Ladies and gentlemen, as Chairman of the Supervisory Board at Covestro AG, and thus Chairman of this annual general meeting, I call the fifth AGM of our company to order. I would also like to welcome you on behalf of the Board of Management and the Supervisory Board. We would like to have welcomed you to this year's annual general meeting in person here in Bonn. Our AGM is taking place this year under unusual circumstances. The COVID-19 pandemic is a global threat to health, to life and health, and to human interactions as we have known them up until now. Some restrictions have been relaxed, but the order of the day continues to be to limit physical contacts and to practice social distancing.
This makes an annual general meeting with a large number of shareholders coming together, as we've had in the past, something that is unfortunately not possible today. In agreement with the Supervisory Board, the Board of Management decided to hold this year's AGM as an online event without the presence of shareholders in person. This is a possibility which the German legislature gave to corporations as a reaction to the COVID-19 pandemic. The purpose here is to be able to have AGMs in the first place and to give shareholders the possibility to take the necessary decisions without posing risks to their health or the health of our employees or our service providers. For shareholders, this means that they can exercise their rights electronically and follow the meeting on the internet.
Ladies and gentlemen, I'd also like to add that this was not an easy decision for the Board of Management and the Supervisory Board because we value the dialogue with you, shareholders, and I'm sure that you also value discussions with the Board of Management and the Supervisory Board of your company. A virtual AGM gives us only limited possibilities for this type of dialogue. This year, you were able to submit your questions ahead of time, and we will answer all of your questions during the course of this annual general meeting. The major advantage behind an online AGM is that with you, we can take the decisions we need to take within the normal eight-month period. We can review fiscal 2019 and take all of the necessary resolutions. This includes a resolution on the use of distributable profit for 2019 and also the dividend payment, among other things.
The Board of Management and the Supervisory Board are proposing a dividend amounting to EUR 1.2 per share as a result of the current economic situation, which means that approximately half of the net income from fiscal 2019 will be carried forward. In other words, it will remain in the company. But rest assured, this too was a decision that was not easy for us to take, but we're convinced that it's in the best interest of Covestro AG and all of Covestro's shareholders so that we can give stability to our company. And next year, we hope, after the health and economic situation will return to normal, that we will be able to return to a higher dividend. The CEO, Dr. Steilemann, will go into more detail on this point in the course of his speech.
Ladies and gentlemen, following these preliminary remarks, I would like to come to some of the formalities behind this online AGM. Of course, these deviate from a traditional AGM where the shareholders are present in person. First of all, I would like to note that the notice to today's online AGM, including the agenda and the proposed resolutions from the Board of Management and Supervisory Board, was published in the Federal Gazette on the 17th of June, 2020, in due form and in due time. Since then, all of the required documents and information were available on Covestro AG's website, and they are also available for the entire duration of this online AGM. One copy of all of the required documents is also available today with Dr.
Mark Hermanns, our notary public, who is based in Cologne, and he will be responsible for taking the minutes of today's AGM, as he has done in the past. Dr. Hermanns is sitting next to me. When I sit down, he'll be sitting next to me. And of course, we will have the required social distancing. Welcome to you, Dr. Hermanns. The Board of Management at Covestro AG is present today. It is made up of the CEO, Dr. Markus Steilemann, and Ms. Sucheta Govil, Dr. Thomas Toepfer, and Dr. Klaus Schäfer. I would like to welcome all of them. I'd especially like to welcome Ms. Sucheta Govil. She joined the Board of Management last August, and she is our Chief Commercial Officer responsible for sales, marketing, and innovation. Ms.
Govil has held a number of management positions in renowned companies in the fields of marketing and innovation, and she will be contributing her experience here at Covestro. Ms. Govil, we are very happy to have you on board. With regard to the Supervisory Board, I am here in person together with Professor Dr. Nonnenmacher. The remaining members of the Supervisory Board are participating online using the video and audio transmission of today's annual general meeting. This is also due to the current circumstances caused by COVID-19, and it will help us to keep the number of personal contacts to an absolute minimum. And now, at this point, I would like to welcome Ms. Reinbold-Knape. She joined the Supervisory Board in January. Ms. Reinbold-Knape succeeds Mr. Peter Hausmann, who was a member of the Supervisory Board as an employee representative.
He stepped down at the end of fiscal 2019 when he retired. On behalf of the Supervisory Board, I would like to thank Peter Hausmann once again for his many years of work on the Supervisory Board, for the good cooperation, and a large number of valuable discussions. His successor, Ms. Reinbold-Knape, is on the board of the Mining, Chemical and Energy Trade Union and is responsible for education, labor market, and diversity. Ms. Reinbold-Knape, I too would like to welcome you here today. Ladies and gentlemen, of course, we will be drawing up a list of participants for our online AGM as required by law. This will include the proxies designated by the company who are here in person, and also the shareholders they represent and their respective shares.
I would now like to announce the number of shares represented, which can be seen on the current list of participants. Of the registered share capital at Covestro, amounting to EUR 183 million , divided up into 183 non-par value shares, we see that 119,606,238 non-par value shares are represented here with the same number of votes. This is 65.36% of the registered share capital. Of course, we also have absentee ballots representing 85,222 non-par value shares. So that means, all in all, we have 119,691,460 non-par value shares, which represents 65.41% of the registered share capital. The list of participants is in this room and will be updated on an ongoing basis whenever necessary. I will announce the number of shares represented later once again. The shareholders who registered in due time and in due form were able to submit questions prior to the AGM.
This was done via the investor portal up until midnight of last Monday, the 27th of July 2020. These questions will then be answered today following the speech given by the CEO and the report of the Supervisory Board. All in all, 62 questions were received from seven individuals. So that is not even more questions than at the AGM in 2019 when we received 50 questions from seven individuals. This is even more questions than we received on average in the last few years. I'm very pleased at the interest you are showing in our company and in our online AGM. It's important for me to note now that with regard to the questions, we have not made a selection. We will be answering all of the questions that were duly submitted.
We will mention your name if you explicitly agreed to our doing so when you submitted your question. We will also answer your questions just as extensively as we would do in a traditional in-person AGM because it's important for us. It's very important for us, for you, our shareholders, to receive all of the necessary information so that you can appropriately decide on the agenda and on our proposed resolutions. In this way, we want to come as close to the dialogue we would have in an in-person AGM as close as possible under the given circumstances. And all of the shareholders who registered in due form and due time could also cast their vote electronically beforehand, either by means of absentee ballot or by giving authorization and instructions to the proxies designated by the company.
During our AGM today, you can still do so using the website's investor portal. You can do this until the Board of Management has answered all of the shareholders' questions and until we come to the votes. I will mention this once more and explicitly tell you that that will then be the last possibility you have to vote electronically or to give instructions. I would like to ask you to cast your votes as soon as possible, and information on exercising your voting rights can be found in the notice to the AGM and on the company's website. I would also like to note that no additions to the agenda were requested and no counter motions were received. So that should suffice when it comes to formalities. Ladies and gentlemen, that brings us to the agenda, which was published in the notice to the AGM.
We want to begin with agenda items one and two, which deal with the financial statements and reports, as well as the resolution on the use of distributable income. Ladies and gentlemen, I would now like to hand over to the Chief Executive Officer at Covestro, Dr. Markus Steilemann.
Ladies and gentlemen, shareholders, on behalf of the whole Board of Management of Covestro AG, welcome to our virtual AGM. I am delighted so many of you are here today. Unfortunately, we're not able to gather in person due to the coronavirus pandemic. All of us are experiencing exceptional times now, and this continues to present us with new challenges. This applies to you, and this applies to us on the Board of Management of Covestro, and this applies to each and every one of our employees.
This is one reason why I feel it is important to begin by saying thank you. I am proud of our employees. No one could have foreseen the coronavirus pandemic, but Covestro has responded swiftly and professionally to the challenge. Around the globe, our employees have put their shoulders to the wheel. They are ensuring our plants operate safely and reliably, and they are safeguarding the supply to our customers. That's what they've always done, and now they are doing it under completely new conditions because the coronavirus pandemic has changed our daily work routine tremendously. Within just a few days, our entire organization not only adopted the new way of working, it also infused it with life. I'm also proud of the solidarity demonstrated by our employees around the world.
Today, they're showing this toward their colleagues, toward our business partners, and far beyond our company as well. All the more so when I think about what the crisis has demanded of each of us. Our guiding principle is we are one. This is simple when everything is running smoothly, but it's also our ambition in challenging times, and we have accomplished it exceptionally well. In the spring, we initially focused on maintaining production and supply chains. The health of our employees, business partners, and customers has always been at the top of our priority list. Our administration employees have worked from home during the past few weeks and months. Only the necessary core staff was on site, and this has mostly remained the same until today.
This was not so easy in production, and for this reason, I would like to extend a special thanks to our colleagues on the front line. They have kept our plants around the world running. And it goes without saying, compliance with the very stringent protective and hygiene measures we have. Therefore, our global supply chains have remained stable at all times, and we are thus once again proving that Covestro is a reliable partner in tough times as well. This will lastingly strengthen our customer relationships even beyond the current coronavirus crisis. We want to contribute to containing the global pandemic, and this is very important for us. Therefore, our employees around the globe have been working hard over the past few weeks and months. I would like to provide you with just a few examples.
We've donated protective eyewear and respirator masks to hospitals in Germany to help doctors and nurses protect themselves against the virus. Our Chinese colleagues have given 10,000 units of protective eyewear to the German Ministry of Health, and we have provided the German Aerospace Center with plastic granulate needed to make 3D printed face protection. The coronavirus pandemic has, of course, impacted our business, but we took prompt and systematic counteraction. That proved extremely challenging. The uncertainty was high, especially in the first few weeks of the crisis. We had to work cautiously and react quickly in a new situation that was in permanent flux. Our top priority is always to ensure the safety of our employees, business partners, and customers. That's followed by maintaining production and supply chains.
Equally important for us is to safeguard our strong liquidity position because liquidity is vital to maintaining our ability to act in a situation where it is hard to predict what will happen, and to do that, we have resolutely taken various measures. We have taken early action by creating a foundation for sustainably improving efficiency through our Perspective program, and we're now benefiting from this. This year, we expect savings of EUR 130 million . On top of that, there is our short-term cost-saving program, which we have tightened once again in the course of the corona crisis. As a result, we will reduce costs by an additional EUR 300 million instead of the EUR 200 million that we had originally planned. As things currently stand, we will achieve this target.
We have secured considerable additional liquidity through a new revolving credit line, through short-term working capital facilities, through a loan from the European Investment Bank, and through the issuance of Euro bonds. We've adjusted our investment plans, and the current fiscal year will invest EUR 700 million. That's about EUR 200 million less than originally intended, and that further strengthens our liquidity position in the short term. Our employees worldwide are also showing their solidarity in this exceptional economic situation. In Germany, we've come to an agreement with employee representatives on the following model. We are adjusting salaries of all employees and, at the same time, shortening working hours. This applies for six months through the end of November. It goes without saying that we will share the burdens fairly and not make excessive demands of anyone.
