Evonik Industries AG: Strong results in second quarter

• Sales up by 7 percent to EUR3.9 billion
• Adjusted EBITDA rises 16 percent to EUR742 million
• Free cash flow climbs to EUR56 million (prior-year: -EUR192 million)

 
Essen. Evonik increased adjusted EBITDA to EUR742 million in the second quarter of 2018 (prior-year: EUR640 million). All three chemical segments contributed with excellent operational business development: All three segments were able to increase their adjusted EBITDA as well as EBITDA margin compared to the same quarter of the previous year. Evonik thereby confirms the preliminary results pre-released on July 17.
 
Sales increased to EUR3.9 billion in the second quarter (prior-year: EUR3.6 billion), largely due to higher sales volumes and higher selling prices. Adjusted net income was EUR354 million, which corresponds to adjusted earnings per share of EUR0.76. The adjusted EBITDA margin improved to 19.2 percent, 1.5 percentage points higher than in the same period of the previous year.

Evonik is well on track in terms of free cash flow development. While free cash flow is usually negative in the second quarter because of variable compensation payments, it improved significantly by EUR248 million and was positive at EUR56 million (prior year: -EUR192 million). This was primarily due to improved operating income.
 
"We are pleased to confirm the strong results that we already pre-released," says Christian Kullmann, Chairman of the Executive Board. "The implementation of strategic measures and a higher awareness of cost is increasingly reflected in our operating business development and a significantly improved cash flow."
 
In the first half of the year 2018, Evonik generated sales of EUR7.5 billion and an adjusted EBITDA of EUR1.4 billion. Compared to the first half of 2017, sales rose by 4 percent, and adjusted EBITDA by 15 percent. The adjusted EBITDA margin rose from 17.0 to 18.8 percent. Free cash flow rose significantly in the first half to EUR140 million (prior year: -EUR135 million).
 
Outlook increased
 
Based on its excellent performance in the first half of the year, Evonik increased its outlook for the fiscal year 2018 and is now expecting an adjusted EBITDA between EUR2.60 and EUR2.65 billion. The company had previously projected an adjusted EBITDA between EUR2.4 and EUR2.6 billion.
 
The outlook for free cash flow has also been increased. Evonik projects a noticeably higher free cash flow for the fiscal year 2018 compared to prior year (EUR511 million). The company had so far forecasted a free cash flow slightly above the level of 2017. 

Development in the segments
 
The Resource Efficiency segment continued its extremely stable and profitable development in the second quarter. Sales increased by 8 percent to EUR1.5 billion, while adjusted earnings were 15 percent above the same quarter of the previous year at EUR366 million. The adjusted EBITDA margin in the segment increased by 1.4 percentage points to an outstanding 24.7 percent. Overall, the segment benefited from high capacity utilization and continuing high demand for silica, high-performance polymers, including for lightweight design, and for water-based, environmentally friendly paints and coatings from the Coating Additives business line.

Sales in the Nutrition & Care segment were 2 percent above prior-year at EUR1.2 billion. Adjusted earnings rose by 10 percent to EUR222 million. The segment was able to significantly increase its adjusted EBITDA margin to 18.7 percent (prior-year: 17.3 percent). This was achieved with a consistent focus on higher-margin products, successfully passing on increased raw material costs, and strict cost reductions, especially in Animal Nutrition and Baby Care. In the amino acids business for animal nutrition, the market environment remained robust over the course of the reporting quarter. Sales volumes developed positively and were above those of the same quarter in the previous year. Sales prices continued the stabilization trend that had already been evident at the beginning of the year. Significant sales increases were also reported in Personal Care, which benefited from significantly higher volumes at an improved product mix. In the Health Care business pharmaceutical polymers and exclusive synthesis developed very well.
 
Sales in the Performance Materials segment reached EUR1.0 billion in the second quarter, 13 percent above the previous year. This was due to persistently high selling prices in the methacrylate business and an improved market environment for Performance Intermediates. The adjusted EBITDA improved by 17 percent to EUR196 million. The Performance Materials segment increased its adjusted EBITDA margin to 19.1 percent (prior-year: 18.5 percent).



Contact:
Tim Lange
Head of Investor Relations
+49 201 177-3150
tim.lange@evonik.com