Gasgoo Munich- Covestro recently released its fiscal 2025 earnings report. Despite headwinds from a strained global market and a fire at its Dormagen chemical park, the company still met its established earnings before interest, taxes, depreciation, and amortization (EBITDA) targets.
The report shows sales fell 8.7% to 12.9 billion euros, driven largely by lower product prices across regions and currency fluctuations. EBITDA came in at 740 million euros—down from 1.1 billion euros a year earlier but landing within the 700 million to 800 million euro range the company outlined in October. The fire at the Dormagen chemical park forced multiple plants offline, costing the group hundreds of millions. Combined with broader market pressure, Covestro posted a net loss of 644 million euros and a negative free operating cash flow of 283 million euros. Both metrics, however, fell within expected ranges.
Image Source: Covestro
In fiscal 2025, Covestro accelerated its transformation, rolling out strategic initiatives and cost-cutting measures in tandem.
On the investment front, the company completed the acquisition of Pontacol AG in August, expanding its film portfolio into highly specialized multi-layer films and opening new opportunities in medical technology, mobility, and textiles. That same month, Covestro signed a deal with Vencorex to acquire two HDI derivative production sites in Rayong, Thailand, and Freeport, Texas. Slated to close in the first half of 2026, the transaction will bolster the group’s aliphatic isocyanate network and support the growth strategy of its Coatings & Adhesives segment.
Regarding efficiency, the STRONG transformation program launched in 2024 continued to advance. By the end of 2025, it had delivered roughly 275 million euros in cost savings. The initiative aims to achieve 400 million euros in annual savings globally by the end of 2028. Future efforts will focus on driving the transformation, optimizing organizational structures and processes, and integrating digital tools and artificial intelligence across all business areas.
December 10, 2025, marked a pivotal milestone in Covestro’s annual transformation. On that day, the group finalized a strategic partnership with XRG, completing a planned capital increase of 1.17 billion euros in December. The deal not only strengthened Covestro’s equity base but also significantly enhanced its financial flexibility amid a volatile market—laying the groundwork for the group to accelerate its "Sustainable Future" strategy.
Looking to fiscal 2026, Covestro anticipates the global market will remain fraught with challenges. Sustainable signs of recovery in global demand have yet to emerge, while overcapacity, persistent price pressure, and rising trade protectionism continue to constrain industry growth. Against this backdrop, the group decided to replace quantitative guidance with a qualitative assessment for EBITDA, free operating cash flow, and ROCE over WACC. Nevertheless, Covestro expects EBITDA to remain roughly flat compared to 2025, while free operating cash flow and ROCE over WACC should show significant improvement over the previous year.
