Significant Events

War in Ukraine

The Russian war against Ukraine, which began in February 2022, has had a notable impact on the global economy and also influenced Covestro’s business situation. Currently, Covestro is not affected directly by the conflict, because less than 1% of Group sales are generated in Russia, Belarus and Ukraine combined. The existing trade accounts receivable were evaluated and impaired, if needed. Covestro does not operate any production facilities in these three countries, only a single sales support office with 12 employees in Russia. The sanctions imposed on Russia and Belarus by the international community therefore only minimally affect Covestro’s business. The worldwide consequences for the energy and raw material markets and on supply chains do, however, influence Covestro’s business.
See “Opportunities and Risks.”

Covestro reacted to the humanitarian crisis in Ukraine and its neighboring countries by donating aid for this purpose. We have made available €250,000 to UNO-Flüchtlingshilfe, the German partner organization to the United Nations High Commissioner for Refugees (UNHCR). Covestro also has provided its companies in Slovakia and Poland an additional €40,000 to donate to local aid organizations.

Coronavirus Pandemic

Restrictive measures introduced by some countriesto combat the coronavirus pandemic affected the global economy in the first quarter of 2022. The health, safety, and hygiene measures implemented by Covestro are regularly reviewed and modified to address current conditions. Depending on the local situation in each case, some staff, particularly employees in administrative departments, continue to work from home. Whereas employees in the EMLA and NA regions were gradually returning to the workplace, the situation in APAC, particularly China, has deteriorated, with stricter measures again in place. Production at our sites was not affected by the pandemic in the first quarter of 2022, although initial logistical bottlenecks emerged at the Shanghai (China) site at the end of the first quarter of 2022.

Share Buyback Program

On February 28, 2022, Covestro AG’s Board of Management resolved to initiate a share buyback program in view of the company’s successful business performance. The total volume of the program is approximately €500 million (not including ancillary transaction costs), and it is expected to be completed within two years. The repurchased shares will then be retired and the capital stock reduced accordingly. Share buybacks began in March 2022. By the end of the first quarter of 2022, Covestro AG had acquired 1,011,703 shares valued at €48 million.
Additional information is available at: www.covestro.com/en/investors/share-performance/share-buyback

New Climate Targets

In the course of Covestro’s efforts to make plastics production fully circular, the company communicated new climate targets on March 1, 2022. The Group is striving to become climate neutral and to reach net-zero greenhouse gas (GHG) emissions* by the year 2035. Covestro plans to reduce direct GHG emissions from its own production activities (Scope 1) and indirect GHG emissions from external energy sources (Scope 2) by 60% to 2.2 million metric tons of CO₂ equivalents by the year 2030. In the long term, Covestro’s goal is to use up to 100% renewable energy such as wind and solar power as well as alternative raw materials such as biomass, waste, CO₂ and hydrogen in its production processes. A target for the long-term reduction of indirect GHG emissions from upstream and downstream processes in the value chain (Scope 3) will follow in the year 2023.

Extension of the Revolving Credit Facility

In March 2022, the second of two agreed options was exercised to extend the term of the five-year, €2.5 billion syndicated revolving credit facility obtained in fiscal 2020 by another year until March 2027. This facility provides a back-up cash reserve and is linked to an environmental, social and governance (ESG) rating.
See “Financial Management” in the Annual Report 2021.