month hedge horizon. Foreign currency positions are managed using a value-at-risk approach in the portfolio approach, with USD, INR, and MXN constituting the primary risk currencies. The hedged underlying transactions comprise highly probable forecast sales and purchases in foreign currencies.
For further information, please refer to note 24.2 “Financial Risk Management and Information on Derivatives” in the Notes to the Consolidated Financial Statements
For a detailed presentation of financial opportunities and risks as well as further explanations, please see Covestro’s opportunities and risks report.
For further information, please refer to “Opportunities and Risks Report.”
For further information, please refer to note 24.2 “Financial Risk Management and Information on Derivatives” in the Notes to the Consolidated Financial Statements.