Economic Outlook

Global economy

The lingering coronavirus pandemic is likely to make the year 2021 another challenging one for the global economy. Likewise, the spread of coronavirus variants raise the possibility of new waves of the pandemic, which could affect growth negatively. However, as a result of the increasing availability of vaccines and the start of a controlled approach to fighting the pandemic, we continue to expect a return to positive growth rates in all regions. In contrast to the outlook we published in the 2020 Annual Report, we now anticipate a faster recovery of the global economy and a resulting greater increase in economic performance of 5.3%.

We revised our estimates for all regions upward, principally due to expected higher production volumes and consumer spending. In the NA region, we anticipate a significant increase in expected economic growth compared with our outlook published in the 2020 Annual Report. This is attributable to factors including the increase in the U.S. economic stimulus package to USD 1.9 trillion. In contrast to the projection in the 2020 Annual Report, the overall economic situation in the EMLA and APAC regions appears to be improving somewhat, which led to an upward revision of the expected growth there.

Economic growth1










Growth 2020


Growth forecast 2021
(2020 Annual Report)


Growth forecast 2021















Europe, Middle East, Latin America2, Africa (EMLA)







of which Europe







of which Germany







of which Middle East







of which Latin America2







of which Africa







North America3 (NA)







of which United States







Asia-Pacific (APAC)







of which China








Real growth of gross domestic product; source: IHS (Global Insight), Growth 2020 and Growth forecast 2021 as of April 2021.


Latin America (excluding Mexico).


North America (Canada, Mexico, United States).

Main customer industries

In all main customer industries, we continue to forecast positive growth for the year 2021. However, we expect the pace of growth to differ in the individual industries.

Growth in main customer industries1










Growth 2020


Growth forecast 2021
(2020 Annual Report)


Growth forecast 2021






















Electrical, electronics and household appliances















Covestro’s estimate, based on the following sources: LMC Automotive Limited, B+L, CSIL (Centre for Industrial Studies), Oxford Economics. We limited the economic data of our “automotive and transportation” and “furniture and wood processing” main customer industries to the automotive and furniture segments (not the transportation or wood processing segments). As of: April 2021.

Growth in the automotive industry is projected to be 15.7%, down from the outlook presented in the 2020 Annual Report. The growth expected for the furniture industry was also corrected slightly downward. In contrast, we anticipate an increase in the growth rate of the electrical, electronics and household appliances industry to 8.7%, up from our forecast in the 2020 Annual Report. At 1.1%, growth in the construction industry will likely exceed the projection in the 2020 Annual Report.

Forecast for the Covestro Group

The analysis of the development of our key management indicators is based on the business performance described in this Quarterly Statement, the economic outlook outlined above, and consideration of our potential risks and opportunities. There have been no fundamental changes in the risk situation from the presentation in the 2020 Annual Report. At the time this Quarterly Statement was prepared, there were no risks that could endanger the Group’s continued existence. The acquisition completed on April 1, 2021, and the integration of the Resins & Functional Materials (RFM) business of Koninklijke DSM N.V., Heerlen (Netherlands), into the Coatings, Adhesives, Specialties segment has been factored into this forecast. One-time costs that could arise in conjunction with the LEAP transformation program have not been considered.

Covestro adjusted the forecast presented in the 2020 Annual Report on April 13, 2021, as a result of business development that has been better than expected to date. We now expect the following changes in our key management indicators over the course of the rest of fiscal 2021:

Forecast for key management indicators












Forecast 2021 (2020 Annual Report)


Adjusted Forecast 2021

Core volume growth




Between 10% and 15%


Between 10% and 15%

Free operating cash flow (FOCF)


€530 million


Between €900 million and €1,400 million


Between €1,300 million and €1,800 million

Return on capital employed (ROCE)1




Between 7% and 12%


Between 12% and 17%


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 noncurrent and current assets less noninterest-bearing liabilities such as trade accounts payable.

We still anticipate that core volume growth for the Covestro Group will be between 10% and 15%, with around 6 percentage points attributable to the acquisition of the RFM business. We also continue to project growth for the Coatings, Adhesives, Specialties segment significantly above the corridor expected for the Group. For the Polyurethanes and Polycarbonates segments, our growth projection remains in the mid- to high-single-digit percentage range.

This year, FOCF is forecast to fall between €1,300 million and €1,800 million. Owing to one-time expenses in conjunction with the RFM acquisition, we continue to expect FOCF in the Coatings, Adhesives, Specialties segment to be significantly below the prior-year value. In contrast, FOCF in the Polyurethanes and Polycarbonates segments is still anticipated to come in well above the prior-year levels.

For fiscal year 2021, we now expect a ROCE of between 12% and 17%.