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16.05.2006 – 08:34

Wacker Chemie AG



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Wacker Chemie AG reports a year-on-year sales growth and even stronger earnings for Q1 2006. Despite higher raw-material and energy costs, the Munich-based chemical company increased its year-on-year EBITDA to EUR183.6 million, up 100 percent (Q1 2005: EUR92 million). Semiconductor operations were the main growth driver. At Siltronic, EBITDA rose by EUR68 million against the weak prior-year first quarter. Q1 EBIT increased to EUR105.7 million (Q1 2005: EUR9.2 million) and the Group net profit reached EUR66.2 million, up EUR86.5 million year on year. In consequence, earnings per share amounted to EUR1.49. Benefiting from a robust global economy and strong volume gains, consolidated sales rose to EUR798.5 million, up 31 percent (Q1 2005: EUR608.2 million). Five percent of this rise stemmed from exchange-rate shifts. All business divisions clearly surpassed their comparable prior-year sales figures. WACKER expects the upward trend to continue for the remainder of the year. Providing that high oil prices do not depress the economic situation, the WACKER Group estimates sales growth for the full year to be slightly above prior year’s 10 percent. EBITDA should be between EUR640 million and EUR680 million.

"Our good first-quarter figures underpin the Group’s operational strength," says CEO Peter-Alexander Wacker. "We see this as validation of our corporate strategy geared to long-term, profitable growth."

In terms of regional growth, most of the Group’s sales gains were made on international markets. In Asia, Q1 2006 sales grew by 86 percent to EUR217.8 million (Q1 2005: EUR117 million). In China, sales more than doubled compared to the corresponding prior-year period. At EUR173.9 million (Q1 2005: EUR135 million), sales in the Americas were also strong, rising by 29 percent. In the European markets, excluding Germany, sales rose by 16 percent to EUR232.5 million (Q1 2005: EUR200.5 million) - with central and eastern European countries making an above-average contribution. In Germany, first-quarter sales were up 10 percent to EUR152.7 million (Q1 2005: EUR138.2 million).

In the first three months of 2006, net cash flow improved significantly, reaching EUR22.7 million (Q1 2005: EUR-93.8 million). The increase was mainly due to the operational upturn in semiconductors. Another contributory factor were prepayments from customers, in connection with WACKER POLYSILICON’s capacity expansion. At EUR75 million in Q1 2006, investments in intangibles and property, plant and equipment were up 26 percent compared to Q1 2005 (EUR59.6 million). This rise results mainly from investments in strategic growth projects, such as new production facilities for silicone downstream products at Zhangjiagang (China) and capacity expansions for polycrystalline silicon production at Burghausen (Germany).

On March 31, 2006, WACKER had 14,520 employees worldwide (Dec. 31, 2005: 14,434). So, Group employee numbers have remained constant since the end of last year.

Business Divisions WACKER SILICONES generated total sales of EUR323 million in Q1 2006, a year-on-year rise of 21 percent (Q1 2005: EUR266.5 million). The key factors were higher sales volumes and product-mix improvements (+16 percent). The division’s earnings growth was even stronger than its sales performance. EBITDA grew 42 percent to EUR64.8 million (Q1 2005: EUR45.6 million), boosted mainly by capacity expansion and improved utilization rates, which more than offset price increases for raw materials and energy.

WACKER POLYMERS had a first-quarter sales total of EUR121.4 million, a year-on-year increase of 22 percent (Q1 2005: EUR99.8 million). Growth was primarily driven by higher sales volumes, which accounted for 17 percent of the sales rise. On the earnings front, WACKER POLYMERS generated an EBITDA of EUR23.7 million, 35 percent above Q1 2005 (EUR17.6 million). The main reasons for earnings growth were higher sales volumes, productivity gains, and enhanced capacity utilization.

WACKER FINE CHEMICALS generated total sales of EUR33.5 million from January to March 2006 (Q1 2005: EUR27.4 million). The main growth drivers were organic fine chemicals and customer projects finalized by the end of Q1. Market demand for organic intermediates remained particularly strong throughout the quarter under review. An improved product mix helped WACKER FINE CHEMICALS to increase its EBITDA by 21 percent to EUR5.8 million (Q1 2005: EUR4.8 million).

