EANS-News: WACKER Increases Sales and Earnings in Q2 2011
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quarterly report
Subtitle: - WACKER Group sales up 10 percent to 1.33 billion in Q2 2011
- Earnings before interest, taxes, depreciation and amortization grow by 5
percent to 325 million
- Net income for Q2 2011 reaches 143 million
- Investments focus on polysilicon expansion and climb to 208 million, almost
50 percent higher than Q2 2010
- Full-year sales and earnings forecast for 2011 reaffirmed
Munich (euro adhoc) - August 2, 2011 - Wacker Chemie AG increased its sales and
earnings in Q2 2011 compared with the same period last year and is well on track
to achieve its full-year targets. Q2 2011 sales at the Munich-based chemical
company climbed 10 percent to EUR1.33 billion (Q2 2010: EUR1.20 billion), mainly
due to the higher sales volumes generated by sustained customer demand. In the
silicones and polymers segments, WACKER was able to negotiate higher prices in
the market in some cases. By contrast, the sales trend was held back by currency
exchange-rate effects, primarily due to the weaker US dollar.
WACKER also enhanced its profitability over the previous year. Earnings before
interest, taxes, depreciation and amortization (EBITDA) rose by over 5 percent
to EUR324.8 million in Q2 2011 compared to a year ago (Q2 2010: EUR308.6
million). The second-quarter EBITDA margin was 24.5 percent, after 25.7 percent
in Q2 2010. Group earnings before interest and taxes (EBIT) rose by 5 percent to
EUR215.1 million in Q2 2011, up from EUR204.7 million in the prior-year period.
The EBIT margin for the period April through June 2011 was 16.2 percent (Q2
2010: 17.0 percent). Net income for the period reached EUR142.7 million (Q2
2010: EUR135.4 million), resulting in earnings per share of EUR2.87 (Q2 2010:
EUR2.71).
Substantially higher raw-material costs dampened earnings performance in Q2
2011. At the start of 2011, WACKER was still able to use some raw-material
inventory from 2010 procured on more favorable terms. Compared to Q2 2010
prices, silicon metal increased by over 30 percent, ethylene by about 25 percent
and methanol by just under 20 percent. WACKER´s second-quarter profitability was
also impacted by the up-front costs for an accelerated production start-up at
the new polysilicon plant at Nünchritz.
WACKER expects full-year sales and earnings to rise in 2011 and has reaffirmed
its previous outlook. Group sales are forecast to top EUR5 billion. EBITDA for
fiscal 2011 is expected to exceed the previous year´s figure of EUR1.19 billion.
"Half-way through 2011, we are well on track to achieve the sales and earnings
targets we set for the full year," said CEO Rudolf Staudigl in Munich on
Tuesday. "We profited in all markets and segments from the global economy´s
enduring strength. Even though economic growth is likely to slow somewhat in the
second half of the year, we remain well placed to achieve profitable growth -
particularly thanks to our strong polysilicon business."
Regions
In Q2 2011, WACKER posted double-digit sales growth in all key markets, apart
from the Americas. From April through June 2011, the Group generated the largest
share of its total sales in Asia - some 38 percent. At EUR499.8 million,
second-quarter Asian sales rose 16 percent (Q2 2010: EUR430.9 million). WACKER
also posted double-digit sales growth in Germany and in the other European
countries during Q2 2011. In Germany, second-quarter sales grew 11 percent to
EUR242.8 million (Q2 2010: EUR217.8 million). Sales in the other European
countries reached EUR329.5 million (Q2 2010: EUR296.1 million). In the Americas
region, sales were significantly held back by exchange-rate effects due to the
weaker US dollar. As a result, although sales were higher in US dollar terms,
they were slightly below the prior-year figure when converted into euros. From
April through June 2011, WACKER generated total sales of EUR211.8 million in the
Americas (Q2 2010: EUR213.3 million). In the other regions, WACKER posted total
sales of EUR41.9 million in Q2 2011 (Q2 2010: EUR43.9 million). Overall, WACKER
generated about 82 percent of its second-quarter sales with customers outside
Germany (Q2 2010: 82 percent).
Investments and Net Cash Flow
In Q2 2011, WACKER continued its dynamic investment strategy. At EUR208.3
million, capital expenditures were significantly higher than in both Q2 2010
(EUR140.9 million) and Q1 2011 (EUR136.6 million). The focus was on expanding
polysilicon-production capacities at Nünchritz and Charleston. Almost two-thirds
of April-through-June investments were for these two key projects. Further funds
were spent on increasing silicon-wafer output and on eliminating bottlenecks at
the plants of other divisions. The polysilicon facility at Nünchritz is nearing
completion and will come on stream, as planned, in the next few months. At
Charleston in the US State of Tennessee, construction work on WACKER´s new
integrated polysilicon site is also in full swing after the groundbreaking
ceremony in early April. The site, with a nominal capacity of 15,000 metric tons
per year, is expected to be completed by the end of 2013.
