Here we are! Interim report January 1 to September 30, 2014

3rd quarter 2014: Successful in a difficult environment

Further volume growth; overall prices now only slightly lower than in the previous year
Adjusted EBITDA far better than in previous quarters and now only down slightly year-on-year
Adjusted earnings per share already higher than in previous year
Outlook for 2014 confirmed

Key data for the Evonik Group

	3rd quarter		1st nine months
in € million	2014	2013	2014	2013
Sales	3,243	3,198	9,691	9,619
Adjusted EBITDAa	501	517	1,425	1,620
Adjusted EBITDA margin in %	15.4	16.2	14.7	16.8
Adjusted EBITb	350	372	977	1,188
EBIT	296	114	833	864
Income before financial result and income taxes, continuing operations	291	113	820	850
Net income	111	1,473	416	1,959
Earnings per share in €	0.24	3.16	0.89	4.20
Adjusted earnings per share in €	0.46	0.44	1.20	1.49
Cash flow from operating activities, continuing operations	312	667	591	835
Capital expenditures	275	306	753	725
Net financial assets as on the balance sheet as of September 30	–	–	416	592
Employees as of September 30	–	–	33,472	33,612

Prior-year figures restated.

a Earnings before interest, taxes, depreciation, and amortization, after adjustments.

b Earnings before interest and taxes, after adjustments.

Due to rounding, some figures in this report may not add up exactly to the totals stated.

Evonik in focus Q3 2014	3
Evonik on the capital markets	4
Profile of Evonik	6

Quarterly financial report	7
Interim management report Interim financial statements	8 26
Financial calendar Credits	53 53

Evonik in focus Q3 2014

Further details of the new Group structure

Plans for the new Group structure are making good progress. The Executive Board will concentrate on Evonik's strategic development within a management holding structure. The three chemical segments will be given greater entrepreneurial freedom to allow differentiated management of their businesses.

They will operate on the market as separate legal entities with the following names: Evonik Nutrition & Care GmbH (formerly Consumer, Health & Nutrition), Evonik Resource Efficiency GmbH (formerly Resource Efficiency), Evonik Performance Materials GmbH (formerly Specialty Materials). The new companies will start operating on July 1, 2015. To prepare for this, the new management boards will start work on January 1, 2015. Site Services will be part of Evonik Technology & Infrastructure GmbH and the strategic innovation unit Creavis will operate as Evonik Creavis GmbH in the future.

Evonik expects the new management model to provide a far better structural basis for profitable growth of the various business operations.

Expansion of specialty silica capacity

Evonik is increasing its production capacity for specialty silicas at DSL Japan Co., Ltd. in Ako (Japan), a joint venture in which Evonik holds a 51 percent stake. The remaining 49 percent is held by Shionogi & Co., Ltd. Investment will be in the single-digit million euro range and the new capacity is scheduled to become operational in 2015.

The Inorganic Materials Business Unit's SIPERNAT brand of high-quality specialty silicas is used in the food, cosmetics and pharmaceutical sectors, for example in the production of tablets. Evonik aims to step up its supply to these attractive markets.

STEAG divested fully

Evonik divested its entire remaining stake in the energy company STEAG GmbH to the Rhine-Ruhr consortium of municipal utilities on September 5, 2014. The 49 percent stake was sold for €569 million, nearly four years after divestment of the first tranche of 51 percent. The transaction comprised the exercise by the consortium of a purchase option for the 49 percent stake agreed when the first tranche was sold. A binding purchase price mechanism for the second tranche was also agreed at that time.

Evonik invests in methionine for dairy cows

Evonik has begun construction of a new plant to produce Mepron in Mobile (Alabama, USA). Mepron is a formulation of the amino acid methionine developed by Evonik specifically for dairy cow nutrition. A special coating protects the amino acid from undesired degradation in the rumen. The plant, which will be operated by the Health & Nutrition Business Unit, is scheduled to come on stream in the second half of 2015. Investment will be in the lower double-digit million euro range. In this way, Evonik is continuing its strategy of offering amino acids for further high-growth applications alongside MetAMINO, which is mainly used in poultry and pig feed.

Evonik on the capital markets

Share price performance

Evonik's share price developed positively at the start of the third quarter, rising from €29.05 at the end of the previous quarter to €29.98 on July 3, the highest price between July and September. With market sentiment dominated by uncertainty and geopolitical crises, the price then dropped in parallel with the MDAX and DJ STOXX 600 ChemicalsSM to a low of €26.50 in mid-August. This period included the publication of our second quarter results on July 31. The market had expected both the earnings trend for the quarter and specification of the outlook for the full year.

In the remainder of the quarter, sentiment on the capital markets was held back by international conflicts, compounded by growing skepticism about the future development of the global economy and the euro zone in particular. Following a slight recovery up to the end of August, Evonik's share price dropped to €26.42 on September 16, the lowest point in the quarter, with trading volumes well below average. This was followed by a clear rebound, supported by expectations of a continued solid business performance and positive analyst ratings.

As a result, the share ended the quarter at €27.44, about 4 percent up from its lowest point and around 5.5 percent lower than at the end of the previous quarter. The MDAX dropped around 4.9 percent in the same period, while the DJ STOXX 600 ChemicalsSM slipped 2.1 percent. Average daily trading volume was around 155,000 Evonik shares (€4.3 million) in the third quarter.

Key data

	Jul. 1 – Sept. 30, 2014
Highest share pricea in €	29.98
Lowest share pricea in €	26.42
Average pricea in €	27.76
Closing pricea on September 30, 2014 in €	27.44
No. of shares	466,000,000
Market capitalizationa on September 30, 2014 in € billion	12.79
Average daily trading volumea No. of shares	155,446

Basic data on Evonik stock

WKN	EVNK01
ISIN		DE000EVNK013
Ticker symbol		EVK
Reuters (Xetra trading)	EVKn.DE
Bloomberg (Xetra trading)		EVK GY
First trading day		April 25, 2013
Trading segments		Regulated market (Prime Standard), Frankfurt am Main
Indices		MDAX, DJ STOXX Europe 600, FTSE4Good Global

^a Xetra trading.

Second Capital Markets Day was a success

We continued our intensive dialogue with the capital markets in the third quarter. Overall, we registered more than 100 contacts to investors during roadshows, conferences and field trips.

The Capital Markets Day at the start of October was a highlight of our investor relations work. More than 30 analysts and investors attended the event at Evonik's site in Hanau (Germany). Dr. Klaus Engel, Chairman of the Executive Board, and CFO Ute Wolf presented the latest corporate and financial strategy and talked about the new Group structure. Their main message was that Evonik is positioning itself to step up the pace of growth. The company will be continuing its strict financial discipline. The aspiration level for the mid-term goals—sales of around €18 billion and adjusted EBITDA of over €3 billion by 2018—was confirmed. The second focus of the Capital Markets Day was the Resource Efficiency segment. Examples of its environment-friendly and energyefficient system solutions were highlighted through presentations by the Silica, Oil Additives and Coating Additives Business Lines.

Further increase in coverage of Evonik stock

A further analyst initiated coverage of Evonik in the third quarter. The share is now covered by 21 analysts. Eleven of them rated Evonik shares as a buy, two as a sell, and eight issued neutral recommendations. Their price targets ranged from €23 to €34. The median at the end of the quarter was still €31.

Evonik now included in the FTSE4Good

In September 2014 Evonik was included in the FTSE4Good and FTSE4Good Global responsibilityoriented investment indices. In recent months Evonik has also successfully positioned itself with leading sustainability rating agencies such as Oekom and Sustainalytics. Since the stock exchange

listing, an increasing number of financial investors and analysts who base investment decisions on the sustainability performance of companies as well as their financial performance have had Evonik on their radar screens. In the third quarter, we therefore extended the information for this target group on our investor relations website.

Shareholder structure unchanged

Our largest shareholders in the reporting period were still RAG-Stiftung, with a shareholding of 67.9 percent of the capital stock, and funds advised by CVC Capital Partners, with an indirect shareholding of 17.9 percent. The free float was 14.2 percent.

a The shares in Evonik are held by Gabriel Acquisitions GmbH, an indirect subsidiary of funds advised by CVC Capital Partners.

Investor Relations

For further information on our investor relations activities, visit our website at www.evonik.com/ investor-relations. The financial calendar on our website provides a convenient overview of important dates. The website also contains key facts and figures, especially financial and segment data and details of the company's structure and organization.

This is supplemented by information on Evonik shares, the terms of bond issues and an overview of our credit ratings. Current presentations, analysts' estimates and reports on our business performance are also available.

Profile of Evonik

Evonik is one of the world's leading specialty chemicals companies. The central elements of our strategy for sustained value creation are profitable growth, efficiency and values. Around 80 percent of sales come from market-leading positions, which we are systematically expanding. We concentrate on high-growth megatrends, especially health, nutrition, resource efficiency and globalization. As part of our ambitious growth strategy, we are also stepping up our presence in emerging markets, especially in Asia. Important competitive advantages come from our integrated technology platforms, which we continuously refine. Our operations are grouped in three segments, each of which has two business units.

Consumer, Health & Nutrition

This segment produces specialty chemicals, principally for use in consumer goods for daily needs, and in animal nutrition and healthcare products. It comprises the Consumer Specialties and Health & Nutrition Business Units.

Resource Efficiency

This segment provides environment-friendly and energy-efficient system solutions. It is comprised of the Inorganic Materials and Coatings & Additives Business Units.

Specialty Materials

The heart of the Specialty Materials segment is the production of polymer materials and intermediates, mainly for the rubber and plastics industries. It consists of the Performance Polymers and Advanced Intermediates Business Units.

Services

This segment principally comprises site services and business services. It mainly provides services for Evonik's specialty chemicals segments and Corporate Center, but also serves third parties.

Quarterly financial report 3rd Quarter 2014

Interim management report	8
1. Business conditions and performance	8
1.1 Economic background	8
1.2 Business performance	9
1.3 Segment performance	14
2. Earnings, financial and
asset position	20
2.1 Earnings position	20
2.2 Financial and asset position	21
3. Research & development	23
4. Employees	24
5. Opportunity and risk report	24
6. Events after the reporting date	24
7. Expected development	25

Interim financial statements
Income statement	26
Statement of comprehensive income	27
Balance sheet
Statement of changes in equity	30
Cash flow statement
Notes	34
1. Segment report	34
2. General information	38
3. Accounting policies	38
4. Changes in the Group	40
5. Notes to the income statement	46

6. Notes to the balance sheet	47
7. Notes to the segment report	48

Interim management report as of September 30, 2014

1. Business conditions and performance

1.1 Economic background

Overall, the global economic development was weaker than expected in the first nine months of 2014. Following a reduction in momentum in the second quarter, global growth remained subdued in the third quarter. The positive underlying trend was increasingly overshadowed by uncertainty about the pace of growth in the emerging markets, and a large number of geopolitical, military and humanitarian crises. Important indicators of global economic sentiment have deteriorated and point to possible stagnation until the end of the year.

