Covestro : Non-Deal Debt Roadshow March 2021

Debt Investor Roadshow

Non-deal related

covestro.com

March 2021│ Debt Investor Roadshow

1

AGENDA

Covestro at a glance 3

Strategy centered on Sustainabilty 8

Segment Overview 14

Financials 21

Credit highlights 24

Covestro at a glance

covestro.com

Covestro is well positioned for sustainable growth driven by innovation

Diversified global player with strong capital structure and commitment to solid Investment Grade rating

Sustainability is an integral part of our strategy

• • Enhanced strategy - Focus on sustainable growth, circularity and transforming the company to

  "Become the best of who we are"

• • Tap into attractive new markets with innovative products to address sustainability profitably and accelerate the transition to a fossil-free economy

• • Global KPI & incentive system to align employees towards cash flow, profitability & sustainable growth

High diversification across regions, products and industries

• • Integrated sites in all key regions provide advantages of scale, synergies and a natural hedge of tariffs and independence through globally integrated supply chains

• • Broad geographic footprint and diversified customer portfolio

• • Covestro delivers a wide variety of applications with several thousands different products/grades

Leading market	• A globally leading supplier across the entire portfolio
positions &	• A leading cost position across business segments & regions
Cash cost	• Agile cost management and ability to respond to external
leadership
shocks

• • History of strong cash generative business earnings and exceeding its capital cost over the cycle

  Committed to maintaining a solid Investment Grade rating

• • Prudent balance sheet management with strong financial metrics and low leverage ratios

• • Track record of supporting a solid Investment Grade rating with decisive management actions

• • Revised dividend policy to align cash outflow with both creditor and shareholder interests

A leading high-tech material solutions provider

Covestro at a glance

Well diversified by geography

% of 2020 Group sales

Well spread EBITDA share by business units

% of 2020 Group EBITDA(a)

Well diversified by end-markets

% of 2020 Group sales

NAFTA

EMLA

PCS

CAS

PUR

€10.7bn Sales

~5 million tons

PUR and PCS nameplate capacity

€1.5bn EBITDA

13.7% EBITDA margin

€0.5bn FOCF 36% of EBITDA

Employees ~16,500 FTEs

Headquarters in Leverkusen, Germany

8 world-scale production sites

Europe, United States and Asia

Notes:Based on Covestro Annual Report 2020; EMLA = Europe, Middle East, Africa, Latin America; NAFTA = USA, Canada, Mexico; APAC = Asia, Pacific

(a) The graph does not include "Others / Consolidation" of -3.1%

Covestro integrated sites in all key regions provide advantages of scale and synergies

Strong cash generative business maintained in challenging environment

Elevated financial performance since IPO in 2015

∅ €1,247

∅ €367

In € millions 3,435

Adjusted EBITDAFOCF

1,678

1,606

1,641

∅ 964€1,176

∅€2,345 2,014 1,843

3,200

1,669 1,604

2019

1,472

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2020

Notes:Financials prior to FY2012A based on Bayer AG's MaterialScience segment financials as published by Bayer AG. Financials for FY2012A - 2014A based on Covestro Combined Financial Statements. Financials for FY2015A - FY2020A based on Covestro Annual Reports

Strategy centered on Sustainabilty

covestro.com

Our new strategy - setting the path for tomorrow

! MILESTONE 2020

LEAP transformation initiated

! MILESTONE 2020

Acquisition of RFM(a) announced

! MILESTONE 2020

First alternative feedstock sourced

Note:

(a) Announced acquisition of DSM's Resins and Functional Material (RFM) business subject to regulatory approval

Covestro innovative products tap into attractive new markets

Structural growth drivers

UN SDGs(a)

NEEDS

SAMPLE APPLICATIONS

Notes:

(a) Most impacted goals out of 17 Sustainable Development Goals, set by the United Nations' "2030 Agenda for Sustainable Development"

Accelerate the transition to a fossil-free economy

We will be fully circular

ALTERNATIVE RAW MATERIALS	INNOVATIVE RECYCLING	RENEWABLE ENERGIES
Replacing fossil resources	Energy-efficient technologies	Wind energy
Example Bio-based car top coat	Example Recycled polycarbonates	Example Ørsted wind energy supply

• ▪ Enabling customers to optimize the CO2 footprint of their products

• ▪ New hardener for automotive coatings with carbon basis up to 70% from renewable raw materials

• ▪ No compromises with regards to protective functions and appearance

• ▪ Collaboration with automotive group Audi and the coating experts at BASF Coatings

• ▪ New polycarbonate grades from post- ▪ One of the world's largest corporateconsumer recycled (PCR) content, e.g. water bottles, CDs and auto-motive lighting

