A downturn in 2025 for Covestro

In the 2025 fiscal year, Covestro achieved its Ebitda target despite a persistently challenging market environment. Volatile geopolitical dynamics, sustained weak global demand coupled with intense competitive pressure, and the impact of the fire at the Dormagen Chempark weighed heavily on the Group’s economic development. In particular, the further decline in price levels across all regions and overcapacities in key product groups had a significant effect on margins and earnings. At the same time, Covestro consistently pursued its transformation and, with the successful completion of the strategic partnership with XRG, took decisive strategic steps for the future.

Group sales decreased by 8.7% to 12.9 billion euros in the 2025 fiscal year. This development was primarily driven by lower selling prices in all regions as well as exchange rate effects. At 740 million euros, Ebitda was within the range of 700 million to 800 million euros. The production downtime at several plants following a fire at the Dormagen Chempark had a negative impact on the full year in the low three-digit million euros range. Free operating cash flow amounted to -283 million euros, which was also within the expected range. The Group net result was -644 million euros, reflecting the ongoing challenging market conditions. Greenhouse gas emissions (Scope 1 and Scope 2) fell to 4.3 million metric tons of CO2 equivalents. This was primarily due to the successful implementation of the Nitric Acid Unit Climate Initiative projects at the Baytown (USA) and Shanghai (China) sites.

In the Performance Materials segment, sales decreased by 12.1% to 6.1 billion euros, and Ebitda fell by 34.1% to 375 million euros, due to lower margins and higher expenses for the implementation of the Strong transformation program. The latter primarily related to the closure of the production facility in Maasvlakte (Netherlands) operated jointly with LyondellBasell. In the Solutions & Specialties segment, sales decreased by 5.5% to 6.6 billion euros, due to lower selling prices and negative exchange rate effects. Ebitda decreased by 8% to 681 million euros. Increased sales volumes and lower expenses within the framework of the Strong transformation program had a positive impact on earnings.

A key milestone in the 2025 fiscal year was the successful completion of the strategic partnership between Covestro and XRG in December 2025. With XRG as a long-term oriented shareholder, Covestro will further accelerate its transformation. In this context, the 1.17 billion euros capital increase agreed upon in the investment agreement with XRG was completed in December 2025. The transaction strengthens Covestro’s equity base and increases financial flexibility in a volatile market environment.

For the 2026 fiscal year, Covestro continues to expect a demanding market environment. A sustainable recovery in global demand is currently not in sight, while the global competitive environment remains characterized by overcapacities, persistent price pressure, and an increasingly protectionist trade policy. For 2026, Covestro expects Ebitda to be in the region of the previous year’s level. For free operating cash flow and ROCE, the company anticipates a significant improvement compared to 2025 levels. For greenhouse gas emissions (Scope 1+2) measured in CO2 equivalents, the Group expects a value between 3.9 and 4.5 million metric tons.