A perceptible recovery in developed economies had originally been expected to be the main driver of the anticipated global upswing. However, the economic upturn has stalled in some parts of Europe. Following a good start to 2014, economic output in Germany has so far increased faster than last year, but the development in the other European countries has been inhomogeneous. The latest trends suggest that growth will continue to slow. The only slight economic upturn in Italy and France has already lost momentum. In North America the economy has recovered from the extremely hard winter at the start of the year and the underlying trend is still positive. In the emerging markets, especially China, growth continued at the lower level of the first six months.

Although Evonik's end-customer industries remained robust overall, the more dynamic trend seen in the first six months gave way to slightly slower growth in the third quarter. The typical seasonal dip in August was particularly pronounced in Germany, and the normal counter-reaction in September failed to materialize. Following a strong start to 2014, the automotive and tire industries reported somewhat lower growth in the third quarter, especially in Asian markets. The construction industry lost some momentum, mainly in Europe and Asia, but the trend within the sector varied: While residential construction remained depressed in many regions, the infrastructure market was still very strong. Demand for consumer and care products was still robust as expected, but mounting competitive pressure was observed. The food and feed sectors continued to develop positively in the third quarter, with amino acids for animal nutrition in particular benefiting from strong demand, which was boosted by exceptional circumstances on the supply side.

The pressure on producer prices at the beginning of the year declined slightly during the year. Since overall economic inflationary pressure remains low and the cost of crude oil has recently dropped considerably, many prices remained at the low level seen in the second half of 2013.

Evonik's average raw material prices increased slightly in the third quarter of 2014 compared with the first half of the year. However, having risen to a high for the year in August, prices dropped back again as the oil price fell. Overall, in the first nine months of 2014 raw material costs were slightly above the prior-year level.

Business performance

1.2 Business performance

Significant events

We have further sharpened our profile as a pure specialty chemicals company. At the end of April 2014 we sold our 50.1 percent interest in Li-Tec Battery GmbH and the 10 percent stake in Deutsche Accumotive GmbH & Co. KG to Daimler AG, which became the sole owner of both companies. In view of the planned exit from the lithium-ion business these activities were reclassified to discontinued operations in September 2013. The revaluation of assets and provisions in connection with this agreement, and the subsequent divestment of the shares resulted in income after taxes of €20 million.

We divested the remaining stake in the energy company STEAG GmbH, Essen (Germany) to KSBG Kommunale Beteiligungsgesellschaft GmbH & Co. KG, Essen (Germany) for €569 million at the start of September. We sold the first tranche comprising 51 percent of shares in STEAG to KSBG in 2011 and also concluded an agreement which now enabled KSBG to exercise its option to acquire the remaining 49 percent stake. A binding purchase price mechanism for the second tranche was also agreed at that time. The stake in STEAG was reclassified to discontinued operations in mid-July 2014 when we received notification that KSBG intended to exercise the call option. Deconsolidation resulted in negative earnings effects in connection with, among other things, the valuation and deconsolidation of the options, and the adjustment of a provision. Offsetting this against income, principally from the guaranteed dividend, resulted in an after-tax loss of €30 million in the first nine months.

The reorganization of the management and portfolio structure planned for 2015 is designed to create a better basis for differentiated management of Evonik's various businesses with closer market alignment. The Executive Board will concentrate on Evonik's strategic development within a management holding structure. The three chemical segments will be given greater entrepreneurial freedom in the management of their businesses and will operate on the market as separate legal entities. The new management model is intended to provide a far better structural basis for profitable growth of their respective business operations.

At its meeting on June 26, 2014, the Supervisory Board appointed Mr. Christian Kullmann (45) to the Executive Board effective July 1, 2014.

Business performance in Q3 2014

Our business developed well despite the more difficult economic environment: Buoyant demand for our products worldwide led to a further rise in volume sales. The clear downward price trend for some important products in previous quarters slowed. Adjusted EBITDA improved perceptibly compared with previous quarters and is now only slightly below the prior-year level. In particular, the Consumer, Health & Nutrition and Specialty Materials segments reported higher earnings than in previous quarters.

^{2014 2013} Prior-year figures restated.

The Evonik Group grew sales by 1 percent to €3,243 million. We posted organic sales growth of 1 percent, driven by higher volumes (2 percentage points), with only slight erosion of selling prices (–1 percentage point).

Year-on-year change in sales

in %	1st quarter 2014	2nd quarter 2014	3rd quarter 2014	1st nine months 2014
Volumes	5	5	2	4
Prices	–4	–2	–1	–2
Organic sales growth	1	3	1	2
Exchange rates	–1	–2	0	–1
Other effects	0	0	0	0
Total	0	1	1	1

Adjusted EBITDA by quarters

2014 2013

Business performance

Adjusted EBITDA was €501 million, down 3 percent year-on-year. The adjusted EBITDA margin slipped from 16.2 percent to 15.4 percent. Adjusted EBIT dropped 6 percent to €350 million.

Statement of income

	3rd quarter 1st nine months
in € million	2014	2013	Change in %	2014	2013	Change in %
Sales	3,243	3,198	1	9,691	9,619	1
Adjusted EBITDA	501	517	–3	1,425	1,620	–12
Depreciation and amortization	–151	–145		–448	–432
Adjusted EBIT	350	372	–6	977	1,188	–18
Adjustments	–54	–258		–144	–324
thereof attributable to
Restructuring	–32	–164		–57	–196
Impairment losses/ reversals of impairment losses	–13	–18		–36	–18

Acquisition/divestment of shareholdings	2	–27		2	–37
Other	–11	–49		–53	–73
Net interest expense	–64	–67		–200	–201
Income before income taxes, continuing operations	232	47	394	633	663	–5
Income taxes	–64	–17		–196	–182
Income after taxes, continuing operations	168	30	460	437	481	–9
Income after taxes, discontinued operations	–54	1,351		–11	1,377
Income after taxes	114	1,381	–92	426	1,858	–77
thereof attributable to non-controlling interests	3	–92		10	–101
Net income	111	1,473	–92	416	1,959	–79
Earnings per share in €	0.24	3.16	–	0.89	4.20	–

Prior-year figures restated.

The adjustments of minus €54 million include minus €32 million relating to restructuring, especially the optimization of administrative structures and shutdown of a production site in the UK. Impairment losses/reversals of impairment losses totaling minus €13 million chiefly comprise impairment losses on capitalized expenses for construction in progress relating to a project in the Specialty Materials segment that was terminated following a routine review of investment projects. Other adjustments relate, among other things, to expenses for an increase in provisions for the phased early retirement program to comply with IAS 19 (2011). The prior-year figure of minus €258 million mainly comprised restructuring expenses and the establishment of provisions for environmental protection measures and legal disputes.

Net interest expense improved slightly to €64 million. This was principally due to the repayment of the Evonik Degussa bond in December 2013. Income before income taxes, continuing operations was €232 million, well above the prior-year figure, which was impacted by high restructuring expenses. The income tax rate was 27 percent and thus below the expected Group tax rate of 30 percent, partly due to tax-free income.

The income after taxes, discontinued operations of minus €54 million was mainly attributable to the deconsolidation of the 49 percent stake in STEAG, which was divested in September 2014. The prior-year figure of €1,351 million principally comprised the proceeds from the divestment of the real estate activities in July 2013. The net income of €111 million was therefore considerably lower than in the previous year.

Adjusted net income, which reflects the operating performance of the continuing operations, rose 3 percent to €213 million in the third quarter of 2014. Adjusted earnings per share increased from €0.44 to €0.46.

	3rd quarter			1st nine months
in € million	2014	2013	Change in %	2014	2013	Change in %
Income before financial result and income taxes a	291	113	158	820	850	–4
Result from investments recognized at equity	5	1		13	3
Other financial income	–	–		–	11
EBIT	296	114	160	833	864	–4
Adjustments	54	258		144	324
Adjusted EBIT	350	372	–6	977	1,188	–18
Adjusted net interest	–63	–67		–175	–201
Adjusted income before income taxes a	287	305	–6	802	987	–19
Adjusted income taxes	–74	–96		–234	–284
Adjusted income after taxes a	213	209	2	568	703	–19
thereof adjusted income attributable to non-controlling interests	–	3		7	9
Adjusted net incomea	213	206	3	561	694	–19
Adjusted earnings per sharea in €	0.46	0.44	–	1.20	1.49	–

Reconciliation to adjusted net income

Prior-year figures restated.

^a Continuing operations.

Business performance in the first nine months of 2014

Sales increased 1 percent to €9,691 million. We posted organic sales growth of 2 percent, driven by higher volumes (4 percentage points), which was countered by lower selling prices (–2 percentage points). Currency effects clipped sales by 1 percentage point.

Adjusted EBITDA was €1,425 million, 12 percent below the year-back figure, mainly due to lower selling prices. The adjusted EBITDA margin declined from 16.8 percent to 14.7 percent. Adjusted EBIT dropped 18 percent to €977 million.

The adjustments of minus €144 million include minus €57 million relating to restructuring, especially the optimization of administrative structures and shutdown of a production site in the UK. Impairment losses/reversals of impairment losses totaling minus €36 million mainly relate to capitalized expenses for construction in progress for two projects in the Specialty Materials segment that were terminated following a routine review of investment projects. Other adjustments relate, among other things, to expenses in connection with incidents incurred by business partners, and expenses for an increase in provisions relating to the phased early retirement programs to comply with IAS 19 (2011). The prior-year figure of minus €324 million principally comprised restructuring expenses and the establishment of provisions for environmental protection measures and legal disputes.

Net interest expense was €200 million and contains one-off factors amounting to minus €25 million in connection with the establishment of provisions. If this is factored out, there was a considerable year-on-year improvement, chiefly because of the repayment of the Evonik Degussa bond in December 2013. Income before income taxes, continuing operations was 5 percent lower at €633 million. The income tax ratio was 31 percent, and thus basically in line with the expected Group tax rate.

Income after taxes, discontinued operations1 totaling minus €11 million mainly comprises operating income from the investment in STEAG, which was divested in September, and the lithium-ion business. The prior-year figure of €1,377 million mainly comprised the proceeds from the divestment of the real estate activities in July 2013. The net income of €416 million was therefore well below the very high prior-year level.

Adjusted net income dropped 19 percent to €561 million, while adjusted earnings per share declined from €1.49 to €1.20.

Efficiency enhancement programs

Systematic implementation of the On Track 2.0 efficiency enhancement program introduced in 2012 is proceeding well. Measures with annual savings potential of more than €360 million out of the target of €500 million set for year-end 2016 are already being implemented. The additional Administration Excellence program launched last fall to optimize the quality of our Group-wide administration processes is also on schedule. This program should leverage savings of up to €250 million a year by the end of 2016. Following initial organizational changes in 2013, details of further optimization have now been worked out and most measures have now been passed to the line management for implementation. The first measures have already been undertaken and the majority will be implemented in 2015 and 2016.