Strong shoulders bear the greatest load, and we believe that this also is what solidarity means. The higher the employee's pay grade, the greater the percentage of the salary reduction. Members of the Board of Management and Supervisory Board have taken a 15% cut in pay. That is a higher percentage than all other employees, and I'm very proud that more than 95% of our managerial employees voluntarily agreed to make this sacrifice. Our international companies have implemented the measures in a manner specific to their respective region. Our employees are therefore making a key contribution to helping Covestro navigate safely through the crisis, and I join all of us in thanking them for that. Shareholders, after careful deliberation, we've adopted a further measure. It has a very immediate impact on you. We are proposing to today's AGM a dividend of EUR 1.20.
That is only half of the originally planned EUR 2.40. We've reached, therefore, a balanced decision. First, we are taking into account your interest in participating in the company's success to an appropriate extent. Secondly, we are safeguarding our strong liquidity position and creditworthiness. Thus, we are further strengthening the stability of Covestro in these turbulent economic times. In the end, all of us, including you as our shareholders, will benefit from that. Our systematic crisis management is already producing positive results. We can see that from our figures for the second quarter of the current fiscal year. You're already familiar with these figures. We released them a week ago, but let us still take a look at them now. The quarter was overshadowed by the coronavirus pandemic and its impact on all industries in the whole world.
As anticipated, the economies of Europe and North America were hit particularly hard by it, and this affects us too. Core volumes fell sharply by 22.7% in comparison with the prior year quarter. That is also reflected in sales. The intensified pressure on prices is amplifying this effect. As a result, sales decreased by around EUR 1 billion to approximately EUR 2.2 billion. Earnings also fell EUR 125 million, following EUR 459 million in the previous year. That decline, however, is far lower than analysts had expected, and that is very good news. At the beginning of July, the analysts' assessment was that we would post earnings of just EUR 80 million. What's the reason for that? Well, demand recovered quickly. The biggest fall in core volumes took place in April. The situation has progressively improved since mid-May, particularly for Polycarbonates.
The segment has seen rising demand from the construction industry. So our diversified positioning is therefore proving its worth yet again. And we've also got some good news about our liquidity. Our free operating cash flow has increased to EUR 24 million, and this shows our strict liquidity management is working. On the basis of that, we are confirming our guidance for the current fiscal year. Nevertheless, 2020 remains an exceptional year. The economic environment continues to be uncertain. Further developments depend largely on the course of the coronavirus pandemic, and that is not completely foreseeable. This makes it all the more important that we've established a solid position for ourselves. Our measures are working and producing positive results, and we will continue to steer Covestro unwaveringly through this crisis. We already mastered the challenging year of 2019 successfully.
You're familiar with these figures, but it's important to me that we review them again. Price trends in 2019 were already very challenging. There's been a market shift in the supply and demand situation. Many new plants entered the world market. Demand, however, is not increasing to the same extent. This means that we're facing a global oversupply. That mainly affects the rigid foam precursor MDI, and our flexible foam precursor TDI is impacted as well, just like the polycarbonate area. That is high-tech materials. In this challenging market environment, we achieved solid results in 2019. All key figures are in line with our annual guidance. Core volumes increased by 2%. Sales fell to EUR 12.4 billion . EBITDA declined sharply to EUR 1.6 billion . Our free operating cash flow was EUR 473 million , and ROCE was 8.4%. This means that we achieved all our financial targets in 2019.
I would like to emphasize one thing. Demand for our products was absolutely intact until the coronavirus pandemic broke out. Since 2015, we have increased volumes by around 4% annually. I'll return later to our strategy for tackling this situation, and now, I will hand over to Thomas Toepfer. He will provide you with a detailed look at how this impacted 2019.
Thank you, Markus. Ladies and gentlemen, shareholders, I would also like to extend a warm welcome to our virtual annual general meeting. In the next few minutes, I would like to provide you with more details about our figures for the past fiscal year 2019 and explain Covestro's current financial situation. Let us first take a look at the individual segments. First, the polyurethane segment. That is the core product for the production of rigid as well as soft foams.
Soft foams, you know, for example, from your car seats or mattresses. Rigid foams, for instance, are used for the efficient insulation of buildings. Here, we posted very solid growth of 2.3% in fiscal 2019. Our sales declined to EUR 5.8 billion over the same period, however. As is also the case for group sales, that is mainly attributable to the considerable pressure on prices. Now, this does particularly apply to TDI. In this area, our margins were at an exceptionally high level in fiscal 2018. Looking forward to the future, we need to differentiate between our products. The prices for MDI in fiscal year 2019 were well below long-term levels. That also remains the case for the moment.
However, we believe there is a very good chance that the gap between demand and production capacities will close in the medium term, and we will therefore see a more positive price trend. We likewise have surplus capacities and consequently pressure on margins in the TDI arena. That situation will not change in the short term as a result of the coronavirus pandemic. However, we do believe, and this is at least the positive news, that we have reached the bottom of the downturn. In these challenging conditions, the segment generated an EBITDA of EUR 648 million in the past fiscal year. The margin of around 11% is below average for the cycle. That is due to the circumstances that I have just explained. Let us now turn to the second segment, Polycarbonates.
These are high-performance polymers, such as what is used for car headlights, for laptop casings, or in medical equipment. Here too, we achieved solid volume growth of 2.7% in 2019. We greatly benefit from our diversified positioning in this segment. Demand in one of our most important sales markets, the automotive industry, did indeed fall. However, that was more than offset by rising demand from other industries, such as medical technology and electronics. Nevertheless, we experienced significant pressure on prices here too. That is also reflected in our earnings performance: EUR 536 million and a decline in the margin to 15.4%, which we're not fully able to compensate for despite the cost cuts. However, we remain confident that the polycarbonate business has good growth prospects in the long term and that it will remain a very interesting line of business that offers attractive margins.
Now we come to our third segment, CAS. CAS stands for Coatings, Adhesives, and Specialties, and this includes products that increase the resilience of vehicle coatings or flooring or that prevent the weathering of wind turbines. We had a slightly negative volume growth of -1% in this segment. That is attributable to the previously mentioned decline in global demand in individual industries, specifically the automotive industry. EBITDA in this segment was slightly up over the previous year at EUR 469 million , and the margin remained constant at approximately 20%. We therefore managed to compensate for the negative volume effect on our earnings. A targeted acquisition in Japan helped us accomplish that, but we also succeeded in stabilizing our prices. In that regard, we can be satisfied with our result in the CAS segment. Let us now return to group level and look at our balance sheet for 2019.
As you can see from the header, we can continue to report that our balance sheet for 2019 is exceptionally solid. Although net debt as of December the 31st, 2019, rose by EUR 1.16 billion to almost EUR 3 billion, that increase was almost fully due to accounting effects. Adoption of the accounting standard, IFRS 16, means the existing lease agreements we concluded long ago are now carried on our balance sheet. This effect increased debt by EUR 575 million. Moreover, the discount rate for pensions, in particular in Germany, fell again. As a result, our pension obligations in our balance sheet increased by EUR 520 million. You can see that in the line on the right-hand side of the graphic. The combined total for these two effects is over EUR 1 billion.
While it's therefore true that our net debt has risen, this is attributable to the accounting effects I just mentioned. The ratio between EBITDA and net debt has increased from 0.6 at the end of 2018 to 1.8. However, we remain unequivocally committed to maintaining a solid investment-grade rating. Now let's have a look at our dividend policy. Our policy is to pay out an increased or at least stable dividend to our shareholders. That was also our intention last year. We will, however, deviate from that policy in 2020 due to the enormous impact of the coronavirus pandemic. Nevertheless, and I believe that this is good news in these times, we want to pay you, our shareholders, a dividend despite the difficult macroeconomic situation. Envisaged is EUR 1.20 a share.
The total payout would therefore be almost EUR 220 million , which is equal to a payout ratio of 40% and, as a result, a new record. I am convinced we have made a balanced decision with this proposed dividend. We consider the interests of our shareholders, and we secure our robust liquidity position and credit rating. In these challenging times, we benefit from having promptly and with determination implemented measures to maintain our ability to act. Back in 2018, we launched our Perspective Program, an extensive concept aimed at increasing our effectiveness and efficiency. Since then, we have reached and accomplished important milestones as part of this program. We have streamlined our standard businesses with structural measures. At the same time, we have maximized synergy effects in our portfolio and also increased cost efficiencies.
We have also recognized our central functions and pressed ahead with differentiating our portfolio in order to put our company on an even broader and more stable basis. All that resulted in a contribution of EUR 150 million to our earnings in 2019. A further EUR 130 million are expected in 2020. Given the challenging market environment, we have implemented further short-term cost-cutting measures since last year. In view of the coronavirus pandemic, we have intensified efforts even more this year. We now aim to achieve additional short-term savings of more than EUR 300 million this fiscal year, instead of the originally planned EUR 200 million . And as things currently stand, we will also achieve these targets. We will achieve those additional savings by reducing material costs, among other actions. In this context, we have initiated and conducted intensive budget reviews. Another significant item is our maintenance costs.
Here too, we are working intensively on a number of measures to reduce them. However, and I wish to emphasize this, these measures are in no way affect the safety and responsibility and reliability of our plants. Our colleagues' safety always has top priority for us. We have primarily postponed non-acute projects here. Our procurement chain is a further area where we are leveraging cost-cutting potential by means of targeted optimization measures. In addition, there are the solidarity measures of Covestro's global workforce, including the management board and supervisory board. Markus Steilemann has already explained this in detail. We are also scrutinizing our investments to further strengthen our liquidity. As you can see, we are thinking long-term with our Perspective Program, while not neglecting short-term challenges. All these measures help us maintain the flexibility and security that we need to cope with the challenges of the coronavirus pandemic.
A strong liquidity position is a further key success factor. It makes us more resilient and able to respond to unforeseen events. That is why we took various financing measures in the first half of this year to strengthen Covestro's lasting liquidity. We concluded a new revolving credit facility of EUR 2.5 billion with a term of five years with our principal banks. That is a pure liquidity reserve, since we have no plans at present to draw on the loan. The credit line is linked to an ESG rating comprising three criteria: environmental, social, and governance. The better we as a company perform in these areas, the lower the interest components are. Thus, there is a clear financial incentive for us to develop our business sustainably.
We have strengthened financing of our current business operations, for example, in relation to our plants, with a short-term working capital facilities of EUR 500 million and a loan of EUR 225 million from the European Investment Bank, which will help us boost our research and development activities, in particular in the area of the circular economy. You will also be aware of the fact that we recently placed two Euro bonds with a total volume of EUR 1 billion on the international debt markets. These bonds were issued in two tranches, which are due in February 2026 and June 2030, and they carry an interest of 0.875% and 1.375%, respectively. There was exceptionally high demand from investors. It was so high that the issue was oversubscribed more than tenfold. A clear sign that the capital market has a great trust in Covestro, even in these challenging times.
