Against the backdrop of a clearly weakening economy, Evonik showed a solid performance in the third quarter. Although sales volumes sold declined, revenues increased by 26% year-on-year to €4.88 billion due to price increases. That way, higher variable costs were successfully passed on. Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) only declined by 5% to €615 million.

“Despite the increasingly difficult environment, we remain confident of achieving our outlook for the full year,” said Christian Kullmann, chairman of the Executive Board. “At the same time, we are preparing for a recession in the coming year.”

Corresponding measures, such as restrictions on business travel and trade shows, cutting down on the use of external consultants and disciplined hiring, should help reduce costs in the three-digit million-euro range next year. Implementation is deliberately meant to be decentral and flexible, so the company can react to the volatile economic situation.

Evonik confirms the outlook for adjusted EBITDA in the range of €2.5 to €2.6 billion. Sales in the current year are now expected to be €18.5 billion.

Free cash flow significantly improved compared with the negative €106 million generated in the first half and stood at €288 million in the third quarter.

“We have achieved a lot in improving that measure, and the fourth quarter should be even better,” said CFO Ute Wolf. “We are working hard to achieve our goal of a free cash flow conversion rate of about 30%.”

Evonik has managed to make its energy mix less dependent on natural gas. At its largest site in Marl, Germany, the newly built gas-fired power plant can now be operated with liquefied petroleum gas. At the same time, an extension of the operating license of the coal-fired power plant on site ensures power supply.

Evonik is also becoming less dependent on fossil fuels: The specialty chemicals company recently concluded a long-term power purchase agreement with German energy supplier EnBW for the offshore wind farm “He Dreiht.” Evonik will purchase 100 megawatts green electricity from the new wind farm located in the North Sea for 15 years. Therefore, approximately one quarter of Evonik’s electricity needs in Europe will be met by wind power from 2026 onwards. The parties signed the corresponding contracts last week.

Evonik is also pushing ahead with the revamp of its portfolio, concentrating on specialty chemicals. In August, it sold its betaine business in the U.S., followed by the recent sale of the TAA derivatives business.