Covestro is holding out the prospect of a return to growth

After the corona-related slump in sales and profits last year, the plastics manufacturer Covestro is holding out the prospect of a return to growth. "The pandemic is not over yet, of course the uncertainty persists," said CFO Thomas Toepfer. "But we are seeing clear signals in the markets that there is high demand for our products, and we are also seeing good momentum with our start into 2021." For the current year, the DAX group is forecasting results above the level of 2019: In the core business, volume growth of ten to 15 percent is expected and the operating result (Ebitda) should be between 1.7 billion and 2.2 billion euros. Last year, the Corona crisis hit Leverkusen hard, for example because the production lines in the automotive industry, an important customer group, were partially idle in the spring. Despite a recovery from the middle of the year and strong growth in the fourth quarter, the pandemic-related losses could not be offset. Overall, Covestro achieved an Ebitda of almost 1.5 billion euros - more than eight percent less than a year earlier. Sales fell by 13.7 percent to 10.7 billion euros, while the sales volume in the core business fell by 5.6 percent. The bottom line was that net profit fell by almost 17 percent to 459 million euros. Nevertheless, a dividend of 1.30 euros per share is to be paid out to the shareholders, 10 cents more than last year. Covestro plans to continue to pay out 35 to 55 percent of net profits to owners in the future. The proposed dividend corresponds to a 55 percent payout ratio. The company also expects a boost from the recently acquired DSM coating business and a reorganization of the business areas. With the DSM division, Covestro is strengthening the high-margin specialty chemicals business, said CEO Markus Steilemann. And from July the group will conduct its business in two segments with seven operating units instead of the previous three divisions. This makes it easier to differentiate mass business, which is primarily about low costs, from specialty products.