COVESTRO AG (incorporated as a stock corporation (Aktiengesellschaft) in the Federal Republic of Germany) EUR 5,000,000,000 Debt Issuance Programme

Transcription

1 1 st Supplement, dated June 18, 2018 to the Base Prospectus dated March 9, 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 June 20, This Supplement together with the Base Prospectus and the documents incorporated by reference are also available for viewing at 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 three-month period ended March 31, 2018 and to amend other disclosure on the Issuer. This Supplement is supplemental to, and should be read in conjunction with the Base Prospectus. 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.

2 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 2-16 of this Supplement, there has been no other significant new factor, material mistake or inaccuracy since the publication of the Base Prospectus. 1. 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 three-month period ended March 31, Financial year ended December 31, (1) 2017 (1) 2016 (amounts in EUR million, earnings per share in EUR) (unaudited) (audited) Net sales 3,779 3,586 14,138 11,904 Gross profit 1,431 1,198 4,830 3,293 EBIT (2) ,808 1,331 Financial result (28) (54) (150) (196) Income before income taxes ,658 1,135 Income after income taxes , Basic earnings per share 3.24 (3) (4) 3.93 Diluted earnings per share 3.24 (3) (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 taxes. (3) Weighted average number of no-par voting shares of Covestro AG in issue: 198,901,329 (previous year: 202,500,000). (4) Weighted average number of no-par voting shares of Covestro AG in issue: 202,396,416 (previous year: 202,500,000). Consolidated Statement of Financial Position As of March 31, As of December 31, (1) 2016 (amounts in EUR million) (unaudited) (audited) Noncurrent assets 5,588 5,606 5,966 Current assets 5,674 5,735 4,268 Total assets 11,262 11,341 10,234 Equity 5,686 5,365 4,216 Equity attributable to Covestro AG stockholders 5,653 5,335 4,189 Noncurrent liabilities 2,999 2,885 3,544 Current liabilities 2,577 3,091 2,474 Total equity and liabilities 11,262 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

3 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, 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 March 31, 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 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 should be completed no later than in the third quarter of Since March 19, 2018 Covestro AG is a member of the leading German equity index DAX. 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, The buyback of a first tranche of shares was concluded in February The second tranche is being carried out in the period between May 4, 2018 and August 10, On April 1, 2018, Dr. Thomas Toepfer took office as new Chief Financial Officer (CFO) of the Issuer. Since June 2017, Patrick Thomas has been interim CFO of the Issuer in addition to his function as Chief Executive Officer (CEO). The Supervisory Board of Covestro agreed on an amicable retirement of Patrick Thomas' tenure as CEO effective May 31, He was succeeded effective June 1, 2018 by Dr. Markus Steilemann, previously Chief Commercial Officer (CCO). With the retirement of Patrick Thomas and Dr. Markus Steilemann becoming CEO of Covestro, the Issuer's Board of Management now consists of three members. The former major shareholder of the Issuer, Bayer AG, has substantially reduced its stake in Covestro AG via a series of private placements of shares. On May 4, 2018 Bayer AG sold million shares representing 14.2% of all shares in Covestro AG. Bayer AG continues to hold a 6.8% interest in the Issuer. Bayer Pension Trust no longer holds any shares of Covestro AG. 3. 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 3

4 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: Shareholder Bayer AG BlackRock Inc. Covestro AG (treasury shares) * Norges Bank Total Actual (direct or indirect ownership of Covestro AG Share of voting rights 13,791,540 voting rights (6.81%) 10,948,716 voting rights (5.41%) 6,197,079 voting rights (3.06%) 6,100,478 voting rights (3.01%) 37,037,813 voting rights (18.29%) * The voting rights of treasury shares are suspended. 4. 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 Dreimonatszeitraum endend am 31. März Für das Geschäftsjahr endend am 31. Dezember (1) 2017 (1) 2016 (Beträge in Millionen Euro, Ergebnis je Aktie in Euro) (ungeprüft) (geprüft) Umsatzerlöse Bruttoergebnis vom Umsatz EBIT (2) Finanzergebnis Ergebnis vor Ertragssteuern Ergebnis nach Ertragssteuern Unverwässertes Ergebnis je Aktie 3,24 (3) 2,31 9,93 (4) 3,93 Verwässertes Ergebnis je Aktie 3,24 (3) 2,31 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 Ertragsteuern. (3) Gewichtete durchschnittliche Anzahl der ausgegebenen stimmberechtigten Stückaktien der Covestro AG: (Vorjahr: ). (4) Gewichtete durchschnittliche Anzahl der ausgegebenen stimmberechtigten Stückaktien der Covestro AG: (Vorjahr: ). 4

