26.07.2018
Wacker Chemie AG DE000WCH8881
DGAP-News: Wacker Chemie AG: WACKER's Sales and Earnings Rise in Q2 2018 Amid Strong Performance in Chemicals
DGAP-News: Wacker Chemie AG / Key word(s): Quarter Results/Interim Report
Wacker Chemie AG: WACKER's Sales and Earnings Rise in Q2 2018 Amid Strong
Performance in Chemicals
26.07.2018 / 07:14
The issuer is solely responsible for the content of this announcement.
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- GROUP SALES CLIMB TO EUR1.33 BILLION, 9 PERCENT HIGHER BOTH YEAR OVER YEAR
AND QUARTER OVER QUARTER
- EBITDA REACHES EUR261 MILLION, UP 3 PERCENT VERSUS LAST YEAR AND 2 PERCENT
VERSUS A QUARTER AGO
- NET INCOME FOR Q2 2018 AMOUNTS TO EUR84 MILLION
- FULL-YEAR FORECAST UNCHANGED: GROUP SALES FOR 2018 EXPECTED TO GROW BY A
LOW-SINGLE-DIGIT PERCENTAGE, WITH EBITDA LIKELY TO RISE BY A
MID-SINGLE-DIGIT PERCENTAGE
Munich, July 26, 2018 - Thanks to the strong performance of its chemical
business, Wacker Chemie AG's sales and EBITDA continued to grow in the
second quarter of 2018, both year over year and quarter over quarter. The
Munich-based chemical company posted sales of EUR1,329.9 million in the
reporting quarter (Q2 2017: EUR1,218.3 million). That was an increase of 9
percent. Sales were lifted by better prices, especially for silicone
products, by volume growth for chemical products and by positive effects
from the chemical-product mix. Exchange-rate headwinds, though, slowed the
sales trend, with the euro appreciating strongly year over year. Relative to
a quarter ago (EUR1,217.6 million), the sales increase was also 9 percent.
WACKER generated EBITDA of EUR260.5 million in Q2 2018. That was 3 percent
more than a year ago (EUR253.4 million) and 2 percent more than a quarter
ago (EUR254.5 million). Growth drivers were better prices for chemical
products and higher income from the stake in Siltronic. As a result, WACKER
more than compensated for raw-material costs, which increased markedly both
year over year and quarter over quarter. High plant utilization was another
positive factor in earnings performance in the reporting quarter. The
Group's EBITDA margin for Q2 2018 was 19.6 percent (Q2 2017: 20.8 percent).
In the preceding quarter, it was 20.9 percent. Group earnings before
interest and taxes (EBIT) amounted to EUR125.0 million in Q2 2018 (Q2 2017:
EUR101.9 million), yielding an EBIT margin of 9.4 percent (Q2 2017: 8.4
percent). Net income for the reporting quarter amounted to EUR83.5 million
(Q2 2017: EUR60.5 million) and earnings per share came in at EUR1.59 (Q2
2017: EUR1.17).
The full-year 2018 forecast for sales and earnings as published in the 2017
Annual Report remains unchanged. WACKER continues to expect that Group sales
will grow by a low-single-digit percentage relative to last year (EUR4,924.2
million). EBITDA is likely to rise by a mid-single-digit percentage compared
with last year (EUR1,014.1 million). WACKER expects Group net income from
continuing operations to rise markedly.
"After the first six months of the year, we are firmly on track to achieve
our full-year targets," said Group CEO Rudolf Staudigl in Munich on
Thursday. "Our chemical portfolio is currently performing very well and
customer demand for silicones, in particular, is very high. In this market
environment, we are posting volume growth with specialty products and
achieving substantial price increases for standard silicones. The
intensifying trade dispute between the USA and both China and the EU poses a
significant risk to the global economy. In addition, markedly higher
raw-material costs reduce our earnings. On the other hand, our chemical
business is performing considerably better than anticipated at the start of
the year. The first six months have delivered a good basis for WACKER's
development in the current year. Provided there is no economic downturn, we
could outperform our current full-year earnings forecast."
Regions
In Q2 2018, WACKER continued growing its sales in every region. The biggest
increase was in Asia, where sales rose 13 percent to EUR495.7 million (Q2
2017: EUR440.3 million). Sales in Europe reached EUR543.2 million, up 7
percent over last year's figure of EUR506.0 million. In the Americas, sales
reached EUR223.7 million (Q2 2017: EUR214.2 million), an increase of 4
percent.
