DGAP-News: Evonik Industries AG / Key word(s): Quarter Results Evonik Industries AG: Third good quarter in a row - Outlook confirmed 04.11.2016 / 07:00 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Third good quarter in a row - Outlook confirmed - Volume growth continued in the third quarter - Adjusted EBITDA margin at a very good level of 18.1 percent in the first nine months - Financing of the planned acquisition of Air Products' specialty and coating additives business secured at an average interest rate of 0.35 percent - Outlook for FY 2016 confirmed Essen. "In the third quarter of 2016 Evonik continued the volume growth seen in the first six months, despite the weak global economic conditions," reported Klaus Engel, Chairman of the Executive Board of Evonik Industries. "Based on this, we are confirming our outlook for the full year." In the first nine months of this year, Group sales declined 8 percent year- on-year to EUR9,527 million. This was mainly due to lower selling prices. At the same time, volume sales rose by 2 percent. Adjusted EBITDA was 12 percent below the very high prior-year level at EUR1,728 million. The adjusted EBITDA margin was very good at 18.1 percent. Adjusted EBIT shrank by 18 percent to EUR1,191 million. Adjusted net income declined 19 percent to EUR501 million. Net income was EUR628 million, down 27 percent from the high prior-year level, which contained the proceeds from the divestment of the stake in Vivawest. Evonik generated a clearly positive free cash flow of EUR488 million in the first nine months of 2016. This was partly due to a reduction in net working capital, while capital expenditures for property, plant and equipment were around the prior-year level at EUR589 million. Outlook Evonik still expects sales for the full year to be slightly below the EUR13.5 billion reported in the previous year. Thanks to its strong market positions, balanced portfolio and concentration on high-growth businesses, the company assumes there will be continued high demand for its products and appreciable volume growth despite the difficult macro-economic conditions. The new production capacities taken into service in recent years and further intensification of sales activities are contributing to this. Selling prices are declining considerably, especially in the Nutrition & Care and Performance Materials segments, leading to the forecast slight reduction in sales. Evonik is confirming the outlook for adjusted EBITDA specified at the end of the first six months: The company is confident that it can realize adjusted EBITDA in the upper half of the anticipated range of EUR2.0 billion to EUR2.2 billion. Performance in Q3 The positive volume trend continued in the third quarter of 2016, with good demand for Evonik's products worldwide. Selling prices declined further, partly because lower raw material prices were passed on to customers. The Group posted a drop of 6 percent in sales to EUR3,164 million. Adjusted EBITDA was EUR578 million, 11 percent lower than in the exceptionally strong prior-year quarter. The adjusted EBITDA margin was very good at 18.3 percent. Adjusted EBIT declined 16 percent to EUR396 million. Adjusted net income declined 17 percent to EUR247 million. Net income increased 19 percent to EUR223 million as a result of the reduced impact of one-off factors. Acquisition of Air Products' Performance Materials Division In September 2016 Evonik successfully placed bonds with a nominal value of EUR1.9 billion and an average interest rate of 0.35 percent on the capital market via its subsidiary Evonik Finance B.V. The proceeds will be used to finance the planned acquisition of Air Products' specialty and coating additives business. The responsible antitrust authorities in the USA, Germany and most European countries have already approved the transaction, which is expected to be closed by the end of the year. Details of segment performance In the Nutrition & Care segment sales declined 14 percent to EUR1,066 million in the third quarter of 2016. Since volumes were stable compared with the strong prior-year period, this was mainly attributable to lower selling prices. Adjusted EBITDA was EUR239 million, which was below the very high prior-year level of EUR382 million, mainly on price grounds. The adjusted EBITDA margin dropped to 22.4 percent. In the first nine months of 2016 sales in the Nutrition & Care segment fell by 13 percent to EUR3,223 million. Since volumes were virtually unchanged, the decline was attributable to considerably lower selling prices. Adjusted EBITDA was 29 percent below the very strong prior-year level at EUR796 million. The adjusted EBITDA margin remains very good at 24.7 percent. The Resource Efficiency segment continued its successful business performance in the third quarter of 2016. Sales rose 7 percent to EUR1,117 million, driven principally by clear volume growth. Selling prices slipped slightly, mainly because lower raw material costs were passed on to customers. Adjusted EBITDA improved 21 percent to EUR262 million, mainly as a consequence of higher volumes and