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1. Company Snapshot

1.a. Company Description

Evonik Industries AG engages in the specialty chemicals business.It operates through Specialty Additives, Nutrition & Care, Smart Materials, Performance Materials, and Technology & Infrastructure segments.The Specialty Additives segment provides polyurethane additives, organically modified silicones, isophorones, epoxy curing agents, oil additives, fumed silicas, matting agents, TAA and TAA derivatives, and acetylenic diol-based surfactants for consumer goods and specialized industrial applications.


The Nutrition & Care segment offers amphoteric surfactants, ceramides, phytosphingosines, oleochemicals, quaternary derivatives, amino acids and amino acid derivatives, synthesis products, pharmaceutical polymers, and DL-methionine for use in consumer goods, animal nutrition, and healthcare products.The Smart Materials segment provides hydrogen peroxide, peracetic acid, activated nickel catalysts, precious metal powder catalysts, oil and fat hydrogenation catalysts, amorphous polyalphaolefins, polybutadienes, polyester resins, thermoplastic and reactive methacrylate resins, PEEK, polyamide 12, organosilanes, chlorosilanes, fumed silicas, fumed metal oxides, and precipitated silicas for the automotive, paints, coatings, adhesives, construction, and various other sectors.The Performance Materials segment produces polymer materials and intermediates, including butene-1, DINP, isononanol, cyanuric chloride, alkoxides, and superabsorbent for rubber, plastics, and automotive industries.


The Technology & Infrastructure segment provides site management, utilities and waste management, technical, process technology, engineering, and logistics services.It operates in the Asia-Pacific, Europe, the Middle East, Africa, Central and South America, and North America.The company was founded in 1873 and is headquartered in Essen, Germany.


Evonik Industries AG is a subsidiary of RAG-Stiftung.

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1.b. Last Insights on EVK

Evonik Industries' recent performance was negatively driven by its second-quarter 2025 earnings miss, which was largely attributed to an 11% decline in revenue. The company's high-performance plastics segment, including PEEK and ULTEM, faces intense competition from peers like Arkema and Victrex. Additionally, Evonik's fatty amines business is under pressure due to increasing competition and a focus on sustainability.

1.c. Company Highlights

2. Evonik's Q3 Earnings: A Resilient Performance Amidst a Challenging Environment

Evonik reported a revenue decline, but the company's adjusted EBITDA margin was relatively stable. The actual EPS came out at €0.27, significantly higher than the estimated €0.1254. The company's cash conversion rate was between 30% to 40%, with a positive free cash flow of around €300 million in Q3. The net working capital reduction accelerated throughout the quarter, making the company optimistic for further significant steps in Q4.

Publication Date: Nov -13

📋 Highlights
  • Revised Full-Year Adjusted EBITDA Guidance: Cut to EUR 1.9 billion, with cash conversion rate between 30% to 40% due to weak demand post-summer.
  • Q3 Free Cash Flow: EUR 300 million achieved, driven by accelerated net working capital reduction of EUR 300 million in the quarter.
  • Structural Cost Savings: 740 fewer FTEs by end-September under Evonik Tailor Made program, contributing to EBITDA support.
  • Q4 Earnings Drivers: Health Care segment sales pickup, lower personnel costs, and Animal Nutrition growth expected to offset challenges.

Financial Performance

The company's Q3 financial performance was impacted by weak demand across all segments and end markets. The revenue decline was partly due to extraordinary factors, with certain businesses experiencing a weak quarter. However, the company's Custom Solutions businesses showed resilience, holding prices up despite an 8% volume decline. The analysts estimate next year's revenue growth at 0.7%, indicating a slow recovery.

Segmental Performance

The Advanced Technologies segment reported lower EBITDA due to methionine shutdown costs and inventory reduction. However, the cash flow increased, indicating that the reduction in working capital was the main reason for the lower EBITDA. The Health Care segment is expected to benefit from the trend of production returning to the U.S. and Europe, with a more pronounced year-end recognition of sales and earnings.

Valuation and Outlook

With a P/E Ratio of 15.3 and an EV/EBITDA of 3.2, the company's valuation appears reasonable. The Dividend Yield is attractive at 8.32%, and the Free Cash Flow Yield is 7.2%. The company's focus on specialties and transformation efforts is expected to drive growth in the years to come. As Christian Kullmann mentioned, "the higher your businesses are positioned in respect of specialties, the better your chance will be in 2026." The company's guidance for full-year adjusted EBITDA was lowered to around €1.9 billion, but the company is confident of achieving this outlook.

Growth Prospects

The company's new alkoxide plant and aluminum oxide plant are expected to contribute to its biodiesel catalysts and lithium-ion battery businesses. The health care business is also expected to benefit from the trend of production returning to the U.S. and Europe. The company's C4 business, polyamide 12, and membrane businesses are expected to show improvement in 2026. With a ROIC of 3.94% and an ROE of 4.75%, the company is expected to deliver sustainable returns.

3. NewsRoom

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Kelyniam Global Secures Exclusive U.S. License for Evonik's VESTAKEEP® Fusion Biomaterial in Cranial Implants

Nov -13

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Evonik Industries' (ETR:EVK) Conservative Accounting Might Explain Soft Earnings

Nov -12

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Evonik (XTRA:EVK) Margin Hit by €242m One-Off Loss, Raising Fresh Profitability Questions

Nov -05

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Evonik Industries (XTRA:EVK): Evaluating Valuation After Prolonged Share Price Weakness

Nov -04

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Evonik Industries AG (EVKIF) Q3 2025 Earnings Call Highlights: Navigating Challenges with ...

