After a good fiscal year 2017, Wacker expects further sales and earnings growth for 2018

Excerpt: Wacker announced that Group sales reached €4.92 billion, up 6 percent year over year (2016: €4.63 billion)

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.

At €4.92 billion, sales for 2017 are 6 percent higher year over year, with EBITDA of €1.014 billion also up 6 percent

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.

Income from continuing operations increases 40 percent to €250 million

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.

Dividend proposal of €2.50 and additional bonus of €2.00 per share corresponds to a payout of €224 million

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.

EBITDA projected to grow slightly more than sales in 2018

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.”