German specialty chemicals giant Evonik has released preliminary financial results for the first quarter, surpassing market expectations. With an adjusted EBITDA of €522 million, up from €409 million in Q1 2023, the company has shown a robust 28% increase.
Strong growth was observed in the Specialty Additives and Nutrition & Care divisions, driven primarily by higher sales volumes. This growth marks a reversal from seven consecutive quarters of decline, with increased volumes attributed to both improved end-customer demand and restocking due to low inventory levels. However, a widespread recovery in demand across all sectors of the portfolio is not yet evident.
In the first quarter of 2024, Evonik’s sales stood at approximately €3.8 billion, marking a modest decrease of around 5% compared to the previous year’s figure of €4.0 billion. This decline was primarily driven by lower sales prices stemming from decreased raw material costs.
Continued efforts in cost-cutting initiatives resulted in further expense reductions, thereby positively impacting the adjusted EBITDA margin. The margin saw an improvement of over 3 percentage points, reaching 13.7% compared to 10.2% in Q1 2023.
Evonik’s Specialty Additives division achieved an adjusted EBITDA of €185 million, marking a 10% increase from the previous year’s figure of €168 million. This growth was primarily fueled by higher sales volumes and increased plant utilization, driven by customer inventory restocking and a gradual recovery in demand, particularly in China. Additionally, a slight decline in raw material prices contributed positively to earnings.
The Nutrition & Care division nearly doubled its earnings compared to the previous year, achieving an adjusted EBITDA of €140 million, up from €76 million in Q1 2023. The significant improvement was mainly attributed to the Animal Nutrition segment, benefiting from higher sales volumes, reduced variable costs, and business model optimization. Care Solutions also performed well across its entire portfolio, contributing to the division’s strong start to the year.
However, the Smart Materials division did not observe significant improvements in most of its end markets compared to the end of 2023. Adjusted EBITDA remained relatively stable year-on-year at €159 million, compared to €164 million in Q1 2023. Earnings were supported by a slight recovery in the Silica segment and the sale of a license for the HPPO production process in Active Oxygens.