5 Konsolidierte Bilanz Zum 31. März Zum 31. Dezember (1) 2016 (Beträge in Millionen Euro) (ungeprüft) (geprüft) Langfristige Vermögenswerte Kurzfristige Vermögenswerte Gesamtvermögen Eigenkapital Aktionären der Covestro AG zurechenbarer Anteil am Eigenkapital Langfristiges Fremdkapital Kurzfristiges Fremdkapital Gesamtkapital (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 31. März 2018 keine wesentlichen Veränderungen in der Finanzlage und Handelsposition der Covestro AG gegeben. 5. 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 Covestro im Segment Polycarbonates eine Vereinbarung über den Verkauf des nordamerikanischen Polycarbonat-Platten-Geschäfts an Plaskolite LLC, Columbus (USA), unterzeichnet. Die Transaktion soll spätestens im 3. Quartal 2018 abgeschlossen werden. Die Covestro AG ist seit dem 19. März 2018 Mitglied des deutschen Leitindex DAX. 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. Der Rückkauf einer zweiten Tranche wird zwischen dem 4. Mai 2018 und dem 10. August 2018 durchgeführt. Zum 1. April 2018 hat Dr. Thomas Toepfer sein Amt als neuer Chief Financial Officer (CFO) der Emittentin angetreten. Seit Juni 2017 hatte Patrick Thomas neben seiner Tätigkeit als Vorstandsvorsitzenden (CEO) außerdem die Funktion des CFO der Emittentin kommissarisch ausgeübt. Der Aufsichtsrat von Covestro hat die einvernehmliche vorzeitige Beendigung der Amtszeit von Patrick Thomas als Vorstandsvorsitzender zum Ablauf des 31. Mai 2018 beschlossen. Zum 1. Juni 2018 hat Dr. Markus Steilemann, zuvor Chief Commercial Officer (CCO), als Nachfolger von Patrick Thomas das Amt als Vorstandsvorsitzender angetreten. Mit dem Ausscheiden 5

6 von Patrick Thomas und dem Amtsantritt von Dr. Markus Steilemann als CEO von Covestro besteht der Vorstand der Emittentin jetzt aus drei Mitgliedern. Der frühere Großaktionär der Emittentin, die Bayer AG, hat seine Beteiligungsquote durch eine Reihe von Privatplazierungen von Aktien signifikant verringert. Am 4. Mai 2018 hat die Bayer AG weitere 28,81 Millionen Aktien veräußert, dies entspricht 14,2% aller Aktien der Covestro AG. Die Bayer AG ist weiterhin zu 6,8% an der Emittentin beteiligt. Der Bayer Pension Trust ist nicht länger Aktionär der Covestro AG. 6. 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. 6 Tatsächliche (direkte oder indirekte) Beteiligung an der Covestro AG Anteilseigner Anzahl der Stimmrechte Bayer AG Stimmrechte (6,81%) BlackRock Inc Stimmrechte (5,41%) Covestro AG (Eigene Aktien) * Stimmrechte (3,06%) Norges Bank voting rights (3,01%) Gesamt Stimmrechte (18,29%) * Das Stimmrecht ruht bei eigenen Aktien. 7. 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.

