COVESTRO AG EUR 5,000,000,000 Debt Issuance Programme
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2nd Supplement, dated September 7, 2018 to the Base Prospectus dated March 9, 2018 as supplemented by the
1st Supplement dated June 18, 2018
This document constitutes a supplement (the "Supplement") for the purposes of Art. 16 (1) of Directive 2003/71/EC of the European Parliament
and of the Council of November 4, 2003, as amended (the "Prospectus Directive") and Art. 13 (1) of the Luxembourg law on prospectuses for
securities (loi relative aux prospectus pour valeurs mobilières) dated July 10, 2005 as amended (the "Luxembourg Prospectus Law") which
implements the Prospectus Directive into Luxembourg law, to the base prospectus of Covestro AG, dated March 9, 2018, (the "Base Prospectus")
relating to issues of non-equity securities within the meaning of Art. 22 No. 6 (4) of Commission Regulation (EC) No. 809/2004 of April 29,
2004, as amended.
COVESTRO AG
(incorporated as a stock corporation (Aktiengesellschaft) in the Federal Republic of Germany)
EUR 5,000,000,000 Debt Issuance Programme
The Commission de Surveillance du Secteur Financier (the "CSSF") of the Grand Duchy of Luxembourg in its
capacity as competent authority under the Prospectus Directive has approved this Supplement as a supplement
within the meaning of Art. 16 (1) of the Prospectus Directive pursuant to article 13 (1) of the Luxembourg
Prospectus Law. By approving this Supplement, CSSF gives no undertaking as to the economic and financial
soundness of the operation or the quality or solvency of the Issuer.
The Issuer has requested the CSSF to provide the competent authorities in the Federal Republic of Germany
("Germany"), the Republic of Austria and The Netherlands with a certificate of approval attesting that this
Supplement has been drawn up in accordance with the Luxembourg Prospectus Law. The Issuer may request the
CSSF to provide competent authorities in additional host member states within the European Economic Area with
such notification.
Right to withdraw
In accordance with Article 13 paragraph 2 of the Luxembourg Prospectus Law, investors who have already
agreed to purchase or subscribe for securities before the Supplement is published have the right, exercisable
within two working days after the publication of this Supplement, to withdraw their acceptances, provided
that the new factor arose before the final closing of the offer to the public and the delivery of the securities.
The final date for the right of withdrawal will be September 11, 2018.
This Supplement together with the Base Prospectus, the 1st supplement to the Base Prospectus dated June 18, 2018
and the documents incorporated by reference are also available for viewing at www.bourse.lu.
The purpose of this Supplement is to supplement the Base Prospectus with information from the unaudited
consolidated interim financial statements of the Issuer as of and for the six-month period ended June 30, 2018 and
to amend other disclosure on the Issuer.
This Supplement is supplemental to, and should be read in conjunction with the Base Prospectus as supplemented
by the 1st Supplement dated June 18, 2018. Terms defined in the Base Prospectus have the same meaning when
used in this Supplement.
Covestro AG, Leverkusen ("Covestro AG" or the "Issuer", together with its consolidated subsidiaries, "Covestro
Group" or the "Group") with its registered office in Leverkusen, Germany accepts responsibility for the
information given in this Supplement.
The Issuer hereby declares that, having taken all reasonable care to ensure that such is the case, the information
contained in this Supplement for which it is responsible is, to the best of its knowledge, in accordance with the
facts and contains no omission likely to affect its import.The Arranger and the Dealers have not separately verified the information contained in this Supplement. Neither
the Arranger nor any of the Dealers makes any representation, expressly or implied, or accepts any responsibility,
with respect to the accuracy or completeness of any information contained in this Supplement. Neither this
Supplement nor any other financial statements are intended to provide the basis of any credit or other evaluation
and should not be considered as a recommendation by the Issuer, the Arranger or the Dealers that any recipient of
this Supplement or any other financial statements should purchase the Notes. Each potential purchaser of Notes
should determine for itself the relevance of the information contained in this Supplement and its purchase of Notes
should be based upon such investigation as it deems necessary. None of the Arranger or the Dealers undertakes to
review the financial condition or affairs of the Issuer during the life of the arrangements contemplated by this
Supplement nor to advise any investor or potential investor in the Notes of any information coming to the attention
of any of the Dealers or the Arranger.
To the extent that there is any inconsistency between any statement included in this Supplement and any statement
included or incorporated by reference in the Base Prospectus, the statements in this Supplement will prevail.
Save as disclosed on pages 2-17 of this Supplement, there has been no other significant new factor, material
mistake or inaccuracy since the publication of the Base Prospectus.
1. Notice – Benchmark Regulation
On page 3 of the Base Prospectus, the paragraph "BENCHMARK REGULATION - STATEMENT IN RELATION
TO ADMINISTRATOR'S REGISTRATION" shall be replaced by the following:
"BENCHMARK REGULATION - STATEMENT IN RELATION TO ADMINISTRATOR'S
REGISTRATION – Amounts payable under floating rate Notes issued under the Programme are calculated by
reference to (i) the Euro Interbank Offered Rate ("EURIBOR") which is provided by the European Money Markets
Institute ("EMMI") or (ii) the London Interbank Offered Rate ("LIBOR") which is provided by the ICE
Benchmark Administration Limited ("IBA"). As at the date of this Base Prospectus, EMMI does not appear on the
register of administrators and benchmarks established and maintained by the European Securities and Markets
Authority ("ESMA") pursuant to Article 36 of the Benchmark Regulation (Regulation (EU) 2016/1011) (the
"Benchmark Regulation") while IBA has been included therein as of 30 April 2018. As far as the Issuer is aware,
the transitional provisions in Article 51 of the Benchmark Regulation apply, such that EMMI is not currently
required to obtain authorisation or registration (or, if located outside the European Union, recognition, endorsement
or equivalence)."
