Annual Report 2007 Sales in € Million 14,430 14,125 EBITDA (Before Non-Operating Result) in € Million 2,221 2,157
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The first annual report published under the Evonik brand. Overview Evonik Group: Key figures 2007 2006 Annual Report 2007 Sales in € million 14,430 14,125 EBITDA (before non-operating result) in € million 2,221 2,157 EBITDA margin in % 15.4 15.3 EBIT (before non-operating result) in € million 1,348 1,179 Return on capital employed (ROCE) in % 9.5 8.4 Net income in € million 876 1,046 The First. Total assets in € million 19,800 20,953 Equity ratio in % 25.7 20.6 Annual Report Annual 2007 Cash flow from operating activities in € million 1,215 1,142 Capital expenditures1) in € million 1,032 935 Depreciation and amortization1) in € million 862 943 The The First. Net financial debt in € million 4,645 5,434 Employees as of December 31 43,057 46,430 1) Intangible assets, property, plant, equipment and investment property. A clear structure Evonik Industries The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America, Canada, Japan or Australia. Chemicals Energy Real Estate Business areas Business units Industrial Consumer Coatings & Energy Real Estate Chemicals Specialties Additives Inorganic Health & Performance Materials Nutrition Polymers Technology Consumer Specialty Energy Real Estate Segments Evonik Industries AG Specialties Solutions Materials Rellinghauser Straße 1–11 45128 Essen Germany www.evonik.com The first annual report published under the Evonik brand. Overview Evonik Group: Key figures 2007 2006 Annual Report 2007 Sales in € million 14,430 14,125 EBITDA (before non-operating result) in € million 2,221 2,157 EBITDA margin in % 15.4 15.3 EBIT (before non-operating result) in € million 1,348 1,179 Return on capital employed (ROCE) in % 9.5 8.4 Net income in € million 876 1,046 The First. Total assets in € million 19,800 20,953 Equity ratio in % 25.7 20.6 Annual Report Annual 2007 Cash flow from operating activities in € million 1,215 1,142 Capital expenditures1) in € million 1,032 935 Depreciation and amortization1) in € million 862 943 The The First. Net financial debt in € million 4,645 5,434 Employees as of December 31 43,057 46,430 1) Intangible assets, property, plant, equipment and investment property. A clear structure Evonik Industries The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America, Canada, Japan or Australia. Chemicals Energy Real Estate Business areas Business units Industrial Consumer Coatings & Energy Real Estate Chemicals Specialties Additives Inorganic Health & Performance Materials Nutrition Polymers Technology Consumer Specialty Energy Real Estate Segments Evonik Industries AG Specialties Solutions Materials Rellinghauser Straße 1–11 45128 Essen Germany www.evonik.com Overview of our business areas Chemicals Energy Real Estate Evonik Industries is a global Our Energy Business Area is the Evonik Industries is one of the leader in specialty chemicals. second largest German generator largest private-sector housing Our six business units, grouped of power from hard coal and has companies in Germany with in the Technology Specialties, over 9,000 Megawatts (MW) around 60,000 residential units Consumer Solutions and installed output worldwide, in- and a 50 percent stake in THS Specialty Materials segments, cluding around 7,300 MW in Treuhandstelle GmbH, which has have a diversified product Germany. We rank among the over 75,000 residential units. portfolio ranging from high- world leaders in the construc The regional focus of our Real performance plastics to addi- tion of state-of-the-art coal-fired Estate Business Area, which has tives for paints and coatings, power plants, for instance, the around 500 employees, is the from exclusive synthesis to new power plant in Duisburg- Ruhr district, the Aachen region superabsorbers. With around Walsum, Germany, which will and the “Rhine corridor” com- 34,000 employees at more than have over 45 percent efficiency. prising the cities of Düsseldorf, 100 sites, Evonik has chemical We are also well-positioned in Cologne and Bonn. Key indica- production facilities in 28 coun- renewable energies, a promis- tors such as occupancy rates and tries. More than 80 percent of ing global growth market. As a tenant turnover are better than sales are generated in markets full-service supplier, we bundle the sector average. Because we where we are positioned among our engineering and consulting use smart housing concepts to the leaders and 20 percent services so we can offer cus- improve the quality of life for our of sales come from products, tomers in Germany and abroad tenants, while active manage- processes and applications all-round solutions. The techni- ment of operating