1.3 Segment performance

Consumer, Health & Nutrition segment

3rd quarter: higher volumes, perceptible pickup in some selling prices
3rd quarter: adjusted EBITDA almost on a par with the prior-year period
1st nine months: adjusted EBITDA margin at a good level of 19.4 percent

	3rd quarter			1st nine months
in € million	2014	2013	Change in %	2014	2013	Change in %
External sales	1,034	1,034	0	3,015	3,110	–3
Consumer Specialties Business Unit	529	536	–1	1,576	1,633	–3
Health & Nutrition Business Unit	505	498	1	1,439	1,477	–3
Adjusted EBITDA	209	215	–3	585	723	–19
Adjusted EBITDA margin in %	20.2	20.8	–	19.4	23.2	–
Adjusted EBIT	171	178	–4	471	614	–23
Capital expenditures	124	116	7	331	261	27
Employees as of September 30	–	–		7,081	7,116	0

Key data for the Consumer, Health & Nutrition segment

Prior-year figures restated.

The business trend in the Consumer, Health & Nutrition segment was good in the third quarter. Sales were on a par with the prior-year quarter at €1,034 million. The only slight overall decline in selling prices was offset by higher volumes and positive currency effects. Adjusted EBITDA was better than in the previous quarters and was only down 3 percent year-on-year at €209 million. The adjusted EBITDA margin slipped slightly from 20.8 percent to 20.2 percent.

Sales for the Consumer, Health & Nutrition segment

In the first nine months of 2014 this segment's sales dropped by 3 percent to €3,015 million. The pleasing volume growth was more than canceled out by lower selling prices and a negative exchange rate effect. Adjusted EBITDA dropped 19 percent to €585 million as a result of lower selling prices and start-up expenses for new production capacity. The adjusted EBITDA margin was good at 19.4 percent.

Adjusted EBITDA for the Consumer, Health & Nutrition segment

2014 2013

Prior-year figures restated.

Consumer Specialties

This business unit's sales slipped 1 percent to €529 million in the third quarter of 2014. Although demand developed well overall, volume sales of superabsorbents fell short of the very high prioryear figure. The drop in adjusted EBITDA was caused by lower volumes and by higher fixed costs and start-up expenses in connection with growth investments in China and Brazil.

Health & Nutrition

Sales in the Health & Nutrition Business Unit increased 1 percent to €505 million in the third quarter. In particular, volume sales of amino acids for animal nutrition rose further in response to high demand. The significant downward price trend that started in summer 2012 has weakened considerably and in some cases selling prices have picked up perceptibly. Thanks to increased volumes and high capacity utilization, the Health & Nutrition Business Unit reported an improvement in adjusted EBITDA.

Resource Efficiency segment

3rd quarter: far higher demand and stable selling prices
3rd quarter: another year-on-year rise in adjusted EBITDA
1st nine months: adjusted EBITDA margin rose to an excellent 22.6 percent

Key data for the Resource Efficiency segment

	3rd quarter			1st nine months
in € million	2014	2013	Change in %	2014	2013	Change in %
External sales	813	795	2	2,448	2,367	3
Inorganic Materials Business Unit	374	367	2	1,118	1,098	2
Coatings & Additives Business Unit	439	428	3	1,330	1,269	5
Adjusted EBITDA	173	169	2	553	515	7
Adjusted EBITDA margin in %	21.3	21.3	–	22.6	21.8	–
Adjusted EBIT	139	141	–1	458	429	7
Capital expenditures	44	68	–35	142	155	–8
Employees as of September 30	–	–		5,875	5,873	0

The Resource Efficiency segment continued its successful business performance in the third quarter. Sales advanced 2 percent to €813 million due to a further rise in volumes and unchanged prices. Adjusted EBITDA also rose by 2 percent to €173 million. The adjusted EBITDA margin was unchanged at 21.3 percent.

Sales for the Resource Efficiency segment

2014 2013

Sales grew 3 percent to €2,448 million in the first nine months. This segment achieved clear organic sales growth, almost entirely as a result of perceptible increases in volumes. This was countered by negative currency effects. Adjusted EBITDA increased 7 percent to €553 million, mainly because of the rise in volumes and high capacity utilization. The adjusted EBITDA margin increased from 21.8 percent to 22.6 percent.

Business conditions and performance Segment performance

Adjusted EBITDA for the Resource Efficiency segment

Inorganic Materials

The Inorganic Materials Business Unit grew sales 2 percent to €374 million in the third quarter. The principal factors behind this were higher volumes and the acquisition of Silbond Corporation in the first half of the year. The silicas and silanes business was very successful. Adjusted EBITDA improved, driven mainly by the increase in volume sales and high capacity utilization.

Coatings & Additives

The normal summer dip affected the Coatings & Additives Business Unit in the third quarter. Nevertheless, sales increased 3 percent to €439 million. Business with high-quality crosslinkers was particularly good, along with the performance of additives and specialty binders. These products benefited primarily from continued good demand, especially from the automotive and construction sectors. Despite this, adjusted EBITDA was below the good prior-year figure due to scheduled plant maintenance.

Specialty Materials segment

3rd quarter: volumes up-year-on-year with almost stable selling prices
3rd quarter: adjusted EBITDA higher than in previous quarters
1st nine months: adjusted EBITDA margin slipped to a weak 10.0 percent

Key data for the Specialty Materials segment

	3rd quarter			1st nine months
in € million	2014	2013	Change in %	2014	2013	Change in %
External sales	1,160	1,132	2	3,510	3,431	2
Performance Polymers Business Unit	458	469	–2	1,395	1,371	2
Advanced Intermediates Business Unit	702	663	6	2,115	2,060	3
Adjusted EBITDA	128	147	–13	352	457	–23
Adjusted EBITDA margin in %	11.0	13.0	–	10.0	13.3	–
Adjusted EBIT	83	107	–22	225	342	–34
Capital expenditures	69	81	–15	184	206	–11
Employees as of September 30	–	–		6,278	6,305	0

The Specialty Materials segment's sales rose 2 percent to €1,160 million in the third quarter. Since selling prices were almost stable, this was due to a further rise in volumes. Adjusted EBITDA was €128 million, above the level registered in the previous quarters but down 13 percent year-on-year. The adjusted EBITDA margin dropped to 11.0 percent, down from 13.0 percent in the third quarter of 2013.

Sales for the Specialty Materials segment

2014 2013

The Specialty Materials segment grew sales 2 percent to €3,510 million in the first nine months, driven by far higher volume sales, while lower selling prices held back sales growth. Adjusted EBITDA dropped 23 percent to €352 million, mainly because of the lower selling prices. The adjusted EBITDA margin fell to 10.0 percent, compared with 13.3 percent in the first nine months of 2013.

Adjusted EBITDA for the Specialty Materials segment

Performance Polymers

The business trend in the Performance Polymers Business Unit in the third quarter was impaired by a comparatively strong seasonal dip. Sales fell 2 percent to €458 million, mainly for volume reasons. The brunt of the downward trend was borne by methacrylates, while demand for polyamide 12 products remained stable. Adjusted EBITDA was below the prior-year level.

Advanced Intermediates

The Advanced Intermediates Business Unit grew sales 6 percent to €702 million in the third quarter. The continued significant volume growth was pleasing. This was mainly attributable to the new production facilities for hydrogen peroxide in China and catalysts for the manufacture of biodiesel in South America. Overall, selling prices were only slightly lower than in the prior-year period. Adjusted EBITDA did not quite match the year-back level.

Services segment

Key data for the Services segment

	3rd quarter			1st nine months
in € million	2014	2013	Change in %	2014	2013	Change in %
External sales	214	219	–2	663	656	1
Adjusted EBITDA	54	50	8	158	157	1
Adjusted EBITDA margin in %	25.2	22.8	–	23.8	23.9	–
Adjusted EBIT	29	27	7	85	87	–2
Capital expenditures	33	28	18	80	75	7
Employees as of September 30	–	–		12,654	12,330	3

Prior-year figures restated.

Sales shrank 2 percent to €214 million in the third quarter, mainly due to the lower price of electricity. Thanks to higher earnings contributions from Utilities and Waste Management, adjusted EBITDA rose 8 percent to €54 million.

Sales increased 1 percent to €663 million in the first nine months. Adjusted EBITDA was €158 million, slightly above the prior-year level.

2. Earnings, financial and asset position

2.1 Earnings position

In the first nine months of 2014, sales rose 1 percent to €9,691 million. An increase in volumes was partly canceled out by lower selling prices and adverse currency effects. As a result of the higher sales volumes, the cost of sales increased 2 percent to €6,971 million. The gross profit on sales decreased by 3 percent to €2,720 million. Selling and administrative expenses also declined by 3 percent to €1,406 million thanks to successful cost savings. To strengthen our innovative capability still further, we raised spending on research and development by 6 percent to €304 million.

Other operating income totaling €493 million mainly includes income from the measurement of derivatives (€191 million) and from currency translation of monetary assets and liabilities (€166 million). The €217 million year-on-year decline in other operating income was principally attributable to the fact that the prior-year figure included insurance refunds, and income from the termination of contracts and the reversal of provisions. The other operating expenses of €683 million comprised €212 million relating to the measurement of derivatives, €160 million relating to currency translation of monetary assets and liabilities, €58 million for restructuring, and €43 million relating to impairment losses. The decline of €244 million compared with the prior period was mainly due to lower restructuring expenses. Income before financial result and income taxes, continuing operations declined by 4 percent to €820 million.

The financial result was minus €187 million, as in the prior-year period. This figure includes interest expense of €25 million relating to one-off factors in connection with the establishment of provisions. Income before income taxes, continuing operations declined 5 percent to €633 million. The income tax ratio was 31 percent, and thus basically in line with the expected Group tax rate. Income after taxes, continuing operations was €437 million, 9 percent lower than in the prior-year period.

Income after taxes, discontinued operations1 was minus €11 million and mainly relates to operating income from the investment in STEAG, which was divested in September 2014, and the lithium-ion business. The prior-year figure of €1,377 million mainly comprised the proceeds from the divestment of the real estate activities in July 2013. The Evonik Group's net income of €416 million was therefore well below the very high prior-year figure (€1,959 million).

2.2 Financial and asset position

Financial debt increased to €1,718 million, a rise of €112 million compared with December 31, 2013 due to project-related investment financing. Financial assets were considerably higher than on June 30, 2014 as a result of the receipt of the purchase price for the STEAG shares. At €2,134 million, financial assets were almost at the level reported at year-end 2013. Net financial assets as stated on the balance sheet amounted to €416 million on September 30, 2014, €155 million less than on December 31, 2013.

