Targets are set: Evonik wants to keep the margin high in the business with special additives | message
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In the medium term, too, around 27 percent of every euro turnover should remain as adjusted earnings before interest, taxes, depreciation and amortization (Ebitda), explained Lauren Kjeldsen, head of the Specialty Additives division at an analyst event on Thursday. This would mean that the business area would remain by far the most profitable. Group-wide, Evonik boss Christian Kullmann’s management is aiming for an operating profit margin of 18 to 20 percent in the medium term.
The comparatively high margin of Specialty Additives is made possible by the often tailor-made solutions that Evonik offers customers. The products should, for example, make surfaces more durable and reduce fuel consumption. According to Evonik, they make wind turbines more stable or help to distribute pesticides evenly on leaves.
In this environment, Evonik relies not only on innovations but also on digitalization. For example, paint and varnish manufacturers looking for new compositions of their products can have Evonik automatically test many different variants within a short period of time. In this context, the Essen-based group has also developed a digital assistant that helps customers in the coatings industry to quickly find the additives required for certain product properties.
Kjeldsen also sees potential in the still young business with products that are supposed to simplify the recycling of plastics – such as agents that help remove labels from plastic packaging without leaving any residue or with de-foaming agents that simplify the washing process. Such offers are expected to generate sales of at least 350 million euros from 2030 onwards. For comparison: in 2020 the entire division achieved sales of around 3.2 billion euros.
Analyst Gunther Zechmann from Bernstein Research considers this recycling market to be very promising, but emphasizes in a current study that the prices for recycled plastics would have to fall significantly in order to be permanently competitive in comparison to original plastics.
In view of the numerous innovations, analysts at the event on Thursday also raised the question of why no higher growth target was given for the division. The management for Specialty Additives is aiming for an average increase in sales of more than three percent per year, which only corresponds to the medium-term target for the group as a whole. Kjeldsen referred to the broad product portfolio, which is aimed at a wide variety of industries with phased opposing developments in demand, which then often offset each other. In addition, higher growth rates have been achieved in the past.
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