Results of Operations
Second quarter 2025
Group sales declined by 8.4% in the second quarter of 2025, to €3,379 million (previous year: €3,690 million). The drop in sales was mainly a result of macroeconomic developments following the increase in US import tariffs, which led to, in some cases abrupt, disruptions in the supply chains and downturns in exports to the United States. As a consequence, product surpluses that arose in our markets, especially from the APAC region, were exported to the world’s remaining regions, where they triggered price decreases. We therefore saw a lower selling price level in all regions, which had a decreasing effect on sales of 4.8%. In addition, exchange rate movements had an unfavorable impact of 3.2% on sales. Sales volumes had a reducing effect on sales of 0.4%.
Sales in the Performance Materials segment dipped by 11.8% in the second quarter of 2025 to €1,618 million (previous year: €1,834 million). Sales in the Solutions & Specialties segment were down 5.4% to €1,713 million (previous year: €1,810 million).
1 EMLA: Europe, Middle East, Latin America (excluding Mexico), Africa region.
2 NA: North America region (Canada, Mexico, United States).
3 APAC: Asia and Pacific region.
In the EMLA region, sales were 12.3% lower, at €1,349 million (previous year: €1,538 million), while sales in the NA region were down 0.4% to €911 million (previous year: €915 million). The APAC region also saw sales decline by 9.5% to €1,119 million (previous year: €1,237 million).
In the second quarter of 2025, the Group’s EBITDA decreased by 15.6% to €270 million (previous year: €320 million), mainly due to a decline in average selling prices, which lower raw material prices offset only to some extent. The resulting drop in margins reduced earnings. Exchange rate movements also had a negative impact on earnings in the second quarter of 2025.
Conversely, changes in volumes sold had the effect of raising earnings, since the reduction in business with negative margins ultimately had a positive volume effect on EBITDA despite an overall decline in sales volumes. Moreover, lower provisions for short-term variable compensation in an amount of €44 million had an increasing impact on earnings. In addition, a gain on the sale of intangible assets in an amount of €20 million benefited earnings.
Depreciation, amortization, impairment losses, and impairment loss reversals went down by 7.5% to €221 million in the second quarter of 2025 (previous year: €239 million), of which €204 million (previous year: €219 million) was attributable to property, plant and equipment and €17 million (previous year: €20 million) to intangible assets.
In the second quarter of 2025, the Covestro Group’s EBIT decreased by 39.5% to €49 million (previous year: €81 million).
Taking into account a financial result of €–38 million (previous year: €–29 million), income before income taxes fell to €11 million compared with the prior-year quarter (previous year: €52 million). The tax expense amounted to €70 million in the second quarter of 2025 (previous year: €126 million), It includes a tax effect from impairment losses and reversals of impairment losses totaling €13 million on deferred tax assets arising from loss carryforwards and temporary differences. Furthermore, deferred tax assets arising from loss carryforwards and temporary differences of €98 million could not be recognized. resulting in a net loss after taxes of €59 million (previous year: €74 million). After noncontrolling interests, the net loss amounted to €59 million (previous year: net loss of €72 million). Earnings per share came to €–0.31 (previous year: €–0.38).
First Half of 2025
Group sales declined by 4.8% in the first six months of 2025, to €6,856 million (previous year: €7,200 million). This drop was mainly attributable to the economic situation in the second quarter of 2025 described above, which resulted in a lower selling price level, with an adverse effect on sales of 3.0%. In addition, exchange rate movements had a reducing effect on sales of 1.3%. The negative impact of volumes sold amounted to 0.5%.
1 EMLA: Europe, Middle East, Latin America (excluding Mexico), Africa region.
2 NA: North America region (Canada, Mexico, United States).
3 APAC: Asia and Pacific region.
Both segments saw sales decline in the first half of 2025. In the Performance Materials segment, sales fell by 6.5% to €3,295 million (previous year: €3,523 million), while the Solutions & Specialties segment recorded a decrease of 3.3% to €3,458 million (previous year: €3,577 million).
In the EMLA region, sales were 6.0% lower, at €2,871 million (previous year: €3,053 million), while sales in the APAC region were down 7.5% to €2,186 million (previous year: €2,363 million). In the NA region, sales increased by 0.8% to €1,799 million (previous year: €1,784 million).
The Group’s EBITDA contracted by 31.4% to €407 million in the first half of 2025 compared with the prior-year period (€593 million). This was mainly attributable to a decline in the selling price level, which lower raw material prices offset only to some extent. In particular the resulting drop in margins had a negative impact on earnings. Exchange rate movements also had a negative impact on earnings in the first half of 2025.
In addition, expenses incurred to implement the transformation program STRONG had an adverse year-on-year impact on earnings of €110 million. Most of these expenses in the first quarter of 2025 were attributable to the planned closure of the production facility at the Maasvlakte (Netherlands) site.
This was set against an effect of raising earnings resulting from changes in volumes sold, since the reduction in business with negative margins ultimately had a positive volume effect on EBITDA despite an overall decline in sales volumes. Lower provisions for short-term variable compensation in an amount of €63 million also boosted earnings. In addition, a gain on the sale of intangible assets in an amount of €20 million had a beneficial impact on earnings.
Depreciation, amortization, impairment losses, and impairment loss reversals rose by 1.0% to €455 million in the first half of 2025 (previous year: €451 million), of which €420 million (previous year: €412 million) was attributable to property, plant and equipment and €35 million (previous year: €39 million) to intangible assets. This includes impairment losses of €15 million in connection with the closure of the joint venture production site in Maasvlakte (Netherlands).
In the first half of 2025, the Covestro Group’s EBIT amounted to €–48 million (previous year: €142 million).
Taking into account a financial result of €–82 million (previous year: €–59 million), income before income taxes went down to €–130 million compared with the prior-year period (€83 million). After deduction of the tax expense of €90 million for the first half of 2025 (previous year: €194 million), the net loss after taxes totaled €220 million (previous year: net loss of €111 million). The tax expense includes a tax effect from impairment losses and reversals of impairment losses totaling €16 million on deferred tax assets arising from loss carryforwards and temporary differences. Furthermore, deferred tax assets arising from loss carryforwards and temporary differences of €153 million could not be recognized. After noncontrolling interests, the net loss amounted to €219 million (previous year: net loss of €107 million). Earnings per share in the first half of 2025 amounted to €–1.16 € (previous year: €–0.57).