EANS-News: WACKER Posts Very Good Third Quarter Figures and Expects 2011 EBITDA
at Last Year´s Level
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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Financial Figures/Balance Sheet
Subtitle: - WACKER Group sales up one percent to 1.28 billion in Q3 2011
- Earnings before interest, taxes, depreciation and amortization down seven
percent from a strong Q3 2010, at 318 million
- Net income for Q3 2011 reaches 125 million
- Investments of 299 million up almost 40 percent compared to Q3 2010 - focus
on polysilicon expansion
- More cautious full-yerar forecast: 2011 Group sales expected to reach about
5 billion, with EBITDA at prior-year level
Munich (euro adhoc) - October 28, 2011 - Wacker Chemie AG increased its
third-quarter sales slightly compared with a year ago. At the Munich-based
chemical group, sales reached EUR1.28 billion from July through September 2011,
climbing one percent (Q3 2010: EUR1.27 billion). The rise stemmed mainly from
higher sales volumes, driven by good customer demand. Additional positive
effects came from successful price increases in some areas, such as dispersions
and dispersible polymer powders. In contrast, sales were held back by
exchange-rate effects resulting primarily from the weaker US dollar.
WACKER´s earnings performance did not match the strong prior-year level. In Q3
2011, earnings before interest, taxes, depreciation and amortization (EBITDA)
fell 7 percent year-on-year to EUR317.6 million (Q3 2010: EUR340.0 million). The
third-quarter EBITDA margin was 24.8 percent, down from 26.8 percent in Q3 2010.
Earnings before interest and taxes (EBIT) declined 16 percent to EUR197.2
million (Q3 2010: EUR234.3 million). The EBIT margin for the
July-through-September quarter was 15.4 percent (Q3 2010: 18.5 percent). Net
income for the period came in at EUR124.9 million (Q3 2010: EUR155.8 million).
As a result, earnings per share reached EUR2.50 (Q3 2010: EUR3.13).
The main reason why earnings were down against Q3 2010 was the higher price
level for key raw materials and starting materials. Ethylene, for example, was
nearly 20 percent more expensive in Q3 2011 than a year ago. Silicon metal
prices increased almost 30 percent. Vinyl acetate monomer, a key starting
material in the manufacture of dispersions and dispersible polymer powders, went
up by more than 30 percent compared with Q3 2010. In addition, start-up costs
for commissioning the new polysilicon production facility at Nünchritz (Germany)
reduced third-quarter EBITDA.
For Q4 2011, WACKER estimates that a weaker global economy and the resultant
decline in momentum will slow demand for its products and affect customer
ordering patterns. In the semiconductor sector, leading market experts have
revised downward their growth projections for the coming months. As a result,
WACKER expects Siltronic´s fourth-quarter sales volumes to be lower than
anticipated at mid-year. In its solar business, price and consolidation
pressures are intensifying on the photovoltaic market due to high customer
inventories.
Consequently, WACKER POLYSILICON´s sales revenues and margins will be lower in
Q4 2011 than in the quarter under review. Amid these developments, WACKER may
not quite achieve the sales and earnings figures forecast earlier. WACKER now
expects to generate sales of about EUR5 billion in 2011. According to its
current estimates, Group EBITDA will be at last year´s level (EUR1.19 billion).
"Despite the tougher economic climate, business was good in the third quarter,"
said CEO Rudolf Staudigl in Munich on Friday. "Given the economic uncertainties,
our customers are being more cautious with their orders, while prices for our
key raw materials remain very high. The demand for our products, however, is as
strong as ever in many areas. Even if the fourth quarter turns out to be weaker
than originally anticipated, 2011 will be comparable to last year´s record
results."
Regions
In Q3 2011, WACKER posted slight year-on-year sales increases in all regions -
apart from Europe excluding Germany. Asia once again provided the largest share
of consolidated sales from July through September 2011. The Group generated some
38 percent of its total third-quarter sales in this region (Q3 2010: 37
percent). At EUR484.7 million, Asian sales climbed 4 percent (Q3 2010: EUR466.6
million). The quarter also saw further business growth in Germany, where WACKER
achieved sales of EUR237.6 million (Q3 2010: 228.9 million), up some 4 percent
year on year. In the rest of Europe, however, sales slipped 7 percent to
EUR298.7 million (Q3 2010: EUR319.8 million). In the Americas, the WACKER Group
posted third-quarter sales of EUR219.9 million (Q3 2010: EUR218.2 million) - an
increase of one percent, even though the US dollar was considerably weaker than
during the comparable quarter last year. In the other regions, sales totaled
EUR39.7 million (Q3 2010: EUR36.0 million). Overall, WACKER generated about 81
percent of its third-quarter sales with customers outside Germany (Q3 2010: 82
percent).
