Annual Report 2023

Management Report Profile

Combined Management Report of Covestro AG

The Combined Management Report pertains to both the Covestro Group and Covestro AG, which has its registered office in Leverkusen (Germany). This report covers the period from January 1 to December 31, 2023. The presentation of the results of operations, financial position, and net assets as well as the expected development, including the principal opportunities and risks, relate to the Covestro Group, unless otherwise noted. The results of operations, financial position, and net assets of Covestro AG are presented in a separate chapter of the Report on Economic Position. In addition, the nonfinancial statement pursuant to Sections 315b and 315c in conjunction with Sections 289c through 289e of the HGB is integrated into the sustainability report, which is part of the Group Management Report. The sustainability report also includes the statements in accordance with the European Union’s Taxonomy Regulation (2020/852).

Alternative Performance Measures

In its financial reporting, Covestro uses alternative performance measures (APMs) to assess the business performance of the Group. These are not defined in the International Financial Reporting Standards (IFRSs) adopted by the European Union (EU). The alternative performance measures of relevance to the Covestro Group include earnings before interest, taxes, depreciation, and amortization (EBITDA), return on capital employed (ROCE), free operating cash flow (FOCF), and net financial debt. The calculation methods for the APMs may vary from those of other companies, thus limiting the extent of the overall comparability. These alternative performance measures should not be viewed in isolation or employed as an alternative to the financial indicators determined in accordance with IFRSs and presented in the Consolidated Financial Statements for purposes of assessing Covestro’s results of operations, financial position, and net assets.

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.
HGB/German Commercial Code
Comprises the majority of German accounting legislation.
IFRSs/ International Financial Reporting Standards
International accounting standards as applicable in the EU or as published by the IASB or the IFRS IC.
Net Financial Debt
Interest-bearing liabilities (excluding pension obligations) less liquid assets.
ROCE/Return on Capital Employed
Ratio of EBIT after imputed income taxes to capital employed.

Topics filter

What are you looking for? Filter our online annual report by main topics.