Covestro (1COV) Q4 2025 earnings summary

Executive summary

• 2025 was marked by a challenging market environment with significant pricing pressure, adverse FX impacts, and stable volumes, prompting active management and transformation initiatives.

• The company continued its Sustainable Future strategy, focusing on operational excellence, customer centricity, and efficiency, while advancing partnerships and portfolio changes.

• Major milestones included the partnership with XRG, acquisitions of Pontacol and Vencorex, and progress in sustainability and digitalization.

• EBITDA fell 30.9% year-over-year to €740m, within guidance, as margin pressure persisted.

• Net income was negative at -€644m, reflecting significantly lower EBIT and impairment losses.

Financial highlights

• Sales declined by 8.7% year-over-year to €12.9bn, mainly due to a 5.2% price decline and 2.6% FX impact, while volumes remained relatively stable.

• EBITDA dropped to €740m from €1.1bn in 2024, reflecting margin pressure, negative price delta, and restructuring costs.

• Free operating cash flow was -€283m, with Q4 showing a positive swing due to disciplined working capital and investment management.

• Investments/capex totaled €770m, in line with guidance.

• Earnings per share declined to -€3.39 from -€1.41 year-over-year.

Outlook and guidance

• FY 2026 EBITDA is expected to be around the 2025 level, with possible single-digit percentage deviation.

• Significant year-over-year increase anticipated in free operating cash flow and ROCE over WACC.

• Sustainability targets include greenhouse gas emissions (scope 1 and 2) between 3.9 and 4.5 million tons.

• Mark-to-market EBITDA for FY 2026 projected at approximately €0.8bn.