In the fourth quarter of 2017, German engineering plastics producer Covestro (Leverkusen; www.covestro.com) reported its most successful three-month reporting period ever, with a sales increase of 16.7% to EUR 3.5 bn year-on-year, driven both by higher selling prices and volumes. EBITDA more than doubled from EUR 390m to EUR 879m, while net income soared to EUR 566m from EUR 124m.

Propelled by the Polyurethanes segment with a 5.1% gain, company-wide core volume sales grew by 4.1% in Q4 2017. Polycarbonates saw a core volume growth of 3.7%. Overall, selling prices rose 17.4%, thanks mainly to a 25% upswing for Polyurethanes, while Polycarbonates prices rose 13%. Sales revenue of Polyurethanes came in 26% higher at EUR 1.9 bn, and revenues from Polycarbonates rose 12.7% to EUR 939m.

Altogether, 2017 was an outstanding year for the former Bayer MaterialScience. “We achieved an impressive result and significantly exceeded our overall targets,” said CEO Patrick Thomas, presenting results to journalists for the final time before he hands over to Markus Steilemann in summer 2018. Group sales for the full year grew 18.8% to EUR 14.1 bn, while EBITDA surged forward 70.6% to EUR 3.4 bn. Net income more than doubled to EUR 2 bn.

Both the Polyurethanes and Polycarbonates segments made solid full-year gains in 2017. With all regions contributing, core volumes in Polyurethanes improved by 3.4%, while EBITDA rose by 151% to EUR 2.2m, thanks to “significant” improvements in margins for MDI and TDI. The segment’s selling prices rebounded with a 27% gain after a decline of 6% in 2016. Along with higher sales volume, intake of EUR 39m from the divestment of a systems house in North America and a EUR 35m insurance reimbursement positively influenced the bottom line. Finally, the decision to continue MDI production in Tarragona / Spain – see Plasteurope.com of 13.12.2017 – led to a EUR 72m reversal of provisions set aside for the closure.

In Polycarbonates, core volumes rose 5% globally for the full year, with all regions contributing. EBITDA grew 21% to EUR 853m. Selling prices, driven mainly by increased demand in the automotive and E&E industries, rose 8% after a 4% slide a year earlier.

In 2018, Covestro expects to continue benefiting from growth in its main customer industries including automotive, furniture, construction and E&E, driven by sustainability trends such as e-mobility, energy-efficient construction and energy-saving LED lamps. Management is predicting a low- to mid-single-digit percentage increase in core volume growth. For the first quarter, however, EBITDA is forecast to be well above the 2017 quarter.

Sustainability is "firmly anchored" in the company's strategy, inline with the UN's goals on sustainable development. Chief commercial officer Steilemann says by 2025, Covestro wants to spend 80% of R&D expenditure on areas contributing to the UN sustainability goals. He also considers digitalisation as a key innovation driver, and the company will soon launch a digital marketplace, which is to simplify access to basic products and connect customers with Covestro as well as other providers. New digital business models, like the digital marketplace, are expected to generate cumulative sales of up to EUR 1 bn by the end of 2019.