22.03.2007 – 07:52
WACKER had its best year ever in 2006
- Net income more than doubled to 311 million (2005: 144m) -
Dividend of 2.00 per share proposed, plus a special bonus of 0.50 - Sales grew 21 percent to 3.34 billion (2005: 2.76bn) - In 2007 focus on capacity expansion and continued growth in sales and earnings
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March 22, 2007 - Wacker Chemie AG has posted its best annual sales and earnings figures since its foundation over 90 years ago. Despite substantially higher raw-material and energy costs in 2006, the Munich-based chemical Group generated an EBITDA of EUR786 million (2005: EUR614m). Adjusted for special items in fiscal 2005 totaling EUR47 million, the increase was 39 percent. Net income was EUR311 million (2005: EUR144m), with earnings per share amounting to EUR6.46 (2005: EUR2.90). The Groups robust financial performance is also reflected in its Return on Capital Employed of 18 percent (2005: 10%). Benefiting from strong volume gains, high capacity utilization and a sustained upturn in global economic activity, consolidated sales rose 21 percent to EUR3.34 billion (2005: EUR2.76bn). Thereof, EUR2.68 billion (2005: EUR2.18bn) was generated outside Germany. International business accounted for about 80 percent of total sales. Although capital expenditures were up 76 percent year on year, WACKERs 2006 net cash flow increased 16 percent to EUR185 million (2005: EUR159m). WACKER expects the market upswing to carry forward in 2007. The companys sales and earnings are estimated to show further growth in the current fiscal year thanks to substantial capacity expansions, which will start contributing to results during 2007.
"The above-average success of last year stems from our strategic focus on activities with healthy margins and high growth potential," said Group CEO Peter-Alexander Wacker in Munich on Thursday. "2006 saw our investment projects making huge progress. With an equity ratio of about 50 percent and financial debt down by almost two thirds, our ambitious growth strategy is set on a sound financial basis. In all our major business fields, we expect customer demand to remain high. As a result, we are focusing intensely on further expanding our production capacity during the remainder of the year."
2006s success was the result of several factors. The Group generated strong volume gains in many business sectors, fueled by a substantial increase in capacity coupled with high utilization levels. At Siltronic, the robust price situation and strong customer demand boosted semiconductor sales and earnings. Additionally, the usual seasonal Q4 downturn in chemical business was less marked in 2006 than in previous years. Thanks to the mild winter, construction-industry demand for WACKER products remained high. In Q4 2006, the Group generated total sales of EUR851 million (2005: EUR731m), with EBITDA at EUR189 million (2005: EUR157m).
Total capital expenditures for 2006 grew to EUR525 million (2005: EUR299m). WACKERs investment activities focused on several major projects: At Burghausen, WACKER POLYSILICON continued to expand its capacities for polycrystalline hyperpure silicon. The division currently has two new production plants under construction there. With a combined capacity of 8,000 metric tons, they are aimed to meet soaring demand both from chipmakers and the booming photovoltaics industry.
At Freiberg (Saxony) and Burghausen (Bavaria) in Germany, Siltronic is expanding its capacity for 300 mm silicon wafers. More and more chipmakers are switching their production lines to these wafers, since the larger diameter enables them to achieve a cost advantage of about 30 percent. Moreover, in a joint venture with Samsung Electronics Siltronic is building a new 300 mm production plant in Singapore. Siltronic and Samsung are jointly investing a total of US$1 billion in this project. Production is scheduled to start in mid-2008.
WACKER SILICONES has further expanded its locations at Nünchritz (Saxony) and Zhangjiagang (China). The division is thus responding to huge demand for silicone, a truly general-purpose material. A new monomer plant at Nünchritz came on stream in early November. Its main product is siloxane, a key raw material for silicones. The new facility has increased WACKERs global siloxane capacity to 200,000 metric tons per year. At Zhangjiagang, 2006 saw starting up production facilities for silicone elastomers and sealants. Additionally, WACKER and Dow Corning started building a joint siloxane facility there. Work to construct a pyrogenic silica production plant - again in partnership with Dow Corning - is on track. It is scheduled for completion in the second half of 2007.
At WACKER POLYMERS, capacity expansion continues for dispersible polymer powders, with plants being built at Burghausen and in China. The new facilities, each with an annual capacity of 30,000 metric tons, will be the largest in the world. Completion of Burghausens powder dryer is scheduled for mid-2007. Construction work on the Chinese plant - at a new site in Nanjing - should also begin this year.
