Results of Operations and Financial Position of the Covestro Group

Results of Operations

Group sales declined by 0.9% in the first quarter of 2025, to €3,477 million (previous year: €3,510 million), driven by a decline in sales volumes and in average selling prices in the APAC region. Overall, sales volumes had a reducing effect on sales of 0.4% and the selling price level had a negative impact of 1.1%. Exchange rate movements had a positive effect on sales of 0.6%.

In the EMLA region, sales were 0.5% higher, at €1,522 million (previous year: €1,515 million), in the first quarter of 2025, while sales in the NA region were up 2.2% to €888 million (previous year: €869 million). In the APAC region, by contrast, sales dropped by 5.2% to €1,067 million (previous year: €1,126 million).

In the first quarter of 2025, sales decreased by 0.7% to €1,677 million (previous year: €1,689 million) in the Performance Materials segment and by 1.2% to €1,745 million (previous year: €1,767 million) in the Solutions & Specialties segment.

¹ EMLA: Europe, Middle East, Latin America (excluding Mexico), Africa region.

²NA: North America region (Canada, Mexico, United States).

³ APAC: Asia and Pacific region.

The Group’s EBITDA was down 49.8% to €137 million in the first quarter of 2025 (previous year: €273 million). Here it was mainly expenses incurred to implement the transformation program STRONG in a high double-digit million euro range that had a negative impact on earnings. 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, while the drop in the selling price level also weighed on earnings. On the other hand, the trend in volumes sold and exchange rate movements had a beneficial effect on earnings. Lower provisions for short-term variable compensation in an amount of €19 million also boosted earnings.

EBITDA dropped by 87.4% to €13 million (previous year: €103 million) in the Performance Materials segment and by 13.0% to €181 million (previous year: €208 million) in the Solutions & Specialties segment.

The Covestro Group’s EBIT was negative at €97 million in the first quarter of 2025 (previous year: €61 million).

Financial Position

In the first quarter of 2025 cash outflows from operating activities amounted to €73 million (previous year: €23 million). This rise in cash outflows was mainly due to lower EBITDA. A decrease in the amount of cash tied up in working capital compared to the previous year had a beneficial effect on free operating cash flow.

Free operating cash flow declined to €–253 million in the first quarter of 2025 (previous year: €–129 million), largely due to higher cash outflows for additions to property, plant, equipment and intangible assets as well as lower cash flow from operating activities.

In comparison with December 31, 2024, the Covestro Group’s gross financial debt rose by €533 million to €3,683 million as of March 31, 2025. This was primarily attributable to an increase in liabilities to banks by €371 million, which resulted mostly from borrowings of €382 million in China. Other financial debt rose at the same time, driven mainly by the issuance of commercial paper of €189 million under the European Commercial Paper Program (ECPP); this was offset by a repayment of commercial paper of €40 million.

Cash and cash equivalents were up €233 million in comparison with the figure on December 31, 2024, to €742 million. This was primarily attributable to cash inflows of €468 million from financing activities. Conversely, cash outflows of €180 million for additions to property, plant, equipment and intangible assets as well as cash outflows of €73 million from operating activities caused cash and cash equivalents to decline.

The net cash inflows from short-term bank deposits drove down current financial assets by €15 million to €8 million.

Net financial debt therefore grew by €315 million compared with the figure on December 31, 2024, to €2,933 million as of March 31, 2025.