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

Transcription

1 2nd Supplement dated August 23, 2017 to the Base Prospectus dated March 17, 2017 as supplemented by the 1 st Supplement dated May 17, 2017 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 17, 2017, (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 August 25, This Supplement together with the Base Prospectus, the 1st supplement to the Base Prospectus dated May 17, 2017 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 half-year period ended June 30, 2017 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 1 st supplement dated May 17, 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 2-14 of this Supplement, there has been no other significant new factor, material mistake or inaccuracy since the publication of the 1 st supplement to the Base Prospectus dated May 17, Summary - Section B - Issuer - Element B.12 On pages 8 and 9 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 half-year period ended June 30, Financial year ended December 31, (amounts in EUR million, earnings per share in EUR) (unaudited) (audited) Sales 7,084 5,865 11,904 12,082 Gross profit 2,338 1,645 3,293 2,644 EBIT (1) 1, , Financial result (88) (123) (196) (175) Income before income taxes 1, , Income after income taxes Basic earnings per share (2) Diluted earnings per share (2) (1) EBIT: Income after income taxes plus financial result and income taxes (2) Weighted average number of no-par voting shares of Covestro AG in issue: 202,500,000. Consolidated Statement of Financial Position 2 As of June 30, As of December 31, (amounts in EUR million) (unaudited) (audited) Noncurrent assets 5,593 5,966 6,294 Current assets 4,927 4,268 4,237 Total assets 10,520 10,234 10,531 Equity 4,746 4,216 3,612 Equity attributable to Covestro AG stockholders 4,718 4,189 3,596 Noncurrent liabilities 2,920 3,544 2,355 Current liabilities 2,854 2,474 4,564 Total equity and liabilities 10,520 10,234 10,531

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 consolidated financial information dated June 30, Summary - Section B - Issuer - Element B.13 On page 9 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 Effective June 2, 2017, Frank H. Lutz resigned early as Chief Financial Officer and Labour Director (Arbeitsdirektor) of the Issuer. Patrick Thomas as Chief Executive Officer of the Issuer has taken on the additional office as Chief Financial Officer on an interim basis. 3. Summary - Section B - Issuer - Element B.16 On page 10 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 21 et seqq. WpHG 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 Bayer Pension Trust e.v. BlackRock Inc. Total Actual (direct or indirect ownership of Covestro AG Share of voting rights 82,750,000 voting rights (40.86%) 18,000,000 voting rights (8.89%) 7,065,155 voting rights (3.49%) 107,815,155 voting rights (53.24%) 3

4 4. German Translation of the Summary- Abschnitt B - Emittentin - Element B.12 On pages 23 and 24 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 Halbjahreszeitraum endend am 30. Juni Für das Geschäftsjahr endend am 31. Dezember (Beträge in Millionen Euro, Ergebnis je Aktie in Euro) (ungeprüft) (geprüft) Umsatzerlöse Bruttoergebnis vom Umsatz EBIT (1) Finanzergebnis (88) (123) (196) (175) Ergebnis vor Ertragssteuern Ergebnis nach Ertragssteuern Unverwässertes Ergebnis je Aktie (2) 4,70 2,03 3,93 2,21 Verwässertes Ergebnis je Aktie (2) 4,70 2,03 3,93 2,21 (1) EBIT: Ergebnis nach Ertragsteuern zuzüglich Finanzergebnis und Ertragsteuern (2) Gewichtete durchschnittliche Anzahl der ausgegebenen stimmberechtigten Stückaktien der Covestro AG: Konsolidierte Bilanz Zum 30. Juni Zum 31. Dezember (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 Trendinformation Die Aussichten der Covestro AG haben sich seit dem Datum des letzten veröffentlichten, geprüften Konzernabschlusses zum 31. Dezember 2016 nicht wesentlich nachteilig verändert. Wesentliche Veränderungen in der Finanzlage und Handelsposition Nicht anwendbar. Es hat seit dem Datum der letzten Konzernfinanzinformationen zum 30. Juni 2017 keine wesentlichen Veränderungen in der Finanzlage und Handelsposition der Covestro AG gegeben. 4

5 5. German Translation of the Summary - Abschnitt B - Emittentin - Element B.13 On page 24 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 Zum 2. Juni 2017 hat Frank H. Lutz vorzeitig sein Amt als Finanzvorstand und Arbeitsdirektor der Emittentin niederlegt. Der Vorstandsvorsitzende der Emittentin, Patrick Thomas, hat das zusätzliche Amt des Finanzvorstandes für einen Übergangszeitraum übernommen. 6. German Translation of the Summary - Abschnitt B - Emittentin - Element B.16 On page 25 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 21 Wertpapierhandelsgesetz mitgeteilt wurden 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. Anteilseigner Bayer AG Bayer Pension Trust e.v. BlackRock Inc. Gesamt Tatsächliche (direkte oder indirekte) Beteiligung an der Covestro AG Anzahl der Stimmrechte Stimmrechte (40,86%) Stimmrechte (8,89%) Stimmrechte (3,49%) Stimmrechte (53,24%) 7. Description of Covestro AG and the Covestro Group Shareholder Structure On pages 121 and 122 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). 5

