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Constant challenges in the market environment costron maintained stable performance

constant challenges in the market environment costron maintained stable performance

October 26, 2018

Group sales increased by 4.8% to 3.7 billion euros

core business sales remained stable

ebitd3, the measurement of beam displacement is roughly the same as deformation measurement. A reached 859 million euros, unchanged from last year

net profit increased by 1.0% to 496 million euros

due to increased investment, Free operating cash flow decreased by 12.2% to 578million euros

cost saving target: 350million euros per year

despite the increasingly challenging market environment, covestro continued its positive performance since 2018 and achieved steady performance in the third quarter. Thanks to the rise in sales prices and sales, the group's sales in the third quarter increased by 4.8% year-on-year to 3.7 billion euros. Although the product supply capacity was limited by the application of antirust engine oil, the sales volume of core business still increased slightly by 0.2%, maintaining the same level as that of Chinese coatings in the same period last year. The group's profit before interest, tax, depreciation and amortisation (EBITDA) was € 859 million, which was also flat with the same period last year. The profit margin of polyurethane business segment decreased, but this effect was offset by the increased profit margin of polycarbonate business segment. Net profit increased by 1.0% to 496million euros. Thanks to the ongoing share repurchase program, the company's earnings per share rose 6.6% to 2.59 euros. Due to increased investment, free operating cash flow (focf) decreased by 12.2% to 578million euros

Dr. rkus steilemann, CEO of covestro, said: "We will continue to move forward on the path of success. The investment projects we have identified will guide us in the direction and lay the foundation for future organic growth. We will expand production capacity in all business sectors, so as to consolidate our leading position in highly attractive industries and grow at a rate faster than the global economic growth in these areas. In addition to specific implementation, we will improve the cost balance in the medium term through efficiency improvement plans Structure. "

costron recently announced that it would invest about 1.5 billion euros to expand the MDI capacity of the bedun base in Texas, the United States, and build a world-class plant of 500000 tons/year. The project is expected to be put into operation in 2024. At the same time, the company is promoting investment projects located in bronsbitt, Germany, talagona, Spain, Antwerp, Belgium and Caojing base, China, respectively, to improve the production capacity of MDI and its precursors, so as to benefit from the growth of the global market. In the long run, the average annual growth rate of MDI market is expected to be about 5%, about 2 percentage points higher than the global GDP growth rate

costron is also committed to developing innovative products to help achieve sustainable development. For example, the company is developing some new thermoplastic polyurethane products made of carbon dioxide as raw material, and the first product in this series was launched in the autumn of 2018. Compared with traditional materials, these new polyurethanes have less ecological impact and help meet the demand for more sustainable solutions

confirmation of annual financial guidelines

Dr. Omas Toepfer, chief financial officer of covestro, said: "The third quarter performance is in line with our expectations. We note that the challenges facing the global economy are increasing. In addition, our product supply capacity in Europe and Asia has also been affected in the past quarter. Nevertheless, we have been able to maintain stable sales. In this context, today we confirm the financial guidelines for 2018."

covestro expects the sales volume of its core business to achieve a medium to low single digit percentage growth in 2018. Free operating cash flow is expected to exceed € 2billion. The company expects the return on capital employed (roce) to be the same as that in 2017, while maintaining the prediction that EBITDA will be higher than that in 2017

covestro continued to promote its stock repurchase plan in the third quarter and launched the third batch of repurchases in August. Since the beginning of the plan, a total of about 1.2 billion euros (accounting for nearly 8% of the share capital) have been repurchased. The overall goal of covestro is to repurchase up to 1.5 billion euros or 10% of the issued share capital by the middle of 2019

cost saving target: 350million euros per year

at the same time, covestro has made good progress in another strategic lever: by strengthening cross departmental collaboration and increasing the application of digital solutions, the efficiency and efficiency are expected to be significantly improved. By 2021 at the latest, the annual cost savings can reach 350million euros, with the goal of limiting the growth of operating costs. The determined measures are mainly to permanently reduce non labor costs, but companies such as news universal testing machine, unidirectional pulsation fatigue testing machine, impact testing machine, etc. will still reduce about 900 full-time jobs worldwide, such as jobs in the administrative field. The company will promote the downsizing plan through socially acceptable solutions. In Germany, the company has reached an agreement with the Works Council on the solution

polycarbonate and coatings, adhesives and special chemicals sector grew strongly

in the third quarter, the sales volume of polyurethane business sector decreased slightly by 1.2% to 1.849 billion euros. The decline in sales in EMLA (Europe, the Middle East, Africa and Latin America except Mexico) and Asia Pacific was offset by growth in NAFTA (United States, Canada and Mexico). The reasons for the decline include price changes, exchange rate effects and unplanned plant downtime. The core business sales of polyurethane business segment decreased by 2.0%. EBITDA of this business segment decreased by 21.5% to 432million euros. The main reason is the rising purchase price of raw materials

the polycarbonate business segment continued to maintain strong growth in the third quarter, with sales up 11.3% to 1.038 billion euros. The sales volume of core business increased by 2.6%, and the sales price also increased, which had a positive impact on sales

sales in EMLA and the Asia Pacific region increased significantly, offsetting the decline in NAFTA. Benefiting from higher profit margin and selling price, the EBITDA of this sector increased by 49.3% to 315 million euros. This result includes € 36million in non recurring income from the sale of the U.S. sheet business

the sales of coatings, adhesives and special chemicals increased by 8.8% to 606million euros. This sector has achieved growth in all three regions. In the third quarter, the core business sales of this business segment also increased significantly, up 7.2% from the same period last year. EBITDA rose 0.8% to 126 million euros, roughly the same level as last year

successful performance in the first nine months of 2018

costron's performance in the first nine months of 2018 laid a solid overall foundation for the whole year. The cumulative core business sales increased by 1.5% over the same period last year. Sales increased by 6.9% to 11.3 billion euros, and EBITDA increased by 13.7% to 2.9 billion euros. In addition, the company's free operating cash flow increased by 9.9% to 1.3 billion euros

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