As a result of this measure, we have significantly lengthened the average maturity of our bond portfolio and bolstered our liquidity further. Moreover, we will also use the funds we generate to repay the existing bond with a maturity up to 2021. As you can see, ladies and gentlemen, Covestro has a very solid basis, especially in these challenging times, and it enjoys the trust of the capital markets. I would now like to hand things back to Markus Steilemann, who will go over the progress we have made in addressing our strategic areas of focus. Over to you, Markus.
Thank you, Thomas. Ladies and gentlemen, shareholders, the development over the first six months and the economic outlook for the current year show that we still find ourselves in a difficult macroeconomic situation. But I'm sure of this, that we will successfully steer Covestro through this situation.
That's because we're pursuing a clear and far-sighted strategy, the strategy that addresses current challenges, but above all, it will secure the company's long-term success. I now wish to explain to you three cornerstones of our strategy in further detail. First, we are positioning our innovative capacity. To do this, we are positioning ourselves thus to thrive in the future, and we're boosting our innovativeness. This is a far-reaching complex. I'll select two areas as examples. First, the major future issue of 5G, a fast-growing market segment. The 5G network standard for mobile communications boasts a high transmission speed but also has a very short range, and this means that a dense network of antennas will be needed. This is the only way for us to achieve good network coverage, and we'll have to install a lot of antennas, and the material of choice is polycarbonate.
You could call it the decathlete among materials. That is due to its unique combination of qualities. It's light and yet dimensionally stable. That makes it exceptionally safe to use, and it offers maximum freedom in terms of color and surface design. Polycarbonate, therefore, meets all the requirements to play a key role in the expansion of 5G, for example. Now let's move on to the second example, digital chemistry. Today, we're able to calculate precise forecasts and models at breathtaking speed. Advances in the power of modern computers have made this possible. It's something researchers could only have dreamed of a few years ago. Perhaps you know this from chemistry lessons at school. Setting up and conducting chemical experiments is often a very laborious process. In the chemicals industry, these experiments are many times more complex.
They involve a lot of time and resources, but now we can simulate them on a computer. We can change individual variables at the touch of a key and simply repeat the experiment as many times as needed. And this saves lots of time and money. Quantum computing is the pinnacle of this development. This technology boasts the greatest computing power now technically possible. In this way, highly complex chemical reaction processes can be simulated and assessed in the future. And this can be done very quickly. This will also play a vital role if we want to advance the circular economy. After all, it will enable us to take research and development to a completely new level. Also, and in particular, in regard to the pace at which we can develop innovations. We want to move forward quickly here, and we're looking for strong partners to do this.
In early July, we announced a partnership with Google. Working together, we will evolve this technology for use in the chemical industry. We optimize our production network. The second key pillar is that we're optimizing our production network. That means that we are making our production more efficient, and we are expanding our production capacities even further. At the start of the year, we successfully expanded our production capacity in Brunsbüttel by 200,000 tons in the area of MDI rigid foams. That's already providing us opportunities for additional growth this year. We are becoming leaders in sustainability. Covestro is leading the way on the topic of sustainability, and that is the third pillar I would like to address. Our society is facing major challenges. We will not be able to resolve many of them without plastics, because plastics are one of the most sustainable materials there are.
But you have to rigorously adopt an approach focused on circularity. And we're embarking on a long strategic journey here, one that will also be arduous, but we're convinced that the goal is worthwhile. I want to now take you on a journey. It starts with issues to which the global community is again turning its focus: the major global challenges. Climate change, environmental pollution, dwindling resources, to name just a few. The coronavirus crisis has dispelled these issues only briefly, and they will move increasingly to the fore in the future. Many feel we've reached a crossroads that the new start also offers an opportunity to create a better, more sustainable world. This has found its way into people's minds, in society, among political leaders, in the business community, in the scientific, cultural, and financial worlds. Terms such as green recovery have been coined for this.
Covestro too aims to contribute to this break with the past, because we want to make the world a brighter place. That is the rationale and purpose of our company, and we know how to get there. A sustainable, climate-neutral future is feasible, but only if we make a significant common effort. Society and the economy must find a responsible approach to our limited resources and make circularity the new guiding principle. And not least, we must make value creation more sustainable. We have the blueprint for a truly sustainable world, the concept of the circular economy. It has to become our new global guiding principle. The circular economy will significantly advance protection of the environment. It will enable us to conserve resources if implemented without compromise and worldwide. It will help to attain greenhouse gas neutrality and curb global warming. How will that work?
By ensuring that we do not use carbon from fossil sources such as crude oil, and if, however, it is used, then this must be used in a closed-loop cycle where it cannot enter the atmosphere. The circular economy means we are leaving behind linear consumption and production patterns that are geared to one-time use. Instead, we will use goods repeatedly and for a long time. We will avoid waste and understand and use unavoidable waste as a resource to a much greater extent than we do now. For you and me, as consumers, this means we are breaking with our habits of the past. We are changing our behavior. The business community faces the challenge of adapting supply chain, production methods, and products. The circular economy offers us very considerable economic opportunities here. Plastics play a key role along the way to circularity. They are a particularly sustainable material.
The world needs plastics if we want a healthier, smarter, and more sustainable world. The circular economy will also help us in the fight against plastic waste. To make it crystal clear, we face an enormous waste management problem here. Plastics themselves are part of the solution, and that is why they are still urgently needed. Ladies and gentlemen, I feel sure you will agree with me. Covestro must walk the talk and commit itself wholeheartedly to the circular economy. It is a worthwhile goal. This is where we will take our company. It will be our guiding star in the future. We will be fully circular. This sentence goes to the heart of our strong vision. It completes our corporate mission statement. It specifies the direction to. Wir wissen jetzt ganz konkret, welchen Daseinszweck unserer Stadt und unserer Gesellschaft wir haben.
It gives very tangible form to what we call purpose. We know exactly what our company's raison d'être is: to make the world a brighter place every day. As a plastics manufacturer, we want to do our part for a more sustainable world. We want to help to resolutely counteract climate change, because we will not succeed without the features of high-tech plastics. At the same time, plastics must be fully recycled in the future. We will be fully circular. What does that mean? First, that we are comprehensively establishing the principle of circularity at our company. All divisions around the globe will develop specific concepts for that. Each of us will make our contribution. On the other hand, we want to actively shape the circular economy with the whole of society in the chemicals and plastics industry and beyond.
We want to make a contribution to achieving a greenhouse gas-neutral economy. For this reason, Covestro will also become greenhouse gas-neutral over the long term. With Covestro's new vision, we will be better able to satisfy our stakeholders. Our customers want sustainable products made in an eco-friendly way. Our employees want our actions to be meaningful. Policymakers and regulatory authorities expect that we achieve the UN's Sustainable Development Goals. And you, dear shareholders, have an interest in continuous value creation, just as we do. And I would like to emphasize this one more time. The circular economy offers considerable economic potential, and Covestro is already very well positioned to benefit from this. With our products, which help reduce energy consumption and emissions, whether in the area of mobility or construction, and with our highly efficient production processes that economize resources.
Shareholders, in the future, we want to become even better, though. We want to make our production completely circular. We want to create a closed-loop carbon cycle, and we are striving to deliver a comprehensively sustainable product portfolio, a portfolio that supports the UN's Sustainable Development Goals. To enable that, we launched a long-term strategic program in 2019. Step by step, we are now infusing it with life. We will measure our results with concrete targets and key indicators, and we're currently working on these. In the process, we are focusing on four promising strategic areas. First, alternative raw materials. Biomass and CO2, as well as scrap materials and waste, will replace fossil raw materials such as crude oil. Secondly, innovative recycling. Thanks to energy-efficient new technologies, scrap materials and waste can be more efficiently recycled. Third, joint solutions.
To drive the circular economy, Covestro is cooperating with others across industries and thus breaking ground for new business models. Fourth, renewable energy. The circular economy is only truly sustainable if we use electricity from alternative sources. And this is why we will gradually switch to such sources at our sites. Here, we've recently set an example. The Danish energy supplier, Ørsted, will supply our German sites with green electricity for 10 years from 2025 onward. The power will be operated or generated from a wind farm being erected off the North Sea island of Borkum. This purchase agreement is unprecedented in scale, and it will hopefully contribute to accelerating the expansion of wind energy. We've already chalked up successes in other respects too. In the area of alternative raw materials, we are already using CO2 to make plastics.
For this effort, we were a finalist at the end of last year in the German Future Prize of the President of Germany. In terms of recycling technologies, we have launched more than 20 research and development projects. This includes the reuse of mattress foam. We're making good headway here. We're also making progress with partnerships. For example, in the joint Circularize Plastics initiative. The goal of this is to enable traceability of plastics by means of blockchains, that is, digitally encrypted local databases. Ladies and gentlemen, regardless of all these successes, we are just at the beginning of the road. There is still a long way to go before the circular economy becomes the new guiding principle in our company and in the world. This journey calls for know-how, inventiveness, courage, and perseverance, and of course, support.
I therefore ask you to support Covestro on the long journey toward the circular economy. Please get behind our new vision. It will be worthwhile for our planet, for the well-being of its inhabitants, and for sustainable value creation. To conclude my presentation, I would like to recap where we currently stand. The current economic development environment in 2019 was already challenging, and 2020 has developed into an absolutely exceptional year. This has become quite clear. Let's look at some of our customer industries. They have been facing significant challenges for some time now. One example is the automotive industry, which is currently going through structural change, and then there are geopolitical uncertainties. Consider the trade conflict between the U.S. and China. The impact from the coronavirus pandemic on the economic environment, production, and supply chains is a further aggravating factor.
How this will unfold cannot fully be foreseen at the present. How long will COVID-19 continue to hold the world in its grip? No one can say this for sure today. So for us, this means the economic environment will remain uncertain in the second half of the year as well, and we must be well prepared for this. Therefore, we will continue to focus on efficiency, cost awareness, and safeguarding liquidity. We have taken the right action early on with our Perspective program. This has now benefited us in the coronavirus crisis. At the same time, we've intensified our short-term cost-cutting measures, and we have implemented many additional measures. The results from the second quarter demonstrate that these measures are working. We have rigorously countered the effects and achieved a sound position for ourselves, and we will not relent in our efforts.
For this reason, we are reconfirming our guidance for the full year again today. Shareholders, even as we place our short-term focus on safely navigating Covestro through the crisis, we must not lose sight of our long-term goals. This is very important to me. We're therefore relentlessly pursuing our long-term goal even now. We will be fully circular. That is our guiding star. We work toward this each and every day because we are assuming responsibility for a sustainable new beginning following the coronavirus crisis, for a brighter world to live in. We are pleased you are joining us on this journey. Thank you for your attention.
