Evonik seeks €1 billion extra EBITDA

At its latest capital markets day, Evonik has announced that it aims to increase its operational and financial performance significantly by 2027. This will be focused on four strategic pillars: the set-up of its portfolio in two new segments, sustainable innovations, a balanced regional footprint and a culture of mutual respect and performance orientation.

Return on capital employed, the company's key financial indicator, is expected to reach around 11%, which means adjusted EBITDA would increase by €1 billion on 2023. This increase is expected to result roughly equally from growth and cost optimisation, with acquisitions ruled out during the time period.

‘Growth’-driven EBITDA increases refers to higher capacity utilisation of new plants and from new products in the three defined ‘innovation growth areas’. Fully biodegradable biosurfactants are seen as one key driver.  ‘Optimisation’ include such cost-cutting programmes as Evonik Tailor Made, various single-business initiatives and the ePro programme in procurement.

“We used the economic crisis of 2023 as an opportunity to refine our strategy for the coming years and to set clear goals,” said CEO Christian Kullmann (pictured). “These goals are ambitious – but we know the quality of our business and see additional opportunities, for example from economic stimulus programs in Germany and Europe.”

This followed the announcement that Evonik’s adjusted EBITDA was 7% up in Q1 over the same period in 2024 at €560 million, despite the difficult economic environment. This was attributed to higher sales volumes and better than expected prices in Animal Nutrition, plus continued cost discipline.

Sales volumes were 2% up on Q1 2024 while prices were 2% down. Revenue remained roughly stable at €3.78 billion. Net income grew to €233 million, compared with €156 million. CFO Maike Schuh said: “Our efficiency efforts are taking hold. And that is urgently needed in view of resurgent economic concerns.”