Net financial assets

in € million	Sept. 30, 2014	Dec. 31, 2013
Non-current financial liabilities	–665	–627
Current financial liabilities	–1,053	–979
Financial debt a	–1,718	–1,606
Cash and cash equivalents	1,495	1,527
Current securities	630	635
Other financial assets	9	15
Financial assets a	2,134	2,177
Net financial assets as stated on the balance sheet	416	571
Net financial assets, discontinued operations	–	18
Net financial assets (total)	416	589

Prior-year figures restated.

^a Excluding derivatives.

Cash flow statement (excerpt)

	1st nine months
in € million	2014	2013
Cash flow from operating activities, continuing operations	591	835
Cash flow from operating activities, discontinued operations	31	31
Cash flow from operating activities	622	866
Cash flow from investing activities, continuing operations	–293	280
Cash flow from investing activities, discontinued operations	–1	59
Cash flow from investing activities	–294	339
Cash flow from financing activities, continuing operations	–421	57
Cash flow from financing activities, discontinued operations	–	385
Cash flow from financing activities	–421	442
Change in cash and cash equivalents	–93	1,647

Prior-year figures restated.

In line with operating earnings, the cash flow from operating activities, continuing operations decreased by €244 million to €591 million in the first nine months of 2014. The cash flow, discontinued operations was €31 million, as in the previous year. Overall, the cash flow from operating activities declined by €244 million to €622 million.

Investing activities by the continuing operations led to a cash outflow of €293 million, with outflows for investment in property, plant and equipment and the acquisition of shares in companies offset to some extent by inflows from the divestment of shareholdings, especially the stake in STEAG. In the previous year, cash inflows, mainly from the divestment of the real estate business, exceeded outflows for property, plant and equipment, giving a net cash inflow of €280 million. Together with the corresponding cash flow from the discontinued operations, there was a cash outflow of €294 million for investing activities, compared with an inflow of €339 million in the first nine months of 2013.

The cash flow for financing activities, continuing operations comprised an outflow of €421 million, principally due to the dividend payment for 2013 (€466 million). In the prior-year period, the issue of a new corporate bond resulted in a cash inflow of €57 million in the continuing operations.

Capital expenditures increased 4 percent to €753 million. 44 percent of capital expenditures were allocated to the Consumer, Health & Nutrition segment, 24 percent to the Specialty Materials segment, and 19 percent to the Resource Efficiency segment. To extend our leading market positions, we started up new production capacity. In Shanghai (China), the Resource Efficiency segment has invested more than €100 million in an integrated production complex for isophorone and isophorone diamine. Isophorone chemicals increase the service life of, for example, heavy-duty surfaces, and also facilitate environment-friendly coating technologies. The Resource Efficiency segment also started production at extended facilities for precipitated silicas in Rayong (Thailand) and Chester (Pennsylvania, USA). The main growth drivers are tires that reduce fuel consumption and lifescience applications. The Specialty Materials segment has taken a new hydrogen peroxide plant with production capacity of 230,000 metric tons p.a. into service in Jilin (China). The hydrogen peroxide produced there is supplied straight to the neighboring propylene oxide plant newly erected by Jishen Chemical Industry Co., Ltd., which uses it to manufacture propylene oxide on the basis of the efficient HPPO process developed by Evonik and ThyssenKrupp Industrial Solutions.

Investment in financial assets amounted to €111 million and mainly comprises the purchase of a 14.8 percent stake in Borussia Dortmund GmbH & Co. KGaA, Dortmund (Germany), and the acquisition of Silbond Corporation, Weston (Michigan, USA), a specialized supplier of silicic acid esters.

Total assets were €16.5 billion as of September 30, 2014, €0.7 billion higher than at year-end 2013. Non-current assets increased by €0.4 billion to €10.2 billion, with divestment of the stake in STEAG offset, among other things, by additions to property, plant and equipment resulting from investing activities. Current assets increased by €0.3 billion to €6.4 billion. Equity declined by €0.6 billion to €6.2 billion, mainly because of the reduction in the discount rate for pension provisions1. The equity ratio declined from 43.0 percent to 37.4 percent.

3. Research & development

In the first nine months of 2014, research and development (R&D) expenses amounted to €304 million, 6 percent more than in the prior-year period. Significant projects related to composites for lightweight automotive and aviation engineering, specialty medical technology applications, and innovative ingredients for the cosmetics sector.

In July 2014 Evonik acquired a stake in the start-up company Biosynthetic Technologies, LLC, Irvine, (California, USA). Biosynthetic Technologies has developed and manufactures a new class of additives (estolides) from renewable raw materials for use in motor oils for automobiles and in industrial lubricants. These biodegradable additives have the ability to combat soot buildup in engines, which helps keep fuel consumption low. This is an attractive growth market for the Coatings & Additives Business Unit's oil additives business.

The Coatings & Additives Business Unit has inaugurated a new Application Technology Center for Electronic Solutions in Hsinchu (Taiwan), in the direct vicinity of our Light & Electronics Project House. It focuses on customer-specific formulations and applications for the innovative iXsenic product line that is currently being launched. iXsenic comprises semiconductors, dielectrics, etch-stoppers and passivation materials for the manufacture of high-resolution displays. They can be applied like a coating and therefore make more efficient use of resources than conventional materials, which have to be applied by vacuum deposition.

Market introduction of CAPLUS is a milestone for the Advanced Intermediates Business Unit. This new product is a high-performance absorber for the efficient removal of unwanted gases such as carbon dioxide and hydrogen sulfide from natural gas, synthesis gas, biogas and flue gas. The product has now been used successfully for the first time in a large natural gas plant in Indonesia, where it immediately increased the purity of the natural gas. At the same time, absorbent losses are lower than with conventional solutions.

Regular interchange with leading international researchers is important to Evonik. At the Evonik meets Science forum in Fulda (Germany) in September 2014, our experts discussed new materials with professors from leading German universities. At the start of the forum, Evonik launched the Friedrich-Berguis Lecture, which was awarded to Professor Markus Antonietti, Director of the Max-Planck Institute of Colloids and Interfaces in Potsdam (Germany) in 2014.

4. Employees

As of September 30, 2014 the Evonik Group had 33,472 employees. 33,296 of them were employed in the continuing operations, an increase of 301 compared with year-end 2013. The decline of 479 people in the discontinued operations was due to the divestment of Li-Tec Battery GmbH.

Employees by segment

	Sept. 30, 2014	Dec. 31, 2013
Consumer, Health & Nutrition	7,081	7,150
Resource Efficiency	5,875	5,854
Specialty Materials	6,278	6,268
Services	12,654	12,192
Other operations	1,408	1,531
Continuing operations	33,296	32,995
Discontinued operations	176	655
Evonik	33,472	33,650

Prior-year figures restated.

5. Opportunity and risk report

As an international Group with a diversified portfolio of specialty chemicals, Evonik is exposed to a wide range of opportunities and risks. The risk categories and principal individual opportunities and risks relating to our earnings, financial and asset position, and the structure of our risk management system are described in detail in the opportunity and risk report for 2013.

With the economic situation remaining uncertain, we regularly and systematically monitor and analyze the markets, sectors and growth prospects of relevance for our segments. In the light of present market developments, at the end of the first three quarters we see fewer opportunities for the remaining months than in our assessment at the start of 2014, while the risk situation is unchanged. In the Specialty Materials segment in particular, we are of the opinion that there are fewer opportunities as a result of current price trends, while the risks have increased. This is compensated at Group level by lower risks in the Consumer, Health & Nutrition and Resource Efficiency segments. As in the past, there are no risks that could jeopardize the continued existence of the Evonik Group. Looking at material individual companies, the risk situation for our lithium-ion business has declined considerably following the divestment of our shares in Li-Tec Battery GmbH.

6. Events after the reporting date

No material events have occurred since the reporting date.

7. Expected development

Given the weaker economic development observed to date, in the present global economic conditions we also assume lower global growth in 2014 as a whole. The stepwise recovery in the global economy is increasingly stalling. Structural challenges in the emerging markets and the uncertainty stemming from ongoing political disputes and military conflicts are increasingly holding back growth expectations. The decline in producer prices observed since 2013 will presumably slow further in the final quarter of the year. Renewed price risks could, however, arise from the present trend in the price of crude oil and the resulting purchasing restraint, combined with a reduction in inventories. Following the expected cyclical recovery at the start of the year, growth is already slowing perceptibly, especially in Germany and the other European countries. In the emerging markets, too, the pace of growth has stabilized at a lower level, and this will hold back a broadly based recovery in the global economy. By contrast, the underlying positive trend in North America is still intact.

Consequently, we have slightly revised the forecast we made at the start of this year for global economic conditions in 2014 and now assume lower global economic growth. Unlike our previous assessment, we now only expect a small change in raw material costs. Our forecast is therefore based on the following assumptions for the year as a whole:

• Global growth: 2.9 percent (originally planned: 3.3 percent)
• Euro/US dollar exchange rate: US\$1.33 (originally planned: US\$1.35)
• Price of Brent crude: US\$103 (originally planned: US\$100)

Despite lower overall economic growth, we are confirming our outlook for the full year. We anticipate that sales will rise slightly (2013: €12.7 billion1) and expect that adjusted EBITDA will be in the lower rather than the upper part of the €1.8 billion to €2.1 billion range (2013: €2.0 billion).

So far, the positive business performance in the first half of the year has continued in the second half. Volumes should continue to grow in the remainder of the year, supported by the completion of our first growth investments. On the price front, we expect the stabilization that has been evident so far to continue. Clearly positive price trends are visible in some businesses. However, this does not apply to the Specialty Materials segment, where price trends have remained below our original expectations.

Further relief on the cost front should come from the On Track 2.0 efficiency enhancement program. In addition, we expect to see the first positive effects of the Administration Excellence program, which was launched in fall 2013 to optimize administrative structures. Downside factors could result from ramp-up expenses for growth investments and negative currency effects.

This report contains forward-looking statements based on the present expectations, assumptions and forecasts made by the Executive Board and the information available to it. These forward-looking statements do not constitute a guarantee of future developments and earnings expectations. Future performance and developments depend on a wide variety of factors which contain a number of risks and unforeseeable factors and are based on assumptions that may prove incorrect.

¹ Restated for IFRS 11 Joint Arrangements.