Capital Expenditures and Net Cash Flow
In Q2 2018, the Group's capital expenditures came in at EUR97.7 million (Q2
2017: EUR74.8 million), up 31 percent year over year. The funds went mainly
toward expanding capacity for silicone and polymer products. In addition,
WACKER acquired a production site for biologics in Amsterdam (Netherlands)
in April.
Net cash flow totaled EUR-101.4 million in Q2 2018 (Q2 2017: EUR93.9
million). This marked decline was mainly attributable to substantially
higher cash outflows for capital expenditures and acquisitions, higher
variable-compensation payments, repair and ramp-up costs at WACKER's
Charleston site, and the increase in working capital due to rising business
volumes.
Employees
WACKER's global workforce edged up in the reporting quarter. The Group had
14,270 employees as of June 30, 2018 (March 31, 2018: 13,983). At the end of
the reporting quarter, 10,156 employees (March 31, 2018: 10,076) worked at
WACKER sites in Germany and 4,114 (March 31, 2018: 3,907) at international
locations.
Business Divisions
WACKER SILICONES generated total sales of EUR653.8 million in Q2 2018 (Q2
2017: EUR548.7 million), up 19 percent. Growth was driven by better prices
for silicone products, coupled with higher volumes and an enhanced product
mix. Relative to a quarter ago (EUR605.8 million), WACKER SILICONES' sales
rose 8 percent. The division's reporting-quarter EBITDA of EUR176.6 million
was 59 percent above the year-earlier figure (EUR110.8 million). Versus a
quarter ago (EUR148.5 million), the increase was 19 percent. Earnings
benefited from not only sales growth, but also product-mix effects and
generally high production output. The EBITDA margin improved to 27.0 percent
in Q2 2018, after 20.2 percent in Q2 2017 and 24.5 percent a quarter ago.
Sales at WACKER POLYMERS totaled EUR343.1 million in the reporting quarter,
2 percent higher than a year ago (EUR335.3 million). This slight increase
was due to better prices and to volumes that were somewhat higher on
balance. Compared with the preceding quarter (EUR301.9 million), sales were
up 14 percent, mainly due to volume growth. The division's EBITDA amounted
to EUR32.6 million in Q2 2018, after EUR62.4 million a year ago. This 48
percent decline stemmed mainly from substantially higher raw-material costs.
In order to counter this development, the division is raising the prices of
its products. Compared with a quarter ago (EUR41.9 million), EBITDA was down
22 percent. Aside from higher prices for the raw materials vinyl acetate
monomer and ethylene, a scheduled plant shutdown for maintenance also
lowered earnings. The reporting-quarter EBITDA margin was 9.5 percent, after
18.6 percent the year before and 13.9 percent a quarter ago.
WACKER BIOSOLUTIONS posted total sales of EUR57.2 million in Q2 2018, up 11
percent versus a year ago (EUR51.4 million). The increase was mainly driven
by volume growth and better prices for some products. Compared with a
quarter ago (EUR54.3 million), the division's sales were up 5 percent.
WACKER BIOSOLUTIONS' reporting-quarter EBITDA of EUR5.4 million was 41
percent below the year-ago figure (EUR9.1 million) and 47 percent lower than
the preceding quarter (EUR10.1 million). Factors in this decline included
not only higher raw-material costs, but also integration costs and still-low
utilization rates at the newly acquired biologics plant in the Netherlands.
The EBITDA margin was 9.4 percent, after 17.7 percent last year and 18.6
percent in Q1 2018.
WACKER POLYSILICON generated total sales of EUR242.1 million in the
reporting quarter. That was 2 percent less than a year ago (EUR246.7
million). The main reason for the slight decrease was that volumes and
average prices were somewhat lower. Sales were up 10 percent relative to the
preceding quarter (EUR219.3 million), driven mainly by substantial volume
growth. This enabled the division to more than compensate for average
polysilicon prices that were generally lower on balance than a quarter ago.
WACKER POLYSILICON's reporting-quarter EBITDA came in at EUR39.1 million,
down 45 percent compared with a year ago (EUR71.3 million). The decrease was
mainly due to ramp costs at Charleston, where production facilities are
gradually coming on stream again. EBITDA contracted relative to a quarter
ago (EUR48.2 million) as well, with the 19 percent decrease additionally
attributable to lower prices. No insurance compensation for the business
interruption loss at Charleston was booked in the entire first half of 2018.