In Q1 2006, WACKER POLYSILICON posted total sales of EUR85.5 million (Q1 2005: EUR79.7 million). Sales were up 7 percent even though ongoing measures to increase production capacity had not yet had an impact in the period under review. Sales growth came mainly from within the Group, where demand from Siltronic rose sharply. This limited the quantities available for delivery to external customers in the electronics and photovoltaics sectors. Due to the long and harsh German winter, first-quarter sales of road salt surpassed the high prior-year figure.  WACKER POLYSILICON’s earnings rose much more than sales, mainly due to a rise in average sales prices and a decrease in unit costs for hyperpure silicon. EBITDA reached EUR30.9 million, a rise of 22 percent (Q1 2005: EUR25.3 million). Currently, the division is pressing ahead with the strategic expansion of its production capacity at Burghausen (Germany). An additional 1,000 metric tons from existing plants are scheduled to come on stream by the end of 2006. Nominal capacity is expected to reach 6,500 metric tons annually as a result. The new solar-grade silicon plant currently under construction is expected to provide an additional 3,500 metric tons of polysilicon annually from the start of 2008.

Siltronic’s Q1 2006 figures reflect the sustained success of measures to enhance the division’s operational performance. Total sales reached EUR286.4 million from January to March 2006, a year-on-year rise of 66 percent (Q1 2005: EUR172.7 million). Sales more than doubled for 300-mm wafers and even grew by about 40 percent for smaller wafer diameters. The key growth drivers were volume gains and product-mix enhancements. On the earnings front, Siltronic followed up on its success during the second half of 2005. EBITDA reached EUR69.3 million (Q1 2005: EUR1.8 million). Main drivers for profitability were sustained benefits from productivity gains and cost reduction efforts, as well as higher capacity utilization and the successful ramp-up of Freiberg’s 300-mm production line.

Outlook WACKER expects the upward trend to continue during 2006, providing that the economic environment remains favorable. One uncertain factor, in WACKER’s opinion, is the impact of higher oil prices on the global economy. Profitability should benefit from higher capacity utilization and price increases, moderated by an increasingly strong Euro. Mainly WACKER’s Chemicals business will also be impacted by higher raw material and energy costs.

The company expects a full-year sales growth slightly above last year’s 10 percent. As for earnings, WACKER forecasts an EBITDA of between EUR640 million and EUR680 million.

Key Group Figures

EUR million        Q1 2006 Q1 2005 in %
Sales                 798.5    608.2    31
EBITDA1              183.6    92.0      100
EBITDA margin2  23.0 %  15.1 %  52
EBIT(3)              105.7    9.2        >100
EBIT margin2      13.2 %  1.5 %    >100
Financial result-11.0    -14.2    -23
Pre-tax result  94.7      -5.0      n. a.
Net profit/loss 66.2      -20.3    n. a.
EPS in EUR         1.49      -0.39    n. a.
Investment         75.0      59.6      26
Net cash flow    22.7      -93.8    n. a.
                                            March 31,  March 31,            Dec. 31,
EUR million                                 2006              2005                2005
Equity                                        930.7            893.7              934.4
Financial liabilities                990.6         1,019.0              946.2
Provisions for pensions            355.3            342.9              352.1
Net financial debt                    954.1            994.0              911.5
Total assets                          3,019.8         2,900.2          2,922.9
Employees                                 14,520          14,494            14,434
1          EBITDA is EBIT before depreciation and amortization.
2          Margins are calculated based on sales.
3          EBIT is the result of continuing operations for the business year before
interest and other financial result, limited partnership interests and income

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.

Note to editors: The report on 1st Quarter 2006 is available for download from Wacker Chemie AG’s website ( under the caption Investor Relations.

end of announcement                                                 euro adhoc 16.05.2006 08:34:41

ots Originaltext: Wacker Chemie AG
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Christof Bachmair
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Branche: Chemicals
ISIN:      DE000WCH8881
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