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Evonik Releases 2025 Q2 Financial Report: Declining Demand Impacts Performance

Evonik 2025-08-01 13:44:11

Economic uncertainty leads to a decline in sales.

Adjusted EBITDA for the second quarter decreased by 12% year-on-year.

Adjusted EBITDA for the full year 2025 is expected to be at the lower end of the forecast range.

In an increasingly challenging economic environment, Evonik Industries reported an adjusted EBITDA of €509 million for the second quarter of 2025, down 12% from the strong performance in the same period last year (Q2 2024: €578 million).

Christian Kullmann, Chairman of the Executive Board and CEO of Evonik Industries, stated, "Market demand was weak this quarter, and uncertainty has significantly increased. These challenges are also reflected in our performance."

Evonik's sales in the second quarter of this year fell by 11% year-on-year to 3.5 billion euros (Q2 2024: 3.93 billion euros). More than half of the decline was due to unfavorable exchange rate movements and the divestment of the superabsorbent business, which was still part of Evonik in the same period last year. Sales volume decreased by 4% year-on-year, while overall product prices remained stable. Sales performance of C4 chain products was below average. Extended downtime for maintenance of production facilities for products such as Polyamide 12 also had a certain impact on sales.

The adjusted EBITDA margin was 14.5%, basically unchanged from 14.7% in the same period last year. Net profit reached 120 million euros, a significant improvement compared to the same period last year. In the same period last year, a net loss of 5 million euros was recorded due to provisions related to the "Evonik TailorMade" efficiency improvement program. Free cash flow was negative 211 million euros (Q2 2024: 217 million euros), mainly due to an increase in net working capital and significantly higher variable compensation payments for 2024.

Evonik Industries' Chief Financial Officer Maike Schuh stated: "The economic situation clearly deteriorated in May and June. In the second half of this year, maintenance shutdowns will decrease, and the capacity of certain products will be increased, which is expected to have a positive impact for us."

Evonik expects that, barring any further deterioration in the global economy, the adjusted EBITDA for the full year 2025 will reach the lower end of the forecast range (€2.0 billion to €2.3 billion).

The cash conversion rate is expected to remain around 40% in 2025. To ensure strong free cash flow, capital expenditure will be reduced by 100 million euros, down to approximately 750 million euros. The return on capital is expected to remain flat compared to last year (2024: 7.1%).

In the second quarter of 2025, sales revenue of the Customized Solutions business segment declined by 7% year-on-year to €1.37 billion, mainly due to lower sales volumes and unfavorable exchange rate effects. However, slightly higher sales prices partially offset the decrease. Demand for additives used in polyurethane foams and durable consumer goods fell significantly, and demand for products used in the coatings and paints industry was also lower than last year’s strong levels. Sales prices for lubricant additives increased, while demand remained generally stable. Overall, revenues from the additives business declined. The Care Solutions business also saw a year-on-year decrease in sales revenue due to lower volumes. Affected by weak sales, the segment’s adjusted EBITDA dropped by 10% year-on-year to €254 million, and the adjusted EBITDA margin decreased from 19.1% in the same period last year to 18.6%.

In the second quarter of 2025, sales in the Advanced Technologies segment decreased slightly by 1% year-on-year to €1.51 billion. This performance was mainly due to a slight decline in sales prices and adverse currency effects, which were partially offset by slightly higher volumes. Sales in the Animal Nutrition business increased significantly year-on-year due to higher volumes. In the Inorganic business, the hydrogen peroxide business benefited from a licensing agreement; however, due to overall weak demand, sales in this business were lower than in the same period last year. Sales in the Organic business declined significantly, mainly due to intensified competition in the crosslinking agent market and lower volumes resulting from planned shutdowns in the high-performance plastics business. Adjusted EBITDA for this segment was €266 million, remaining unchanged from the same period last year. Due to one-off gains from contractual agreements, the segment’s adjusted EBITDA margin rose slightly from 17.4% in the same period last year to 17.6%.

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Evonik Releases 2025 Q2 Financial Report: Declining Demand Impacts Performance

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