Forecast

Economic Outlook

In 2019, we expect weaker global economic growth than in the previous year at 2.6%. Our current assessment of the macroeconomic environment and of developments in the individual regions is therefore slightly weaker than our outlook in the Annual Report 2018.

Compared with our expectations from the Annual Report 2018, we so far see only minor changes, or none at all, for the performance of our main customer industries, with the exception of the automotive sector, assuming no further global trade barriers. Growth in the automotive industry is anticipated to be weaker than presented in the Annual Report 2018.

Forecast for Key Data

On the basis of the business performance described in this quarterly statement and with consideration of the potential associated risks and opportunities, we confirm the forecast made in the Annual Report 2018 for the rest of the 2019 fiscal year.

We expect core volume growth in the low-to-mid-single-digit-percentage range. This projection applies to the Covestro Group as well as to the Polyurethanes, Polycarbonates and Coatings, Adhesives, Specialties segments.

In fiscal 2019, we anticipate free operating cash flow (FOCF) of between €300 million and €700 million. For the Polyurethanes segment, we assume an increase in cash outflows for additions to property, plant, equipment and intangible assets that will exceed the expected operating cash flows. FOCF is anticipated to decline in the Polycarbonates segment as well, although the trend here will likely be much more positive than for the Group as a whole. For the Coatings, Adhesives, Specialties segment, we expect FOCF around the prior-year level.

For fiscal 2019, we expect ROCE¹ of between 8% and 13%.