From April through June 2018, WACKER POLYSILICON's EBITDA margin amounted to
16.2 percent, after 28.9 percent in Q2 2017 and 22.0 percent in Q1 2018.
Outlook
WACKER described in detail its projections for the Group's performance this
year in the Outlook section of its 2017 Annual Report. These projections
have changed as follows:
Net financial debt is now expected to amount to around EUR500 million by
year-end 2018, partly due to exchange-rate effects. WACKER had previously
assumed that its net financial debt would be on par with last year (EUR454.4
million). According to current estimates, the Group's full-year capital
expenditures will come in at around EUR450 million (2017 Annual Report:
around EUR470 million).
Due to strong customer demand, WACKER SILICONES is likely to achieve an even
more substantial increase in sales and EBITDA for full-year 2018 than was
projected on publication of the 2017 Annual Report. The division now expects
to post sales of some EUR2.5 billion (2017 Annual Report: low-single-digit
percentage increase). EBITDA will likely reach some EUR600 million (2017
Annual Report: mid-single-digit percentage increase).
WACKER POLYMERS expects to achieve volume growth and better prices for the
full year. At the same time, however, raw-material costs continue to rise.
Overall, the division anticipates the second-half-year EBITDA to be similar
to the first half. WACKER POLYMERS' full-year EBITDA will therefore amount
to around EUR150 million (2017 Annual Report: EBITDA at last year's level).
The division's forecast for a mid-single-digit percentage increase in sales
remains unchanged.
At WACKER POLYSILICON, full-year sales volumes are likely to be lower than
expected at the start of the year. At the same time, the division expects
average polysilicon prices to be lower than last year. Due to both these
factors, full-year sales will decline by a low-double-digit percentage
compared with last year (2017 Annual Report: high-single-digit percentage
decline). EBITDA is likely to be around 10 percent lower than last year
(2017 Annual Report: slight increase).
Otherwise, the statements made in the 2017 Annual Report regarding the
Group's expectations did not change on balance during the reporting period.
For 2018, WACKER anticipates higher raw-material costs 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
growth should continue, increasing by a mid-single-digit percentage versus
last year. WACKER expects its EBITDA margin to be slightly higher than a
year ago. Depreciation of about EUR550 million will be significantly lower
than last year's level. 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.
Key Figures of the WACKER Group
EUR million Q2 2018 Q2 2017 Chang- 6M 2018 6M 2017 Change
e in in %
%
Sales 1,329.9 1,218.3 9.2 2,547.5 2,437.1 4.5
EBITDA1 260.5 253.4 2.8 515.0 482.7 6.7
EBITDA margin2 19.6 20.8 - 20.2 19.8 -
(%)
EBIT3 125.0 101.9 22.7 246.7 175.1 40.9
EBIT margin2 (%) 9.4 8.4 - 9.7 7.2 -
Financial result -16.8 -26.1 -35.6 -33.7 -49.7 -32.2
Income from 108.2 75.8 42.7 213.0 125.4 69.9
continuing
operations before
income taxes
Income from 83.5 60.5 38.0 162.6 91.7 77.3
continuing
operations
Income from - - - - 634.7 -100.0
discontinued
operations
Net income for 83.5 60.5 38.0 162.6 726.4 -77.6
the period
Earnings per 1.59 1.17 35.9 3.11 1.76 76.7
share from
continuing
operations (EUR)
Earnings per 1.59 1.17 35.9 3.11 14.36 -78.4
share (EUR)
Capital 97.7 74.8 30.6 166.9 121.5 37.4
expenditures
Depreciation / 135.5 151.5 -10.6 268.3 307.6 -12.8
amortization
Net cash flow4 -101.4 93.9 n.a. 66.6 147.1 -54.7
from continuing
operations
EUR million June June Dec.
30, 30, 31,
2018 2017 2017
Total assets 6,947.7 7,096.2 6,835.7
Equity 3,066.0 3,136.3 3,169.3
Equity ratio (%) 44.1 44.2 46.4
Financial 1,028.3 1,361.9 1,001.6
liabilities
Net financial 639.5 671.4 454.4
debt5
Employees (number 14,270 13,689 13,811
at end 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 result and other financial result, and income taxes.
4 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.
5 Sum of cash and cash equivalents, noncurrent and current securities, and
noncurrent and current financial liabilities.
Information for editorial offices: the Q2 2018 report 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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26.07.2018 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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