There are several reasons for this jump in earnings. Last year, WACKER achieved higher
prices overall – primarily for polysilicon, but also in several chemical-business
segments. Productivity programs, measures to curb specific energy consumption and
higher production volumes have reduced Group costs by around €200 million. At Siltronic,
the first-time consolidation of Siltronic Silicon Wafer Pte. Ltd. had a positive effect.
WACKER POLYSILICON terminated or restructured contractual relationships with a number
of solar-industry customers. In this connection, the division retained advance payments
and received damages. That resulted in income of €206.3 million (2013: €77.6 million).
Adjusted for this effect, Group EBITDA in 2014 was €836.0 million (adjusted 2013:
€601.1 million), rising 39 percent and yielding an EBITDA margin of 17.3 percent.
WACKER’s earnings before interest and taxes (EBIT) reached €443.3 million in 2014
(2013: €114.3 million), thus almost quadrupling year on year. Looking at the bottom
line, WACKER ended 2014 with Group net income of €195.4 million (2013: €6.3 million).
That is about €189 million more than in the previous year.
In the first two months of the current year, WACKER has experienced solid demand.
Across all divisions, the sales of these two months beat the comparable prior-year
figures. Overall, the chemical company forecasts sales of some €1.3 billion for Q1
2015 (Q1 2014: €1.16 billion).
For full-year 2015, WACKER is expecting higher consolidated sales and higher EBITDA
(adjusted for special income) compared with 2014. The company is anticipating a high-single-digit
percentage increase in sales, with all divisions expected to achieve higher volumes
and sales than in 2014. Relative to a year earlier, EBITDA should rise modestly, adjusted
on a comparable basis to exclude special solar-sector income from damages received
and from restructured contractual and delivery relationships with customers. Group
net income will come in below the 2014 figure, due to lower special income and a tax
rate of slightly more than 50 percent.
“I am confident that 2015 will be a good year for WACKER,” said Group CEO Rudolf Staudigl
in Munich on Tuesday. “We want to continue 2014’s upward trend and achieve sales of
more than five billion euros for the first time in the company’s history. This year
will see us starting to produce polysilicon at our new plant in Tennessee. The conclusion
of our largest-ever single investment project will mark a major milestone of having
integrated production plants in all of our key regions around the world. That will
be highly important for our strategy of ongoing expansion.”
During 2014, the Group invested €572.2 million (2013: €503.7 million). That is almost
14 percent more than a year earlier due to project-related factors. WACKER’s investing
activities remained centered on the construction of the new polysilicon site at Charleston,
Tennessee (USA). About €310 million – somewhat more than half of all 2014 investments
– went toward this project. Construction there continued as planned throughout 2014,
and production is due to commence in the second half of 2015.
Investing activity in 2014 additionally focused on production-capacity expansion for
polymer products and silicones. WACKER built a new dispersible polymer powder production
plant at the Burghausen site. It has an annual capacity of 50,000 metric tons and
will come on stream in the next few weeks. A plant for modified siloxanes in Burghausen
was expanded as well. This intermediate for silicones is used in a variety of end
products, such as silicone fluids, emulsions and resins. A new facility for manufacturing
polyvinyl acetate solid resins has initiated production at the polymer site in Nanjing
(China). Its annual capacity is 20,000 metric tons. The Group is extending its existing
production setup at the Calvert City site (USA) by building a new dispersions reactor.
Capacity there will increase by 85,000 metric tons per year. The reactor is expected
to come on stream mid-year.
WACKER’s workforce increased slightly in 2014 by some 700 employees. WACKER had 16,703
employees worldwide as of December 31, 2014 (Dec. 31, 2013: 16,009), up 4.3 percent
on the prior-year period. This increase was mainly the result of the takeover of a
majority stake in Singapore-based Siltronic Samsung Wafer and the acquisition of Scil
Proteins Production in Halle, Germany. At year-end, WACKER’s German sites had 12,366
employees (2013: 12,322) and its international sites 4,337 (2013: 3,687).
Net Cash Flow, Net Financial Debt and Equity Ratio
Net cash flow almost doubled year on year, totaling €215.7 million in 2014 (2013: €109.7 million).
Higher net income is the main reason for this increase. As planned, net financial debt increased against the prior year and amounted to €1,080.6 million at the balance
sheet date (Dec. 31, 2013: €792.2 million). The rise of €288.4 million was less than
had been expected at the start of 2014.
WACKER’s total assets rose 10 percent last year, totaling €6.95 billion as of December 31, 2014 (Dec. 31,
2013: €6.33 billion), mainly due to currency-translation effects, the increase in
property, plant and equipment, and higher trade receivables. On the reporting date,
Group equity amounted to €1.95 billion (Dec. 31, 2013: €2.20 billion). Higher provisions for pensions
due to lower discount rates were the main reason for this decline. As a result, the
equity ratio was 28.0 percent (Dec. 31, 2013: 34.7 percent).
In 2014, WACKER SILICONES increased its sales by almost 4 percent to €1.73 billion (2013: €1.67 billion), primarily
due to higher volumes and positive product-mix effects. EBITDA was lower year on year,
declining around 9 percent to €209.8 million (2013: €230.2 million). A key reason
for the decline was a non-recurring effect from the previous year. In 2013, the division
had reversed provisions that had been set aside in the past, to cover contingent losses
from the joint venture with Dow Corning in China. This reversal had positively impacted
2013’s EBITDA by some €14 million. In addition, slightly lower prices, particularly
at the start of 2014, held back the earnings trend.