6 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 21 et seqq. WpHG 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 82,750,000 voting rights (40.86%) Bayer Pension Trust e.v. 18,000,000 voting rights (8.89%) BlackRock Inc. 7,065,155 voting rights (3.49%) Total 107,815,155 voting rights (53.24%) 8. Description of Covestro AG and the Covestro Group Selected Consolidated Financial Information On pages 125 and 126 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, 2016 and on the unaudited consolidated interim financial information of Covestro AG as of and for the half-year period ended June 30, Consolidated Income Statement For the half-year period ended June 30, Financial year ended December 31, (amounts in EUR million, earnings per share in EUR) (unaudited) (audited) Sales 7,084 5,865 11,904 12,082 Gross profit 2,338 1,645 3,293 2,644 EBIT (1) 1, , Financial result (88) (123) (196) (175) Income before income taxes 1, , Income after income taxes Basic earnings per share (2) Diluted earnings per share (2) (1) EBIT: Income after income taxes plus financial result and income taxes (2) Weighted average number of no-par voting shares of Covestro AG in issue: 202,500,000. 6

7 Consolidated Statement of Financial Position As of June 30, As of December 31, (amounts in EUR million) (unaudited) (audited) Noncurrent assets 5,593 5,966 6,294 Current assets 4,927 4,268 4,237 Total assets 10,520 10,234 10,531 Equity 4,746 4,216 3,612 Equity attributable to Covestro AG stockholders 4,718 4,189 3,596 Noncurrent liabilities 2,920 3,544 2,355 Current liabilities 2,854 2,474 4,564 Total equity and liabilities 10,520 10,234 10, Description of Covestro AG and the Covestro Group Management and Supervisory Bodies of Covestro AG On page 139 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 Patrick Thomas appointed as chair. The following table lists the members of the Management Board and their respective responsibilities. Name Area of Responsibility Principal Outside Board Memberships Patrick Thomas (Chair) Chief Executive Officer: Human Resources; Corporate Office; Communications; Corporate Audit, Sustainability Interim Chief Financial Officer: Investor Relations; Finance; Taxes; Accounting; Controlling; Portfolio Development; Law, IP & Compliance; Information Technology; CFO Greater China, USA; Chair of the Oxford University Business Economics Programme Board, chair of the advisory board of the European Institute for Industrial Leadership, fellow Royal Academy of Engineering, Member of executive committee of VCI, Executive Committee and Board of CEFIC, Member of supervisory board of AkzoNobel N.V., Amsterdam (nominated) Dr. Klaus Schäfer Chief Technology Officer: Member of the presidium of Weltenergierat- Production & Technology Deutschland e.v., member of committees in the Polyurethanes, Polycarbonates and Registered Association of the Chemical Industry Coatings, Adhesives and (VCI) and the European Chemical Industry Council Specialities; Operational Excellence; (CEFIC), member of the Board of VIK (Verband Technology Coordination; der Industriellen Energie- und Kraftwirtschaft e.v.), Leadership for all chemical member of the Board of Forum für production assets; Health, Safety, Zukunftsenergien e.v. Environment and Quality; Global Project Engineering; CTO Office; Procurement; Labour Director Germany (Arbeitsdirektor) 7

8 Name Area of Responsibility Principal Outside Board Memberships Dr. Markus Steilemann Chief Commercial Officer: Business Member of the Board of Trustees of the German Units Polyurethanes; Polycarbonates Chemical Industry Fund (Kuratorium des Fonds der and Coatings, Adhesives and Chemischen Industrie), member of the Steering Specialities; Strategy; Innovation Committee of the Catalytic Center Aachen, member Management & Commercial of the Steering Committee Covestro-Tongji Services; Supply Chain Center Innovation Academy, Beijing EMLA, NAFTA, APAC The members of the Management Board may be contacted at the business address of Covestro AG. 10. Description of Covestro AG and the Covestro Group Recent Events On page 142 of the Base Prospectus, in the section Recent Events the content shall be replaced by the following: Recent Events Effective June 2, 2017, Frank H. Lutz resigned early as Chief Financial Officer and Labour Director (Arbeitsdirektor) of the Issuer. Patrick Thomas as Chief Executive Officer of the Issuer has taken on the additional office as Chief Financial Officer on an interim basis. For further information please see Description of Covestro AG and the Covestro Group Management and Supervisory Bodies of Covestro AG. 11. Description of Covestro AG and the Covestro Group Significant Changes On page 142 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 consolidated financial information dated June 30, Description of Covestro AG and the Covestro Group Consolidated Financial Information On pages 143 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, 2016 and on the unaudited consolidated interim financial information of Covestro AG as of and for the half-year period ended June 30, 2017, 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 PwC issued an unqualified auditor's report. 8

