13.03.2018
Wacker Chemie AG DE000WCH8881
DGAP-News: Wacker Chemie AG: After a Good Fiscal Year 2017, WACKER Expects Further Sales And Earnings Growth For 2018
DGAP-News: Wacker Chemie AG / Key word(s): Final Results/Forecast
Wacker Chemie AG: After a Good Fiscal Year 2017, WACKER Expects Further
Sales And Earnings Growth For 2018
13.03.2018 / 07:15
The issuer is solely responsible for the content of this announcement.
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As stipulated by IFRS 5 (Non-Current Assets Held for Sale and Discontinued
Operations), WACKER is retrospectively reporting the net income of Siltronic
AG and its subsidiaries for 2016 as "Income from discontinued operations."
Since March 15, 2017, WACKER's stake in Siltronic has been accounted for
using the equity method. Where applicable, the figures for 2016 given in
this press release have been adjusted accordingly and are therefore
comparable with the latest figures.
- AT EUR4.92 BILLION, SALES FOR 2017 ARE 6 PERCENT HIGHER YEAR OVER YEAR,
WITH EBITDA OF EUR1.014 BILLION ALSO UP 6 PERCENT
- INCOME FROM CONTINUING OPERATIONS INCREASES 40 PERCENT TO EUR250 MILLION
- DIVIDEND PROPOSAL OF EUR2.50 AND ADDITIONAL BONUS OF EUR2.00 PER SHARE
CORRESPONDS TO A PAYOUT OF EUR224 MILLION
- EBITDA PROJECTED TO GROW SLIGHTLY MORE THAN SALES IN 2018
Munich, March 13, 2018 - As already reported, Wacker Chemie AG met or
surpassed its own projections for all its performance indicators in 2017. On
presenting its annual report today, the Munich-based chemical company
announced that Group sales reached EUR4.92 billion, up 6 percent year over
year (2016: EUR4.63 billion). The rise was mainly due to higher volumes in
chemicals and in polysilicon. As a result, WACKER more than compensated both
for negative currency effects due to the euro's strength against the US
dollar and for prices that, on balance, were somewhat lower.
EBITDA (earnings before interest, taxes, depreciation and amortization)
totaled EUR1,014.1 million in 2017 (2016: EUR955.5 million). That was a
year-over-year increase of 6 percent and yielded an EBITDA margin of 20.6
percent (2016: 20.6 percent). This growth was mainly prompted by higher
sales, by a very good operating performance, and by income of EUR40.0
million from the company's stake in Siltronic. On the other hand,
raw-material costs were higher year over year and dampened earnings.
Group EBIT (earnings before interest and taxes) rose strongly last year, up
26 percent to EUR423.7 million (2016: EUR337.5 million). This corresponds to
an EBIT margin of 8.6 percent (2016: 7.3 percent). Lower depreciation year
over year had a positive influence on EBIT and amounted to EUR590.4 million
in 2017 (2016: EUR618.0 million).
Income from continuing operations climbed 40 percent in 2017 to EUR250.1
million (2016: EUR178.1 million). The Group's net income for the year was
EUR884.8 million (2016: EUR189.3 million). It included EUR634.7 million in
income from discontinued operations from Q1 2017. This amount comprised both
the gain associated with the deconsolidation of Siltronic AG as a WACKER
Group segment and Siltronic's net income in the first quarter of 2017.
In 2018, WACKER intends to continue the good performance of last year,
despite strong currency headwinds. Currency effects and amendments to
accounting standards are expected to reduce sales by an amount in the
low-triple-digit millions. Nonetheless, WACKER aims to lift its full-year
sales by a low-single-digit percentage. Group EBITDA is projected to rise by
a mid-single-digit percentage compared with 2017. As for net income from
continuing operations, WACKER expects a marked increase.
During the first two months of the current year, WACKER's chemical business
performed well. Over this period, total chemical-division sales were clearly
above the prior-year figure. On the other hand, polysilicon sales for the
first two months were noticeably lower than a year ago because less material
was available for sale as a result of the production shutdown at Charleston.
For Q1 2018, WACKER expects total Group sales to be on par with last year
(Q1 2017: EUR1.22 billion). Group EBITDA in Q1 2018 is likely to be
substantially higher than a year ago because earnings are supported by
better prices for silicone products, by high plant utilization, and by
increased income from the stake in Siltronic AG.
