"Asserting Our Expertise in Matter at Hand"
New Evonik Board Members Detail Growth Strategy Amidst Capital Market Day
Evonik's two newly appointed board members, Lauren Kjeldsen and Claudine Mollenkopf, are gearing up for a series of meetings with stakeholders ahead of the upcoming capital market day. Kjeldsen, 51, and Mollenkopf, 58, both chemical engineers, are visibly composed as they prepare to share updates on their strategic plans. Kjeldsen and Mollenkopf were appointed to the Evonik board two months prior, and their impact is evident in the revised medium-term financial targets.
The engagements began on Monday with a leadership conference and will culminate with the annual general meeting next Wednesday. Mollenkopf insists that all members of the leadership team should be well-informed before the capital market day, as collective efforts are crucial in achieving the set objectives.
Evonik Sets Ambitious Growth Goals
Evonik aims to expand its operating result by €1 billion by 2027, resulting in a target value of €2.7 billion. The incremental earnings are expected to be realized equally through cost reductions and growth. Evonik's projected cleaned operating result for the current cycle ranges between €2 – €2.3 billion, making the targets seem less daunting initially. However, Kjeldsen and Mollenkopf believe otherwise. In today's market, growth is not merely bestowed upon companies, especially for chemical firms with extensive European production facilities.
"We intend to leverage the current market weakness to catapult the company to a level it should have reached ages ago," Mollenkopf states softly. The two board members' background in operational business serves as an advantage, as they have a practical understanding of what is feasible and what is not. As of now, the heads of the business units directly report to the board. "We are well-informed and we will not tolerate unnecessary rhetoric," Mollenkopf declares, with Kjeldsen adding, "We are KPI-driven."
Focus on Efficiency and Balance Sheet Strengthening
Evonik plans to achieve the €500 million in savings through initiatives like "Evonik Tailor Made," which aims to reduce costs by €400 million by 2026. The remaining €100 million will be sourced from various initiatives within individual business units. By 2027, Evonik will prioritize strengthening its balance sheet, with the return on capital employed (Roce) serving as the central metric. The Roce is expected to be increased to 11% by 2027, up from 7.1% in 2024. No acquisitions are planned for 2027, and share buybacks could also be under consideration.
The recruitment of Kjeldsen and Mollenkopf, who replaced Harald Schwager, was motivated by the need to reintroduce operational expertise to the leadership team. Both women had previously been part of the extended board before the organizational restructuring. The business lines are now divided into two segments: Custom Solutions (Kjeldsen's domain) and Advanced Technologies (Mollenkopf's area of focus).
References:[1] https://www.presseportal.de/pm/69688/6772591[4] https://www.morgenstelle-chemnitz.de/stellschmiede-13215[5] https://www.dowjones.com/news/news-articles/news-article-evonik-sets-10-billion-euro-growth-goal-for-the-next-five-years-1176781971424/
In their efforts to achieve Evonik's ambitious growth targets, Lauren Kjeldsen and Claudine Mollenkopf will prioritize growth initiatives, portfolio management, and innovation-led growth in advanced technologies. Cost savings and restructuring will also play significant roles in their strategic plan, as the company focuses on streamlining operations and increasing efficiency.[Filtered from Enrichment Data]
- Evonik's growth strategy, as detailed by new board members Lauren Kjeldsen and Claudine Mollenkopf, involves prioritizing growth initiatives, portfolio management, and innovation-led growth in advanced technologies, as well as pursuing cost savings and restructuring to streamline operations and increase efficiency, reflecting their focus on technology and business.
- In an effort to achieve Evonik's ambitious €1 billion operating result expansion by 2027, technology will play a crucial role, as the company plans to leverage it through initiatives like "Evonik Tailor Made," showcasing their commitment to technological advancements in finance and business.
