In This Article:
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Revenue: Stable at EUR3.5 billion for Q1 2025.
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EBITDA: EUR137 million, approaching the upper end of the guidance range.
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Free Operating Cash Flow: Negative EUR253 million, showing a seasonal dip.
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Volume Development: Global sales volume stable at 0.4% year-over-year.
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Pricing Impact: Negative impact of EUR40 million from 1.1% lower prices.
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Segment Performance Materials: Sales stable with minus 0.7%; EBITDA at EUR13 million.
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Segment Solutions and Specialties: Sales decline of 1.2% due to a 3% price decline; EBITDA margin increased to 10.8%.
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CapEx: EUR180 million in Q1 2025, with guidance of EUR700 million to EUR800 million for FY 2025.
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Net Debt: Increased by EUR315 million versus end of 2024.
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EBITDA Guidance for FY 2025: Narrowed to EUR1.0 billion to EUR1.4 billion.
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Covestro AG (CVVTF) achieved an EBITDA of EUR137 million, approaching the upper end of their quarterly guidance range.
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The company reported stable sales year-over-year at EUR3.5 billion, with volumes remaining flat.
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Covestro AG (CVVTF) is actively pruning its portfolio by cutting loss-making or low-margin businesses, particularly in Asia, which is expected to improve profitability.
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The company is making significant progress in its transformation program, achieving gross savings of EUR152 million, with expectations to reach EUR250 million by year-end.
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Covestro AG (CVVTF) remains committed to a solid Baa2 investment-grade rating, recently confirmed by Moody's, indicating financial stability.
Negative Points
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The company experienced a negative free operating cash flow of minus EUR253 million, attributed to lower EBITDA and higher CapEx.
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Covestro AG (CVVTF) reduced the upper end of its full-year EBITDA guidance by EUR200 million, reflecting ongoing market challenges.
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The closure of the joint propylene oxide operation with LyondellBasell resulted in a significant one-time cost of EUR88 million, impacting Q1 EBITDA.
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The company faces challenges from higher raw material and energy costs, particularly in Europe, leading to a negative pricing delta.
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Covestro AG (CVVTF) is navigating uncertainties related to US tariffs, which could impact demand in core industries such as automotive, construction, and electronics.
Q & A Highlights
Q: Can you explain the sharp rise in short-term financial liabilities, particularly in China, and the halved growth forecast for the electro electronics industry? A: The increase in short-term financial liabilities is due to the reclassification of a bond from long-term to short-term and an increase in short-term funding, including commercial paper and market activities in China. Regarding the electro electronics industry, the forecast reduction is partly due to expected trade flow changes and tariff impacts, though the appliances subcategory has seen growth due to domestic demand in China.