Materials manufacturer Covestro delivered the strongest quarter in the company's history in the third quarter of 2017 as the positive trend of the first six months carried on.
At EUR 491 million, net income was up 89.6% on the prior-year quarter. At the same time, EBITDA was 50.2% higher, and sales rose 16.9% over the same period the previous year. Core volumes increased 2.6%. The boost in sales was primarily due to higher selling prices, mainly in the Polyurethanes segment, with a positive effect of 18.4%.
FOCF amounted to EUR 658 million, up 1.9% over the prior-year quarter. Based on these strong results, Covestro decided to review its announced target to deliver EUR 5 billion of cumulative FOCF until year-end 2021. However, on Group level, the company reiterates its guidance for the full year 2017.
This outstanding performance is attributable to the ongoing robust demand in the company's main customer industries and positive margin performance, also mainly in the Polyurethanes segment.
"We are currently enjoying tremendous growth momentum and we are delivering records in revenues, profitability and cash generation. The extraordinary cash generation provides us, earlier than originally expected, with the opportunity to return significant amounts of cash to our shareholders while preserving the ability to consider bolt-on acquisition opportunities," says CEO Patrick Thomas. "Therefore we decided to start a share buyback for either up to EUR 1.5 billion or up to 10% of the outstanding stock capital without further delay."
"We are actively working on a strategy update to further benefit from the generational opportunity our current momentum offers. Digitization will be an integral part of our corporate strategy. We aim to give our customers a simpler, more efficient way to shop for our standard products. Currently, we are developing the new online platform which is expected to generate around one billion euros in sales as early as the end of 2019," explains Dr. Markus Steilemann, member of the Board of Management overseeing marketing, sales and innovation.
In this context, Covestro has identified three dimensions of digitization: digital business processes, digital customer experience and new, digital business models.
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