“In a weakening global economy, we were able to hold our ground in terms of sales and earnings,” said Christian Kullmann, chairman of the executive board. “With free cash flow, we were even able to post a significant gain. Our portfolio is now more robust in the face of macroeconomic trends than it was in the past. The divestment of our methacrylates business has contributed to that.”
One-time start-up costs for new production facilities and a temporary bottleneck in the supply of raw materials in the Performance Materials segment contributed to the drop in adjusted EBITDA. Correspondingly, the adjusted EBITDA margin slipped from 17.1% to 16.4%. Adjusted net income fell 5% to €249 million with adjusted earnings per share at €0.53.
Free cash flow improved significantly year-on-year, increasing by €109 million to €159 million. This was mostly due to less build up of net working capital and lower pension payments.
As a result of the agreed sale of the methacrylates business, the outlook for continuing operations has been revised upwards. Evonik now expects adjusted EBITDA and sales to be at least on the same level as last year. In 2018, the continued operations posted an adjusted EBITDA of €2.15 billion and sales of €13.3 billion.
Resource Efficiency: The successful business development in this segment continued in the first quarter of 2019. Sales rose 3% to €1,399 million. This was principally due to higher selling prices, whereas volumes were slightly lower than in the prior-year period.
Demand for high-performance polymers (polyamide 12) and membranes remained high, so higher prices had a positive impact, resulting in a correspondingly strong rise in sales. Higher sales were also reported by crosslinkers as a result of high demand. Despite start-up costs for the new silica plant in the USA, adjusted EBITDA improved 2% to €324 million.
Nutrition & Care: Sales increased 3% to €1,149 million in the first quarter of 2019. Adjusted EBITDA was €180 million, 14% lower than in the prior-year period, partly due to expenses in connection with the planned start-up of the new methionine facility in Singapore in mid-2019.
Performance Materials: In the first quarter of 2019, sales fell 7%, compared with the prior-year period, to €559 million as a result of lower volumes, declining prices, and negative currency effects. Adjusted EBITDA at the segment declined 9% to €59 million.