14.03.2017
Wacker Chemie AG DE000WCH8881
DGAP-News: Wacker Chemie AG: WACKER'S 2017 FORECAST IS AGAIN FOR SALES GROWTH AND HIGH NET CASH FLOW
DGAP-News: Wacker Chemie AG / Key word(s): Final Results
Wacker Chemie AG: WACKER'S 2017 FORECAST IS AGAIN FOR SALES GROWTH AND HIGH
NET CASH FLOW
14.03.2017 / 07:14
The issuer is solely responsible for the content of this announcement.
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* IN 2016, SALES CAME IN AT EUR5.4 BILLION, UP 2 PERCENT YEAR OVER YEAR
* AT EUR1.1 BILLION, FULL-YEAR EBITDA GREW BY 5 PERCENT DESPITE LOWER
SPECIAL INCOME
* NET INCOME DECLINED BY 22 PERCENT TO EUR189 MILLION AMID SUBSTANTIALLY
HIGHER DEPRECIATION
* DIVIDEND PROPOSAL OF EUR2.00 PER SHARE CORRESPONDS TO 53 PERCENT OF NET
INCOME
* FOR 2017, WACKER EXPECTS SALES TO GROW BY A MID-SINGLE-DIGIT PERCENTAGE,
WITH ADJUSTED EBITDA AT PRIOR-YEAR LEVEL
* NET CASH FLOW AGAIN PROJECTED TO REACH ABOUT EUR400 MILLION IN 2017
Munich, March 14, 2017 - As already reported, Wacker Chemie AG met its sales
target and exceeded its earnings expectations in 2016. On presenting its
annual report today, the Munich-based chemical company announced that Group
sales came in at EUR5.40 billion, up 2 percent year over year (2015: EUR5.30
billion). The rise was mainly due to higher volumes. EBITDA - earnings
before interest, taxes, depreciation and amortization - totaled EUR1,101.4
million in 2016 (2015: EUR1,048.8 million). This corresponds to an EBITDA
margin of 20.4 percent (2015: 19.8 percent).
Although special income from advance payments retained and damages received
from solar customers was much lower than in 2015, EBITDA was 5 percent above
the prior-year value. Special income totaled EUR20.3 million in full-year
2016 (2015: EUR137.6 million). Adjusted for this effect, EBITDA reached
EUR1,081.1 million (2015: EUR911.2 million), a rise of around 19 percent.
The Group's EBIT (earnings before interest and taxes) came in at EUR366.2
million in 2016 (2015: EUR473.4 million), a year-over-year decline of 23
percent. A key factor here was that depreciation rose significantly. It
amounted to EUR735.2 million in 2016 (2015: EUR575.4 million). On the bottom
line, WACKER ended 2016 with Group net income of EUR189.3 million (2015:
EUR241.8 million). That was around 22 percent less than the year before.
In 2017, WACKER intends to continue its good performance, despite
expectations of higher raw-material prices. For the full year, WACKER aims
to lift its sales by a mid-single-digit percentage. Group EBITDA is
projected at last year's level - when adjusted on a comparable basis to
exclude special income from damages received and from terminated contractual
and delivery relationships with solar customers. WACKER anticipates a high
cash inflow from operating activities again in 2017. At about EUR400
million, net cash flow should be at a similar level to the year before.
Group net income is also projected to reach the year-earlier level.
During the first two months of the current year, WACKER's business developed
positively. In chemicals, and at Siltronic and WACKER POLYSILICON, sales for
the first two months were clearly above the comparable values of last year.
Overall, WACKER expects to generate sales of some EUR1.4 billion in the
first quarter of 2017 (Q1 2016: EUR1.31 billion). In addition to volume
growth, WACKER is achieving better prices than a year earlier, especially
for semiconductor wafers. As a result, the Group expects EBITDA to grow
significantly in Q1 2017.
"WACKER is in very good shape," said CEO Rudolf Staudigl in Munich on
Tuesday. "We expect volumes to rise at every division. In the industry
sectors relevant to our business, the trend will be broadly positive in
2017. That is why we are confident of increasing sales by a slightly higher
percentage than last year. We are, however, facing headwind from
raw-material prices. At present, they are rising significantly and this
could impact earnings. If current market conditions remain unchanged during
the year, we definitely see additional upward potential for EBITDA - over
and above our present expectations."
Capital Expenditures
In 2016, the Group's capital expenditures amounted to EUR427.6 million
(2015: EUR834.0 million). They dropped by about half versus the year before,
as expected.
One of the priorities of investing activities last year remained the
completion of the new polysilicon site at Charleston, Tennessee (USA). Some
EUR100 million - or about a quarter of total capital spending in 2016 - went
toward this project. WACKER finished commissioning the production facilities
there on schedule in the third quarter of 2016.
A further investment priority in 2016 was expanding capacities for
manufacturing downstream products. For example, WACKER increased production
capacity for cyclodextrins by 30 percent at its site in Eddyville, Iowa
(USA). At its Burghausen site, it expanded production of functional silicone
fluids in several stages. Capital spending for this amounted to some EUR25
million. Siltronic's Freiberg site invested in new pulling facilities for
manufacturing silicon monocrystals.