WACKER´s net cash flow from April through June 2011 amounted to EUR-53.1 million
(Q2 2010: EUR55.5 million). Two factors were mainly responsible for this
decline. Capital expenditures in the second quarter were about 50 percent higher
than in the previous year. At the same time, the payment of variable salary
components to employees for a highly successful fiscal 2010 decreased gross cash
flow in the period under review. Gross cash flow amounted to EUR138.4 million,
thus down 23 percent over the Q2 2010 figure of EUR180.4 million.
Employees
As of June 30, 2011, WACKER had 16,834 employees worldwide (March 31, 2011:
16,602). The groupwide increase of 232 enables WACKER to maintain the quality of
production, customer service and administrative processes amid growing customer
demand and high plant utilization. On June 30, 2011, WACKER had 12,572 employees
in Germany (March 31, 2011: 12,414) and 4,262 at its international sites (March
31, 2011: 4,188).
Business Divisions
In the second quarter of 2011, WACKER SILICONES generated total sales of
EUR421.1 million - a rise of some 4 percent year on year (Q2 2010: EUR406.5
million). Customer demand remained robust in every major business field in Q2.
Toward the end of the quarter, though, orders from some sectors - especially
construction - edged down slightly. Particularly strong Q2 growth was achieved
by organofunctional silanes for the formulation of construction foams and by
silicones for electronic, solar and medical applications. The steep rise in
raw-material costs weighed more heavily on the division´s profitability in Q2
than at the beginning of the year. WACKER SILICONES was able to offset the cost
rise only in part through greater volumes and higher sales prices in some
sectors. Second-quarter earnings before interest, taxes, depreciation and
amortization (EBITDA) came in at EUR50.1 million (Q2 2010: EUR73.3 million). The
division thus missed the prior-year level by some 32 percent. The EBITDA margin
for the second quarter of 2011 was 11.9 percent (Q2 2010: 18.0 percent).
In Q2 2011, WACKER POLYMERS increased its total sales to EUR249.7 million, up 11
percent year on year (Q2 2010: EUR224.6 million). This growth was primarily due
to continuing high demand for dispersible polymer powders and dispersions. From
April through June 2011, WACKER POLYMERS posted EBITDA of EUR32.0 million (Q2
2010: EUR37.8 million), a 15-percent decline year on year. Higher raw-material
costs, for example for ethylene, had an appreciable impact on divisional
earnings. The division´s EBITDA margin for Q2 2011 was 12.8 percent (Q2 2010:
16.8 percent). WACKER POLYMERS raised its prices for dispersions and dispersible
polymer powders several times in recent months to at least partially offset
higher raw-material costs.
From April through June 2011, WACKER BIOSOLUTIONS generated total sales of
EUR39.0 million, up slightly year on year (Q2 2010: EUR38.3 million). Business
was particularly strong for pharmaceutical proteins and other products for the
pharmaceutical and agrochemical sectors. Acetylacetone and gumbase also
experienced brisk demand. Second-quarter EBITDA at WACKER BIOSOLUTIONS amounted
to EUR8.6 million (Q2 2010: EUR7.8 million), yielding an EBITDA margin of 22.0
percent (Q2 2010: 20.4 percent) The positive factors here included higher
prices.
In Q2 2011, WACKER POLYSILICON continued to benefit from the high volumes of
hyperpure polycrystalline silicon that could be placed on the market. At
EUR399.2 million, total second-quarter sales were 24 percent higher than a year
earlier (Q2 2010: EUR321.5 million). The amounts of polysilicon sold were
significantly higher than a year ago and all of WACKER POLYSILICON´s production
facilities are currently running at full capacity. In Q2 2011, the average
prices achieved for polysilicon remained broadly stable at about the level seen
in both the comparable prior-year quarter and Q1 2011. WACKER POLYSILICON
generated second-quarter EBITDA of EUR188.2 million (Q2 2010: EUR174.6 million).
That is a rise of 8 percent and equates to an EBITDA margin of 47.1 percent (Q2
2010: 54.3 percent). Start-up costs, chiefly for Nünchritz´s new polysilicon
plant, served to constrain earnings.
In the second quarter of 2011, Siltronic generated total sales of EUR276.9
million (Q2 2010: EUR255.8 million), an increase of 8 percent. Second-quarter
sales volumes were higher than in either Q2 2010 or Q1 2011. Volume growth was
driven mainly by 300 mm wafers, where Siltronic was able to boost its output
substantially to meet the demand surge caused by production shortfalls in
earthquake-damaged Japan. As for EBITDA, Siltronic more than doubled its Q2 2010
figure. EBITDA reached EUR37.3 million from April through June 2011 (Q2 2010:
EUR18.0 million). Earnings growth was due not only to higher volumes, but also
to better average prices compared with a year ago, especially for 200 mm and
smaller-diameter wafers. The EBITDA margin in Q2 2011 was 13.5 percent (Q2 2010:
7.0 percent).
