Evonik Industries Ag · XETR:EVK
Evonik Industries — Q2 2014 Earnings Presentation
25 slides from Evonik Industries's earnings presentation, Jul 31, 2014
Slide 1: Evonik. Power to create. Q2 2014 Earnings Conference Call
Evonik. Power to create. Q2 2014 Earnings Conference Call Klaus Engel, Chief Executive Officer Ute Wolf, Chief Financial Officer 31 July, 2014
Slide 2: Table of contents
Table of contents 1 Highlights Q2 2014 2 Financial performance Q2 2014 3 Outlook FY 2014 31 July, 2014 | Evonik Q2 2014 Earnings Conference Call Page 2
Slide 3: Financial highlights Q2 2014
Financial highlights Q2 2014 Earnings pick-up sequentially; full year guidance confirmed and specified Sales of €3,247 m slightly exceed prior year level (+1%); strong volume growth (+5%) continued, price deflation easing further (-2%) Adj. EBITDA of €473 m sequentially improved (Q1: €463 m, prior y
Slide 4: Execution of investment program
Execution of investment program Growth projects on track Selected approved projects Start-up Segment Product area Location Capex (expected) Feed amino acids: CHN Singapore >€500 m Q4 2014 DL-methionine CHN Personal & home care ingredients China & Brazil >€100 m China: Q1 2014 Brazil: Q1 2015 Globa
Slide 5: Reorganization of Group structure (1/2)
Reorganization of Group structure (1/2) Structural preconditions for more focused growth and capital allocation Plans for reorganization • Management holding to concentrate on strategic development of the Group • Three separate specialty chemicals segments as fully functional legal entities Strategi
Slide 6: Reorganization of Group structure (2/2)
Reorganization of Group structure (2/2) Differentiated management tailored to specific needs of individual businesses Management Holding Consumer, Resource Efficiency Specialty Materials Health & Nutrition Leading in customized, individual and Leading in product- innovation-driven solutions driven a
Slide 7: Table of contents
Table of contents 1 Highlights Q2 2014 2 Financial performance Q2 2014 3 Outlook FY 2014 31 July, 2014 | Evonik Q2 2014 Earnings Conference Call Page 7
Slide 8: Financial highlights Q2 2014
Financial highlights Q2 2014 Another quarter of strong positive volume development; pricing trend improving • Continued strong volume Sales (in € m) Adj. EBITDA (in € m) / margin development (+5%) and further OSG1: +3% 15.9% 14.6% improving pricing trend +1% -7% (Q4: -6%; Q1: -4%; Q2: -2%) 3,209 3,2
Slide 9: Segment overview
Segment overview Sequential earnings improvement in all segments Adj. EBITDA development (in € m) / margin (in %) 509 523 381 463 473 Group 15.9% 16.4% 12.3% 14.5% 14.6% Services 53 50 26 51 54 Specialty Materials 128 147 111 112 95 Resource Efficiency 174 169 140 189 191 Consumer, 227 215 199 187 1
Slide 10: Consumer, Health & Nutrition
Consumer, Health & Nutrition Stable performance Sales (in € m) • Sales sequentially improved due to good volume development in amino acids; -4% decline yoy driven by normalized 1,049 1,034 1,061 1,003 situation in Baby Care and on average 978 weaker amino acid prices CS 551 536 525 525 521 • Consume
Slide 11: Resource Efficiency
Resource Efficiency Continued high profitability Sales (in € m) • Resource Efficiency again with increased sales and earnings yoy supported by +4% both Business Units 801 795 717 805 830 • Margin maintained on high level of 23% IM 370 367 366 377 due to ongoing strong volume trend and 338 high plant
Slide 12: Specialty Materials
Specialty Materials Recovery slower than expected Sales (in € m) • Sales slightly above prior year supported by still increasing PA12 sales +4% • Solid volume development; prices again 1,129 1,132 1,177 1,174 1,059 below last year, but comparables easing PP 459 469 461 476 439 • Demand situation rob
Slide 13: Services and Corporate / Others
