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Covestro continues growth path innovation and sustainability as growth drivers

March 07/2018

MOSCOW (MRC) -- Covestro had an outstanding fiscal year 2017. Driven by a high demand for high-performance plastics and significantly higher margins, Covestro increased Group sales over the past fiscal year and net income more than doubled, as per GV.

"Compared with our first year as an independent company, we have once again clearly improved and demonstrated that our success is sustainable", said CEO Patrick Thomas.

For 2018, Covestro expects solid growth in the main customer industries including the automotive, furniture, construction, and electrical and electronics industries. Within these industries, Covestro considers in particular the social trend toward greater sustainability as a driver of growth. "In more and more industries, customers are increasingly looking for sustainable solutions and that is exactly what we offer," said Patrick Thomas. He further mentioned areas of growth such as e-mobility, energy-efficient construction and energy-saving LED lamps.

True to Covestros purpose to make the world a brighter place, sustainability has always been firmly anchored in its strategy. In addition to this commitment, Covestro has integrated the Sustainable Development Goals of the United Nations in its strategy. "Sustainability is and remains a key driver of innovation, explained Dr. Markus Steilemann, Chief Commercial Officer and future CEO of Covestro. By 2025, we want to spend 80 % of our research and development expenditure in areas that contribute to the Sustainable Development Goals."

Steilemann considers digitalization as a further driver of innovation: "With our comprehensive program, we are taking advantage of the opportunities that digitalization provides, making it a key focus in our company. As part of this focus, we will set new standards of collaboration with our customers." An example of this is a soon-to-be-launched digital marketplace that will simplify access to basic products and connect customers with Covestro and other providers. By the end of 2019, new digital business models such as the digital marketplace are expected to generate cumulative sales of up to one billion euros.

In the Polyurethanes segment, Covestro increased its core volumes over the previous year in all three regions an overall increase of 3.4 %. Meanwhile, EBITDA rose by 151.1 % to EUR 2,212 million. This growth was primarily the result of significant improvements in margins in the MDI and TDI product groups. Moreover, the increased sales volume, gains from the sale of a systems house in North America, and an insurance reimbursement all had a positive effect. Furthermore, the decision to continue production in Tarragona (Spain) led to a reversal of provisions.

Core volumes in the Polycarbonates segment rose by 5.0 %. Here, too, all three regions contributed to growth. This segments EBITDA rose 21.2 % to EUR 853 million. Higher core volumes and increased selling prices had a positive effect on earnings, while sales were mainly driven by increased demand in the automotive, and electrical and electronics industries.

In 2017 as a whole, core volumes in the Coatings, Adhesives, Specialties segment saw virtually no change (-0.3%) amidst a challenging competitive environment. EBITDA was down 9.4 % from the previous years figure, dropping to EUR 453 million. Increased selling prices on average were not able to fully offset the higher cost of goods sold.

Meanwhile, expanded production of polyurethane dispersions commenced in Dormagen (Germany) and Barcelona (Spain) to meet the increasing demand from the coatings and adhesive industry. Covestro also began operations at a new production facility in Dormagen for high-quality, multi-layer flat films used in security cards or automotive interiors.

As MRC informed before, on 1 September, 2015, Bayer MaterialScience became known as Covestro. The plans for the carve-out of Bayer MaterialScience were announced in September 2014.

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc.
Author:Margaret Volkova
Tags:PC, poliuretan, sheet extrusion, car components, furniture, adhesives, construction, electrical goods, Bayer, Covestro.
Category:General News
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