A Good Start to Fiscal 2017
- Sales grow considerably by 19 percent to €3.68 billion
- Adjusted EBITDA increases 8 percent to €612 million
- Air Products specialty additives business is being successfully integrated
- Outlook for the full year confirmed
Evonik increased sales considerably by 19 percent to €3.68 billion in the first three months of 2017. The main growth drivers were higher demand, which boosted sales volumes, and the first-time inclusion of the Air Products specialty additives business.
“The successful start to the year shows that we are on the right track with our growth strategy,” said Klaus Engel, Chairman of the Executive Board. “The combination of organic growth and strategic acquisitions has strengthened the company. We are on the road to becoming less vulnerable to economic cycles and having a more balanced portfolio. Demand for our specialty chemicals such as silica, coating additives and pharmaceutical ingredients boosted quarterly earnings.”
Adjusted EBITDA rose 8 percent to €612 million in the first quarter driven by improved results in the Resource Efficiency and Performance Materials segments. Earnings at Nutrition & Care were significantly below the prior year period mainly because of lower prices for animal nutrition products.
The company’s adjusted net income at €260 million remained at about the same level as the first quarter last year with adjusted earnings per share at €0.56. Net income was €160 million, about €80 million less than last year. The decline was primarily due to one-time effects tied to the acquisition of the Air Products specialty additives business.
The specialty additives business acquired from Air Products at the beginning of the year is being integrated successfully and smoothly. The company is still on track to achieve its planned synergies of about €70 million by 2020. The acquisition of the silica business of U.S. company J. M. Huber is progressing well and Evonik aims to close the purchase in the second half of the year.
The company’s net financial debt amounted to €2.3 billion at the end of the first quarter after payment for the Air Products specialty additives business. “Evonik still has a solid financial position after the biggest acquisition in the company’s history,” said Chief Financial Officer Ute Wolf. “We are within the framework of a solid investment-grade rating.”
Evonik is confident of achieving its forecast to grow sales and operating earnings in 2017 and expects adjusted EBITDA to increase to between €2.2 billion and €2.4 billion (previous year: €2.165 billion). The growth segments Nutrition & Care and Resource Efficiency will benefit from the integration of the Air Products specialty additives business.