Ladies and gentlemen, on behalf of the Supervisory Board and on behalf of you as well, I would like to thank the Board of Management and all employees at Covestro.
I would like to thank you and express our recognition for your great commitment. Before I turn to the Supervisory Board report, I would like to note that additional information on all of the current members of the Supervisory Board and their specific experience, as well as additional offices they hold in other companies, can be found on Covestro's website and in the current annual report. I would also like to note that the term of office for all six shareholder representatives on the Supervisory Board will end today at the end of today's online AGM. That means agenda item six includes elections to the Supervisory Board. The Supervisory Board is proposing in alphabetical order the following six candidates. The first five of them are already on the Supervisory Board, so that means they are standing for re-election. For re-election, we have Mr. Ferdinando Falco Beccalli, Dr.
Christina Maria Bortenlänger, Professor Dr. Rolf Nonnenmacher, Ms. Regina Stachelhaus, and myself, Richard Pott. An additional candidate proposed by the Supervisory Board for the first time is Patrick Thomas. He is the former Chief Executive Officer at Covestro. We have detailed CVs for the candidates that can be found in the notice to the AGM in the Federal Gazette and on our website. Mr. Johannes Dietsch is not standing for re-election, and that is why I would like to thank Mr. Dietsch on my own behalf and on behalf of the other members of the Supervisory Board. Thank you for your many years of commitment and the excellent, loyal, and productive cooperation on the Supervisory Board. Mr.
Dietzsch has been with Covestro from the very beginning and has contributed with his experience so that the newly founded company could set up a very professional Supervisory Board in a very short period of time. Ladies and gentlemen, I'd now like to come to the report of the Supervisory Board. It is published in the annual report on pages 24 to 30, and I would like to refer you to these pages. We have reported in detail there, and that's why I would like to be brief today. We have monitored and advised the Board of Management on a continuous basis in the past fiscal year. We had six meetings of the Supervisory Board, and all members of the Supervisory Board were present. At its meetings, the Supervisory Board focused on the following topics.
At its first meeting in the year under review in February, the Supervisory Board dealt extensively with the annual financial statements and the consolidated financial statements for fiscal 2018, the audit report, and the independent auditor's report. We also discussed the internal risk reporting and the compliance management system across the group. The Supervisory Board also dealt with the results of its effectiveness and efficiency review in the form of a self-evaluation. At its meeting in April, we dealt primarily with preparations for the annual general meeting. At our June meeting in Antwerp, we dealt with the appointment of the new member of the Board of Management, Ms. Sucheta Govil, and also the current organization of the Board of Management and the executive responsibilities. The members of the Supervisory Board also discussed certain aspects of investment strategy and investment planning.
The Supervisory Board also was given information on the expertise and the value creation potential of digitization in the field of internal research and development within the group. At its meeting in August, the Supervisory Board again dealt with the current investment activities and received information in detail on the importance of circular economy for Covestro. At its October meeting, as in the previous year, this meeting was preceded by a strategy workshop, and at the October meeting, the Supervisory Board dealt with the implementation of strategy and continued considerations with regard to the six key core elements in the group's strategy. At its last meeting in December, the Supervisory Board dealt with the appropriateness review for compensation for Board of Management members, including the long-term compensation component for 2020 to 2023, as well as the proposed corporate planning proposed by the Board of Management for fiscal 2020.
We have had a regular exchange between the CEO and myself between the different meetings, in particular with regard to strategy and planning questions, business development, and upcoming decisions. Members of the Supervisory Board also were involved in continuing education in fiscal 2019, for example, by visiting the Covestro manufacturing site in Antwerp and also as part of guest lectures. The Supervisory Board's work was prepared and continued in the committee meetings. In the period under review, the audit committee met a total of four times, and the human resources committee met a total of six times. One member of the audit committee and one member of the HR committee was not able to attend one of these committee meetings for private reasons. Apart from that, all members were present at all committee meetings.
The audit committee monitored the financial reporting and the effectiveness of the internal control system and the risk management system. It received continuous information on the developments of the compliance management system and other issues, including risk assessment. The HR committee dealt, among other things, with target achievement by the members of the Board of Management, as well as with the appointment of the new managing board member, Ms. Govil, and her contract of employment. In the year under review, the nominating committee met three times. The committee, consisting of three members, reviewed the skills profile and the diversity concept of the Supervisory Board and prepared proposals for the re-election of the Supervisory Board members. In addition, we had regular contact between the chairman of the audit committee, Professor Dr. Rolf Nonnenmacher, and Dr.
Toepfer, where they had intense discussions on the risk and compliance management system, as well as with regard to financial reporting at Covestro. The audit committee and the Supervisory Board reviewed the financial statements and the combined management report, which all received the unqualified audit opinion, as well as the audit reports of the independent auditors. We agree with these financial statements and also the assessment on the further development of the company. As in the past, I am convinced that cooperation between the Board of Management and the Supervisory Board is close and transparent. What is very important to us is the principles of good corporate governance. Ladies and gentlemen, that concludes the report by the Supervisory Board. Before we begin answering your questions, I would like to briefly refer to the compensation of the members of the Board of Management.
Compared to last year, the main features of Board of Management compensation have remained unchanged. These were approved by the annual shareholders' meeting on the 3rd of May 2016. I thus assume that the key features of the compensation system are known to you. I can also refer to the compensation report, which you will find in the annual report on pages 134 to 144. This gives you detailed information on the compensation system for the Board of Management. I'd also like to add that in fiscal 2020, the Supervisory Board will deal intensively and will continue to deal intensely with the compensation of the Board of Management. As you know, on the 1st of January 2020, new legal requirements entered into force relating to the system of Board of Management compensation.
The German Corporate Governance Code was also subject to far-reaching review, and this also had an impact on the recommendations and suggestions with regard to the compensation of the Board of Management. That is why the Supervisory Board will be focusing in fiscal 2020 on a careful review of the compensation system for the members of the Board of Management and, if necessary, to adapt it to the new requirements. We will then submit the system to next year's annual general meeting in 2022 and subject it to your approval. Ladies and gentlemen, that brings us now to your questions. Before we do so, however, I would like to note that using our Investor Portal on the company's website, you can exercise your voting rights during the virtual AGM, either by an electronic absentee ballot or by authorizing and instructing proxies designated by the company.
But remember that this function will be switched off in the Investor Portal shortly after we complete answering your questions so that we can then determine the results of the vote. I will announce this in due time. As I said at the beginning, we received a total of 61 questions from seven individuals. We decided to answer these questions by individual. The Board of Management will then answer the questions from the shareholders, and any questions which relate to the responsibility of the Supervisory Board will be answered by myself in agreement with the Board of Management. Ms. Ina Moritz from our Legal Affairs Department will read out the questions submitted.
We hope, anyway, that this will make this section of the AGM a bit more lively and more interesting and will help to contribute to having as close to a dialogue as possible, something we appreciate that we are normally able to have in an in-person AGM.
Mr. Masek was asked about the future dividend policy of the company and asked which calculation method will be used by the Board of Management for future dividend proposals. I can respond to this. Our dividend policy is that we pay out a constant or increased dividend to our shareholders, and this is what we had initially intended for this year. However, due to the heavy impacts of the coronavirus pandemic in 2020, we will have to move away from this policy. Mr.
Masek also referred to the resolution proposals for items seven and eight on the agenda, saying that overall this is looking for a capital increase of up to 50% and also an exclusion of drawing rights as well as cash assets. Now, there is nothing about a strategy which is being pursued with this move. Now, if you fully use what you have available, the SDK believes that there will be significant dilution as a consequence. Mr. Masek asked why you were looking for such a capital increase. I can respond to this. Now, the authorizations that we have for approved and contingent capital are aimed at putting the Board of Management in a position which allows it to provide capital adequacy of the company at all times.
As you can see in the invitation, the unused authorizations will expire in the second half of this year, and as such, the unused authorizations for approved and for contingent capital will be renewed. Now, for the new authorizations, we will have a reduction, elimination, or adaptation in order to ensure that the shareholders' interests can be aligned with those of the company to allow it to continue to act. And our proposal contains a reduction from 50% to a level of 40%. Now, there is also a self-obligation on the part of the Board of Management, which will mean there will be no dilution which exceeds 10% of current share capital, including the exclusion of drawing rights. Now, the new proposals will also be contingent resolutions. Now, Mr. Masek also asked about credit commitments of the core banks connected with the ESG rating that the company has. Mr.
Masek would like to know the costs of the ESG rating process and also the implementation measures that would incur. He would also like to know which savings can be made in loan costs by implementing ESG-relevant measures. I can respond to this. Linking ESG components is not a commercial endeavor for Covestro, but it looks from a strategic perspective at sustainability, and this has an impact on the financing of the company. Now, ESG rating is not a one-off process. It's a continued, usually a process that usually has an annual assessment looking at ESG criteria. And as such, we will have our loan agreements looked at with a view to ESG. Now, any savings can only be achieved if Covestro continues to improve its already strong ESG rating, and the savings potential is in a lower to mid-six-digit area depending on how much loans are used.
Now, on to pension payments to board members, Mr. Masek said that the SDK believes that a fixed component of 5% or 3% of overall compensation is adequate. Any figures higher than this is, in the SDK opinion, not correct. Now, the pension commitments for Covestro board members are in a much higher percentage range, which is why Mr. Masek would like to hear the rationale behind this and also like to see how this compares vertically and horizontally to Covestro's peers. I'll be happy to answer this question. Target compensation of our board members is made up of the main components, which you have a fixed compensation and also short-term and long-term variable compensation, as well as pension commitments.
Now, the amounts of target compensation overall and its individual components are reviewed by means of a horizontal comparison with other companies which have more or less the same size as our company does, and we also assess them against the backdrop of our economic positioning within this group. This would be compared with other companies listed in the DAX and the MDAX. However, banks and insurance companies, due to the limited comparability with our company, we do not factor these into these equations. Now, for a vertical comparison, we look at the ratio of management compensation to the compensation received by our overall workforce in Germany. In its annual review, the Supervisory Board has seen that the level of individual compensation elements, including pension commitments, is adequate on a horizontal and a vertical basis.
Now, I told you who the peer group is here, and the peer group is other companies listed in the DAX and the MDAX, with the exception of banks and insurance companies. And if you look at it on this basis, then pension commitments relative to fixed compensation usually come in at a scale of 30% and more.
With regard to the proposals for election to the Supervisory Board, Mr. Masek had several questions. First of all, he asked about a possible risk of overboarding with Ms. Stachelhaus because she has comparable positions in other companies. Let me say the following about that. In line with the criteria of the German Corporate Governance Code, Ms. Stachelhaus has a position on Supervisory Board of Covestro AG, but only three more comparable positions. That is, with Ceconomy AG, with Leoni AG, and with SPIE SA.
