Finance
Evonik sees stable 2025 core earnings, no impact from US tariffs
Published by Global Banking and Finance Review
Posted on March 5, 2025
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Published by Global Banking and Finance Review
Posted on March 5, 2025
By Matthias Inverardi and Anastasiia Kozlova
(Reuters) -Germany's Evonik Industries does not expect U.S. tariffs to impact its business due to local production, it said after forecasting broadly stable earnings for 2025 on Wednesday.
Shares of the chemicals maker were 9% higher by 1028 GMT, on track for their biggest daily rise since March 2020.
Metzler analyst Thomas Schulte-Vorwick said the shares were benefiting from the "convincing" outlook, which also included an expected rise in first quarter core profit.
The cyclical sector in Germany should also benefit from the newly announced infrastructure package, which could drive construction activity, he added.
Evonik sees adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of between 2.0 billion and 2.3 billion euros ($2.1 billion and $2.4 billion) in 2025, compared with 2.07 billion last year.
Analysts' median forecast for 2024 was 2.08 billion, which they expected to rise to 2.15 billion in 2025, a poll compiled by Vara Research showed.
Schulte-Vorwick said the annual guidance seems rather conservative and should offer room for upside if the economic situation in Europe improves.
Strict cost discipline and good volume development at its speciality additives business have so far helped Evonik to overcome the difficult market environment.
The "trip through hell" is possible to manage and withstand, CEO Christian Kullmann said in a press conference, referring to the slew of macroeconomic and political challenges since the COVID-19 pandemic.
LIMITED TARIFF IMPACT
Evonik, which generates around 24% of its sales in North America, does not expect the tariffs threatened or imposed by U.S. President Donald Trump to affect its business, Kullmann said.
It could even benefit from higher tariffs, as it produces a lot for the goods sold in the U.S. market locally, Kullmann added.
The direct impact of tariffs on Evonik and the broader chemicals sector should be relatively limited, Schulte-Vorwick also said, as production is largely local-for-local and sourced locally. The indirect impact is difficult to assess for now, he added.
($1 = 0.9469 euros)
(Reporting by Matthias Inverardi in Düsseldorf and Anastasiia Kozlova in Gdansk, additional reporting by Amir Orusov; editing by Milla Nissi)