9 Consolidated Income Statement For the half-year period ended June 30, Financial year ended December 31, (amounts in EUR million, earnings per share in EUR) (unaudited) (audited) Sales 7,084 5,865 11,904 12,082 Cost of goods sold (4,746) (4,220) (8,611) (9,438) Gross profit 2,338 1,645 3,293 2,644 Selling expenses (690) (658) (1,323) (1,257) Research and development expenses (132) (125) (259) (257) General administration expenses (227) (214) (451) (480) Other operating income Other operating expenses (25) (29) (55) (98) EBIT (1) 1, , Equity-method loss (12) (10) (20) (10) Interest income 11 (2) 5 (2) 5 4 Interest expense (71) (2) (81) (2) (53) (89) Other financial result (16) (2) (37) (2) (128) (80) Financial result (88) (123) (196) (175) Income before income taxes 1, , Income taxes (332) (164) (329) (153) Income after income taxes of which attributable to noncontrolling interest of which attributable to Covestro AG stockholders (net income) Basic earnings per share (3) Diluted earnings per share (3) (1) EBIT: Income after income taxes plus financial result and income taxes (2) The previous year s figures were adjusted retroactively to reflect the change in the accounting treatment of forward exchange contracts. Since January 1, 2017, the effect on earnings of forward exchange contracts for the purpose of hedging foreign exchange risks has been divided into an interest and a currency component to improve the transparency of presentation for the results of operations. The interest component comprises interest rate-induced changes in the fair value of forward exchange contracts and the forward element, which reflects the interest rate differences between two currency areas at the time the transaction is entered into. For this reason, the interest component is no longer reported in other financial result, but instead in interest income or expense. Net interest therefore provides a more comprehensive picture of financing costs. In addition, there will no longer be any interest-rate induced effects in the currency position included in the other financial results. In accordance with IAS 8.22, the changes will be applied retroactively. (3) Weighted average number of no-par voting shares of Covestro AG in issue: 202,500,000. 9

10 Consolidated Statement of Financial Position As of June 30, As of December 31, (amounts in EUR million) (unaudited) (audited) Noncurrent assets 5,593 5,966 6,294 Goodwill Other intangible assets Property, plant and equipment 4,327 4,655 4,934 Investments accounted for using the equity method Other financial assets Other receivables Deferred taxes Current assets 4,927 4,268 4,237 Inventories 1,842 1,721 1,783 Trade accounts receivable 1,982 1,674 1,486 Other financial assets Other receivables Claims for income tax refunds Cash and cash equivalents Assets held for sale Total assets 10,520 10,234 10,531 Equity 4,746 4,216 3,612 Capital stock of Covestro AG Capital reserves of Covestro AG 4,908 4,908 4,908 Other reserves (393) (922) (1,515) Equity attributable to Covestro AG stockholders 4,718 4,189 3,596 Equity attributable to noncontrolling interest Noncurrent liabilities 2,920 3,544 2,355 Provisions for pensions and other post-employment benefits 1,167 1,209 1,462 Other provisions Financial liabilities 1,245 1, Income tax liabilities Other liabilities Deferred taxes Current liabilities 2,854 2,474 4,564 Other provisions Financial liabilities ,507 Trade accounts payable 1,358 1,536 1,403 Income tax liabilities Other liabilities Total equity and liabilities 10,520 10,234 10,531 10

11 Consolidated Statement of Cash Flows For the half-year period ended June 30, (amounts in EUR million) (unaudited) Income after income taxes Income taxes Financial result Income taxes paid (62) (201) Depreciation, amortization and impairments Change in pension provisions 26 (2) (Gains) losses on retirements of noncurrent assets (45) - Decrease (increase) in inventories (200) 76 Decrease (increase) in trade accounts receivable (382) (302) (Decrease) increase in trade accounts payable (128) (131) Changes in other working capital, other noncash items (207) (50) Cash flows from operating activities Cash outflows for additions to property, plant, equipment and intangible assets (166) (126) Cash inflows from sales of property, plant, equipment and other assets 12 3 Cash inflows from divestitures 47 - Cash outflows for noncurrent financial assets (17) (7) Cash inflows from noncurrent financial assets 1 2 Cash outflows for acquisitions less acquired cash (4) - Interest and dividends received (1) 18 9 Cash inflows from (outflows for) other current financial assets (1) Cash flows from investing activities (1) (377) (74) Dividend payments and withholding tax on dividends (274) (143) Issuances of debt 156 1,740 Retirement of debt (99) (2,392) Interest paid (1) (63) (63) Cash flows from financing activities (1) (280) (858) Change in cash and cash equivalents due to business activities 39 (492) Cash and cash equivalents at beginning of period Change in cash and cash equivalents due to exchange rate movements (6) 1 Cash and cash equivalents at end of period (1) The previous year s figures were adjusted retroactively to reflect the change in the accounting treatment of forward exchange contracts. Since January 1, 2017, the effect on earnings of forward exchange contracts for the purpose of hedging foreign exchange risks has been divided into an interest and a currency component to improve the transparency of presentation for the results of operations. The interest component comprises interest rate-induced changes in the fair value of forward exchange contracts and the forward element, which reflects the interest rate differences between two currency areas at the time the transaction is entered into. For this reason, the interest component is no longer reported in other financial result, but instead in interest income or expense. Net interest therefore provides a more comprehensive picture of financing costs. In addition, there will no longer be any interest-rate induced effects in the currency position included in the other financial results. In accordance with IAS 8.22, the changes will be applied retroactively. 11

