Successful First Year for Covestro
Materials manufacturer Covestro AG, formerly Bayer MaterialScience, Leverkusen, Germany, can look back at very successful development in its first year of independence. All financial targets were achieved in 2015. Compared with the prior-year period, adjusted EBITDA increased substantially, and the free operating cash flow reached a record level. The recently listed company plans to pay its stockholders a first-ever dividend of EUR 0.70 per share. Covestro believes it is on course for further growth in 2016 and hopes to once again generate high cash inflows.
In the reporting year, Covestro increased adjusted EBITDA by 41.3% compared with 2014 to EUR 1.64 billion. This can be attributed primarily to a more favorable supply and demand situation as well as higher volumes. As a result, sales increased by 2.7% to EUR 12.08 billion despite declining selling prices. Core volume growth – an important new key performance indicator for controlling the Group – increased by the same proportion. All three regions in which the company operates recorded comparable volume growth last year.
Core volume growth of 1.8% was also recorded in 2015 for the largest segment, Polyurethanes, where Covestro develops and produces precursors for high-quality foams. Because selling prices declined sharply due primarily to lower raw material prices, segment sales decreased compared with the prior-year period by 3.1% to EUR 6.09 billion. However, adjusted EBITDA increased by 5.4% to EUR 624 million.
At Polycarbonates, adjusted EBITDA more than tripled compared with 2014 to EUR 560 million. With sales up 12.4% to EUR 3.17 billion, core volume growth amounted to 5.2 %. Polycarbonate is a versatile high-performance plastic produced and continuously optimized by Covestro.
Sales in the Coatings, Adhesives, Specialties segment grew by 8.6% compared with 2014 to a record level of EUR 2.09 billion while core volume growth was 2.7%. Adjusted EBITDA increased by 12.4% to EUR 491 million. The segment comprises raw materials for coatings, adhesives and sealants, as well as specialties such as high-quality films. All three segments contributed to an increase in free operating cash flow of over 200% to a record-setting EUR 964 million. As with the adjusted EBITDA, this figure more than met expectations of a significant increase.
In light of the positive business development, Covestro intends to share its commercial success commensurately with its stockholders. The Board of Management and Supervisory Board propose the payment of a first dividend for 2015 of EUR 0.70 per share.
Covestro Deutschland AG
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