As expected, Covestro made a moderate start to the 2025 fiscal year. Sales in the first quarter remained at the previous year’s level and amounted to EUR 3.48 billion. This was only 0.9 per cent below the previous year’s figure (previous year: EUR 3.51 billion). As expected, EBITDA fell by around 50 per cent compared to the previous year. A key driver for this was a one-off effect from the planned closure of the PO11 plant in Maasvlakte, Netherlands. However, at EUR 137 million, the result was still at the upper end of the start-of-the-year guidance and slightly above the market expectation of EUR 125 million. The net income for the first three months of the year was EUR –160 million (previous year: EUR –35 million), while free operating cash flow (FOCF) amounted to EUR –253 million (previous year: EUR –129 million). “The first quarter of the new fiscal year shows that we are remaining on course in a very challenging economic environment – with stable sales but continued pressure on earnings. This encourages us to consistently drive forward our transformation and resolutely continue to implement our ‘Sustainable Future’ strategy,” says Dr Markus Steilemann, Chief Executive Officer of Covestro. “Whoever hesitates in these turbulent times loses. But whoever acts prudently now can shape the future. That is precisely what we are doing – with full conviction, high speed and a clear vision.” Full-year guidance for 2025 narrowed within given ranges Due to increasing geopolitical uncertainties as a result of on-going trouble spots and new trade tensions caused by the US government’s tariff policy, the forecast for global economic growth in 2025 has been revised downward from 2.8 per cent to 2.6 per cent. Against this backdrop of a persistently challenging market environment, Covestro has narrowed its expectations for EBITDA and ROCE over WACC for the 2025 financial year within the given range. Covestro now expects EBITDA of between EUR 1.0 billion and EUR 1.4 billion (previously: EUR 1.0 billion to EUR 1.6 billion). The group anticipates FOCF unchanged between EUR 0 million to EUR 300 million. ROCE above WACC is now expected to be between –6 percentage points and –3 percentage points (previously –6 percentage points to –2 percentage points). The target range for greenhouse gas emissions at all environmentally relevant locations remains at 4.2 million metric tons to 4.8 metric million tons of CO2 equivalents. The Group anticipates EBITDA between EUR 200 million and EUR 300 million for the second quarter of 2025. “The first quarter of this fiscal year has once again demonstrated the volatile and challenging nature of a market environment increasingly characterized by trade conflicts and growing protectionism,” says Christian Baier, CFO of Covestro. “With our strategic approach of producing in the regions for the regions, we are well positioned in this respect. Now it’s imperative that we continue pursuing the priorities we have set: increasing efficiencies, maintaining cash flow stability and consistently implementing our ‘Sustainable Future’ strategy.” Focus on transformation and sustainable growth In the first quarter of 2025, the focus was on the continued systematic implementation of the “Sustainable Future” strategy. Covestro further optimized its portfolio by deciding, together with LyondellBasell, to permanently shut down the joint operation propylene oxide/styrene monomer plant (PO11) in Maasvlakte, the Netherlands. Following a comprehensive assessment of market conditions, the decision comes against the backdrop of global overcapacity, high energy and production costs in Europe and growing import dynamism from Asia. Covestro’s fundamental commitment to the European market remains unaffected. This measure is part of the STRONG transformation program, by which Covestro is systematically strengthening its efficiency and competitiveness. At the same time, Covestro is systematically driving the transformation towards a fully circular and climate-neutral production. A key lever here is increasing energy efficiency. This March, the group fleshed out the goal it set in the 2024 Annual Report: by 2030, Covestro aims to reduce energy consumption per metric ton manufactured by 20 percent compared to 2020 levels, saving the equivalent of 550,000 metric tons of CO2 emissions. The goal represents a major milestone on the journey to achieving operational climate neutrality by 2035. Similarly impactful is the comprehensive modernization of the TDI plant in Dormagen, the largest of its kind in Europe. A new reactor system that uses process heat to generate steam will save around 22,000 tons of CO2 emissions per year – clear evidence that climate protection, efficiency and industrial competitiveness are compatible. Segment results at a glance In the Performance Materials segment, sales in the first quarter of 2025 amounted to EUR 1.7 billion and therefore matched the previous year’s level (previous year: EUR 1.7 billion). EBITDA fell by 87.4 percent to EUR 13 million (previous year: EUR 103 million). On the one hand, expenses in connection with the closure of the PO11 joint operation plant in Maasvlakte, Netherlands, had a negative impact. On the other hand, a decline in margins due to significantly higher energy prices, which outweighed the positive effects of higher selling prices, also contributed to the decline. Without the one-off effect of the closure, EBITDA would have been roughly the same as in the prior-year quarter. The segment’s FOCF was EUR –124 million (previous year: EUR –73 million). The EBITDA guidance for Performance Materials for fiscal 2025 is between EUR 400 million and EUR 700 million. The Solutions & Specialties segment recorded a decline in sales of 1.2 per cent to EUR 1.7 billion in the first quarter of 2025 (previous year: EUR 1.8 billion). The decline in average selling prices was largely offset by increased sales volumes and positive exchange rate effects. EBITDA fell by 13 per cent to EUR 181 million (previous year: EUR 208 million), mainly due to the lower selling price level and the resulting decline in margins. However, EBITDA increased sequentially compared to the previous quarter, mostly due to higher volumes in the Coatings & Adhesives business entity. This was reflected in an improved EBITDA margin of 10.4 per cent. Free operating cash flow was EUR –11 million (previous year: EUR 22 million). Covestro maintains its expectation that annual EBITDA for the segment will narrowly beat last year’s level.