2. Summary - Section B - Issuer - Element B.12
On pages 9 and 10 of the Base Prospectus, in Element B.12 of the Summary, the section "Selected historical key
financial information" shall be replaced by the following:
"
B.12 Selected historical key financial information
Consolidated Income Statement
For the six-month period Financial year ended
ended June 30, December 31,
2018 2017(1) 2017(1) 2016
(amounts in EUR million, earnings per
share in EUR) (unaudited) (audited)
Sales 7,642 7,084 14,138 11,904
Gross profit 2,814 2,338 4,830 3,293
EBIT(2) 1,733 1,375 2,808 1,331
Financial result (55) (88) (150) (196)
Income before income taxes 1,678 1,287 2,658 1,135
Income after income taxes 1,252 955 2,017 806
Basic earnings per share 6.31(3) 4.70 9.93(4) 3.93
Diluted earnings per share 6.31(3) 4.70 9.93(4) 3.93
(1) As of January 1, 2018, Covestro applied the new IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with
Costumers) accounting standard retroactively. Prior-year figures have not been adjusted.
(2) EBIT: income after income taxes plus financial result and income tax expenses.
(3) Weighted average number of outstanding no-par voting shares of Covestro AG in issue: 197,746,827 (previous year:
202,500,000).
(4) Weighted average number of outstanding no-par voting shares of Covestro AG in issue: 202,396,416 (previous year:
202,500,000).
2Consolidated Statement of Financial Position
As of June 30, As of December 31,
2018 2017(1) 2016
(amounts in EUR million) (unaudited) (audited)
Noncurrent assets 5,633 5,606 5,966
Current assets 5,269 5,735 4,268
Total assets 10,902 11,341 10,234
Equity 5,505 5,365 4,216
Equity attributable to Covestro AG
stockholders 5,474 5,335 4,189
Noncurrent liabilities 2,981 2,885 3,544
Current liabilities 2,416 3,091 2,474
Total equity and liabilities 10,902 11,341 10,234
(1) As of January 1, 2018, Covestro applied the new IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with
Costumers) accounting standard retroactively. Prior-year figures have not been adjusted.
Trend information
There has been no material adverse change in the prospects of Covestro AG since the date of the last
published audited consolidated financial statements dated December 31, 2017.
Significant change in the financial and trading position
Not applicable. There has been no significant change in the financial or trading position of Covestro
AG since the last unaudited consolidated financial information dated June 30, 2018.
"
3. Summary - Section B - Issuer - Element B.13
On page 10 of the Base Prospectus, in Element B.13 of the Summary, the section "Recent Events" shall be
replaced by the following:
"
B.13 Recent Events In the Polycarbonates segment, Covestro Group signed an
agreement on March 14, 2018, on the sale of assets and
liabilities (disposal group) of the North American
polycarbonates sheet business to Plaskolite LLC, Columbus
(United States). The transaction closed successfully on
August 1, 2018.
The Covestro Board of Management has resolved on
October 24, 2017 to buy back own shares worth a maximum
notional amount of EUR 1.5 billion or up to 10% of the
outstanding capital stock, depending on which value is
reached first. This decision is based on the authorization of
the Annual General Meeting of September 1, 2015. The
buyback of a first tranche of shares was concluded in
February 2018 and the buyback of a second tranche of shares
in July 2018. The third tranche is being carried out in the
period between August 13, 2018 and February 8, 2019.
On July 18, 2018, Covestro Group announced that it intends
to significantly expand its global film production to meet the
growing demand in all regions. In particular, capacity
expansions are planned at Map Ta Phut, Thailand,
Guangzhou, China, South Deerfield, USA, and Dormagen,
Germany. The total investment of more than EUR 100
million also includes the expansion of the associated
infrastructure and logistics.
On July 30, 2018, Moody's raised the credit rating of the
Issuer from Baa2 to Baa1 with stable outlook.
On August 13, 2018, MSCI raised the Issuer's sustainability
rating from BBB to A. The financial services provider's
reason for the upgrade was Covestro Group's stepped-up
focus on sustainable product solutions and technologies as
well as continual improvement in safety standards.
"
34. Summary - Section B - Issuer - Element B.16
On page 11 of the Base Prospectus, in Element B.16 of the Summary, the section "Major shareholders" shall
be replaced by the following:
"
B.16 Major shareholders On the basis of the notifications received by Covestro AG as
of the date of this Base Prospectus in accordance with the
German Securities Trading Act (Wertpapierhandelsgesetz -
WpHG) and pursuant to information provided by the
respective shareholders, the following shareholders directly
or indirectly hold more than 3 per cent. of Covestro AG's
ordinary shares. The percentage values shown in the table
below are based on the amount of voting rights last notified
to Covestro AG with regard to the stated reference date by
the respective shareholder pursuant to Sections 33 et seqq.
WpHG (without taking into account voting rights attached
to financial instruments) in relation to Covestro AG's share
capital as of the date of this Base Prospectus. It should be
noted that the number of voting rights last notified could
have changed since such notifications were submitted to
Covestro AG without requiring the relevant shareholder to
submit a corresponding voting rights notification if no
notifiable thresholds have been reached or crossed:
Actual (direct or indirect
ownership of Covestro
AG
Shareholder Share of voting rights
13,791,540 voting rights
Bayer AG
(6.81%)
10,455,558 voting rights
BlackRock Inc.
