March 4, 2020 / 7:09 AM / in a month

UPDATE 1-Evonik targets flat 2020 sales as economy weighs

(Adds details, CFO quote)

March 4 (Reuters) - German chemicals group Evonik Industries forecast stable 2020 sales on Wednesday, with its specialty chemicals sales expected to grow but softer global economy weighing on its more commoditized businesses.

The group also said it expected its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) at between 2.0 billion and 2.3 billion euros this year, after reporting 2.15 billion euro core profit for 2019.

Analysts in a company-compiled poll had expected 2020 sales at 13.4 billion euros, compared with 13.1 billion euros the company reported for 2019.

The maker of specialty chemicals used in several industries and products such as feed additives and super-absorbers for diapers said it expected lower growth in the automotive industry but slightly higher earnings in its nutrition & care division, as it assumes stable methionine price in 2020.

Falling methionine prices have been a concern over the past several years for Evonik, which is a market leader in the production of the amino acid used primarily in chicken feed.

The group, which generated about 8% of its 2019 sales in China, said the coronavirus outbreak could contribute to a slowdown in global growth and estimated the impact of the epidemic at its first quarter results at around 30 million euros.

“The measures implemented in the last years to improve our cash generation have been effective,” Chief Financial Officer Ute Wolf said in a statement, adding that in 2020 the company was aiming for a further improvement in free cash flow.

The company said its fourth-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for one-offs, rose 26% to 505 million euros ($564 million), slightly above an analysts’ forecast of 499 million euros in a company-compiled poll.

$1 = 0.8960 euros Reporting by Bartosz Dabrowski in Gdansk Editing by Tomasz Janowski

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