Consolidated interim financial statements as of September 30, 2014

Income statement

Income statement for the Evonik Group

	3rd quarter		1st nine months
in € million	2014	2013	2014	2013
Sales	3,243	3,198	9,691	9,619
Cost of sales	–2,322	–2,304	–6,971	–6,816
Gross profit on sales	921	894	2,720	2,803
Selling expenses	–324	–322	–957	–971
Research and development expenses	–102	–100	–304	–287
General administrative expenses	–149	–156	–449	–478
Other operating income	221	220	493	710
Other operating expenses	–276	–423	–683	–927
Income before financial result and income taxes, continuing operations	291	113	820	850
Interest income	3	7	14	22
Interest expense	–67	–74	–214	–223
Result from investments recognized at equity	5	1	13	3
Other financial income	–	–	–	11
Financial result	–59	–66	–187	–187
Income before income taxes, continuing operations	232	47	633	663
Income taxes	–64	–17	–196	–182
Income after taxes, continuing operations	168	30	437	481
Income after taxes, discontinued operations	–54	1,351	–11	1,377
Income after taxes	114	1,381	426	1,858
thereof attributable to
Non-controlling interests	3	–92	10	–101
Shareholders of Evonik Industries AG (net income)	111	1,473	416	1,959
Earnings per share in € (basic and diluted)	0.24	3.16	0.89	4.20

Statement of comprehensive income

	3rd quarter		1st nine months
in € million	2014	2013	2014	2013
Income after taxes	114	1,381	426	1,858
Comprehensive income that will be reclassified subsequently to profit or loss	147	–72	164	–130
Unrealized gains/losses on available-for-sale securities	–4	1	–2	–13
Gains/losses on hedging instruments	–73	14	–110	12
Currency translation adjustment	201	–82	243	–126
Deferred taxes	23	–5	33	–3
Comprehensive income that will not be reclassified subsequently to profit or loss	–382	16	–765	–22
Remeasurement of the net defined benefit liability for defined benefit pension plans	–548	25	–1,095	–25
Deferred taxes	166	–9	330	3
Other comprehensive income after taxes	–235	–56	–601	–152

Total comprehensive income	–121	1,325	–175	1,706
thereof attributable to
Non-controlling interests	8	–94	16	–105
Shareholders of Evonik Industries AG	–129	1,419	–191	1,811
Total comprehensive income attributable to shareholders of Evonik Industries AG	–129	1,419	–191	1,811
thereof attributable to
Continuing operations	–75	–20	–178	331
Discontinued operations	–54	1,439	–13	1,480

Statement of comprehensive income for the Evonik Group

Balance sheet

Balance sheet for the Evonik Group

	Sept. 30,	Dec. 31,
in € million	2014	2013
Intangible assets	3,089	3,038
Property, plant and equipment	5,295	4,822
Investment property	10	10
Investments recognized at equity	392	878
Financial assets	90	150
Deferred tax assets	1,240	837
Other income tax assets	13	13
Other receivables	43	30
Non-current assets	10,172	9,778

Inventories	1,765	1,594
Other income tax assets	205	188
Trade accounts receivable	1,816	1,626
Other receivables	346	278
Financial assets	687	748
Cash and cash equivalents	1,495	1,527
	6,314	5,961
Assets held for sale	54	144
Current assets	6,368	6,105

Total assets	16,540	15,883

in € million	Sept. 30, 2014	Dec. 31, 2013
Issued capital	466	466
Capital reserve	1,165	1,165
Accumulated income	4,729	5,547
Accumulated other comprehensive income	–264	–420
Equity attributable to shareholders of Evonik Industries AG	6,096	6,758
Equity attributable to non-controlling interests	92	78
Equity	6,188	6,836

Provisions for pensions and other post-employment benefits	4,416	3,331
Other provisions	936	800
Deferred tax liabilities	417	412
Other income tax liabilities	183	148
Financial liabilities	683	627
Other payables	70	81
Non-current liabilities	6,705	5,399

Other provisions	853	979
Other income tax liabilities	207	158
Financial liabilities	1,197	1,037
Trade accounts payable	1,016	1,089
Other payables	354	282
	3,627	3,545
Liabilities associated with assets held for sale	20	103
Current liabilities	3,647	3,648

Total equity and liabilities	16,540	15,883

Statement of changes in equity

Statement of changes in equity for the Evonik Group

in € million	Issued capital	Capital reserve	Accumulated income
As of December 31, 2012	466	1,165	3,940
Changes pursuant to IAS 8	–	–	1

As of January 1, 2013	466	1,165	3,941
Capital increases/decreases	–	–	–
Purchase of treasury shares	–	–	–
Share-based payment	–	–	–
Sale of treasury shares	–	–	–
Dividend distribution	–	–	–429
Changes in ownership interests in subsidiaries without loss of control	–	–	–
Income after taxes	–	–	1,959
Other comprehensive income after taxes	–	–	–22
Total comprehensive income	–	–	1,937
Other changes	–	–	2
As of September 30, 2013	466	1,165	5,451

As of January 1, 2014	466	1,165	5,547
Capital increases/decreases	–	–	–
Purchase of treasury shares	–	–	–
Share-based payment	–	3	–
Sale of treasury shares	–	–3	–
Dividend distribution	–	–	–466
Changes in ownership interests in subsidiaries without loss of control	–	–	–
Income after taxes	–	–	416
Other comprehensive income after taxes	–	–	–765
Total comprehensive income	–	–	–349
Other changes	–	–	–3
As of September 30, 2014	466	1,165	4,729

Total equity	Attributable to non-controlling interests	Attributable to shareholders of Evonik Industries AG	Accumulated other comprehensive income	Treasury shares
5,469	111	5,358	–213	–
–9	–	–9	–10	–

5,460	111	5,349	–223	–
18	18	–	–	–
–	–	–	–	–
–	–	–	–	–
–	–	–	–	–
–435	–6	–429	–	–
–2	–2	–	–	–
1,858	–101	1,959	–	–
–152	–4	–148	–126	–
1,706	–105	1,811	–126	–
–3	–3	–	–2	–
6,744	13	6,731	–351	–

6,836	78	6,758	–420	–
	–	–	–	–
–13	–	–13	–	–13
	–	3	–	–
10	–	10	–	13
–471	–5	–466	–	–
	–	–	–	–
426	10	416	–	–
–601	6	–607	158	–
–175	16	–191	158	–
	3	–5	–2	–
6,188	92	6,096	–264	–

Cash flow statement

Cash flow statement for the Evonik Group

	3rd quarter		1st nine months
in € million	2014	2013	2014	2013
Income before financial result and income taxes, continuing operations	291	113	820	850
Depreciation, amortization, impairment losses/ reversal of impairment losses on non-current assets	164	161	484	483
Gains/losses on the disposal of non-current assets	–7	–2	–	–
Change in inventories	–62	–15	–108	–107
Change in trade accounts receivable	36	62	–132	–96
Change in trade accounts payable and current advance payments received from customers	–100	42	–51	–56
Change in provisions for pensions and other post-employment benefits	–55	–44	–122	–103
Change in other provisions	75	247	–111	–7
Change in miscellaneous assets/liabilities	37	139	3	136
Cash outflows for interest	–12	–13	–41	–49
Cash inflows from interest	2	2	10	8
Cash inflows from dividends	–	1	16	3
Cash inflows/outflows for income taxes	–57	–26	–177	–227
Cash flow from operating activities, continuing operations	312	667	591	835
Cash flow from operating activities, discontinued operations	2	–10	31	31
Cash flow from operating activities	314	657	622	866
Cash outflows for investments in intangible assets, property, plant and equipment, investment property	–243	–303	–764	–754
Cash outflows for investments in shareholdings	–65	–4	–107	–8
Cash inflows from divestments of intangible assets, property, plant and equipment, investment property	–	3	2	33
Cash inflows/outflows from divestment of shareholdings	581	1,071	559	1,047
Cash inflows/outflows relating to securities, deposits and loans	19	–302	17	–38
Cash flow from investing activities, continuing operations	292	465	–293	280
Cash flow from investing activities, discontinued operations	–	75	–1	59
Cash flow from investing activities	292	540	–294	339

	3rd quarter		1st nine months
in € million	2014	2013	2014	2013
Cash outflows for dividends to shareholders of Evonik Industries AG	–	–	–466	–429
Cash outflows for dividends to non-controlling interests	–	–3	–3	–6
Cash inflows/outflows from changes in ownership interests in subsidiaries without loss of control	–	–	–	–2
Cash outflows for the purchase of treasury shares	–	–	–13	–
Cash inflows from the sale of treasury shares	–	–	13	–
Cash inflows from the addition of financial liabilities	9	156	148	751
Cash outflows for repayment of financial liabilities	–13	–89	–100	–257
Cash flow from financing activities, continuing operations	–4	64	–421	57
Cash flow from financing activities, discontinued operations	–	272	–	385
Cash flow from financing activities	–4	336	–421	442
Change in cash and cash equivalents	602	1,533	–93	1,647
Cash and cash equivalents as of July 1/January 1	881	903	1,572	793
Change in cash and cash equivalents	602	1,533	–93	1,647
Changes in exchange rates and other changes in cash and cash equivalents	12	–7	16	–11
Cash and cash equivalents as of September 30	1,495	2,429	1,495	2,429
Cash and cash equivalents included in assets held for sale	–	–	–	–
Cash and cash equivalents as on the balance sheet as of September 30	1,495	2,429	1,495	2,429

Notes

1. Segment report

Segment report by operating segments—3rd quarter

	Operating segments
	Consumer, Health & Nutrition		Resource Efficiency		Specialty Materials
in € million	2014	2013	2014	2013	2014	2013
External sales	1,034	1,034	813	795	1,160	1,132
Internal sales	17	18	20	20	23	33
Total sales	1,051	1,052	833	815	1,183	1,165
Adjusted EBITDA	209	215	173	169	128	147
Adjusted EBITDA margin in %	20.2	20.8	21.3	21.3	11.0	13.0
Adjusted EBIT	171	178	139	141	83	107
Capital expenditures	124	116	44	68	69	81
Financial investments	–	4	1	–	–	–

Prior-year figures restated.

Segment report by regions—3rd quarter

	Germany		Other European countries		North America
in € million	2014	2013	2014	2013	2014	2013
External sales	699	757	1,051	1,007	579	604
Capital expenditures	99	90	33	21	33	32

Notes Segment report

	Services		Total	reporting segments		Corporate, other operations, consolidation		Total Group (continuing operations)
	2014	2013	2014	2013	2014	2013	2014	2013
1,132	214	219	3,221	3,180	22	18	3,243	3,198
33	459	495	519	566	–519	–566	–	–
	673	714	3,740	3,746	–497	–548	3,243	3,198
	54	50	564	581	–63	–64	501	517
13.0	25.2	22.8	17.5	18.3	–	–	15.4	16.2
	29	27	422	453	–72	–81	350	372
	33	28	270	293	5	13	275	306
–	–	–	1	4	65	–	66

Central and South America		Asia-Pacific			Total Group Middle East, Africa (continuing operations)
2014	2013	2014	2013	2014	2013	2014	2013
203	202	621	558		90	70 3,243	3,198
25	14	85	148		–	1 275	306

Segment report by operating segments—1st nine months

	Operating segments
	Consumer, Health & Nutrition		Resource Efficiency		Specialty Materials
in € million	2014	2013	2014	2013	2014	2013
External sales	3,015	3,110	2,448	2,367	3,510	3,431
Internal sales	51	53	60	68	85	103
Total sales	3,066	3,163	2,508	2,435	3,595	3,534
Adjusted EBITDA	585	723	553	515	352	457
Adjusted EBITDA margin in %	19.4	23.2	22.6	21.8	10.0	13.3
Adjusted EBIT	471	614	458	429	225	342
Capital expenditures	331	261	142	155	184	206
Financial investments	2	7	41	–	–	2
Employees as of September 30	7,081	7,116	5,875	5,873	6,278	6,305

Prior-year figures restated.

