Covestro AG · VIE:1COV
Covestro — Q2 2025 Earnings Presentation
56 slides from Covestro's earnings presentation, July 2025
Slide 1: Navigating volatile market environment
Navigating volatile market environment Roadshow presentation covestro.com Q2 2025 │ IR Roadshow Presentation 0
Slide 2: Covestro investment highlights
Covestro investment highlights Group financials Q2’25 Segment overview Background information covestro.com Q2 2025 │ IR Roadshow Presentation 1
Slide 3: Covestro is diversified across geographies and end-markets
Covestro is diversified across geographies and end-markets Key performance indicators and sales split €14bn €1.1bn €0.1bn -7pp Sales EBITDA FOCF ROCE above WACC 2024 2024 2024 2024 2024 sales Automotive & Sports / leisure, transportation cosmetics, health, APAC EMLA 18% diverse industries Other 30%
Slide 4: Covestro is a global leader across its entire portfolio
Covestro is a global leader across its entire portfolio World-wide industry positions and production capacities KEY MARKETS Aliphatic Polyurethane MDI TDI Polyether polyols PC isocyanates dispersions CAPACITY SHARE IN 2023(1) Others Others 9% Others 7% 17% Others 21% 20% Others Others 59% 9% 36% 35%
Slide 5: A clear connection to customers and our ambitions
A clear connection to customers and our ambitions Our strategy – setting the path for tomorrow Strategy Updated Customer Be a reliable partner for our Grow our product portfolio based Develop sustainable solutions Financial and perspective customers on customers needs for and with our customers non-
Slide 6: Climate neutrality with existing technologies and assets
Climate neutrality with existing technologies and assets Covestro greenhouse gas emissions UPSTREAM DOWNSTREAM Suppliers, Clients, use Transportation Transportation raw materials phase, end of life Indirect emissions Indirect emissions Indirect emissions Indirect emissions Direct emissions Indirect
Slide 7: Sustainable manufacturing and renewable energy to lead path
Sustainable manufacturing and renewable energy to lead path Climate neutrality target for GHG emissions scope 1 and 2 GHG emissions in million metric tons, scope 1 and 2 EMISSION REDUCTION MEASURES 0.1 • Three main levers make a vital contribution to reduce GHG emissions: More sustainable manufactur
Slide 8: Numerous measures effectively reduce GHG emissions
Numerous measures effectively reduce GHG emissions Climate neutrality target for GHG emissions scope 1 and 2 MORE SUSTAINABLE MANUFACTURING RENEWABLE ELECTRICITY RENEWABLE STEAM Reducing nitrous oxide EMLA(1): Solar&wind electricity PPA’s Converting steam generation with ENGIE for 60% of site’s powe
Slide 9: Continuously improving global renewable electricity footprint
Continuously improving global renewable electricity footprint Additional PPAs became active end 2024 MILESTONES TO RENEWABLE ELECTRCITY SUPPLY ELECTRICITY TRANSFORMATION PROGRESS GWh 80% PPAs with BP, Engie and Ørsted for 650 EMLA GWh solar and wind energy: +10% 45% of electricity for Antwerp site s
Slide 10: Target reduction of 10m tons GHG until 2035 and net-zero until 2050
Target reduction of 10m tons GHG until 2035 and net-zero until 2050 Climate neutrality target for GHG emissions scope 3 GHG emissions in million metric tons, scope 3 - categories 1, 3, 4, 12(1) EMISSION REDUCTION MEASURES • Four main levers make a vital contribution to reduce 3.6 scope 3 GHG emissio
Slide 11: Strategic levers supporting transformation towards climate neutrality
Strategic levers supporting transformation towards climate neutrality Target for GHG emissions scope 3 FOCUS ON SUPPLIERS ADVANCING MAKE PROJECTS FOCUS ON CUSTOMERS OTHER MEASURES Broaden engagement with Continue innovation & Identify first mover suppliers that achieve digital R&D in renewable custo
Slide 12: Re-shaping the PU value chain for soft foams into a closed loop
