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Covestro adjusts FY20 financial guidance due to Covid-19

16 Apr '20

2 min read

Pic: Covestro

Covestro, a supplier of high-tech polymer materials, has adjusted FY 2020 financial guidance due to effects of the Coronavirus pandemic after reaching its EBITDA target in Q1 2020. The board of management has reported that core volume growth is expected to be negative for 2020 compared to 2019. Preliminary core volume growth in Q1 2020 was -4.1 per cent.

Covestro has been actively executing its crisis management plans in response to the global spread of the coronavirus pandemic and has been adjusting business operations according to local developments. The board of management has taken early and decisive actions to adapt the company to the current conditions, to protect the health of all Covestro employees, to ensure the ability to deliver to customers and to secure its strong liquidity position.

As a consequence of the coronavirus pandemic and the increasingly adverse business environment, the company reported that the provided outlook cannot be upheld. The board of management therefore provides the following adjustments to the group financial guidance for 2020: EBITDA is expected to be in the range between €700 million and €1,200 million in 2020; free operating cash flow (FOCF) is expected to be in the range between €-200 million and €300 million in 2020; in 2020, the return on capital employed (ROCE) is projected between -1 to 4 per cent; and capital expenditures are reduced by around €200 million and are now expected to amount to around €700 million in FY 2020.

The company reports that this update takes into account the negative impact of the coronavirus pandemic as it is foreseeable at present, and assumes a recovery of the current situation starting in Q3 2020.

Fibre2Fashion News Desk (JL)