Evonik Industries AG (EVK) cut its outlook for sales and profit in 2013 and said it will accelerate cost cuts after a disappointing recovery in some markets.
The German maker of tire additives and ingredients for cosmetics and animal feed now sees sales at last year’s level and a decline in earnings, slashing a forecast for growth in both metrics, it said. The stock dropped as much as 2.2 percent.
“Let me not beat about the bush, the new chapter in our company’s history as a listed company got off to a more difficult start than we expected in terms of the share price and earnings,” Chief Executive Officer Klaus Engel said on a conference call today.
Evonik said it held off from adjusting guidance earlier in the year as it thought some markets would bounce back, as seen in the past. The CEO earmarked 6 billion euros for investment through 2016, yet opted to cut capital expenditure plans for this year by 20 percent to 1.2 billion euros ($1.6 billion).
Second-quarter earnings before interest, taxes, depreciation and amortization fell by 23 percent to 489 million euros, compared with an average estimate from analysts of 484 million euros.
Evonik this year scaled back plans for an initial public offering, listing 14 percent of its shares largely through a private placement in April. So far, the stock has declined 20 percent since its debut in Frankfurt.
Nicotine Patch Interest
After years of disposals, Engel is also trying to take the company into new higher-margin areas and expand its nutrition and health portfolio, where demand held steady in the first half.
Evonik is also among the companies considering a bid for nicotine-patch maker LTS Lohmann Therapie-Systeme AG, valued at more than 1 billion euros, according to people with knowledge of the matter. It’s holding talks with Morgan Stanley, which is preparing the sale process for the German maker of plasters that deliver drugs through the skin, said the people.
Sales at the consumer, health and nutrition business reached 2.1 billion euros in the first half, with an adjusted earnings before interest, taxes, depreciation and amortization margin of 23.7 percent, boosted by demand for products such as powdered gels that can absorb liquid.
The stock declined as much as 58 cents to 25.50 euros in Frankfurt today and was down 1 percent as of 9:34 a.m., valuing the company at 12 billion euros.
To contact the reporter on this story: Andrew Noel in London at email@example.com
To contact the editor responsible for this story: Simon Thiel at firstname.lastname@example.org