Covestro AG · VIE:1COV
Covestro — Q1 2018 Earnings Presentation
16 slides from Covestro's earnings presentation, Apr 26, 2018
Slide 1: Well on track – Financial Highlights Q1 2018
Well on track Financial Highlights Q1 2018 covestro.com │ April 26, 2018│ Q1 2018 Investor Conference Call 1
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: Q1 2018 Key Highlights
Q1 2018 Key Highlights Well on track Stable core volumes Y/Y EBITDA increase of 26% Y/Y to €1,063m EPS increase of 40% Y/Y to €3.24 FOCF increase of 73% Y/Y to €364m Guidance confirmed for FY 2018 3 │ April 26, 2018 │ Q1 2018 Investor Conference Call
Slide 4: Q1 2018 – Sales per Region
Q1 2018 – Sales per Region Core volumes on high previous year’s level Development in Q1 2018 Highlights in € million / Core volume growth Y/Y High basis in Q1 2017 • Sell out of production and inventories to satisfy pent-up demand after Force China 813 Majeure in Q4 2016 Vol. +3% • Ramp-up of new pr
Slide 5: Q1 2018 – Sales Bridge
Q1 2018 – Sales Bridge Strong pricing mitigated by considerable FX headwind Sales Bridge Highlights in € million +513 -258 Strong pricing and high industry utilization 3,779 3,586 -62 • Higher selling prices positively impacted FX Volume Price sales by 14.3% Y/Y • Sales volumes declined by 1.7% Y/Y
Slide 6: Q1 2018 – EBITDA Bridge
Q1 2018 – EBITDA Bridge Expanded pricing delta fully compensates considerable FX headwind EBITDA Bridge Highlights in € million Pricing Delta Improving cash margin +€390m +513 -123 • Positive pricing delta driven by PUR and -70 PCS -84 Raw 1,063 • Selling prices increased significantly more FX Mater
Slide 7: Q1 2018 – Group Results
Q1 2018 – Group Results Continued margin expansion Net Sales and Core Volume Growth Highlights in € million / changes Y/Y 8.9% • Stable core volumes (in kt) on high level: 7,000 6,000 2.6% 4.2% 0.0% 10.0% 5.0% PCS compensates for declines in PUR and -1.7% 5,000 4,000 0.0% CAS -5.0% • Sales increased
Slide 8: Q1 2018 – PUR Segment Results
Q1 2018 – PUR Segment Results Polyurethanes – record margins continued Net Sales and Core Volume Growth Highlights in € million / changes Y/Y • Slight decline in core volumes due to 6.3% 4.1% 5.3% constrained product availability -1.0% -2.9% • Sales increased by 7.1% Y/Y driven by price in all three
Slide 9: Q1 2018 – PCS Segment Results
Q1 2018 – PCS Segment Results Polycarbonates – Favorable pricing delta Net Sales and Core Volume Growth Highlights in € million / changes Y/Y • Solid core volume growth of 2.7% Y/Y 14.7% despite double-digit increase in Q1 2017 1.5% 3.7% 2.7% 0.7% • Sales increase by 8.3% Y/Y, mainly driven by highe
Slide 10: Q1 2018 – CAS Segment Results
Q1 2018 – CAS Segment Results Coatings, Adhesives, Specialties – Encouraging start to the year Net Sales and Core Volume Growth Highlights in € million / changes Y/Y 1,200 10.8% 20.0% 15.0% • Slight decline in core volumes, although on high previous year’s level 1,000 10.0% 800 -0.2% -1.0% -1.3% 5.0
Slide 11: Q1 2018 – Free Operating Cash Flow
Q1 2018 – Free Operating Cash Flow Strong FOCF despite higher working capital Free Operating Cash Flow development Highlights in € million • FOCF follows EBITDA development: FOCF FOCF 77 +174% 211 +73% 364 to EBITDA conversion rate increased to 34% vs. 25% in Q1 2017 • Working capital to sales ratio
Slide 12: Q1 2018 – Total net debt
Q1 2018 – Total net debt Strong balance sheet Total net debt Highlights in € million • Total net debt to EBITDA ratio* unchanged 106 1,480 1,470 at 0.4x 257 3 187 283 • Further decrease of net financial debt by 8 €96m, despite cash outflow for the share -364 buy-back • Repayment of a €500m bond out
Slide 13: Confirmation of 2018 guidance
Confirmation of 2018 guidance Well on track FY 2017 Guidance FY 2018 Low- to mid-single-digit Core Volume Growth +3.4% percentage increase Y/Y Ø 2015-2017: Significantly above the average FOCF €1,391m of the last three years ROCE 33.4% Approaching previous year’s level Additional financial expectati
Slide 14: Q1 2018 – Summary
Q1 2018 – Summary Well on track Stable core volumes despite high comparison basis Strong earnings growth driven by positive pricing delta and high utilization rates Continued strong cash generation despite increasing capex Attractive cash return to shareholders with a dividend of €2.20 per share for
Slide 15: Upcoming IR Events
Upcoming IR Events Find more information on investor.covestro.com Reporting dates • July 26, 2018 Half-Year Financial Report 2018 • October 25, 2018 Q3 2018 Interim Statement • February 25, 2019 Annual Report 2018 Capital Markets Day • June 28, 2018 London Broker conferences • May 15, 2018 Deutsche
Slide 16: Restatement information, effective Jan. 1, 2018
Restatement information, effective Jan. 1, 2018 Elastomers business shifted from PUR to CAS segment Fiscal Year 2017 In € million Q1 Q2 Q3 Q4 FY Sales 73 71 67 63 274 Elastomers EBITDA 14 7 7 5 33 16 │ April 26, 2018 │ Q1 2018 Investor Conference Call