Report on Economic Position

Business Performance at a Glance

Significant Events

Coronavirus Pandemic

The coronavirus pandemic continued to leave its mark on the global economy, although the impact is considerably less severe than in the previous year. High vaccination rates and updated measures to combat the pandemic took effect. Compared with the prior year, Covestro also observed a further upturn in demand, although this could not be met fully due to bottlenecks in global supply chains. The health, safety, and hygiene measures implemented by the company at an early stage in the previous year remain in place. Covestro supports employee access to vaccinations against the coronavirus, including through cooperation with company health facilities. Depending on the local situation in each case, some staff, particularly employees in administrative departments, continue to work from home. Production at our sites was not affected by the pandemic in fiscal 2021.

Covestro is monitoring the development of the coronavirus pandemic worldwide on an ongoing basis. Existing measures are modified as required in line with recommendations and instructions issued by the relevant governments and committees of experts. At the end of 2021, we again redoubled our health, safety, and hygiene efforts in reaction to the new Omicron variant of the virus.

Other Events

On April 1, 2021, Covestro completed the acquisition of the Resins & Functional Materials (RFM) business from Koninklijke DSM N.V., Heerlen (Netherlands). A total of 27 RFM companies were fully consolidated for the first time on that date. Completing the RFM acquisition makes Covestro one of the world’s leading suppliers of sustainable coating resins.

In the year 2021, Covestro unveiled the Group’s new Sustainable Future strategy, which has customer centricity and sustainable growth at its core. The guiding principle of the strategy and the Group’s long-term objective is to become fully circular. In the interest of this objective, Covestro realigned its organizational and reporting structure effective July 1, 2021. The Group’s three reportable segments to date (Polyurethanes, Polycarbonates and Coatings, Adhesives, Specialties) have been replaced with two new reportable segments: Performance Materials and Solutions & Specialties. The Performance Materials segment concentrates on reliably delivering standard products at competitive costs. The focus of the Solutions & Specialties segment is on differentiated products with a high pace of innovation, which Covestro combines with application technology services. Other business activities that cannot be allocated to any of the aforementioned segments are reported under “Other/Consolidation.” Intersegment transactions are conducted at arm’s length and reported separately as intersegment sales. The Quarterly Statement as of September 30, 2021 marked the first time our reporting reflected the new segment structure; reference information for fiscal 2020 was restated.

On July 7, 2021, the euro bond placed in fiscal 2016 with a total volume of €500 million and maturing in October 2021 was fully repaid at par value ahead of schedule. Moreover, due to the positive liquidity situation, Covestro contributed €500 million to pension plan assets (Metzler Trust e.V., Frankfurt am Main (Germany)) in November 2021 to further fund pension commitments to employees in Germany, while at the same time reducing the volatility of the total assets.

On July 26, 2021, Covestro successfully wrapped up the sale of the systems house business in the Middle East by selling its interests in the Pearl Polyurethane Systems FZCO and Pearl Polyurethane Systems LLC legal entities to co-shareholder Pearl Industries Overseas Ltd., Dubai (United Arab Emirates). The sale is part of an ongoing effort to optimize the portfolio and represents another step toward refocusing the Polyurethanes segment.

In October 2021, the Supervisory Board of Covestro AG issued an early extension of the contract with Board of Management member Sucheta Govil, which was to expire on July 31, 2022. The new term runs until July 31, 2025. She has been a Covestro’s Chief Commercial Officer (CCO) since August 2019.

Overall Assessment of Business Performance and Target Attainment

Business Performance

The Covestro Group looks back on a successful fiscal year. In contrast to the previous year, which was overshadowed by the coronavirus pandemic, was 10.0% in the year under review, up significantly (previous year: –5.6%). This development is attributable to factors including the acquisition and integration of the RFM business into Covestro. increased to €3,085 million (previous year: €1,472 million), mainly due to considerably higher margins. Cash outflows for additions to property, plant, equipment, and intangible assets increased to €764 million (previous year: €704 million). Higher EBITDA increased to €1,429 million (previous year: €530 million).

Target Attainment

In the Annual Report 2020, the Covestro Group published a forecast for key management indicators in fiscal 2021. Covestro adjusted the forecast presented in the Annual Report 2020 on April 13, 2021, as a result of business development that had been better than previously expected. An increasingly positive outlook led to the forecast being raised again on July 12, 2021. In view of our business performance in the second half of 2021, we again adjusted our guidance on November 8, 2021.

The Covestro Group most recently anticipated core volume growth between 10% and 12% after originally projecting core volume growth between 10% and 15%. Likewise, we also adjusted the forecasts for free operating cash flow (FOCF) and (ROCE). After initially projecting FOCF of between €900 million and €1,400 million, the Covestro Group changed this range in November 2021 to between €1,400 million and €1,700 million for the full year. The original forecast for ROCE was between 7% and 12%, which was recently lifted to between 19% and 21%.

Covestro met and in some cases exceeded the original forecast issued in the Annual Report 2020. Core volume growth for the 2021 fiscal year was 10.0%, within the range of our original projection. FOCF totaling €1,429 million and ROCE amounting to 19.5% exceed the originally communicated range. In view of the most recently adjusted forecast from November 2021, the performance of all key management indicators was as anticipated.

Target attainment for fiscal year 2021














Forecast 20211


Adjusted forecast 20212


Target attainment 2021

Core volume growth




Between 10% and 15%


Between 10% and 12%



Free operating cash flow (FOCF)


€530 million


Between €900 million and €1,400 million


Between €1,400 million and €1,700 million


€1,429 million

Return on capital employed (ROCE)




Between 7% and 12%


Between 19% and 21%




Published on February 23, 2021 (Annual Report 2020).


Published on November 8, 2021 (Quarterly Statement as of September 30, 2021).

Core volume growth
Core volume growth refers to the core products in the Performance Materials and Solutions & Specialties. It is calculated as the percentage change in externally sold volumes compared with the prior year. Covestro also takes advantage of business opportunities outside its core business, for example the sale of precursors and by-products such as hydrochloric acid, sodium hydroxide solution, and styrene. These transactions are not included in core volume growth.
EBITDA/earnings before interest, taxes, depreciation and amortization
EBIT plus depreciation and amortization of property, plant, equipment, and intangible assets
FOCF/free operating cash flow
Operating cash flows (pursuant to IAS 7) less cash outflows for additions to property, plant, equipment and intangible assets
ROCE/return on capital employed
Ratio of operating result after imputed income taxes to the capital employed