- Adjusted EBITDA rises 11 percent to €639 million
- Outlook for the full year specified: “in the upper half”
- Integration of Huber’s silica business is proceeding
Essen. Evonik increased adjusted EBITDA to €369 million in the third quarter, an increase of 11 percent compared with the third quarter of 2016. This was mainly due to better earnings in the Resource Efficiency and Performance Materials segments. A positive factor was the contribution made by the specialty additives business that Evonik acquired from the US company
Air Products at the beginning of the year. Furthermore, the silica business acquired from J. M. Huber at the start of September made a contribution for the first time.
“Having completed the acquisition of Huber’s silica business, we reaped the benefit of both acquisitions for the first time,” said Executive Board Chairman Christian Kullmann. “The integration of both businesses is proceeding rapidly, and we have already realized initial synergies of around €10 million.”
Sales rose to €3.56 billion in the third quarter, adjusted net income increased to €275 million and adjusted earnings per shareimproved to €0.59. The company’s adjusted EBITDA margin was 18 percent, almost one percentage point higher than in the first six months. Free cash flow amounted to €485 million in the third quarter, about 70 percent above the prior-year level. Evonik has therefore generated a significantly positive free cash flow since the start of the year.
Evonik confirmed that it will raise both sales and the operating profit in 2017. Following the positive performance in the third quarter, adjusted EBITDA is now expected to be in the upper half of the €2.2 billion to €2.4 billion range (2016: €2.165 billion).
Nutrition & Care: Sales increased 3 percent to €1.10 billion in the third quarter. This was attributable to the consolidation of the business acquired from Air Products and to higher sales volumes. Market conditions for feed additives have improved. Selling prices therefore stabilized in the third quarter but are still considerably lower than in the prior-year quarter. This was the main reason for the decline in adjusted EBITDA to €184 million in the Nutrition & Care segment.
Resource Efficiency: Sales grew 22 percent to €1.36 billion in the third quarter. The silica business benefited from strong demand from the tire industry, and sales volumes of oil additives increased thanks to higher demand from the automotive, construction and transportation industries. Consolidation of the operations acquired from Air Products and Huber contributed 14 percentage points of the sales growth. Adjusted EBITDA rose to €312 million in the Resource Efficiency segment.
Performance Materials: Sales rose 15 percent to €919 million in the third quarter. High demand, especially from the coatings and automotive sectors, combined with continuing tight supply, led to higher selling prices. The adjusted EBITDA of the Performance Materials segment improved to €174 million.