"WACKER's prospects remain bright," said Group CEO Rudolf Staudigl in Munich
on Tuesday. "Demand is very high in all our business fields. Our chemical
operations will continue to grow this year. In our polysilicon business, we
currently lack Charleston's output, but, in all likelihood, we can begin
ramping up our facilities there in a few weeks' time. All in all, Group
sales will not grow as dynamically this year as in 2017, but we expect
earnings to rise markedly."
Capital Expenditures
In 2017, the Group's capital expenditures amounted to EUR326.8 million
(2016: EUR338.1 million). That was 3 percent less than the year before.
An investment priority last year was capacity expansion at WACKER's three
chemical divisions. At the Jincheon site in South Korea, new facilities were
built for manufacturing silicone sealants and specialty silicones. These
products are used in the construction, electronics and automotive
industries. In Burghausen, Germany, a new dispersion reactor expanded
WACKER's polymer operations there. It went on stream in Q4 and has an annual
capacity of 60,000 metric tons.
In 2017, WACKER launched a number of other investment projects. They include
new plants for dispersions and dispersible polymer powders at the Ulsan site
(South Korea), construction of a new production facility for pyrogenic
silica in Charleston (USA) and silicon-metal capacity expansion at Holla
(Norway). At Léon (Spain), WACKER is modernizing a large-scale fermentation
plant acquired in 2016. Bio-engineered cystine for the food and
pharmaceutical industries is to be produced there.
Employees
Increasing chemical-division sales expanded the Group's workforce. The
number of employees rose by around 360 in 2017. As of December 31, 2017,
WACKER had 13,811 employees worldwide (Dec. 31, 2016: 13,448). Its German
sites had 9,984 employees (2016: 9,775) and its international sites 3,827
(2016: 3,673).
Net Cash Flow, Net Financial Debt and Equity Ratio
WACKER again generated a high cash inflow in 2017. At EUR358.1 million
(2016: EUR361.1 million), net cash flow from continuing operations was on
par with the prior year and, thus, even somewhat better than the last
forecast. This result was positively influenced by substantially lower cash
payments for capital expenditures. The Group's net financial debt amounted
to EUR454.4 million as of December 31, 2017 (Dec. 31, 2016: EUR992.5
million). That was 54 percent less than the year before. WACKER's total
assets on December 31, 2017 amounted to EUR6.84 billion (Dec. 31, 2016:
EUR7.46 billion). The main reasons for this 8-percent decline were the
deconsolidation of Siltronic and a reduction in fixed assets due to
depreciation. Group equity rose strongly year over year. It amounted to
EUR3.17 billion on the reporting date (Dec. 31, 2016: EUR2.59 billion). The
resulting equity ratio was 46.4 percent (Dec. 31, 2016: 34.8 percent). The
increase essentially reflected the year's high net income.
Business Divisions
In 2017, WACKER SILICONES posted substantial sales growth. Climbing 10
percent, its sales reached EUR2.20 billion (2016: EUR2.00 billion). The rise
was due to volume gains and somewhat higher prices. EBITDA growth outpaced
sales gains year over year. EBITDA climbed 23 percent to EUR444.9 million
(2016: EUR361.2 million). This trend was driven by strong volume growth, by
somewhat higher prices in several product groups, by high plant utilization
and by good cost efficiency.
WACKER POLYMERS' sales rose 4 percent in 2017 to EUR1.25 billion (2016:
EUR1.19 billion). Growth was fueled by higher volumes for dispersions and
dispersible polymer powders. Lower prices and negative currency effects
dampened sales performance. EBITDA of EUR205.6 million was 21 percent below
the year-earlier level (2016: EUR261.0 million). A key factor here was the
strong increase in raw-material prices.
At WACKER BIOSOLUTIONS, sales of EUR205.9 million were on par with the year
before (2016: EUR206.4 million). While the division sold higher volumes,
slightly lower prices and negative currency effects had a contrary impact.
EBITDA of EUR37.5 million (2016: EUR37.0 million) was marginally higher than
the year before.
Sales at WACKER POLYSILICON climbed 3 percent in 2017 to EUR1.12 billion
(2016: EUR1.10 billion). Growth was due to a strong rise in volumes despite
lower average prices. Prospects of stronger volume and sales growth were
impeded by the loss of production at Charleston in the USA. On September 7,
2017, a technical defect led to a hydrogen explosion there, which damaged a
plant section. Production had to be shut down. As a result, WACKER
POLYSILICON had a shortfall of around 6,000 metric tons of polysilicon that
would have been available for sale. EBITDA amounted to EUR290.4 million,
rising by 2 percent (2016: EUR285.9 million). This gain mainly stemmed from
higher sales and a decline in production costs.
