Evonik Completes Successful 2013

Evonik reported its 2013 financial results. The company reported group sales €12.9 billion, with a virtually stable organic sales trend. Adjusted EBITDA was €2.0 billion; the reduction from the very high prior-year figure was mainly price-induced. The adjusted EBITDA margin was 15.6 percent.

“Evonik is now listed on the stock exchange and – since last summer’s divestment of the majority of shares in the real estate activities – a well-positioned and focused specialty chemicals company. In 2013 we made considerable progress with our growth strategy: The first major projects in our ambitious investment program were completed,” id Klaus Engel, chairman of the Executive Board of Evonik Industries AG.

“The general economic background was tougher than anticipated in 2013. While volumes increased, lower selling prices, in particular, led to a drop in Evonik’s operating results. “Despite the difficult market environment, our business performance was solid,” said Engel. “We will be raising the efficiency of our operational and administrative areas still further and systematically improving our cost position. That will support our competitiveness and our profitable growth strategy,” he stressed.

Evonik anticipates that sales will rise slightly year-on-year in 2014 (2013: €12.9 billion), and expects adjusted EBITDA to be between €1.8 billion and €2.1 billion (2013: €2.0 billion).

In 2013, Evonik’s end-customer industries and thus the company’s own business performance were affected by the lower economic growth in Asia-Pacific and North America, which are important regions for the company. The persistently weak development in Europe also had an impact. The challenging market environment led to perceptible pressure on selling prices and considerable price erosion for some important businesses. By contrast, the continued high global demand was very pleasing and resulted in clear volume rises, especially in the second half of 2013 compared with the same period of 2012.

Organically, Group sales were virtually stable in 2013, posting only a slight year-on-year decline of minus 1%. This was mainly caused by lower selling prices (-5%), whereas volumes increased (4%). Together with other effects (-2%), primarily the divestment of two small businesses in 2012, and currency effects (-1%), the overall result was a 4% drop in sales to €12,874 million (2012: €13,365 million).

The operating results fell short of the very high prior-year results, mainly because of the reduction in selling prices for some key businesses. Overall, adjusted EBITDA declined by 19% to €2,007 million (2012: €2,467 million) and adjusted EBIT was 25% lower at €1,424 million (2012: €1,887 million). The adjusted EBITDA margin was 15.6% and thus remained at an attractive level (2012: 18.5%).

The Resource Efficiency segment comprises the Inorganic Materials and Coatings & Additives Business Units. Sales in the Resource Efficiency segment were €3,084 million, 2% lower than in 2012 (€3,131 million). This was principally attributable to negative currency effects and the impact of the colorants business, which was contained in the prior-year figures until April. After adjustment for these factors, the segment posted organic sales growth, driven by higher volumes and unchanged selling prices. Business with fumed silicas and specialty oxides was especially pleasing, with high demand and good utilization of production capacity. Rising demand for silicas and silanes for the tire and rubber industries, especially in Europe and Asia, led to a positive performance by these products. The segment registered unchanged high demand for oil additives for the automotive, construction and transportation industries, and for products for the coatings industry and binders.

The operating results were very good. Adjusted EBITDA was €656 million and almost matched the previous year’s level of €663 million. Adjusted EBIT rose 3% to €540 million (2012: €526 million), mainly due to lower depreciation. The adjusted EBITDA margin increased slightly from 21.2% to 21.3%.