(5.16%)
Covestro AG (treasury 11,708,763 voting rights
shares) * (5.78%)
35,955,861 voting rights
Total
(17.75%)
* The voting rights of treasury shares are suspended.
"
5. Summary - Section B - Issuer - Element B.17
On page 12 of the Base Prospectus, in Element B.17 of the Summary, the section "Credit ratings of Covestro
AG or its debt securities" shall be replaced by the following:
"
B.17 Credit ratings of Covestro AG or its Moody's Investors Service Limited ("Moody's") has
debt securities assigned a "Baa1"1 rating (outlook stable) to Covestro AG.
1
The Credit rating included or referred to in this Base Prospectus has been issued by Moody's, which is established in the European Union and are registered
under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies and included in the list
of registered credit rating agencies published on the website of the European Securities and Markets Authority at
https://www.esma.europa.eu/supervision/credit-rating-agencies/risk.
Moody's defines "Baa2" as follows: "Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain
speculative characteristics. Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates
that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking
in the lower end of that generic rating category"
4[The [expected] rating of the Notes is [●]2 from [●]3.] [Not
applicable. The Notes are not rated.]
"
6. German Translation of the Summary- Abschnitt B - Emittentin - Element B.12
On pages 24 and 25 of the Base Prospectus, in Element B.12 of the German Translation of the Summary, the
section "Ausgewählte historische Finanzinformationen" shall be replaced by the following:
"
B.12 Ausgewählte historische Finanzinformationen
Konsolidierte Gewinn-und Verlustrechnung
Für den Sechsmonatszeitraum Für das Geschäftsjahr
endend am 30. Juni endend am 31. Dezember
2018 2017(1) 2017(1) 2016
(Beträge in Millionen Euro, Ergebnis
je Aktie in Euro) (ungeprüft) (geprüft)
Umsatzerlöse 7.642 7.084 14.138 11.904
Bruttoergebnis vom Umsatz 2.814 2.338 4.830 3.293
EBIT(2) 1.733 1.375 2.808 1.331
Finanzergebnis -55 -88 -150 -196
Ergebnis vor Ertragssteuern 1.678 1.287 2.658 1.135
Ergebnis nach Ertragssteuern 1.252 955 2.017 806
Unverwässertes Ergebnis je Aktie 6,31(3) 4,70 9,93(4) 3,93
Verwässertes Ergebnis je Aktie 6,31(3) 4,70 9,93(4) 3,93
(1) Zum 1. Januar 2018 wendet Covestro den neuen Rechnungslegungsstandard IFRS 9 (Financial Instruments) und IFRS 15
(Revenue from Contracts with Costumers) retrospektiv an. Die Vorjahreszahlen wurden nicht angepasst.
(2) EBIT: Ergebnis nach Ertragsteuern zuzüglich Finanzergebnis und Ertragsteueraufwand.
(3) Gewichtete durchschnittliche Anzahl der ausgegebenen, ausstehenden stimmberechtigten Stückaktien der Covestro AG:
197.746.827 (Vorjahr: 202.500.000).
(4) Gewichtete durchschnittliche Anzahl der ausgegebenen, ausstehenden stimmberechtigten Stückaktien der Covestro AG:
202.396.416 (Vorjahr: 202.500.000).
Holders should be aware that a credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at
any time.
2
[Insert brief explanation of the meaning of the rating.]
3 [Indicate whether the rating agency is established in the European Community and is registered under the CRA Regulation.]
5Konsolidierte Bilanz
Zum 30. Juni Zum 31. Dezember
2018 2017(1) 2016
(Beträge in Millionen Euro) (ungeprüft) (geprüft)
Langfristige Vermögenswerte 5.633 5.606 5.966
Kurzfristige Vermögenswerte 5.269 5.735 4.268
Gesamtvermögen 10.902 11.341 10.234
Eigenkapital 5.505 5.365 4.216
Aktionären der Covestro AG
zurechenbarer Anteil am Eigenkapital 5.474 5.335 4.189
Langfristiges Fremdkapital 2.981 2.885 3.544
Kurzfristiges Fremdkapital 2.416 3.091 2.474
Gesamtkapital 10.902 11.341 10.234
(1) Zum 1. Januar 2018 wendet Covestro den neuen Rechnungslegungsstandard IFRS 9 (Financial Instruments) und IFRS 15
(Revenue from Contracts with Costumers) retrospektiv an. Die Vorjahreszahlen wurden nicht angepasst.
Trendinformation
Die Aussichten der Covestro AG haben sich seit dem Datum des letzten veröffentlichten, geprüften
Konzernabschlusses zum 31. Dezember 2017 nicht wesentlich nachteilig verändert.
Wesentliche Veränderungen in der Finanzlage und Handelsposition
Entfällt. Es hat seit dem Datum der letzten ungeprüften Konzernfinanzinformationen zum 30. Juni 2018
keine wesentlichen Veränderungen in der Finanzlage und Handelsposition der Covestro AG gegeben.
"
7. German Translation of the Summary - Abschnitt B - Emittentin - Element B.13
On page 25 of the Base Prospectus, in Element B.13 of the German Translation of the Summary, the section
"Jüngste Ereignisse" shall be replaced by the following:
"
B.13 Jüngste Ereignisse Am 14. März 2018 hat die Covestro Gruppe im Segment
Polycarbonates eine Vereinbarung über den Verkauf des
nordamerikanischen Polycarbonat-Platten-Geschäfts an
Plaskolite LLC, Columbus (USA), unterzeichnet. Die
Transaktion wurde am 1. August 2018 erfolgreich
abgeschlossen.
