Evonik: sales fell slightly in 2019
The company has kept earnings stable despite a deteriorating global economy. Adjusted EBITDA in 2019 was €2.153 billion compared with €2.150 billion in the previous year. Sales fell slightly by one percent to €13.1 billion.
We achieved our outlook and kept our earnings stable even in a market environment that was significantly more difficult than the prior year,” said Christian Kullmann, chairman of the executive board. “We stand for reliability and stability.” At the annual shareholders’ meeting on May 27, 2020, the executive and supervisory boards will be proposing a dividend of €1.15 per share. Based on the closing share price at year-end 2019 that gives a dividend yield of 4.2 percent, positioning the company among the top chemical companies.
Net income doubled
Net income for the year more than doubled to €2.1 billion, driven primarily by proceeds from the sale of the Methacrylates business in July 2019. The company generated free cash flow of €717 million, before carve-out taxes related to the sale of the Methacrylates business. Thus, free cash flow improved significantly compared with the previous year. “The measures implemented in the last years to improve our cash generation have been effective,” Chief Financial Officer Ute Wolf said. “For the current year, we are aiming for a further improvement in free cash flow.”
For 2020 the company is expecting growth at its specialty businesses. However, a less dynamic global economy is expected to burden the more commoditized businesses. On this basis, the company expects sales to remain stable and an adjusted EBITDA of between €2.0 billion and €2.3 billion in 2020.
Current segments will be transferred into four divisions
The company is working consistently on the implementation of its strategy. Accordingly, the company is adjusting its structure to fit the growth engines that it defined two years ago. On July 1, the current operating segments will be transferred into four divisions that are more balanced in their size and type of business. The divisions will be easier to manage because of their clear strategic roles, common end-markets and a clear alignment of technology platforms. The four divisions – Specialty Additives, Nutrition & Care, Smart Materials and Performance Materials – will have a lean and efficient setup. At the same time, Evonik has defined its self-perception: Leading beyond chemistry, to improve life, today and tomorrow. “This purpose will serve as a compass,” said Kullmann. “Understanding what we are means we know what drives us forward.”
Segment Nutrition & Care
Sales in 2019 fell one percent to €4.58 billion. Despite high demand for essential amino acids for animal nutrition, sales prices continued to fall over the course of the year. The specialties in the cosmetic solutions business developed particularly well. Adjusted EBITDA dropped ten percent to €728 million in 2019.