Evonik delivered another strong quarter, exceeding analysts' expectations. Based on preliminary and unaudited figures, the company achieved an adjusted EBITDA of €578 million in the second quarter, 29% above the prior-year.
First quarter results reveal that consolidated and net sales are both down, attributed mostly to lower demand. In addition, the decorative business saw a revenue decline due to price cuts, according to the company.
While the company saw a decline in revenue over sales generated in the same quarter of the previous year, the gross profit margin of 15.3%, was similar to Q1/2023.
Although the company saw a decline in sales over the previous year, it maintains that this was mainly driven by considerably reduced prices as a result of lower raw materials and energy prices in almost all segments, as well as lower precious metal prices.
Results included record first quarter Housing and Infrastructure Products (HIP) income from operations, and Performance & Essential Materials (PEM) sales volume growth.
First quarter 2024 net sales increased year-over-year. The growth within the company’s end-markets was driven by improvement in both refinish and light vehicles, offset partially by lower net sales in industrial and commercial vehicles.
The company was able to increase its sales volumes, in particular within the EMLA and APAC regions, with the former benefiting from higher plant availability. Due to lower average selling prices associated with lower raw material prices being passed on to customers, sales fell slightly.
According to the CEO, "Dow once again delivered top-quartile performance in our annual benchmarking on three-year average cash flow, margins, return on invested capital and shareholder remuneration."
Although sales are still down since the previous year, the good start into the year gives the company confidence that it can achieve its targets for the fiscal year.
