Evonik executive board

Evonik executive board

Evonik to focus on innovation for growth

The company has identified four areas – specialty additives, animal nutrition, smart materials and health care – that have above-average growth and margin potential

July 2017

Evonik, a leading German speciality chemicals company, aims to achieve profitable growth by making its portfolio more speciality and more balanced, strengthening its innovation power and driving a performance-oriented corporate culture.

“I am excited at the opportunities that lie ahead for our company,” Christian Kullmann, chief executive officer, Evonik, told analysts and investors at a recent strategy update in London, UK.

“We will enhance value creation for our stakeholders by sharpening our focus on specialty chemicals, driving innovation and encouraging a trustful corporate culture of measured risk-taking,” he said.

With the help of these three levers, Evonik aims to grow sales volumes faster than global gross domestic product (GDP). At the same time the company plans to lift its adjusted Ebitda margin into a sustainably higher range of 18 to 20 per cent, from a historic range of around 16 to 18 per cent.

“We want to focus more strongly on businesses with a clear speciality chemicals character,” said Kullmann. “Going forward our portfolio will have a higher share of growth businesses.”

The new four-member management board will form a strong and aligned team with complementing strengths. Along with Christian Kullmann, Harald Schwager will be joining Evonik on September 1 as the new deputy chairman of the executive board with responsibility for chemicals and innovation, said a statement.

Ute Wolf and Thomas Wessel will continue in their roles as chief financial officer and chief human resources officer respectively, it said.

Essen Klaus Engel, long-standing chief executive officer of Evonik, handed over to Christian Kullmann at the end of the annual shareholders’ meeting.

The company has identified four areas – speciality additives, animal nutrition, smart materials and health care – that have above-average growth and margin potential. These will be the focus of capital allocation, it added.

“Active portfolio management with regular strategic reviews as well as improved cost competitiveness will help the group achieve its growth and margin goals,” emphasised Ute Wolf, chief financial officer, Evonik.

Evonik’s innovation pipeline will also drive improving profitability. The goal is for products and applications younger than five years to make up 16 per cent of sales in the medium term. The company will sharpen the focus of its activities by intensifying collaboration with customers and along value chains, it said.

The company aims for a corporate culture in which employees will take action and initiate change. The goal is to develop a more international and diverse mind-set that builds on trust, respect and openness, it stated.

Profitable growth and a sustained increase in the value of the company form the heart of Evonik’s corporate strategy. Evonik benefits specifically from its innovative prowess and integrated technology platforms. It is active in over 100 countries around the world with more than 35,000 employees. In fiscal 2016 the enterprise generated sales of around €12.7 billion ($142.29 billion) and an operating profit (adjusted Ebitda) of about €2.165 billion.

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