Annual Report 2015DEENCN

Report of the Supervisory Board

 

Dr. Werner Müller, Chairman of the Supervisory Board

In 2015, the Supervisory Board of Evonik Industries AG (Evonik) performed the obligations defined by law and the Articles of Incorporation correctly and with the utmost care, and regularly and conscientiously supervised the work of the Executive Board. We supported the Executive Board by providing advice on the management and strategic development of the company.

Collaboration between the Executive Board and Supervisory Board

The Executive Board always gave us full and timely information on all material issues affecting the Group, and involved us in all fundamental decisions relating to the company. Key areas were business performance and the situation of the company, along with aspects of business policy, corporate planning and Evonik’s ongoing strategic development.
In addition to reporting at meetings of the Supervisory Board, the Executive Board kept us informed orally and in writing of current business developments and activities of particular significance for Evonik. The Chairman of the Supervisory Board was kept informed of all major business events.
The Supervisory Board was always consulted at an early stage on decisions of any significance. The Supervisory Board’s oversight of the Executive Board centered in particular on ensuring the correct, orderly, expedient and cost-effective management of Group-wide business activities. The content and scope of reporting by the Executive Board complied with the law, the principles of good corporate governance and the requirements set by the Supervisory Board.
Section 16 of the Articles of Incorporation of Evonik Industries AG and the Rules of Procedure of the Supervisory Board set out business activities and measures of fundamental importance on which the Executive Board is required to seek the approval of the Supervisory Board or, in some cases, individual committees. In the past fiscal year, the Supervisory Board took decisions on business activities and measures submitted by the Executive Board after examining them and discussing them with the Executive Board.

Meetings and work of the Supervisory Board

We examined all issues of importance to the company at five meetings, on March 2, May 19, June 25, September 24 and December 10, 2015. In addition, the Supervisory Board adopted one resolution via a written circulation procedure.

In 2015 the work of the Supervisory Board was again prepared and supported by its committees. The committees and their members in the year under review were as follows:

  • Executive Committee: Dr. Werner Müller (Chairman), Michael Vassiliadis (Deputy Chairman), Günter Adam (until December 10, 2015), Ralf Hermann, Steven Koltes and Dr. Volker Trautz.
  • Audit Committee: Dr. Siegfried Luther (Chairman and independent financial expert within the meaning of Section100 Paragraph 5 German Stock Corporation Act/AktG), Karin Erhard (Deputy Chairwoman), Prof. Barbara Grunewald, Jürgen Nöding (until September 30, 2015), Norbert Pohlmann (from October 1, 2015), Dr. Wilfried Robers and Dr. Christian Wildmoser.
  • Finance and Investment Committee: Michael Rüdiger (Chairman), Michael Vassiliadis (Deputy Chairman), Günter Adam (until December 10, 2015), Martin Albers (from December 11, 2015), Stephan Gemkow, Ralf Hermann, Frank Löllgen, Dr. Werner Müller and Dr. Christian Wildmoser.
  • Nomination Committee: Dr. Werner Müller (Chairman), Steven Koltes and Dr. Volker Trautz.
  • Mediation Committee: Dr. Werner Müller (Chairman), Michael Vassiliadis (Deputy Chairman), Ralf Hermann and Dr. Volker Trautz.

The tasks allocated to these committees are described in detail in the Corporate Governance Report on pages 63 and 64.
The Executive Committee held eight meetings in 2015. The Audit Committee and the Finance and Investment Committee each held four meetings. In addition, the Finance and Investment Committee adopted one resolution via a written circulation procedure. The Nomination Committee met once in the reporting period. There was no need for the Mediation Committee to meet during the reporting period. The chairman or deputy chairperson of each committee reported regularly at the meetings of the Supervisory Board on the issues discussed and decisions taken at committee meetings. The Supervisory Board therefore always had extensive and well-founded information on all matters of significance in the Evonik Group.
At its meeting in March, the Supervisory Board focused on examining the annual financial statements, which had first been considered in detail by the Audit Committee, and on preparing for the Annual Shareholders’ Meeting. It also resolved on measures resulting from an efficiency review conducted with external support in 2014. The meeting in May was dedicated to supplementary information prior to the Annual Shareholders’ Meeting. In June, the focus of the meeting was the resignation from the Executive Board of Patrick Wohlhauser, formerly Chief Operating Officer, and the appointment of Dr. Ralph Sven Kaufmann as his successor. At the meeting in September, the Supervisory Board discussed the strategy of the Evonik Group, the extension of the term of office of Thomas Wessel as Chief Human Resources Officer, targets for female members of the Supervisory Board and Executive Board, revision of the objectives for the composition of the Supervisory Board in accordance with Section 5.4.1 Paragraph 2 of the German Corporate Governance Code, and the new version of the Rules of Procedure of the Supervisory Board. At its meeting in December, the Supervisory Board discussed the Declaration of Conformity in compliance with Section 161 of the German Stock Corporation Act (AktG), the budget for 2016, the mid-term planning for the period to 2018, and progress in implementing the measures adopted following the efficiency review.
In the reporting period, the main issues discussed by the Executive Committee were: the bonuses for the Executive Board members for 2014 and their objectives for 2015, adjustment of the remuneration of the Executive Board effective January 1, 2016, systematic succession planning for the Executive Board, preparation of a proposal on implementation of the recommendations made by the efficiency review, the change of Chief Operating Officer on the Executive Board, acceptance and discussion of a report by the Chairman of the Executive Board on acquisition considerations, determination of the targets for the proportion of women on the Supervisory Board and Executive Board, and the business situation, current projects and Evonik’s share price.At its meeting in March, the Audit Committee examined the annual financial statements of Evonik Industries AG, the consolidated financial statements, and the proposal for the election of the auditor for fiscal 2015. The focus at its meeting in May was the interim report on the first quarter, while in July the meeting focused on the interim report on the first six months. In October, the central issues discussed by the Audit Committee, apart from the interim report on the third quarter, were corporate governance and the compliance update.
The attention of the Finance and Investment Committee in the reporting period was mainly concentrated on growth projects and investment controlling (see page 51 “Investment and investment controlling”).
In January, the Nomination Committee discussed the implications of the legislation on equal participation of women and men in management positions in the private and public sectors for both groups of representatives on the Supervisory Board.In addition—apart from the reports required by law—the Supervisory Board and its committees examined and discussed the following issues in detail:

Performance and situation of the Evonik Group

The Evonik Group posted a very successful business performance despite the challenging macro-economic environment. Although global growth was lower than expected, the Group posted a pleasing volume trend, supported by the new production capacities. There was a particularly strong rise in selling prices in the Nutrition & Care segment, whereas prices in the Performance Materials segment declined, mainly because of the drop in the oil price. Overall, selling prices were on the previous year’s level. Sales increased to €13.5 billion in 2015 and adjusted EBITDA improved considerably to €2.47 billion.