In 2016, WACKER began additional investment projects. These include new
facilities for silicone products at sites in Jincheon (South Korea) and
Jandira (Brazil). In Burghausen, WACKER is building a new reactor for
polymeric dispersions and is expanding a plant for hydrophobic specialty
grades of silica.
Employees
Sales growth at the chemical divisions and the start-up of the new site in
Charleston, Tennessee, expanded the Group's workforce. The number of
employees rose by around 230 in 2016. The Group had 17,205 employees
worldwide as of December 31, 2016 (Dec. 31, 2015: 16,972). Its German sites
had 12,138 employees at the reporting date (2015: 12,251) and its
international sites 5,067 (2015: 4,721).
Net Cash Flow, Net Financial Debt and Equity Ratio
As projected, the Group's net cash flow was clearly positive, increasing
many times over versus the year before. It came in at EUR400.6 million
(2015: EUR22.5 million). This strong rise was mainly due to the marked
decline in capital expenditures. The Group's net financial debt amounted to
EUR992.5 million as of December 31, 2016 (Dec. 31, 2015: EUR1,074.0
million). It was slightly below the year-earlier level, as planned. WACKER's
total assets amounted to EUR7.46 billion as of December 31, 2016, rising by
about EUR200 million compared with the year before (Dec. 31, 2015: EUR7.26
billion). The key factors supporting this increase of almost 3 percent were
higher trade receivables and higher inventories. At the reporting date,
Group equity amounted to around EUR2.59 billion (Dec. 31, 2015: EUR2.80
billion). The corresponding equity ratio was 34.8 percent (Dec. 31, 2015:
38.5 percent). The decline was basically caused by an adjustment to pension
provisions recognized in other comprehensive income, as the result of a
change in the discount rate. Pension provisions amounted to EUR2.11 billion
at the reporting date (Dec. 31, 2015: EUR1.61 billion). Compared with their
September 30 peak of last year (EUR2.57 billion), pension provisions were
down by about EUR460 million by the end of the year.
Business Divisions
In 2016, sales at WACKER SILICONES topped the two-billion-euro mark for the
first time, rising to EUR2.00 billion (2015: EUR1.94 billion). The main
reason for this 3-percent increase was volume growth amid somewhat lower
prices. EBITDA outpaced sales growth, climbing 31 percent to EUR361.2
million (2015: EUR276.2 million). The rise was fueled by volume growth, good
plant utilization and high levels of cost efficiency.
Sales at WACKER POLYMERS grew slightly in 2016, up 1 percent to around
EUR1.20 billion (2015: EUR1.19 billion). Growth was mainly driven by higher
volumes for dispersions and dispersible polymer powders. Lower prices had
the opposite effect. EBITDA amounted to EUR261.0 million, rising by around
17 percent (2015: EUR222.2 million). This reflected the impact of much
higher volumes, good plant capacity utilization and very high levels of cost
efficiency.
The sales trend was positive at WACKER BIOSOLUTIONS, too. Sales rose by
around 5 percent in 2016 to EUR206.4 million (2015: EUR197.1 million). It
was essentially higher volumes that spurred the increase, while lower prices
had the opposite effect. EBITDA increased by 15 percent to EUR37.0 million
(2015: EUR32.2 million), mainly due to volume growth and high plant
utilization.
WACKER POLYSILICON lifted its sales slightly in 2016. They climbed 3 percent
to around EUR1.10 billion (2015: EUR1.06 billion). The rise was due to
substantial volume growth, despite the fact that average solar-silicon
prices were lower. At over 66,000 metric tons, the division sold more
polysilicon last year than the year before (2015: 56,000 metric tons).
EBITDA amounted to EUR285.9 million, 29 percent below the previous year's
level (2015: EUR402.4 million). The decline was basically caused by lower
average prices, by start-up costs at the new production site at Charleston,
Tennessee (USA), and by a substantial reduction in special income from
advance payments retained and damages received from customers. In 2016,
special income amounted to EUR20.3 million (2015: EUR137.6 million).
At Siltronic, sales in 2016 were roughly on a par with the previous year,
coming in at EUR933.4 million (2015: EUR931.3 million). Volume gains and
favorable exchange-rate effects were countered by lower prices. EBITDA
improved by about 18 percent year over year, climbing to EUR145.9 million
(2015: EUR124.0 million). Positive factors influencing EBITDA included
additional cost-reduction measures, high rates of production-capacity
utilization and lower currency-hedging expenses.
Proposal on Appropriation of Profits
In 2016, Wacker Chemie AG posted a retained profit of EUR1,243.8 million
under German Commercial Code accounting rules. The Executive and Supervisory
Boards will propose a dividend of EUR2.00 per share (2015: EUR2.00) at the
Annual Shareholders' Meeting. Based on the number of shares entitled to
dividends as of December 31, 2016, the cash dividend corresponds to a payout
of EUR99.4 million. Calculated in relation to WACKER's average share price
in 2016, the dividend yield is 2.6 percent.