Investments and Net Cash Flow
In Q3 2011, WACKER invested a total of EUR299.1 million (Q3 2010: EUR215.5
million), almost 40 percent more than a year ago. Capital expenditures in Q3
2011 continued to focus on the expansion and construction of new
hyperpure-polysilicon production facilities. More than half of the Group´s
third-quarter investments were for this segment. The scheduled ramp-up of
polysilicon facilities at Nünchritz (Germany) is progressing well. Q3 2011 saw
the first deposition reactors coming on stream and the first quantities produced
for sale. Full nominal capacity of 15,000 metric tons per year is expected in
the second quarter of 2012. In the US state of Tennessee, construction of the
new Charleston polysilicon facility continues at full swing.
WACKER´s net cash flow from July through September 2011 amounted to EUR34.5
million (Q3 2010: EUR192.4 million). Third-quarter cash flow reflected the
continued high level of investments in polysilicon-capacity expansion and a
decline in advance payments received. Cash inflow from operating activities
totaled EUR296.9 million, over 30 percent less than a year ago (Q3 2010:
EUR441.3 million). This decrease was due, among other things, to higher
inventories and to lower year-on-year net income.
Employees
With production capacity and sales structures continuing to expand, WACKER´s
workforce has grown. As of September 30, 2011, WACKER had 17,133 employees
worldwide (June 30, 2011: 16,834). Employee numbers were 2 percent higher than
on June 30, 2011. On September 30, 2011, WACKER had 12,778 employees in Germany
(June 30, 2011: 12,572) and 4,355 at its international sites (June 30, 2011:
4,262).
Business Divisions
In the third quarter of 2011, WACKER SILICONES reported total sales of EUR405.2
million, almost 4 percent less than a year ago (Q3 2010: EUR421.3 million). The
weak US dollar was a major factor in sales not quite matching the prior-year
figure. Additionally, slightly lower prices left their mark on some market
segments. Customer demand edged down slightly in the third quarter. Silicones
for the energy, electronic and medical sectors put in a good market performance,
as did pyrogenic silica for coatings and adhesives. However, customers ordered
more cautiously and at shorter notice in the third quarter than during the first
half of 2011. As a result, the book-to-bill ratio decreased. In Q3 2011, WACKER
SILICONES was only able to partly counter the strong year-on-year rise in
raw-material costs by increasing its prices. Consequently, EBITDA declined by
just over 33 percent to EUR52.0 million (Q3 2010: EUR77.9 million). The
corresponding EBITDA margin was 12.8 percent (Q3 2010: 18.5 percent).
Due to robust demand for dispersions and dispersible polymer powders, total
third-quarter sales at WACKER POLYMERS climbed by 14 percent to EUR257.9 million
(Q3 2010: EUR225.8 million). Business benefited from a strong increase in sales
volumes and higher product prices. The division´s third-quarter EBITDA amounted
to EUR39.2 million, about one percent below Q3 2010 (EUR39.7 million).
Profitability was held back by significantly higher prices for ethylene and
vinyl acetate monomer. The July-through-September EBITDA margin was 15.2 percent
(Q3 2010: 17.6 percent).
WACKER BIOSOLUTIONS achieved total sales of EUR34.1 million in Q3 2011, down
about 8 percent from Q3 2010 (EUR37.0 million). The main reason for the
year-on-year decline was low capacity utilization at several production
facilities, in line with business levels. The specialty silanes business for
pharmaceutical applications made good progress during the quarter under review.
In contrast, demand for acetylacetone and gumbase slackened. Due to the
underutilization of several plants, WACKER BIOSOLUTIONS´ third-quarter EBITDA of
EUR3.1 million was well below the prior-year figure (EUR5.5 million). The
division´s third-quarter EBITDA margin fell correspondingly to 9.1 percent (Q3
2010: 14.9 percent).
At WACKER POLYSILICON, higher production and sales volumes increased total
third-quarter sales to EUR378.2 million - up 8 percent against Q3 2010 (EUR349.5
million). Despite extreme overcapacity and initial consolidation in the
downstream value-added stages of the solar industry (wafers, cells, modules),
demand for the division´s high-quality polysilicon remained very strong in the
period under review. In particular, the volumes supplied to customers in Asia
under multiyear contracts rose substantially. Spot market prices remained
largely stable from July to mid-September 2011, following a marked downturn in
the first half-year. WACKER POLYSILICON generated third-quarter EBITDA of
EUR179.4 million, down 6 percent from Q3 2010 (EUR189.9 million). The decline
mainly stems from start-up costs for the expansion of production capacity at
Nünchritz. The third-quarter EBITDA margin was 47.4 percent (Q3 2010: 54.3
percent).
