Evonik restructures business lines from four into two for leaner management model

Essen, Germany – Evonik is putting in place a new segment structure and adopting a significantly leaner management model. The company’s business lines, which so far have been bundled into four divisions, will now be led directly by members of the Executive Board. Going forward, the operating businesses will be managed in a significantly more differentiated manner, divided into two segments.

Evonik has progressively focused its portfolio on growth and resilience and geostrategic balance in recent years. After this extensive reorganization, the company is now taking the next step. “We have significantly improved the quality of our portfolio in recent years,” says Christian Kullmann, Chairman of the Executive Board. “In our current structure, it is no longer sufficient to solely focus on the criterion of specialty chemicals to drive the company forward. Its meaning has been completely blurred and no longer sufficiently differentiates us in the eyes of our customers and the capital markets. Going forward, we will manage Evonik in a more differentiated manner by leveraging the strengths of our two pillars: solutions and innovation-driven businesses on the one hand, and technology and efficiency-driven businesses on the other. Our new management model takes this approach into account.”

Currently, Evonik manages its chemicals businesses in the growth divisions Specialty Additives, Nutrition & Care, and Smart Materials. Under the new structure, which will take effect on April 1, 2025, the Group will organize its business lines in two new segments: Custom Solutions and Advanced Technologies. This will allow for clearer strategic focus and resource allocation. It will also enable more differentiated management of the businesses according to their respective business models. The segments currently have annual sales of around €6 billion each.

“The Supervisory Board supports the Executive Board’s strategy and the structural development of the Group,” says Bernd Tönjes, Chairman of the Supervisory Board. ”We are convinced that Evonik will be able to exploit its full potential for profitable growth with the new structure.”

The Custom Solutions businesses are defined by innovation-driven business models. They operate in specific niche markets, have a strong customer proximity, and develop customized solutions, allowing for pricing power. The focus for acquisitions rests on this segment with around 7,000 employees, which includes additives for paints and coatings as well as products for the cosmetics and pharmaceutical industries.

The Advanced Technologies businesses are efficiency-driven, featuring a high level of technological expertise and operational excellence. This puts them in a globally leading cost position. The segment, with approximately 8,000 employees, includes high performance polymers and hydrogen peroxide production, amongst others.

The two segments ideally complement each other and play equally crucial roles for the Group’s value creation. Custom Solutions businesses play a major role as growth drivers and contribute more than average to adjusted EBITDA growth. Advanced Technologies businesses play a stronger financing role and generate cash flow. The key indicator across all businesses is ROCE (return on capital employed). Driven by both segments, Evonik will earn its cost of capital at Group level.

At the same time, both segments are driving Evonik’s sustainability transformation forward. Evonik aims to increase the share of so-called NextGen Solutions, products with outstanding sustainability benefits, to over 50 percent by 2030.