Evonik has sharply raised its 2026 earnings forecast after a stronger-than-expected second quarter, with supply chain disruptions linked to the Middle East conflict creating a temporary boost for key businesses.

 

The German specialty chemicals group reported adjusted EBITDA of €630 million in the second quarter, up 24 percent year on year and above market expectations. In June, Evonik had forecast adjusted EBITDA between €600 million and €650 million but has now lifted its full-year guidance to between €2.0 billion and €2.2 billion, compared with its previous forecast of €1.7 billion to €2.0 billion. The company recorded adjusted EBITDA of around €1.9 billion in 2025.

 

"We are witnessing a warm summer rain," says Chief Executive Officer Christian Kullmann. "But unfortunately, this does not change the fundamental challenges for our industry."

 

The company said supply bottlenecks, particularly outside Europe, have benefited several of its businesses by limiting competition from Asian producers. Disruptions to global shipping routes, especially around the Arabian Peninsula, have affected competitors’ access to raw materials and supported demand for Evonik products.

 

Despite the short-term gains, Evonik is continuing its drive to reduce costs and improve competitiveness. The company is expanding its efficiency program "Evonik Tailor Made", which will now include further workforce reductions. 

 

Between 2024 and 2026, the program and additional projects within operating businesses will cut around 2,800 jobs. Since the start of 2026, employee numbers have already fallen by almost 700. The latest extension will result in an additional reduction of approximately 3,200 positions between 2027 and 2029.

 

Second-quarter revenue increased 11 percent, supported by a 7 percent rise in both sales volumes and prices. Net income stood at €84 million, compared with €120 million in the same period last year. Free cash flow improved significantly to €49 million, compared with a negative €211 million in the second quarter of 2025.

 

Evonik maintained its target of achieving a cash conversion rate of around 40 percent in 2026, following 37 percent in 2025.

 

"We want to improve our debt ratios to create more room to maneuver in the future," says Michael Rauch, the company’s Chief Financial Officer since May 1. "This strong quarter is helping us achieve that."

 

Evonik’s Advanced Technologies segment was the strongest performer, benefiting from supply constraints affecting Asian competitors.

 

Sales in the segment climbed 9 percent to €1.647 billion in the second quarter of 2026, driven by higher volumes across all businesses and improved pricing, particularly in Animal Nutrition. Currency headwinds and other factors limited the overall increase.

 

The Animal Nutrition business saw a significant improvement, supported by higher volumes and stronger prices for essential amino acids. The company attributed this momentum partly to uncertainty and supply shortages linked to disruptions around the Strait of Hormuz.

 

The Organics business also delivered strong growth, with crosslinkers benefiting from competitors’ supply challenges. Demand for high-performance polymers improved, leading to further capacity expansion. The Inorganics business recorded slightly higher sales, supported by increased demand for precipitated silicas.

 

Adjusted EBITDA in Advanced Technologies jumped 25 percent to €333 million, driven by higher volumes, stronger pricing and improved production capacity utilization. The adjusted EBITDA margin increased to 20.2 percent from 17.6 percent a year earlier.

 

The Custom Solutions segment reported a 4 percent increase in second-quarter sales to €1.422 billion, supported by higher volumes and pricing. Negative currency effects and other factors limited growth.

 

The Additives business recorded strong demand for polyurethane foam additives, consumer applications, paints and coatings products, and oil additives. Higher selling prices helped lift overall sales.

 

The Care business remained broadly stable compared with the previous year.

 

Adjusted EBITDA for Custom Solutions increased 7 percent to €271 million, while the segment’s adjusted EBITDA margin improved to 19.1 percent from 18.6 percent in the prior-year period.

 

Evonik said the second-quarter performance demonstrates the strength of its portfolio, but warned that structural pressures facing the chemical industry remain unresolved.