Evonik’s successful start to 2022 significantly exceeded capital market expectations. Based on preliminary figures, which Evonik, adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) rose to €735 million in the first quarter. The analyst consensus was approximately €652 million.

“Across all divisions, we were able to adjust selling prices successfully and therefore off-set the increase in variable costs,” said Christian Kullmann, chairman of the Executive Board. “Although business conditions were dominated by uncertainty and bottlenecks, Evonik made a good start to the year.”

The main growth drivers at present are the Nutrition & Care and Performance Materials divisions. The Performance Materials division benefited from higher demand and improved selling prices for C4 products. In the present situation, its naphtha-based price clauses act as a natural hedge against higher oil prices.

These developments are also reflected in company sales, which increased by 34% year-on-year to €4.5 billion in the first three months. Adjusted net income was 49% higher at
€356 million.

Free cash flow amounted to €133 million in the first quarter, compared with €312 million in the prior-year period. “Cost inflation and, above all, higher raw material costs have raised the value of our inventories,” said CFO Ute Wolf. “Moreover, we have increased inventories as a precaution, so we are prepared for possible supply chain disruptions.”

In light of lower projections for global economic growth, Evonik has reviewed its expectations for 2022 as a whole. Evonik now anticipates that global growth will be 3.3%.

“We are living in a period of unusual economic uncertainty,” said Kullmann. “Higher energy prices and considerable uncertainty about the supply of raw materials are weighing on industry and the entire economy. Based on our strong start to the year and assuming there will be no further escalation in the geopolitical situation, we are confirming our outlook for the full year.

The company expects to report adjusted EBITDA of between €2.5 billion and €2.6 billion and sales of between €15.5 billion and €16.5 billion. In 2021, Evonik’s adjusted EBITDA was €2.38 billion and sales were €15 billion.