Covestro’s business performance in the second quarter was, as expected, significantly impacted by the further spread of the coronavirus pandemic in Europe and North America. Core volumes decreased by 22.7% year-on-year from April to June due to the massive drop in demand in all key customer industries. The global coronavirus pandemic drove down core volumes with strongest volume impact in April and sequential improvement since mid-May. Group sales fell accordingly by 32.9% to around EUR 2.2 billion (previous year: EUR 3.2 billion).
Sales in the EMLA and NAFTA regions declined more sharply than in the APAC region, mainly due to the time lag in the impact of the coronavirus pandemic. As communicated in the ad-hoc statement on the preliminary key financial results on July 9, 2020, Group EBITDA was EUR 125 million (–72.8%) and thus above market expectations for the second quarter of 2020 at the time of publication. That was attributable in particular to an accelerated recovery in demand, especially in the Polycarbonates segment, in June.
Net income for the second quarter was EUR –52 million (previous year: EUR 189 million). In contrast to the decline in EBITDA, free operating cash flow (FOCF) rose to EUR 24 million (previous year: EUR –55 million) as a result of strict liquidity management.
As expected, the figures for the first half of 2020 were significantly impacted by the effects of the coronavirus pandemic. Core volumes decreased by 13.6%, and Group sales fell by 22.7% to around EUR 4.9 billion (previous year: EUR 6.4 billion). That is mainly attributable to lower total volumes and a decline in the level of selling prices. EBITDA consequently dropped by 57.9% to EUR 379 million, while net income totaled EUR –32 million (previous year: EUR 368 million). FOCF in the first half of 2020 declined to EUR –225 million (previous year: EUR –100 million).