Evonik. Power to create. Company presentation March 2015
Table of contents 1 Evonik at a glance 2 Group strategy 3 Financials Q4 / FY 2014 4 Appendix March 2015 | Evonik company presentation | Evonik at a glance Page 2
One of the world leaders in specialty chemicals >13 1.9 80% of sales from #1-3 market positions billion € total market billion € adj. EBITDA capitalization achieved in 2014 >4% ~500 ~33,000 employees in more average volume growth R&D projects driving (CAGR) since 2009 1 innovation than 100 countries 1 Excluding Carbon Black, Real Estate and lithium-ion business March 2015 | Evonik company presentation | Evonik at a glance Page 3
Three specialty chemicals segments Sales Adj. EBITDA Margin ROCE € 12,917 bn € 1,867 bn 14.5% 12.3% 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 € 4,076 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 / € 895 m € 79 m Sales Sales Services € 180 m Other - € 317 m Adj. EBITDA Adj. EBITDA Specialty chemicals segments’ financials for FY 2014 restated to reflect new segment structure from Jan 1 st , 2015 March 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 March 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 March 2015 | Evonik company presentation | Evonik at a glance Page 6
Table of contents 1 Evonik at a glance 2 Group strategy 3 Financials Q4 / FY 2014 4 Appendix March 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 March 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 March 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 1 H 2 O 2 for HPPO plant Capex ~ € 100 m Capex >130 m Start up 2017 Start up Q2 2014 Expansion C4 chain Marl & Oleochemicals plant Capex > € 250 m Antwerp Capex > € 50 m Jilin Start up 2015 Start up Q1 2014 Xuzhou Oleochemicals plant Isophorone chain Shanghai Capex > € 50 m Capex > € 100 m Start up Q2 2015 Start up Q2 2014 Singapore New silica plant Methionine plant Sao Paulo Capex ~ € 50 m Capex > € 500 m Start up 2016 Start up Q4 2014 Nutrition & Care Resource Efficiency Performance Materials 1 Basic engineering March 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 March 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) March 2015 | Evonik company presentation | Group Strategy Page 12
Innovation Constant process and product innovation Product innovation: Process innovation: Bio-based PA12 Material for metal-oxide semiconductors • Development of new, bio-based process • Additives for new inorganic metal-oxide for the synthesis of the Polyamide 12 semiconductors heighten image resolution (PA12) monomer amino lauric acid and lower production costs of ultra-HD televisions • Based on palm kernel oil • Replacement of traditional amorphous silicon • Development initiated at Creavis, R&D then • Customer trial runs already underway taken up by Business Line High • Idea generated by Creavis, before being Performance Polymers advanced to market readiness by a cross- • Pilot plant up and running in Slovenska functional team of Resource Efficiency together with potential key customers from Lupca since 2013 the display industry March 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 € 230 m Streamlining of Savings of ~ € 40 m administrative functions already realized at worldwide by end of 2016 year-end 2014 Administration Excellence March 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 March 2015 | Evonik company presentation | Group Strategy Page 15
Table of contents 1 Evonik at a glance 2 Group strategy 3 Financials Q4 / FY 2014 4 Appendix March 2015 | Evonik company presentation | Financials Q4 / FY 2014 Page 16
Highlights FY 2014 Constant progress and new strategic alignment Start-up of several new production sites 15.6% Announcement of new corporate structure Crosslinkers, Shanghai Active Oxygens, Jilin Methionine, Singapore December May August November Sale of remaining STEAG stake Outlook accomplished March 2015 | Evonik company presentation | Financials Q4 / FY 2014 Page 17
Financial highlights FY 2014 Outlook achieved; returning to earnings growth Sales of € 12,917 m slightly above prior year (+2%); good volume development; pricing strengthening towards year-end Outlook accomplished: adj. EBITDA of € 1,867 m; Q4 shows first yoy adj. EBITDA growth since 2011 Stable dividend of € 1.00 per share for FY 2014 proposed (FY 2013: € 1.00) Outlook 2015 : slightly higher sales and adj. EBITDA, additional upside potential from FX March 2015 | Evonik company presentation | Financials Q4 / FY 2014 Page 18
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