Evonik has reported a significant increase in earnings for the second quarter of 2024, despite ongoing economic challenges. The final figures, confirmed on July 15, show a 28% rise in adjusted EBITDA, reaching €578 million compared to the previous year. Free cash flow turned positive at €217 million, a significant improvement from the €203 million outflow recorded a year earlier.
Chief Executive Officer Christian Kullmann commented on the company’s performance, “We are cutting costs and making significant strides with our restructuring programs. While the economic environment remains challenging, our efforts are clearly paying off.”
Group sales for the second quarter rose by 1% to €3.93 billion year-over-year. Although prices fell by 2% due to lower raw material costs being passed on, the Animal Nutrition sector saw a recovery in prices. Sales volumes increased by 5%, with Specialty Additives achieving notable double-digit growth. Improved cost discipline and reduced production costs contributed to a higher adjusted EBITDA margin, which rose by 3.1 percentage points to 14.7%.
Chief Financial Officer Maike Schuh noted, “The improvements in our key financial metrics compared to last year are promising. However, we must acknowledge that the recovery is from a low base in 2023, and we still have significant progress to make.”
Following these results, Evonik has raised its 2024 adjusted EBITDA outlook to a range of €1.9 billion to €2.2 billion, up from the previous range of €1.7 billion to €2.0 billion. The forecasts for other key financial metrics remain unchanged, with sales expected to be between €15 billion and €17 billion. The company anticipates a cash conversion rate of approximately 40% and a notable increase in ROCE. For the third quarter, Evonik expects adjusted EBITDA to match the level seen in Q2.
The Evonik Tailor Made efficiency program is expected to start generating savings by the end of this year. The company has finalized negotiations for socially responsible job reductions in Germany, leading to provisions of €238 million in the second quarter. These provisions also contributed to a negative net income of €-5 million for the quarter, an improvement from the €-270 million net loss in the same quarter last year.
Evonik is advancing its product portfolio with a focus on sustainability. The company recently inaugurated the world’s first industrial-scale plant for sustainable biosurfactants in Slovakia, underscoring its commitment to the green transformation in the cleaning, beauty, and personal care industries. The plant in Slovenská Ľupča is expected to reach full capacity by the end of 2026, with long-term sales potential estimated at €1 billion.
The sale of the superabsorbents business is expected to be finalized in the current third quarter, completing the divestment of two of the three business lines from the former Performance Materials division.
