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Covestro April 12th, 2019

Item 3: We recommend to oppose the discharge of the Management Board. On 20 November 2018, the Company issued a profit warning and lowered its guidance for financial year 2018 with respect to core volume growth, EBITDA, free operating cash flow (FOCF) and return on capital employed (ROCE). According to the Company, this was due to "intense competition, increased costs and formation of provisions". The profit warning, which led to a drop in the Company's share price by 15.6%, came only four weeks after the Company had confirmed its full-year guidance on 25 October 2018. In our view this raises fundamental concerns over the reliability of the Management Board's forecasting ability and its communication to stakeholders.

Covestro AG

Covestro AG is a global supplier of high-tech polymer materials and application solutions developed for these materials. Co. produces precursors for polyurethane foams and the high-performance plastic polycarbonate in addition to raw materials for coatings, adhesives and sealants as well as specialty products, including high-quality films. Other precursors such as chlorine and by-products like styrene are part of Co.'s range of products.


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