Der Vorstand der Covestro AG hat am 24. Oktober 2017
beschlossen, dass die Emittentin eigene Aktien bis zu einem
Gesamtwert von EUR 1,5 Mrd. (ohne Nebenkosten) oder bis
zu 10% des Grundkapitals, abhängig davon, welcher Wert
zuerst erreicht wird, erwerben wird. Dieser Beschluss erfolgt
unter der am 1. September 2015 von der Hauptversammlung
erteilten Ermächtigung. Der Rückkauf einer ersten Tranche
von Aktien wurde im Februar 2018 abgeschlossen und der
Rückkauf einer zweiten Tranche im Juli 2018. Der Rückkauf
einer dritten Tranche wird zwischen dem 13. August 2018
und dem 8. Februar 2019 durchgeführt.
Am 18. Juli 2018 hat die Covestro Gruppe die Absicht
bekannt gegeben seine weltweite Folienproduktion deutlich
ausbauen, um die steigende Nachfrage in allen Regionen zu
decken. Insbesondere sind Kapazitätserweiterungen an den
Standorten Map Ta Phut, Thailand, dem chinesischen
Guangzhou, in South Deerfield, USA, sowie in Dormagen
geplant. In der Gesamtinvestition von mehr als EUR 100
Millionen ist auch ein Ausbau der zugehörigen Infrastruktur
und Logistik enthalten.
Am 30. Juli 2018 hat Moody's die Bonitätsnote der
Emittentin von Baa2 auf Baa1 mit stabilem Ausblick
angehoben.
6Am 13. August 2018 hat MSCI das Nachhaltigkeits-Rating
von Covestro von BBB auf A angehoben. Der
Finanzdienstleister begründete das Upgrade mit dem
verstärkten Fokus der Covestro Gruppe auf nachhaltige
Produktlösungen und Technologien sowie mit stetig
verbesserten Sicherheitsstandards.
"
8. German Translation of the Summary - Abschnitt B - Emittentin - Element B.16
On page 26 and 27 of the Base Prospectus, in Element B.16 of the German Translation of the Summary, the
section "Hauptanteilseigner" shall be replaced by the following:
"
B.16 Hauptanteilseigner Auf Grundlage der durch die Covestro AG empfangenen
Benachrichtigungen gemäß Wertpapierhandelsgesetz und
gemäß den von den jeweiligen Anteilseignern übermittelten
Informationen halten die folgenden Anteilseigner direkt
oder indirekt mehr als 3% der Aktien der Covestro AG. Die
in der untenstehenden Tabelle dargestellten Anteile basieren
auf der Anzahl der Stimmrechte wie sie der Covestro AG
zuletzt zum dargestellten Zeitpunkt von den jeweiligen
Anteilseignern gemäß § 33 Wertpapierhandelsgesetz
mitgeteilt wurden (ohne Berücksichtigung von durch
Finanzinstrumente vermittelte Stimmrechte) und beziehen
sich auf das Stammkapital der Covestro AG zum Zeitpunkt
dieses Basisprospekts. Zu beachten ist, dass sich die Anzahl
der Stimmrechte dieser Anteilseigner seit der Mitteilung an
die Covestro AG verändert haben könnte, ohne dass die
jeweiligen Anteilseigner verpflichtet gewesen sind eine
entsprechende Mitteilung zu veröffentlichen, da keine
relevanten Stimmrechtsschwellen erreicht oder
überschritten wurden.
Tatsächliche (direkte
oder indirekte)
Beteiligung an der
Covestro AG
Anteilseigner Anzahl der Stimmrechte
13.791.540 Stimmrechte
Bayer AG
(6,81%)
10.455.558 Stimmrechte
BlackRock Inc.
(5,16%)
Covestro AG (Eigene 11.708.763 Stimmrechte
Aktien) * (5,78%)
35.955.861 Stimmrechte
Gesamt
(17,75%)
* Das Stimmrecht ruht bei eigenen Aktien.
"
79. German Translation of the Summary - Abschnitt B - Emittentin - Element B.17
On page 27 of the Base Prospectus, in Element B.17 of the German Translation of the Summary, the section
"Ratings der Covestro AG oder ihrer Schuldverschreibungen" shall be replaced by the following:
"
B.17 Ratings der Covestro AG oder ihrer Moody's Investors Service Limited ("Moody's") hat das
Schuldverschreibungen Kreditrating der Covestro AG auf "Baa1"4 (Ausblick stabil)
festgesetzt.
[Das [erwartete] Rating der Schuldverschreibungen ist [●]5
durch [●]6.]
[Entfällt. Die Schuldverschreibungen sind nicht geratet.]
"
10. Risk Factors – Risks associated with the reform of interest rate benchmarks
On page 61 of the Base Prospectus, in the section "Risks associated with the reform of interest rate benchmarks",
the fourth paragraph (starting with "Amounts payable under…") shall be replaced by the following:
"Amounts payable under floating rate Notes issued under the Programme are calculated by reference to (i)
EURIBOR which is provided by the European Money Markets Institute ("EMMI") or (ii) the London
Interbank Offered Rate ("LIBOR") which is provided by the ICE Benchmark Administration Limited
("IBA"). As at the date of this Base Prospectus, EMMI does not appear on the register of administrators and
benchmarks established and maintained by the European Securities and Markets Authority ("ESMA")
pursuant to Article 36 of the Benchmarks Regulation while IBA has been included therein as at 30 April 2018.
