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Evonik Announces 3Q 2017 Results

Sales rose to €3.56 billion in the third quarter, with adjusted EBITDA up 11% to €639 million.

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By: DAVID SAVASTANO

Contributing Editor, Coatings World and Ink World, Coatings World and Ink World Magazine

Evonik increased adjusted EBITDA to €639 million in the third quarter, an increase of 11% compared with the third quarter of 2016. This was mainly due to better earnings in the Resource Efficiency and Performance Materials segments.
 
A positive factor was the contribution made by the specialty additives business that Evonik acquired from the US company Air Products at the beginning of the year. Furthermore, the silica business acquired from J. M. Huber at the start of September made a contribution for the first time. 
 
“Having completed the acquisition of Huber’s silica business, we reaped the benefit of both acquisitions for the first time,” said Christian Kullmann, Executive Board chairman. “The integration of both businesses is proceeding rapidly, and we have already realized initial synergies of around €10 million.” 
 
Sales rose to €3.56 billion in the third quarter, adjusted net income increased to €275 million and adjusted earnings per share improved to €0.59. The company’s adjusted EBITDA margin was 18%, almost one percentage point higher than in the first six months. Free cash flow amounted to €485 million in the third quarter, about 70% above the prior-year level. Evonik has therefore generated a significantly positive free cash flow since the start of the year. 
 
Nutrition & Care sales increased 3% to €1.10 billion in the third quarter. This was attributable to the consolidation of the business acquired from Air Products and to higher sales volumes. Selling prices therefore stabilized in the third quarter but are still considerably lower than in the prior-year quarter. This was the main reason for the decline in adjusted EBITDA to €184 million in the Nutrition & Care segment. 
 
Resource Efficiency sales grew 22% to €1.36 billion in the third quarter. The silica business benefited from strong demand from the tire industry. Consolidation of the operations acquired from Air Products and Huber contributed 14% petcentage points of the sales growth. Adjusted EBITDA rose to €312 million in the Resource Efficiency segment. 
 
Performance Materials sales rose 15% to €919 million in the third quarter. High demand, especially from the coatings and automotive sectors, combined with continuing tight supply, led to higher selling prices. The adjusted EBITDA of the Performance Materials segment improved to €174 million.

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