7 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 The second tranche is being carried out in the period between May 4, 2018 and August 10, As of May 29, 2018, the Issuer had purchased 1,689,327 own shares under the second tranche of the buyback program. The former major shareholder of the Issuer, Bayer AG has substantially reduced its stake in Covestro AG via a series of private placements of shares. On May 4, 2018 Bayer AG, in a final step, sold million shares representing 14.2% of all shares in Covestro AG. Bayer AG continues to hold a 6.8% interest in the Issuer. Bayer Pension Trust no longer holds any shares of Covestro AG. 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 Bayer AG 13,791,540 voting rights (6.81%) BlackRock Inc. 10,948,716 voting rights (5.41%) Covestro AG (treasury shares) * 6,197,079 voting rights (3.06%) Norges Bank 6,100,478 voting rights (3.01%) Total 37,037,813 voting rights (18.29%) * The voting rights of treasury shares are suspended. 8. 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 three-month period ended March 31,

8 Consolidated Income Statement For the three-month period ended March 31, Financial year ended December 31, (1) 2017 (1) 2016 (amounts in EUR million, earnings per share in EUR) (unaudited) (audited) Net sales 3,779 3,586 14,138 11,904 Gross profit 1,431 1,198 4,830 3,293 EBIT (2) ,808 1,331 Financial result (28) (54) (150) (196) Income before income taxes ,658 1,135 Income after income taxes , Basic earnings per share 3.24 (3) (4) 3.93 Diluted earnings per share 3.24 (3) (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 taxes. (3) Weighted average number of no-par voting shares of Covestro AG in issue: 198,901,329 (previous year: 202,500,000). (4) Weighted average number of no-par voting shares of Covestro AG in issue: 202,396,416 (previous year: 202,500,000). Consolidated Statement of Financial Position As of March 31, As of December 31, (1) 2016 (amounts in EUR million) (unaudited) (audited) Noncurrent assets 5,588 5,606 5,966 Current assets 5,674 5,735 4,268 Total assets 11,262 11,341 10,234 Equity 5,686 5,365 4,216 Equity attributable to Covestro AG stockholders 5,653 5,335 4,189 Noncurrent liabilities 2,999 2,885 3,544 Current liabilities 2,577 3,091 2,474 Total equity and liabilities 11,262 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. 9. Description of Covestro AG and the Covestro Group Management and Supervisory Bodies of Covestro AG On page 141 of the Base Prospectus, in the section Management and Supervisory Bodies of Covestro AG the content of the subsection Board of Management shall be replaced by the following: Board of Management The Supervisory Board determines the number of Management Board members which must consist of at least two persons according to the articles of association. The Supervisory Board may appoint one Management Board member as chair and another member as deputy chair. Currently, the Management Board of Covestro AG consists of three members with Dr. Markus Steilemann appointed as chair. The following table lists the members of the Management Board and their respective responsibilities. 8