As far as the Issuer is aware, the transitional provisions in Article 51 of the Benchmark Regulation apply,
such that EMMI is not currently required to obtain authorisation or registration (or, if located outside the
European Union, recognition, endorsement or equivalence)."
11. Description of Covestro AG and the Covestro Group – Shareholder Structure
On pages 124 and 125 of the Base Prospectus, in the section "Shareholder Structure" the content shall be replaced
by the following:
"Shareholder Structure
Covestro AG's share capital as of the date of this Base Prospectus amounts to EUR 202,500,000 divided into
202,500,000 ordinary registered shares with no par value (Stückaktien). The share capital of Covestro AG is
fully paid up.
On October 24, 2017, the Issuer announced the launch of a share buyback program in a maximum notional
amount of EUR 1.5 billion or up to 10% of the outstanding capital stock of Covestro AG, depending on which
value is reached first. The buyback of a first tranche of 4,507,752 shares was concluded in February 2018.
The buyback of a second tranche of 5,920,837 shares was concluded in July 2018. On August 10, 2018, the
Issuer announced that the buyback of a third tranche will be carried out between August 13, 2018 and
February 8, 2019.
On the basis of the notifications received by Covestro AG as of the date of this Base Prospectus in accordance
with the German Securities Trading Act (Wertpapierhandelsgesetz - WpHG) and pursuant to information
provided by the respective shareholders, the following shareholders directly or indirectly hold more than 3
4
Das im Basis-Prospekt enthaltene oder darauf Bezug genommene Rating wurde von Moody's begeben, die in der Europäischen Union niedergelassen und
gemäß der Verordnung (EG) Nr. 1060/2009 des Europäischen Parlaments und des Rates vom 16. September 2009 über Ratingagenturen in die Liste der
registrierten Ratingagenturen, die auf der Internetseite der Europäischen Wertpapieraufsichtsbehörde (ESMA) unter
https://www.esma.europa.eu/supervision/credit-rating-agencies/risk eingetragen wurde.
Moody's definiert "Baa2" wie folgt: Mit Baa bewertete Verbindlichkeiten sind Verbindlichkeiten mittlerer Klasse, unterliegen moderaten Kreditrisiken und
können als solche gewisse spekulative Charakteristiken aufweisen. Moody's erweitert ihre generischen Ratingklassen von Aa bis Caa um die numerischen
Modifkatoren 1, 2 und 3. Der Modifikator 1 zeigt an, das eine Verbindlichkeit am obeneren Ende ihrer generischen Ratingklasse einzuordnen ist, der Modifkator
2 zeigt eine Einordnng im Mittelfeld der Ratingklasse und der Modifikator 3 zeigt an, dass eine Verbindlichkeit am unteren Ende ihrer generischen Ratingklasse
einzuordnen ist.
Anleger sollten sich bewusst sein, dass eine Ratingeinstufung keine Empfehlung zum Kauf, Verkauf oder zum Halten von Wertpapieren darstellt und sie
jederzeit revidiert oder zurückgenommen werden kann.
5
[Kurze Erklärung zur Bedeutung des Ratings einfügen.]
6
[Angaben, ob die Ratingagentur in der Europäischen Gemeinschaft niedergelassen und ob sie nach Maßgabe der CRA-Verordnung eingetragen ist.]
8per cent. of Covestro AG's ordinary shares. The percentage values shown in the table below are based on the
amount of voting rights last notified to Covestro AG with regard to the stated reference date by the respective
shareholder pursuant to Sections 33 et seqq. WpHG (without taking into account voting rights attached to
financial instruments) in relation to Covestro AG's share capital as of the date of this Base Prospectus. It
should be noted that the number of voting rights last notified could have changed since such notifications
were submitted to Covestro AG without requiring the relevant shareholder to submit a corresponding voting
rights notification if no notifiable thresholds have been reached or crossed:
Actual (direct or indirect) ownership of
Covestro AG
Shareholder Share of voting rights
Bayer AG 13,791,540 voting rights (6.81%)
BlackRock Inc. 10,455,558 voting rights (5.16%)
Covestro AG (treasury shares) * 11,708,763 voting rights (5.78%)
Total 35,955,861 voting rights (17.75%)
* The voting rights of treasury shares are suspended.
"
12. "Description of Covestro AG and the Covestro Group – Ratings
On page 125 of the Base Prospectus, in the section "Ratings" the content shall be replaced by the following:
"Ratings
Moody's Investors Service Limited ("Moody's") has assigned a "Baa1"7 rating (outlook stable) to Covestro
AG.
Notes to be issued under the Programme may be rated or unrated. Where an issue of Notes is rated, a security
rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating
agency at any time. Any negative change in the credit rating of Covestro AG could adversely affect the trading
price of the Notes. Investors should consider each rating individually and obtain additional and more detailed
understanding of the significance of the respective credit rating information provided by the respective rating
agency.
The Credit rating included or referred to in this Base Prospectus has been issued by Moody's, which is
established in the European Union and registered under Regulation (EC) No 1060/2009 of the European
Parliament and of the Council of September 16, 2009 on credit rating agencies and included in the list of
registered credit rating agencies published on the website of the European Securities and Markets Authority
at https://www.esma.europa.eu/supervision/credit-rating-agencies/risk."