Segment report by regions—1st nine months

	Germany		Other European countries		North America
in € million	2014	2013	2014	2013	2014	2013
External sales	2,168	2,176	3,235	3,082	1,690	1,791
Goodwill as of September 30a	1,541	1,542	544	541	319	288
Other intangible assets, property, plant and equipment, investment property as of September 30a	2,748	2,664	499	466	799	683
Capital expenditures	262	228	80	55	84	83
Employees as of September 30	21,483	21,190	2,749	2,814	3,683	3,801

Prior-year figures restated.

^a Non-current assets according to IFRS 8.33 b.

Notes Segment report

	Total	reporting segments		Corporate, other operations, consolidation	Total Group	(continuing operations)
2014 2013	2014	2013	2014	2013	2014	2013
663 656	9,636	9,564	55	55	9,691	9,619
1,369 1,407	1,565	1,631	–1,565	–1,631	–
2,032 2,063	11,201	11,195	–1,510	–1,576	9,691	9,619
158 157	1,648	1,852	–223	–232	1,425	1,620
23.8 23.9	17.1	19.4	–	–	14.7	16.8
85 87	1,239	1,472	–262	–284	977	1,188
80 75	737	697	16	28	753	725
–	– 43	9	68	154	111	163
12,654 12,330	31,888	31,624	1,408	1,324	33,296	32,948

Total Group Middle East, Africa (continuing operations)	Asia-Pacific
2014 2013 2014	2013	2014	2013	2014
249 236 9,691	1,717	1,784	617	565
1 1 2,684	248	251	26	28

10 10 5,710	1,074	1,503	61	151
1 2 753	321	247	36	79
125 124 33,296	4,514	4,655	505	601

2. General information

Evonik Industries AG is an international specialty chemicals company headquartered in Germany. It also has an investment in the residential real estate sector. The remaining shares in the former investment in the energy company STEAG GmbH (STEAG), Essen (Germany) were divested to KSBG Kommunale Beteiligungsgesellschaft GmbH & Co. KG (KSBG), Essen (Germany), in the reporting period, see Note 4.2.

The present condensed and consolidated interim financial statements (consolidated interim financial statements) of Evonik Industries AG and its subsidiaries (referred to jointly as Evonik or the Group) as of September 30, 2014, have been prepared in accordance with the provisions of IAS 34 Interim Financial Reporting, and in application of Section 315a Paragraph 1 of the German Commercial Code (HGB) using the International Financial Reporting Standards (IFRS) and comply with these standards. The IFRS comprise the standards (IFRS, IAS) issued by the International Accounting Standards Board (IASB), London (UK) and the interpretations (IFRIC, SIC) of the IFRS Interpretations Committee (IFRS IC), as adopted by the European Union.

The consolidated interim financial statements as of September 30, 2014 are presented in euros. The reporting period is January 1 to September 30, 2014. All amounts are stated in millions of euros (€ million) except where otherwise indicated. The basis for the consolidated interim financial statements comprises the consolidated financial statements for the Evonik Group as of December 31, 2013, which should be referred to for further information.

3. Accounting policies

The accounting and consolidation principles applied in these consolidated interim financial statements are the same as those used for the consolidated financial statements as of December 31, 2013, with the exception of changes resulting from application of new or revised accounting standards that are applicable for the first time in fiscal 2014.

Since January 1, 2014, Evonik has applied IFRS 10 Consolidated Financial Statements and IFRS 11 Joint Arrangements, which the IASB published in May 2011. IFRS 12 Disclosure of Interests in Other Entities, which was published at the same time, will result in extended disclosures in the notes to the consolidated financial statements for the first time as of December 31, 2014.

IFRS 10 replaces the guidelines on control and consolidation contained in IAS 27 Consolidated and Separate Financial Statements and SIC-12 Consolidation—Special Purpose Entities. The new standard alters the definition of control so that the same principles are applied to all companies to determine a relationship of control. A parent company is deemed to control an entity if it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. This definition is supported by extensive application guidance. The new standard does not alter the previous core principle set out in IAS 27 that consolidated financial statements present the parent company and its subsidiaries as a single economic entity, nor does it alter the consolidation procedure. IAS 27 is to be renamed Separate Financial Statements and will in future only contain the unchanged rulings on the preparation of separate financial statements. SIC-12 will be withdrawn. First-time application of IFRS 10 did not have any impact on the scope of consolidation as of January 1, 2014.

IFRS 11 supersedes IAS 31 Interests in Joint Ventures. As a result of the amended definitions in IFRS 11, there are now two types of joint arrangements: joint operations and joint ventures. Joint ventures may now only be recognized using the equity method. The previous option of pro rata consolidation has been abolished. This change does not affect Evonik as the company only used the equity method in the past. Companies involved in joint operations are required to recognize their share of the assets, liabilities, revenue and expenses from such operations. As a result of first-time application of IFRS 11, effective January 1, 2014 Evonik was required to reclassify a company with three subsidiaries allocated to the Consumer, Health and Nutrition segment that was previously recognized at equity as a joint operation.

The following tables show the impact of the retrospective application of IFRS 11 on the prioryear figures.

Impact of IFRS 11 on the consolidated income statement of the Evonik Group (excerpt)

	3rd quarter 2013	1st nine months 2013
in € million	Impact of change	Impact of change
Sales	–41	–120
Cost of sales	49	148
Result from investments recognized at equity	–5	–17
Income taxes	–1	–3
Income after taxes	2	8

Impact of IFRS 11 on the consolidated balance sheet of the Evonik Group (excerpt)

	Dec. 31, 2013
in € million	Impact of change
Non-current assets	–42
thereof investments recognized at equity	–82
Current assets	27
thereof cash and cash equivalents	9
Total assets	–15
Equity	–11
Non-current liabilities	2
Current liabilities	–6
Total equity and liabilities	–15

Impact of IFRS 11 on the cash flow statement of the Evonik Group (excerpt)

	3rd quarter 2013	1st nine months 2013
in € million	Impact of change	Impact of change
Cash flow from operating activities	–19	–32
Cash flow from investing activities	–6	–16
Cash flow from financing activities	–	–

4. Changes in the Group

4.1 Scope of consolidation

The scope of consolidation changed as follows in the reporting period:

Changes in the scope of consolidation

No. of companies	Germany	Other countries	Total
Evonik Industries AG and consolidated subsidiaries
As of December 31, 2013	45	102	147
Acquisitions	–	1	1
Other companies consolidated for the first time	–	2	2
Divestments	–1	–1	–2
Intragroup mergers	–5	–2	–7
Other companies deconsolidated	–1	–1	–2
As of September 30, 2014	38	101	139
Joint operations
As of December 31, 2013	–	–	–
Changes due to first-time application of IFRS 11	2	2	4
As of September 30, 2014	2	2	4
Investments recognized at equity
As of December 31, 2013	7	10	17
Changes due to first-time application of IFRS 11	–1	–	–1
Divestments	–1	–	–1
Other companies deconsolidated	–	–1	–1
As of September 30, 2014	5	9	14
	45	112	157

4.2 Acquisitions and divestments

This section provides a more detailed overview of the principal changes in the scope of consolidation in the reporting period, divided into acquisitions and divestments.

Acquisitions

On February 28, 2014 Evonik acquired all shares in Silbond Corporation, Weston (Michigan, USA) from Silbond Holdings LLC, Bloomfield Hills (Delaware, USA). Silbond Corporation is a leading supplier of silicic acid esters, a special group of functional silanes used in a wide variety of future-oriented applications, for example, in the electronics industry and in chemical applications. The business has been integrated into the Resource Efficiency segment.

The impact of Silbond Corporation on the balance sheet as of the date of initial consolidation was as follows:

in € million
Non-current assets	35
Current assets	9
thereof receivables	6
thereof cash and cash equivalents	1
Non-current liabilities	–16
Current liabilities	–1
Net assets	27
Goodwill	11
Cost of acquisition (purchase price)	38

When the purchase price allocation was finalized, the main change was that a larger portion of the purchase price was allocated to non-current assets than in the first quarter of 2014. At the same time, goodwill was reduced by €7 million. The purchase price was settled out of cash and cash equivalents. Transaction costs of less than €1 million relating to this acquisition are included in other operating expenses. The goodwill is not tax-deductible and mainly comprises the expected future benefits of assets that were not individually identifiable or for which recognition is not permitted, for example, anticipated synergies or the workforce.

Due to the short period for which it has been part of the Group and the size of the business, the contributions made by Silbond Corporation to sales and earnings were not material relative to the Resource Efficiency segment as a whole, either in the reporting period or on a pro forma basis in the period since January 1, 2014.

Divestments

Under an agreement dated March 31, 2014, Evonik divested its 50.1 percent stake in Li-Tec Battery GmbH (Li-Tec Battery), Kamenz (Germany), and its 10 percent stake in Deutsche Accumotive GmbH & Co. KG (Deutsche Accumotive), Kirchheim unter Teck (Germany), which were part of its lithium-ion business, to Daimler AG, Stuttgart (Germany). It was agreed not to divulge the purchase prices. The transaction was closed on April 29, 2014. Until then, the shares were included in the segment report in other operations. The wholly owned subsidiary Evonik Litarion GmbH (Evonik Litarion), Kamenz (Germany) did not form part of this transaction and is still reported in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, see Note 4.3.

On March 19, 2014 Evonik and Deb Holdings Ltd, Denby (UK) signed an agreement on the sale of the operating assets of the STOKO Skin Care business (asset deal). It was agreed not to disclose the purchase price. The assets were transferred on June 2, 2014. Until then this business was part of the Consumer, Health & Nutrition segment.

On July 14, 2014 Evonik received notification from KSBG that it intended to exercise the call option for the remaining 49 percent of shares in STEAG. On August 29, 2014, KSBG and Evonik concluded the agreement on the transfer of the shares for a consideration of €569 million. The transaction was closed on September 5, 2014. In the segment report, these shares were previously included in other operations. KSBG had acquired 51 percent of the shares in STEAG in fiscal 2011.