Nov -04

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Waterproofing Chemicals Market Size | Companies Analysis 2025- 2034

Nov -03

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United States Lipid Nanoparticle Market Forecast and Competitive Analysis Report 2025-2033 Featuring Merck, Evonik, Genevant Sciences, CordenPharma, Arcturus, Ascendia, Acuitas, Croda

Oct -24

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[Latest] Global L-Alanine Market Size/Share Worth USD 267.47 Million by 2034 at a 5.69% CAGR: Custom Market Insights (Analysis, Outlook, Leaders, Report, Trends, Forecast, Segmentation, Growth Rate, Value, SWOT Analysis)

Oct -23

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.64%)

6. Segments

Smart Materials

Expected Growth: 1.8%

Evonik's Smart Materials segment growth is driven by increasing demand for sustainable and eco-friendly products, advancements in technologies such as 3D printing and nanotechnology, and growing adoption in industries like automotive, aerospace, and healthcare. Additionally, the company's focus on R&D and strategic partnerships contribute to its 1.8% growth rate.

Nutrition & Care

Expected Growth: 1.5%

Evonik's Nutrition & Care segment growth is driven by increasing demand for sustainable and specialty animal feed, rising popularity of natural and organic personal care products, and growing need for bio-based and biodegradable materials. Additionally, the segment benefits from its strong market position, innovative product portfolio, and strategic partnerships.

Speciality Additives

Expected Growth: 1.2%

Evonik's Speciality Additives segment growth of 1.2% is driven by increasing demand for sustainable and eco-friendly products, growth in the automotive and construction industries, and the company's strategic focus on innovative and high-margin products, such as coatings and adhesives additives.

Performance Materials

Expected Growth: 1.8%

Evonik's Performance Materials segment growth of 1.8% is driven by increasing demand for specialty additives in the automotive and construction industries, as well as growing sales of high-performance polymers in the electronics and healthcare sectors. Additionally, the company's focus on innovation and sustainability has led to the development of new products and applications, contributing to the segment's growth.

Technology & Infrastructure

Expected Growth: 2.5%

Evonik's Technology & Infrastructure segment growth of 2.5% is driven by increasing demand for specialty chemicals in the automotive and construction industries, as well as the company's focus on digitalization and sustainability initiatives, leading to improved operational efficiency and reduced costs.

Enabling, Functions, Other Activities, Consolidation

Expected Growth: 1.0%

Evonik Industries AG's 1.0% growth is driven by enabling factors such as strategic M&A, R&D investments, and operational efficiency. Functional drivers include diversified product portfolio, strong brand recognition, and global market presence. Other activities contributing to growth are sustainable solutions, digitalization, and innovation. Consolidation efforts focus on integrating acquired businesses, optimizing production, and reducing costs.

7. Detailed Products

Coatings Additives

Specialty additives for coatings, paints, and inks to improve performance, appearance, and sustainability.

Animal Nutrition

Amino acids, vitamins, and other nutritional products for animal feed to promote healthy growth and well-being.

Smart Materials

Innovative materials for 3D printing, composites, and other applications requiring unique properties.

Health Care

Pharmaceutical excipients, active pharmaceutical ingredients, and medical device materials.

Catalysts

Homogeneous and heterogeneous catalysts for the chemical industry, oil refining, and petrochemicals.

Crosslinkers

Specialty chemicals for crosslinking reactions in coatings, adhesives, and composites.

Silica

High-purity silica products for applications in tires, coatings, and other industries.

8. Evonik Industries AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Evonik Industries AG operates in a highly competitive market with many substitutes available, but the company's strong brand recognition and high-quality products help to mitigate the threat.

Bargaining Power Of Customers

Evonik Industries AG has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often customized to meet specific customer needs, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Evonik Industries AG relies on a network of suppliers for raw materials and services. While the company has some bargaining power due to its large scale, suppliers also have some leverage due to the specialized nature of some of the materials and services required.

Threat Of New Entrants

The chemical industry has high barriers to entry, including significant capital requirements and regulatory hurdles. Additionally, Evonik Industries AG's strong brand recognition and established customer relationships make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The chemical industry is highly competitive, with many established players competing for market share. Evonik Industries AG faces intense competition from companies such as BASF, Bayer, and Lanxess, which can lead to pricing pressure and reduced profit margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 27.98%
Debt Cost 3.95%
Equity Weight 72.02%
Equity Cost 9.24%
WACC 7.76%
Leverage 38.84%

11. Quality Control: Evonik Industries AG passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Evonik

A-Score: 5.4/10

Value: 7.7

Growth: 2.8

Quality: 3.9

Yield: 9.4

Momentum: 1.0

Volatility: 7.7

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Fuchs Petrolub

A-Score: 5.4/10

Value: 5.1

Growth: 5.6

Quality: 7.2

Yield: 5.0

Momentum: 3.0

Volatility: 6.3

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Brenntag

A-Score: 5.4/10

Value: 7.1

Growth: 5.6

Quality: 5.1

Yield: 5.6

Momentum: 1.5

Volatility: 7.3

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Arkema

A-Score: 4.7/10

Value: 7.3

Growth: 3.4

Quality: 3.2

Yield: 7.5

Momentum: 0.5

Volatility: 6.0

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Clariant

A-Score: 4.3/10

Value: 6.3

Growth: 3.7

Quality: 3.1

Yield: 6.9

Momentum: 0.0

Volatility: 6.0

1-Year Total Return ->

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IMCD

A-Score: 4.2/10

Value: 4.2

Growth: 6.6

Quality: 5.0

Yield: 3.1

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.0$

Current Price

13$

Potential

-0.00%

Expected Cash-Flows