Essen, Germany --- In the first three months of 2009, Evonik Group's sales fell by 19 percent to Euro 3205 million (Q1 2008: Euro 3939 million). In its core chemicals business, which includes the company's Evonik Goldschmidt polyurethane additives business, sales dropped by 24 percent to Euro 2212 million (Q1 2008: Euro 2906 million).
Evonik said this fall was attributable to a sharp drop in volumes (minus 27 percent) and changes in the scope of consolidation (minus 1 percent). Positive factors were higher prices (1 percent) and exchange rate movements (3 percent).
In Evonik's energy business, sales increased by 1 percent to Euro 873 million, but in real estate, sales slipped 2 percent to Euro 81 million.
EBITDA (earnings before interest, taxes, depreciation and amortisation) for Evonik dropped 49 percent to Euro 331 million (Q1 2008: Euro 651 million) as a result of one-off operating expenses, especially impairment losses on inventories in chemicals and energy, following a further drop in raw material prices.
In chemicals, Evonik's EBITDA was Euro 233 million in Q1 2009 (Q1 2008: Euro 461 million).
Evonik said chemicals suffered a "sharp drop in demand, which led to far lower capacity utilisation." In total, "the poor business trend resulting from the economic situation" resulted in net income of minus Euro 46 million in Q1 2009, compared with a profit of Euro 284 million in Q1 2008, Evonik said.
"The global economic crisis once again left a deep mark on our operating business in the first quarter, especially in chemicals," said Dr Klaus Engel, Evonik Industries AG chairman, in the company's results statement.
To counteract the effects of the economic downturn, Evonik has introduced an efficiency enhancement programme. "Tough cutbacks, for example in our cost structures, are necessary to strengthen the group and place it on a sound footing for the future. We are on schedule with all of these measures," said Engel.
The programme covers active portfolio management, systematic reorganisation of administrative structures and leveraging both short-term and sustainable earnings potential.
Evonik introduced an extensive cost-saving programme at the start of 2009 with the aim of sustained savings of around Euro 500 million annually worldwide by 2012. This year it intends to reduce costs by Euro 300 million, but points out that this figure includes one-off savings.