Covestro Q2 Sales Down 8.4 Percent EBITDA Drops to €270 Million Outlook Cut Amid Tariff Shock and Price Squeeze

Covestro’s Q2 2025 results reveal a sharp setback as global headwinds—including sudden US tariff hikes and persistent oversupply—dragged group sales down 8.4% to €3.4 billion and EBITDA down 15.6% to €270 million. Net loss narrowed year-on-year to -€59 million, but free operating cash flow worsened to -€228 million. While volumes held steady, lower average selling prices and currency swings weighed heavily on performance.

CEO Dr. Markus Steilemann flagged the unexpected impact of escalating tariffs, which hammered US-bound exports and triggered a global supply glut, slashing prices across key markets. Although Covestro hit the upper end of its guidance thanks to a €44 million bonus provision reversal, the company now expects full-year EBITDA of €700–1,100 million, down from a previous €1–1.4 billion range, and has revised its free cash flow outlook to -€400 to €100 million.

The Functional Materials division took the brunt, with Q2 sales sliding 11.8% to €1.6 billion and EBITDA down to €149 million, hurt by margin erosion and transformation costs. In contrast, Solutions & Specialties saw sales dip only 5.4% to €1.7 billion, with EBITDA inching up to €175 million, buoyed by solid volumes and lower transformation expenses.

Covestro is pushing ahead with its “STRONG” transformation program and has moved to acquire Swiss film maker Pontacol, eyeing synergy in specialty films. Meanwhile, Monique Buch will take over as Chief Commercial Officer for Solutions & Specialties from August, strengthening the group’s commercial leadership.

For H1 2025, group sales slid 4.8% to €6.9 billion, EBITDA fell to €407 million, and free cash flow worsened to -€481 million—underscoring relentless price and margin pressure. Despite market turbulence, Covestro’s focus on strategic transformation and disciplined execution may prove decisive for navigating a challenging global landscape.