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.