Evonik. Power to create. Company presentation June 2015
Table of contents 1 Evonik at a glance 2 Group strategy 3 Financials Q1 2015 4 Appendix May 2015 | Evonik company presentation | Evonik at a glance Page 2
One of the world leaders in specialty chemicals >15 1.9 80% of sales from #1-3 market positions billion € billion € adj. EBITDA total market capitalization achieved in 2014 >4% ~500 ~33,000 employees in more R&D projects driving average volume growth (CAGR) since 2009 1 innovation than 100 countries 1 Excluding Carbon Black and Real Estate May 2015 | Evonik company presentation | Evonik at a glance Page 3
Three specialty chemicals segments Sales Adj. EBITDA Margin ROCE € 12,917 m € 1,882 m 14.6% 12.5% Nutrition & Resource Performance Care Efficiency Materials Products for applications in the Polymer materials and intermediates Environment-friendly and consumer goods, animal nutrition mainly for the rubber and plastics energy-efficient system solutions and healthcare sectors industries € 4,075 m € 4,040 m € 3,827 m Sales Sales Sales € 847 m € 836 m € 325 m Adj. EBITDA Adj. EBITDA Adj. EBITDA Margin 20.8% Margin 20.7% Margin 8.5% Corporate / € 906 m € 69 m Sales Sales Services € 151 m - € 277 m Other Adj. EBITDA Adj. EBITDA 2014 financials restated May 2015 | Evonik company presentation | Evonik at a glance Page 4
Balanced and diversified portfolio End market split 1 Sales by region 2 15−20% 10−15% 5−10% < 5% Agriculture Renewable energies Paper and printing Other 2% Consumer goods and Paints and coatings personal care products Germany 22% Asia-Pacific 19% Metal and oil products Central and Electrical and electronics South America 6% Food and animal feed Pharmaceuticals Other industries Plastics and rubber Automotive and Other European mechanical engineering North America 18% Countries 33% Construction No dependency on single end markets; Strong European heritage, no end market exposure >20% focus on expansion into growth regions 1 Based on specialty chemicals segments’ 2014 sales 2 Consolidated Group sales 2014 May 2015 | Evonik company presentation | Evonik at a glance Page 5
Committed to create value Strengthening of Strategic and Clear commitment market leadership financial discipline by allocation of resources Proven track record of to deliver according to high growth active portfolio management sustainable growth opportunities Solid balance sheet and to increase profitability by development of tailor-made and innovative solutions disciplined use of funds together with customers Value creation for our shareholders May 2015 | Evonik company presentation | Evonik at a glance Page 6
Table of contents 1 Evonik at a glance 2 Group strategy 3 Financials Q1 2015 4 Appendix May 2015 | Evonik company presentation | Group Strategy Page 7
New corporate structure Enabling differentiated management of segments Strategic Management Holding • Three specialty chemicals segments as separate legal entities • Differentiated management of businesses tailored to specific needs • Higher degree of entrepreneurial freedom Nutrition & Care Resource Efficiency Performance Materials Growth Efficiency Investments Innovation M&A May 2015 | Evonik company presentation | Group Strategy Page 8
Levers for sustainable growth Combining internal and external growth Investments Innovation M&A • • • “Power to create” as part Focused investments into Acquisitions as additional of Evonik’s DNA high-growth end markets route for value creation and regions • • “Leading innovation” Sharpening of specialty • Disciplined and flexible initiative with ambition to chemicals portfolio approach in execution generate best-in-class • Proven track record of ideas for future products • Recently finished projects portfolio optimization and solutions according with increasing • Disciplined use of funds • earnings contribution Strong market and customer orientation for tailor-made solutions May 2015 | Evonik company presentation | Group Strategy Page 9
Investments Major projects finished in 2014, more underway Plants currently Recently finished under construction investment projects Fumed silica & silanes platform H 2 O 2 for HPPO plant Capex ~ € 100 m Capex >130 m Start up 2017 Start up Q2 2014 Expansion C4 chain Marl & Isophorone chain Capex > € 250 m Antwerp Capex > € 100 m Jilin Start up 2015 Start up Q2 2014 Xuzhou Essen Silicone platform Oleochemicals plants Shanghai Capex > € 100 m Capex > € 100 m Start up 2017 China: Start up Q1 2014 Singapore Brazil: Start up Q1 2015 New silica plant Sao Paulo Capex ~ € 50 m Methionine plant Capex > € 500 m Start up 2016 Start up Q4 2014 Nutrition & Care Resource Efficiency Performance Materials May 2015 | Evonik company presentation | Group Strategy Page 10
