Covestro benefits from recovery in global demand
In the second quarter of 2021, Covestro benefited from a continued strong recovery in global demand compared to a weak Q2 2020 as a result of the coronavirus pandemic.
The Resins & Functional Materials (RFM) business acquired from DSM effective April 1, 2021, was also consolidated for the first time. As a result, the Group significantly increased its core volumes sold by 35 percent year-on-year, of which around 10 percentage points is attributable to initial consolidation of the RFM business.
At the same time, unplanned weather-related production outages in the North America (NA) region and continued raw material bottlenecks have had a negative impact on product availability – also constraining the growth potential of all segments in the second quarter of 2021. Apart from the volume growth, substantially higher selling prices resulted in an 83.5 percent year-on-year increase in sales of over EUR 3.9 billion. As a result of the volume growth and the overall increase in margins, EBITDA rose to EUR 817 million (previous year: EUR 125 million).
Negative one-time effects
This result also includes negative one-time effects of EUR 35 million in connection with the consolidation of RFM. Net income in the second quarter of 2021 was EUR 449 million (previous year: EUR –52 million), and the free operating cash flow (FOCF) increased significantly to EUR 374 million (previous year: EUR 24 million).
Core volumes sold in the Coatings, Adhesives, Specialties segment rose 133.5 percent from the figure in the prior-year quarter. Around 100 percentage points is attributable to the initial consolidation of the RFM business. This portfolio change, together with the increase in volumes and higher selling prices, resulted in sales of EUR 926 million (previous year: EUR 443 million). Consequently, EBITDA more than doubled year on year, rising to EUR 134 million (previous year: EUR 60 million).
