Evonik Reports First Quarter 2018 Results

Evonik made a good start to 2018. Adjusted EBITDA increased to €679 million in the first quarter, a significant rise of 14% year-on-year. All three chemicals segments contributed to the gain in earnings.
 
“We are consistently implementing our new strategy,” said Christian Kullmann, chairman of the Executive Board. “With our focus on innovation and our performance-oriented corporate culture, we are consistently striving for profitable growth. Our goal is a balanced portfolio focused on specialty chemicals.”
 
Sales grew 1% to €3.68 billion in the first quarter, driven mainly by slightly higher sales volumes as well as increased selling prices. Currency effects, especially the weaker U.S. dollar, had a counter effect.
 
The adjusted EBITDA margin improved to 18.5% (prior-year quarter: 16.4%). Adjusted net income increased to €333 million and adjusted earnings per share rose to €0.71. Free cash flow increased to €84 million (prior-year quarter: €57 million) as a result of lower outflows for capital expenditures.
 
Despite an increasingly negative currency effect, Evonik is reiterating its forecast and expects to grow both sales and operating earnings this year. Adjusted EBITDA is expected to increase to between €2.4 billion and €2.6 billion (2017: €2.36 billion). Due to its strong market positions and strategic focus on its four growth engines—Specialty Additives, Animal Nutrition, Smart Materials, and Health & Care—Evonik anticipates that demand will remain high.
 
Segment Performance
 
• Resource Efficiency: Sales rose 3% to €1.4 billion in the first quarter. The consolidation of the silica business acquired from J. M. Huber in September last year and higher selling prices contributed to this rise. There was strong demand for coating additives, especially in Asia-Pacific, and for crosslinkers in Europe. Adjusted EBITDA rose to 9% to €325 million in the Resource Efficiency segment.
 
• Nutrition & Care: In the first quarter of 2018, sales were level with the prior-year quarter at €1.12 billion. Market conditions for essential amino acids for animal nutrition were robust in the reporting period. Adjusted EBITDA rose 12% to €209 million in the Nutrition & Care segment.
 
• Performance Materials: Sales grew 4% to €995 million in the first quarter. This was due to higher selling prices, while negative currency effects had a counter effect. The methacrylates business continued to perform positively and reported a considerable rise in sales. Demand remained pleasing, especially from the coatings and automotive sectors, while market supply was still tight. The adjusted EBITDA of the Performance Materials segment improved 14% to €179 million.