EVONIK
Sales and earnings slump in Q2 / EBITDA forecast confirmed
 Evonik CEO Christian Kullmann said the company was “weathering the crisis well” (Photo: Evonik) |
Sales of German speciality chemicals and plastics producer Evonik (Essen; www.evonik.com) fell by 14% to EUR 2.83 bn in the 2020 second quarter, as adjusted EBITDA tumbled 19% to EUR 456m and adjusted net income deteriorated by 30% to EUR 160m. This was due to significantly weaker demand in some markets as a knock-on effect of the pandemic, said CEO Christian Kullmann. However, strategic portfolio changes implemented earlier and the benefits of efficiency schemes cushioned the blow. All in all, “we got through the first half of the year better than initially expected,” the CEO remarked, adding that “Evonik is weathering the crisis well.”
The German group’s two growth segments, Resource Efficiency and Nutrition & Care, reported a “robust” performance in Q2, posting strong EBITDA margins of 20% each. However, Performance Materials – which includes plastics additives – was hit hard by the slump in demand as well as low oil prices.
In the Resource Efficiency segment, some businesses weathered the economic slowdown better than others. While cross-linkers saw higher demand from the wind-energy market, production at customers in other industries – especially automotive – led Evonik’s volume sales of high-performance plastics, silica and silanes for the tyre industry to slump. The segment’s quarterly sales declined 14% to EUR 1.24 bn, and adjusted EBITDA eroded by 22% to EUR 255m.
The second quarter was dismal for the Performance Materials segment, with sales nosediving 42% to EUR 319m and adjusted EBITDA plunging 85% to EUR 11m. The Performance Intermediates division suffered badly from the demand slump in the automotive and oil industries.
For full year 2020, Evonik has confirmed its guidance from May, which foresees sales in the range of EUR 11.5-13 bn and adjusted EBITDA between EUR 1.7 bn and EUR 2.1 bn. Nevertheless, there are caveats. “We are starting to see initial signs of recovery in some markets. However, there is still no question of a general economic recovery,” said CFO Ute Wolf, adding that the coronavirus crisis was not over.
The German group’s two growth segments, Resource Efficiency and Nutrition & Care, reported a “robust” performance in Q2, posting strong EBITDA margins of 20% each. However, Performance Materials – which includes plastics additives – was hit hard by the slump in demand as well as low oil prices.
In the Resource Efficiency segment, some businesses weathered the economic slowdown better than others. While cross-linkers saw higher demand from the wind-energy market, production at customers in other industries – especially automotive – led Evonik’s volume sales of high-performance plastics, silica and silanes for the tyre industry to slump. The segment’s quarterly sales declined 14% to EUR 1.24 bn, and adjusted EBITDA eroded by 22% to EUR 255m.
The second quarter was dismal for the Performance Materials segment, with sales nosediving 42% to EUR 319m and adjusted EBITDA plunging 85% to EUR 11m. The Performance Intermediates division suffered badly from the demand slump in the automotive and oil industries.
For full year 2020, Evonik has confirmed its guidance from May, which foresees sales in the range of EUR 11.5-13 bn and adjusted EBITDA between EUR 1.7 bn and EUR 2.1 bn. Nevertheless, there are caveats. “We are starting to see initial signs of recovery in some markets. However, there is still no question of a general economic recovery,” said CFO Ute Wolf, adding that the coronavirus crisis was not over.
21.08.2020 Plasteurope.com [245757-0]
Published on 21.08.2020
German version of this article...