• ▪ Closed loop recycling system to collect, sort, shred and clean material

• ▪ Recycled granules are finally compounded with virgin resins

• ▪ PCR grades are used in various electr. applications for a second lifesupply contracts for offshore wind energy entered with Ørsted in December 2019

• ▪ Starting in 2025, Ørsted to provide 100 MW of electricity for 10 years

• ▪ Newly built wind farm in North Sea, implemented without public funding

• ▪ Supply to cover c. 10% of electricity consumed by Covestro in Germany

JOINT SOLUTIONS

Cross-industry collaboration Example PUReSmart consortium

• ▪ PUReSmart to seek ways of transition from current linear lifecycle of polyurethane (PU) products to a circular economy model

• ▪ Consortium as an end-to-end collaboration spanning the entire PU reprocessing value chain

• ▪ Nine partners from six different countries, coordinated by the Belgian company Recticel

Becoming more customer-centric

Transformation program LEAP in 2021-2023

Notes:

TPU = Thermoplastic Polyurethanes

HIGHLIGHTS

• Comprehensive redesign of structures and processes as well as manage-ment and governance mechanisms • By July 2021, new organizational set- up to be implemented • Bundle entities based on business specifics and customer needs while fostering entrepreneurship: ̶ Solutions and Specialties differentiated chemical products and application technology services, with focus on innovation and customer interaction ̶ Performance Materials focus on reliable supply of standard products at competitive market prices with lowest internal costs

Shown future entities and structures do not necessarily reflect segmentation of future financial reporting

Covestro's rating results and index memberships

as of February 2021

RATING / INDEX

2016

2017

2018

2019

2020SCORING

A

BENCHMARK

ABBB

A

BBB

AAA - CCC

in Specialty Chemicals

B-

B-

B-

A+ - D-

Prime Status

New methodology(a)

80 23.3

74

75

20.0

max. 100 Points 0 - 100 Points

(the lower the better)

in Specialty Chemicals

80

max. 100 Points

Gold RankingInclusion in FTSE4Good Index(b)

Notes:

• (a) Methodology reversed - the lower the score the better

• (b) Since December 2016, reviewed in June 2020

Segment Overview

covestro.com

A leading global position across the entire portfolio

World-wide industry positions and entry requirements

#1 in PolyurethanesCapacitysharein2020(a)

A leading producer of PU raw materials

MDI

TDI

Others

Others

Entry requirements

• • Sizable investment requirement

• • Intense pressure to advance process technology

  • • Persistent demand for product and process innovation

  • • Efficient feedstock integration required

• • Global asset base to enable customer proximity

Notes: Source:

(a) Covestro position based on total nameplate capacity at year end 2020 relative to competitors Covestro estimates

#1 in Polycarbonates

A leading supplier of PC

#1 in Coatings, Adhesives & Specialties

A leading producer of Aliphatic isocyanate derivatives & Polyurethane dispersions

Polyether polyols

PC

Aliphatic isocyanates

Polyurethane dispersions

• • Economies of scope

• • Formulation and application know-how

• • Close customer relationships and long-term R&D collaborations

• • Operation of global business platform

A leading producer globally and inventor of PU(a)

Polyurethanes (PUR) at a glance

PRODUCTS

Polyurethane rigid foam is an excellent insulation material and adds to high energy efficiency in cooling units and buildings.

As soft foam polyurethane provides comfort, for example in mattresses, car seats and upholstery.

Covestro develops and produces the components of this versatile material.

KEY CUSTOMER INDUSTRIES:

€5.0bn

Sales 2020

€625m

EBITDA 2020

€14m

FOCF 2020

Notes:

(a) Based on total combined nameplate capacity for MDI, TDI and polyether polyols at year end 2020 as per Covestro estimates

A leading producer globally and inventor of PC(a)

Polycarbonates (PCS) at a glance

PRODUCTS

As a true high-tech material, polycarbonate is not only very robust, break-proof and light-weight, but also offers a high degree of design flexibility.

Polycarbonate is available in all colors ranging from crystal clear to deep black. It is an excellent substitute for traditional material such as glass or metal.

This allows for a wide variety of application possibilities ranging from vehicles to smartphones and laptops as well as lenses or large roofs.

KEY CUSTOMER INDUSTRIES:

€3.0bn

Sales 2020

€553m

EBITDA 2020

€327m

FOCF 2020

Notes:

(a) Based on nameplate capacity at year end 2020 as per Covestro estimates

Performance materials for coatings, adhesives and specialties

Coating, Adhesives, Specialties (CAS) at a glance

PRODUCTS

There is a vast application range of coatings and finishes made of Covestro polyurethane raw materials. They are used for protection and decoration.

In addition, the company produces pre-products for adhesives, sealants and elastomers as well as specialty films.

Coating, Adhesives, Specialties (CAS) also supplies materials for cosmetics, textiles and medical goods.