Re-shaping the PU value chain for soft foams into a closed loop Innovative recycling / joint solutions COVESTRO TECHNOLOGY FUTURE PU SOFT FOAM LOOP • Chemical recycling of polyurethane (PU) mattress foams, turning Conceptual illustration M cer attre waste into valuable resources End r me du ss Co •
Slide 13: Leading cost positions across markets and regions
Leading cost positions across markets and regions Covestro cash cost positions NORTH AMERICA EUROPE ASIA HIGHLIGHTS Cash cost Cash cost Cash cost • Covestro MDI is one of the low-cost producers with cost MDI(1) advantage of ~20% versus the average of 5 least leader Chinese (landed China) Chinese lag
Slide 14: Significant downgrade in most industry growth expectations
Significant downgrade in most industry growth expectations Key industry growth AUTOMOTIVE CONSTRUCTION FURNITURE ELECTRICALS GDP In % Y/Y In % Y/Y In % Y/Y In % Y/Y +200% -67% -29% -78% -11% 0.6 0.6 1.5 5.2 2.7 2.4 0.5 1.0 3.7 0.2 0.5 0.5 2.4 2.8 2.6 2.3 2.5 0.7 0.6 0.4 Feb-25 Mar-25 May-25 Jul-25 F
Slide 15: GDP outlook for 2025 with mostly reduced growth
GDP outlook for 2025 with mostly reduced growth Global demand development KEY CUSTOMER INDUSTRIES 2024 Y/Y(1) 2025 Y/Y(2) 2025e(3) UPDATE Global GDP +2.8% +2.8% +2.5% Automotive -0.6% +2.7% +0.6% +8.3% +22.4% +24.0% EV / BEV Construction -2.4% +0.2% +0.6% Residential -5.5% -1.5% -1.7% Furniture -0.5
Slide 16: FY 2025 guidance adjusted
FY 2025 guidance adjusted Full year guidance 2025 Guidance FY 2025 FY 2024 as of Feb. 26 as of May 6 as of July 31 HIGHLIGHTS EBITDA €1,071m €1,000 to 1,600m €1,000 to 1,400m €700 to 1,100m Mark-to-market (M2M): FOCF €89m €0 to 300m €0 to 300m €-400 to +100m • Mark-to-market (M2M) EBITDA for FY 2025
Slide 17: Short-term measures mobilized to counter market headwinds
Short-term measures mobilized to counter market headwinds Break-down of FY 2025 EBITDA guidance adjustment in € million HIGHLIGHTS Market headwinds Short-term measures Decisive action to counter (~ -700m€*) (~ +300m€*) current market headwinds ~1,300 STRONG in FY2025 with ~-100 ~€250m cumulated EBIT
Slide 18: STRONG transformation in progress
STRONG transformation in progress Transformation program STRONG TARGETS FOR COST MEASURES 2024-2028E HIGHLIGHTS target delivered • STRONG was launched in June 2024 to shape target pending 400 Mio. € Covestro for sustainable competitiveness target ambition o Effective structures and efficient process
Slide 19: Majority of cash allocated to growth
Majority of cash allocated to growth Balanced use of cash CAPEX DIVIDEND PORTFOLIO SHARE CAPITAL € € • Covestro’s industry and cost • Policy: 35-55% payout of net • Acquisition of DSM’s Resins • Share buyback of €1.5bn leadership make growth income and Functional Material executed in 2017-2018 inves
Slide 20: Significant investments into growth
Significant investments into growth Group capex and D&A HISTORIC AND PROJECTION HIGHLIGHTS in € million 180%• Growth capex of around €3.3bn from 1350 160% 2015 to 2024 140%• D&A 2024 included impairment write-off of 984 120% €142m ~900 910 894 700- • Planned investments 823 832 100% Capex = D&A 752
Slide 21: Dividend based on net income payout ratio
Dividend based on net income payout ratio Dividend development HIGHLIGHTS 55% • Net income determining factor for the 55% dividend 40% • Committed to a payout ratio of 35% to 35% 1616 55%, related to dividend over net income o Higher payout intended in years with peak earnings, while ratio towards 6
Slide 22: Ongoing shift to high-margin business
Ongoing shift to high-margin business Portfolio management DIVESTMENTS ACQUISITIONS Additive Manufacturing business Cumulated, in € million DSM Resins & Functional Materials business in € million April 2023 April 2021 932 Dubai system house(1) July 2021 ~650 Europe Polycarbonates sheets business Sep
