After a strong Q3 WACKER expects to post full-year EBITDA of €1 billion
- GROUP SALES FOR Q3 2017 REACH €1.31 BILLION, UP 14 PERCENT YEAR OVER YEAR AND 8 PERCENT
QUARTER OVER QUARTER
- EBITDA OF €298 MILLION IS 13 PERCENT ABOVE LAST YEAR AND 18 PERCENT HIGHER THAN A
- NET INCOME FOR Q3 AMOUNTS TO €104 MILLION
- NET CASH FLOW CLEARLY POSITIVE AT €205 MILLION
- GROUP EARNINGS FORECAST RAISED: FULL-YEAR EBITDA EXPECTED TO BE AT €1 BILLION, WITH
SALES GROWTH UNCHANGED AT A MID-SINGLE-DIGIT PERCENTAGE
Munich, Oct 26, 2017
Wacker Chemie AG substantially increased its sales and EBITDA in the third quarter
of 2017, both year over year and quarter over quarter. The Munich-based chemical company
posted sales of €1,311.6 million in the reporting quarter (Q3 2016: €1,150.8 million).
That was 14 percent more than a year ago and 8 percent higher than in Q2 2017 (€1,218.3
million). The main reason for the increase versus Q3 2016 was the fact that overall
volumes for silicones, polymer products and polysilicon were markedly higher year
over year. As a result, WACKER more than compensated for negative exchange-rate effects
from a stronger euro and for prices that were somewhat lower on balance.
WACKER generated EBITDA of €298.0 million in Q3 2017. That was 13 percent higher than
last year (€264.0 million) and 18 percent more than a quarter ago (€253.4 million).
The increase was prompted mainly by volume-driven sales growth and by income from
the equity investment in Siltronic. As a result, WACKER more than compensated for
the year-over-year rise in raw-material prices. High plant utilization also strengthened
EBITDA in the reporting quarter. The Group’s EBITDA margin from July through September
2017 was 22.7 percent (Q3 2016: 22.9 percent). A quarter ago, it was 20.8 percent.
Group earnings before interest and taxes (EBIT) amounted to €155.3 million in Q3 2017
(Q3 2016: €108.1 million). That was a year-over-year increase of 44 percent and yielded
an EBIT margin of 11.8 percent (Q3 2016: 9.4 percent). Net income for the reporting
quarter amounted to €104.2 million (Q3 2016: €67.5 million) and earnings per share
came in at €2.04 (Q3 2016: €1.29).
WACKER has raised its earnings forecast for full-year 2017. EBITDA is now expected
to be at €1 billion, exceeding last year’s adjusted figure of €955.5 million. Previously,
WACKER anticipated that EBITDA would be between €900 million and €935 million. The
reasons for the upgrade are the Group’s strong business performance as well as the
income from its stake in Siltronic AG. Group sales are expected, as before, to rise
by a mid-single-digit percentage compared with last year’s €4,634.2 million.
“At WACKER, the third quarter was the most successful so far this year,” said Group
CEO Rudolf Staudigl in Munich on Thursday. “Demand for silicones and polysilicon was
especially strong, with the two divisions posting new volume records. Our robust performance
more than compensated for the headwinds from markedly higher raw-material prices and
a stronger euro. Given the continued strength of business, we are upgrading our forecast.
This means our 2017 earnings will be higher than last year.”
In Q3 2017, Group sales continued to climb in every region except for the Americas,
where sales of €207.0 million were 1 percent lower year over year (Q3 2016: €208.8
million) due to currency-exchange effects. Asia posted the biggest increase, with
sales up 29 percent to €536.4 million (Q3 2016: €416.4 million). In Europe, sales
of €511.5 million were 7 percent higher year over year (Q3 2016: €476.3 million).
Capital Expenditures and Net Cash Flow
In Q3 2017, the Group’s capital expenditures amounted to €74.9 million (Q3 2016: €76.6
million), a decline of 2 percent. Investments went primarily toward expanding capacity
for silicone and polymer products. Net cash flow from continuing operations amounted
to €205.3 million in Q3 2017 (Q3 2016: €208.9 million).
WACKER’s global workforce edged up in the reporting quarter. The Group had 13,798
employees as of September 30, 2017 (June 30, 2017: 13,689). At the end of the reporting
quarter, 9,973 employees (June 30, 2017: 9,887) worked at WACKER sites in Germany
and 3,825 (June 30, 2017: 3,802) at international locations.
