Forecast for the Covestro Group

The analysis of the development of our key management indicators is based on the business performance described in this Half-Year Financial Report and consideration of our potential risks and opportunities.

Compared with the estimates presented in the Annual Report 2023, we continue to expect challenging economic conditions, and for this reason we have narrowed the guidance for EBITDA and ROCE above WACC and adjusted the free operating cash flow for fiscal 2024. We now expect the key performance indicators to develop as follows:

¹ Earnings before interest, taxes, depreciation and amortization (EBITDA): EBIT plus depreciation, amortization, and impairment losses; less impairment loss reversals on property, plant and equipment and intangible assets.

² Free operating cash flow (FOCF): cash flows from operating activities less cash outflows for additions to property, plant and equipment and intangible assets.

³ Return on capital employed (ROCE): ratio of the adjusted operating result (EBIT) after imputed income taxes to capital employed.

⁴ Weighted average cost of capital (WACC): weighted average cost of capital reflecting the expected return on the company’s equity and debt capital. A figure of 8.1% has been taken into account for the year 2024 (2023: 7.6%).

⁵ Greenhouse gas emissions (Scope 1 and Scope 2, GHG Protocol) at main production sites (responsible for more than 95% of our energy usage).

For the Covestro Group’s EBITDA, we now forecast a figure of between €1,000 million and €1,400 million (previously: between €1,000 million and €1,600 million). We anticipate the Performance Materials segment’s EBITDA to total between €400 million and €700 million (previously: between €400 million and €800 million). For the Solutions & Specialties segment, we are projecting EBITDA on a level with the year 2023 *(previously: significantly up on the figure for the year 2023).

The Covestro Group’s FOCF is now forecast to total between €–⁠100 million and €100 million (previously: between €0 million and €300 million). In the Performance Materials segment, we continue to expect FOCF to be significantly down on the amount of the year 2023 (€162 million). In the Solutions & Specialties segment, we also continue to forecast FOCF to be significantly lower than in the year 2023 (€551 million).

We now expect ROCE above WACC of between –⁠7% points and –⁠4% points (previously: between –⁠7% points and –⁠2% points).

The Covestro Group’s GHG emissions measured as CO₂ equivalents are still projected to be between 4.4 million metric tons and 5.0 million metric tons.