Slide 23: Navigating volatile market environment
Navigating volatile market environment Q2 2025 Highlights Flat volume development burdened by economic and geopolitical uncertainties Sales lower at €3.4bn caused by lower prices and unfavorable FX EBITDA Q2 2025 of €270m above mid-point of guidance range helped by internal measures FY 2025 guidance
Slide 24: Group financials Q2'25
Covestro investment highlights Group financials Q2’25 Segment overview Background information covestro.com Q2 2025 │ IR Roadshow Presentation 23
Slide 25: EBITDA supported by bonus provision release
EBITDA supported by bonus provision release Group results – Highlights Q2 2025 SALES HIGHLIGHTS Q2 2025 in € million / changes Y/Y • Year-over-year, declining sales (-8.4%) with negative pricing (-4.8%) and negative FX (-3.2%) -6.2% -0.8% 1.0% 0.9% -0.9% -8.4% while flattish volumes (-0.4%) • Quarte
Slide 26: Volumes burdened by tariffs announcements
Volumes burdened by tariffs announcements Q2 2025 – Regional split Sales volume Y/Y HIGHLIGHTS • Mostly declining volume development across the industries: China €741m • Electro high single-digit % decline EMLA €1,349m • Furniture/wood mid-single-digit % decline Volume -6.2% • Auto low single-digit
Slide 27: Sales declining mainly due to negative pricing and FX
Sales declining mainly due to negative pricing and FX Q2 2025 – Sales bridge in € million HIGHLIGHTS Volume flat -8.4% • Volume flattish at -0.4% Y/Y • Performance Materials with 2.2% Y/Y decline and 3,690 Solutions & Specialties with 1.0% Y/Y gain in volumes -18 Pricing negative • Pricing affected
Slide 28: EBITDA burdened by negative pricing delta
EBITDA burdened by negative pricing delta Q2 2025 – EBITDA bridge in € million HIGHLIGHTS Positive volume -15.6% • Focus on profitable business with above average growth whereas loss making business was Pricing delta reduced 24 -100 320 Negative pricing delta 39 270 • Negative pricing delta due to o
Slide 29: EMLA facing volume weakness
EMLA facing volume weakness H1 2025 – Regional split Sales volume Y/Y HIGHLIGHTS • Year-over-year, mostly negative volume development across the industries: China €1437m • Electro mid-single-digit % decline EMLA €2,871m • Auto low single-digit % decline Volume -3.0% • Furniture/wood low single-digit
Slide 30: Sales mainly burdened by lower prices and FX
Sales mainly burdened by lower prices and FX H1 2025 – Sales bridge in € million HIGHLIGHTS Volume flat -4.8% • Volume flattish at -0.5% Y/Y • Performance Materials with 2.1% Y/Y decline 7,200 while Solutions & Specialties with 1.1% Y/Y increase -32 Pricing negative 6,856 -216 • Pricing affected sal
Slide 31: EBITDA declined with negative pricing delta and other items
EBITDA declined with negative pricing delta and other items H1 2025 – EBITDA bridge in € million HIGHLIGHTS Positive volume -31.4% • Focus on profitable business with above average growth whereas loss making business was Pricing delta reduced 54 -173 593 Negative pricing delta • Negative pricing del
Slide 32: Seasonally negative FOCF due to lower EBITDA and higher capex
Seasonally negative FOCF due to lower EBITDA and higher capex Historical FOCF development in € million HIGHLIGHTS 1,429 • FOCF H1 2025 decreased Y/Y to €-481m (H1 530 232 2024: €-276m) 138 89 • Working capital to sales ratio(3) decreased to 19.0% v (H1 2024: 19.8%), driven by lower absolute working
Slide 33: Negative net income due significantly lower EBIT
Negative net income due significantly lower EBIT P&L statement H1 2025 In € million H1 2024 H1 2025 % of H1’25 SALES Y/Y HIGHLIGHTS Sales 7,200 6,856 100% -4.8% Impairments • Q1 2025 impairment loss of EBITDA 593 407 5.9% -31.4% €15m due to closure of the D&A excl. impairments -421 -437 -6.4% 3.8%
Slide 34: Total net debt increase caused by negative FOCF
