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Evonik announces 2021 full-year financial results: Sustaining sustainable and profitable growth

Company News > Evonik announces 2021 full-year financial results: Sustaining sustainable and profitable growth

Evonik's sales, adjusted EBITDA and free cash flow all grew by more than 20% in 2021. All chemicals businesses benefited from continued strong demand, with group sales up 23 per cent to €15bn.

The group's adjusted EBITDA rose 25 percent to 2.38 billion euros, successfully offsetting the impact of higher raw material, energy and logistics costs. Adjusted net income rose 54 percent to 986 million euros. Adjusted earnings per share rose to 2.12 euros from 1.37 euros.

Free cash flow increased 22% to eur950 million and the cash conversion rate was 40%. "We have managed to maintain a high cash conversion rate and expect the company's free cash flow to grow for the fifth consecutive year," said Ute Wolf, chief financial officer. Evonik is confident about its business development in 2022. After a strong start, the group expects adjusted EBITDA to grow at least 10 per cent in the first quarter compared with the same period last year.

In 2022, Evonik expects sales of between 15.5 billion and 16.5 billion euros. Adjusted EBITDA will be between €2.5bn and €2.6bn. The cash conversion rate will remain around 40 per cent.

At the annual general meeting scheduled for May 25, 2022, the executive board and supervisory board will propose a slight increase in the dividend to €1.17 per share, corresponding to a dividend yield of around 4%.

Strengthen product mix, drive development by innovation

Innovation strength is an important driving force for the sound development of Evonik business. In 2021, new products in six innovative growth areas contributed more than 500 million euros in sales, a significant increase from about 350 million euros in the previous year. Growth in cosmetics active ingredients and drug delivery technologies is particularly strong.

Harald Schwager, Evonik Executive Board member and head of innovation, said: "We are very hopeful of reaching our goal of 1 billion euros in sales of innovative products by 2025. Products in innovative growth areas have high growth potential and above-average market margins."

Sustainable development has become a core driver of innovation. To this end, Evonik will steadily increase sales of sustainable products. Evonik now generates 37% of its sales from "next generation solutions" with significant sustainability advantages, up two percentage points from the previous year to 37%. "Next generation solutions" provide customers with more sustainable benefits than competing products. Evonik, for example, is building its first industrial-grade plant in Slovakia to produce fully biodegradable biosurfactants.

Evonik is focusing on the restructuring of its product portfolio. In October 2021, Evonik acquired Botanica, a Swiss plant extract producer, to strengthen its position in the cosmetics active ingredients market. The baby care business, meanwhile, has been spun off for sale.

Promote "true leadership" and upgrade the diversified management system

Evonik is initiating a change in management positions. Incoming senior managers will take on more responsibility. The proportion of women in management and the number of managers with international backgrounds is also rising. "Our people are the key to our success," khuman says. Our employees make unremitting efforts to give full play to their expertise, creativity and initiative to make people's lives better and better. Diversity makes us strong and will be reflected in the group's management positions. In short, we will focus on promoting a strategy of diverse integration."

This change will be particularly evident in senior management, below the executive board. Three of Evonik's five business units will be led by women, including two from the United States and France.

The importance of the Asian market is growing. Evonik will strengthen its presence in Asia through personnel changes. As part of the expanded Executive Board, Claus Retting, currently head of the Smart Materials business unit, will be stationed in Asia from Essen, Germany, with full authority to lead a strong management team in Asia. "If you want to grow with Asia, it's not enough to just supply products," says Mr Khuman. To do this, we must strengthen our presence in Asia, develop local production and research and development, and build a strong management team. "

Lauren Kjeldsen, former head of the Specialty Additives business, will take over the smart Materials business, succeeding Claudine Mollenkopf. Joachim Dahm and Maike Schuh will lead the Technology and Facilities business group and the Functional Materials business group, respectively.

Business unit performance

Specialty Additives segment: Sales increased 15% to 3.71 billion euros in 2021. Sales of products used in the construction and coatings industries, as well as in the renewable energy market, increased significantly in all regions thanks to a surge in demand. Sales of polyurethane foam additives used in durable consumer goods such as mattresses and refrigerators increased significantly. Global supply chain disruptions and related shortages of raw materials took a toll on sales growth in the business unit in the second half. Adjusted EBITDA in the specialty additives business rose 7 percent to 920 million euros.

Nutrition and Consumer Chemicals Segment: Sales increased 19% to EUR3.56 billion in 2021. Global sales of essential amino acids for animal nutrition have increased significantly thanks to continued high market demand and price increases. In the healthcare sector, Evonik expanded production of liposomes for mRNA vaccines early last year, leading to a significant increase in pharmaceutical applications sales. Sales of care chemicals, particularly active ingredients used in cosmetics, continue to grow. Adjusted EBITDA in the nutrition and consumer chemicals business rose 28 per cent to €717m, helped by higher selling prices.

Smart Materials Segment: Sales increased 21% to 3.92 billion euros in 2021. Sales of polymers are up significantly. Among them, the automotive industry has seen a significant increase in demand for high-performance polymers, as well as strong demand for polyamide 12 powders for 3D printing and membrane technology for efficient gas processing. Sales of inorganic materials also increased significantly. Worldwide, the silica business for the tire industry is in high demand. In the specialty and traditional hydrogen peroxide business, reactive oxide products maintained a good sales growth trend. Adjusted EBITDA in the smart materials business rose 23 per cent to €650m.

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Evonik announces 2021 full-year financial results: Sustaining sustainable and profitable growth

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