Significant Events
Events outside the Company
Challenging Economic Environment
The situation in the European energy markets largely stabilized in the first quarter of 2023 compared with the volatile full-year 2022, mainly due to a significant decrease in gas prices. This is, however, set against persistently weak demand, driven especially by lower consumer spending. The adverse macroeconomic conditions impacted above all on the volumes sold by Covestro in the EMLA region.
War in Ukraine
The Russian war against Ukraine, which began in February 2022, has had a notable impact on the global economy. Covestro’s business situation is, however, not directly affected by the consequences of the war, as Covestro does not operate any sites in the countries affected by the war (Russia, Belarus, and Ukraine). As in the previous year, the sanctions imposed on Russia and Belarus by the international community therefore affected Covestro’s business only indirectly.
Events within the Company and Funding Measures
Operations Start at New Chlorine Plant in Tarragona
In Tarragona (Spain), Covestro has successfully commissioned a new large-scale plant for the manufacture of chlorine. It is the world’s first industrial-scale production plant using the innovative and energy-efficient oxygen-depolarized cathode technology developed by Covestro and partners. The new plant guarantees efficient, continuous, and independent supplies of chlorine for the diphenylmethane diisocyanate (MDI) production in Tarragona, thus strengthening the European MDI production network. 50 new jobs were created at the site as a result of the investment.
Maezio® Product Line to be Discontinued
As part of its continuous Group-wide activities to optimize the portfolio, Covestro will in future align the Engineering Plastics business entity with its core business. As a result, the Board of Management has resolved that the manufacture of the highly specialized Maezio® products, and therefore the operations at the production site in Markt Bibart (Germany), are to be discontinued. In this context, impairment losses of €30 million were recognized on goodwill, intangible assets, and property, plant and equipment in the first quarter of 2023, and provisions and valuation allowances on inventories of €7 million were recognized through profit or loss.
Chief Financial Officer (CFO) Dr. Thomas Toepfer to Leave Covestro at the End of August 2023
In February 2023, CFO and Labor Director Dr. Thomas Toepfer requested the early termination of his contract, which was due to expire on March 31, 2026, to pursue a new role as CFO at the European aircraft manufacturer Airbus. The Supervisory Board of Covestro AG acceded to this request. Until Dr. Thomas Toepfer leaves the company as of August 31, 2023, he will continue his work as CFO and Labor Director to the full extent. The Supervisory Board immediately initiated the search for a successor and will announce the result in due course.
Issuance of Schuldschein Loans
On October 7, 2022, Covestro for the first time issued Schuldschein loans with a total volume equivalent to €650 million. Linked to an ESG rating, these loans were issued in tranches comprising fixed and variable interest rates with terms of three, five, and seven years. The remaining €100 million of the firm Schuldschein loan commitment was transferred to Covestro in the first quarter of 2023.