Total net debt increase caused by negative FOCF June 30, 2025 – Total net debt in € million HIGHLIGHTS 481 35 • Total net debt to EBITDA ratio(2) of 3.8x at the 3,325 end of H1 2025 compared to 3.2x at the end of -24 H1 2024 -100 • Increased net debt to EBITDA ratio reflects the 2,933 cyclical natur
Slide 35: Segment overview
Covestro investment highlights Group financials Q2’25 Segment overview Background information covestro.com Q2 2025 │ IR Roadshow Presentation 34
Slide 36: Differentiation based on customer proximity and innovation
Differentiation based on customer proximity and innovation Solutions & Specialties PRODUCTS SUCCESS FACTORS BENEFITS FOR GROUP Differentiated polymer products • Maintain leadership in Implement a pull supply chain differentiated niche SALES 2024 (in € million) Use deep customer understanding to appl
Slide 37: Solutions & Specialties – Sales affected by FX and lower prices
Solutions & Specialties – Sales affected by FX and lower prices Segment results – Highlights Q2 2025 SALES HIGHLIGHTS Q2 2025 in € million / changes Y/Y • Sales decreased by 5.4% Y/Y, driven by FX -6.2% -3.3% -2.0% -2.9% -1.2% -5.4% (-3.4%), lower prices (-3.0%) while positive volumes (1.0%) • Quart
Slide 38: Continuing shift to differentiated polycarbonate
Continuing shift to differentiated polycarbonate Solutions & Specialties: high-growth contributor Engineering Plastics POLYCARBONATE 2024 SALES €2.9bn ENGINEERING PLASTICS (EP) INDUSTRY +4% CAGR 2024-2029e Covestro polycarbonate volume split by segment CUSTOMER INDUSTRIES GROWTH DRIVERS • Global tre
Slide 39: EBITDA margin to grow
EBITDA margin to grow Solutions & Specialties segment target EBITDA AND MARGIN – SOLUTIONS & SPECIALTIES TARGET MARGIN in € million • EBITDA margin 2024 decreased Y/Y due to 14.7% restructuring efforts and 13.7% cyclical demand weakness 9.9% 9.6% 11.2% Value- RFM based • EBITDA margin growth driven
Slide 40: Standard products with reliable supply and lowest cost
Standard products with reliable supply and lowest cost Performance Materials PRODUCTS SUCCESS FACTORS BENEFITS FOR GROUP Polyurethane and polycarbonate standard • Maintain leadership in products as well as basic chemicals Ensure high asset utilization Covestro core industries Integrated end-2-end pl
Slide 41: Performance Materials – EBITDA decline due negative pricing delta
Performance Materials – EBITDA decline due negative pricing delta Segment results – Highlights Q2 2025 SALES HIGHLIGHTS Q2 2025 in € million / changes Y/Y • Sales declining (-11.8%) Y/Y, driven by lower -5.7% 2.5% 4.1% 5.2% -0.7% -11.8% prices (-6.6%), FX (-3.0%) and volumes (-2.2%) • Sequentially,
Slide 42: MDI market moving to balance
MDI market moving to balance Performance Materials: MDI industry demand and supply MDI DEMAND DEVELOPMENT (2019 - 2029e) MDI SUPPLY DEVELOPMENT (2019 - 2029e) in kt(1) in kt(2) BASE % growth as CAGR % growth as CAGR BASE 5% HIGH 6% HIGH ~3-4% ~5% ~4% 3% LOW ~3% 4% LOW 10,260 8,790 2019 2024 2029e 20
Slide 43: TDI market moving toward balance
TDI market moving toward balance Performance Materials: TDI industry demand and supply TDI DEMAND DEVELOPMENT (2019 - 2029e) TDI SUPPLY DEVELOPMENT (2019 - 2029e) in kt(1) in kt(2) % growth as CAGR % growth as CAGR BASE BASE ~3% 4% HIGH ~3-4% 4% HIGH ~1% 2% LOW ~1% 3% LOW 3,260 2,670 2019 2024 2029e
Slide 44: Covestro closes loss making propylene oxide production
Covestro closes loss making propylene oxide production Propylene oxide (PO) demand and supply situation GLOBAL PO PRODUCTION LANDSCAPE COVESTRO PO CAPACITY ADJUSTMENT in million tons EMEA Economic situation • Increased invest into petrochemical sites in China led +13% to lower propylene feedstock co
Slide 45: Background information
Covestro investment highlights Group financials Q2’25 Segment overview Background information covestro.com Q2 2025 │ IR Roadshow Presentation 44
