Sales of Evonik industry increased to 15 billion euros

Evonik industrial group released its 2018 financial report and 2019 expectation: the implementation of the strategy has achieved results, and the performance of Evonik is more stable. The expected goal has been achieved: the adjusted EBITDA has climbed to 2.6 billion euros. The sales volume has increased by 4% to 15 billion euros. The 2019 expectation: the adjusted EBITDA has slightly decreased or remained stable, and the free cash flow has increased significantly Strong growth again in 2018. Adjusted EBITDA increased by 10% from last year to 2.6 billion euros. All three chemical business segments contributed to profit growth. In spite of the difficult external environment in the second half of 2018, Evonik still achieved the profit forecast raised in the middle of the year. Sales increased by 4% to 15 billion euros. The adjusted EBITDA margin climbed to 17.3%, about 1 percentage point higher than in 2017. This means that Evonik has taken an important step towards its medium-term goal of achieving a profit margin of 18% to 20%. "Despite the heavy external pressure, we have met our expectations for 2018," said Ku Leman, chairman of Evonik industries. "Our continued implementation of our corporate strategy has begun to bear fruit, even in the face of global economic weakness and abnormal weather, Evonik has performed more steadily." At the annual general meeting on May 28, the executive board and the supervisory board will propose a dividend of 1.15 euros per share.

According to the closing price of the stock at the end of 2018, the dividend yield reached 5.3%, which is the best among chemical enterprises. Adjusted net income for the year increased 29% to 1.29 billion euros, a record. Evonik generated 672 million euros of free cash flow. "We committed to a significant increase in free cash flow in 2018, and now we have successfully completed it," said ute wolf, CFO. "This year we will continue our efforts to steadily improve free cash flow." In the autumn of 2017, Evonik announced to optimize its administrative and sales processes, and by the end of 2020, it will save 200 million euros annually. Among them, the cost savings of 50 million euros have been reflected in the revenue in 2018. For the remaining 150 million euros, relevant measures have been gradually confirmed in the last year. Based on the New Sustainable Development Strategy 2020 +, Evonik sets the company's goal to reduce greenhouse gas emissions by 50% by 2025, taking 2008 as the reference year. For important investment decisions, an internal pricing of carbon dioxide will be taken into account. At the same time, Evonik is gradually expanding specific business activities to increase the proportion of products and solutions with specific sustainability benefits. At present, half of the company's sales come from product applications that help customers improve resource efficiency. In spite of political uncertainty and weak economic growth, Evonik expects the adjusted EBITDA in 2019 to be flat or slightly lower than that in 2018. "With the active construction of the investment portfolio and the improvement of cost awareness, Evonik will take a better look to promote this year's transformation," said Chairman kuleman.

"It's not going to be an easy year, but we're ready to meet the challenges and work hard to build a good specialty chemicals company." Performance of business segment performance of resource efficiency business segment: sales increased by 6% to 5.71 billion euros in 2018. The main reasons include the increase of sales price (partly due to the rising cost of raw materials), and the silica business of Qiu Bo company acquired in September 2017. The strong demand for paint additives and polyamide 12 used in the automotive and 3D printing industries has driven the sales of this business segment. Adjusted EBITDA for resource efficiency increased by 10% to EUR 1.29 billion. Nutrition and consumer chemicals business segment: due to the increase of production and sales price caused by the growth of global demand, the annual sales of this business segment increased by 3% to 4.65 billion euros. In the medical health business, polymers used in intelligent drug delivery systems in the medical field have achieved great success, which are components of personal care products. Although the price of essential amino acids in feed additives was lower than last year, sales remained stable due to sales growth. Adjusted EBITDA for the business segment increased 8% to EUR 810 million. Functional materials business segment: sales increased by 6% to 3.98 billion euros in 2018, mainly due to the sharp increase in sales prices. The outstanding performance of the methacrylate business is attributed to the continued good market demand, especially in the coating and automotive industries, as well as the tight market supply. In the second half of the year, the low water level of the Rhine River limited the transportation of raw materials and goods and led to higher logistics costs. Adjusted EBITDA for the business segment increased 2% to EUR 670m.