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covestro.com
Annual Stockholders’ Meeting2016Patrick Thomas, CEOFrank H. Lutz, CFO
Year of changeCovestro launched successfully
Bayer MaterialScienceis now
│ Annual Stockholders’ MeetingMay 3, 2016
│ Annual Stockholders’ Meeting
To make the world a brighter place
May 3, 2016
Global playerPartner of choice for more than 10,000 customers
May 3, 2016 │ Annual Stockholders’ Meeting
Automotive ConstructionElectronics
Sports and leisureHealth Fashion
Clear strategyFocus on long-term profitable growth
1. Harnessing growth potential
May 3, 2016 │ Annual Stockholders’ Meeting
2. Focus on sustainability
3. Innovation is core element
4. Efficient production
5. Competitive costs
Harnessing growth potentialProducts and solutions addressing global challenges
Higher productivity
• “Smart” intermediates improve paintwork
• Shorter cycle times due to faster drying
• Superior coating properties: better adhesion and self-healing
May 3, 2016 │ Annual Stockholders’ Meeting
Focus on sustainabilityPreserve the environment, advance society, add value
Clean technologies
• Covestro supports Solar Impulse on its journey around the world without fuel
• High-tech polymers reduce the weightof aircraft and protect pilots
• “Flying laboratory” to explore potential new applications
May 3, 2016 │ Annual Stockholders’ Meeting
Innovation is core elementImprovement of products and processes
Broader raw material base
• Carbon dioxide as a substitute for crude oil in polymer production
• New technology more environmentally friendly than standard process
• New foam component with 20 percent carbon dioxide soon to be launched
May 3, 2016 │ Annual Stockholders’ Meeting
Efficient productionImprove efficiency while upholding high safety and environmental standards
Optimization of facility downtimes
• First facility downtimes handled using new management system
• Faster planning and execution, safer and more cost efficient
• Global leadership in downtime management
May 3, 2016 │ Annual Stockholders’ Meeting
Competitive costsContinuous optimization to achieve cost leadership
Streamlined structures
• Consolidated distribution support for 27 countries and 140 employees
• One company – continued local presence with 27 branches
• Simplified workflows, reduced administration costs
May 3, 2016 │ Annual Stockholders’ Meeting
COVESTROSUCCESSFULLY EN ROUTE
May 3, 2016 │ Annual Stockholders’ Meeting
2015 – HighlightsFinancially strong in first year
Solid core volume growth of 2.7% year on year
Adjusted EBITDA 41% higher than 2014
Record free operating cash flow of €964 million
Adjusted ROCE of 9.5% clearly above cost of capital of 7.2%
May 3, 2016 │ Annual Stockholders’ Meeting
2015 – Sales and earningsSolid core volume growth and significant improvement in earnings
+2.7% +41.3% +3.3pp
2014 20152014 20152014 2015
6.2%
+208%
2014 2015
May 3, 2016 │ Annual Stockholders’ Meeting
Core volumes Adjusted EBITDA ROCEkilotons € million
FOCF€ million
4,3354,454
1,161
1,641
9.5%
964
313
2015 – SegmentsThree profitable areas
€560 million(>200%)
Polyurethanes
Polycarbonates
Coatings, Adhesives, Specialties
+1.8%
+2.7%
€624 million(+5.4%)
€491 million(+12.4%)
+5.2%
Core volumes Adjusted EBITDA
May 3, 2016 │ Annual Stockholders’ Meeting
2015 – Factors in earnings growthStrong pricing as a driver
Derivation of adjusted EBITDA€ million
2014 2015
+41.3%
Price advantage:€296 million
Currency
Volume
Price Variable costs
Others
1,161
1,641+1,201 -122
+229 +77 -905
May 3, 2016 │ Annual Stockholders’ Meeting
2015 – Free Operating Cash Flow New record
Free Operating Cash Flow
181
415313
964
2012 2013 2014 2015
May 3, 2016 │ Annual Stockholders’ Meeting
€ million
+129% -25%
+208%
DividendAttractive dividend policy
Goal: consistent dividend
payments
Payout ratio of 30% – 50%
of net earnings
First dividend of €0.70 per share
after three months as a listed company
May 3, 2016 │ Annual Stockholders’ Meeting
Share price developmentCovestro outperforms the market (October 6, 2015 = 100)
May 3, 2016 │ Annual Stockholders’ Meeting
80
90
100
110
120
130
140
Covestro AG DAX Index MDAX Index STOXX Europe 600 Chemicals
ASMMay 3, 2016
Turbulence on Chinese marketsStart of 2016
IPO October 6, 2015
*Compared with Covestro’s issue price of €24
+43.8%*
Q1 2016 – Sales and earnings Sustained volume growth and earnings improvement
+8.5%
Q1 2015 Q1 2016Q1 2015 Q1 2016
+29.3%
393
5081,080
1,171
May 3, 2016 │ Annual Stockholders’ Meeting
Core volumes EBITDA kilotons € million
Outlook for 2016Covestro is on track
Free Operating Cash Flow At a high level,above the average of recent years
ROCE Premium earned on cost of capital
Core volume growth Mid-single-digit increase
May 3, 2016 │ Annual Stockholders’ Meeting
Forecast
May 3, 2016 │ Annual Stockholders’ Meeting
To make the world a brighter place