WACKER SILICONES generated total sales of €559.3 million in Q3 2017 (Q3 2016: €503.1 million), up
11 percent. Volume growth was the main reason for this increase, with better prices
also lifting sales somewhat. Compared with a quarter ago (€548.7 million), the division’s
sales rose 2 percent. EBITDA at WACKER SILICONES reached €128.0 million in the reporting
quarter, 27 percent higher than a year ago. In addition to sales growth, product-mix
effects and high production output enhanced profitability. Relative to a quarter ago
(€110.8 million), WACKER SILICONES’ EBITDA climbed 16 percent. The EBITDA margin improved
to 22.9 percent in Q3 2017, after 20.0 percent in Q3 2016 and 20.2 percent in the
Sales at WACKER POLYMERS totaled €317.9 million in the reporting quarter, 3 percent higher than a year ago
(€308.2 million). Volume growth was the main reason for this increase. Compared with
the preceding quarter (€335.3 million), sales declined by 5 percent, in part due to
exchange-rate effects. The division’s EBITDA amounted to €57.0 million in Q3 2017
(Q3 2016: €73.2 million). This decline of 22 percent was mainly caused by a substantial
year-over-year increase in raw-material prices. The division announced price rises
to counter this development. EBITDA contracted by 9 percent versus a quarter ago (€62.4
million), mainly due to lower sales. The reporting-quarter EBITDA margin was 17.9
percent, after 23.8 percent a year earlier and 18.6 percent a quarter ago.
WACKER BIOSOLUTIONS reported total sales of €53.2 million in Q3 2017. That was 2 percent below the year-earlier
period (€54.0 million), but 3 percent higher than in the preceding quarter (€51.4
million). The main causes of the slight year-over-year decline were somewhat lower
prices in certain product segments and negative exchange-rate effects. The division’s
EBITDA came in at €10.3 million in the reporting quarter, down 9 percent from a year
ago (€11.3 million), mainly due to lower sales. On the other hand, the division exceeded
its EBITDA of a quarter ago (€9.1 million) by 13 percent. The EBITDA margin was 19.4
percent, after 20.9 percent last year and 17.7 percent in Q2 2017.
WACKER POLYSILICON achieved total sales of €341.7 million in the reporting quarter. That was 35 percent
more than a year ago (€253.0 million) and 39 percent higher versus the preceding quarter
(€246.7 million). The strong rise was mainly due to substantial year-over-year and
quarter-over-quarter volume growth, which was supported by sales from inventory. WACKER
POLYSILICON’s reporting-quarter EBITDA came in at €85.0 million, compared with €82.3
million last year. That was an increase of 3 percent. Relative to a quarter earlier
(€71.3 million), EBITDA grew by 19 percent. From July through September 2017, the
division’s EBITDA margin was 24.9 percent, after 32.5 percent in Q3 2016 and 28.9
percent in Q2 2017. Substantially higher sales lifted earnings, while product-mix
and inventory effects dampened the EBITDA margin.
In Q1 2017, WACKER reduced its stake in Siltronic AG to 30.8 percent. As stipulated
by IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations), WACKER is
retrospectively reporting the net income of Siltronic AG and its subsidiaries for
2016 and Q1 2017 as income from discontinued operations. Since March 15, 2017, WACKER’s
stake in Siltronic has been accounted for using the equity method.
At the time of publishing its Q1 2017 report and then its Q2 2017 report, the company
revised upward its expectations for WACKER SILICONES, given the strong demand for
silicone products. WACKER also upgraded its forecast for Group earnings in the Q2
In the present Interim Report, WACKER has once again revised up-ward its earnings
forecast for the Group. Full-year EBITDA is anticipated to be at €1 billion, exceeding
last year’s adjusted figure of €955.5 million. The reasons for the upgrade are the
company’s strong business performance and also the income included in the forecast
from WACKER’s stake in Siltronic AG. The full-year EBITDA margin is likely to be on
a par with last year’s level. Previously, WACKER expected it to be somewhat lower
than a year ago. WACKER has also adjusted or stated more precisely its estimates for
investment spending, net cash flow, ROCE and net financial debt.
The full-year 2017 projections for WACKER’s financial performance indicators – based
on the adjusted 2016 figures – are as follows:
Group sales are projected, as before, to rise by a mid-single-digit percentage compared
with last year’s €4,634.2 million.
The EBITDA margin is expected to be on a par with last year (20.6 percent).
Full-year EBITDA is anticipated to be at €1 billion.
ROCE will be slightly above last year’s figure of 5.6 percent.
Net cash flow is expected to be clearly positive in 2017, but somewhat lower than
last year (€361.1 million).
In 2017, capital expenditures will be at the year-earlier level (€338.1 million, without
As before, depreciation is expected to come in at around €600 million, slightly below
last year’s level (€618.2 million).
Net financial debt will amount to around €500 million.
Information for editorial offices: The Interim Report for Q3 2017 is available for
download on the WACKER website (www.wacker.com) under Investor Relations.
This press release contains forward-looking statements based on assumptions and estimates
of WACKER’s Executive Board. Although we assume the expectations in these forward-looking
statements are realistic, we cannot guarantee they will prove to be correct. The assumptions
may harbor risks and uncertainties that may cause the actual figures to differ considerably
from the forward-looking statements. Factors that may cause such discrepancies include,
among other things, changes in the economic and business environment, variations in
exchange and interest rates, the introduction of competing products, lack of acceptance
for new products or services, and changes in corporate strategy. WACKER does not plan
to update its forward-looking statements, nor does it assume the obligation to do