Evonik expects end-year demand to drive strong start to 2027 (updated)

Evonik Industries AG

Tue 06:02

Recasts with CFO comments on 2027 in paragraphs 1 and 3, adds interim CEO comments on BASF bid in paragraphs 10-11, context in paragraphs 2 and 9.
Q3 adjusted EBITDA rises 40% to €629 million, slightly below consensus
Any consolidation must make strategic sense, interim CEO Rettig said about BASF bid
2026 core profit seen in the upper end of earlier €2.0 billion to €2.2 billion range
By Anastasiia Kozlova and Matthias Inverardi
Nov 3 (Reuters) - Evonik EVKn.DE expects healthy end-year demand to turn into a solid start to 2027, the German chemicals group said on Tuesday, after it forecast full-year core earnings at the higher end of its previously guided range.
Strict cost discipline and good volume development at its speciality additives business have so far helped Evonik overcome the difficult market environment.
"Order books are looking good going into 2027," finance chief Michael Rauch said in a conference call. He added the good business performance was expected to continue for longer, without providing detailed targets for next year.
Evonik last raised the outlook for 2026 adjusted earnings before interest, taxes, depreciation and amortisation to between €2.0 billion and €2.2 billion ($2.2 billion and $2.5 billion) in July. It now expects to reach the top half of that range. 
Adjusted EBITDA jumped 40% to €629 million in the third quarter, narrowly missing a Vara consensus of €633.2 million.
Fourth-quarter earnings are also expected to exceed last year's, despite the period typically being seasonally weaker due to lower sales volumes.
Evonik booked €313 million in third-quarter restructuring provisions and expects to take a further high double-digit million-euro charge in the fourth quarter. In June, it extended its cost-cutting programme through 2029, a move that will eliminate 3,200 jobs worldwide.
It also expects to name a buyer for its Oxeno C4 chemicals business in the coming months, while preparing a potential sale of infrastructure services unit Syneqt.
     
SEEKING RATIONALE FOR BASF BID
Evonik said on Friday that BASF's BASFn.DE sweetened takeover offer was not enough to persuade it to start formal deal talks, though it has asked the suitor's management to elaborate on the rationale for its bid.
Interim CEO Claus Rettig, who is leading Evonik on a temporary basis after Christian Kullmann stepped down in August due to illness, said on Tuesday that any consolidation would have to make strategic sense.
"We always said consolidation is a part we want to play in as an active player," Rettig told analysts and investors.
     
($1 = 0.8937 euros)

(Reporting by Anastasiia Kozlova and Matthias Inverardi; editing by Matt Scuffham and Milla Nissi-Prussak)
((Anastasiia.Kozlova@thomsonreuters.com))