4.3 Assets held for sale and discontinued operations

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations sets out the accounting principles to be used for assets held for sale and their presentation in the consolidated financial statements.

Assets held for sale and the associated liabilities have to be stated separately from other assets and liabilities on the balance sheet. The amounts recognized for these assets and liabilities in the previous year do not have to be restated.

Businesses whose assets and liabilities have been classified as held for sale may also meet the criteria for classification as discontinued operations, especially if a separate, significant business area is to be disposed of. The income and expenses of such discontinued operations have to be stated separately from those of continuing operations in the income statement. The cash flows also have to be stated separately. The prior-period figures have to be restated in the income statement and the cash flow statement.

The shares in Li-Tec Battery and Deutsche Accumotive assigned to the lithium-ion business were classified as discontinued operations until closure of the sale on April 29, 2014. The 100 percent stake in Evonik Litarion is still classified as a discontinued operation as Evonik still intends to divest this business.

In connection with the divestment of the former Energy Business Area, on July 14, 2014 Evonik was notified by KSBG that it intended to exercise the call option for the remaining 49 percent of shares in STEAG, so they were reclassified to discontinued operations. The sale of these shares to KSBG was closed on September 5, 2014.

The following table shows the main impact of the discontinued operations on the income statement.

	Operating income after taxes			Divestment gains/losses	Income after taxes, discontinued operations
	3rd quarter		3rd quarter		3rd quarter
in € million	2014	2013	2014	2013	2014	2013
Lithium-ion business	–1	–239	–	–	–1	–239
Former Energy Business Area	–52	30	–	–	–52	30
Former Real Estate segment	–	41	–	1,519	–	1,560
Other discontinued operations	–	–	–1	–	–1	–
	–53	–168	–1	1,519	–54	1,351

Impact of discontinued operations on the income statement in the third quarter

	Operating income after taxes		Divestment gains/losses after taxes		Income after taxes, discontinued operations
	1st nine months		1st nine months		1st nine months
in € million	2014	2013	2014	2013	2014	2013
Lithium-ion business	21	–272	–1	–	20	–272
Former Energy Business Area	–30	14	–	–	–30	14
Former Real Estate segment	–	110	–	1,519	–	1,629
Other discontinued operations	–	–	–1	6	–1	6
	–9	–148	–2	1,525	–11	1,377

Impact of the discontinued operations on the income statement in the first nine months

Breakdown of operating income from the discontinued operations:

Operating income, discontinued operations

	3rd quarter		1st nine months
in € million	2014	2013	2014	2013
Income	124	78	226	267
Lithium-ion business	9	20	81	47
Former Energy Business Area	115	6	145	18
Former Real Estate segment	–	52	–	202
Expenses	–177	–267	–227	–429
Lithium-ion business	–10	–281	–52	–343
Former Energy Business Area	–167	24	–175	–4
Former Real Estate segment	–	–10	–	–82
Operating income before income taxes, discontinued operations	–53	–189	–1	–162
Lithium-ion business	–1	–261	29	–296
Former Energy Business Area	–52	30	–30	14
Former Real Estate segment	–	42	–	120
Income taxes	–	21	–8	14
Lithium-ion business	–	22	–8	24
Former Energy Business Area	–	–	–	–
Former Real Estate segment	–	–1	–	–10
Operating income after taxes, discontinued operations	–53	–168	–9	–148
Lithium-ion business	–1	–239	21	–272
Former Energy Business Area	–52	30	–30	14
Former Real Estate segment	–	41	–	110

The operating income before income taxes from the lithium-ion business totaling €29 million mainly resulted from the impact reported in the first quarter of 2014 of the revaluation of the assets that have now been sold, one-off income from the adjustment of agreements and a provision established in the previous year.

The operating loss of €30 million before income taxes relating to the former Energy Business Area comprised income from the at-equity valuation of the investment and income from guaranteed dividends on the 49 percent of shares in STEAG now divested, plus effects arising from the valuation and deconsolidation of the associated options. In addition, earnings were impacted by the increase in a restructuring provision in connection with the divestment of the former Energy Business Area. The revaluation of the shares in STEAG as prescribed by IFRS 5 resulted in an impairment loss of €13 million, which was charged to operating income before income taxes.

No divestment gains were registered from the former Energy Business Area in the reporting period as the assets divested were carried at fair value. The remaining divestment gains and losses for discontinued operations comprise the following:

	3rd quarter		1st nine months
in € million	2014	2013	2014	2013
Income before income taxes from the divestment of discontinued operations	–1	1,538	–2	1,544
Lithium-ion business	–	–	–1	–
Former Real Estate segment	–	1,538	–	1,538
Other discontinued operations	–1	–	–1	6
Income taxes	–	–19	–	–19
Lithium-ion business	–	–	–	–
Former Real Estate segment	–	–19	–	–19
Other discontinued operations	–	–	–	–
Income after taxes from the divestment of discontinued operations	–1	1,519	–2	1,525
Lithium-ion business	–	–	–1	–
Former Real Estate segment	–	1,519	–	1,519
Other discontinued operations	–1	–	–1	6

Divestment gains and losses, discontinued operations

The following table shows the assets held for sale and the associated liabilities after all consolidation steps:

in € million	Sept. 30, 2014	Dec. 31, 2013
Intangible assets	–	5
Property, plant and equipment	5	9
Deferred tax assets	4	3
Inventories	18	46
Trade accounts receivable	25	34
Other receivables	2	2
Cash and cash equivalents	–	45
Assets held for sale	54	144
Provisions for pensions and other post-employment benefits	1	8
Other provisions	4	38
Deferred tax liabilities	1	2
Financial liabilities	8	36
Trade accounts payable	6	16
Other payables	–	3
Liabilities associated with assets held for sale	20	103

Assets held for sale and associated liabilities

The net value of €34 million for the assets held for sale and associated liabilities is the result of a loss-free valuation. It is allocated to Level 2 of the fair value hierarchy set out in IFRS 13 Fair Value Measurement. The main input factor for the valuation was expected proceeds from sale less the costs to sell.

5. Notes to the income statement

Other operating income

	3rd quarter		1st nine months
in € million	2014	2013	2014	2013
Income from the measurement of derivatives (excluding interest rate derivatives)	89	97	191	224
Income from currency translation of monetary assets and liabilities	84	14	166	110
Income from restructuring measures	1	9	1	45
Other income	47	100	135	331
	221	220	493	710
thereof adjustments	4	15	10	95

To enhance transparency, as of September 30, 2014 restructuring measures are stated separately for the first time in other operating income and other operating expenses. The prior-year figures have been restated accordingly.

In the first nine months of 2014, the other income of €135 million included income from non-core businesses, the disposal of assets, and insurance refunds. The decline in other income was principally due to the fact that the prior-year figure contained higher insurance refunds, income in connection with the termination of contracts, and reversals of provisions.

Other operating expenses

	3rd quarter		1st nine months
in € million	2014	2013	2014	2013
Losses on the measurement of derivatives (excluding interest rate derivatives)	104	83	212	222
Losses on currency translation of monetary assets and liabilities	71	36	160	130
Expenses for restructuring measures	33	173	58	241
Impairment losses	15	20	43	25
Other expense	53	111	210	309
	276	423	683	927
thereof adjustments	58	273	154	419

The expenses for restructuring measures totaling €58 million in the first nine months of 2014 (1st nine months 2013: €241 million) include impairment losses on property, plant and equipment of €2 million (1st nine months 2013: €36 million).

The impairment losses of €43 million in the first nine months of 2014 mainly relate to capitalized expenses for construction in progress for projects in the Specialty Materials segment that were terminated following a routine review of investment projects. This is included in the adjustments. The other expense of €210 million in the first nine months of 2014 relates, among other things, to outsourcing, projects for the acquisition and divestment of companies and business operations, non-core businesses, commission expenses, and legal and consultancy fees.

6. Notes to the balance sheet

Equity and employee share program

For the Share.2014 employee share program launched in March 2014, the Executive Board utilized the resolution adopted by the Annual Shareholders' Meeting of Evonik Industries AG on March 11, 2013 authorizing it to buy back shares in the company in accordance with Section 71 Paragraph 1 No. 8 of the German Stock Corporation Act (AktG). The Supervisory Board approved this share buy-back program.

Overall, Evonik Industries AG purchased 466,731 ordinary shares on the capital market at an average price of €27.53 per share. At the end of April 2014, 420,727 of these ordinary shares (including 112,544 bonus shares) were transferred to participating employees on the basis of the share price and the exchange rate for the US dollar prevailing on April 29, 2014. The remaining 46,004 ordinary shares were sold to third parties by May 9, 2014.

As of September 30, 2014, Evonik therefore no longer held any treasury shares.

Provisions for pensions and other post-employment benefits

Compared with December 31, 2013, provisions for pensions and other post-employment benefits increased by a total of €1,085 million to €4,416 million as of September 30, 2014. The increase includes €1,095 million recognized in equity with no impact on income after taxes. This increase was mainly attributable to the reduction in the discount rate used for Germany and the euro-zone countries from 3.75 percent to 2.75 percent. The discount rate for Germany and the euro-zone countries is determined from market data for AA-rated euro-denominated corporate bonds, whose market yields had declined as of September 30, 2014. By contrast, the market value of the plan assets developed better than expected. The change in provisions for pensions and other postemployment benefits and the related deferred tax assets is reflected in a reduction of €765 million in other comprehensive income from the remeasurement of the net defined benefit liability for defined benefit pension plans, which is recognized in equity under accumulated income.

Capital measures

The Annual Shareholders' Meeting on May 20, 2014 resolved to withdraw the Executive Board's existing authorization to create authorized capital and to replace it with a new authorization. Pursuant to Section 4 Paragraph 6 of the Articles of Incorporation, the Executive Board is authorized until May 1, 2019 to increase the company's capital stock, subject to the approval of the Supervisory Board, by up to €116,500,000 by issuing new registered no-par shares (Authorized Capital 2014).

The Annual Shareholders' Meeting on May 20, 2014 also created conditional capital linked to the authorization to issue convertible and warrant bonds in order to extend the business financing options available to Evonik Industries AG. Pursuant to Section 4 Paragraph 7 of the Articles of Incorporation, the capital stock can be conditionally increased by up to €37,280,000, divided into up to 37,280,000 registered non-par shares (Conditional Capital 2014).

Details, especially of eligibility and the ability to exclude subscription rights, are set out in the corresponding provisions of the Articles of Incorporation.

7. Notes to the segment report

The Executive Board of Evonik Industries AG decides on the allocation of resources and evaluates the profitability of the Group's operations on the basis of the operating segments (subsequently referred to as segments). The operating activities are divided into business units within the segments. The reporting based on segments reflects the Group's internal organizational and reporting structure (management approach).

Until the end of 2013, adjusted EBIT was the main earnings parameter that could be influenced by the segment management. As from 2014, the main parameter used to measure operating performance is adjusted EBITDA.

