Evonik has delivered a powerful third-quarter earnings performance, with adjusted EBITDA surging 40 percent year-on-year to €629 million, strengthening expectations that the German specialty chemicals group will finish 2026 in the upper half of its full-year profit guidance.

 

The strong performance, achieved against a backdrop of sluggish economic growth and mounting geopolitical tensions, exceeded the company's August forecast, which had anticipated earnings broadly in line with the second quarter's €630 million.

 

Evonik now sees a stronger finish to the year, with adjusted EBITDA projected to reach the upper half of its €2.0 billion to €2.2 billion guidance range. The company also expects fourth-quarter earnings to improve compared with the same period last year.

 

"Our strategic positioning is paying off in full right now. We are strong and robust," says Claus Rettig, Chief Executive Officer ad interim. "We are even more optimistic about our outlook. Dragons fly highest in headwinds."

 

The latest results underscore the company's efforts to strengthen profitability through tighter cost controls, portfolio restructuring and targeted investments. Evonik had already raised its full-year guidance in June and is pressing ahead with ambitious medium-term targets, including a return on capital employed (ROCE) of around 11 percent by 2029.

 

ROCE is expected to exceed 8 percent in 2026, a significant improvement on the 6.1 percent recorded in 2025.

 

A central pillar of the turnaround strategy is the extension of the "Evonik Tailor Made" (ETM) efficiency programme through 2029, aimed at delivering substantial cost reductions.

 

The programme, however, comes with significant restructuring expenses. Evonik set aside €313 million in the third quarter for ETM-related measures, including severance payments. These provisions weighed heavily on the bottom line, pushing net income to a loss of €53 million. The company had reported a net loss of €106 million in the third quarter of 2025.

 

Meanwhile, Evonik is advancing its portfolio restructuring. The planned sale of Oxeno, its C4 chemistry business, is progressing as scheduled, with a buyer expected to be announced in the coming months.

 

Preparations have also begun for a potential sale of Syneqt, which operates the chemical parks in Marl and Wesseling, Germany.

 

Beyond operating earnings, Evonik recorded its strongest quarterly sales growth in four years.

 

Third-quarter sales climbed 13 percent year-on-year, marking the biggest quarterly increase since the third quarter of 2022. Sales volumes rose 2 percent, while prices increased 10 percent.

 

Free cash flow also remained robust, reaching €369 million against €300 million in the year-ago quarter. For the first nine months of 2026, free cash flow more than doubled to €601 million, providing further support for debt reduction.

 

Evonik is targeting a cash conversion rate of around 40 percent for 2026, compared with 37 percent in 2025. It expects full-year free cash flow of approximately €850 million, up from €695 million last year.

 

"Higher operating profit, significantly better free cashflow and lower net debt, this is how we continuously improve our financial profile, which was recently also underlined by rating company Moody’s", says Chief Financial Officer Michael Rauch.

 

The improving financial position has already received recognition from credit rating agency Moody’s, which upgraded Evonik by one notch to Baa1 on August 27.

 

The Advanced Technologies segment emerged as a standout performer in the third quarter, posting an extraordinary 87 percent year-on-year increase in adjusted EBITDA.

 

Its resilient global positioning and efficiency improvements across several major businesses drove the earnings surge, helping the segment navigate disruptions to global supply chains stemming from the conflict in the Middle East.

 

The latest results reinforce Evonik's confidence that its combination of operational efficiency, portfolio discipline and strategic positioning can deliver stronger earnings despite an uncertain global economic environment.