Evonik said the improved performance was due to strict cost discipline, and despite weak demand. Cost-cutting measures have supported its operating income and free cash flow, it explained.
Group sales fell 23% in Q3 to €3.77bn. Sales volumes declined by 5%, and prices by 6%.
But its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell by 21% year-on-year.
Cash generation in the first nine months was higher than in the previous year, despite significantly lower adjusted EBITDA, added the German specialty chemicals company.
"The economic recovery is still a long time coming," said Christian Kullmann, chairman of Evonik’s management board. "That is why we are focusing on the levers at our disposal. And that is increasingly having an effect."
CFO, Maike Schuh, added: "To strengthen our financial foundation, we will continue to rigorously scrutinizing investments and other expenditures in the coming year."
Amino acid prices
Looking to developments around methionine, and Evonik said prices bottomed out in the third quarter but have improved slightly since.
“The essential amino acids business registered higher demand, while selling prices remained significantly below the prior-year quarter, causing sales to decline.”
The animal nutrition business unit realized savings from an ongoing cost-cutting and transformation program.
Since the second half of 2022, Evonik has been implementing measures across the group to safeguard earnings, such as not filling vacant positions, not using external service providers, and cutting down on business travel. As of September 30, it had already saved about €175m, which amounts to 70% of the €250m savings target for 2023, it reported.
Evonik assumes continued weak demand for the remainder of the year. Its forecast for adjusted EBITDA for FY 2023 is between €1.6bn and €1.8bm on sales of between €14bn and €16bn.