Covestro AG · VIE:1COV
Covestro — Q2 2017 Earnings Presentation
15 slides from Covestro's earnings presentation, Jul 25, 2017
Slide 1: Strong earnings momentum continues – Financial Highlights Q2 2017
Strong earnings momentum continues Financial Highlights Q2 2017 covestro.com │ July 25, 2017│ Q2 2017 Investor Conference Call
Slide 2: Forward-looking statements
Forward-looking statements 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 situati
Slide 3: Q2 2017 Key Highlights
Q2 2017 Key Highlights Strong earnings momentum continues Constrained core volume growth (-1.6% Y/Y) 10th consecutive quarter with Y/Y EBITDA improvement (€848m; 56% Y/Y) EPS increase to €2.39 (112% Y/Y) FOCF increase to €319m (35% Y/Y) Guidance for FY 2017 unchanged 3 │ July 25, 2017 │ Q2 2017 Inve
Slide 4: Q2 2017 & 6M 2017 – Sales per Region
Q2 2017 & 6M 2017 – Sales per Region Solid volume growth in all regions in 6M 2017 Constrained growth in Q2 2017 Solid growth in 6M 2017 in € million / in € million / China China Core volume Core volume 687 1,440 growth Y/Y Vol. +1.6% growth Y/Y Vol. +9.4% APAC APAC 1,124 EMLA 2,301 EMLA Vol. -0.5%
Slide 5: Q2 2017 – Sales Bridge
Q2 2017 – Sales Bridge Constrained volume growth and strong pricing Sales Bridge Highlights in € million +33 3,498 Strong pricing and higher industry +458 FX utilization • Higher selling prices positively impacted sales by 15.3% Y/Y +17 Product mix upgrades 2,990 Volume Price • Core volume growth (i
Slide 6: Q2 2017 – EBITDA Bridge
Q2 2017 – EBITDA Bridge Strong positive pricing delta EBITDA Bridge Highlights in € million Pricing Delta +€238m Improving cash margin +458 -220 • Positive pricing delta driven by TDI & MDI +48 848 • Selling price increases could more than compensate for higher raw material prices Raw Other Material
Slide 7: Q2 2017 – Group Results
Q2 2017 – Group Results Continued margin expansion Net Sales and Core Volume Growth Highlights in € million / changes Y/Y 9.1% 9.0% • Above GDP core volume growth (in kt) of 8.4% 7.7% 4.8% 3.5% in 6M 2017 -1.6% • Slightly declining core volumes in Q2 mainly due to constrained product availability 2,
Slide 8: Q2 2017 – PUR Segment Results
Q2 2017 – PUR Segment Results Polyurethanes – Structurally improving margins in MDI Net Sales and Core Volume Growth Highlights in € million / changes Y/Y • Solid core volume growth of 2.1% Y/Y in 10.3% 9.0% 9.0% 6.8% 6M 2017 2.4% -2.3% • Slight core volume decrease of 2.3% Y/Y in Q2 due to constrai
Slide 9: Q2 2017 – PCS Segment Results
Q2 2017 – PCS Segment Results Polycarbonates – Steady high margin business Net Sales and Core Volume Growth Highlights in € million / changes Y/Y 11.6% 12.8% 14.7% • Strong core volume growth of 7.5% Y/Y in 8.5% 8.5% 6M 2017 0.7% • Core volumes stable with 0.7% Y/Y in Q2 2017 due to high prior-year
Slide 10: Q2 2017 – CAS Segment Results
Q2 2017 – CAS Segment Results Coatings, Adhesives, Specialties – Quarter affected by volume phasing Net Sales and Core Volume Growth Highlights in € million / changes Y/Y 8.1% • Solid core volume growth of 2.3% Y/Y in 3.5% -2.8% -1.8% 0.0% -3.0% 6M 2017 • Core volumes decreased by 3.0% Y/Y in Q2 201
Slide 11: 6M 2017 – Free Operating Cash Flow
6M 2017 – Free Operating Cash Flow Strong FOCF generation Free operating cash flow development Highlights in € million • Working capital to sales ratio* at 18.8%, FOCF 320 -2% 314 +69% 530 slightly above the targeted range of 15-17% • Capex of €166m, among others for the MDI expansion in Brunsbüttel
Slide 12: June 30, 2017 – Total Net Debt
June 30, 2017 – Total Net Debt Strong balance sheet Total net debt Highlights in € million • Total net debt to EBITDA ratio* slightly 2,708 -530 reduced to 0.9x 274 -102 -42 2,353 • Pension provisions decreased slightly to 45 €1,167m due to higher interest rates in 1,499 Germany 1,186 • Equity ratio
Slide 13: Guidance 2017
Guidance 2017 Fully on track FY 2016 Guidance FY 2017* 1-6 2017 Low- to mid-single-digit Core Volume Growth +7.5% +3.5% percentage increase Y/Y Ø 2014-2016: Significantly above the average FOCF €530m €881m of the last three years ROCE 14.2% Significantly above the 2016 level n.a. Additional financia
Slide 14: Q2 2017 – Summary
Q2 2017 – Summary Strong earnings momentum continues Solid core volume growth above global GDP in H1 2017 despite constrained volumes in Q2 Strong earnings growth driven by positive pricing delta, improving product mix and high utilization rates Continued cash generation despite increasing capex and
Slide 15: Upcoming IR Events
Upcoming IR Events Find more information on investor.covestro.com Reporting dates • October 24, 2017 Q3 2017 Interim Statement • February 20, 2018 Q4 & FY 2017 Annual Report • April 26, 2018 Q1 2018 Interim Statement Annual General Meeting • April 13, 2018 Annual General Meeting, Bonn Broker confere