Implementation of the new management and portfolio structure

The Supervisory Board discussed in detail the reorganization of the management and portfolio structure of the Evonik Group, which started in 2014 and was completed in 2015. The principal objective of the reorganization—to take account of the different management needs of the businesses and bring a further improvement in the structural basis for their profitable growth—was achieved in the reporting period through the following steps:

  • Establishment of new legal entities and transfer of management responsibility to the future managing directors of these companies with effect from the start of 2015
  • Assumption of the operating business by these new companies through plant management agreements and the associated transfers of undertaking pursuant to Section 613a of the German Civil Code (BGB) effective July 1, 2015
  • Concentration of Evonik Industries AG from this date as a management holding company on the strategic management and ongoing development of the legal entities.

This introduced the principle of differentiated management. Consequently, the Nutrition & Care and Resource Efficiency segments now have an even stronger focus on growth, while the Performance Materials segment is run as a financing business.

Investment and investment controlling

Alongside this, the Supervisory Board and its committees kept a close eye on Evonik’s growth course. At our meetings we discussed the development of Evonik’s sales, earnings and capacity utilization, the financial and earnings position and the main growth projects, including investment controlling for current projects. The projects considered in detail by the Supervisory Board and the Finance and Investment Committee included:

  • Preliminary planning for the construction of a further methionine plant (Singapore)
  • Ongoing construction work on an integrated production complex for oleochemical specialty surfactants (Brazil)
  • Ongoing construction of a lysine plant (Brazil)
  • Extension of capacity for polyamide 12 powder (Germany)
  • Extension of production of high-molecular polyester (Germany)
  • Acquisition of Monarch Catalyst Pvt. Ltd. (India)
  • Joint venture for the construction of a production facility for potassium hydroxide solution and chlorine (Germany)
  • Construction of a production facility for acrolein cyanhydrin-o-acetate (USA).

Divestments

During the year the Supervisory Board and the Finance and Investment Committee also closely examined divestment projects, including the following:

  • Divestment of the remaining 10.3 percent stake held by Evonik Industries AG in the real estate company Vivawest GmbH to RAG Aktiengesellschaft, Herne (Germany).

Other issues addressed by the Supervisory Board and its committees

In addition to the issues and developments outlined above, the main topics addressed by the Supervisory Board and its committees in 2015 were:

  • Proposals for resolutions to be adopted at the Annual Shareholders’ Meeting in May 2015, especially the proposal of the Supervisory Board to the Annual Shareholders’ Meeting on the appointment of the auditor
  • Revision of the Rules of Procedure of the Supervisory Board
  • Appointment of Dr. Ralph Sven Kaufmann as a member of the Executive Board and renewal of the appointment of Thomas Wessel as a member of the Executive Board (see “Personnel issues relating to the Executive Board and Supervisory Board” on page 55)
  • Resolutions on the Declarations of Conformity in compliance with Section 161 of the German Stock Corporation Act (AktG) in March and December 2015, and the Supervisory Board’s report to the Annual Shareholders’ Meeting.

Corporate Governance

The Supervisory Board is committed to the principles of good corporate governance. This is based principally on recognition of the provisions of the German Corporate Governance Code, both in the version dated June 24, 2014 and in the present version of May 5, 2015. This does not exclude the possibility of deviation from its recommendations and suggestions in legitimate individual cases.
Since it is listed on the stock exchange, Evonik is subject to the obligation contained in Section 161 of the German Stock Corporation Act (AktG) to submit a declaration of the extent to which it has complied with or will comply with the German Corporate Governance Code and which recommendations have not been and will not be met, together with the reasons for this (declaration of conformity). The Executive Board and Supervisory Board issued declarations of conformity in March and December 2015. These are available on the company’s website. In addition, the corporate governance report on page 56 f. contains the most recent declaration of conformity from December 2015.
The Executive Board and Supervisory Board examined the requirements imposed by the German legislation on equal participation of women and men in management positions in the private and public sectors. In accordance with this, the list of objectives for the composition of the Supervisory Board was amended to state that in the future appointments to the Supervisory Board should ensure at least 30 percent women and at least 30 percent men; this requirement is applicable for new appointments from January 1, 2016. Further, the Supervisory Board defined a target of at least 20 percent female members of the Executive Board for the period up to June 30, 2017.
As an additional objective for its composition, Evonik’s Supervisory Board has set a regular limit on membership of no more than three full terms of office to satisfy the new requirements set out in the latest version of the German Corporate Governance Code.
With the exception of the quotas for men and women to be observed in future appointments, the present composition of the Supervisory Board meets all of the major objectives set for its composition.
Further details of the diversity requirements and the list of objectives are set out in the corporate governance report on pages 64 and 65.
For 2015, the members of the Supervisory Board will receive attendance fees and purely fixed remuneration for their work on the Supervisory Board and any membership of committees (see page 133).
Members of the Supervisory Board of Evonik Industries AG had no conflicts of interest in 2015.
Moreover, there were no consultancy, service or similar contracts with any members of the company’s Supervisory Board in 2015. Furthermore, there were no transactions between the company or a company in the Evonik Group on the one hand and Supervisory Board members and related parties on the other.
In 2014 the Supervisory Board examined the efficiency of its work with the support of an external consultant. The measures adopted as a result of this review were either implemented in 2015 or adopted as an ongoing process. All of the measures implemented will increase the efficiency of the Supervisory Board and thus bring a further improvement in corporate governance at Evonik.