7
Moody's defines "Baa2" as follows: "Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain
speculative characteristics. Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates
that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in
the lower end of that generic rating category".
Holders should be aware that a credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at
any time.
913. Description of Covestro AG and the Covestro Group – Selected Consolidated Financial Information
On pages 128 and 129 of the Base Prospectus, in the section "Selected Consolidated Financial Information" the
content shall be replaced by the following content:
"Selected Consolidated Financial Information
The following selected historical financial information for the Group is based on the audited consolidated
financial statements of Covestro AG as of and for the financial year ended December 31, 2017 and on the
unaudited consolidated interim financial information of Covestro AG as of and for the six-month period
ended June 30, 2018.
Consolidated Income Statement
For the six-month period
ended June 30, Financial year ended December 31,
2018 2017(1) 2017(1) 2016
(amounts in EUR million, earnings per
share in EUR) (unaudited) (audited)
Sales 7,642 7,084 14,138 11,904
Gross profit 2,814 2,338 4,830 3,293
EBIT(2) 1,733 1,375 2,808 1,331
Financial result (55) (88) (150) (196)
Income before income taxes 1,678 1,287 2,658 1,135
Income after income taxes 1,252 955 2,017 806
Basic earnings per share 6.31(3) 4.70 9.93(4) 3.93
Diluted earnings per share 6.31(3) 4.70 9.93(4) 3.93
(1) As of January 1, 2018, Covestro applied the new IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with Costumers) accounting
standard retroactively. Prior-year figures have not been adjusted.
(2) EBIT: income after income taxes plus financial result and income tax expense.
(3) Weighted average number of outstanding no-par voting shares of Covestro AG in issue: 197,746,827 (previous year: 202,500,000).
(4) Weighted average number of outstanding no-par voting shares of Covestro AG in issue: 202,396,416 (previous year: 202,500,000).
Consolidated Statement of Financial Position
As of June 30, As of December 31,
2018 2017(1) 2016
(amounts in EUR million) (unaudited) (audited)
Noncurrent assets 5,633 5,606 5,966
Current assets 5,269 5,735 4,268
Total assets 10,902 11,341 10,234
Equity 5,505 5,365 4,216
Equity attributable to Covestro AG
stockholders 5,474 5,335 4,189
Noncurrent liabilities 2,981 2,885 3,544
Current liabilities 2,416 3,091 2,474
Total equity and liabilities 10,902 11,341 10,234
(1) As of January 1, 2018, Covestro applied the new IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with Costumers) accounting
standard retroactively. Prior-year figures have not been adjusted.
"
1014. Description of Covestro AG and the Covestro Group – Recent Events
On pages 145 and 146 of the Base Prospectus, in the section "Recent Events" the content shall be replaced by the
following:
"Recent Events
In the Polycarbonates segment, Covestro Group signed an agreement on March 14, 2018, on the sale of assets
and liabilities (disposal group) of the North American polycarbonates sheet business to Plaskolite LLC,
Columbus (United States). The transaction closed successfully on August 1, 2018.
The Covestro Board of Management has resolved on October 24, 2017 to buy back own shares worth a
maximum notional amount of EUR 1.5 billion or up to 10% of the outstanding capital stock, depending on
which value is reached first. This decision is based on the authorization of the Annual General Meeting of
September 1, 2015. The buyback of a first tranche of shares was concluded in February 2018 and the buyback
of a second tranche of shares in July 2018. The third tranche is being carried out in the period between August
13, 2018 and February 8, 2019.
On July 18, 2018, Covestro Group announced that it intends to significantly expand its global film production
to meet the growing demand in all regions. In particular, capacity expansions are planned at Map Ta Phut,
Thailand, Guangzhou, China, South Deerfield, USA, and Dormagen, Germany. The total investment of more
than EUR 100 million also includes the expansion of the associated infrastructure and logistics.
On July 30, 2018, Moody's raised the credit rating of the Issuer from Baa2 to Baa1 with stable outlook.
On August 13, 2018, MSCI raised the Issuer's sustainability rating from BBB to A. The financial services
provider's reason for the upgrade was Covestro Group's stepped-up focus on sustainable product solutions
and technologies as well as continual improvement in safety standards."
15. Description of Covestro AG and the Covestro Group – Significant Changes
On page 146 of the Base Prospectus, in the section "Significant changes" the content shall be replaced by the
following:
"Significant Changes
There has been no significant change in the financial or trading position of Covestro AG since the last
unaudited consolidated financial information dated June 30, 2018."
16. Description of Covestro AG and the Covestro Group – Consolidated Financial Information
On pages 146 et seqq. of the Base Prospectus, in the section "Consolidated Financial Information" the content up
to and excluding the sub-section "Core Volume Growth and Additional Performance Measures" shall be replaced
by the following content:
"Consolidated Financial Information
The following historical financial information for the Group is based on the audited consolidated financial
statements of Covestro AG as of and for the financial year ended December 31, 2017 and on the unaudited
consolidated interim financial information of Covestro AG as of and for the six-month period ended June 30,
2018, which are incorporated by reference in this Base Prospectus and should be read together with them.
The consolidated annual financial statements of the Group were audited by PwC and issued with an
unqualified auditor's report.
