German specialty chemicals group Evonik outperformed earnings expectations in the first quarter of 2026, even as geopolitical turmoil, inflation pressures and weakening demand rattled global markets.
The company posted adjusted EBITDA of €475 million for the quarter, beating its own forecast of around €450 million despite what it described as an exceptionally challenging business climate. The result comes as the war in the Middle East sends energy and raw material prices soaring and disrupts major global trade routes.
"Economic growth relies on the free movement of goods," says CEO Christian Kullmann. "This had already been constrained by rising protectionism. Now, the war in the Middle East is blocking entire trade routes, adding further risk."
Evonik’s first-quarter sales fell 9 percent year-on-year to €3.43 billion, with unfavorable exchange rates accounting for more than half of the decline. Sales volumes slipped 2 percent, while prices dropped 1 percent. The adjusted EBITDA margin narrowed to 13.9 percent from 14.8 percent a year earlier.
Net income plunged to €125 million from €233 million in the first quarter of 2025. Free cash flow remained resilient at €183 million, compared with €195 million a year ago.
Yet signs of a near-term rebound are emerging. Since March, Evonik has seen stronger order volumes in some businesses as customers rush to secure supplies amid escalating geopolitical tensions. Prices for methionine, a key animal nutrition additive, have also climbed faster than expected.
The company now expects adjusted EBITDA of at least €550 million in the second quarter, up from €509 million in the same period last year. Evonik said the current quarter is likely to be the strongest of 2026 before inflation and higher costs weigh more heavily on consumer spending, investment and industrial demand later in the year.
"The first quarter was not good, but it was better than we expected, especially towards the end," says Claus Rettig, who had assumed operational responsibility in the finance department until April 30. "This gives us a little more confidence compared to the beginning of the year."
Evonik also announced a leadership transition in finance. Michael Rauch became Chief Financial Officer on May 1 and is set to introduce himself to shareholders at the company’s Annual General Meeting on June 3. Rettig will return full-time to his role as President of the Asia-Pacific region.
Despite mounting economic uncertainty, Evonik reaffirmed its full-year guidance and continues to forecast adjusted EBITDA between €1.7 billion and €2.0 billion for 2026.
The company also said its “Evonik Tailor Made” efficiency drive remains on schedule in its final year, with a total of 1,000 jobs set to be eliminated in 2026 through cost-cutting and operational optimization programs.