favorable raw material costs. The adjusted EBITDA margin improved to a very good 23.5 percent. In the first nine months of the year, sales in the Resource Efficiency segment increased 3 percent to EUR3,392 million. This was mainly due to higher volumes, while the reduction in selling prices driven by raw material prices had a counter-effect. Adjusted EBITDA rose by 10 percent to EUR788 million. The adjusted EBITDA margin improved from 21.8 percent to a very good level of 23.2 percent. In the Performance Materials segment, sales dropped 7 percent to EUR797 million in the third quarter of 2016. The main reason was the reduction in selling prices as lower raw material costs were passed on to customers. By contrast, volumes rose considerably thanks to good demand. Adjusted EBITDA grew 11 percent to EUR104 million. This was primarily due to a rise in volumes, high capacity utilization at production facilities, and the initial effects of cost-cutting measures. The adjusted EBITDA margin was 13.0 percent, up from 11.0 percent in the third quarter of 2015. In the first nine months of the year, sales in the Performance Materials segment shrank 9 percent to EUR2,399 million. With volumes up, the decline was caused by the oil-driven drop in selling prices. Adjusted EBITDA improved 11 percent to EUR273 million and the adjusted EBITDA margin rose to 11.4 percent. Evonik Group: Excerpt from the income statement (in EUR million) Q3 2016 Q3 Change 9M 9M Change 2015 in % 2016 2015 in % Sales 3,164 3,365 -6 9,527 10,309 -8 Adjusted EBITDA 578 653 -11 1,728 1,964 -12 Adjusted EBIT 396 473 -16 1,191 1,444 -18 Adjustments -15 -91 -74 -6 Financial result -55 -86 -183 -200 Income before 326 296 10 934 1,238 -25 income taxes, continuing operations Income taxes -100 -105 -297 -354 Income after 226 191 18 637 884 -28 taxes, continuing operations Income after 1 - 1 -15 taxes, discontinued operations Income after taxes 227 191 19 638 869 -27 thereof 4 3 10 7 attributable to non-controlling interests Net income 223 188 19 628 862 -27 Adjusted net 247 296 -17 748 923 -19 income Prior-year figures restated Segment performance Sales Q3 Adjusted EBITDA Q3 2016 2015 Change 2016 2015 Change EUR EUR in % EUR EUR in % million million million million Nutrition & 1,066 1,240 -14 239 382 -37 Care Resource 1,117 1,044 7 262 216 21 Efficiency Performance 797 858 -7 104 94 11 Materials Services 173 207 -16 50 46 9 Other 11 16 -21 -34 operations Group 3,164 3,365 -6 578 653 -11 Sales 9M Adjusted EBITDA 9M 2016 2015 Change 2016 2015 Change EUR EUR in % EUR EUR in % million million million million Nutrition & 3,223 3,716 -13 796 1,116 -29 Care Resource 3,392 3,278 3 788 714 10 Efficiency Performance 2,399 2,646 -9 273 247 11 Materials Services 503 626 -20 119 119 - Other 10 54 -80 -79 operations Group 9,527 10,309 -8 1,728 1,964 -12 Prior-year figures restated Employees by segment Sept. 30, 2016 Dec. 31, 2015 Nutrition & Care 7,550 7,165 Resource Efficiency 8,879 8,662 Performance Materials 4,421 4,380 Services 12,896 12,668 Other operations 531 701 Evonik 34,277 33,576 Prior-year figures restated Company information Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Profitable growth and a sustained increase in the value of the company form the heart of Evonik's corporate strategy. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world. In fiscal 2015 more than 33,500 employees generated sales of around EUR13.5 billion and an operating profit (adjusted EBITDA) of about EUR2.47 billion. Disclaimer In so far as forecasts or expectations are expressed in this Investor Relations News or where our statements concern the future, these forecasts, expectations or statements may involve known or unknown risks and uncertainties. Actual results or developments may vary, depending on changes in the operating environment. Neither Evonik Industries AG nor its group companies assume an obligation to update the forecasts, expectations or statements contained in this release. Contact: Tim Lange Head of Investor Relations +49 201 177-3150 [email protected] Evonik Industries AG Rellinghauser Straße 1-11 45128 Essen Germany Phone +49 201 177-01 Fax +49 201 177-3475 www.evonik.com Supervisory Board Dr. Werner Müller, Chairman Executive Board Dr. Klaus Engel, Chairman Christian Kullmann, Deputy Chairman Dr. Ralph Sven Kaufmann Thomas Wessel Ute Wolf Registered Office is Essen Register Court Essen Local Court Commercial Registry B 19474 --------------------------------------------------------------------------- 04.11.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de --------------------------------------------------------------------------- Language: English Company: Evonik Industries AG Rellinghauser Straße 1-11 45128 Essen Germany Phone: +49 (0) 201 177-01 Fax: +49 (0) 201 177-3475 E-mail: [email protected] Internet: www.evonik.com ISIN: DE000EVNK013, XS0911405784 WKN: EVNK01, A1TM7T Indices: MDAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange; Luxemburg End of News DGAP News Service --------------------------------------------------------------------------- 516977 04.11.2016