Evonik Industries (EVK) Q3 2024 earnings summary

Executive summary

• Adjusted EBITDA reached €577 million in Q3 2024, up 19% year-over-year, with margin improving to 15% from 12.9% in Q3 2023, and sector-leading earnings growth supported by cost savings and business realignment.

• Free cash flow for the first nine months was €701 million, over €400 million higher than the prior year, supporting a targeted 40% cash conversion rate for FY 2024.

• Portfolio realignment and exits from underperforming businesses, especially in Healthcare and Coating & Adhesive Resins, are sharpening focus on innovation in Biosolutions, Circular Economy, and Energy Transition.

• New Innovation Growth Areas target €1.5 billion in additional sales by 2032, focusing on sustainability and green transformation.

• Organic sales growth of 5% in Q3 2024 was driven by higher volumes, cost discipline, and price recovery in Animal Nutrition.

Financial highlights

• Q3 2024 sales were €3,832 million, up 2% year-over-year; organic sales growth was 5%, offset by negative currency effects and divestments.

• Adjusted EBIT increased 59% to €322 million; adjusted net income rose 43% to €271 million.

• Free cash flow in Q3 was €357 million, down from €469 million in Q3 2023 due to higher NWC outflows and capex.

• Net financial debt decreased to €3,286 million at quarter-end, driven by strong cash generation.

• CapEx in 2024 was low, with a sustainable level expected at €750–800 million or above in future years.

Outlook and guidance

• FY 2024 adjusted EBITDA guidance confirmed at €1.9–2.2 billion, underpinned by strong 9M results.

• Free cash flow conversion rate targeted at around 40% for FY 2024.

• Sales expected between €15–17 billion; capex around €750 million.

• All divisions anticipate higher earnings than previous year; margin expectation higher than at start of year.

• Market growth in Nutrition & Care expected to continue at 3%-4% in 2025, especially driven by Asia.