KEY CUSTOMER INDUSTRIES:

€2.0bn

Sales 2020

€341m

EBITDA 2020

€189m

FOCF 2020

Announced acquisition of DSM Resins & Functional Material (RFM)

Strategic growth opportunity through complementary product offerings

PRODUCTS

A leader in water-based hybrid technologies combining water-based acrylic, polyurethane and alkyd technologies

Strong, global position in powder coating resins, optical fiber coatings

RFMs excellent know-how and market position in non-solvent based products expands and complements Covestro's offering, creating a leader in the attractive growth market for sustainable products

KEY CUSTOMER INDUSTRIES:

€0.9bn

Sales 2020(b)

€115m

EBITDA 2020(b)

€91m

FOCF 2020(b)

Note:

• (a) Announced acquisition of DSM's Resins and Functional Material (RFM) business subject to regulatory approval

• (b) Source: DSM

Investment highlights of the announced DSM RFM acquisition

Building a leading sustainable coating resins player

Creating a global leader in coating resins

Diversifying CAS portfolio towards a more balanced product and industry mix

Shifting CAS portfolio to high growth markets driven by sustainability

Significant synergies leading to attractive valuation multiple

Committed to a solid Investment Grade rating

Note:

(a) Announced acquisition of DSM's Resins and Functional Material (RFM) business subject to regulatory approval

Financials

covestro.com

Solid business and financial performance in challenging times

Financials 2020 at a glance

Sales and Core Volume Growth(a)

in € million / changes Y/Y 2.0%FY 2019Sales

FY 2020

Core Volume Growth Y/Y

Free Operating Cash Flow(a)

in € million

1,383

910

473

1,234

704

530

FY 2019

Cash flows from operating activitiesCapEx

FY 2020

Free Operating Cash Flow

Notes: (a) Covestro Annual Report 2020

EBITDA and Margin(a,b)

in € million / margin in percent

12.9%

13.7%

1,604

1,472

FY 2019EBITDA

FY 2020

EBITDA Margin

Comments

• • Core Volume Growth decline in FY 2020 was limited to -5.6% despite large double-digit decline in Q2 2020 in all regions

• • Increased Free Operating Cash Flow and EBITDA margin despite Covid-19 challenges in 2020

(b) EBITDA defined as EBIT plus "depreciation, amortization and impairments"; EBITDA Margin defined as EBITDA divided by Sales

Excellent financial metrics

Financial performance 2020 at a glance

FY 2019

FY 2020

Leverage Ratio(a,c)

1.8x

1.7x

FY 2019

Notes: (a) Covestro Annual Report 2020 (b) "Net financial debt" is defined as "noncurrent financial liabilities" plus "current financial liabilities" plus "receivables from derivatives" minus "cash and cash equivalents" minus "other financial assets"; (c) "Leverage ratio" is defined as ("net financial debt" plus "provisions for pensions and other post-employment benefits")/EBITDA; EBITDA defined as EBIT plus "depreciation, amortization and impairments"; (d) "Cash and cash equivalents" plus "Current financial assets"

2021

2022

2023

2024

Comments

2025

≥ 2026

• • Equity strengthened through an ABB in Oct. 2020 in connection with the financing of the announced acquisition of DSM RFM business

• • Covestro maintained a moderate leverage ratio and a well-spread maturity profile

• • Increased level of liquid funds(d) of €2.5bn allow all-cash funding of purchase price for announced DSM RFM acquisition of €1.6bn and upcoming bond maturity in October 2021

• • Committed Revolving Credit Facility of €2.5bn remained undrawn

FY 2020

Credit highlights

covestro.com

Covestro well positioned for sustainable growth driven by innovation

Securing profitable growth underpinning solid Investment Grade rating

Leading and defendable global industry positions

Innovation and cost leader generating strong profitability and cash flows

High diversification across regions, products, customers and industries

Transformation program LEAP to exploit Covestro's full potential, together with DSM RFM acquisition

Proven agile cost management

Ability to respond to external shocks by including actions with all stakeholders

New dividend policy 35-55% payout ratio of net income aligns earnings and cash outflows and balances creditor and investor interests

Enhanced strategy introduced

Transforming the company with focus on sustainable growth, circularity and customer centricity

Disclaimer

This presentation (the "Presentation"), and the information contained therein, is not directed to, or intended for viewing, release, distribution, publication or use by (directly or indirectly, in whole or in part), any person or entity that is a citizen of, or resident or located in, the United States, Australia, Canada or Japan or any jurisdiction where applicable laws prohibit its viewing, release, distribution, publication or use.

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This Presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Company, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of the Company, or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements.

These factors include those discussed in Company's public reports which are available on the website of the Company atwww.covestro.com. The Company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

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