Outlook
According to the latest economic estimates and forecasts, the global expansion
is set to continue, even though the overall pace of economic growth is likely to
slow slightly in the coming months. WACKER expects its divisions will benefit
from the positive outlook for sales markets and the economy as a whole.
At its WACKER SILICONES and WACKER POLYMERS chemical divisions, vibrant economic
growth - especially in the emerging markets of Asia and Latin America - will
keep demand for their products and services high in the months ahead. At WACKER
POLYSILICON, the Group has contractually secured virtually its entire output
until the end of 2015. This ensures high capacity utilization, but also limits
opportunities for generating extra business in the short term. At Siltronic, the
order-book situation will depend, in the medium term, on how well global
silicon-wafer production keeps pace with demand. Japan´s wafer manufacturers,
for instance, have resumed production sooner than originally expected, which
means Siltronic´s sales-volume growth will be less dynamic in the second half of
2011 than in the first half.
The future price trends for raw materials and energy will greatly influence the
Group´s business profitability. WACKER will keep its focus firmly on countering
the heavier cost burden with improved efficiency. Wherever market conditions and
customer contracts allow, it aims to cushion the impact of higher raw-material
costs, at least to some extent, by raising product prices. The Group expects
that the costs of starting up its new polysilicon plant at Nünchritz and
building the polysilicon site at Charleston (Tennessee, USA) will constrain
earnings somewhat in the second half of 2011.
Overall, WACKER reaffirms its full-year guidance that 2011´s sales will exceed
EUR5 billion. It currently anticipates that EBITDA will be above last year´s
figure of EUR1.19 billion.
Note to editors: The Q2 2011 report is available for download on the WACKER
website (www.wacker.com) under Investor Relations.
Key Figures of the WACKER Group
|EUR million |Q2 2011 |Q2 2010 |Change | |6M 2011|6M 2010|Change|
| | | |in % | | | |in % |
|Sales |1,325.8 |1,202.0 |10.3 | |2,617.5|2,269.0|15.4 |
|EBITDA1 |324.8 |308.6 |5.2 | |675.8 |562.3 |20.2 |
|EBITDA margin2 |24.5% |25.7% |-4.6 | |25.8% |24.8% |4.0 |
|EBIT3 |215.1 |204.7 |5.1 | |461.0 |358.4 |28.6 |
|EBIT margin2 |16.2% |17.0% |-4.7 | |17.6% |15.8% |11.4 |
| | | | | | | | |
|Financial result |-9.7 |-9.0 |7.8 | |-17.6 |-12.3 |43.1 |
|Income before taxes |205.4 |195.7 |5.0 | |443.4 |346.1 |28.1 |
|Net income for the period|142.7 |135.4 |5.4 | |310.7 |241.3 |28.8 |
| | | | | | | | |
|Earnings per share (EUR) |2.87 |2.71 |6.0 | |6.26 |4.85 |29.0 |
| | | | | | | | |
|Investments (incl. |208.3 |140.9 |47.8 | |344.9 |239.2 |44.2 |
|financial assets) | | | | | | | |
|Net cash flow4 |-53.1 |55.5 |n.a. | |233.2 |110.1 |>100 |
| | | | | |
|EUR million |June 30,|June 30,|Dec.31,| |
| |2011 |2010 |2010 | |
| | | | | |
|Equity |2,599.7 |2,169.0 |2,446.8| |
|Financial liabilities |547.4 |499.1 |533.4 | |
|Net financial |348.3 |-58.1 |264.0 | |
|receivables/ liabilities5| | | | |
|Total assets |5,843.0 |4,962.6 |5,501.2| |
| | | | | |
|Employees (number at end |16,834 |15,901 |16,314 | |
|of period) | | | | |
1 EBITDA is EBIT before depreciation and amortization
2 Margins are calculated based on sales
3 EBIT is the result from continuing operations for the period before interest
and other financial results, and income taxes
4 Sum of cash flow from operating activities and noncurrent investment
activities before securities, including additions from finance leases
5 Sum of cash and cash equivalents, noncurrent and current securities, and
noncurrent and current financial liabilities
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 the forward-looking statements, nor does it assume the obligation
to do so.
Further inquiry note:
Christof Bachmair
Media Relations & Information
Tel.: +49 (0)89 6279 1830
E-Mail: christof.bachmair@wacker.com
end of announcement euro adhoc
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company: Wacker Chemie AG
Hanns-Seidel-Platz 4
D-81737 München
phone: +49 (0) 89 6279 01
FAX: +49 (0) 89 6279 1770
mail: info@wacker.com
WWW: http://www.wacker.com
sector: Chemicals
ISIN: DE000WCH8881
indexes: Midcap Market Index, MDAX, CDAX, Classic All Share, HDAX, Prime All
Share
stockmarkets: regulated dealing/prime standard: Frankfurt
language: English