These positions are also in line with international standards to prevent what is called overboarding. The Supervisory Board has also talked to Mrs. Stachelhaus, and she has confirmed to the Supervisory Board that her activity on the Supervisory Board of Covestro AG can be provided. Mr. Masek also stated that the guidelines of the SDK Shareholders Association call for a cooling-off period when a member of a Board of Management switches to the Supervisory Board and that this three-year period wasn't achieved for Mr. Thomas. He asked whether or not the nomination committee has any reservations about his candidacy, for instance, with regard to liability. Let me answer by saying this: Patrick Thomas left the Board of Management of Covestro AG on the 31st of May 2018. The statutory cooling-off period is two years, and therefore it ended on the 31st of May 2020.
When he joins the Supervisory Board of Covestro AG, Mr. Thomas's previous membership on the Board of Management of the company will be completely in line with the criteria of the German Corporate Governance Code, and so it will not be a reason to prevent him from becoming a member of the Supervisory Board. And in addition to that, because of his career in international chemicals companies, he is intimately familiar with the chemicals sector and the value creation chains involved there. And as a long-year member of the Board of Management of Covestro, he has a wealth of strategic knowledge and experience in operative management of a leading global chemicals company that will be beneficial to the company when he's on the Supervisory Board. And for this reason, we can say that the nominating committee has no reservations about his candidacy. Mr.
Masek also asks this: in view of the fact that SDK sees there might be a risk of overboarding for Mr. Beccalli, and also in view of his short-time nomination period, why wasn't another person nominated for that position? As I already explained with regard to Ms. Stachelhaus and Mr. Thomas, the Supervisory Board has, of course, intensively looked at the proposal for re-electing Mr. Beccalli to the Supervisory Board. Mr. Beccalli worked for a long time for General Electric in various management positions, not least in the polycarbonate industry, which is important for Covestro. And he has much experience in the segment and with these technologies, and the Supervisory Board has been able to benefit from these in the past five years.
In the interest of staggered terms for different members of the Supervisory Board, he was kind enough to state that he would continue to provide us with his international and industry-specific expertise on the Supervisory Board of Covestro AG for another term, and he said he would be able to spend the necessary amount of time to fulfill this position, and he would be pleased to do so. In the opinion of the Supervisory Board, the activity of Mr. Beccalli on the Supervisory Board of Covestro AG is in line with the criteria of the German Corporate Governance Code and international standards to prevent what is called overboarding.
We will now continue with questions asked by Ms. Vanessa Golz from Deka Investment.
She referred, first of all, to the coronavirus pandemic and the outlook for the year, and she wanted to know which business units were affected most by the corona crisis and which were affected or will be affected the least. When does Covestro expect to have a sustainable EBITDA of more than EUR 2 billion, and whether there will be supply shortages this summer due to low levels in the Rhine River, and what alternatives the company has provided for in such circumstances in order to avoid such shortages? Thank you for this question or these questions as well. First of all, the coronavirus pandemic and the impact on our business units. In the first half of 2020, at group level, our volumes in core business were nearly 14% below this figure the year before.
In the 2020 budget, of course, nobody could foresee such a pandemic, and we had assumed that growth would be up 4% compared to the previous year. While the amounts in core business, the volumes in Polyurethanes and CAS, were down by about 15% year on year in the polycarbonate segment, this figure amounted to minus 10%. So all of the business units have been negatively impacted by the pandemic. Based on customer industries, the core volume sold in the automotive and transport industry came in at minus 29% approximately, and they were affected the most. Due to continuing uncertainties in the economic environment, it is not possible to give you a precise forecast with regard to the further course of the pandemic and its impact on our business units. Now, I'd like to ask your question about the medium-term sustainable EBITDA of more than EUR 2 billion .
This is for all of our shareholders. From our average invested capital, which is referred to as the capital employed, amounting to EUR 7.5 billion, and our weighted average capital costs amounting to about 7%, an EBIT of about EUR 1.5 billion can be derived from this, which needs to be generated by Covestro in order to cover its cost of capital. Since, according to our group KPIs, we wanted to receive a return of capital employed, which would be above the cost of capital, the derived EBITDA has to be above the approximately EUR 1.5 billion. From the target values for bonuses, which are published in the annual report and which are uniform for the members of the managing board and employees not covered by collective wage agreements, we can derive an EBIT value of about EUR 2 billion.
Our outlook for 2022 provides for an EBITDA of between EUR 700 million and EUR 1.2 billion . This target value in 2020 will not be achieved. I cannot tell you yet in which year we will be able to achieve this EBITDA, and I'd like to also refer to the impact as a result of possible low levels on the Rhine River. In fiscal 2018, we had a very dry summer, and we had very, very low levels in the Rhine River. This not only affected the transport routes on the lower Rhine sites on Leverkusen, Dormagen, and Uerdingen, it also affected the transport routes for our suppliers and customers. We do not expect a repetition of this situation this year due to the precipitation we have already received.
During the low water situation in 2018, we developed short and medium-term measures in order to be prepared for future extremes in the future. This includes more efficient loading and unloading processes at the ship's bridges, possible use of smaller ships with a shallower draft, better data exchange between the authorities and the company, and also planned deepening of the channels. Ms. Golz asked about the resilient or the more stable business and asked for information on this. Where in fiscal 2020 will the EBITDA be for what is referred to as resilient business units? Will the margins in resilient business areas remain resilient in the current situation? Will they remain robust, or will there be a shift in the range?
In fiscal 2018, we said that about EUR 1.5 billion of a total of EUR 3.2 billion of our EBIT result from business units with higher stability in terms of earnings. We also said that this value would be between EUR 1.3 billion and EUR 1.6 billion in a normal economic environment. In fiscal 2019, we had a number of unfortunate developments which also affected resilient business: decline in production figures in the automotive industry, decline in demand in coating raw materials and special uses, and also lower margins in polyol business. The weakness in demand also related in particular to resilient businesses in Polyurethanes and Polycarbonates, as well as large parts of CAS. In 2019, the contribution to earnings in resilient businesses was below EUR 1.3 billion. Fiscal 2020, as we already said, has proven to be a crisis year.
Massive loss in volumes, especially in the automotive industry, with volumes going down by 29% in the first half year compared to the previous period, as well as in the electrical industry, with declines in volume of 13% in the same period. These not only have a negative effect on the volumes with regard to EBITDA, but also lead to major shifts within our product portfolio. Businesses which up until now had stable margins also are much lower than in the past due to a decline in demand. We assume that the contribution to earnings will be below last year's values in fiscal 2020. Please bear with us. Due to the continuing uncertainty, we cannot give you any more specific figures here.
Ms.
Golz also asked about our strategic program for embedding the circular economy in all areas of the company and would like to know which milestones this program contains, which verifiable targets are being pursued, during which timeframe this concept is being implemented, and also the amount being invested for the program. Let me begin by speaking about the milestones of our strategic program for embedding the circular economy in all areas of the company. In the Covestro circular economy program, we are forming the foundations for the strategic alignment of the group over the next few years, maybe even for the next few decades. In order to continue to exhibit sustainable growth, we will have to confront two main challenges. Firstly, our consumption of resources has to be reduced, in particular by ensuring that the plastic that we have used is recycled and is fed back into the value-added cycle.
Moreover, overall, greenhouse gas emissions have to continue to be reduced. Milestones that have been achieved for the milestones are when we have commercialization of recycled products. Even more so when it comes to CO2 reductions, we have achieved significant milestones and were able to cut our Scope 1 and 2 emissions and our immediate Scope 2 targets. We're able to decouple these from CO2 emissions. Furthermore, the implementation of our corporate vision will be secured over the cycle of this strategy. It will ensure that the resource planning will play a particular role in shaping the resource planning of our company. Our indicator system, the KPIs system, will be adapted to align with our vision. And this will ensure that the measures we have for reducing greenhouse gas emissions and achieving circularity is verifiable.
We will also make investment in research and development of recycling technologies in more than 20 projects. Our aim is to bring this technology to market as quickly as possible. Now, let me move on to the verifiable targets of the strategic program for embedding the circular economy in our company. We are employing a circular growth strategy to pursue the financial targets that I've just outlined. And as I mentioned earlier, we have our strategy program, circular economy, which will allow us to identify ways and means with which targets in resource conservation and reduction in greenhouse gas emissions can be achieved. I'd now like to move on to the timeframe in which we're going to implement the program for embedding the circular economy in our company. Now, Covestro's alignment towards circularity is a transformation which will require years and certainly more than a decade to be completed.
In order to achieve greenhouse gas neutrality, then we have to move away from a type of industry which hitherto has been based on fossil fuels and move over to alternative renewable energy sources. This is something that we'll not be able to achieve alone, but we will need a larger societal effort to accomplish this. I'd now like to speak about the amount of investment for the strategic program. We have already invested substantial amounts in recycling technologies as well as for bio-based and CO2-based process technologies to cover the next 10 years. We hope that this will extend our position as one of the leading global chemical companies in the circular economy and capitalize on the promising market opportunities that this offers. We believe that with new investments and a circular and sustainable product portfolio, we'll be able to deliver attractive margins and exhibit continual growth. Mrs.
Golz also asked about the business areas of Covestro and asked what the supply-demand situation is trending like in MDI, also what the future pricing policy the company expects in the two main products, MDI and TDI for Polyurethanes, and what the reasons are as to why PCS and CAS were able to register greater margins than PUR. I'll start by looking at the supply and demand situation with MDI. Now, if we base this on the assumption of normal economic conditions, then at MDI, we expect an average increase in demand of 4%-5% over the next five years. Now, this demand could be covered by the market with the capacity that is currently available.
As to future price developments of the two main products, MDI and TDI, well, what I can tell you is that for the pricing for MDI, given the volatile environment with a lack of certainty and the difficulty with forecasts, we're being very, very cautious, and because we believe that there will be low industry capacity to utilization, we don't expect an improvement. In TDI, we do not believe there will be any further deterioration, but over the short term, due to high capacity, we believe that there is limited upward potential. Now, let me finish by looking at the reasons for the more positive EBITDA margins in the PCS and CAS segments compared with PUR in the second quarter. The EBITDA margins of these segments are only comparable to a limited degree.
Now, in the second quarter, PUR suffered a significant decline in demand as well as a negative price delta due to stiff competition. On the contrary, PCS was able to offset sales declines through the robust demand in profitable healthcare and construction segments. Now, the weak demand in the main customer industries led in CAS to negative volume trends, but we were able to offset this with lower costs.
Ms. Golz is also interested in the functioning of our supply chains at Covestro during the corona crisis and is asking whether any changes in that regard are planned. Despite the very challenging situation, we succeeded in continuously maintaining our complete supply chains. Against this backdrop, there are no changes planned as of now. Ms.