Audit of the annual financial statements

PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft (PwC), Düsseldorf (Germany) has audited the financial statements of Evonik Industries AG as of December 31, 2015 prepared in accordance with the German Commercial Code (HGB), the consolidated financial statements for the Evonik Group prepared using the International Financial Reporting Standards (IFRS), as permitted by Section 315a Paragraph 1 of the German Commercial Code (HGB), and the combined management report for Evonik Industries AG and the Evonik Group, and has endorsed them with an unqualified opinion pursuant to Section 322 of the German Commercial Code (HGB). The Supervisory Board awarded the contract for the audit of the annual financial statements of Evonik Industries AG and the consolidated financial statements of the Evonik Group in line with the resolution taken by the Shareholders’ Meeting on May 19, 2015. In accordance with Section 317 Paragraph 4 of the German Commercial Code (HGB), the annual audit includes an audit of the risk identification system. The audit established that the Executive Board has taken the steps required in compliance with Section 91 Paragraph 2 of the German Stock Corporation Act (AktG) to establish an appropriate risk identification system and that this system is suitable for timely identification of developments that could represent a threat to the continued existence of the company.
The Executive Board submitted the above documents, together with the auditor’s reports and the Executive Board’s proposal for the distribution of the profit to all members of the Supervisory Board to prepare for the meeting of the Supervisory Board on March 2, 2016. At its meeting on February 26, 2016 the Audit Committee discussed the annual financial statements, auditor’s reports and proposal for the distribution of the profit in the presence of the auditor to prepare for the subsequent examination and discussion of these documents by the full meeting of the Supervisory Board. Further, the Audit Committee requested the auditor to report on its collaboration with the internal audit department and other units involved in risk management, and on the effectiveness of the risk identification system. The auditor reported that the Executive Board had taken the steps required in compliance with Section 91 Paragraph 2 of the German Stock Corporation Act (AktG) to establish an appropriate risk identification system and that this system is suitable to ensure timely identification of developments that could represent a threat to the continued existence of the company.
The Supervisory Board conducted a thorough examination of the annual financial statements of Evonik Industries AG, the consolidated financial statements for the Evonik Group, the combined management report for fiscal 2015 and the Executive Board’s proposal for the distribution of the profit and—on the basis of explanations of these documents by the Executive Board—discussed them at its meeting on March 2, 2016. The auditor was also present at this meeting and reported on the main findings of the audit. He also answered questions from the Supervisory Board about the type and extent of the audit and the audit findings. The discussion included the audit of the risk identification system. The Supervisory Board shares the Audit Committee’s assessment of the effectiveness of this system.
In this way, the Supervisory Board convinced itself that the audit had been conducted properly by the auditor and that both the audit and the audit reports comply with the statutory requirements. Following its thorough examination of the annual financial statements of Evonik Industries AG, the consolidated annual financial statements and the combined management report (including the declaration on corporate management), the Supervisory Board declares that, based on the outcome of its examination, it has no objections to raise to the annual financial statements of Evonik Industries AG, the consolidated annual financial statements and the combined management report. In line with the recommendation made by the Audit Committee, the Supervisory Board has therefore accepted the audit findings. At its meeting on March 2, 2016, the Supervisory Board therefore endorsed the annual financial statements of Evonik Industries AG and the consolidated annual financial statements. The annual financial statements for 2015 are thus ratified. The Supervisory Board concurs with the Executive Board’s assessment of the situation of the company and the Group as expressed in the combined management report. The Supervisory Board considered the Executive Board’s proposal for the distribution of the profit, in particular with a view to the dividend policy, the impact on liquidity and its regard for shareholders’ interests. This also included an explanation by the Executive Board and a discussion with the auditor. The Supervisory Board then voted in favor of the proposal put forward by the Executive Board for the distribution of the profit.

Examination of the report by the Executive Board on relations with affiliated companies

The Executive Board has prepared a report on relations with affiliated companies in 2015. This was examined by the auditor, who issued the following unqualified opinion in accordance with Section 313 of the German Stock Corporation Act (AktG):

”In accordance with our professional audit and judgment we confirm that
1. the factual disclosures made in this report are correct
2. the company’s expenditures in connection with the legal transactions contained in the report were not unreasonably high.”

The Executive Board submitted the report on relations with affiliated companies and the associated auditor’s report to all members of the Supervisory Board to enable them to prepare for the Supervisory Board meeting on March 2, 2016.
The Audit Committee conducted a thorough examination of these documents at its meeting on February 26, 2016 to prepare for the examination and resolution by the full Supervisory Board. The members of the Executive Board provided detailed explanations of the report on relations to affiliated companies and answered questions on it. The auditor, who was present at this meeting, reported on the main findings of the audit of the report on relations with affiliated companies and answered questions raised by members of the Audit Committee. The members of the Audit Committee acknowledged the audit report and the audit opinion. The Audit Committee was able to convince itself of the orderly nature of the audit and audit report and, in particular, came to the conclusion that both the audit report and the audit conducted by the auditor comply with the statutory requirements. The Audit Committee recommended that the Supervisory Board should approve the results of the audit and, since it was of the opinion that there were no objections to the Executive Board’s declaration on the report on relations with affiliated companies, should adopt a corresponding resolution.
The Supervisory Board discussed the report on relations with affiliated companies at its meeting on March 2, 2016. At this meeting too, the members of the Executive Board provided detailed explanations of the report on relations with affiliated companies and answered questions on it. Moreover, the auditor was present at this meeting of the Supervisory Board and reported on the main findings of the audit of the report on relations with affiliated companies and answered questions from members of the Supervisory Board. On this basis, the Supervisory Board ascertained that under the circumstances known at the time they were undertaken, the company’s expenditures in connection with the transactions outlined in the report on relations with affiliated companies were not unreasonably high and compensation had been received for any disadvantages. In particular, it obtained an explanation of the principles used to determine the relevant activities and the remuneration therefor, especially in the case of transactions of material significance. The Audit Committee had discussed the report on relations with affiliated companies and gave the Supervisory Board a detailed overview of the outcome of its deliberations. The Supervisory Board was able to convince itself of the orderly nature of the audit and audit report and came to the conclusion, in particular, that both the audit report and the audit itself meet the statutory requirements.
In particular, it examined the completeness and correctness of the report on relations with affiliated companies. No grounds for objection were identified.
The Supervisory Board thus has no objection to raise to the final declaration made by the Executive Board in its report on relations with affiliated companies and concurs with the auditor’s findings.

Personnel issues relating to the Executive Board and Supervisory Board

At its meeting on June 25, 2015, the Supervisory Board first agreed to the early termination of the contract with Patrik Wohlhauser as a member of the Executive Board and his resignation as of June 30, 2015. The Supervisory Board then appointed Dr. Ralph Sven Kaufmann as a member of the Executive Board for three years from July 1, 2015. At its meeting in September, the Supervisory Board reappointed Thomas Wessel to the Executive Board as Chief Human Resources Officer for a further five years from September 1, 2016 until August 31, 2021.
There were some changes in the employee representatives on the Supervisory Board in 2015: Jürgen Nöding resigned from the Supervisory Board with effect from September 30, 2015. Martin Albers was appointed to the Supervisory Board effective October 1, 2015 through a decision taken by the District Court of Essen on October 2, 2015 in accordance with Section 104 of the German Stock Corporation Act (AktG). Günter Adam resigned from the Supervisory Board effective December 10, 2015. He was succeeded by Carmen Fuchs, who was elected to the Supervisory Board as a substitute member in accordance with the provisions of the German Codetermination Act (MitbestG) of 1976.
The Supervisory Board would like to thank those members who have left for their dedicated commitment to the good of the company and its workforce over the years.