11Consolidated Income Statement
For the six-month period
Financial year ended December 31,
ended June 30,
2018 2017(1) 2017(1) 2016
(amounts in EUR million, earnings per
share in EUR) (unaudited) (audited)
Sales 7,642 7,084 14,138 11,904
Cost of goods sold (4,828) (4,746) (9,308) (8,611)
Gross profit 2,814 2,338 4,830 3,293
Selling expenses (708) (690) (1,352) (1,323)
Research and development expenses (136) (132) (274) (259)
General administration expenses (247) (227) (481) (451)
Other operating income 23 111 145 126
Other operating expenses (13) (25) (60) (55)
EBIT(2) 1,733 1,375 2,808 1,331
Equity-method loss (10) (12) (23) (20)
Interest income(3) 12 11 21 19
Interest expense(3) (41) (71) (120) (133)
Other financial result(3) (16) (16) (28) (62)
Financial result (55) (88) (150) (196)
Income before income taxes 1,678 1,287 2,658 1,135
Income taxes (426) (332) (641) (329)
Income after income taxes 1,252 955 2,017 806
of which attributable to 4 3 8 11
noncontrolling interest
of which attributable to Covestro 1,248 952 2,009 795
AG stockholders
(net income)
Basic earnings per share 6.31(4) 4.70 9.93(5) 3.93
Diluted earnings per share 6.31(4) 4.70 9.93(5) 3.93
(1) As of January 1, 2018, Covestro applied the new IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with Costumers) accounting
standard retroactively. Prior-year figures have not been adjusted.
(2) EBIT: income after income taxes plus financial result and income tax expenses.
(3) The figures for the financial year 2016 were adjusted retroactively to reflect the change in the accounting treatment of forward exchange contracts.
(4) Weighted average number of outstanding no-par voting shares of Covestro AG in issue: 197,746,827 (previous year: 202,500,000).
(5) Weighted average number of outstanding no-par voting shares of Covestro AG in issue: 202,394,416 (previous year: 202,500,000).
12Consolidated Statement of Financial Position
As of June 30, As of December 31,
2018 2017(1) 2016
(amounts in EUR million) (unaudited) (audited)
Noncurrent assets 5,633 5,606 5,966
Goodwill 254 253 264
Other intangible assets 79 81 97
Property, plant and equipment 4,262 4,296 4,655
Investments accounted for using 212 208 230
the equity method
Other financial assets 30 31 31
Other receivables(2) 40 35 41
Deferred taxes 756 702 648
Current assets 5,269 5,735 4,268
Inventories 2,091 1,913 1,721
Trade accounts receivable 2,185 1,882 1,674
Other financial assets 88 285 171
Other receivables(2) 317 281 316
Claims for income tax refunds 81 138 119
Cash and cash equivalents 475 1,232 267
Assets held for sale 32 4 -
Total assets 10,902 11,341 10,234
Equity 5,505 5,365 4,216
Capital stock of Covestro AG 193 201 203
Capital reserves of Covestro AG 4,105 4,767 4,908
Other reserves 1,176 367 (922)
Equity attributable to Covestro AG 5,474 5,335 4,189
stockholders
Equity attributable to noncontrolling 31 30 27
interest
Noncurrent liabilities 2,981 2,885 3,544
Provisions for pensions and other 1,305 1,187 1,209
post-employment benefits
Other provisions 227 229 319
Financial liabilities 1,182 1,213 1,796
Income tax liabilities 93 74 36
Other liabilities(2) 19 21 26
Deferred taxes 155 161 158
Current liabilities 2,416 3,091 2,474
Other provisions 370 529 569
Financial liabilities 83 583 135
Trade accounts payable 1,473 1,618 1,536
Income tax liabilities 219 161 37
Other liabilities(2) 269 200 197
Liabilities directly related to assets 2 - -
held for sale
Total equity and liabilities 10,902 11,341 10,234
(1) As of January 1, 2018, Covestro applied the new IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with Costumers) accounting
standard retroactively. Prior-year figures have not been adjusted.
(2) As of June 30, 2018, contains the contract assets, contract liabilities/refund liabilities from IFRS 15.
13Consolidated Statement of Cash Flows
For the six-month period ended June 30, 2018 2017(1)
(amounts in EUR million) (unaudited)
Income after income taxes 1,252 955
Income taxes 426 332
Financial result 55 88
Income taxes paid (335) (62)
Depreciation, amortization and impairment losses and
impairment loss reversals 315 319
Change in pension provisions 8 26
(Gains)/losses on retirements of noncurrent assets 1 (45)
Decrease/(increase) in inventories (197) (200)
Decrease/(increase) in trade accounts receivable (299) (382)
(Decrease)/increase in trade accounts payable (129) (128)
Changes in other working capital, other noncash items (128) (207)
Cash flows from operating activities 969 696
Cash outflows for additions to property, plant, equipment and
intangible assets (241) (166)
Cash inflows from sales of property, plant, equipment and
other assets - 12
Cash inflows from divestitures - 47
Cash outflows for noncurrent financial assets (8) (17)
Cash inflows from noncurrent financial assets 1 1
Cash outflows for acquisitions less acquired cash - (4)
Interest and dividends received 12 18
Cash inflows from/(outflows for) other current financial
assets 201 (268)
Cash flows from investing activities (35) (377)
Reacquisition of treasury shares (670) -
Dividend payments and withholding tax on dividends (440) (274)
Issuances of debt 40 156
Retirements of debt (589) (99)
Interest paid (33) (63)
Cash flows from financing activities (1,692) (280)
Change in cash and cash equivalents due to business
activities (758) 39
Cash and cash equivalents at beginning of period 1,232 267
Change in cash and cash equivalents due to exchange rate
movements 1 (6)
Cash and cash equivalents at end of period 475 300
(1) As of January 1, 2018, Covestro applied the new IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with Costumers) accounting
standard retroactively. Prior-year figures have not been adjusted.