WACKERs R&D expenditures in 2006 amounted to EUR152 million (2005: EUR147m), or 4.6 percent of sales. The focus of divisional research activities included development of novel hybrid polymers at WACKER SILICONES and surface treatment technologies for silicon wafers at Siltronic. WACKERs basic research activities investigated new biotech processes, for example, and functional materials to generate energy from renewable sources.
At year end, WACKER had some 14,700 employees, 1.6 percent more than the prior-year number.
Business Divisions In 2006, WACKER SILICONES posted sales of EUR1.29 billion (2005: EUR1.12bn), a year-on-year increase of 15 percent. This growth mainly stems from substantially higher sales volumes following capacity expansions. The divisions EBITDA reached EUR232 million (2005: EUR211m), 10 percent more than a year earlier.
WACKER POLYMERS 2006 sales totaled EUR560 million, 18 percent up on 2005 (EUR474m). The main driver here was strong volume gains for dispersible polymer powders. At EUR107 million, EBITDA grew almost 8 percent against 2005 (EUR99m).
In 2006, WACKER FINE CHEMICALS posted total sales of EUR113 million, up 2 percent (2005: EUR111m). The division's EBITDA of EUR11 million, however, did not reach the prior-years EUR18 million. Earnings were impacted by price pressures in custom synthesis. In contrast, the divisions biotech products business performed well.
In 2006, WACKER POLYSILICON increased its sales by 13 percent to EUR326 million (2005: EUR288m). The higher sales volumes were driven by successful measures to boost production yields and enhanced capacities. Sales also benefited from higher price levels. At the end of 2006, the division finished expanding nominal capacity for hyperpure polycrystalline silicon from 5,500 to 6,500 metric tons. As a result, production output rose to 6,200 metric tons last year. Earnings growth was even more pronounced than sales, with EBITDA amounting to EUR118 million (2005: EUR90m) - up 31 percent.
Siltronic generated total sales of EUR1.26 billion in 2006 (2005: EUR0.93bn). This was a year-on-year increase of 37 percent - fueled by soaring sales volumes, a favorable product-mix shift toward 300 mm silicon wafers, and higher average wafer prices. Earnings went up much more sharply than sales. Siltronics EBITDA reached EUR356 million (2005: EUR167m), thus more than doubling this figure compared to 2005.
Proposal on Appropriation of Profits Following 2006s healthy results, the Executive Board and Supervisory Board will propose a dividend of EUR2.00 at the annual shareholder meeting. In relation to WACKERs share price at the end of 2006, the dividend yield is 2.0 percent. Additionally, the Executive and Supervisory Boards propose paying a non-recurring special bonus of EUR0.50 cents per dividend-bearing share. The special bonus is intended to reward investors trust with respect to the IPO after WACKERs first year as a publicly listed company.
Outlook In their full-year outlook for 2007, economic analysts anticipate continued growth in all key regions. In view of this forecast and the Groups rising production capacities, WACKER currently expects further increases in both sales and earnings during 2007.
Key Group Figures
|EUR million |2006 |2005 |change | | | | | |in % | | |Sales |3,336.9 |2,755.7 |21.1 | | |EBITDA |786.3 |613.7 |28.1 | | |EBIT |456.3 |262.5 |73.8 | | |Net income |311.3 |143.7 |116.6 | | |Earnings per share |6.46 |2.90 |122.8 | | |EUR | | | | | |Return on Capital |17.9% |10.3% |- | | |Employed | | | | | | | | | | | |Balance Sheet/Cash | | | | | |Flow | | | | | | | | | | | |Total assets |3,258.2 |2,922.9 |11.5 | | |Equity |1,585.8 |934.4 |69.7 | | |Equity ratio |48.7% |32.0% |- | | |Capital | | | | | |expenditures (incl.|525.3 |299.0 |75.7 | | |financial assets) | | | | | |Depreciation (incl.| | | | | |financial assets) |330.0 |351.2 |-6.0 | | |Net cash flow |184.7 |158.7 |16.4 | | |Net financial |367.0 |911.5 |-59.7 | | |liabilities | | | | | | | | | | | |Research | | | | | | | | | | | |Research |152.3 |146.9 |3.7 | | |expenditures | | | | | | | | | | | |Employees | | | | | | | | | | | |Personnel expenses |962.4 |867.8 |10.9 | | |Employees (December|14,668 |14,434 |1.6 | | |31) | | | | | | | | | | |
This press release contains forward-looking statements based on assumptions and estimates of WACKERs 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.
end of announcement euro adhoc 22.03.2007 07:51:08
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