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.

In view of the results of the first quarter of 2023 and higher margins and an improved cost level compared with the forecast published in the Annual Report 2022, Covestro has adjusted the guidance for the key management indicators EBITDA, free operating cash flow, and ROCE above WACC for fiscal 2023. Reductions of emissions expected in energy procurement have led to the guidance for greenhouse gas (GHG) emissions being narrowed.

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Forecast for key management indicators

2022

Forecast 2023
(Annual Report 2022)

Adjusted forecast 2023
(April 28, 2023)

EBITDA¹

€1,617 million

Significantly down
on previous year

Between €1,100 million
and €1,600 million

Free operating cash flow²

€138 million

Significantly down
on previous year

Between €0 million
and €500 million

ROCE above WACC^{3, 4}

–5.0% points

Significantly down
on previous year

Between –6% points
and –2% points

Greenhouse gas emissions⁵
(CO₂ equivalents)

4.7 million metric tons

Similar
to previous year⁶

Between 4.2 million metric tons
and 4.8 million metric tons

¹	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	ROCE: ratio of EBIT after imputed income taxes to capital employed.
⁴	WACC: weighted average cost of capital reflecting the expected return on the company’s equity and debt capital. A figure of 7.6% has been taken into account for the year 2023 (2022: 7.0%).
⁵	GHG emissions (Scope 1 and 2, GHG Protocol) at main production sites (responsible for more than 95% of our energy usage).
⁶	This may entail a variance in the single-digit percentage range.

For the Covestro Group’s EBITDA, we now project a figure between €1,100 million and €1,600 million (previously: significantly down on the previous year). The forecast for the Performance Materials segment’s EBITDA is unchanged and EBITDA is still expected to be significantly below the figure for the year 2022. In the Solutions & Specialties segment, we continue to project an EBITDA on a level with the year 2022*.

The Covestro Group’s FOCF is now forecast between €0 million and €500 million (previously: significantly down on the previous year). For the Performance Materials segment, we still expect FOCF to fall significantly short of the figure for the year 2022. In the Solutions & Specialties segment, however, we have not adjusted our forecast that FOCF is anticipated to be significantly higher than the amount of the year 2022.

We now expect ROCE above WACC to be between –6% points and –2% points (previously: significantly down on the previous year).

The Covestro Group’s GHG emissions measured as CO₂ equivalents are now projected to be between 4.2 million metric tons and 4.8 million metric tons (previously: on a level with the previous year*).

*This may entail a variance in the single-digit percentage range.

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.

ROCE / Return on Capital Employed

Ratio of EBIT after imputed income taxes to capital employed.

WACC / Weighted Average Cost of Capital

Weighted average cost of capital reflecting the expected return on the company’s equity and debt capital. Used for the internal measurement of the absolute value contribution.

Quarterly Statement First Quarter 2023

Financial Documents

Forecast for the Covestro Group