Outlook
Estimates by economic experts indicate that the world economy is on track
for moderate growth. But the projections involve major uncertainties.
WACKER's chemical business offers good prospects for further growth in 2017.
Sales are projected to continue rising at all three chemical divisions. At
WACKER SILICONES and WACKER POLYMERS, sales are expected to grow by a
mid-single-digit percentage, with all business units contributing. At WACKER
BIOSOLUTIONS, the sales forecast is for a low-single-digit percentage
increase, chiefly driven by products for the pharmaceutical and agrochemical
industries.
EBITDA at WACKER SILICONES should rise slightly year over year, amid higher
raw-material prices in some cases. At WACKER POLYMERS, the EBITDA projection
is for a substantial year-over-year decline due to expectations of much
higher raw-material prices - with the projected EBITDA margin exceeding the
16 percent targeted for WACKER's chemical divisions. At WACKER BIOSOLUTIONS,
integration costs for the new site in Spain will impact 2017's EBITDA, which
will be significantly lower than last year.
In its polysilicon business, WACKER expects additional volume growth in
2017. The Group's assumption is that the photovoltaic market will continue
on its growth trajectory. Given the fact that average solar-silicon prices
are likely to be lower than a year earlier, WACKER POLYSILICON expects sales
to only match last year's level despite volume growth. The division's EBITDA
should be somewhat higher than last year - when adjusted on a comparable
basis to exclude special income from advance payments retained and damages
received.
In its semiconductor business, WACKER is projecting a high-single-digit
percentage increase in sales. Siltronic expects sales to reach at least EUR1
billion in the current year, mainly spurred by volume gains and higher sales
prices. In 200 mm and 300 mm wafer business, the company anticipates high
capacity utilization. EBITDA is likely to climb substantially year over
year. Siltronic forecasts an EBITDA margin of at least 20 percent,
potentially even significantly higher.
Overall, WACKER expects Group sales to rise by a mid-single-digit percentage
in 2017. EBITDA - adjusted on a comparable basis to exclude special income -
should be on a par with last year. If current market conditions continue
during the year, there will be additional opportunities for the EBITDA
trend. The Group's EBITDA margin is projected to be slightly below the
year-earlier level due to generally lower prices for its own products and
rising raw-material prices. At around EUR450 million, capital expenditures
will edge up slightly versus last year. Depreciation will be slightly below
last year's level, at around EUR720 million. Group net income is projected
to be at the year-earlier level. Net cash flow should be clearly positive
and at a similar level to last year. Net financial debt will decrease
significantly.
Information for editorial offices: The Annual Report for 2016 is available
for download on the WACKER website (www.wacker.com) under Investor
Relations.
Key Figures of the WACKER Group
Results / Return 2016 2015 Change
in %
Sales EURm 5,404.2 5,296.2 2.0
EBITDA1 EURm 1,101.4 1,048.8 5.0
EBITDA margin 2 % 20.4 19.8 n.a.
EBIT3 EURm 366.2 473.4 -22.6
EBIT margin 2 % 6.8 8.9 n.a.
Financial result EURm -101.4 -66.7 52.0
Income before taxes EURm 264.8 406.7 -34.9
Net income EURm 189.3 241.8 -21.7
Earnings per share EUR 3.61 4.97 -27.4
ROCE % 6.1 8.1 n.a.
Financial Position / Cash Flows
Total assets EURm 7,461.6 7,264.4 2.7
Equity EURm 2,593.2 2,795.1 -7.2
Equity ratio % 34.8 38.5 n.a.
Financial liabilities EURm 1,458.2 1,455.4 0.2
Net financial debt4in EUR m 992.5 1,074.0 -7.6
Capital expenditures5in EUR m 427.6 834.0 -48.7
Depreciation / amortizationin EUR m 735.2 575.1 27.8
Net cash flow6in EUR m 400.6 22.5 >100
Research and Development
R&D expenses EURm 183.4 175.3 4.6
Employees
Personnel expenses EURm 1,379.4 1,350.1 2.2
Employees (December 31) No. 17,205 16,972 1.4
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 and cash equivalents, noncurrent and current securities, and
noncurrent and current financial liabilities
5 Capital expenditures excluding acquisitions.
6 Sum of cash flow from operating activities (excluding changes in advance
payments) and cash flow from long-term investing activities (before
securities), including additions due to finance leases.
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.
For further information, please contact:
Wacker Chemie AG
Media Relations & Information
Christof Bachmair
Tel. +49 89 6279-1830
[email protected]
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14.03.2017 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Wacker Chemie AG
Hanns-Seidel-Platz 4
81737 München
Germany
Phone: 0049-89-6279-1633
Fax: 0049-89-6279-2933
E-mail: [email protected]
Internet: www.wacker.com
ISIN: DE000WCH8881
WKN: WCH888
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover,
Munich, Stuttgart, Tradegate Exchange
End of News DGAP News Service
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