Covestro (1COV) Q4 2025 earnings summary

Executive summary

• 2025 was marked by a challenging market environment with significant pricing pressure and adverse FX, leading to a 9% year-over-year sales decline to EUR 12.9 billion.

• EBITDA fell 30.9% year-over-year to EUR 740 million, within guidance, as margin pressure persisted.

• Transformation efforts, including the STRONG program, delivered EUR 275 million in savings, partially offsetting margin pressure.

• Net income was negative at -EUR 644 million, reflecting lower EBIT and impairment losses.

• Strategic milestones included a partnership with XRG, acquisitions of Pontacol and Vencorex, and continued focus on sustainability and operational excellence.

Financial highlights

• Sales declined 9% year-over-year to EUR 12.9 billion, mainly due to lower selling prices and FX impacts; volumes were stable at -0.9%.

• EBITDA dropped from EUR 1.1 billion in 2024 to EUR 740 million in 2025, reflecting margin pressure and restructuring costs.

• Free operating cash flow was -EUR 283 million, with Q4 showing a positive swing due to disciplined working capital and investment management.

• Investments/capex totaled EUR 770 million, in line with guidance.

• Earnings per share declined to -EUR 3.39 from -EUR 1.41 year-over-year.

Outlook and guidance

• 2026 EBITDA expected to be within the 2025 range, with possible single-digit percentage deviation.

• Significant year-over-year increase anticipated in free operating cash flow and ROCE over WACC.

• Sustainability targets include greenhouse gas emissions between 3.9 and 4.5 million tons.

• Mark-to-market EBITDA for FY 2026 projected at approximately EUR 0.8 billion.