Concluding remark

The Supervisory Board would also like to thank the Executive Board, Works Councils and Executive Staff Councils, and all employees of Evonik Industries AG and its affiliated companies, for their successful work over the past year.

The Supervisory Board adopted this report at its meeting on March 2, 2016, in accordance with Section 171 Paragraph 2 of the German Stock Corporation Act (AktG).

Essen, March 2, 2016

On behalf of the Supervisory Board
Dr. Werner Müller, Chairman

Joint report of the Executive Board and Supervisory Board of Evonik Industries AG on Corporate Governance

(Corporate Governance Report)

1. Principles of corporate governance and corporate structure

Corporate governance comprises all principles for the management and supervision of a company. As an expression of good and responsible corporate management, it is therefore a key element in Evonik’s management philosophy. The principles of corporate governance relate mainly to collaboration within the Executive Board and Supervisory Board, between these two boards and between the boards and the shareholders, especially at Shareholders’ Meetings. They also relate to the company’s relationship with other people and organizations with which it has business dealings.

Evonik is committed to the German Corporate Governance Code

Evonik Industries is a stock corporation established under German law. Its shares have been listed on the stock exchange since April 25, 2013.
Alongside compliance with the provisions of the relevant legislation, the basis for ensuring responsible management and supervision of Evonik with a view to a sustained increase in corporate value is our commitment to the German Corporate Governance Code, both in the version dated June 24, 2014, and the revised version of May 5, 2015. This code, which was adopted by the Government Commission on the German Corporate Governance Code, contains both key statutory provisions on the management and supervision of publicly listed German companies and recommendations and suggestions based on nationally and internationally recognized standards of responsible corporate governance.
The Executive Board and Supervisory Board of Evonik Industries AG are explicitly committed to responsible corporate governance and identify with the goals of the German Corporate Governance Code. According to the foreword, in the interest of good and proactive corporate governance, a company may deviate from the recommendations set out in the code if this is necessary to reflect enterprisespecific requirements.

2. Information on corporate management and corporate governance

2.1 Declaration of conformity with the German Corporate Governance Code pursuant to Section 161 of the German Stock Corporation Act (AktG)

Under Section 161 of the German Stock Corporation Act (AktG), the Executive Board and Supervisory Board of Evonik Industries AG are required to annually submit a declaration that the company has been, and is, in compliance with the recommendations of the Government Commission on the German Corporate Governance Code and which recommendations have not been or are not being applied, together with the associated reasons. The declaration has to be made permanently available to the public on the company’s website.

The Executive Board and Supervisory Board of Evonik Industries AG hereby submit the following declaration pursuant to Section 161 of the German Stock Corporation Act:

Since submitting its last declaration of conformity in March 2015, the company has fully complied with all recommendations of the German Corporate Governance Code in the versions dated June 24, 2014 and May 5, 2015, as published in the Federal Gazette on September 30, 2014 and June 12, 2015, respectively, and will continue to do so.

Further, nearly all suggestions contained in the aforementioned two versions of the German Corporate Governance Code were applied, with the following exceptions:

The suggestion set forth in Section 2.3.3 of the German Corporate Governance Code (the company should make it possible to follow the general meeting using modern communication media) was not and will not be applied. Instead, for organizational reasons, only the speeches by the Chairman of the Supervisory Board and the Chairman of the Executive Board will be transmitted. This procedure also correlates with widespread practice. Moreover, it cannot be excluded that a more extensive transmission could infringe the personal rights of shareholders, which are to be protected.

Further, Section 2.3.2 Sentence 2, second half-sentence of the German Corporate Governance Code (the representative appointed to exercise shareholders’ voting rights in accordance with instructions should also be reachable during the general meeting) was not and will not be applied. Application of this suggestion would only be appropriate in the event of transmission of the general shareholders’ meeting in full via modern communication media. Furthermore, the availability of the representatives nominated by the company via electronic media during the meeting as put forward by this suggestion involves technical uncertainties. These and the associated risks for the efficacy of resolutions are to be avoided.

Essen, December 2015

The Executive Board The Supervisory Board

2.2 Relevant information on corporate management practices

Corporate governance

The company complies with the recommendations and—with two exceptions—the suggestions set forth in the Ger-man Corporate Governance Code (detailed in section 2.1 above).

Compliance

Evonik understands compliance as all activities to ensure that the conduct of the company, its governance bodies and its employees respect all applicable mandatory standards such as legal provisions, statutory requirements and prohibitions, in-house directives and voluntary undertakings. The basis for this understanding and for compliance with these binding standards is set out in Evonik’s Code of Conduct.

Code of Conduct

Evonik’s binding Group-wide Code of Conduct contains the most important corporate values and principles and gov-erns the conduct of Evonik, its legal representatives and its employees both internally, in the treatment of one an-other, and externally in the treatment of the company’s shareholders and business partners, representatives of au-thorities and government bodies, and the general public. It requires all employees to comply with the applicable laws, regulations and other obligations. They are also required to observe ethical standards. All employees receive training in the Code of Conduct and systematic action is taken to deal with any breach of its rules. The Code of Conduct fosters a culture that ensures clear responsibility, mutual trust and respect, dependability and lawfulness.

House of Compliance

The compliance areas identified as being of specific relevance to our company are bundled in a House of Compliance. Following a refocusing, this still includes the traditional compliance issues: antitrust law, foreign trade law, fighting corruption, data protection and—as a publicly listed company—capital market compliance. Environment, safety, health and quality are bundled in a separate corporate division.
The role of the House of Compliance is to define minimum Group-wide standards for the compliance management systems for these areas and ensure that they are implemented. The process of forming a consensus, sharing experience and coordinating joint activities takes place in the Compliance Committee, which is composed of the heads of the respective units, who have independent responsibility for their areas, and the Head of Corporate Audit. The Compliance Committee is chaired by the Head of Compliance and Antitrust Law.

The compliance management system to be implemented by each area of compliance on the basis of the defined values and specific targets has to implement the tools shown in the next chart. Measures must be put in place to avoid compliance risks and systematic misconduct, identify cases of misconduct, apply appropriate sanctions, and correct process weaknesses.

