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Covestro reports “strongest” quarter with 90% income hike

By: Shahrzad Pourriahi, Plastics News Europe

24 October 2017

German materials supplier Covestro AG has reported a net income increase of 89.6% at €491m for the third quarter of 2017, marking the strongest quarter in the company’s two-year history.
For the three months to end of September, the Leverkusen-based speciality chemicals manufacturer post a year-on-year 50.2% rise in earnings (EBITDA) at €862m on a 16.9% increase in sales at €3.5bn.
The boost in sales was primarily due to higher selling prices, mainly in the Polyurethanes segment, with a positive effect of 18.4%.
Core volumes increased 2.6% over the same time compared to the same quarter in 2016.
The company attributed the “outstanding performance” to the robust demand in its main customer industries and positive margin performance, particularly in the Polyurethanes segment.
“We are currently enjoying tremendous growth momentum and we are delivering records in revenues, profitability and cash generation,” said CEO Patrick Thomas.
As a result of the cash generation, Thomas said the company had decided to start a share buyback for either up to €1.5 billion or up to 10% of the outstanding stock capital.
As part of its growth strategy, Thomas reiterated plans to consider bolt-on acquisitions.
Also, on the menu is digitisation which the company says will be “an integral part of its corporate strategy.”
“Currently, we are developing the new online platform which is expected to generate around €1bn in sales as early as the end of 2019,” explains Markus Steilemann, member of the board of management overseeing marketing, sales and innovation.
In this context, Covestro has identified three dimensions of digitisation: digital business processes, digital customer experience and new, digital business models.