Covestro (1COV) Q4 2024 earnings summary

Executive summary

• Sales for 2024 were EUR 14.2 billion, down 1.4% year-over-year due to lower prices and negative FX, despite a 7.4% increase in volumes.

• EBITDA remained stable at EUR 1.1 billion, nearly flat year-over-year and in line with guidance, as positive volume effects offset negative pricing and FX impacts.

• Free operating cash flow was EUR 89 million, at the upper end of guidance, driven by strong Q4 performance.

• Net income was negative at EUR -266 million, resulting in no dividend payout.

• The ADNOC (now XRG) takeover bid succeeded, with over 95% share ownership and regulatory approvals underway.

Financial highlights

• Sales volumes increased 7.4% year-over-year, with APAC up 10.6% and EMLA up 9.3%.

• Negative pricing delta of EUR 1.16 billion (8%) and FX effect of EUR 120 million (0.8%) weighed on results.

• EBITDA was supported by insurance reimbursement and lower bonus provisions.

• Impairments of EUR 142 million in Polyols and Coatings & Adhesives due to demand weakness and oversupply.

• CapEx for 2024 was EUR 789 million, in line with guidance.

Outlook and guidance

• 2025 EBITDA guidance: EUR 1.0–1.6 billion; free operating cash flow: EUR 0–300 million.

• Sales expected between EUR 14.5–15.5 billion in 2025.

• Q1 2025 EBITDA expected at EUR 50–150 million, including EUR 100 million in restructuring costs.

• CapEx for 2025 forecasted at EUR 700–800 million, with EUR 300 million for expansion projects.

• ROCE above WACC expected at -2 to -6 percentage points.