Further information on Evonik’s compliance management system and the corresponding areas of focus and action taken in the year under review can be found in the Sustainability Report.1

Corporate Responsibility

Companies that strive for lasting success on the market need social acceptance as well as reliable and responsible corporate governance. Together with Evonik’s Code of Conduct, the Global Social Policy (GSP) and our Environment, Safety and Health (ESH) Values contribute to responsible corporate management.In its Global Social Policy, Evonik outlines its principles of social responsibility for its employees and requires them to comply with recognized international standards of conduct such as the International Labor Standards of the International Labour Organisation (ILO) and the Guidelines for Multinational Enterprises issued by the Organisation for Economic Cooperation and Development (OECD). Evonik does not tolerate any conduct that violates the OECD Guidelines for Multinational Enterprises. The governments of the OECD member states and other countries have signed these as a guide to multinational enterprises on how to meet their obligation to ensure responsible corporate conduct. The Global Social Policy states that the company’s success and reputation are based fundamentally on the professionalism and commitment of all employees.
By joining the United Nations’ Global Compact (UN Global Compact), Evonik also gave an undertaking that, within its sphere of influence, it would respect and promote labor rights and human rights, avoid discrimination, protect people and the environment and fight against corruption.
As a signatory to the chemical industry’s Responsible Care Global Charter, we have also given an undertaking that we will continuously strive to improve our performance in health protection, safety, environmental protection and product stewardship. Evonik has signed the Code of Responsible Conduct for Business, which sets measurable standards that have to be firmly anchored in participating companies. These include fair competition, social partnership, the merit principle and sustainability. We also expect our suppliers to share these principles and accept their responsibility with regard to their own employees and business partners, society and the environment. This is set out in our Supplier Code of Conduct.
Further, as a responsible company we have given a commitment to report regularly on our climate performance as part of the world’s largest climate initiative, the Carbon Disclosure Project (CDP). This covers internal organizational processes and accountability, as well as transparent and challenging targets.
Evonik’s sustainability management complies with the provisions of the German Sustainability Code.

The main documents containing the guidelines on conduct in the Evonik Group can be found on the following internet sites:

Transparency

Evonik regards timely and equal public disclosure of information as a key basis of good corporate governance. The Investor Relations section of the company’s website provides extensive information in German and English.
This includes our financial calendar, which provides a convenient overview of important dates.2
Evonik’s business performance is outlined principally in our quarterly reports, annual report and investor relations presentations. These are supplemented by information on Evonik’s shares, the terms of bond issues and an overview of our credit ratings.3
Mandatory publications such as adhoc announcements, voting rights announcements and information on directors’ dealings are also published immediately on our Investor Relations site.4
The offering also includes information on corporate strategy, and Evonik’s corporate structure and organization.
In addition, the Investor Relations site provides information on Evonik’s approach to corporate responsibility, and how the management and supervision of the company (corporate governance) are aligned to responsible and sustained value creation.5

2.3 Work of the Executive Board and Supervisory Board

The German Stock Corporation Act (AktG) forms the legal basis for the incorporation of Evonik Industries AG. Further details are set forth in the company’s Articles of Incorporation and the provisions of the German Corporate Governance Code (see section 2.1 above).

Executive Board

The Executive Board of Evonik Industries AG is responsible for running the company in the company’s interests with a view to sustained value creation, taking into account the interests of the shareholders, employees and other stakeholders. It works together trustfully with the other corporate governance bodies for the good of the company.
The Executive Board defines and updates the company’s business objectives, its basic strategic focus, business policy and corporate structure. It is responsible for complying with statutory provisions and internal directives, and exerts its influence to ensure that they are observed by Group companies (compliance). Its tasks also include ensuring appropriate risk management and risk controlling within the company.
When making appointments to management functions in the company, the Executive Board applies the principles of diversity. In this it strives, in particular, to ensure adequate representation of women.
The Executive Board currently has five members. One member is appointed to chair the Executive Board. With the approval of the Supervisory Board, the Executive Board has adopted Rules of Procedure and a plan allocating areas of responsibility. The Chairman coordinates the work of the Executive Board, provides information for the Supervisory Board and maintains regular contact with the Chairman of the Supervisory Board. The members of the Executive Board are jointly responsible for the overall management of the company. They work together constructively and keep each other informed of the main activities and developments in their areas of responsibility. The Executive Board endeavors to take decisions unanimously, but may also adopt resolutions by majority vote. If an equal number of votes is cast, the Chairman has the casting vote.Ensuring that the Supervisory Board receives sufficient information is the joint responsibility of the Executive Board and Supervisory Board. The Executive Board provides the Supervisory Board with the reports to be prepared in accordance with Section 90 of the German Stock Corporation Act (AktG) and the Rules of Procedure of the Supervisory Board. It gives the Supervisory Board timely, regular and full information on all matters that are relevant to the company and Group relating to strategy, planning, business development, risks, risk management and compliance. It outlines deviations between the planned and actual business performance and targets and the reasons therefor.
Further, the Executive Board submits timely reports to the Supervisory Board on business matters and actions for which it is required by the Articles of Incorporation or the Supervisory Board’s Rules of Procedure to obtain the approval of the Supervisory Board, including the annual budget for the Group. In addition, the Supervisory Board can make further business activities and measures dependent on its consent on a case-by-case basis.
Members of the Executive Board are required to act in the interests of the company. They may not pursue personal interests in their decisions, nor may they utilize business opportunities available to the company for themselves.The members of the Executive Board are subject to a comprehensive non-compete obligation during their term of office. They may only assume additional posts, especially seats on the supervisory boards of companies that are not affiliated companies of Evonik Industries AG, with the consent of the Supervisory Board. Where such posts are assumed with the consent of the Supervisory Board, the Executive Board member shall accept the post as a personal office and shall ensure strict confidentiality and strict separation from his/her activities as a member of the company’s Executive Board. Every member of the Executive Board is required to disclose any conflict of interests to the Chairman of the Supervisory Board without delay and to inform the other members of the Executive Board.
In fiscal 2015 there were no conflicts of interest relating to members of the Executive Board of Evonik Industries AG.
All transactions between the company or companies in the Evonik Group on the one hand and Executive Board members and related parties on the other must take place on terms that are customary in the sector. No such transactions took place in the reporting period.The composition of the Executive Board and membership of supervisory boards and similar governance bodies are outlined on page 216.

Supervisory Board

The Supervisory Board advises and supervises the Executive Board. It appoints the members of the Executive Board and names one member as the Chairperson of the Executive Board. It also decides on the remuneration of the members of the Executive Board. The Executive Board is required to obtain the approval of the Supervisory Board on decisions of fundamental importance, which are defined in a separate list. These include:

  • fundamental changes to the structure of the company and the Group
  • setting the annual budget for the Group
  • investments exceeding € 25 million
  • the assumption of loans and the issuance of bonds exceeding € 300 million with a maturity of more than one year.

