Annual Report 2022

Building with blue overlay (graphic)

Covestro Shares

Performance of Covestro shares versus market in fiscal year 2022

€ (Covestro shares)

Performance of Covestro shares versus market in fiscal year 2021 (line chart)

Volatile Stock Markets in a Downward Spiral in a Recessionary Environment

Like the previous year, fiscal 2022 was affected by the global coronavirus pandemic and the Russian war against Ukraine, which has continued since February 2022. The Chinese government’s restrictive zero-COVID policy led to massive constraints in der Chinese economy, especially in the first half of 2022, with a significant impact also on global logistics chains and therefore on global economic growth. The stock markets reacted with a sustained downward trend, which was broken in the last quarter of the year. The Russian war against Ukraine and the subsequent energy crisis weighed on economic performance, particularly in Europe, and led to negative economic growth. The European benchmark index EURO STOXX 50* had lost 31% by the time it reached its low at the end of September 2022, but recorded significant gains again in the course of the last quarter. The EURO STOXX 50 ended fiscal 2022 at 3,794 points, 12% down on the previous year. The DAX also finished the year lower, losing 12% year over year at 13,924 points.

European chemical stocks declined more sharply than the DAX and STOXX 50 benchmark indices, due to this industry’s greater exposure to the energy crisis. As of December 31, 2022, the STOXX Europe 600 Chemicals** index was down 14.8% from its level at the beginning of the year. At a Xetra closing price of €36.55, Covestro’s share price was also down considerably at the end of fiscal 2022, although by the end of the year the share price had recovered from its low, finishing down 32.6% from the previous year end. Covestro’s share price marked its low for the reporting year on September 29, 2022, closing at €28.85. The high for the year was €57.48 on January 7, 2022.

Including the fiscal year 2021 dividend of €3.40 per share paid out on April 26, 2022, Covestro’s stock performance (with dividend reinvestment) for fiscal 2022 was –27.1% compared with the 2021 year-end closing price of €54.20.

*EURO STOXX 50: European stock index that reflects the share price performance of the 50 most important and highest-revenue companies in Europe.

**STOXX Europe 600 Chemicals: Sector index by index issuer STOXX; the STOXX Europe 600 comprises 600 European companies.

Dividend performance

Dividend per share carrying dividend rights (€)

Dividend Performance (bar chart)

1 Short fiscal year of Covestro AG.

At the end of the reporting period, Covestro’s market capitalization stood at €6.9 billion based on 189.9 million shares outstanding. The average daily Xetra trading volume was 1.3 million shares.

Covestro share at a glance

 

 

 

 

 

 

 

 

 

 

 

2021

 

2022

Average daily turnover

 

million shares

 

0.9

 

1.3

Closing date (Dec. 31)

 

 

54.20

 

36.55

High

 

 

62.48

 

57.48

Low

 

 

49.84

 

28.85

Outstanding shares (closing date)

 

million shares

 

193.2

 

189.9

Market capitalization (closing date)

 

€ billion

 

10.5

 

6.9

Share price change

 

%

 

7.4

 

–32.6

Share price performance (with dividend reinvestment)

 

%

 

9.9

 

–27.1

Covestro closing prices on Xetra; source: Deutsche Börse

Dividend Policy

Since the 2020 Financial Statements, Covestro AG’s dividend policy has been more closely linked to the Group’s overall business situation. The current dividend policy specifies that Covestro AG should distribute between 35% and 55% of the Group’s net income to shareholders of Covestro AG. The Group’s net income was negative for the first time, showing a net loss of €272 million. Under the dividend policy this means that no dividend will be distributed to shareholders of Covestro AG for fiscal year 2022.

Moody’s Confirms Covestro Rating

On May 10, 2022, 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.

Virtual Annual General Meeting Held on April 21, 2022

Covestro AG’s 2022 Annual General Meeting (AGM) was held on April 21, 2022. Due to the ongoing coronavirus pandemic, the company had decided early on to hold a virtual AGM as in the previous year to avoid exposing those present to additional health risks.

The AGM approved the dividend of €3.40 per share for the fiscal year 2021 proposed by the Board of Management and Supervisory Board. With a total distribution of €651 million to shareholders of Covestro AG in April 2022, Covestro’s payout ratio amounted to 40%.

Furthermore, Dr. Sven Schneider was elected by the AGM as a new member of the Supervisory Board. He succeeds Prof. Dr. Rolf Nonnenmacher, who resigned effective at the end of the 2022 AGM. Dr. Schneider is the CFO of Infineon Technologies AG. He brings with him extensive professional knowledge, and experience as a CFO and was elected as Chairman of the Audit Committee.

ADR Program Successful for Sixth Year

Since December 1, 2016, the American Depositary Receipt (ADR) program has granted global investors simplified access to Covestro shares. Covestro ADRs are traded over the counter in the United States under the COVTY ticker symbol. At the end of fiscal 2022, the total number of outstanding ADRs reached 6.7 million (previous year: 3.6 million).

Majority of Analysts Issue Buy Recommendation for Covestro Shares

At the end of the year 2022, Covestro was covered by 22 securities brokers. Of these, twelve analysts issued buy recommendations and ten were neutral. The average share price target was approximately €42 at the reporting date.

Basic Covestro share information

 

 

 

Capital stock

 

€193,200,000

Outstanding shares (year-end)

 

189,948,365

Share class

 

No-par ordinary bearer shares

ISIN

 

DE0006062144

WKN

 

606214

Ticker symbol

 

1COV

Reuters symbol

 

1COV.DE

Bloomberg symbol

 

1COV GY

Market segment

 

Regulated market

Transparency level

 

Prime standard

Sector

 

Chemicals

Index

 

DAX

ADR / American Depositary Receipt
A depositary receipt issued by U.S. banks that documents ownership of a certain number of deposited shares of a foreign company and is traded on U.S. stock markets as representation of the original shares.

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