Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
web
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • ITEC
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • Silicone
    • Latex
    • Coronavirus
    • Executive Action
    • Government/Legal
    • Opinion
    • Technical Notebooks
    • International Elastomer Show
    • Women in Tire & Rubber
    • HEXPOL Sponsored Content
    • Goodyear recognized by Lockheed Martin as 'elite supplier'
      EV tire advancements to help secure future
      Lambillotte: Only question on AVs is timing
      CAR official says EV future brighter than autonomous
    • Hot topics at virtual CES: AVs, air taxis and drones
      Apollo to raise prices of Vredestein brand tires
      China's tire production up in 2020
      Renault to form JV with U.S. hydrogen specialist Plug Power for fuel cell vans
    • GRI expanding ag tire capacity at 3-year-old Sri Lanka plant
      Apollo to raise prices of Vredestein brand tires
      China's tire production up in 2020
      Smithers webinars focus on performance materials in green tires
    • WCCO task force navigates pandemic, expands communications
      JobsOhio funding gives Sperry & Rice room to grow
      TRAC's Glenn Maidment caps 51-year rubber industry career
      LafargeHolcim looks to solidify U.S. presence with Firestone Building Products purchase
    • Biesterfeld to supply Denka acrylate rubbers
      Ace Products & Consulting partners with Wallace Instruments
      Engel starts distribution of its Wintec brand in Europe
      ANRPC notes rubber price recovery
    • Ace Products & Consulting partners with Wallace Instruments
      Safic-Alcan extends distribution agreement with Momentive
      Momentive aims to grow silicone presence in Asia-Pacific region
      IRP Medical solidifies portfolio with KDL deal
    • WCCO task force navigates pandemic, expands communications
      ASTM cancels April meetings as COVID-19 continues impact
      Paycheck Protection Program funding reopens Jan. 15
      Detroit Auto Show canceled; alternative event being planned for September
    • ARP Materials adds technical sales manager
      Jack Murphy joins Akron Dispersions
      Adriano Alfani named Versalis CEO
      Maroon Group adds to Southeast sales team
    • Hot topics at virtual CES: AVs, air taxis and drones
      Paycheck Protection Program funding reopens Jan. 15
      Taiwan tire makers propose settlement of import duties case
      Lobbying group unveils policy agenda to speed transition to EVs
    • Column: Pandemic looms over everything in life, business in 2020
      Column: Lessons from the 2020 Best Places to Work
      Editorial: Silicone hit hard by pandemic, expected to bounce back
      Column: Still far way from normal
    • Effects of multiple repurposed materials for reinforcements of standard rubber compounds
      Impact of peroxide blends on the cure rate and aged properties in HNBR
      Techniques to detect long chain branching in polymers
      A comparative study looking at effects of curing kinetics and batch variation on SBR injection molding and numerical analytics
    • Rubber Division seeks abstracts for 200th Technical Meeting
      WORD panelists say evolution, authenticity keys to success
      IEC keynote: Communication key to logistics
      IEC speaker: Specialized elastomers may reduce spread of life-threatening pathogens
    • WORD panelists say evolution, authenticity keys to success
      New video celebrates women in rubber industry
      ITEC panelists say women can thrive in tire industry
      Rubber Division planning second Women of Rubber event
    • Sponsored By HEXPOL Compounding
      Faster Access to Your Polymer Compounding Experts Around the World
      Sponsored By HEXPOL Compounding
      Take a walk thru a HEXPOL Lab
      Sponsored By HEXPOL Compounding
      HEXPOL offers a unique selection of High Performance Elastomers to match your application requirements
      Sponsored By HEXPOL Compounding
      It’s what you can’t see that makes the Difference at HEXPOL
  • Blogs
    • Products
    • Wacky World of Rubber
    • New Products: MonTech introduces 1,500 kN lab press
      New products: 3M introduces new durable, pliable medical adhesive
      New Products: Lanxess launches energy-efficient PU elastomer
      New Products: MonTech automates bale cutter for safety, productivity
    • Wacky World of Rubber: How Trelleborg, teens sealed a spot in the world record book
      Wacky World of Rubber: Of chicken and feet, but not chicken feet
      Wacky World of Rubber: Time to go mattress shopping
      Wacky World of Rubber: Because nothing says football like 'frunk' shrimp
  • Newsletters
    • Rubber in Automotive
    • Silicone News
    • Latex News
    • Sign Up for Newsletters
    • Hot topics at virtual CES: AVs, air taxis and drones
      Apollo to raise prices of Vredestein brand tires
      China's tire production up in 2020
      Renault to form JV with U.S. hydrogen specialist Plug Power for fuel cell vans
    • Ace Products & Consulting partners with Wallace Instruments
      Safic-Alcan extends distribution agreement with Momentive
      Momentive aims to grow silicone presence in Asia-Pacific region
      IRP Medical solidifies portfolio with KDL deal
    • Jack Murphy joins Akron Dispersions
      Synthomer optimistic, raises earnings forecast
      Top Glove reopens COVID-hit factories with enhanced precautions
      Malaysia electronics group to enter rubber gloves sector
  • Multimedia
    • Videos
    • Photo Galleries
  • Directory
  • Resources
    • Classifieds & Mold Mart
    • Sponsored Content
    • White Papers
    • Sponsored By HB Chemical
      The Company Behind the Inventory
      Sponsored By French Oil Mill Machinery
      Process Improvement, Cost Reduction with Custom Press Systems
    • Sponsored By Uncountable Inc.
      Cooper Standard deploys lab informatics platform to synchronize R&D
      Sponsored By Elkem
      LSR Select™: A solution to improve your financial impact in molding applications
      Sponsored By HEXPOL Compounding
      Understanding and Selecting Performance Additives for Rubber Compounding
      Sponsored By HEXPOL Compounding
      Peroxide Cureable Silicone Injection Molding
  • Data
  • Events
    • RPN Events
    • RPN Livestreams/Webinars
    • Industry Events
    • Past Events
    • ITEC Library
    • International Silicone Conference Library
    • 2021 Healthcare Elastomers Virtual Edition
      2021 Rubber in Automotive Virtual Edition
      2020 International Silicone Conference Virtual Edition
      2020 ITEC Virtual Edition
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
February 21, 2018 01:00 AM