Siltronic posted total sales of EUR255.3 million from July through September
2011, a drop of 9 percent (Q3 2010: EUR280.4 million). Third-quarter business
was influenced by weaker sales volumes, which were some 5 percent lower than a
year ago, and by the unfavorable strength of the euro against the US dollar.
Customer orders edged down in the period under review. Japan´s semiconductor
manufacturers managed to get their plants up and running again faster than had
at first been expected following the March 2011 earthquake. As a result, the
supply situation on world markets has returned to normal. The positive demand
and price effects that benefited Siltronic in the first half of 2011 thus no
longer apply. Production capacity utilization at Siltronic declined during the
quarter, in line with the ordering patterns of its customers. At the end of the
quarter, Siltronic´s plants were generally operating at around two-thirds of
capacity. Siltronic´s EBITDA, though, improved in the third quarter to EUR33.6
million, rising 6 percent (Q3 2010: EUR31.6 million). The EBITDA margin for the
July-through-September quarter was 13.2 percent (Q3 2010: 11.3 percent).
Outlook
In the first three quarters of 2011, WACKER kept its sales performance high, and
enhanced it in some divisions. Weaker business trends and the resultant decline
in momentum, though, are slowing demand for the Group´s products and affecting
customer ordering patterns. As a result, it is difficult to predict exactly how
business will develop during the remaining months of fiscal 2011.
For the fourth quarter, the Group anticipates substantially lower sales volumes
and revenues, especially in its semiconductor business, coupled with declining
plant utilization. This will have an appreciable impact on Siltronic´s earnings
in Q4 2011. In the Group´s polysilicon business, fourth-quarter sales revenues
and margins will fall short of the preceding quarter´s figures as customers
tighten their inventories. In silicones, the Group anticipates that some
segments are likely to see a decline in incoming orders. Additionally, the
Group´s chemical divisions will experience the normal seasonal effects of their
business with, for example, the construction sector. Seasonality will hold back
sales volumes and revenues, though no more than usual.
Due mainly to the trends expected in its semiconductor and polysilicon business
during Q4 2011, WACKER may not quite achieve the sales and earnings figures
previously forecast for full-year 2011. WACKER now expects to generate sales of
about EUR5 billion in 2011. According to its latest estimates, EBITDA will be at
last year´s level (EUR1.19 billion).
Note to editors: The Q3 2011 report is available for download on the WACKER
website (www.wacker.com) under Investor Relations.
Key Figures of the WACKER Group
|EUR million |Q3 2011 |Q3 2010 |Change in| |9M 2011|9M 2010|Change
|
| | | |% | | | |in % |
|Sales |1,280.6 |1,269.5 |0.9 | |3,898.1|3,538.5|10.2 |
|EBITDA1 |317.6 |340.0 |-6.6 | |993.4 |902.3 |10.1 |
|EBITDA margin2 |24.8 |26.8 |- | |25.5 |25.5 |- |
|EBIT3 |197.2 |234.3 |-15.8 | |658.2 |592.7 |11.1 |
|EBIT margin2 |15.4 |18.5 |- | |16.9 |16.8 |- |
| | | | | | | | |
|Financial result |-9.3 |-11.7 |-20.5 | |-26.9 |-24.0 |12.1 |
|Income before taxes |187.9 |222.6 |-15.6 | |631.3 |568.7 |11.0 |
|Net income for the |124.9 |155.8 |-19.8 | |435.6 |397.1 |9.8 |
|period | | | | | | | |
| | | | | | | | |
|Earnings per share (EUR) |2.50 |3.13 |-20.1 | |8.76 |7.98 |9.8
|
|(basic/diluted) | | | | | | | |
| | | | | | | | |
|Investments (incl. |299.1 |215.5 |38.8 | |644.0 |454.7 |41.6 |
|financial assets) | | | | | | | |
|Investments in |- |-66.1 |-100.0 | |- |-66.1 |-100.0 |
|acquisitions | | | | | | | |
|Net cash flow4 |34.5 |192.4 |-82.1 | |267.7 |302.5 |-11.5 |
| | | | | |
|EUR million |Sept. |Sept. |Dec. 31, | |
| |30, 2011|30, 2010|2010 | |
|Equity |2,698.9 |2,341.6 |2,446.8 | |
|Financial liabilities |593.1 |470.1 |533.4 | |
|Net financial |364.0 |152.0 |264.0 | |
|receivables/liabilities5| | | | |
|Total assets |6,125.7 |5,233.0 |5,501.2 | |
| | | | | |
|Employees (number at end|17,133 |16,184 |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: MDAX, CDAX, Prime All Share
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Hamburg,
Stuttgart, Düsseldorf, Hannover, München, regulated dealing: Berlin
language: English