Golz also asked what innovative products and solutions Covestro is currently working on in order to achieve the market volumes based on UN sustainability targets that Covestro estimates to be EUR 14 billion. Answer: Covestro today is already aligned to offer sustainable products and solutions. By even more targeted, focusing on the UN sustainability targets in our R&D activities, we can tap into further market potential. Let me just mention three current examples of innovative products and solutions from our development laboratories. First of all, Cardyon substances for mattresses and fibers in which we incorporate carbon dioxide and thus recycle it. In addition to that, new intermediates on the basis of bio-based raw materials with a smaller environmental footprint, such as bioaniline or precursors for lacquer hardeners. And finally, the new polyurethane resins for more efficient wind turbines. Ms. Golz also asks the following questions about cost savings.
What will the net savings impact be with regard to the cumulative savings volume of EUR 350 per year from the Perspective program, and what will that savings be in the earnings statement? Will the effect of the short-term savings for EUR 300 million just be temporary, or will they be permanent? And in 2020 and in 2021, there are plans for investment cuts, and could they mean that some future opportunities might be missed? Well, with regard to the net savings of the Perspective program, I can tell you this by way of an answer. This cost structure and efficiency program was already initiated back in 2018, and in the first year, the savings and the one-off expenditures were more or less in balance.
The year after that, 2019, our Perspective efficiency and effectiveness program had a net savings volume that is after savings and one-off expenditures of EUR 105 million . In the current fiscal year, we're expecting additional net savings of about EUR 85 million , and in 2021, we're expecting another net savings of about EUR 70 million . So all in all, the planned savings of the Perspective program at the end of it are expected to be about EUR 350 million , and these expenditures are countered by one-off expenditures of about EUR 140 million . Now, let me move on to the impact of the short-term savings on our income statement or our earnings statement. We expect that more than EUR 300 million of short-term cost savings will be achieved in 2020.
Now, the joint solidarity amount from employees, the board of management, supervisory board, is limited to six months, and we decided we will decide on whether or not these measures will be maintained depending on the economic development after normalization of business activities. These short-term cost savings ought to be neutralized after one or two years. And finally, I will look at the impact of the planned investment cuts in 2020 and 2021 with regards to taking advantage of future opportunities. Covestro investments in 2020 and in 2021 ought to be at a level which is substantially above the long-term average. In our investment expenditures, we're always looking for an optimum between short-term cash allocation and long-term growth orientation.
The list of our investment projects is constantly compared to our long-term strategic plans for the different divisions and adapted to them, and thus we're able to ensure that our investments are sustainable and forward-looking and take advantage of our market opportunities. Ms. Golz also asked about the reasons for the change of the proposal for a dividend to EUR 1.20 per share and asked whether or not there was a discussion about not paying a dividend at all. Well, the focus of the board of management since the beginning of the corona pandemic has been on guiding the company and its employees safely through the crisis, and this means that the measures must be spread across as many shoulders as possible. This includes short-term savings measures, reduced investments, the solidarity package of our employees, and safeguarding liquidity.
In this context, the Board of Management thinks it is a balanced approach to have shareholders participate in these measures, and today's resolution on a dividend of EUR 1.20 will mean there will be an outflow of capital of EUR 200 million. And from the point of view of the Board of Management, this is still a high payout in the middle of a crisis, and we don't even know what the result of the crisis will be. And therefore, the Board of Management has requested that you approve item two on the agenda. And I can tell you that in the final Board of Management meeting on the 19th of May 2020, there was also a discussion about whether or not we would even pay out a dividend at all.
Ms.
Golz then also asked about the performance criteria for achieving sustainability targets, which are very relevant for Covestro, and she also asked how this would be included in the board of management's new compensation system. Right. Let me give you the following answer. Sustainability is already a major driver for our business, and we are convinced that these are reflected in our financial KPIs because sustainability is firmly integrated into our mindset and our activities. So we have assured that the board of management deals in detail with sustainability by having regular reports on important sustainability topics. The board of management defines the strategic orientation of the group when it comes to sustainability and allocates the necessary resources. When it comes to circular economy, our new guiding principle, which underlies our overall strategy, we can see that a number of progress indicators are assessed.
When reviewing the compensation system for the board of management at Covestro, we are reviewing the possibility of including an indicator in variable remuneration. This indicator will probably not only apply to members of the management board, but for the compensation for the entire top management. The specific shape of this is now being worked on. We will present the new compensation system next year and submit it to the AGM for your approval. That brings us to the questions asked by Arne Rautenberg, who is a portfolio manager at Union Investment. He asked about changes in long-term growth assumptions for polyurethane due to the current crisis. Thank you very much for that question. Mr. Rautenberg, long-term growth assumptions for TDI and MDI demand have not changed as a result of the current crisis. In other words, we expect that the growth drivers for our core applications are still intact.
We are convinced that Covestro continues to be very well positioned to benefit from this growth. I'd also like to refer to answers that I already gave to questions asked by Ms. Golz. Mr. Rautenberg also asked about investments to expand sustainable production processes and business units. The implementation of circular economy as our solution to climate neutrality is our vision and an essential part of Covestro's strategy. It's also reflected in our investment planning. For our production sites, we have provided for significant investments in the coming years to use sustainable raw materials based on biomaterials, CO2, and plastic waste. We also plan significant investments in order to further expand the high level of efficiency of our production processes. Our business units have a clear orientation toward sustainable solutions, lightweight and energy-saving installations, which we want to further enhance.
We will also be giving a clear orientation of our research with regard to the UN sustainability goals. These will be intensified and given quantitative targets. We also plan to use our product portfolio and our customer industries and also to move into new business units where our high-quality materials with a sustainable effect can also develop as best as possible. Mr. Rautenberg would also like to know when and what measures will be achieved when it comes to climate neutrality at Covestro. We explicitly support the goals defined in the Paris Climate Agreement as well as the targets formulated by the European Commission when it comes to climate neutrality. As a result, with our activities, we want to increase all dimensions and possibilities of circular value creation and also improve resource efficiency to continuously reduce greenhouse gas emissions.
Measures to achieve neutrality goals are now being drafted in our strategy program, Circular Economy. When defining measures, targets, and their implementation, we are guided by the timelines that are provided for the European Union, which go up until 2050. Mr. Rautenberg also asked when Covestro will participate in the Carbon Disclosure Project. On a regular basis, we review which external sustainability assessments we should be participating in. We weigh the resources involved and the added value. Up until now, we are involved in reporting according to the GRI standard and the EcoVadis method as well as the ESG rating agents. We see no further need for additional assessment methods. We also review a possible participation in the Carbon Disclosure Project, but up until now, we have not decided to initiate such a participation.
Mr.
Rautenberg asked about the preferences for future capital allocation between dividend, balance sheet quality, and growth. I'd like to divide my answer over into a short-term and medium to long-term component. Now, in the short term, the board of management is focusing on ensuring that the company, its employees, can be guided through the crisis safely, and this includes the implementation of the cost structure and savings program, the reduction in capital investment, securing the liquidity and the solidarity pact for our employees, for the company, and of course, this is in order to manage the crisis. Now, in the medium to long term, the focus and the measures taken will significantly depend on what the medium to long-term consequences over the coronavirus pandemic will be and their impact on our operating business and thus on the financial position of Covestro. Now, the same continues to apply.
Firstly, corporate strategy and measures follow our new vision, which is in alignment towards a circular economy, and this is a process we want to accelerate. Secondly, Covestro occupies a leading position in its industry measured according to its capacity share, cost, and position, production technologies, and product innovations. Now, we intend to defend this leading position in the future too by making competitive investments in innovation, which is research and development, and also in growth and capacity expansion. Thirdly, in the future, Covestro will continue to maintain its financing and finance indicators, which will remain in investment grade. And this corresponds to sustainable dividend policy. Mr. Rautenberg, in his last question, asked about a further improvement in corporate governance at Covestro. I would like to answer this as Mr. Pott.
Corporate governance at Covestro is in line with the recommendations of the German Corporate Governance Code, and this is something that the Supervisory Board and Board of Management deliver a declaration. As things stand and for the future, we believe we are very well positioned. Moreover, we also expect to continue applying the criteria that your company requires, particularly in terms of auditing capital measures and sustainability reporting. At the start of my report, I said that the topic of management compensation is something that the Supervisory Board has looked at very closely in fiscal 2020 and will continue to do so. This is why, in this fiscal year, one key focus of the Supervisory Board's work will be on ensuring that the compensation for the members of the Board of Management is closely monitored and, if necessary, adapted to the new legal requirements and the recommendations of the code.
As I said in my response to Ms. Golz, we expect to be able to put this to vote for approval at the AGM in 2021. This brings us to the questions submitted by Hendrik Schmidt for the DWS. Mr. Schmidt asked about the current crisis situation and business performance, and his main questions are: which measures the board of management has taken in the current crisis situation where employees of the company are concerned and where other stakeholders are concerned? Also, what are the immediate effects that you have determined and how you've responded to them? Also, to what extent the COVID-19 pandemic will impact your short and medium-term targets? Furthermore, which impact will it have on the global supply chains? What effect have you noticed, and how will the company strengthen its business areas in the future given what has happened? Thank you very much for your questions.
So let me start by looking at the measures in the current crisis situation with reference to our employees and other stakeholders. We responded at a very early stage to the corona pandemic and implemented significant protection measures. Now, these consist of setting up local and regional crisis offices and also developing and continuous monitoring of detailed measures for hygiene measures, business trips, events, and also cooperating with internal and external partners. In these endeavors, the health of our employees and their families, as well as the maintenance of ensuring that our business can continue to operate, is the main priority. Let me speak about the immediate impact of the coronavirus pandemic and our reaction to it. The corona pandemic had a significant negative impact on global economic growth and thus also on demand in our customer industries. And it thus had a significant impact on Covestro's commercial performance.
Now, this materialized in the form of a 13.6% volume decline during the first six months of this year. Covestro is on a solid footing and still has a very strong balance sheet and a high level of liquidity. We took significant measures at a very early stage in order to adapt the company to the current conditions, and as a result, we were able to protect the health of all Covestro employees, as well as maintaining our production operations and supply chains and securing our strong liquidity position. Simultaneously, we reinforced our activities in terms of operative efficiency, cost discipline, and continual monitoring of our capital expenditure. In our semi-annual financial report, which was published on the 23rd of July, you can find detailed information about the measures that Covestro has taken.
Overall, we believe that the uncertainty in connection with the consequences of the coronavirus pandemic remains significant for economic growth. Against this backdrop, we are continually observing the situation globally in order to adapt the measures that we have in place at any point in time to the current situation and take additional measures if necessary. Let me now speak about the impact of the coronavirus pandemic on our short and medium-term targets. Now, the expansion of the coronavirus pandemic has had a significant impact on the global economy and our global sales industries. As such, in 2020, we expect volumes to decline in our core business, and we expect this to have an impact on our underlying results. And this was factored into our forecast, the amended forecast, which was published on the 15th of April 2020.
