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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 AG's recent performance has been positively driven by growth in its key markets. The global silicone market, a significant area of operation for Evonik, is projected to grow at a 5.15% CAGR, reaching around USD 27.16 billion by 2033, driven by increasing demand from industries like construction, automotive, and healthcare. Additionally, the smart polymers market, valued at US$5.11 billion in 2024, is set to grow to US$7.67 billion by 2030, driven by demand across industries like biomedical and automotive. Evonik's sphingolipids business also shows promise, with the market projected to reach USD 1,145.6 million by 2035.

1.c. Company Highlights

2. Evonik's 2025 Earnings: A Resilient Performance Amidst a Challenging Environment

Evonik reported a robust financial performance in 2025, with EBITDA reaching around €1.9 billion and free cash flow of almost €700 million, resulting in a 37% cash conversion rate. The company's actual EPS came in at -€0.22747, significantly below estimates of €0.09171. Despite the challenging environment, Evonik achieved its revised outlook for 2025. The company's revenue growth is expected to be around 3.0% next year, according to analysts' estimates. With a P/E Ratio of 72.55, the market seems to be pricing in a significant growth premium, which may be challenging to justify given the current earnings trajectory.

Publication Date: Mar -02

📋 Highlights
  • 2025 Financial Performance:: Achieved EBITDA of €1.9 billion and free cash flow of €700 million, with 37% cash conversion rate.
  • 2026 Guidance:: EBITDA target of €1.7–2 billion amid stable earnings, despite weak demand and methionine market declines.
  • Dividend Policy Shift:: New payout ratio of 40–60% of adjusted net income, proposing €1 per share dividend for 2025.
  • Cost Optimization:: 1,000 headcount reductions by 2026, €100M+ energy cost savings, and €70M+ fixed cost reductions expected.
  • Strategic Priorities:: ROCE target of 11%, SYNEQT divestment options, and capital allocation prioritizing CapEx, deleveraging, and dividends.

Operational Highlights

Evonik's management expects weak demand to persist, but sees opportunities for growth in areas such as Custom Solutions and Advanced Technologies. The company also expects to reduce costs further, with a headcount reduction of another 1,000 by the end of 2026. The Oxano business is expected to benefit from changes in the CO2 emission trading system, and a major shutdown in 2025, which cost double-digit millions, will not recur in 2026. Claus Rettig, CFO, stated that the company prioritizes CapEx, dividend, and deleveraging, but does not rule out share buybacks, which will depend on cash flow.

Capital Allocation and Dividend Policy

Evonik's new dividend policy proposes a payout of 40% to 60% of adjusted net income, with a proposed dividend of €1 per share for 2025. The company's priorities for the use of earnings are: CapEx, with a focus on projects with fast returns of 1-2 years; remaining an attractive dividend company; deleveraging, with a net financial leverage of 1.6; and potentially share buybacks if there is sufficient free cash available. The Dividend Yield is around 7.91%, which is relatively attractive.

Outlook and Valuation

Evonik's guidance for 2026 implies stable results compared to 2025, largely due to the impact of new capacities in the methionine business. Despite lower fixed costs, earnings growth is not expected due to this business's decline. With an EV/EBITDA ratio of 6.15, the company's valuation appears reasonable. However, the ROE of 1.08% and ROIC of 1.28% suggest that the company still has room for improvement in terms of profitability.

Regulatory Environment

3. NewsRoom

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Ammonium Sulfate Market worth $6.81 billion by 2030 at CAGR 3.4% says MarketsandMarkets™

Mar -02

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Silicone Market Competitive Landscape Report: Key Players Analysis, Company Profiles, Product Developments, Mergers, Strategic Collaborations, and Revenue Forecast Insights to 2033

Feb -24

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Smart Polymers Market Analysis Report 2026: A Moderately Fragmented $7.67 Billion Market by 2030 with a Mix of Large Multinationals, Specialized Material Manufacturers, and Research-driven Startups

Feb -18

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Evonik Industries AG's (ETR:EVK) Has Been On A Rise But Financial Prospects Look Weak: Is The Stock Overpriced?

Feb -16

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Sphingolipids Market Forecast 2025-2035: Global Value to Reach USD 1,145.6 Million by 2035 at 5.1% CAGR

Feb -13

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The U.S. Is Awash in Natural Gas, but American Factories Still Can’t Get Enough

Feb -10

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The World Market for Super Absorbent Polymers 2025-2033: Trends, Shares and Opportunities Featuring Key Players BASF, Evonik Industries, Formosa Plastics Group, Kao Corp., LG Chem and More

Dec -30

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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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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

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IMCD

A-Score: 4.3/10

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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

16.77$

Current Price

16.77$

Potential

-0.00%

Expected Cash-Flows