Investments Capex returning to sustainable level after 2016 Capex spending (in € m) Growth capex by segment and region 1 Performance Materials up to 1,140 1,123 Nutrition & 1,100 Care 960 800-900 ~800 Resource Efficiency RoW Europe Asia 2012 2013 2014 2015 2016 Sus- D&A tainable level North America Total capex Growth capex Basis investments 1 After 2016 May 2015 | Evonik company presentation | Group Strategy Page 11
Innovation Strong market and customer orientation Transformational innovation (Creavis) • Centralized, mid-to- Technology / ~10% Products long-term R&D € 413 m new (+5%) 1 ~90% adjacent Core and adjacent business innovation • Decentralized, shorter-term R&D in established operating segments • Cross business, e.g. in industry teams Market / • Very close to Application customers (often joint established adjacent new R&D efforts) 1 R&D expenses 2014 (vs. 2013) May 2015 | Evonik company presentation | Group Strategy Page 12
Innovation Constant process and product innovation Application innovation: Process innovation: Silica in personal care products Bio-based PA12 • Development of new, bio-based process • Silica as environmentally friendly alternative for the synthesis of the Polyamide 12 for microplastics (PE/PP) in exfoliants in (PA12) monomer amino lauric acid personal care products; in line with trend to natural skin care and environmental friendly • Based on palm kernel oil products • Development initiated at Creavis, R&D then • High-purity silica delivering abrasion effect taken up by Business Line High (e.g. in shower gels and peelings) plus Performance Polymers absorbing liquid active ingredients or scents • Pilot plant up and running in Slovenska • Major international personal care companies Lupca since 2013 have already started to switch to silica May 2015 | Evonik company presentation | Group Strategy Page 13
Proven history of efficiency improvements Improving cost position since 2009 2009 2010 2011 2012 2013 2014 2015 2016 Operational excellence (e.g. production processes), Procurement € 500 m On Track Measures with € 500 m Operational excellence savings potential (e.g. production processes), > € 400 m already in by end of 2016 Procurement implementation On Track 2.0 Streamlining of € 230 m Savings of ~ € 40 m administrative functions already realized at by end of 2016 worldwide year-end 2014 Administration Excellence May 2015 | Evonik company presentation | Group Strategy Page 14
Aspiration level: Adj. EBITDA of > € 3 bn and an attractive premium on cost of capital > € 3 bn ~ € 0.6 bn € 2.0 bn CAGR >8% Underlying Efficiency Growth Acquisitions / Adj. EBITDA Adj. EBITDA Growth programs (net) Investments Divestments 2013 2018 May 2015 | Evonik company presentation | Group Strategy Page 15
Table of contents 1 Evonik at a glance 2 Group strategy 3 Financials Q1 2015 4 Appendix May 2015 | Evonik company presentation | Financials Q1 2015 Page 16
Highlights Q1 2015 Strong start into the year; outlook raised Adj. EBITDA of € 650 m significantly above prior year level (+40%) driven by strong performance in Nutrition & Care and Resource Efficiency Accelerating operational performance Outlook raised: adj. EBITDA for FY 2015 at least € 2.2 bn Expansion of silicone platform in Essen and Shanghai, investing more than € 100 m until 2017 Consistent Innovation: new heat-sealing binder launched, reducing execution of complexity of coating formulations significantly growth strategy Acquisition of Monarch in India to strengthen global leadership position in catalyst business May 2015 | Evonik company presentation | Financials Q1 2015 Page 17
Financial highlights Q1 2015 Sales and earnings significantly increased Sales increased by 7% to € 3,425 m driven by dynamic volume growth in Nutrition & Care (+5%) and Resource Efficiency (+6%) as well as by favourable currency exchange rates Adj. EBITDA of € 650m clearly above prior year (+40%); Three quarters of 22 Business Lines contributing to accelerated performance Adj. EPS of € 0.69 (+63%) driven by operational performance and improved financial result Net cash position of € 548 m improved thanks to strong operating cash flow of € 445 m (+49%) May 2015 | Evonik company presentation | Financials Q1 2015 Page 18
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