Proposal on Appropriation of Profits
In 2017, Wacker Chemie AG posted a retained profit according to German
Commercial Code accounting principles of EUR1,502.4 million. The Executive
and Supervisory Boards will propose a dividend of EUR2.50 per share for 2017
(2016: EUR2.00) at the Annual Shareholders' Meeting. In addition, they will
propose an extra EUR2.00 per share in connection with not only the sale of
Siltronic shares and the very good net-financial-debt trend, but also the
positive prospects for the company. Based on the number of dividend-bearing
shares as per December 31, 2017, the total cash dividend corresponds to a
payout of EUR223.5 million. Calculated in relation to WACKER's average share
price in 2017, the dividend yield is 4.0 percent.
Outlook
Economists expect the global upswing to continue in 2018 with increasing
momentum.
WACKER sees good opportunities for further growth in its chemical business
this year. Sales at all three chemical divisions are expected to climb. At
WACKER SILICONES, the forecast is for a low-single-digit percentage
increase. At WACKER POLYMERS and WACKER BIOSOLUTIONS, sales are likely to
grow by a mid-single-digit percentage.
EBITDA at WACKER SILICONES is projected to rise by a mid-single-digit
percentage year over year, amid higher prices for some raw materials. WACKER
POLYMERS anticipates EBITDA at the prior-year level, since raw-material
prices are likely to continue rising and because there will be a scheduled
production shutdown in the second quarter. At WACKER BIOSOLUTIONS,
integration costs for the new site in Spain will impact 2018's EBITDA, which
will be significantly lower than last year.
In its polysilicon business, given the present production shutdown at
Charleston, WACKER's 2018 forecast is that volumes will be at last year's
level, amid lower average prices for polysilicon. Consequently, sales are
expected to fall below last year's figure by a high-single-digit percentage.
EBITDA is projected to climb slightly year over year, supported by the
continued success of cost-cutting measures, and taking account of insurance
compensation.
Overall, WACKER anticipates further increases in raw-material prices in 2018
and headwinds from a stronger euro against the US dollar. Given these
underlying conditions, Group sales are projected to climb by a
low-single-digit percentage. EBITDA should grow further, up by a
mid-single-digit percentage versus last year. WACKER expects its EBITDA
margin to be slightly higher than a year ago. At around EUR470 million,
capital expenditures will rise substantially compared with last year, mainly
to support growth at WACKER SILICONES. Depreciation of about EUR550 million
will be significantly lower than a year ago. WACKER expects Group net income
from continuing operations to rise markedly. Net cash flow is forecast to be
clearly positive, but substantially below last year's figure, due to higher
capital expenditures. Net financial debt will remain on par with last year.
Key Figures of the WACKER Group
EUR million 2017 20167 Change in
%
Results / Return
Sales 4,924.2 4,634.2 6.3
EBITDA1 1,014.1 955.5 6.1
EBITDA margin2 (%) 20.6 20.6 n.a.
EBIT3 423.7 337.5 25.5
EBIT margin2 (%) 8.6 7.3 n.a.
Financial result -88.7 -91.1 -2.6
Income from continuing operations before 335.0 246.4 36.0
income taxes
Income from continuing operations 250.1 178.1 40.4
Income from discontinued operations 634.7 11.2 >100
Net income for the year 884.8 189.3 >100
Earnings per share from continuing 4.85 3.44 40.7
operations (EUR)
Earnings per share (EUR) 17.45 3.61 >100
ROCE (%) 7.5 6.4 n.a.
Financial Position / Cash Flows
Total assets 6,835.7 7,461.6 -8.4
Equity 3,169.3 2,593.2 22.2
Equity ratio (%) 46.4 34.8 n.a.
Financial liabilities 1,001.6 1,458.2 -31.3
Net financial debt4 454.4 992.5 -54.2
Capital expenditures (continuing 326.8 338.1 -3.3
operations)5
Depreciation (continuing operations) -590.4 -618.0 -4.5
Net cash flow (continuing operations)6 358.1 361.1 -0.8
Research
Research and development expenses 153.1 150.0 2.1
(continuing operations)
Employees
Personnel expenses (continuing operations) 1,198.0 1,101.2 8.8
Employees (December 31, number) 13,811 13,448 2.7
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 result and other financial result, 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.
7 Apart from statement-of-financial-position items, prior-year figures
exclude Siltronic. Adjusted in accordance with IFRS 5 (Non-Current Assets
Held for Sale and Discontinued Operations).
Information for editorial offices: The Annual Report for 2017 is available
for download on the WACKER website (www.wacker.com) under Investor
Relations.
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
its 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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13.03.2018 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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