The Supervisory Board examines the company’s annual financial statements, the Executive Board’s proposal for the distribution of the profit, the consolidated financial statements for the Group and the combined management report. The Supervisory Board submits a written report on the outcome of the audit to the Shareholders’ Meeting. The Supervisory Board is subject to the German Codetermination Act (MitbestG) 1976. In accordance with these statutory provisions, the Supervisory Board comprises twenty members, ten representatives of the shareholders and ten representatives of the workforce. The representatives of the shareholders are elected by the Shareholders’ Meeting on the basis of nominations put forward by the Supervisory Board as prepared by the Nomination Committee. The representatives of the employees are elected by the workforce and comprise seven employee representatives and three representatives of the industrial union. The composition of the Supervisory Board should ensure that overall its members have the knowledge, ability and professional experience required to perform their duties. The members of the Supervisory Board may not undertake any duties as officers or advisors to the company’s major competitors. The Supervisory Board should not include more than two former members of the Executive Board. A former member of the Executive Board has been elected to the Supervisory Board. His term of office on the Executive Board ended more than two years before the date of his election to the Supervisory Board. All members of the Supervisory Board shall ensure that they have sufficient time to perform their tasks as a member of the Supervisory Board. Members of the Supervisory Board who are also members of the Executive Board of a publicly listed stock corporation should not hold more than three seats on the Supervisory Boards of listed companies outside their group of companies or Supervisory Boards of companies where comparable demands are made on them. Members of the Supervisory Board must act in the interests of the company and not pursue personal interests in their decisions, nor may they utilize business opportunities available to the company for themselves. Members must disclose conflicts of interest to the Supervisory Board. Any member of the Supervisory Board who discloses a conflict of interest is excluded from resolutions at the meetings of the Supervisory Board dealing with matters relating to the conflict of interest. In its report to the Shareholders’ Meeting the Supervisory Board discloses any conflicts of interest that have arisen and how they have been dealt with. Material conflicts of interest relating to a member of the Supervisory Board that are not by nature temporary should lead to termination of his/her term of office. Consultancy, service and similar contracts between a member of the Supervisory Board and the company must be approved by the Supervisory Board. There were no contracts of this type in 2015, nor were there any conflicts of interest relating to members of the Supervisory Board of Evonik Industries AG. The Supervisory Board has adopted Rules of Procedure, which also govern the formation and tasks of the committees. At least two meetings of the Supervisory Board are held in each calendar half-year. In addition, meetings may be convened as required and the Supervisory Board may adopt resolutions outside meetings. If an equal number of votes is cast when taking a decision, and a second vote does not alter this situation, the Chairman of the Supervisory Board has the casting vote.

The Supervisory Board has set objectives for its composition, which are taken into account in the proposals put to the Shareholders’ Meeting with regard to the regular election of members of the Supervisory Board and the subsequent election of a member of the Supervisory Board:

  • At least two members should have sound knowledge and experience of regions which are of material importance for the Evonik Group’s business, either through their background or through professional experience gained in an international context.
  • At least two members should have special knowledge and experience of business administration and of finance/accounting or auditing.
  • At least two members of the Supervisory Board should have specialist knowledge and experience of the area of specialty chemicals.
  • At least two members should have experience of managing or supervising a major company.
  • The Supervisory Board should comprise at least 30 percent women and at least 30 percent men.6
  • The members of the Supervisory Board should not hold consulting or governance positions with customers, suppliers, creditors or other business partners that could lead to a conflict of interests. Deviations from this rule are permitted in legitimate individual cases.
  • Members of the Supervisory Board should not normally be over 70 when they are elected.
  • Members of the Supervisory Board should not normally hold office for more than three full terms within the meaning of Section 102, Paragraph 1 of the German Stock Corporation Act (AktG), i.e. normally 15 years. It is possible to deviate from this rule, in particular in the case of a member of the Supervisory Board who directly or indirectly holds at least 25 percent of the company’s shares or belongs to the governance body of a shareholder that directly or indirectly holds at least 25 percent of the company’s shares.
  • At least five members of the Supervisory Board should be independent within the meaning of Section 5.4.2 of the German Corporate Governance Code.

These targets were last revised in September 2015. The present composition of the Supervisory Board satisfies these objectives, apart from the fact that it currently comprises 20 percent women and consequently does not yet meet the statutory requirement of 30 percent women specified for future elections and appointments (see section 2.4 below). The Supervisory Board and its Nomination Committee will continue to monitor observance of these targets in the future.

In the past fiscal year, the Supervisory Board had the following committees:
The Executive Committee comprises the Chairman of the Supervisory Board, his deputy and four further members. It undertakes the regular business of the Supervisory Board and advises the Executive Board on fundamental issues relating to the ongoing strategic development of the company. Insofar as is permitted by law, it takes decisions in place of the full Supervisory Board on matters which cannot be deferred until the necessary resolution is passed by the full Supervisory Board without detrimental effects for the company. It also takes decisions on the use of authorized capital. It prepares meetings of the Supervisory Board and, in particular, personnel decisions and resolutions on the remuneration of the Executive Board, including the main contractual elements and the overall remuneration of individual members of the Executive Board. It is also responsible for concluding, amending and terminating employment contracts with the members of the Executive Board, where this does not involve altering or setting remuneration, and represents the company in other transactions of a legal nature with present and former members of the Executive Board and certain related parties.
The Audit Committee has six members. The members of the Audit Committee should have specialist knowledge and experience in the application of accounting standards and internal control systems. The Supervisory Board has appointed the Chairman of the Audit Committee as an independent financial expert in accordance with Section 100 Paragraph 5 of the German Stock Corporation Act (AktG). He also meets the more extensive requirements of the German Corporate Governance Code. Acting on behalf of the Supervisory Board, the Audit Committee’s principal tasks comprise supervising the accounting process, the efficacy of the internal control system, the risk management system and the internal audit system, the auditing of the financial statements, especially the independence of the auditor, any additional services provided by the auditor, compliance and the related decisions. It prepares the Supervisory Board’s proposal to the Shareholders’ Meeting on the choice of auditor, and takes decisions on the appoint-ment of the auditor, the focal points of the audit and the agreement on audit fees. Further, it authorizes the Chairman of the Supervisory Board to issue the contract to the auditor.
The Audit Committee prepares the decision of the Supervisory Board on approval of the annual financial statements of Evonik Industries AG and the consolidated financial statements for the Group. For this purpose, it is required to conduct a preliminary examination of the annual financial statements of Evonik Industries AG, the consolidated financial statements for the Group, the management report for the Group and the Executive Board’s proposal for the distribution of the profit. The auditor of the financial statements must attend these meetings of the Audit Committee.
The Audit Committee reviews the interim reports, especially the halfyearly report, discusses the audit review report with the auditor—if an auditor is engaged to conduct a review—and decides whether to raise any objections. Further, it examines issues relating to corporate governance and reports to the Supervisory Board at least once a year on the status, effectiveness and scope to implement any improvements to corporate governance, and on new requirements and new developments in this field.
The Finance and Investment Committee has eight members. Its work covers aspects of corporate finance and investment planning. For example, it takes decisions on behalf of the Supervisory Board involving approval for the establishment, acquisition and divestment of businesses, capital measures at other Group companies and real estate transactions with a value of more than € 25 million and up to € 50 million. If the value of such measures or transactions exceeds the above limit, it prepares for a resolution by the Supervisory Board. The Finance and Investment Committee also takes decisions on the assumption of guarantees and sureties for credits exceeding € 50 million and on investments in companies of more than € 100 million.
The Nomination Committee comprises three Supervisory Board members elected as representatives of the shareholders. The task of the Nomination Committee is to prepare a proposal for the Supervisory Board on the candidates to be nominated to the Shareholders’ Meeting for election to the Supervisory Board.
Finally, there is a Mediation Committee established in accordance with Section 27 Paragraph 3 of the German Codetermination Act 1976. This mandatory committee is composed of the Chairman and Deputy Chairman of the Supervisory Board, one shareholder representative and one employee representative. This committee puts forward proposals to the Supervisory Board on the appointment of members of the Executive Board if the necessary twothirds majority of the Supervisory Board members is not achieved in the first vote.
It is only convened when necessary. All other committees meet regularly and may also hold additional meetings on specific issues in line with their responsibilities as set out in the Rules of Procedure for the Supervisory Board.
Further details of the work of the Supervisory Board and its committees in the past fiscal year can be found in the report of the Supervisory Board on page 48. The report of the Supervisory Board also outlines the composition of the various committees and the meetings attended by members the Supervisory Board. For details of the composition of the Supervisory Board and membership of other supervisory and governance bodies see pages 214 and 215.
The Supervisory Board regularly examines the efficiency of its work. Further details can be found in the report of the Supervisory Board on page 53.

