Evonik defies adverse circumstances in the first quarter

Essen, Germany. Evonik achieved its operating profit target in the first three months of 2026 despite a very difficult business and economic environment. At €475 million, adjusted EBITDA slightly exceeded the company's earnings forecast of around €450 million. The war in the Middle East has resulted in price spikes for energy and important raw materials and significantly reduces supply chain security. In the short term, however, customers appear to be stockpiling, which is expected to provide a tailwind in the second quarter as well.

"Economic growth relies on the free movement of goods," says CEO Christian Kullmann. "This had already been constrained by rising protectionism. Now, the war in the Middle East is blocking entire trade routes, adding further risk."

At €3.43 billion, Evonik's sales in the first quarter were 9 percent below the prior-year results. More than half of this decline is due to unfavorable exchange rates. Sales volumes fell by 2 percent, while prices dropped by 1 percent. The adjusted EBITDA margin declined by 0.9 percentage points to 13.9 percent. Net income was €125 million, compared with €233 million in the first quarter of 2025. Free cash flow was €183 million, nearly on par with the previous year (€195 million).

As a result of the outbreak of war in the Middle East, Evonik has recorded higher sales volumes in certain businesses since March, presumably due to customers engaging in pre-buying. Prices for methionine are also higher than expected. These favorable conditions are expected to continue in the current quarter, likely leading to an expected adjusted EBITDA of at least €550 million (Q2 2025: €509 million). The second quarter is likely to be the strongest quarter in 2026, as higher inflation rates in the second half of the year are likely to negatively affect consumption, investment, and consequently demand for Evonik products. Additionally, energy and raw material costs are projected to be higher than initially assumed.

"The first quarter was not good, but it was better than we expected, especially towards the end," says Claus Rettig, who had assumed operational responsibility in the finance department until April 30. "This gives us a little more confidence compared to the beginning of the year."

Michael Rauch has been appointed Chief Financial Officer effective May 1. At the Annual General Meeting to be held June 3, Rauch will introduce himself to Evonik shareholders personally. Rettig will again fully concentrate on his position as President of the region Asia-Pacific.

Despite the increased uncertainties, Evonik confirms its profit forecast for 2026 and continues to expect adjusted EBITDA of between €1.7 billion and €2.0 billion.

The efficiency program Evonik Tailor Made is on track to deliver the planned savings in its third and final year. Together with various optimization programs in the operating businesses, it will eliminate a total of 1,000 jobs this year.

Development of the chemical segments

Advanced Technologies:

Sales in the Advanced Technologies segment declined by 9 percent to €1.45 billion in the first quarter of 2026. This was due to noticeably negative currency effects as well as slightly lower volumes and prices.

In the Animal Nutrition business, selling prices fell less than expected. Higher volumes partially compensated the price decline. In addition, there were noticeable negative currency effects. Revenue was below the prior-year figure, which included a compensation payment from the termination of a supply contract. Revenue in the Inorganics business was off as a result of a general decline in volumes and, in particular, negative currency effects. Sales in the Organics business slipped, mainly due to price and currency effects. Here, high-performance polymers benefited from positive volume demand, while crosslinkers recorded slightly weaker demand.

At €241 million, adjusted EBITDA in the segment was 17 percent below the prior-year figure. The decrease is mainly due to lower selling prices and negative currency effects. The adjusted EBITDA margin decreased to 16.6 percent from 18.2 percent in the prior-year quarter.

Custom Solutions:

In the Custom Solutions segment, revenue fell by 7 percent to €1.33 billion in the first quarter of 2026. With selling prices remaining almost stable, this resulted from noticeably negative currency effects and lower volumes.

In the Additives business, additives for polyurethane foams and consumer durables recorded slightly higher volume demand. Oil additives also recorded a slight increase in volumes. Overall, sales in the Additives division declined, mainly due to currency effects. Revenue in the Care business was lower than in the previous year, as slightly higher selling prices only partially offset lower volumes and negative currency effects.

Adjusted EBITDA fell by 12 percent to €227 million, mainly due to weaker volume demand and negative currency effects. The adjusted EBITDA margin decreased to 17.0 percent from 17.9 percent in the prior-year quarter.