Coatings World staff09.04.20
Evonik said it is getting through the crisis well.
Nevertheless, sales and earnings in the second quarter decreased compared to the previous year due to significantly weaker demand in some markets.
Company sales fell by 14 percent to €2.83 billion, while adjusted earnings before interest, tax, depreciation and amortization (EBITDA) fell 19 percent to €456 million.
"Evonik is weathering the crisis," said Christian Kullmann, chairman of the management board. "In the second quarter we felt the effects of the pandemic. However, the strategic portfolio changes and the implementation of our efficiency programs contributed to the fact that we got through the first half of the year better than initially expected. This is especially true for our strong growth segments."
The Performance Materials segment was hit much harder by the slump in demand as well as suffering from the low oil price.
Adjusted net income in the second quarter decreased by 30 percent year-on-year to €160 million.
Adjusted earnings per share declined from €0.49 to €0.34. Free cash flow was significantly positive at €96 million. Lower bonus payments and tax reimbursements more than compensated for the effects of lower operating profit and an increase in net working capital.
"In the crisis, we have shown high cash and cost discipline," said Ute Wolf, CFO. "We are starting to see initial signs of recovery in some markets. However, there is still no question of a general economic recovery. The Corona crisis is not yet over."
For the full year 2020 Evonik confirms its outlook from May 7.
The company expects sales of between €11.5 billion and €13 billion as well as adjusted EBITDA of between €1.7 billion and €2.1 billion.
At the Performance Materials segment sales in the second quarter fell significantly by 42 percent to €319 million.
The decline in demand, particularly from the automotive and oil industries, particularly affected Performance Intermediates.
In addition, the massive drop in the price of oil weighed on business. Functional Solutions' sales also declined due to weak demand.
Adjusted EBITDA of the segment decreased by 85 percent to €11 million.