The medium-term consequences of the pandemic for the global economy are not yet forecastable. We don't know exactly how they will be, but the impact of the pandemic will probably have a negative impact on Covestro and also on the overall economy for an unforeseen period of time. This is the biggest challenge for Covestro. Now, let me speak about the impact on our global supply chains and how we can strengthen these supply chains going forward. Despite the challenging situation, we have succeeded in maintaining our supply chains continually and holistically. Our local and regional crisis teams to help maintain our business have paid off. Now, we've spoken with each other internally at a global level, and this allowed us to foresee any potential bottlenecks. Close communication with our commercial partners, particularly in logistics, also had a positive impact.
Now, given this experience, we believe that our operating business will be positive going forward.
Mr. Schmidt also asked how Covestro is implementing the communicated ambitions for a more sustainable future with regard to innovation, circularity, and resource management. It's already the case that many of our processes and process innovations that we are developing for our customers are enhancing our circularity. In order to have more targeted use made of circularity, we have established a company-wide global strategy program with a focus on four elements. First of all, mechanical recycling. That is the use of the underlying polymer without chemical change. Second, the development of new recycling methods such as chemical recycling. In other words, the use of the underlying chemical components for the production of new polymers. Here, in particular, we believe there are possibilities and opportunities to profitably make use of our chemical expertise.
Third, to use biomass and carbon dioxide as alternative raw materials. In this way, we intend to decouple our products increasingly from fossil raw materials. Fourth, active support for new business models that are focused on circularity and establishing new alliances and partnerships. With our activities, we intend to take advantage of the different dimensions and opportunities of circularity to continuously increase our resource efficiency and to overcome over the long term our dependence on crude oil. The high priority that Covestro gives to the subject of circularity is expressed clearly in our new vision for the company. We are becoming fully circular. The implementation of our corporate vision will be moved forward actively at all levels in the years to come. Mr. Schmidt also asked what initiatives that Covestro has tested will be suggested by Dr.
Steilemann to the PlasticsEurope Association as part of his presidency. I see the main role of PlasticsEurope and the association as a catalyst for the chemicals industry internally and externally in order to drive forward the solutions expected by society, sustainable solutions. The three key priorities that I'll have during my presidency are, first of all, to drive forward the principle of circularity and more sustainability in the entire life cycle of plastics. Second, to foster the use of plastics so that they can make the greatest possible positive contribution to solving our current challenges. And third, to foster cooperation along the entire value chain and with the different governments and organizations in order to ensure that plastics are seen as a valuable resource and can make a contribution to resource conserving circularity.
Part of this cooperation with other member companies in the association is already the fact that we have different initiatives that we're pushing forward and are constantly sharing information. We want to foster the spirit of sustainability over the long term together, and we believe that this cooperation is a major success for implementing circularity in the plastics industry over the long term. Mr. Schmidt also asked how Covestro intends to maintain its good position in competition during the presidency of Dr. Steilemann at PlasticsEurope. In view of the many global challenges we're facing, plastics are of key significance in achieving a truly sustainable future and making circularity the new guiding principle. This calls for joint efforts by all stakeholders, for instance, in fostering renewable energies, establishing systems for waste management, for instance, a deposit system for plastics, and statutory recognition of chemical recycling.
We, on the association, want to work together to drive forward the ideas of circularity and believe that this cooperation is a key factor for the success of circularity. At the same time, we expect that there will be competition between the market participants in this area of circularity in order to find the best solutions. And we believe that our vision here, that is, that we are focusing on becoming completely circular, will mean that we are well positioned in competition to take advantage of the initiatives in this field in the future. Mr. Schmidt is also asking about the expected impact on our earnings statement of the introduction of the EU tax on non-recycled plastic packaging starting in January 2021.
The EU tax announced for the 1st of January is intended to make non-recycled plastic repackaging tax at 80 cents per kilogram that will be paid to the EU. And with this measure, the EU hopes that there will be a reduction of disposable plastic waste. Covestro produces plastics that are used in mostly long-term solutions. That is, they're not generally disposable plastics, and that is something that means that we're not generally directly impacted by these measures. But there might be indirect impact on us because of packaging material, and we will make this more specific as soon as the law itself becomes more specific. Mr. Schmidt asked about the purpose of the proposed capital measures. I don't want to repeat myself, and therefore, I'd like to point out what I said when I answered Mr. Masek's question during this AGM.
There I mentioned in particular that the unused authorizations in the second half of the year will be expiring in the second half of the year, and we want to renew these with slight amendments so that the board of management is at all times able to ensure that there are sufficient capital resources for the company.
Mr. Schmidt asked if the supervisory board knew whether Dr. Bortenlänger was planning on resigning from any of her additional mandates within the next 12 months. Well, let me say the following. In line with the criteria of the German Corporate Governance Code, Ms. Bortenlänger, in addition to her position on the supervisory board at Covestro AG, she has three similar mandates at OSRAM Licht AG, at MTU Aero Engines AG, and at TÜV SÜD AG.
In addition, the Supervisory Board has also made certain that she will have the time required in order to serve on the Supervisory Board. Irrespective of whether or not she is planning on resigning from one of her mandates in the near future, we have no knowledge to this effect, but neither according to national nor international standards do we see any risk of so-called overboarding. Mr. Schmidt asked about the time that Ms. Bortenlänger will have for the upcoming term of office on the Supervisory Board. In her activities on the Supervisory Board in her current term of office, she was available without any restrictions, and there is no reason to believe that anything will change there in the future. The Supervisory Board also made certain by speaking with Ms. Bortenlänger that she would have the necessary time. Mr.
Schmidt asked about the contributions made by Covestro AG as member of the German Axion Institute, the DAI, and any possible conflicts of interest with regard to membership and the dual function of Dr. Bortenlänger as managing director at DAI and as a member of the supervisory board at Covestro AG. My answer is that in calendar year 2019, our contribution was EUR 54,000. In calendar year 2020, our contribution is EUR 52,500. Like the majority of DAX companies, Covestro AG is also a member of the DAI. During our IPO, we continued this tradition from our former parent company, Bayer AG, who is and continues to be a member. A conflict of interest as a result of this membership is something that we do not see because Ms. Bortenlänger was not involved in the decision regarding this membership. Mr.
Schmidt asked about a potential conflict of interest due to the three mandates that Professor Dr. Nonnenmacher has in listed corporations, as well as his additional role as a chair of the government commission on the German Corporate Governance Code. My answer is that Professor Nonnenmacher's activity at Covestro AG as a member of the supervisory board and on two other listed companies, Continental AG and ProSiebenSat.1 Media SE, is in line with all national and international standards for preventing so-called overboarding. So we do not agree that the role of chair of the audit committee should be counted twice. We don't see any conflict of interest with Professor Nonnenmacher's honorary role as chairman of the government commission for the German Corporate Governance Code.
In addition, before he was nominated for re-election to the Supervisory Board, we ascertained and made sure that he will have the necessary time, and he wants to have the necessary time to do so. Mr. Schmidt asked about extra financial targets which could be integrated into the compensation for Board of Management members and for measuring target achievement. As in my answer to Mr. Schmidt, we are now looking into including a performance indicator into variable compensation for the Board of Management, and then we will determine which criteria should be used in order to measure target achievement. We will present the compensation system next year and submit it to the Annual General Meeting for approval. Mr.
Schmidt then asked about the background to the addition to the articles of incorporation under agenda item 10 by introducing section 15, paragraph 4, authorizing the board of management to allow shareholders to participate in the AGM without being present on the spot and to attend this and to then allow electronic communication for the exercise of some or all of their rights. We are suggesting this provision due to the experience from the pandemic in recent months. We want to provide for an option to give shareholders an additional possibility to participate in our AGMs and based on the current regulations of the stock corporation, which have to be carried out as an in-person event. The proposed provision would authorize the board of management, not as a matter of principle, to have a virtual online AGM. This is something which is based on the emergency legislation during an AGM.
Mr. Schmidt asked about the number of questions which we received at today's AGM and how many of these questions we have answered, as well as which criteria we used for the order in which the questions were answered. This year, we received 61 questions from a total of seven people, and after looking at all of them, based on the information that we had available, we answered every single one of these questions. This is exactly the same process that we have applied at previous AGMs where the shareholders have actually been here with us. This brings us to questions from shareholders who wish to remain anonymous. One shareholder asked about the current risks to the company relating to the corona pandemic and which additional control measures the management board might deem necessary.
Covestro's performance in the first half of 2020 was characterized by the coronavirus pandemic, and as such, the risks facing us have changed. On the board of management, as we have said in previous answers today, we took decisive measures at a very early stage in order to adapt the company to the prevailing conditions, to protect the health of all Covestro employees, to try and maintain our production operations and supply chains, and secure a strong liquidity position. Simultaneously, our activities in terms of efficiency and cost discipline were reinforced in order to ensure long-term growth for Covestro with a strict focus on the requisite investments. In our semi-annual financial report, which we published on the 23rd of July, we provide a description of our COEG risk assessment, and it looks at the potential impact on the company from the spread of the corona pandemic.
So it looks at not just Covestro, but also the overall economic situation. Here you can find more detailed information about the measures that have been implemented by Covestro. The current uncertainties in connection with the effects of coronavirus going forward for the economic situation are significantly high. Now, at board level, we are continuing to monitor the global trends with coronavirus to ensure that we can adapt the measures that we've introduced to any changes in the situation and, if necessary, introduce additional measures. One shareholder asked what the reasons were why in the 2019 financial report the proposal for profit distribution had a dividend of EUR 2.40 and why it has now been reduced to EUR 1.20, which is a reduction of 50%. To avoid repeating myself, I would like to refer you to the thorough answer I gave to Ms. Schmidt on this topic.
In particular, I'd like to point out that where equity is concerned, we decided that it was necessary given the situation. The same shareholder asked about the board and supervisory board's opinion on dividend continuity. Our dividend policy is to provide a dividend that either increases year for year or at least remains constant in terms of EUR per share. And this is what we had actually intended for this year too. But given the huge financial implications of the coronavirus pandemic on the company, the board of management, in its meeting on the 19th of May 2020, took a decision to move away from this dividend policy this year. And this proposal received the support of the supervisory board. Coming to terms with the immediate financial and economic consequences of the coronavirus pandemic need significant short-term measures.
The medium- to long-term consequences of the crisis on our operative business and thus on the financial position of Covestro are difficult to forecast as of now.
A shareholder asked what the costs were for preparing and carrying out the AGM in 2018 and what the different line items were for carrying out the late AGM. First of all, let me say that the precise breakdown of the costs for an AGM into different line items is not made. For the AGMs in 2018 and 2019, the costs were about 1.5 million EUR each year. This included the costs for the invitations, setting up the structures in the World Conference Center in Bonn, and the costs for the equipment and for security.
