After a good fiscal year 2017, WACKER expects further sales and earnings growth for
As stipulated by IFRS 5 (Non-Current Assets Held for Sale and Discontinued Opera-tions),
WACKER is retrospectively reporting the net income of Siltronic AG and its sub-sidiaries
for 2016 as “Income from discontinued operations.” Since March 15, 2017, WACKER’s
stake in Siltronic has been accounted for using the equity method. Where applicable,
the figures for 2016 given in this press release have been adjusted accord-ingly and
are therefore comparable with the latest figures.
- AT €4.92 BILLION, SALES FOR 2017 ARE 6 PERCENT HIGHER YEAR OVER YEAR, WITH EBITDA
OF €1.014 BILLION ALSO UP 6 PERCENT
- INCOME FROM CONTINUING OPERATIONS INCREASES 40 PERCENT TO €250 MILLION
- DIVIDEND PROPOSAL OF €2.50 AND ADDITIONAL BONUS OF €2.00 PER SHARE CORRESPONDS TO
A PAYOUT OF €224 MILLION
- EBITDA PROJECTED TO GROW SLIGHTLY MORE THAN SALES IN 2018
Munich, Mar 13, 2018
As already reported, Wacker Chemie AG met or surpassed its own projections for all
its performance indicators in 2017. On presenting its annual report today, the Munich-based
chemical company announced that Group sales reached €4.92 billion, up 6 percent year
over year (2016: €4.63 billion). The rise was mainly due to higher volumes in chemicals
and in polysilicon. As a result, WACKER more than compensated both for negative currency
effects due to the euro’s strength against the US dollar and for prices that, on balance,
were somewhat lower.
EBITDA (earnings before interest, taxes, depreciation and amortization) totaled €1,014.1
million in 2017 (2016: €955.5 million). That was a year-over-year increase of 6 percent
and yielded an EBITDA margin of 20.6 percent (2016: 20.6 percent). This growth was
mainly prompted by higher sales, by a very good operating performance, and by income
of €40.0 million from the company’s stake in Siltronic. On the other hand, raw-material
costs were higher year over year and dampened earnings.
Group EBIT (earnings before interest and taxes) rose strongly last year, up 26 percent
to €423.7 million (2016: €337.5 million). This corresponds to an EBIT margin of 8.6
percent (2016: 7.3 percent). Lower depreciation year over year had a positive influence
on EBIT and amounted to €590.4 million in 2017 (2016: €618.0 million).
Income from continuing operations climbed 40 percent in 2017 to €250.1 million (2016:
€178.1 million). The Group’s net income for the year was €884.8 million (2016: €189.3
million). It included €634.7 million in income from discontinued operations from Q1
2017. This amount comprised both the gain associated with the deconsolidation of Siltronic
AG as a WACKER Group segment and Siltronic’s net income in the first quarter of 2017.
In 2018, WACKER intends to continue the good performance of last year, despite strong
currency headwinds. Currency effects and amendments to accounting standards are expected
to reduce sales by an amount in the low-triple-digit millions. Nonetheless, WACKER
aims to lift its full-year sales by a low-single-digit percentage. Group EBITDA is
projected to rise by a mid-single-digit percentage compared with 2017. As for net
income from continuing operations, WACKER expects a marked increase.
During the first two months of the current year, WACKER’s chemical business performed
well. Over this period, total chemical-division sales were clearly above the prior-year
figure. On the other hand, polysilicon sales for the first two months were noticeably
lower than a year ago because less material was available for sale as a result of
the production shutdown at Charleston. For Q1 2018, WACKER expects total Group sales
to be on par with last year (Q1 2017: €1.22 billion). Group EBITDA in Q1 2018 is likely
to be substantially higher than a year ago because earnings are supported by better
prices for silicone products, by high plant utilization, and by increased income from
the stake in Siltronic AG.
“WACKER’s prospects remain bright,” said Group CEO Rudolf Staudigl in Munich on Tuesday.
“Demand is very high in all our business fields. Our chemical operations will continue
to grow this year. In our polysilicon business, we currently lack Charleston’s output,
but, in all likelihood, we can begin ramping up our facilities there in a few weeks’
time. All in all, Group sales will not grow as dynamically this year as in 2017, but
we expect earnings to rise markedly.”
In 2017, the Group’s capital expenditures amounted to €326.8 million (2016: €338.1
million). That was 3 percent less than the year before.
An investment priority last year was capacity expansion at WACKER’s three chemical
divisions. At the Jincheon site in South Korea, new facilities were built for manufacturing
silicone sealants and specialty silicones. These products are used in the construction,
electronics and automotive industries. In Burghausen, Germany, a new dispersion reactor
expanded WACKER’s polymer operations there. It went on stream in Q4 and has an annual
capacity of 60,000 metric tons.
In 2017, WACKER launched a number of other investment projects. They include new plants
for dispersions and dispersible polymer powders at the Ulsan site (South Korea), construction
of a new production facility for pyrogenic silica in Charleston (USA) and silicon-metal
capacity expansion at Holla (Norway). At Léon (Spain), WACKER is modernizing a large-scale
fermentation plant acquired in 2016. Bio-engineered cystine for the food and pharmaceutical
industries is to be produced there.
Increasing chemical-division sales expanded the Group’s workforce. The number of employees
rose by around 360 in 2017. As of December 31, 2017, WACKER had 13,811 employees worldwide
(Dec. 31, 2016: 13,448). Its German sites had 9,984 employees (2016: 9,775) and its
international sites 3,827 (2016: 3,673).
