„Sustainable Future“ strategy advanced in challenging market environment

At today’s Annual General Meeting of Covestro AG, all resolutions proposed by the Supervisory Board and Board of Management were accepted by the shareholders with the required majorities. The actions of both the Board of Management and the Supervisory Board were ratified. This year’s Annual General Meeting was again held virtually and broadcast live on the Internet. Shareholders and their proxies put their questions live via video link, similar to the right to speak and ask questions at physical meetings.

At the start of the Annual General Meeting, Dr. Markus Steilemann, CEO of Covestro, looked back at the past fiscal year, which can be considered one of the most difficult for both the chemical industry as a whole and Covestro. “Numerous different external factors, from geopolitical tensions through inflation down to the weak global economic situation, led to a collapse in global demand in almost all areas. That is also reflected in our financials: Business was extremely challenging in the past year – and is expected to remain that way in 2024. We will therefore focus on those aspects over which we have control: driving our strategy and a clear focus on four key operational focus areas.”

The first of these focus areas is production: Covestro is increasing the safety and reliability of its facilities and working even more energy-efficiently. A second focus is on increasing sales volumes, which will be achieved by optimizing plant capacity utilization. By maintaining strong customer centricity and concentrating on lucrative solutions for customers, Covestro aims to improve margins, which have recently been weak. That is the third focus area. Finally, cost discipline in all areas of the organization and the systematic reduction of fixed costs are at the center. The comprehensive use of artificial intelligence (AI) will provide support in this context in all business and administrative units.

In 2023, Covestro continued to drive its vision of becoming fully circular by, among other things, expanding the procurement of renewable energy by entering into a power purchase agreement in the United States. Recycling technologies were developed further, for example in chemical recycling for polycarbonates on a pilot scale in Leverkusen in Germany. The opening of the world’s first pilot plant for manufacturing bio-based aniline marked another milestone. This underscores Covestro’s claim to being one of the pioneers of the circular economy.

No dividend distribution due to net loss

In his contribution, Christian Baier, CFO of Covestro, talked about the financial indicators and put them into context for shareholders. “The global market environment was impacted by weak demand and declining selling prices as a result. This is reflected in our results for the year 2023. Due to the numerous global challenges, Covestro generated negative net income of 198 million euros for fiscal 2023 overall.”

Given the difficult fiscal year with low profitability, Covestro’s redoubled its focus on free operating cash flow. Despite the significant drop in EBITDA, the company successfully generated a positive figure of 232 million euros in 2023.

In light of the net loss, the Board of Management of Covestro decided not to propose any dividend for fiscal 2023. This is in accordance with the Group’s dividend policy, which since 2020 has linked the dividend more closely to the financial situation of the company.

Markus Steilemann ended the speech section of the Board of Management with a look at the milestones reached in the circular economy and presented the reduction targets for Scope 3 emissions, which complete the Group’s climate neutrality strategy. Covestro is planning operational climate neutrality for Scope 1 and Scope 2 by 2035. The first milestone for Scope 3 emissions is also expected to be achieved by then: a 30 percent reduction in greenhouse gas emissions from upstream and downstream processes in the value chain. Four specific levers have been defined for implementation. Covestro starts with suppliers reducing their Scope 1 and Scope 2 emissions, drives sales of products based on alternative raw materials, and develops innovative processes for alternative and recycled raw materials. In addition, there is a large number of other supporting measures, which have been combined into the fourth lever.

Improvements in operational performance and competitiveness as well as the systematic focus on the circular economy will ensure that Covestro is positioned for the future.

Further information and documents 

• You can find a recording of the 2024 Annual General Meeting, the manuscripts of the presentations and press photos at Media Kit | Annual General Meeting | Covestro AG. 
• The detailed voting results on the agenda items at the Annual General Meeting are available at Annual General Meeting I Covestro | Covestro AG.