The table shows a reconciliation from adjusted EBITDA for the reporting segments to income before income taxes for the Group's continuing operations.

Reconciliation from adjusted EBITDA of the reporting segments to income before income taxes, continuing operations

	3rd quarter		1st nine months
in € million	2014	2013	2014	2013
Adjusted EBITDA, reporting segments	564	581	1,648	1,852
Adjusted EBITDA, other operations	–12	–14	–38	–79
Adjusted EBITDA, Corporate	–47	–55	–170	–169
Consolidation	–3	4	–6	2
Less discontinued operations	–1	1	–9	14
Adjusted EBITDA, Corporate, other operations, consolidation	–63	–64	–223	–232
Adjusted EBITDA	501	517	1,425	1,620
Depreciation, amortization, impairment losses/ reversal of impairment losses	–168	–164	–489	–488
Depreciation, amortization, impairment losses/ reversal of impairment losses included in adjustments	17	19	41	56
Adjusted EBIT	350	372	977	1,188
Adjustments	–54	–258	–144	–324
Net interest expense	–64	–67	–200	–201
Income before income taxes, continuing operations	232	47	633	663

The following table shows a breakdown of the column Corporate, other operations, consolidation in the segment report by operating segments:

Breakdown of Corporate, other operations, consolidation

	discontinued operations) 3rd quarter	Other operations (including	discontinued operations 3rd quarter	Corporate, consolidation, less	consolidation 3rd quarter	Corporate, other operations,
in € million	2014	2013	2014	2013	2014	2013
External sales	31	38	–9	–20	22	18
Internal sales	29	31	–548	–597	–519	–566
Total sales	60	69	–557	–617	–497	–548
Adjusted EBITDA	–12	–14	–51	–50	–63	–64
Adjusted EBIT	–17	–20	–55	–61	–72	–81
Capital expenditures	3	17	2	–4	5	13
Financial investments	65	–	–	–	65	–

Breakdown of Corporate, other operations, consolidation

	discontinued operations)	Other operations (including	Corporate, consolidation, less discontinued operations		Corporate, other operations, consolidation
	1st nine months		1st nine months		1st nine months
in € million	2014	2013	2014	2013	2014	2013
External sales	85	102	–30	–47	55	55
Internal sales	79	86	–1,644	–1,717	–1,565	–1,631
Total sales	164	188	–1,674	–1,764	–1,510	–1,576
Adjusted EBITDA	–38	–79	–185	–153	–223	–232
Adjusted EBIT	–50	–99	–212	–185	–262	–284
Capital expenditures	14	41	2	–13	16	28
Financial investments	68	1	–	153	68	154

Effective April 1, 2014, Evonik transferred the energy trading activities and analytical services for internal and external customers from other operations to the Services segment. The prior-year figures have been restated accordingly.

The column headed other operations includes the interest in Vivawest GmbH, Essen (Germany), which is recognized at equity, the lithium-ion business, parts of which have now been divested, and the investment in STEAG, which was recognized at equity and has now been divested, see Note 4.2. In the column Corporate, consolidation less discontinued operations, an adjustment is made for the lithium-ion business and STEAG. They are not included in the column Corporate, other operations, consolidation because only continuing operations are reported here. The financial investments undertaken in the previous year in connection with the divestment of the Real Estate segment have been recognized under Corporate since the third quarter of 2013.

8. Other disclosures

8.1 Financial instruments

The following overview shows the carrying amounts and fair values of all financial assets and liabilities:

Carrying amounts and fair values of financial assets

	Sept. 30, 2014
in € million	Carrying amount	Fair value
Financial assets	777	777
Other investments	71	71
Loans	12	12
Securities and similar claims	636	636
Receivables from finance leases	–	–
Receivables from derivatives	41	41
Other financial assets	17	17
Trade accounts receivable	1,816	1,816
Cash and cash equivalents	1,495	1,495

Carrying amounts and fair values of financial liabilities

	Sept. 30, 2014
in € million	Carrying amount	Fair value
Financial liabilities	1,880	1,920
Bonds	1,246	1,275
Liabilities to banks	393	404
Loans from non-banks	55	55
Liabilities from finance leases	2	2
Liabilities from derivatives	162	162
Other financial liabilities	22	22
Trade accounts payable	1,016	1,016

The fair value determination is based on the three-level hierarchy stipulated by IFRS 13 Fair Value Measurement:

Level 1: Quoted price for the financial instrument in an active market
Level 2: Quoted price in an active market for similar financial instruments or valuation methods based on observable market data
Level 3: Valuation methods not based on observable market data

The following table shows the financial instruments that are measured at fair value on a recurring basis after initial recognition on the balance sheet:

Fair value based on			Sept. 30, 2014
in € million	Level 1	Level 2	Level 3
Assets recognized at fair value	695	41	–	736
Other investments	59	–	–	59
Securities and similar claims	636	–	–	636
Receivables from derivatives	–	41	–	41
Liabilities recognized at fair value	–	–162	–	–162
Liabilities from derivatives	–	–162	–	–162

Financial instruments recognized at fair value

The financial instruments allocated to Level 1 are recognized at their present stock market price. They comprise all securities and the investment in Borussia Dortmund GmbH & Co. KGaA, Dortmund (Germany).

As of the present reporting date, all derivatives are allocated to Level 2. They comprise currency, interest rate and commodity derivatives whose fair value was determined on the basis of the exchange rates at the European Central Bank, observed interest rate structure curves, observed commodity prices, and observed credit default premiums.

The options for the remaining 49 percent of shares in STEAG allocated to Level 3 have been derecognized as KSBG exercised its call option in September.

Level 3 fair values:

Reconciliation from the opening to the closing balances

in € million	Receivables from derivatives	Liabilities from derivatives	Total
As of January 1, 2014	113	–32	81
Additions	–	–	–
Gains or losses in the reporting period	–113	32	–81
Other operating income	–	32	32
Other operating expenses	–113	–	–113
As of September 30, 2014	–	–	–

There were no transfers between the levels of the fair value hierarchy in the reporting period.

Fair value measurement of financial instruments that are recognized on the balance sheet at amortized cost rather than at fair value is based on the following method:

The fair value of bonds is their directly observable stock market price on the reporting date. For loans, other financial assets, liabilities to banks, loans from non-banks, liabilities from finance leases, and other financial liabilities, the fair value is determined as the present value of the expected future cash inflows or outflows and is therefore allocated to Level 2. Discounting is based on the interest rate for the respective maturity on the reporting date, taking the creditworthiness of the counterparties into account. Since the majority of loans, other financial receivables and liabilities, liabilities from finance leases and trade accounts receivable and payable are current, their fair values—like the fair value of cash and cash equivalents—correspond to their carrying amounts.

The other investments recognized at amortized cost comprise investments in equity instruments for which there is no quoted price in an active market and whose fair values cannot be determined reliably. In this case, the fair value is assumed to be equal to the amortized cost. There is no intention of selling these investments.

8.2 Contingent assets and liabilities

There has not been any material change in contingent assets and liabilities since the consolidated financial statements as of December 31, 2013.

8.3 Related parties

The dividend for fiscal 2013 was paid in the second quarter of 2014, after the resolution of the Annual Shareholders' Meeting on May 20, 2014. RAG-Stiftung, Essen (Germany) received €316 million, Gabriel Acquisitions GmbH, Gadebusch (Germany) received €64 million, and The Gabriel Finance Limited Partnership, St. Helier (Jersey) received €20 million.

There have not been any material changes in related party transactions since December 31, 2013.

8.4 Events after the reporting date

No material events have occurred since the reporting date.

Essen, October 23, 2014

Evonik Industries AG The Executive Board

Dr. Engel Kullmann Wessel

Wohlhauser Wolf

Financial calendar

Financial calendar 2015

Event	Date
Full Year Results/Q4 2014	March 3, 2015
Interim Report Q1 2015	May 6, 2015
Annual Shareholders' Meeting 2015	May 19, 2015

Credits

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phone +49 201 177-3146 fax +49 201 177-3148 [email protected]

Concept, design, and realization BISSINGER[+] GmbH HGB Hamburger Geschäftsberichte GmbH & Co. KG

Photographs Evonik Industries iStockphoto/FotografiaBasica

The English version is a translation of the German version and is provided for information only.

Evonik Industries AG Rellinghauser Straße 1– 11 45128 Essen Germany www.evonik.com

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Evonik Industries AG

150_10-q_2014-10-30_a66135f2-acef-41cc-b4a6-02075ac7dab6.pdf

Here we are! Interim report January 1 to September 30, 2014

3rd quarter 2014: Successful in a difficult environment

Key data for the Evonik Group

Key data for the Evonik Group

Contents

Evonik in focus Q3 2014

Further details of the new Group structure

Expansion of specialty silica capacity

STEAG divested fully

Evonik invests in methionine for dairy cows

Evonik on the capital markets

Share price performance

Key data

Basic data on Evonik stock

Second Capital Markets Day was a success

Further increase in coverage of Evonik stock

Evonik now included in the FTSE4Good

Shareholder structure unchanged

Investor Relations

Profile of Evonik

Consumer, Health & Nutrition

Resource Efficiency

Specialty Materials

Services

Quarterly financial report 3rd Quarter 2014

Interim management report as of September 30, 2014

1. Business conditions and performance

1.1 Economic background

1.2 Business performance

Significant events

Business performance in Q3 2014

Year-on-year change in sales

Adjusted EBITDA by quarters

Statement of income

Reconciliation to adjusted net income

Business performance in the first nine months of 2014

Efficiency enhancement programs

1.3 Segment performance

Consumer, Health & Nutrition segment

Key data for the Consumer, Health & Nutrition segment

Sales for the Consumer, Health & Nutrition segment

Adjusted EBITDA for the Consumer, Health & Nutrition segment

Consumer Specialties

Health & Nutrition

Resource Efficiency segment

Key data for the Resource Efficiency segment

Sales for the Resource Efficiency segment

Adjusted EBITDA for the Resource Efficiency segment

Inorganic Materials

Coatings & Additives

Specialty Materials segment

Key data for the Specialty Materials segment

Sales for the Specialty Materials segment

Adjusted EBITDA for the Specialty Materials segment

Performance Polymers

Advanced Intermediates

Services segment

Key data for the Services segment

2. Earnings, financial and asset position

2.1 Earnings position

2.2 Financial and asset position

Net financial assets

Cash flow statement (excerpt)

3. Research & development

4. Employees

Employees by segment

5. Opportunity and risk report

6. Events after the reporting date

7. Expected development

Consolidated interim financial statements as of September 30, 2014

Income statement

Income statement for the Evonik Group

Statement of comprehensive income

Statement of comprehensive income for the Evonik Group

Balance sheet

Balance sheet for the Evonik Group

Statement of changes in equity