Notes to the Consolidated Financial Statements of the Covestro Group – Other Information

27. Notes to the Statement of Cash Flows

27.1 Cash Flows from Operating Activities

The net cash inflow from operating activities of €997 million (previous year: €970 million) reflects the operating surplus and also takes into account changes in working capital and noncash income and expenses.

Net cash flows from operating activities went up €27 million (2.8%) year-over-year, to €997 million (previous year: €970 million). A decline of €537 million in EBITDA was more than offset by funds freed up from working capital in an amount of €366 million, which compares to funds of €160 million tied up in the previous year, as well as by a €155 million drop in income tax payments.

27.2 Cash Flows from Investing Activities

Net cash outflow for investing activities in 2023 amounted to €925 million (previous year: €477 million).

This was primarily attributable to cash outflows for additions to property, plant and equipment and intangible assets of €765 million (previous year: €832 million), cash outflows for other current financial assets of €305 million (previous year: €374 million), and cash outflows for noncurrent financial assets of €23 million (previous year: €124 million).

This was offset by interest and dividends received in the amount of €70 million (previous year: €75 million) as well as cash inflows from divestments less divested cash in the amount of €55 million (previous year: €6 million), which mainly resulted from cash inflows of €54 million from the sale of assets and liabilities (disposal group) of the additive manufacturing business to Stratasys, a U.S.-Israeli manufacturer of 3D printers and 3D production systems. In addition, there were cash inflows from noncurrent financial assets amounting to €41 million (previous year: €3 million), which mainly resulted from the partial repayment in the amount of €39 million of the drawdown of the initial funding loan by Bayer-Pensionskasse VVaG, Leverkusen (Germany), in December 2022.

27.3 Cash Flows from Financing Activities

The net cash outflow from financing activities amounted to €639 million in fiscal 2023 (previous year: inflow of €64 million). Net credit repayment amounted to €417 million (previous year: net borrowing in the amount of €995 million). Short-term borrowing and debt repayment were netted.

There was an outflow of €49 million (previous year: €150 million) in 2023 for the acquisition of treasury shares as part of Covestro AG’s share buyback program.

No dividend was paid in fiscal 2023 (previous year: €651 million) to Covestro AG shareholders.

The interest paid totaling €169 million (previous year: €131 million) reflected in cash flows from financing activities relates mainly to forward exchange contracts used to hedge foreign currency risks of €61 million (previous year: €63 million), lease liabilities of €28 million (previous year: €25 million), bonds of €44 million (previous year: €20 million), and liabilities to banks of €27 million (previous year: €6 million).