Directors' Dealings 

Under Section 15a Paragraph 1 of the German Securities Trading Act (WpHG), members of the Executive Board and Supervisory Board and related parties (including spouses, registered same-sex partners and dependent children) are required to notify Evonik Industries AG and the Federal Financial Supervisory Authority (BaFin) of any transactions in shares in Evonik Industries AG or related financial instruments, if the total value of such transactions by a member of the Executive Board or Supervisory Board or a related party is € 5,000 or above in a calendar year. The transactions notified are disclosed on the website of Evonik Industries AG.
Total holdings of shares in Evonik Industries AG and related financial instruments by members of the Executive Board and Supervisory Board on the reporting date amounted to less than 1 percent of the issued shares.

2.4 Information on statutory diversity requirements 

The German law on equal participation of women and men in management positions in the private and public sectors came into force on May 1, 2015. The regulations are additional to the diversity requirements set forth in the German Corporate Governance Code, which Evonik has satisfied up to now. The new requirements have been considered by the relevant bodies at Evonik at various levels and the necessary resolutions have been adopted.
Since Evonik Industries AG is a publicly listed company and is therefore also subject to German codetermination legislation, its Supervisory Board is required to meet a fixed gender ratio, which is applicable for new appointments from January 1, 2016. The regulation specifies that the Supervisory Board should comprise at least 30 percent women and at least 30 percent men. As of December 31, 2015, four members of the Supervisory Board of Evonik Industries AG were women, two representing the shareholders and two representing the workforce. Thus, on the reporting date 20 percent of Supervisory Board members were women.
Evonik will take the new statutory regulations into account for new appointments from January 1, 2016 in order to meet the requirements. In light of this, the Supervisory Board has revised the targets for its composition in accordance with Section 5.4.1 Paragraph 2 of the German Corporate Governance Code to take account of this aspect of diversity (see also the section headed “Supervisory Board” above).
Further, the legislation on equal participation of women and men in management positions in the private and public sectors requires that targets be set for the percentage of women on the Executive Board and at the two management levels below the Executive Board, together with deadlines for achieving them. The first deadline for achieving these targets must be no later than June 30, 2017.
In view of this, the Supervisory Board has set a target of at least 20 percent female members of the Executive Board to be achieved by June 30, 2017. That would maintain the present status quo as no new appointments are expected to be made before then.
Further, the Executive Board of Evonik Industries AG has a target of 8.0 percent female managers at the first management level below the Executive Board and 18.8 percent women at the second management level. Both targets are to be met by December 31, 2016. In each case, the targets correspond to the present status quo and take account of succession planning for these two management levels in the period up to the deadline. 

3. Shareholders and the Shareholders’ Meeting

The shareholders exercise their rights at the Shareholders’ Meeting. The Shareholders’ Meeting elects the auditor and the shareholder representatives on the Supervisory Board and resolves on the ratification of the actions of members of the Executive Board and Supervisory Board, the distribution of the profit, capital transactions and amendments to the Articles of Incorporation. The shares are registered shares. Shareholders who are entered in the register of shareholders are eligible to attend the Shareholders’ Meeting and exercise their voting rights, providing they register in good time to attend the meeting. The shareholders may exercise their voting rights at the Shareholders’ Meeting in person, through a proxy of their choice or through a proxy appointed by the company. Each share entitles the holder to one vote.

4. Information on accounting and auditing of the financial statements

Evonik Industries AG prepares its annual financial statements in accordance with the German Commercial Code (HGB) and the German Stock Corporation Act (AktG). The consolidated financial statements are prepared on the basis of the International Financial Reporting Standards (IFRS), as adopted for use in the EU. In addition, the applicable statutory provisions of Section 315a Paragraph 1 of the German Commercial Code (HGB) are taken into account.

As proposed by the Supervisory Board, the Annual Shareholders’ Meeting on May 19, 2015 elected PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft (PwC), Düsseldorf, as auditor for the annual financial statements of Evonik Industries AG and the consolidated financial statements of the Evonik Group and the combined management report for fiscal 2015. The Supervisory Board previously ascertained the independence of the auditor. The auditors that sign the audit of the annual financial statements of Evonik Industries AG and the consolidated financial statements of the Evonik Group are Mr. Lutz Granderath (since fiscal 2012) and Ms. Antje Schlotter (since fiscal 2014). In addition to the accounting, the audit covered the system to identify emerging risks and the accounting-related internal control system. Further, PwC conducted a review of the interim financial statements for the first half of 2015. This was also based on the resolution adopted on May 19, 2015.

5. Risk management and internal control system (ICS)

Risk management in the Evonik Group, including the ICS relating to the accounting process, is described in the opportunity and risk report, which forms part of the management report. Details can be found on page 113.

