Covestro buyback after “strongest” ever quarter
Building on positive first-half trends, third-quarter earnings (EBITDA) at the Leverkusen-based materials company came in 50.2% higher at €862 million, on sales of €3.5 billion, 16.9% higher than in the same period last year.
In a 24 Oct announcement, the polyurethanes, polycarbonate and coatings major linked the gains to “ongoing robust demand” in its main customer-industries and positive margin performance.
With core volumes up by just 2.6%, the higher sales at Covestro were mostly due to improved selling prices, particularly in the polyurethanes segment, with a ‘positive effect’ of 18.4%.
Encouraged by this performance, Covestro's management has decided to start a share-buyback for either up to €1.5 billion or up to 10% of the outstanding stock capital.
“We are currently enjoying tremendous growth momentum and we are delivering records in revenues, profitability and cash generation,” said CEO Patrick Thomas. [This has provided] the opportunity to return significant amounts of cash to our shareholders while preserving the ability to consider bolt-on acquisition opportunities.”
Covestro is also working on a strategy to build on its current momentum, with ‘digitization’ – of business processes, customer interfaces and business models – integral to its corporate plans, the company’s statement continued.
“Currently, we are developing the new online platform which is expected to generate around €1 billion in sales as early as the end of 2019,” explained Dr. Markus Steilemann, member of the board of management overseeing marketing, sales and innovation.
This article is only available to subscribers - subscribe today
Subscribe for unlimited access. A subscription to European Rubber Journal includes:
- Every issue of European Rubber Journal (6 issues) including Special Reports & Maps.
- Unlimited access to ERJ articles online
- Daily email newsletter – the latest news direct to your inbox
- Access to the ERJ online archive