Slide 46: Led by a diverse, international management team
Led by a diverse, international management team Covestro senior management BOARD OF MANAGEMENT Chief Executive Chief Financial Chief Commercial Chief Technology Officer Officer Officer Officer Dr Markus Steilemann Christian Baier Monique Buch Dr Thorsten Dreier Nationality: German Nationality: Germa
Slide 47: Regulatory approvals progressing as expected
Regulatory approvals progressing as expected Progress on XRG transaction as of July 31, 2025 SHARE OWNERSHIP REGULATORY APPROVALS MERGER CONTROL APPROVALS Foreign Direct Investment (FDI) / Indonesia (post closing only) Foreign Subsidies Regulation (FSR) Vietnam Germany 3.44% Brazil EU 81.77% 4.82% F
Slide 48: Covestro ESG rating results and index membership
Covestro ESG rating results and index membership As of July 2025 Scoring ESG Ratings & Range 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Distinction Indices (Worst → Best) Update Leadership D- to A - - - - - A- A- A- pending (1) Level 73 80 72 71 0 to 100 (2) AA AA AA A A A A A MSCI ESG CCC to
Slide 49: Global energy prices rise following gas price development
Global energy prices rise following gas price development Energy cost development QUARTERLY ENERGY COST DEVELOPMENT GLOBAL ENERGY COST HIGHLIGHTS in € million in € billion • Global energy bill in FY 2024 2025 1.8 2024 of €1.1bn, energy 317 ~1.1 demand increased by 259 259 1.0 1.1 1.0 224 243 239 ~7%
Slide 50: Synergies in scale, process technology and chemical know-how
Synergies in scale, process technology and chemical know-how One chemical backbone across all segments INFRA- FINAL RAW MATERIALS CORE UNITS / TECHNOLOGY STRUCTURE PRODUCT Phosgene(4) Toluene DNT TDA HIGHLIGHTS Dinitrotoluene Diaminotoluene TDI • State-of-the-art asset base with leading process • Pr
Slide 51: Synergies from chemical backbone and complementary technologies
Synergies from chemical backbone and complementary technologies Solutions & Specialties backward integration and value chain INFRASTRUCTURE MAIN RAW MATERIALS COVESTRO VALUE CHAIN (simplified) Performance Materials Phosgene(2) Phosgene(2) Phosgene(2) Toluene / Benzene • Premises sTDI sMDI sPC Nitric
Slide 52: Entire organization aligned for performance and sustainability
Entire organization aligned for performance and sustainability Group Profit Sharing Plan (PSP) proposed for 2025-2027 BOARD OF MANAGEMENT STI PROPOSAL Old PSP system Based on three- EBITDA FOCF ROCE CO2 2022-2024 year business plan Proposed PSP adjustment 2025-20271 Mid-term component – 50% 1 One-ye
Slide 53: High accumulated free operating cash flow
High accumulated free operating cash flow Development of last five years 2020 2021 2022 2023 2024 Sales (€ million) 10,706 15,903 17,903 14,377 14,179 • Volume y/y (%) -5.1 +6.5 -5.0 -6.8 +7.4 • Price y/y (%) -5.7 +34.7 +10.1 -11.0 -8.0 • FX y/y (%) -1.6 -0.8 +5.9 -2.2 -0.8 • Portfolio y/y (%) -1.3
Slide 54: Historical share price performance
Historical share price performance Covestro € share price since IPO Mid‘18 Oct’17 Ramp-up of Apr‘22 100 Announced new PU and Aug‘20 COVID lockdown in €1.5bn PC market Post- Jun’23 Shanghai / pay out of share- capacities COVID XRG 90 €3.40 dividend per share buyback rebound market starting rumors Feb
Slide 55: Upcoming IR events
Upcoming IR events Find more information on covestro.com/en/investors REPORTING DATES • October 30, 2025 Q3 2025 Quarterly Statement • February 26, 2026 2025 Annual Report • May 5, 2026 Q1 2026 Quarterly Statement ANNUAL GENERAL MEETING • April 15, 2026 Annual General Meeting BROKER CONFERENCES • Se
Slide 56: Disclaimer
Disclaimer This presentation may contain forward-looking statements based on current assumptions and forecasts made by Covestro AG. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development