6. Remuneration

The principles of the remuneration system and the remuneration of the members of the Executive Board and the Supervisory Board are outlined in the remuneration report, which forms part of the management report. Details can be found on page 125.

1 Sustainability Report 2014 (the Sustainability Report 2015 will be published in May 2016).
2 www.evonik.com/investor-relations.
3 www.evonik.com/investor-relations, News & Reports, Share and Bonds & Ratings. For details of the shareholder structure see „Evonik on the capital markets“ on p. 67 of this annual report.
4 www.evonik.com/investor-relations, News & Reports/Ad-hoc announcements, Share/Voting rights, and Corporate Governance/Director’s Dealings.
5 www.evonik.com/investor-relations, Sustainable Investments (SRI) and Corporate Governance.
6 Applicable for new elections and the appointment of substitute members for one or more members of the Supervisory Board from January 1, 2016.

 

Evonik on the capital market

  • Pleasing share price performance in 2015
  • Higher free float
  • Considerable dividend increase

Pleasing share price performance

Shares in Evonik started 2015 at €27.10 and the share price rose considerably in the early part of the year to over €36 per share in mid-April. The main reasons for this pleasing price performance were our strong operating performance and rising earnings contributions from our growth investments and efficiency enhancement programs. On August 10, following the second upward revision of our guidance for 2015, our share price rose to an all-time high of €37.73. Amid mounting concern about China’s economic development, which increased the volatility of the financial markets, from mid-August Evonik’s share price lost ground, along with the market as a whole. Our shares recovered slightly in the final weeks of 2015 and closed at €30.62 on December 30, 2015. That was nearly 13 percent higher than at the start of the year. Excluding the dividend payment of €1.00 in May, the increase was 16 percent. Shares in Evonik therefore performed far better than direct competitors in the chemical sector: the DJ STOXX 600 ChemicalsSM only gained 5 percent over the year. The broader MDAX index rose by around 23 percent in the same period.

At the Annual Shareholders’ Meeting on May 19, 2015, Dr. Klaus Engel, Chairman of the Executive Board, reported on the previous fiscal year, and private and institutional investors had an opportunity for direct discussion with members of Evonik’s management.

Higher free float

Our biggest shareholder in fiscal 2015 was still RAG-Stiftung, which holds 67.9 percent of our capital stock. Our second largest shareholder—CVC Capital Partners—sold four blocks of shares totaling around 14.8 percent of the capital stock in 2015. At year-end, its shareholding was therefore around 4.1 percent. The free float as defined by Deutsche Börse therefore rose to 32.1 percent. The regional distribution of the free float showed that—alongside the UK—most shareholders were in the USA, Asia and Germany.

Far higher trading volume

The average daily trading volume in our shares increased considerably thanks to the higher free float and was around 648,000 shares (€ 20.9 million) in 2015, compared with 185,000 shares (€ 5.1 million) in 2014. Market capitalization was €14.27 billion on December 30, 2015. At the end of 2015, Evonik ranked twelfth in the MDAX on the basis of market capitalization weighted by free float and sixth on the basis of trading volume, positioning it clearly in the upper section of the index.

Considerable dividend increase for 2015

At the Annual Shareholders’ Meeting on May 18, 2016, the Executive Board and Supervisory Board will be proposing a dividend of €1.15 per share for 2015. That would be a rise of 15 percent from the previous year’s dividend of €1.00 per share.
This increase continues our attractive dividend policy, which aims for dividend continuity and a payout ratio of around 40 percent of adjusted net income. At the same time, the high operating cash flow in fiscal 2015 allows a considerable increase in the dividend without impairing the Group’s ambitious growth targets. Evonik has increased the dividend by an average of 9 percent per year over the past six years, positioning it among the chemical companies that pay the highest dividends.

Dialogue with investors intensified

We extended our intensive dialogue with the capital markets in 2015. The Executive Board and the Investor Relations team outlined Evonik’s business and growth strategy in detail to equity and bond investors at 17 roadshows and 17 conferences. In addition, they discussed our business drivers and their present development. Most of the roadshows and conferences were held in Europe, for example in London, Frankfurt, Amsterdam, Luxembourg, Paris, Dublin, Edinburgh, Oslo, Copenhagen, Zurich, Munich and Milan. The main financial centers in North America—New York, Boston, Chicago and Toronto—were also visited.
Alongside conventional capital market communication, we offer investors the opportunity to participate in field trips to our production sites to gain an insight into our products and how they are produced and marketed. Last year, the number of field trips was doubled to ten, compared with five in 2014, and included trips to our sites in Shanghai, Singapore and Antwerp as well as several sites in Germany, for example Marl, Krefeld, Essen and Herne. Overall, we registered around 700 contacts with investors during the year.

Evonik organized a field trip to its Animal Nutrition facilities in Antwerp on October 1, 2015.

The field trip gave international investors an insight into the Animal Nutrition business.

CFO Ute Wolf talking to investors and analysts.

Animal Nutrition field trip

A highlight of our capital market communication in 2015 was the Animal Nutrition field trip on October 1. Nearly 40 international analysts and investors visited our production site in Antwerp (Belgium). The focus was the Nutrition & Care segment’s Animal Nutrition Business Line. The Executive Board started by outlining the company’s present corporate strategy and progress with its growth strategy. As well as giving analysts and investors extensive information on all aspects of the animal nutrition business, the management then explained that market conditions remain attractive thanks to the nutrition, globalization and, above all, sustainability megatrends. On the same day, Evonik announced plans to build a further methionine plant in Singapore, which is scheduled to come on stream in 2019.

Sound investment grade ratings and a successful bond issue

Evonik still has sound investment grade ratings: BBB+ (outlook: stable) from Standard and Poor’s and Baa2 (outlook: positive) from Moody’s, so we have achieved one of the main goals of our financial strategy.
In January 2015 Evonik Industries AG issued a new €750 million bond with a tenor of eight years. The annual coupon of 1.0 percent is the lowest ever on a bond issued by Evonik. The bond is being used to finance ongoing business and the investment program.

Further increase in price targets

The number of analysts that cover Evonik increased further in 2015—from 22 to 23. Thirteen of them rated the share as a buy, two as a sell, and eight issued neutral recommendations. Their price targets ranged from €29 to €42. The median was €38. In the previous year, the price targets were between €23 and €34 with a median of €30.

Inclusion in another sustainability index

Evonik is included in well-known sustainability stock indices. In 2014 it gained a place in the FTSE4Good Global and STOXX Global ESG Leaders indices. Since December 2015 we have also been included in the Euronext Vigeo Eurozone 120 index.

 

Contact: Phone +49 201 177-3146 | investor-relations@evonik.com