Constant challenges from market environment and stable performance

The group's sales increased by 4.8% to 3.7 billion euros; the sales of core businesses remained stable; the EBITDA reached 859 million euros, the same as last year; the net profit increased by 1.0% to 496 million euros; the free operating cash flow decreased by 12.2% to 578 million euros due to the increase of investment Cost saving target: 350 million euros per year. Despite the increasingly challenging market environment, kostrong continued its positive performance since 2018 and achieved steady performance in the third quarter. The group's third quarter sales rose 4.8% year-on-year to 3.7 billion euros, driven by higher sales prices and volumes. In spite of the limited product supply capacity, the sales volume of core business increased by 0.2% slightly, maintaining the same level of last year. The group's EBITDA was EUR 859 million, also at the same period last year.

Profit margin of polyurethane business decreased, but the impact was offset by the increased profit margin of polycarbonate business. Net profit increased 1.0% to 496 million euros. Earnings per share rose 6.6% to 2.59 euros as a result of the ongoing Share Buyback program. Free operating cash flow (focf) fell 12.2% to € 578m due to increased investment. "We continue on the path to success," said Dr. Markus steilemann, chief executive of covestro. The identified investment projects will guide us and lay the foundation for future organic growth. We will expand our capacity in all business sectors to consolidate our leading position in highly attractive industries and grow faster than global economic growth in these areas. In addition, we will improve the cost structure in the medium term through the efficiency improvement plan. " Cisco recently announced an investment of about 1.5 billion euros to expand the MDI capacity of the base in bedun, Texas, USA, and build a world-class plant with a capacity of 500000 tons / year. The project is expected to be put into production in 2024.

At the same time, the company is promoting investment projects at the bases in blombert, Germany, taragona, Spain, Antwerp, Belgium and Caojing, China to improve the production capacity of MDI and its precursors, so as to benefit from global market growth. In the long run, the annual growth rate of MDI market is expected to be about 5%, about 2 percentage points higher than the global GDP growth rate. Covestro is also committed to developing innovative products to help achieve sustainable development. For example, the company is developing some new thermoplastic polyurethane products made of carbon dioxide, and the first products in this series have been launched in autumn 2018. Compared with traditional materials, these new polyurethanes have less ecological impact and help meet the demand for more sustainable solutions. "The third quarter was in line with our expectations," said Dr. Thomas Toepfer, chief financial officer of Cisco, confirmed in the full year financial guidance. We note that the challenges facing the global economy are increasing and that our product supply capacity in Europe and Asia has also been affected in the past quarter. Nevertheless, we can keep our sales stable. In this context, today we confirm the financial guidance for 2018. "

Covestro expects the sales volume of its core business to achieve a low to medium single digit percentage growth in 2018. Free operating cash flow is expected to exceed EUR 2 billion. The company expects that the return on occupied capital (roce) will be the same as that in 2017, while maintaining the EBITDA higher than that in 2017. Kostron continued to push forward its share buyback plan in the third quarter and launched the third batch of buybacks in August. Since the start of the scheme, a total of about 1.2 billion euros (nearly 8% of equity) of shares have been repurchased. Kostron's overall goal is to buy back up to EUR 1.5 billion or 10% of the issued equity by mid-2019. Cost saving target: 350 million euros per year. At the same time, kostrong has made good progress on another strategic lever: by strengthening cross department collaboration and increasing the application of digital solutions, the efficiency and efficiency are expected to be significantly improved. By 2021 at the latest, the annual cost savings can reach 350 million euros, with the goal of limiting the growth of operating costs. The measures identified are mainly aimed at permanently reducing non labor costs, but the company will still reduce about 900 full-time jobs globally, such as in the administrative field.

In Germany, the company has reached an agreement with the Works Council on the solution. Polycarbonate as well as coatings, adhesives and specialty chemicals saw strong growth in the third quarter, with polyurethane sales slightly down 1.2% to EUR 1849 million. The decrease in sales in EMLA (Europe, Middle East, Africa and Latin America except Mexico) and Asia Pacific was offset by growth in NAFTA (US, Canada and Mexico). The reasons for the decline include price changes, exchange rate effects and unplanned plant shutdowns. The core business sales of polyurethane business decreased by 2.0%. EBITDA in the business segment fell 21.5% to 432 million euros. The main reason is the rise in the purchase price of raw materials. The polycarbonate business segment continued to maintain strong growth in the third quarter, with sales up 11.3% to EUR 1038 million. The sales volume of core business increased by 2.6%, and the sales price also increased, which had a positive impact on the sales volume. Significant sales growth in EMLA and Asia Pacific offset the decline in NAFTA. The sector's EBITDA rose 49.3% to EUR 315 million, benefiting from higher profit margins and selling prices.

This result includes non recurring income of EUR 36 million from the sale of the US sheet business. Sales in coatings, adhesives and specialty chemicals increased 8.8% to EUR 606 million. The sector has grown in all three regions. In the third quarter, the core business sales of the business segment also increased significantly, up 7.2% from the same period last year. EBITDA rose 0.8% to 126 million euros, roughly the same level as last year. The successful performance in the first nine months of 2018. The performance in the first nine months of 2018 laid a solid overall foundation for the whole year. The cumulative sales volume of core business increased by 1.5% over the same period last year. Sales rose 6.9% to 11.3 billion euros, while EBITDA rose 13.7% to 2.9 billion euros. In addition, the company's free operating cash flow rose 9.9% to 1.3 billion euros.