Forecast for the Covestro Group

The analysis of the development of our key management indicators is based on the business performance described in this Half-Year Financial Report and consideration of our potential risks and opportunities. Our forecast does not include the potential effects of a supply bottleneck as the result of a considerable disruption to Russian natural gas deliveries.

On July 29, 2022, Covestro adjusted the forecast for fiscal 2022 in response to another significant increase in energy costs and continued weakening of the global economy. We now expect the following developments in our key management indicators:

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Forecast key management indicators

 

 

 

 

 

 

 

 

 

 

 

2021

 

Forecast 2022
(Annual Report 2021)

 

Previous forecast 2022
(May 2, 2022)

 

Adjusted forecast 2022
(July 29, 2022)

EBITDA1

 

€3,085 million

 

Between €2,500 million
and €3,000 million

 

Between €2,000 million
and €2,500 million

 

Between €1,700 million
and €2,200 million

Free operating cash flow2

 

€1,429 million

 

Between €1,000 million
and €1,500 million

 

Between €400 million
and €900 million

 

Between €0 million
and €500 million

ROCE3 above WACC4

 

12.9% points

 

Between 5% points
and 9% points

 

Between 1% point
and 5% points

 

Between –2% points
and 2% points

Greenhouse gas emissions5 (CO2 equivalents)

 

5.2 million
metric tons

 

Between 5.6 million metric tons and 6.1 million metric tons

 

Between 5.5 million metric tons and 6.0 million metric tons

 

Between 5.3 million metric tons and 5.8 million metric tons

1

Earnings before interest, taxes, depreciation and amortization (EBITDA): EBIT plus depreciation, amortization, and impairment losses; less impairment loss reversals on intangible assets and property, plant and equipment.

2

Free operating cash flow (FOCF): cash flows from operating activities less cash outflows for additions to property, plant, equipment and intangible assets.

3

Return on capital employed (ROCE): ratio of the adjusted operating result (EBIT) after imputed income taxes to capital employed.

4

Weighted average cost of capital (WACC): weighted average cost of capital reflecting the expected return on the company’s equity and debt capital. A figure of 7.0% has been taken into account for the year 2022 (2021: 6.6%).

5

Greenhouse gas (GHG) emissions (Scope 1 and 2, GHG Protocol) at main production sites (responsible for more than 95% of our energy usage).

For the Covestro Group’s EBITDA, we now forecast a figure between €1,700 million and €2,200 million (previously: between €2,000 million and €2,500 million). The Performance Materials segment’s EBITDA is still expected to be significantly down on the prior-year amount. In the Solutions & Specialties segment, however, we project an EBITDA slightly above the prior-year figure (previously: well above the prior-year figure).

The Covestro Group’s FOCF is now forecast to total between €0 million and €500 million (previously: between €400 million and €900 million). For the Performance Materials segment, we still expect FOCF to fall significantly short of the figure for the year 2021. For the Solutions & Specialties segment, we are now also forecasting FOCF to be considerably below the prior-year figure (previously: FOCF well above the prior-year figure).

We now forecast ROCE above WACC of between –2% points and 2% points (previously: between 1% point and 5% points).

The Covestro Group’s GHG emissions measured as CO2 equivalents are now projected to be between 5.3 million and 5.8 million metric tons (previously: between 5.5 million and 6.0 million metric tons).