WACKER POLYMERS’ sales rose substantially in 2014, climbing almost 9 percent to €1.06 billion (2013:
€978.7 million). The increase was fueled by higher volumes for dispersions and dispersible
polymer powders and by slightly higher prices. At €149.5 million, EBITDA was marginally
higher than in 2013 (€147.8 million). The strong rise in the price of vinyl acetate
monomer, a raw material, dampened earnings.
WACKER BIOSOLUTIONS posted a considerable increase in sales, which rose 11 percent to €176.2 million
year on year (2013: €158.4 million). This growth was due to the integration of Halle-based
Scil Proteins Production GmbH, which was consolidated for the first time in 2014,
as well as to higher volumes and prices. At €23.6 million, EBITDA was at the prior-year
level (2013: €23.6 million).
WACKER POLYSILICON’s sales rose substantially in 2014, up almost 14 percent to €1.05 billion (2013: €924.2
million). The rise was due to higher volumes and better prices. The division increased
its polysilicon sales volumes to 51,000 metric tons (2013: 49,000 metric tons). EBITDA
more than doubled, climbing to €537.0 million (2013: €233.9 million). Factors supporting
this positive earnings trend were higher polysilicon prices and special income. In
total, the business division posted €206.3 million in income from the retention of
advance payments and the receipt of damages in connection with the termination or
restructuring of customer contracts (2013: €77.6 million).
Siltronic achieved substantially higher sales in 2014 than in the previous year, up 15 percent
to €853.4 million (2013: €743.0 million). This growth was mainly due to the first-time
consolidation of Siltronic Silicon Wafer Pte. Ltd. since Q1 2014. The sales trend
would have been even better had it not been for lower prices and slightly negative
exchange-rate effects. Volumes were higher across all wafer diameters, especially
300 mm silicon wafers. EBITDA improved compared with the previous year, climbing to
€114.0 million (2013: €26.5 million), chiefly due to the full consolidation of Siltronic
Proposal on Appropriation of Profits
Wacker Chemie AG posted a retained profit under German Commercial Code accounting
rules of €960.5 million in 2014. The Executive and Supervisory Boards will propose
a dividend of €1.50 (2013: €0.50) per share at the Annual Shareholders’ Meeting. Based
on the number of shares entitled to dividends as of December 31, 2014, the cash dividend
corresponds to a payout of €74.5 million. Calculated in relation to WACKER’s average
share price in 2014, the dividend yield is 1.7 percent.
Business analysts expect the global economy to continue on its growth trajectory in
2015. Momentum will be strongest in Asia. Continued strong economic growth is projected
for the USA. According to market experts, the European economy will continue to recover
this year. Ultimately, the rate of global economic expansion depends on the extent
to which geopolitical risks can be contained. WACKER’s own scenario assumes that worldwide
economic output will increase in 2015.
WACKER’s polysilicon business is expected to generate both volume and sales growth
in 2015. The company’s assumption is that the photovoltaic market will continue on
its growth trajectory. Nevertheless, overcapacity is still symptomatic of the entire
supply chain. As previously, WACKER’s key objective is to again reduce polysilicon
production costs. The new production site in Charleston, Tennessee (USA), is scheduled
to come on stream during the second half of 2015. WACKER POLYSILICON’s EBITDA is expected
to decline considerably, since the special income from the retention of advance payments
and the receipt of damages is projected to be lower than in 2014. EBITDA will also
be reduced by start-up costs at the new polysilicon production site in Charleston.
In its semiconductor business, WACKER expects sales growth in 2015 amid slightly higher
volumes and more favorable exchange rates than a year earlier. The company expects
the market for 300 mm silicon wafers to continue growing. In the 200 mm segment, WACKER’s
projection is for stable demand. Smaller-diameter wafers are likely to experience
a slight slowdown in demand. EBITDA is projected to rise considerably compared with
WACKER’s chemical divisions offer good prospects for further growth in 2015. A substantial
sales increase is expected at WACKER SILICONES. Sales growth will be fueled by every
WACKER SILICONES business unit. EBITDA should be markedly above the prior-year figure.
WACKER POLYMERS is aiming for a substantial increase in sales. Both dispersions and
dispersible polymer powders will contribute to sales growth. The division’s EBITDA
is likely to increase considerably compared with the previous year. WACKER BIOSOLUTIONS
is also forecasting a further substantial rise in sales. Now that the integration
of Halle-based Scil Proteins Production GmbH is complete, the division sees further
growth potential in its pharmaceutical proteins business. Thanks to new product developments,
a considerable sales rise is expected in the nutrition segment as well. Divisional
EBITDA in 2015 is projected to show a clear year-on-year increase.
In total, WACKER anticipates that Group sales will rise by a high-single-digit percentage
in 2015. Earnings before interest, taxes, depreciation and amortization are expected
to grow slightly, adjusted on a comparable basis to exclude special income. The EBITDA
margin, on the other hand, will be lower, in large part due to the start-up costs
for the new production site in Charleston, Tennessee (USA). Capital expenditures will
be higher than last year, climbing to about €700 million. Depreciation will amount
to around €625 million, slightly higher than the prior-year level. WACKER expects
a slightly positive net cash flow. Net financial debt will climb by about €200 million
to €300 million, primarily due to investments in Tennessee. Group net income is projected
to be lower than last year.