9 Name Area of Responsibility Principal Outside Board Memberships Dr. Markus Steilemann (Chair) Dr. Thomas Toepfer Chief Executive Officer, Business Units Polyurethane, Polycarbonates and Coatings, Adhesives and Specialities, Corporate Office, Communications, Corporate Audit, Human Resources, Innovation Management & Commercial Services, Strategy, Supply Chain Center EMLA, NAFTA and APAC, Sustainability Chief Financial Officer, Accounting, Controlling, Finance, Investor Relations, CFO Greater China and USA, Information Technology, Portfolio Development, Taxes and Law, Intellectual Property & Compliance Member of the Board of Trustees of the German Chemical Industry Fund (Kuratorium Fond der Chemischen Industrie), Member of the Steering Committee of the CAT Catalytic Center Aachen, Member of the Steering Committee Covestro-Tongji Innovation Academy, Beijing, Member of the Committee for Research, Science and Education of the German Chemical Industry Fund, Member of the Steering Board of PlasticsEurope, Chairman of the Board of SusChem, Director of the Board of Sumika Covestro Urethane, Member of the Board of The European Chemical Industry Council (CEFIC), Member of the Executive Committee of The European Chemical Industry Council (CEFIC), Chairman of the Program Council Innovation of The European Chemical Industry Council (CEFIC), Member of the Board of Directors of the International Council of Chemical Associations (ICCA) - Dr. Klaus Schäfer Chief Technology Officer, Production & Technology Polyurethane, Polycarbonates and Coatings, Adhesives and Specialities, CTO Office, Global Project Engineering, Site Management NRW, Baytown, Caojing, Procurement, Health, Safety, Environment & Quality, Labour Director (Arbeitsdirektor) Member of the Presidium of Weltenergierat- Deutschland e.v., Member of Committees in the Registered Association of the Chemical Industry (VCI) and the European Chemical Industry Council (CEFIC), Member of the Board of VIK (Verband der Industriellen Energie- und Kraftwirtschaft e.v.), Member of the Board of Forum für Zukunftsenergien e.v., Member of the Board of DECHEMA Intellectual Property Management is part of the execution of the Covestro innovation strategy for which Markus Steilemann has responsibility and is supported by the Corporate Function Law, Intellectual Property and Compliance which falls under the responsibility of the Chief Financial Offier. On April 1, 2018, Dr. Thomas Toepfer took office as new CFO of the Issuer. Since June 2017, Patrick Thomas has been interim CFO of the Issuer in addition to his function as Chief Executive Officer (CEO). The Supervisory Board of Covestro agreed on an amicable retirement of Patrick Thomas' tenure as CEO effective May 31, He was succeeded effective June 1, 2018 by Dr. Markus Steilemann, previously Chief Commercial Officer (CCO). The members of the Management Board may be contacted at the business address of Covestro AG. 9

10 10. Description of Covestro AG and the Covestro Group Recent Events On page 145 of the Base Prospectus, in the section Recent Events the content shall be replaced by the following: Recent Events In the Polycarbonates segment, Covestro 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 should be completed no later than in the third quarter of Since March 19, 2018 Covestro AG is a member of the leading German equity index DAX. 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, The buyback of a first tranche of shares was concluded in February The second tranche is being carried out in the period between May 4, 2018 and August 10, On April 1, 2018, Dr. Thomas Toepfer took office as new Chief Financial Officer (CFO) of the Issuer. Since June 2017, Patrick Thomas has been interim CFO of the Issuer in addition to his function as Chief Executive Officer (CEO). The Supervisory Board of Covestro agreed on an amicable retirement of Patrick Thomas' tenure as CEO effective May 31, He was succeeded effective June 1, 2018 by Dr. Markus Steilemann, previously Chief Commercial Officer (CCO). With the retirement of Patrick Thomas and Dr. Markus Steilemann becoming CEO of Covestro, the Issuer's Board of Management now consists of three members. The former major shareholder of the Issuer, Bayer AG, has substantially reduced its stake in Covestro AG via a series of private placements of shares. On May 4, 2018 Bayer AG sold million shares representing 14.2% of all shares in Covestro AG. Bayer AG continues to hold a 6.8% interest in the Issuer. Bayer Pension Trust no longer holds any shares of Covestro AG. 11. 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 March 31, 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 three-month period ended March 31, 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. 10

11 Consolidated Income Statement For the three-month period Financial year ended December 31, ended March 31, (1) 2017 (1) 2016 (amounts in EUR million, earnings per share in EUR) (unaudited) (audited) Net sales 3,779 3,586 14,138 11,904 Cost of goods sold (2,348) (2,388) (9,308) (8,611) Gross profit 1,431 1,198 4,830 3,293 Selling expenses (344) (346) (1,352) (1,323) Research and development expenses (68) (64) (274) (259) General administration expenses (115) (113) (481) (451) Other operating income Other operating expenses (9) (11) (60) (55) EBIT (2) ,808 1,331 Equity-method loss (4) (6) (23) (20) Interest income (3) Interest expense (3) (20) (41) (120) (133) Other financial result (3) (9) (10) (28) (62) Financial result (28) (54) (150) (196) Income before income taxes ,658 1,135 Income taxes (233) (165) (641) (329) Income after income taxes , of which attributable to noncontrolling interest of which attributable to Covestro , AG stockholders (net income) Basic earnings per share 3.24 (4) (5) 3.93 Diluted earnings per share 3.24 (4) (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 taxes. (3) The figures for the financial year 2016 were adjusted retroactively to reflect change in the accounting treatment of forward exchange contracts. (4) Weighted average number of outstanding no-par voting shares of Covestro AG in issue: 198,901,329 (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). 11