For the virtual AGM this year, the costs are about EUR 750,000, and the lower costs are mainly due to the lower amount of effort expense necessary for carrying out a virtual AGM compared to a physical AGM. A shareholder was interested in how many questions were submitted for this year's virtual AGM and how many questions were asked at the AGMs in 2018 and 2019. I'd be pleased to answer that too. In 2018, there were 67 questions from nine persons. In 2019, there were 50 questions from seven different people. As has been said, this year, 61 questions were submitted by seven different people. That shareholder also asked how many interventions there were at the AGMs in 2018 and 2019 and how many different people were responsible for these interventions.
With regard to the precise number of people who made an intervention, I can say that we don't have those numbers, but I can say that in 2018, there were nine interventions during which shareholders asked questions. In 2019, there were seven interventions during which shareholders asked questions. In addition to that, this shareholder asks how many questions will be answered during this year's AGM and how many won't be. And with regard to the non-answered questions, he asked for the specific wording and why they weren't answered. Well, as I already said when I was answering Mr. Schmidt, I can tell you that at this year's AGM, we have answered all of the 61 questions submitted or will be answering them, and then therefore, it's a moot point as to the questions that weren't answered.
A shareholder has asked how many people were involved in preparing and answering the questions here at the AGM. At the back office of the AGM this year, we have more than 20 people from the different divisions of the company. During the preparation and answering of the questions, many different aspects from different divisions and departments were involved, in particular accounting, communications, financial affairs, legal, investor relations, HR, strategy, innovation, sustainability, and the tax department, and of course, people from the Board of Management and the Supervisory Board. A shareholder has asked where the meetings of the Supervisory Board were held that were mentioned in the report, and also where the people were, and also he asked which members took part in the different meetings of the Supervisory Board.
Let me say that the meetings of the supervisory board mentioned in the report were almost all held at the headquarters of the company, that is, Leverkusen. One meeting was held in Antwerp, and that was connected to a visit to the Covestro site there. There was one other one held prior to last year's AGM here in Bonn. During the meetings of the supervisory board and its committees, with two exceptions, all members of the supervisory board and its committees were always present. There was just one meeting of the HR committee and one meeting of the audit committee at which one member was not able to attend on short notice for personal reasons. The members of the board of management were at the meetings of the supervisory board regularly to provide reports, and if needed, we heard from experts and other people providing information to these meetings.
The chairman of the supervisory board was supported in his activities of chairing the meetings by a person who was taking the minutes, and there was also an interpreter present for English. Last question now. A shareholder has asked about the external auditor for the company for the financial statements 2015 to 2028, and he wants to know the specific name of the auditor responsible for the statements from 2015 to 2020. I will be pleased to answer this question. The external auditor for Covestro AG for fiscal 2015 to 2017 was PricewaterhouseCoopers AG Wirtschaftsprüfungsgesellschaft. Since the 1st of March 2017, its name was PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft. The specific auditor responsible for the company between 2015 and 2017 was Dietmar Prüm. There was another audit partner during that time period, and that was Ms. Petra Justenhoven.
On the basis of a public call for tenders, we had KPMG AG as our external auditor, which was selected by the AGM of Covestro AG. That began in 2018 fiscal year, and the auditor for Covestro AG, the specific person since the fiscal year 2018, has been Dr. Markus Zeimes. There is another auditor that's been involved in these activities, and that's Mr. Oliver Geier. For the 2020 fiscal year, the Supervisory Board proposes that on the basis of a recommendation by the Audit Committee, KPMG AG Wirtschaftsprüfungsgesellschaft should be selected as our external auditor. At the current point in time, there are no plans for any changes to the individuals who would be acting as external auditors for fiscal 2020.
Ladies and gentlemen, I would now like to continue. We have now answered all of your questions.
I would like to note that we have answered all of the shareholders' questions that were submitted prior to the annual general meeting via the investor portal. We did not select or restrict any of the questions. This was an intentional decision on our part. I would also like to note that all shareholders who have duly registered for this AGM and who wish to exercise their voting right can also enter an objection using the investor portal, an objection to one or more of the resolutions to be adopted today, should you see reason to do so. The notary public, Dr. Hermanns, will receive any objections from the system and will include them in his minutes of this virtual AGM, very similar to what would happen at an in-person AGM.
Before we turn to the vote, I would like to announce the current number of shares represented of the registered share capital amounting to EUR 183 million divided into 183 million non-par shares. 119,611,281 non-par value shares are represented with the same number of votes. This amounts to 65.36% of the registered share capital. We also have absentee ballots for 90,385 non-par value shares. Altogether, we have 119,701,666 non-par value shares, which amounts to 65.41% of the registered share capital. Ladies and gentlemen, we can now proceed to the vote on the management's proposals with regard to agenda items 2 through 10. In other words, the instructions that you have given will be officially cast by the proxies designated by the company. I should now like to refer to the draft resolutions in agenda items 2 to 10 as published in the notice on the 17th of June 2020.
I would also like to note that with regard to agenda item 3, ratifying the acts of the members of the board of management, members of the board of management must abstain for their own shares and for shares they represent. These shares will have to. You have to abstain here. The same applies to members of the supervisory board and those who represent shares from the supervisory board members. Agenda item 4. As I said, this is your last chance now to exercise your voting rights through the investor portal or alternatively, you have the possibility to give instructions and authorizations to proxies designated by the company. You can also change your vote or your instructions for the very last time now, should you wish to do so. Let me have a look and see what time it is. It's 12:21 P.M.
Let me give you five minutes' time until 12:26 P.M. You have the possibility to make use of these functions in the investor portal. After that, these functions will be switched off without any further ado. The proxies designated by the company will then officially cast the votes that have been saved in the system in accordance with your instructions, and of course, if all of the absentee ballots received by the deadline will be included in the results. We will then determine the results of the vote by counting all of the votes in favor and all of the votes against. Abstentions will not be taken into account. All of this will be done electronically, and we hope that it won't take up that much time.
Ladies and gentlemen, it is now 12:26 P.M., and I assume that all shareholders and their representatives have had sufficient time to exercise their voting rights. Absentee ballots and the authorization and instructions in the investor portal have now been switched off, as I announced earlier on. The proxies designated by the company will officially cast their votes in accordance with the instructions from the votes that were stored in the system. So the voting process has now been concluded. I would then interrupt the AGM until the voting results have been determined. As I said, this probably won't take very much time. The notary public, Dr. Hermanns, will be monitoring the counting of the votes, and the results of the vote will be announced once I have them in front of me. Dann mache ich doch weiter. I'd now like to continue, ladies and gentlemen.
We now have the results of the vote, and I would like to continue the annual shareholders' meeting. I will be announcing the results of the vote and will give them to the notary public for the minutes. As usual, you will also be able to find the results of the vote after the AGM on the company's website. But first of all, I'd like to give you the number of shares represented. Of the registered share capital amounting to EUR 183 million or EUR 183 million non-par value shares, 119,611,708 non-par value shares are represented with the same number of votes. This amounts to 65.3% of the registered share capital. We have also received a total of 99,659 absentee ballots for non-par value shares. That means a total of 119,711,367 non-par value shares are represented, which amounts to 65.42% of the registered share capital.
And now I'd like to come to the results of the vote. I will be announcing the results for agenda items 2 to 10. They refer to the proposed resolutions from the Board of Management and Supervisory Board or from the Supervisory Board as published in the Federal Gazette on the 17th of June 2020. Agenda item 2, resolution on the use of the distributable profit. I would like to announce that the proposal from the Managing Board and Supervisory Board has been approved with the required number of votes. Agenda item 3, ratification of the actions of the members of the Board of Management. I would like to announce that the AGM has adopted the resolution from the Board of Management and Supervisory Board with the required majority.
On behalf of all members of the Board of Management, I would like to thank you for the trust you have placed in us. Agenda item 4, ratification of the actions of the members of the Supervisory Board. I note and announce that the AGM has approved the resolution with the required majority. And on behalf of all members of the Supervisory Board, I would like to thank you for the trust you have placed in us. Agenda item 5, election of the auditor for the audit of the annual financial statements and for the review of the interim financial statements. I would like to note and announce that the AGM has approved the resolution from the Supervisory Board with the required majority. Agenda item 6, election to the Supervisory Board, Dr. Christina Maria Bortenlänger.
I note and announce that the AGM has approved the proposal from the Supervisory Board with the required majority. Agenda item 6, election to the Supervisory Board, Prof. Dr. Rolf Nonnenmacher. I note and announce that the AGM has approved the resolution from the Supervisory Board with the required majority. Agenda item 6, election to the Supervisory Board, Dr. Richard Pott. I note and announce that the AGM has adopted the proposal from the Supervisory Board with the required majority. Agenda item 6, election to the Supervisory Board, Regina Stachelhaus. I note and announce that the AGM has approved the resolution from the Supervisory Board with the required majority. Agenda item 6, election to the Supervisory Board, Patrick Thomas. I note and announce that the AGM has approved the Supervisory Board's resolution with the required majority. Agenda item 6, election to the Supervisory Board, Ferdinando Beccalli.
I note and announce that the AGM has adopted the Supervisory Board's proposal with the required majority. Agenda item 7, resolution on rescinding the existing authorized capital 2015, creating authorized capital 2020 in return for cash contributions and/or contributions in kind with the option to disapply subscription rights and on the corresponding amendments to the articles of incorporation. I note and announce that the AGM has approved the proposal from the Supervisory Board with the required majority. Agenda item 8, resolution on rescinding the existing and granting the Board of Management a new authorization to issue convertible warrant bonds to disapply subscription rights and to rescind the existing conditional capital 2015 and to create a conditional capital 2020 and to amend the articles of incorporation accordingly. I note and announce that the AGM has approved the proposal from the Board of Management and Supervisory Board with the required majority.
Agenda item 9, amendment of sections 3, 14, and 15, paragraph 2 of the articles of incorporation to adapt to the German Act implementing the second shareholder rights directive, ARUG II . I note and announce that the AGM has adopted the proposal from the Board of Management and the Supervisory Board with the required number of votes and majority. Agenda item 10, amendment of sections 10, 15, and 16 of the articles of incorporation. I note and announce that the AGM has adopted the proposal from the Board of Management and the Supervisory Board with the required majorities. Meine Damen und Herren. Ladies and gentlemen, that brings us to the end of our agenda. You still have two minutes to give notice of an objection to resolutions taken by the AGM. This can be entered via the investor portal.
It will be entered in the notary public's minutes, and it is now 12:52 P.M. You have until 12:54 P.M. to do so if you should see any reason to do so. Meine Damen und Herren. Ladies and gentlemen, it is now 12:54 P.M. It is no longer possible to give notice of objections for the minutes. That brings us to the end of this year's online annual general meeting. I would like to thank you for your interest in our company, and I'd like to thank all employees who were involved in preparing and conducting this online AGM. Thank you for your commitment. Next year's AGM will most likely take place on the 16th of April 2021 in Bonn. We hope that this will be an in-person event with our shareholders amongst us, as you and we are used to having AGMs.
Today's AGM is thus concluded, and it is now 12:55 P.M. Thank you very much.