On November 3, German specialty chemicals company Evonik reported its third-quarter results, with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rising 40% year-on-year to 629 million euros, broadly in line with the market expectation of 633 million euros. Revenue grew 13% year-on-year to 3.83 billion euros, mainly driven by rising chemical product prices amid Middle East conflicts. However, the company warned that the favorable market environment in the third quarter is gradually weakening, and the related tailwinds are expected to continue fading over the remainder of the year.
Rising product prices drove profit improvement, but growth momentum is expected to slow. In the third quarter, Evonik's average selling prices rose 10% year-on-year, while sales volumes increased 2%, pushing the adjusted EBITDA margin up from 13.2% a year earlier to 16.4%. By segment, the Advanced Technologies division saw adjusted EBITDA surge 87% year-on-year to 377 million euros, exceeding the market expectation of 353 million euros, mainly benefiting from simultaneous growth in selling prices and sales volumes. The Customized Solutions division posted a 7% increase in adjusted EBITDA to 231 million euros, below the market expectation of 252 million euros, as price increases mainly reflected the pass-through of raw material costs to customers, with sales volumes largely flat. The Infrastructure division recorded a 48% rise in adjusted EBITDA to 80 million euros. Looking ahead to the full year, Evonik narrowed its 2026 adjusted EBITDA guidance to the upper half of its previous range of 2.0 billion to 2.2 billion euros, or approximately 2.1 billion to 2.2 billion euros. Meanwhile, the company raised its return on capital employed forecast, expecting it to be significantly higher than 6.1% in 2025, compared with its previous expectation of only slightly above last year's level.
Restructuring costs led to a net loss, with another 3,200 jobs to be cut over the next three years. Despite the clear improvement in operating profit, Evonik still posted a net loss of 53 million euros in the third quarter, narrower than the 106 million euro loss a year earlier, mainly dragged down by 313 million euros in restructuring costs. However, adjusted net profit excluding special items rose year-on-year to 330 million euros, above the market expectation of 260 million euros. The company announced an expansion of its cost-cutting plan, with an additional 3,200 positions to be cut between 2027 and 2029. Previously, the company had already planned to cut 2,800 positions between 2024 and 2026, bringing the total of the two rounds to 6,000 jobs. On cash flow, Evonik's free cash flow for the first nine months increased from 284 million euros a year earlier to 601 million euros. As of the end of September, the company's net financial debt stood at 3.29 billion euros, roughly flat compared with 3.31 billion euros at the end of 2025. The company maintained its full-year capital expenditure plan of approximately 750 million euros and expects free cash flow to be equivalent to about 40% of adjusted EBITDA.
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