Net Cash Flow, Net Financial Debt and Equity Ratio
WACKER again generated a high cash inflow in 2017. At €358.1 million (2016: €361.1
million), net cash flow from continuing operations was on par with the prior year
and, thus, even somewhat better than the last forecast. This result was positively
influenced by substantially lower cash payments for capital expenditures. The Group’s
net financial debt amounted to €454.4 million as of December 31, 2017 (Dec. 31, 2016:
€992.5 million). That was 54 percent less than the year before. WACKER’s total assets
on December 31, 2017 amounted to €6.84 billion (Dec. 31, 2016: €7.46 billion). The
main reasons for this 8-percent decline were the deconsolidation of Siltronic and
a reduction in fixed assets due to depreciation. Group equity rose strongly year over
year. It amounted to €3.17 billion on the reporting date (Dec. 31, 2016: €2.59 billion).
The resulting equity ratio was 46.4 percent (Dec. 31, 2016: 34.8 percent). The increase
essentially reflected the year’s high net income.
In 2017, WACKER SILICONES posted substantial sales growth. Climbing 10 percent, its sales reached €2.20 billion
(2016: €2.00 billion). The rise was due to volume gains and somewhat higher prices.
EBITDA growth outpaced sales gains year over year. EBITDA climbed 23 percent to €444.9
million (2016: €361.2 million). This trend was driven by strong volume growth, by
somewhat higher prices in several product groups, by high plant utilization and by
good cost efficiency.
WACKER POLYMERS’ sales rose 4 percent in 2017 to €1.25 billion (2016: €1.19 billion). Growth was
fueled by higher volumes for dispersions and dispersible polymer powders. Lower prices
and negative currency effects dampened sales performance. EBITDA of €205.6 million
was 21 percent below the year-earlier level (2016: €261.0 mil-lion). A key factor
here was the strong increase in raw-material prices.
At WACKER BIOSOLUTIONS, sales of €205.9 million were on par with the year before (2016: €206.4 million).
While the division sold higher volumes, slightly lower prices and negative currency
effects had a contrary impact. EBITDA of €37.5 million (2016: €37.0 million) was marginally
higher than the year before.
Sales at WACKER POLYSILICON climbed 3 percent in 2017 to €1.12 billion (2016: €1.10 billion). Growth was due
to a strong rise in volumes despite lower average prices. Prospects of stronger volume
and sales growth were impeded by the loss of production at Charleston in the USA.
On September 7, 2017, a technical defect led to a hydrogen explosion there, which
damaged a plant section. Production had to be shut down. As a result, WACKER POLYSILICON
had a shortfall of around 6,000 metric tons of polysilicon that would have been available
for sale. EBITDA amounted to €290.4 million, rising by 2 percent (2016: €285.9 million).
This gain mainly stemmed from higher sales and a decline in production costs.
Proposal on Appropriation of Profits
In 2017, Wacker Chemie AG posted a retained profit according to German Commercial
Code accounting principles of €1,502.4 million. The Executive and Supervisory Boards
will propose a dividend of €2.50 per share for 2017 (2016: €2.00) at the Annual Shareholders’
Meeting. In addition, they will propose an extra €2.00 per share in connection with
not only the sale of Siltronic shares and the very good net-financial-debt trend,
but also the positive prospects for the company. Based on the number of dividend-bearing
shares as per December 31, 2017, the total cash dividend corresponds to a payout of
€223.5 million. Calculated in relation to WACKER’s average share price in 2017, the
dividend yield is 4.0 percent.
Economists expect the global upswing to continue in 2018 with increasing momentum.
WACKER sees good opportunities for further growth in its chemical business this year.
Sales at all three chemical divisions are expected to climb. At WACKER SILICONES,
the forecast is for a low-single-digit percentage increase. At WACKER POLYMERS and
WACKER BIOSOLUTIONS, sales are likely to grow by a mid-single-digit percentage.
EBITDA at WACKER SILICONES is projected to rise by a mid-single-digit percentage year
over year, amid higher prices for some raw materials. WACKER POLYMERS anticipates
EBITDA at the prior-year level, since raw-material prices are likely to continue rising
and because there will be a scheduled production shutdown in the second quarter. At
WACKER BIOSOLUTIONS, integration costs for the new site in Spain will impact 2018’s
EBITDA, which will be significantly lower than last year.
In its polysilicon business, given the present production shutdown at Charleston,
WACKER’s 2018 forecast is that volumes will be at last year’s level, amid lower average
prices for polysilicon. Consequently, sales are expected to fall below last year’s
figure by a high-single-digit percentage. EBITDA is projected to climb slightly year
over year, supported by the continued success of cost-cutting measures, and taking
account of insurance compensation.
Overall, WACKER anticipates further increases in raw-material prices in 2018 and headwinds
from a stronger euro against the US dollar. Given these underlying conditions, Group
sales are projected to climb by a low-single-digit percentage. EBITDA should grow
further, up by a mid-single-digit percentage versus last year. WACKER expects its
EBITDA margin to be slightly higher than a year ago. At around €470 million, capital
expenditures will rise substantially compared with last year, mainly to support growth
at WACKER SILICONES. Depreciation of about €550 million will be significantly lower
than a year ago. WACKER expects Group net income from continuing operations to rise
markedly. Net cash flow is forecast to be clearly positive, but substantially below
last year’s figure, due to higher capital expenditures. Net financial debt will remain
on par with last year.
Information for editorial offices: The Annual Report for 2017 is available for download
just one click away.