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Covestro Stock Shows Convincing Performance At First Listing Anniversary

Independent and successful - and on the stock market as well
Share price more than doubled - outperformed benchmark indices
Finances strengthened - investments made in company's future
Growth course set to continue - forecast for 2016 raised in July
2016-10-06 18:51 5617

LEVERKUSEN, Germany, Oct. 6, 2016 /PRNewswire/ -- It was one year ago to the day, on October 6, 2015, that Covestro debuted on the stock exchange. For Covestro, formerly Bayer MaterialScience, it was the beginning of a new era as an independent company and a step that has enabled it to play to its strengths faster, more effectively and more flexibly in the global competitive environment.

Covestro Stock Shows Convincing Performance At First Listing Anniversary
Covestro Stock Shows Convincing Performance At First Listing Anniversary

The driver of Covestro's success is its new vision: to make the world a brighter place. "This vision has spurred us all on. We want to use our innovative technologies and products to help meet the challenges of the 21st century  -- climate change, the diminishing availability of resources, and the expanding global population, for example -- with products that benefit society and reduce pollution," said CEO Patrick Thomas.

It is a commitment from which shareholders can also benefit: at EUR 26, the first quoted price for Covestro stock a year ago was substantially higher than the issue price of EUR 24. Since then, Covestro has performed well on the stock market: the current stock price of more than EUR 50 is more than twice the issue price.

"The rise in the stock price reflects Covestro's outstanding performance. Over the last 12 months, we have outperformed every index where we are represented and which is relevant to us. Every Covestro employee has good reason to be proud of this," said Frank H. Lutz, the company's CFO and Labor Director.

Proceeds from the Covestro IPO, which amounted to around EUR 1.5 billion, were used primarily to repay debt to the Bayer Group to achieve an investment-grade rating. In June, Moody's has confirmed Covestro's Baa2 rating. Loans from Bayer have been repaid in full and Covestro is listed on both the STOXX Europe 600 and MDAX indices. Covestro further strengthened its already sound finances in spring 2016 with a bond issue for a total of EUR 1.5 billion, a move that gave the company even greater financial flexibility.

The company has already made use of that freedom, deciding in June to expand production capacity at its Brunsbuttel (Germany) site. Between now and 2018, a sum in the low hundreds of millions EUR will be invested there to double production capacity to 400,000 metric tons of MDI per year, a raw material used in the manufacture of polyurethane.

At the same time, Covestro will continue to enhance its international presence. In response to rising demand, it opened a new large-scale facility in Shanghai in July, which will boost annual capacity by 50,000 metric tons of HDI, a raw material used in the manufacture of coatings and adhesives.

In addition, Covestro is deploying CO2 on an industrial scale for the first time in the manufacture of plastics: it has invested around EUR 15 million at its Dormagen (Germany) site to produce an innovative foam component containing 20 percent CO2, saving the corresponding amount of crude oil, the raw material traditionally used in the manufacturing process. Covestro sees considerable potential here to enhance sustainability.

More good news came from Covestro's business operations, with the company raising its forecast for the current fiscal year as recently as July. "Covestro is posting excellent growth. Since the stock market flotation, we have performed very well, sold higher volumes and enhanced our profitability," added Lutz. "From this strong position, we have paid our shareholders a dividend from the outset and plan to pay attractive dividends going forward."

The company continues to see potential for improvement. "Despite everything we have achieved so far, we have not reached all our goals, particularly in our business processes and some of our internal structures," explained Lutz. So there could be a few more chapters to come in the company's success story: the global economy is forecast to grow by an average annual rate of 2.5 percent until 2020, while demand in the areas in which Covestro is active is expected to increase by an average of 4.0 percent a year.

About Covestro:

With 2015 sales of EUR 12.1 billion, Covestro is among the world's largest polymer companies. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, electrical and electronics, construction and the sports and leisure industries. Covestro, formerly Bayer MaterialScience, has 30 production sites around the globe and as of the end of 2015 employed approximately 15,800 people (full-time equivalents).

This press release is available for download from the Covestro press server at www.covestro.com. Photos are available there for download as well. Please mind the source of the pictures.

Find more information at www.covestro.com.
Follow us on Twitter: www.twitter.com/CovestroGroup

Forward-looking statements

This press release may contain forward-looking statements based on current assumptions and forecasts made by Covestro AG. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Covestro's public reports which are available on the Covestro website at www.covestro.com. Covestro assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

Photo - http://photos.prnasia.com/prnh/20161006/0861610319

Source: Covestro
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