Q2 2025 Public Company Performance

Specialty Chemicals l Materials Sector: Q2 2025 Performance

August 19, 2025

The specialty chemicals and materials sector delivered an unexpectedly weak Q1, casting serious doubt on the consensus forecast for mid-single-digit EBITDA growth in 2025. Companies had widely cautioned that escalating trade tensions could further weaken already fragile demand, pointing to Q2 results as a critical test. The Q2 earnings season wrapped up last week, and results from 40 leading companies confirmed their fears.

Price deflation has now persisted for ten consecutive quarters. The modest volume recovery seen in 2024 not only reversed in Q1 but worsened in Q2. Consolidated adjusted EBITDA fell more than 17% year-over-year, with margins contracting by 220 basis points, sharply weaker than in Q1. More than half of the companies lowered full-year guidance, reflecting what many executives now describe as a “lower for longer” reality. Notably, some companies attempted to downplay weak results to avoid spooking investors; one CEO went so far as to label a 10% sales decline and a 28% drop in adjusted EBITDA as “resilient performance.”

Beneath the consolidated figures, performance diverged sharply by end market and geography. Water solutions, electronics, agriculture, and medical applications showed strength, but not enough to offset broad-based weakness. Against a backdrop of sluggish demand and persistent overcapacity, companies announced 21 plant closures in Q2 alone, with Europe bearing the brunt.

With global trade tensions still unresolved, the sector faces a sobering risk: 2025 could mark the third straight year of revenue and EBITDA decline. That said, our model suggests the second half could finally stabilize versus the prior year, potentially establishing a much-needed floor for performance. 

https://creovgroup.com/blog/f/specialty-chemicals-l-materials-sector-q2-2025-performance