costs mini- developed in the past five years. cal expertise and know-how of mizes their ancillary costs. our roughly 4,900 employees convinces our customers. Key financial data by segment Technology Consumer Specialty Specialties Solutions Materials Energy Real Estate in € million 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 External sales 4,898 4,812 2,871 2,813 3,027 2,881 2,799 2,574 409 464 EBITDA 756 754 409 396 488 454 538 500 174 169 EBIT 454 400 219 195 288 236 448 391 118 117 Capital employed (annual average) 3,906 3,935 2,558 2,661 2,858 2,906 3,014 2,837 1,867 1,775 EBITDA margin in % 15.4 15.7 14.2 14.1 16.1 15.8 19.2 19.4 42.5 36.4 ROCE in % 11.6 10.2 8.6 7.3 10.1 8.1 14.9 13.8 6.3 6.6 This is the first annual report published under the Evonik brand. Evonik is the creative industrial group from Germany with operations in more than 100 countries worldwide. Our Chemicals, Energy and Real Estate Business Areas rank among the market leaders. Now we are heading for the capital markets, supported by our growth potential and sustained earnings power. Evonik. Power to create. The first overview. Evonik Industries AG 4 Letter from the Chairman of the Executive Board 6 The idea behind the new group 8 Our idea of the future 14 Where we are already the first 24 Creation of a new industrial group Our first year. 30 Management report 32 Performance and business conditions 44 Earnings position 46 Financial condition 49 Asset structure 50 Performance of the business areas 74 Regional development 76 Performance of Evonik Industries AG 78 Non-financial performance indicators 82 Employees 85 Events after the end of the reporting period 85 Risk report 89 Outlook Our first results. 90 Consolidated financial statements 92 Income statement 93 Balance sheet 94 Statement of changes in equity 96 Cash flow statement 97 Notes to the consolidated financial statements Supplementary information. 159 Auditor’s report 160 Report of the Supervisory Board 162 Further information on corporate officers 166 Major shareholdings Dr. Werner Müller briefs executives at 8.30 p.m. on September 11, 2007 “ Our new industrial group, which we aim to place on the capital markets, is called Evonik. Ladies and gentlemen, let me welcome you for the first time to Evonik Industries AG.” Annual Report 2007 Evonik Industries It is now about seven months since we rebranded our company Evonik Industries. September 12, 2007 marked the beginning of a new era in our history under a new name. The start of Evonik’s promising future was the culmination of a four-year transformation process driven by enormous creative energy and determination. That process has now been brought to a successful close. The idea of creating a new industrial group, which was sparked a good 50 months ago, has become reality. And already, even a short time after its launch, the name Evonik stands for a modern and creative industrial group positioned among the leaders in attractive markets. The promising position from which Evonik embarked on this new era in its history was the result of much hard work. We are putting our trust in the core competencies that have already brought us so far: creativity, specialization, self-renewal and reliability have grown through our day-to-day work in recent years and give Evonik a competitive edge. One of the many examples from 2007 was the nomination of our lithium ion team for the German Future Award. That honored the development and implementation of an idea that has the capability to revolutionize energy storage around the world. This innovative ceramic separator does not simply pave the way for safer and more powerful electric vehicles. For the first time, it allows large-scale storage of energy from regenerative sources such as wind and solar power. In this way, Evonik is able to meet a fundamental social need and simultaneously gain a promising position in a rapidly growing market. The main driver for future-oriented developments like these is our impressive innovative strength, especially in our Chemicals Business Area. Products, processes and applications developed in the past five years account for about 20 percent of this business area’s sales and we have more than 20,000 patents resulting from development work at 35 R & D sites around the world. In 2007 we once again invested more than € 300 mil- lion in research and development. Evonik is very well-positioned: we are a major player in the attractive and highly profitable specialty chemicals sector. More than 80 percent of sales are generated in businesses where we rank among the market leaders. Evonik’s Energy Business Area is the second largest producer of power from hard coal in Germany and we can point to international success with our major coal-fired power plants.