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BASIC INDUSTRIES: Covestro (COVEGR Baa2/NR/NR): 2Q24 Results

BASIC INDUSTRIES

Increasing volumes gives hopes of green shoots in the sector, but for now cash flow guidance disappoints. Marginal negative for spreads.

  • Small revenue miss, with higher volumes but lower prices YoY.
  • EBITDA beat by 3% on better-than-expected margins.
  • H1 FOCF deteriorated YoY from -€149mn to -€276mn with WC buildup. Leverage increases to 3.2x from 2.7x at FY23.
  • FY24 EBITDA guidance narrowed to the downside, from €1-1.6bn to €1-1.4bn. FOCF guidance lowered from €0-300mn to -€100-100mn. Revising down market growth for autos, up for construction and electronics.

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