Services and Corporate / Others Services: adj. EBITDA (in € m) Corporate / Others: adj. EBITDA (in € m) +2% 53 50 51 54 26 -58 -73 -75 -72 -79 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 • Stable performance and ongoing • Positively impacted by strict cost efficiency measures discipl
Slide 14: Net financial debt
Net financial debt Capex and dividend payment turning net cash into net financial debt again Development of net financial debt (in € m) -€733 m +583 -19 -266 Total leverage1 Total leverage1 1.8x 2.1x -466 -150 +18 Net cash position CF from CF from Dividend Other Net financial debt as of 31 Mar, 2014
Slide 15: Table of contents
Table of contents 1 Highlights Q2 2014 2 Financial performance Q2 2014 3 Outlook FY 2014 31 July, 2014 | Evonik Q2 2014 Earnings Conference Call Page 15
Slide 16: Outlook for 2014 confirmed and specified
Outlook for 2014 confirmed and specified Outlook for Evonik in 2014 • Still slight upturn in global economic growth expected in 2014 as a whole, even Economic though development in H1 was somewhat weaker than previously anticipated environment • Increasing structural challenges in emerging markets a
Slide 17: Slide 17
Slide 18: Sale of former Energy business STEAG
Sale of former Energy business STEAG Buyer intending to call remaining 49% stake Basic information Exercising the call option • Sale of 51% stake in Energy business STEAG • In July 2014, notification received from buyer to consortium of municipal utility suppliers about intention to exercise call op
Slide 19: Price and volume analysis
Price and volume analysis Strong volume development continued; price pressure easing 8 • Positive volume growth for the last seven quarters 6 • Q2 2014 with strongest organic Volumes sales growth since more than 4 two years OSG • Clear upward trend in pricing 2 visible after trough in Q4 2013 0 -2 P
Slide 20: Income statement Q2 2014: Sales to adj. EBITDA bridge
Income statement Q2 2014 Sales to adj. EBITDA bridge • Sales +1% yoy, thereof in € million Q2 2013 Q2 2014 ∆ in % • Volumes: +5% • Prices: -2% Sales 3,209 3,247 +1 • FX: -2% Income before financial result and income taxes 289 260 • Other (incl. M&A): +/-0% Results from investments recognized at 7 11
Slide 21: Income statement Q2 2014: Adj. EBIT to adj. EPS bridge
Income statement Q2 2014 Adj. EBIT to adj. EPS bridge • Adj. net interest expense in € million Q2 2013 Q2 2014 ∆ in % • yoy decrease in adj. net interest expense driven by Adj. EBIT 364 322 -12 • lower interest expense after Adj. net interest expense -68 -59 repayment of Degussa bond end of 2013 Adj
Slide 22: Cash flow statement Q2 2014
Cash flow statement Q2 2014 • CF from operating activities in € million Q2 2013 Q2 2014 • Changes in other provisions Income before financial result and income taxes 289 260 contain mainly outflows for Depreciation and amortization 179 173 variable remuneration ∆ Net working capital -41 -51 Change i
Slide 23: Upcoming IR events
Upcoming IR events Roadshows Conference participations • 5 August, 2014: Roadshow Frankfurt / Main • 12 August, 2014: Jefferies Industrials • 7 August, 2014: Roadshow London Conference, New York • 11-13 August, 2014: Roadshow New York • 8 September, 2014: Commerzbank Sector (11/12) & Boston (13) Con
Slide 24: Evonik Investor Relations Team
Evonik Investor Relations Team Tim Lange Petra Boden Head of Investor Relations Team Assistant +49 201 177 3150 +49 201 177 3146 [email protected] [email protected] Hannelore Gantzer Christoph Rump Investor Relations Manager Investor Relations Manager +49 201 177 3678 +49 201 177 3149 hannel
Slide 25: Disclaimer
Disclaimer In so far as forecasts or expectations are expressed in this presentation or where our statements concern the future, these forecasts, expectations or statements may involve known or unknown risks and uncertainties. Actual results or developments may vary, depending on changes in the oper