Evonik's Essen Silicone Plant and 40% Earnings Jump Test the Standalone Story

Evonik has given investors two fresh data points to weigh against BASF's rejected €24-per-share approach: a €52 million specialty silicone facility that started up in Essen, and third-quarter adjusted EBITDA that climbed 40% to €629 million. Neither settles the argument over whether the chemicals group is worth more on its own — but together they sharpen it.

DZ Bank moved Evonik from "Buy" to "Hold" yesterday. Analyst Peter Spengler sees only limited room for a richer takeover premium and, at the same time, more downside risk. He left his fair value at €22 a share, still calculated without any bid uplift. The stock closed yesterday at €21.00, below that mark — a gap the broker no longer considers wide enough to justify a buy recommendation given the risks in the takeover poker.

Operations Improve, but Not Enough to Surprise

The quarterly figures published yesterday support the case for independence. Adjusted EBITDA rose 40% to €629 million in the third quarter of 2026, a clear improvement in the underlying business. It was not, however, a beat: the analyst consensus stood at €633 million, so no positive surprise can be read into the number.

The distinction between adjusted and bottom-line results matters here. Evonik booked a net loss of €53 million, including €313 million in restructuring charges, while adjusted net profit came in at €330 million. The efficiency programme is weighing on the balance sheet even as operations move forward.

Cash generation adds another layer to the valuation case. Evonik produced free cash flow of €601 million in the first nine months of 2026 and expects around €850 million for the full year.

A Plant Built for Shorter Routes

Essen is one of Evonik's central silicone production sites, and the new facility — complete with tank storage — is designed to cut transport within the group's international production network and reduce the risk of bottlenecks. The specialty silicones feed into insulation materials, mattresses and car seats, as well as adhesives, paints, coatings and cosmetics, so the investment touches a spread of end markets rather than a single one.

The sum invested says little on its own about the earnings contribution. What counts is whether the smoother production and transport flows actually show up in the plant's results — and, more broadly, whether Evonik can lift returns on the capital it deploys.

Returns Are the Yardstick

Evonik has set itself a return on capital employed target of 11% by 2029, against 6.1% in 2025. That requires a substantial step up from today's level. The Essen project sits alongside a wider overhaul: a buyer for Oxeno is expected in the coming months, and preparations for the sale of Syneqt are under way. Site investment and portfolio disposals are separate building blocks of the same strategy.

Cost-cutting runs in parallel rather than in opposition. Evonik plans to shed 3,200 jobs worldwide by 2029 and has extended its efficiency programme through the same year. Expansion at a central production hub and group-wide savings are proceeding side by side.

Independence, With the Door Ajar

Interim chief executive Claus Rettig reaffirmed the company's claim to stand alone yesterday. Evonik, by its own account, is not conducting takeover negotiations with BASF, though it remains open to a confidential exchange of information. Such contacts are not the same as talks over a binding transaction — a distinction the company has been careful to draw.

For shareholders, two perspectives now sit side by side. Evonik is improving its business and pushing the restructuring forward, and the Essen plant makes the standalone case more tangible on the ground. DZ Bank nonetheless sees limited additional upside in the takeover premium. Its downgrade is above all a warning against assuming that operational progress automatically translates into further share price gains from BASF's interest.