Sales increased to €3.9 billion in the second quarter (prior-year: €3.6 billion), largely due to higher sales volumes and higher selling prices. Adjusted net income was €354 million, which corresponds to adjusted earnings per share of €0.76. The adjusted EBITDA margin rose to 19.2%, 1.5 percentage points higher than in the same period of the previous year.
The adjusted EBITDA and adjusted earnings per share are significantly above current market expectations (analyst consensus: €691 million, €0.70 per share). Evonik is therefore obligated to publish preliminary numbers. The group presents its final results on August 2, 2018.
“We are continuing to consistently execute our strategy,” says Christian Kullmann, chairman of the Executive Board. “This is more and more reflected in our operational business development as well. In addition to the continuing strong demand in our growth engines, our strong quarterly results are showing the first signs of success from our efficiency program in administration and sales.”
In the first half of the year, Evonik generated sales of €7.5 billion and an adjusted EBITDA of €1.4 billion. Compared to the first half of 2017, sales rose by 4%, and adjusted EBITDA by 15%. The adjusted EBITDA margin rose from 17% to 18.8%.
Evonik is well on track in terms of free cash flow development: In contrast to the previous year (H1 2017: -€135 million), free cash flow was positive in the first half of 2018.
Based on its performance in the first half of the year, Evonik has increased its outlook for the fiscal year 2018 and is now expecting an adjusted EBITDA between €2.60 billion and €2.65 billion. The company had previously projected an adjusted EBITDA between €2.4 and €2.6 billion.
The outlook for free cash flow has also been increased. Evonik projects a notably higher free cash flow for the fiscal year 2018 compared to prior year. The company had so far forecasted a free cash flow slightly above the level of 2017.
The Resource Efficiency segment continued its stable and profitable development in the second quarter. Sales increased by 8% to €1.5 billion (prior-year: €1.4 billion), while adjusted earnings were 15% above the same quarter of the previous year at €366 million. The adjusted EBITDA margin in the segment increased by 1.4 percentage points to 24.7%. 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 at €1.2 billion were slightly above prior-year (prior-year: €1.2 billion). Adjusted earnings rose by 10% to €222 million (prior-year: €201 million). The segment was able to significantly increase its adjusted EBITDA margin to 18.7% (same quarter of prior-year: 17.3%).
Sales in the Performance Materials segment reached €1.0 billion in the second quarter, 13% 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 €196 million (prior-year: €168 million). The Performance Materials segment increased its adjusted EBITDA margin to 19.1% (prior-year: 18.5%).