12 Consolidated Statement of Financial Position As of March 31, As of December 31, (1) 2016 (amounts in EUR million) (unaudited) (audited) Noncurrent assets 5,588 5,606 5,966 Goodwill Other intangible assets Property, plant and equipment 4,216 4,296 4,655 Investments accounted for using the equity method Other financial assets Other receivables (2) Deferred taxes Current assets 5,674 5,735 4,268 Inventories 2,011 1,913 1,721 Trade accounts receivable 2,108 1,882 1,674 Other financial assets Other receivables Claims for income tax refunds Cash and cash equivalents 926 1, Assets held for sale Total assets 11,262 11,341 10,234 Equity 5,686 5,365 4,216 Capital stock of Covestro AG Capital reserves of Covestro AG 4,513 4,767 4,908 Other reserves (922) Equity attributable to Covestro AG 5,653 5,335 4,189 stockholders Equity attributable to noncontrolling interest Noncurrent liabilities 2,999 2,885 3,544 Provisions for pensions and other 1,293 1,187 1,209 post-employment benefits Other provisions Financial liabilities 1,204 1,213 1,796 Income tax liabilities Other liabilities (2) Deferred taxes Current liabilities 2,577 3,091 2,474 Other provisions Financial liabilities Trade accounts payable 1,442 1,618 1,536 Income tax liabilities Other liabilities (2) Liabilities directly related to assets held for sale Total equity and liabilities 11,262 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) Contains the contract assets, contract liabilities, and refund liabilities from the initial application of IFRS 15, as of March 31,

13 Consolidated Statement of Cash Flows For the three-month period ended March 31, (1) (amounts in EUR million) (unaudited) Income after income taxes Income taxes Financial result Income taxes paid (56) (29) Depreciation, amortization and impairment losses and impairment loss reversals Change in pension provisions 8 10 (Gains)/losses on retirements of noncurrent assets 1 (7) Decrease/(increase) in inventories (149) (157) Decrease/(increase) in trade accounts receivable (258) (328) (Decrease)/increase in trade accounts payable (137) 44 Changes in other working capital, other noncash items (20) (94) Cash flows from operating activities Cash outflows for additions to property, plant, equipment and intangible assets (88) (74) Cash inflows from sales of property, plant, equipment and other assets - 12 Cash outflows for noncurrent financial assets (4) (13) Interest and dividends received 5 9 Cash inflows from/(outflows for) other current financial assets 117 (61) Cash flows from investing activities 30 (127) Reacquisition of treasury shares (257) - Issuances of debt 6 75 Retirements of debt (525) (35) Interest paid (13) (31) Cash flows from financing activities (789) 9 Change in cash and cash equivalents due to business activities (307) 167 Cash and cash equivalents at beginning of period 1, Change in cash and cash equivalents due to exchange rate movements 1 - Cash and cash equivalents at end of period (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. 13

14 Consolidated Statement of Cash Flows Financial year ended December 31, 2017 (1) 2016 (amounts in EUR million) (audited) Income after income taxes 2, Income taxes Financial result Income taxes paid (510) (418) Depreciation, amortization, impairment losses and impairment loss reversals 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 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) 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 Change in cash and cash equivalents due to exchange rate movements (15) 3 Cash and cash equivalents at end of year 1, (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. 14

15 13. 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 Notes to the Consolidated Financial Statements... pages Independent Auditor's Report... pages (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 Notes to the Consolidated Financial Statements... pages Independent Auditor's Report... pages (3) Unaudited consolidated interim financial information of Covestro AG as of and for the threemonth 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. 15

16 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 16

17 Registered Office of the Issuer Covestro AG Kaiser-Wilhelm-Allee Leverkusen Germany 17