Weak third quarter at Evonik

Essen, Germany. In an environment of high uncertainty and weak demand, Evonik generated adjusted EBITDA of €448 million in the third quarter of 2025 ─ 22 percent below the robust prior-year results (Q3 2024: €577 million) and within the expected range of €420 million to €460 million as communicated on September 25.

"The anticipated recovery in September failed to materialize,” says Evonik Chief Executive Officer Christian Kullmann. “In the short term, this is painful. But longer term, it does not throw us off course."

Revenue decreased by 12 percent to €3.39 billion compared to the prior year (Q3 2024: €3.83 billion). While Evonik was able to keep selling prices almost stable, half of the decline in revenue was due to lower sales volumes. The sale of the superabsorbents business in August 2024 and unfavorable exchange rates, especially the weak U.S. dollar, also contributed to the decline. The adjusted EBITDA margin was significantly weaker at 13.2 percent (Q3 2024: 15.1 percent).

Free cash flow was €300 million (Q3 2024: €357 million), marking a clearly positive trend over the course of the year. The strict management of investments and net working capital paid off.

"Many trends are going against us at the moment, so we had to adjust our expectations to this new reality in September," says Claus Rettig, responsible for the finance department since September 18. "Our adjusted targets for this year are achievable, and we are focused on the long-term, successful implementation of our programs to grow revenues and cut costs."

The largest of these change initiatives is the Evonik Tailor Made efficiency program. It is progressing according to plan, and its advantages ─ like fewer hierarchical levels and lower personnel costs ─ are apparent already. By the end of the year, 90 percent of all business lines will have been restructured.

The new, differentiated management of the chemical businesses  has a positive effect as well. With a clear focus on pricing, Evonik increased prices by an average of 2 percent in the Custom Solutions segment with its specialties and tailor-made solutions. In the Advanced Technologies segment, where the focus is on efficient plant utilization, volumes fell by only 2 percent ─ a solid performance in a weak environment.

Evonik expects demand to remain weak through the end of the year, which should bring adjusted EBITDA to around €1.9 billion for the full year (2024: €2.07 billion). The cash conversion rate is expected to be between 30 percent and 40 percent (2024: 42 percent). Absolute free cash flow for the full year should be at an attractive level (2024: €873 million). Capital expenditure will amount to around €750 million (2024: €840 million). Return on capital employed (ROCE) is expected to be slightly below the previous year's level of 7.1 percent.

Development of the chemical segments

Advanced Technologies:
Revenues in the Advanced Technologies segment declined by 6 percent to €1.45 billion in the third quarter of 2025. The decline was due to slightly lower volumes and selling prices as well as negative currency effects.

Animal Nutrition revenues declined noticeably due to lower volumes, reduced methionine prices as expected, and negative currency effects. In the Inorganics unit, sales were below the prior-year figure due to weak volumes and currency effects. Sales in the Organics unit were slightly higher than in the previous year. Here, the high-performance polymer business benefited from clearly positive volume demand, for example for membranes. The Crosslinkers business increased sales volumes despite persistently high competitive pressures.

Adjusted EBITDA at Advanced Technologies declined 32 percent to €202 million, mainly on costs for planned revisions. The adjusted EBITDA margin decreased to 14.0 percent from 19.3 percent.

Custom Solutions:
In the Custom Solutions segment, revenue fell by 9 percent to €1.34 billion in the third quarter of 2025. This was due to lower volumes and negative currency effects, while slightly higher selling prices mitigated the decline.

Revenue In the Additives segment declined noticeably. Volume demand for additives for polyurethane foams and consumer durables products was significantly weaker. Additives for the paints and coatings industry were affected by noticeably lower sales volumes. Demand for oil additives was stable, and prices were slightly higher. Overall, sales in the Additives division declined noticeably. Revenue at the Care division declined due to lower volumes despite higher selling prices.

Adjusted EBITDA fell by 25 percent to €215 million, mainly due to weaker volume demand. The adjusted EBITDA margin decreased to 16.0 percent from 19.6 percent in the previous year.