Evonik releases 2021 full-year financial report: maintain sustainable and profitable growth

● Adjusted EBITDA for the full year rose 25% to EUR 2.
38 billion

● 2022 forecast: Full-year adjusted EBITDA to further increase to between EUR 2.
5 billion and EUR 2.
6 billion

● The leadership structure has been adjusted to become more diverse

After an extremely successful 2021, Evonik expects further growth in 2022
.
Christian Kullmann, Chairman of Evonik Industries, said: "Our earnings have grown strongly and the Group's strategy has been steadily implemented
.
The company is now ready for further growth
.
Evonik will become more sustainable , more profitable and more diversified
.
”

In 2021, Evonik's sales, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) and free cash flow will all grow by more than 20 percent
.
All chemicals businesses benefited from continued strong demand, with group sales increasing by 23 percent to EUR 15 billion
.

Group Adjusted EBITDA of EUR 2.
38 billion increased by 25%, successfully offsetting the impact of sharply higher costs of raw materials, energy and logistics
.
Adjusted net income rose 54 percent to 986 million euros
.
Adjusted earnings per share rose to 2.
12 euros from 1.
37 euros
.

Free cash flow increased by 22% to EUR 950 million, with a cash conversion ratio of 40%
.
"We have managed to maintain a high cash conversion ratio and expect the company's free cash flow to grow for the fifth consecutive year," said Chief Financial Officer Ute Wolf
.

Evonik is confident about its business development in 2022
.
Following a strong start, the group expects adjusted EBITDA to increase by at least 10% in the first quarter compared to the same period last year
.

In 2022, Evonik expects sales to be between 15.
5 billion and 16.
5 billion euros
.
Adjusted EBITDA will be between 2.
5 billion and 2.
6 billion euros
.
The cash conversion rate will remain around 40%
.

At the annual general meeting scheduled for May 25, 2022, the Executive Board and Supervisory Board will propose a slight increase in the dividend to 1.
17 euros per share, corresponding to a dividend yield of around 4%
.

Strengthen product portfolio and drive development with innovation

Innovation strength is an important driving force for the healthy development of Evonik's business
.
In 2021, new products in six innovative growth areas will contribute more than €500 million in sales, a marked increase from around €350 million in the previous year
.
Growth in cosmetic active ingredients and drug delivery technologies is particularly strong
.

Harald Schwager, Member of the Executive Board and Head of Innovation at Evonik, said: "We are very hopeful that we will reach our target of over 1 billion euros in sales of innovative products by 2025.
Products in the
innovative growth area have high growth potential and above-average market levels.
profit margin
.
”

Sustainability has become a core driver of innovation
.
To this end, Evonik will steadily increase sales of sustainable products
.
Currently, 37% of Evonik's sales come from "next-generation solutions" with significant sustainability advantages, and its share of sales rose by two percentage points compared to the previous year to 37%
.
Compared with competing products, "next-generation solutions" can provide customers with higher sustainable benefits
.
For example, Evonik is building its first industrial-scale plant in Slovakia to produce fully biodegradable biosurfactants
.

Evonik is working hard to restructure its product portfolio
.
In October 2021, Evonik acquired Botanica, a Swiss botanical extract producer, to strengthen its position in the cosmetic active ingredient market
.
Meanwhile, the baby care business has completed its divestiture and is ready for sale
.

Promote " true leadership " and upgrade the diversified management system

Evonik is initiating a change in management positions
.
Incoming senior management will take on more responsibilities
.
The proportion of women in management and the number of managers with international backgrounds is also on the rise
.
"Our people are the key to our success," said
Cullman.
"Our people work tirelessly to use their expertise, creativity and initiative to make people's lives better every day
.
Diversity makes us strong and will be reflected in the In the management positions of the group
.
In short, we will focus on advancing the strategy of diversity and integration
.
”

This change will be particularly evident in senior management below the executive board
.
Three of Evonik's five business units will be led by women, two from the US and two from France
.

The importance of the Asian market is growing
.
Evonik will strengthen its presence in Asia through personnel changes
.
As part of the expanded Executive Board, Claus Retting, currently in charge of the Smart Materials business unit, will be based in Asia from Essen, Germany, where he will be given full authority to lead a strong management team in charge of the Asian business
.
"If we want to grow with the Asian market, it's not enough to just supply products
.
To do this, we must strengthen our strength in Asia, develop local production and R&D, and build a strong management team
," said Cullman.

Lauren Kjeldsen, former head of the Specialty Additives business unit, will take over the Smart Materials business unit, and she will be succeeded by Claudine Mollenkopf in the former unit
.
Joachim Dahm and Maike Schuh will lead the Technology & Facilities business unit and the Performance Materials business unit, respectively
.

business unit performance

Specialty Additives: Sales in 2021 to increase by 15% to EUR 3.
71 billion
.
Sales of products used in the construction and coatings industries as well as in the renewable energy market increased significantly in all regions, thanks to a strong increase in market demand
.
Significant growth in sales of polyurethane foam additives for durable consumer goods such as mattresses and refrigerators led to a significant increase in sales
.
In the second half of the year, disruptions to the global supply chain and related shortages of raw materials had an impact on the sales growth of this business unit
.
Adjusted EBITDA for the Specialty Additives business unit increased by 7 percent to EUR 920 million
.

Nutrition and Consumer Chemicals: Sales in 2021 increased by 19% to EUR 3.
56 billion
.
Global sales of essential amino acids for animal nutrition increased significantly, thanks to continued high market demand and rising prices
.
In the field of medicine and health, at the beginning of last year, Evonik expanded the production scale of liposomes for mRNA vaccines, which led to a significant increase in sales of pharmaceutical applications
.
Sales of care chemicals, especially active ingredients for cosmetics, continue to grow
.
Adjusted EBITDA of the Nutrition & Consumer Chemicals business unit increased by 28 percent to EUR 717 million, thanks to higher selling prices
.

Smart Materials: Sales in 2021 will increase by 21% to EUR 3.
92 billion
.
Sales of polymers rose significantly
.
Among them, the demand for high-performance polymers in the automotive industry has increased significantly, and polyamide 12 powder for 3D printing and membrane technology for efficient gas handling are also showing strong demand
.
Sales of inorganic materials also increased significantly
.
Globally, the silica business market for the tire industry is in high demand
.
In the specialty business and the traditional hydrogen peroxide business, active oxide products maintained a good sales growth trend
.
Adjusted EBITDA for the Smart Materials business unit increased by 23 percent to EUR 650 million
.

Functional Materials: Sales in 2021 increased by 47% to EUR 2.
91 billion
.
Benefiting from the substantial increase in market demand and selling price, the sales of carbon 4 products increased significantly
.
The market demand for carbonyl alcohol-related businesses was high, and sales increased significantly
.
The superabsorbent business continued to be impacted by difficult market conditions
.
Adjusted EBITDA of the Performance Materials business unit increased to EUR 317 million from EUR 88 million in 2020, thanks to higher selling prices
.