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Evonik sees good results in a challenging business environment
18 Aug '08
5 min read
The decline was mainly due to a perceptible increase in net working capital and higher income tax payments. Capital expenditures for intangible assets, property, plant, equipment and investment property totaled €437 million, which was 8 percent above the year-back level of €406 million and also above depreciation, which amounted to €411 million in the first six months of this year (H1 2007: €423 million). Net financial debt was reduced to €4.4 billion, down €0.3 billion compared with year-end 2007.
Outlook for 2008 slightly raised:
Evonik expects operating conditions to remain challenging in the second half of this year as a result of high energy and raw material prices, rising inflationary tendencies and adverse effects stemming from the strength of the euro. In addition, the global financial crisis could adversely affect the real economy.
Despite this, Evonik has raised its guidance slightly in the light of its good performance in the first six months. Sales growth is now expected to be in the high single-digit range. The company is also projecting a slight rise in EBIT compared with the prior year, which was boosted by one-off factors.
Technology Specialties:
Sales increased 18 percent to €2,749 million in the Technology Specialties segment. This was principally due to a significant improvement in prices and perceptible volume growth, while the strength of the euro held back growth. Further impetus came from the first-time consolidation of the US company Degussa Engineered Carbons, in which we acquired the remaining shares at the end of October 2007.
EBIT rose 11 percent to EUR 268 million. The Industrial Chemicals Business Unit benefited from a clear rise in demand and improved margins, which enabled it to raise earnings. By contrast, the price increases in the Inorganic Materials Business Unit were not sufficient to offset the rise in raw material and energy costs. At the same time, the weaker exchange rates for the US dollar and yen had a downside effect. However, earnings in the Inorganic Materials Business Unit only slipped slightly thanks to the sharp rise in demand.
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Outlook for 2008 slightly raised:
Evonik expects operating conditions to remain challenging in the second half of this year as a result of high energy and raw material prices, rising inflationary tendencies and adverse effects stemming from the strength of the euro. In addition, the global financial crisis could adversely affect the real economy.
Despite this, Evonik has raised its guidance slightly in the light of its good performance in the first six months. Sales growth is now expected to be in the high single-digit range. The company is also projecting a slight rise in EBIT compared with the prior year, which was boosted by one-off factors.
Technology Specialties:
Sales increased 18 percent to €2,749 million in the Technology Specialties segment. This was principally due to a significant improvement in prices and perceptible volume growth, while the strength of the euro held back growth. Further impetus came from the first-time consolidation of the US company Degussa Engineered Carbons, in which we acquired the remaining shares at the end of October 2007.
EBIT rose 11 percent to EUR 268 million. The Industrial Chemicals Business Unit benefited from a clear rise in demand and improved margins, which enabled it to raise earnings. By contrast, the price increases in the Inorganic Materials Business Unit were not sufficient to offset the rise in raw material and energy costs. At the same time, the weaker exchange rates for the US dollar and yen had a downside effect. However, earnings in the Inorganic Materials Business Unit only slipped slightly thanks to the sharp rise in demand.
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Evonik Industries AG
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Christian Guinet
French Textile Equipment Manufacturers’ Association (UCMTF)
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National Institute of Fashion Technology
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