Evonik Industries AG

Q2 adjusted EBITDA was EUR 630 million, up 24% year over year, driven by 7% higher volumes and 7% higher prices; Advanced Technologies had a strong quarter, helped by methionine, crosslinkers, polymers, C4, and cost savings. Management said first-half adjusted EBITDA totaled EUR 1.1 billion and that the full-year EBITDA outlook midpoint was raised by EUR 250 million. Cash generation improved significantly year over year, and management reiterated full-year cash conversion guidance of around 40%. On the balance sheet, management said seasonal net financial debt increase was less pronounced than in prior years thanks to cash generation and a lower dividend payment; they also said a EUR 1 interim dividend for 2026 will apply, with the new dividend policy first taking effect in May 2027. For outlook, Q3 is expected to remain strong, possibly similar to Q2, with some normalization in Q4; cash guidance is reiterated despite a temporary net working capital headwind from cost and price inflation.

Christian Kullmann stressed execution, cost reduction, portfolio optimization, and disciplined cash management as the core of the strategy. He said Evonik is actively addressing structural challenges, has extended Tailor-made, fully carved out Oxeno and SYNECT, and reorganized innovation to support long-term growth. His tone was confident but cautious: he highlighted strong Q2 momentum while warning that visibility remains subdued and some normalization is likely later in the year.

Michael Rauch highlighted the Q2 beat and said adjusted EBITDA rose to EUR 630 million, with higher volumes and prices each contributing 7 percentage points to the increase. He emphasized better cash conversion, saying operating results converted well into cash, working capital is under control, and lower bonus payments, customer prepayments, and higher noncash provisions helped free cash flow. He reiterated around 40% cash conversion for the year, said the seasonal net debt increase should be smaller than usual, and noted that share buybacks are not currently on the agenda because the company still has sizable net debt.

Analysts focused heavily on methionine, asking how long current pricing strength can last and whether 2027 could bring a pullback. Management said Q3 should remain strong, with positive price effects flowing through and much of the volume already booked, but also said a shakeout in 2027 could pressure smaller competitors and affect market dynamics. Questions also targeted Tailor-made savings, where management said inflation has reduced the net savings impact versus earlier assumptions, and said additional savings must come from structural improvements, not just cost cuts. On capital allocation, management said buybacks remain off the table for now, while on Oxeno it said the goodwill impairment reflects long-term challenges despite temporarily better 2026 results.