Outstanding results and another record year for Covestro in 2017

Karen Laird
Plastics News
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    COLOGNE, Germany—Driven by a high demand for high-performance plastics and significantly higher margins, Covestro increased group sales by 18.8 percent to $17.4 billion over the past fiscal year. Group EBITDA came in at $4.2 billion, which, at a 70.6 percent increase over the prior year period, is a "significant plus," Thomas said at the financial news conference on Feb. 20 in Cologne.

    Net income more than doubled from $979.9 million to $2.5 billion.

    Core volumes registered growth of 3.4 percent, "in the middle of our guidance of low-to-mid-single- digit growth," he noted. APAC showed an increase of 6 percent, EMLA of 3 percent and NAFTA, at 1 percent, grew slightly slower, due to the effect of Hurricane Harvey. "The infrastructure was impacted, and the effects were felt into November," said Thomas.

    He added that ROCE increased from 14.2 to 33.4 percent, "so we reached our target as well."

    Sustainability remains a driver of growth, emphasized Thomas. The trends which have led to Covestro's successful development in the past years are still valid, he said, enabling the company to achieve these excellent results. Covestro not only outgrew GDP in 2017; the company is confident it will continue to do so in years to come.

    For 2018, Covestro expects solid growth in the main customer industries, as well as in other areas, including e-mobility, energy-efficient construction and energy-saving LED lamps.

    Robust customer demand and the tight supply situation over the past year meant that many facilities were running almost at full capacity, Covestro will also significantly increase its investments to take advantage of the expected growth in the main customer industries—the automotive and the building sectors. These investments include all segments and regions and are expected to be in excess of the depreciation level.

    Covestro is in an excellent position to do so, as despite higher working capital, the Free Operating Cash Flow reached a record of more than $2.2 billion in 2017, an improvement of some 35 percent that was wholly driven by the significant EBITDA increase.

    The company now expects to deliver a cumulative free operating cash flow of $6.2 billion by the end of 2019, ahead of the original commitment made in 2017 to generate a cumulative FOCF by year end 2021.

    With so much cash coming in, the interesting challenge of what to spend it on then arises.

    The company intends, in the first place, to pay its shareholders a dividend of $2.71 per share, an increase of 63 percent over the dividend for 2016 and a dividend yield of 2.4 percent.

    Covestro also remains prepared to use opportunities for acquisitions that strengthen the portfolio and create value. "We screen the market very carefully for external opportunities that are value-creating', said Thomas. "We are extremely disciplined in our approach."

    Lastly, he referred to the share buyback programme, which began last year, and will be completed by mid-2019. Under the programme, Covestro's Board of Management is buying back their own shares up to $1.8 billion, or up to 10 percent of the capital stock.

    On the basis of anticipated stable growth in the main customer industries and current economic forecasts, Covestro expects ongoing positive development for 2018. The company expects a low- to mid-single-digit percentage increase in core volume growth. Covestro anticipates free operating cash flow significantly above the average of the last three years. In 2018, ROCE is expected to approach the previous year's level. EBITDA is estimated to be around the level of 2017. For the first quarter of 2018, Covestro anticipates EBITDA significantly above the level of the first quarter of 2017.

    Letter
    to the
    Editor

    Rubber & Plastics News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber & Plastics News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber & Plastics News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    web
    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Contact the Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • ITEC
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • Silicone
      • Latex
      • Coronavirus
      • Executive Action
      • Government/Legal
      • Opinion
      • Technical Notebooks
      • International Elastomer Show
      • Women in Tire & Rubber
      • HEXPOL Sponsored Content
    • Blogs
      • Products
      • Wacky World of Rubber
    • Newsletters
      • Rubber in Automotive
      • Silicone News
      • Latex News
      • Sign Up for Newsletters
    • Multimedia
      • Videos
      • Photo Galleries
    • Directory
    • Resources
      • Classifieds & Mold Mart
      • Sponsored Content
      • White Papers
    • Data
    • Events
      • RPN Events
      • RPN Livestreams/Webinars
      • Industry Events
      • Past Events
      • ITEC Library
      • International Silicone Conference Library
    • Advertise
    • DIGITAL EDITION