12 Consolidated Statement of Cash Flows Financial year ended December 31, (amounts in EUR million) (audited) Income after income taxes Income taxes Financial result Income taxes paid (1) (418) (194) Depreciation, amortization and impairments Change in pension provisions 8 (21) (Gains) / losses on retirements of noncurrent assets 1 (13) Decrease / (increase) in inventories Decrease / (increase) in trade accounts receivable (171) 172 (Decrease) / increase in trade accounts payable 123 (270) Changes in other working capital, other noncash items (1) Cash flows from operating activities 1,786 1,473 Cash outflows for additions to property, plant, equipment and intangible assets (419) (509) Cash inflows from sales of property, plant, equipment and other assets 6 42 Cash outflows for noncurrent financial assets (1) (19) (101) Cash inflows from noncurrent financial assets (1) Cash outflows for acquisitions less acquired cash - (14) Interest and dividends received 7 6 Cash inflows from / (outflows for) current financial assets (1) (621) 23 Cash flows from investing activities (1,042) (380) Capital contribution from Bayer AG - 1,855 Capital contributions from IPO - 1,485 Financial transactions with the Bayer Group - (1,806) Cash outflows for profit transfer to Bayer AG - (5) Dividend payments and withholding tax on dividends (143) (12) Issuances of debt 1,793 4,241 Retirements of debt (2,727) (6,310) Interest paid (45) (93) 12

13 Financial year ended December 31, (amounts in EUR million) (audited) Cash flows from financing activities (1,122) (645) Change in cash and cash equivalents due to business activities (378) 448 Cash and cash equivalents at beginning of year Change in cash and cash equivalents due to exchange rate movements 3 (7) Cash and cash equivalents at end of year (1) In fiscal year 2016, the presentation of the Consolidated Statement of Cash Flows was changed to provide more relevant information pursuant to IAS 1.41 et. seqq. In fiscal year 2015, income taxes paid or accrued were reported in the statement of cash flows. The amount of tax paid in accordance with IAS 7.35 was disclosed separately in the notes to the Consolidated Financial Statements. Furthermore, cash inflows from / outflows for noncurrent financial assets were presented as net item. Starting in fiscal year 2016, gross cash inflows and gross cash outflows are reported separately as per IAS In addition, the classification of cash flows from financial assets was improved in fiscal year In fiscal year 2015, these had been included in cash inflow from / outflows for noncurrent financial assets. Because these are mainly current cash flows, this item will be presented in cash inflows from / outflows for other current financial assets from fiscal year 2016 onward. The prior-year figures were adjusted in each case. The historical financial information for Covestro as of and for the fiscal years ended December 31, 2016 and 2015 presented in this Base Prospectus also reflect this presentation. However, the Consolidated Financial Statements of the Covestro Group as of and for the fiscal year ended December 31, 2015 which are incorporated into this Base Prospectus by reference, were not adjusted to present the cash flow statement accordingly. 13. Documents incorporated by reference On page 183 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, 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

14 (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, 2015 Consolidated Income Statements... page 110 Consolidated Statements of Comprehensive Income... page 111 Consolidated Statements of Financial Position... page 112 Consolidated Statements of Cash Flows... page 113 Consolidated Statements of Changes in Equity... page 114 Notes to the Consolidated Financial Statements... pages Report of the Independent Auditors of the Consolidated Financial Statements... pages (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, 2017 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 (4) 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, 2016 Consolidated Income Statement... page 23 Consolidated Statement of Comprehensive Income... page 24 Consolidated Statement of Financial Position... page 25 Consolidated Statement of Cash Flows... page 26 Consolidated Statement of Changes in Equity... page 27 Notes to the Consolidated Interim Financial Statements... pages 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 14

15 Registered Office of the Issuer Covestro AG Kaiser-Wilhelm-Allee Leverkusen Germany 15