Covestro (1COV) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw strong volume growth of 6.1% year-over-year, with sales at €3.6 billion, as higher volumes offset lower prices and unfavorable FX effects.

• EBITDA reached €287 million, within guidance, but margins remain historically low due to negative pricing delta and weak industry demand.

• Free operating cash flow was €112 million in Q3, but -€164 million for 9M 2024, reflecting lower cash flows from operations.

• Significant progress on climate neutrality, with major projects reducing Scope 1 and 2 emissions, including catalyst installation in China, solar PPA in Spain, and a heat battery in Germany.

• The takeover process with ADNOC is underway, with a public offer at €62.00 per share and a planned 10% capital increase; acceptance period runs until November 27, 2024.

Financial highlights

• Q3 2024 sales were €3.6 billion (+1.0% YoY), driven by 6.1% volume growth offsetting a 4.2% price decline and negative FX.

• EBITDA increased 3.6% year-over-year to €287 million.

• Free operating cash flow for Q3 was €112 million; 9M 2024 free operating cash flow was -€164 million.

• Net debt increased by €159 million since end of 2023; net debt/EBITDA ratio at 3.0x.

• CapEx for 9M 2024 was €422 million, slightly lower year-over-year.

Outlook and guidance

• FY 2024 EBITDA guidance narrowed to €1,000–1,250 million; mark-to-market EBITDA at €1.1 billion.

• Free operating cash flow guidance remains at -€100 million to +€100 million.

• Sales guidance narrowed to €14–14.5 billion; income tax expected at €150–300 million.

• ROCE above WACC narrowed to -7 to -5 percentage points.

• No significant margin rebound expected for the remainder of 2024.