The German polymer manufacturer Covestro, headquartered in Leverkusen, has released its full-year 2025 results, painting a stark picture of operational challenges. The company reported a net loss that deepened significantly to €644 million, accompanied by an almost nine percent decline in revenue. This financial downturn coincides with a period of major corporate transition, including a push by majority shareholder XRG to acquire remaining minority stakes and impending changes to the company’s leadership team.
The detailed figures underscore a severe operational crisis, with a particularly weak final quarter substantially dragging down the annual performance.
Full-Year and Fourth Quarter Performance
For the entire 2025 fiscal year, Covestro’s EBITDA plummeted by 31 percent to €740 million. While this result fell within the company’s narrowed October forecast range of €700 to €800 million, the free operating cash flow turned negative, standing at -€283 million. No dividend will be paid for 2025.
The fourth quarter proved especially difficult, with the net loss nearly doubling to €378 million, up from €192 million in the same period the previous year. Quarterly revenue fell by 13.7 percent to €2.9 billion, while EBITDA was cut in half to just €91 million. This sharp decline was primarily driven by substantial price reductions across the business and unfavorable currency exchange effects.
Segment Analysis and Market Pressures
Both of Covestro’s core divisions suffered under a difficult market environment marked by overcapacity, pricing pressure, and protectionist trade policies.
- The Performance Materials segment saw revenue drop by twelve percent to €6.1 billion. Its EBITDA contracted by 34 percent to €375 million, pressured by lower margins and costs associated with the STRONG transformation program—including the closure of a facility in Maasvlakte operated jointly with LyondellBasell.
- The Solutions & Specialties segment recorded a 5.5 percent revenue decrease to €6.6 billion. EBITDA here declined by eight percent to €681 million, though higher sales volumes provided some offset.
An additional significant burden was a fire at the Chempark Dormagen site in July 2025, which idled several plants. Covestro stated the negative financial impact reached the low triple-digit million-euro range.
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Corporate Control and Leadership Changes
A major shift in ownership was finalized in December 2025 with the completion of the strategic partnership with XRG. The investor from the United Arab Emirates now controls 95.1 percent of Covestro’s shares. Following a €1.17 billion capital increase that bolstered the equity base, XRG initiated a squeeze-out procedure for the remaining minority shareholders in January, a move supported by Covestro’s management and supervisory boards.
Concurrently, the company has applied to move its listing from the Prime Standard to the General Standard on the Frankfurt Stock Exchange, a step viewed as reducing its public market profile.
These structural changes are accompanied by a leadership transition. CEO Markus Steilemann will not renew his contract beyond May 2028, and CFO Christian Baier is set to depart the company in September 2026.
Cautious Outlook for the Coming Year
In a notable shift, Covestro has refrained from issuing specific quantitative forecasts for 2026. The company stated it expects EBITDA to remain approximately at the prior year’s level, with a potential deviation in the single-digit percentage range. Management anticipates a clear improvement in free operating cash flow and capital return.
The rationale for this cautious guidance was decidedly downbeat, with the company noting that a sustainable recovery in global demand is not yet in sight. The market environment continues to be shaped by the same challenging headwinds experienced in 2025.
While the STRONG transformation program achieved cost savings of €275 million by the end of 2025, with a target of €400 million in annual savings by the end of 2028, questions remain about whether this will be sufficient to steer Covestro onto a stable course given the persistently difficult industry landscape.
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