14Consolidated Statement of Cash Flows
Financial year ended December 31, 2017(1) 2016
(amounts in EUR million) (audited)
Income after income taxes 2,017 806
Income taxes 641 329
Financial result 150 196
Income taxes paid (510) (418)
Depreciation, amortization, impairment losses and
impairment loss reversals 627 683
Change in pension provisions 17 8
(Gains)/losses on retirements of noncurrent assets (45) 1
Decrease/(increase) in inventories (306) 73
Decrease/(increase) in trade accounts receivable (325) (171)
(Decrease)/increase in trade accounts payable 156 123
Changes in other working capital, other noncash items (61) 156
Cash flows from operating activities 2,361 1,786
Cash outflows for additions to property, plant, equipment and
intangible assets (518) (419)
Cash inflows from sales of property, plant, equipment and
other assets 16 6
Cash inflows from divestitures 47 -
Cash outflows for noncurrent financial assets (30) (19)
Cash inflows from noncurrent financial assets 1 4
Cash outflows for acquisitions less acquired cash (4) -
Interest and dividends received(2) 29 18
Cash inflows from/(outflows for) other current financial (288)
assets(2) (548)
Cash flows from investing activities(2) (747) (958)
Reacquisition of treasury shares (143) -
Dividend payments and withholding tax on dividends (274) (143)
Issuances of debt 244 1,793
Retirements of debt (330) (2,727)
Interest paid(2) (131) (129)
Cash flows from financing activities(2) (634) (1,206)
Change in cash and cash equivalents due to business
activities 980 (378)
Cash and cash equivalents at beginning of year 267 642
Change in cash and cash equivalents due to exchange rate
movements (15) 3
Cash and cash equivalents at end of year 1,232 267
(1) As of January 1, 2018, Covestro applied the new IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with Costumers) accounting
standard retroactively. Prior-year figures have not been adjusted.
(2) The figures for financial year 2016 were adjusted retroactively to reflect the change in the accounting treatment of forward exchange contracts.
"
17. General Information - Documents Available for Inspection
On page 186 of the Base Prospectus, in the section "Documents Available for Inspection" the seventh
paragraph shall be replaced by the following:
"(vii) the documents incorporated herein by reference."
1518. Documents incorporated by reference
On page 188 of the Base Prospectus, the section "Document incorporated by reference" shall be replaced by the
following:
"DOCUMENTS INCORPORATED BY REFERENCE
This Base Prospectus should be read and construed in conjunction with the following documents which have
been previously published or are published simultaneously with this Base Prospectus and which have been
filed with the CSSF and shall be deemed to be incorporated by reference in, and form part of, this Base
Prospectus and which shall be deemed to modify or supersede the contents of this Base Prospectus to the
extent that a statement contained in this document is inconsistent with such contents. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this
Base Prospectus with respect to any Notes issued thereafter:
Incorporation by Reference
The following information is incorporated by reference into this Base Prospectus:
(1) Audited Consolidated Financial Statements (prepared in accordance with IFRS as adopted in the
European Union) of the Covestro Group as of and for the financial year ended December 31, 2017
Consolidated Income Statement page 168
Consolidated Statement of Comprehensive Income page 169
Consolidated Statement of Financial Position page 170
Consolidated Statement of Cash Flows page 171
Consolidated Statements of Changes in Equity pages 172 - 173
Notes to the Consolidated Financial Statements pages 174 – 242
Independent Auditor's Report pages 244 - 250
(2) Audited Consolidated Financial Statements (prepared in accordance with IFRS as adopted in the
European Union) of the Covestro Group as of and for the financial year ended December 31, 2016
Consolidated Income Statement page 132
Consolidated Statement of Comprehensive Income page 133
Consolidated Statement of Financial Position page 134
Consolidated Statement of Cash Flows page 135
Consolidated Statements of Changes in Equity pages 136 – 137
Notes to the Consolidated Financial Statements pages 138 – 198
Independent Auditor's Report pages 200 – 206
(3) Unaudited consolidated interim financial statements (prepared in accordance with International
Accounting Standard 34: Interim Financial Reporting) of Covestro AG as of and for the half-year
period ended June 30, 2018
Consolidated Income Statement page 21
Consolidated Statement of Comprehensive Income page 22
Consolidated Statement of Financial Position page 23
Consolidated Statement of Cash Flows page 24
Consolidated Statement of Changes in Equity page 25
Notes to the Consolidated Interim Financial Statements pages 26 – 45
16(4) Unaudited consolidated interim financial information of Covestro AG as of and for the three-month
period ended March 31, 2018
Consolidated Income Statement page 3
Consolidated Statement of Comprehensive Income page 4
Consolidated Statement of Financial Position page 5
Consolidated Statement of Cash Flows page 6
All of these pages shall be deemed to be incorporated in by reference, and to form part of, this Base
Prospectus.
The non-incorporated parts of the documents, i.e. the pages not listed in the table above, are either not relevant
for the investor or covered elsewhere in the Base Prospectus pursuant to Art 28.4 of the Commission
Regulation (EC) 809/2004. Copies of the documents which are incorporated herein by reference will be
available free of charge from the specified office of the Principal Paying Agent set out at the end of this Base
Prospectus.
This Base Prospectus and the documents incorporated by reference are also available for viewing at
www.bourse.lu."
17Registered Office of the Issuer
Covestro AG
Kaiser-Wilhelm-Allee 60
51373 Leverkusen
Germany
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