Economic Outlook

Economic Growth










Growth1 2018


Growth1 forecast 2019 (2018 Annual Report)


Growth1 forecast 2019









Real growth of gross domestic product; source: IHS (Global Insight), Growth 2018 and Growth forecast 2019 as of October 2019








European Union







of which Germany














of which United States














of which China







We expect global economic growth of 2.5% for 2019, slightly less positive than our outlook in the 2018 Annual Report. We likewise anticipate a slightly slower growth in the Asia-Pacific and NAFTA regions. The forecast for Germany has been downgraded considerably, while the expectations for the European Union as a whole remained largely unchanged. Overall, we expect to see ongoing difficult economic conditions due to such issues as political uncertainties in Europe and increasing global trade barriers.

Main customer industries

Compared with the expectations we expressed in the 2018 Annual Report, we so far see only minor changes, or none at all, for the performance of the construction sector and the electrical, electronics and household appliance industry, assuming no further trade barriers arise. Growth in the furniture industry is anticipated to be somewhat weaker than presented in the 2018 Annual Report. In contrast to our statements in the 2018 Annual Report, we now anticipate a significant downturn in the automotive industry.

Forecast for Key Data

On the basis of the business performance described in this quarterly statement, we confirm the Group forecast and, in consideration of the potential associated risks and opportunities, provide more specific bandwidths for the forecast for the rest of the 2019 fiscal year than those forecast to date in the 2018 Annual Report.

We now expect core volume growth for the Covestro Group in the low-single-digit-percentage range. This also applies to the Polyurethanes and Polycarbonates segments. For the Coatings, Adhesives, Specialties segment, we currently anticipate a drop in core volumes in the low-single-digit-percentage range (2018 Annual Report forecast: core volume growth in the low-to-mid-single-digit-percentage range for the Covestro Group as well as for the Polyurethanes, Polycarbonates and Coatings, Adhesives, Specialties segments).

For fiscal 2019, we anticipate free operating cash flow (FOCF) for the Group of between €300 million and €500 million (2018 Annual Report forecast: FOCF between €300 million and €700 million). For the Polyurethanes segment, we continue to assume an increase in cash outflows for additions to property, plant, equipment and intangible assets that will exceed the expected net cash provided by operations. FOCF is expected 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. In the Coatings, Adhesives, Specialties segment, FOCF is now projected to be slightly below the prior-year level (2018 Annual Report forecast: FOCF around the prior-year level).

For fiscal 2019, we expect ROCE1 between 8% and 10% (2018 Annual Report forecast: ROCE between 8% and 13%).

1 ROCE: The return on capital employed is calculated as the ratio of EBIT after taxes to capital employed. Capital employed is the capital used by the company. It is the sum of current and noncurrent assets less non-interest-bearing liabilities such as trade accounts payable.