Evonik's Restructuring Strategy Faces Headwinds from Wage Negotiations
Published on 03/23/2026 at 04:34 | Redaktion boerse-global.de
The coming days are critical for Evonik, the German specialty chemicals group, as its ambitious cost-cutting program encounters a significant challenge. Nationwide chemical industry wage talks, resuming this Tuesday, threaten to undermine the company's carefully calculated savings targets.
Financial Performance Underscores Need for Austerity
Recent financial results highlight the pressing need for Evonik's strict cost discipline. The company's final figures for the past year revealed a return on capital employed (ROCE) of just 6.1%, falling well short of its medium-term goal of 11%. Group sales declined by 7% to €14.1 billion. While adjusted EBITDA met expectations at €1.87 billion, management recently revised its 2026 sales forecast downward to a range of €13.5 to €14.5 billion.
This persistent structural pressure is evident in the market's valuation of the company. Evonik shares have lost more than 33% of their value over the past twelve months, closing at €13.91 this Friday.
Wage Talks Pose Direct Threat to "Evonik Tailor Made"
At the heart of the current tension is the "Evonik Tailor Made" transformation initiative. This program is designed to deliver annual savings of approximately €400 million by the end of 2026. Crucially, about 80% of these savings—roughly €320 million—are tied to the elimination of 2,000 positions globally. A substantial wage increase resulting from the ongoing negotiations would directly dilute these projected financial benefits.
Discussions between the IGBCE union and the BAVC employers' association have so far been inconclusive. Employers point to a difficult sector environment characterized by high energy costs and global overcapacity. The union, however, is demanding a wage settlement significantly above the current rate of inflation.
Should investors sell immediately? Or is it worth buying Evonik?
Shareholders to See Revised Dividend Framework
Alongside its operational restructuring, Evonik is implementing a new dividend policy for shareholders. Beginning with the 2026 fiscal year, the company will more closely link its payout to operational performance, targeting a distribution of 40% to 60% of adjusted net income. For the transitional 2025 year, the Annual General Meeting on June 3 will be asked to approve a dividend proposal of €1.00 per share.
A resolution in the wage negotiations this week would at least provide management with greater certainty for continuing its corporate overhaul. Operationally, the focus now shifts to May 8. The company's first-quarter interim statement will offer concrete evidence on whether planned price increases in its core businesses are taking hold and if operational performance can support the broad earnings forecast for 2026.
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