Comparing Actual with Forecast Performance

In 2009, WACKER – and the entire chemical sector – had to cope with the impact of the international financial and economic crisis. Back in mid-2008, we decided on and implemented policies to improve cost structures, profitability and flexibility in all areas. Numerous individual measures enabled us to cut costs and to calculate and control the economic effects. At the same time, we secured the company’s long-term financing at good conditions. Due to the highly unpredictable situation, we did not provide a forecast for 2009. We generally estimated that sales and EBITDA would be markedly below the prior-year figures. Despite this development, WACKER did well last year. With the help of our strong product portfolio, we were able to partially mitigate sales declines in several divisions through substantial growth at WACKER POLYSILICON.

2009’s sales revenue was €3.72 billion – down 13.5%, and thus well below the prior-year level. We posted lower sales at three of our five divisions. As expected, though, WACKER POLYSILICON grew significantly.

EBITDA also showed a clear and expected decline. At year-end 2009, EBITDA was €606.7 million, 42.5% lower than the previous year. Earnings were influenced by non-recurring items relating to our exit from solar wafers and by an extraordinary addition to pension provisions due to a mortality-table realignment and other personnel-related measures.

At the 2010 Annual Shareholders’ Meeting, the Executive and Supervisory Boards’ dividend proposal is to be €1.20 per share.

Adjusted for acquisitions, investments were set to remain at a high level in 2009. Overall, investment spending reached €740.1 million. Most funds flowed into the ongoing expansion of our polysilicon production facilities.

Investments Remain High in 2009

R&D expenditures remained stable. At €164.0 million, they were up 0.5% against the prior year.

WACKER was able to lower personnel costs by €75 million in 2009. This was achieved by reducing temporary-staff numbers, by not renewing short-term contracts, by introducing short-time work at German sites and by cutting variable salary components. Employee numbers fell from 15,922 to 15,618 in 2009, primarily due to reductions in short-term contracts and the use of natural fluctuation.

Our earnings performance was positively impacted by raw-material and energy costs. They fell significantly amid the economic slump. The prices of our four key raw materials – silicon, ethylene, vinyl acetate monomer and methanol – were down 18% on average compared to the prior year. Energy prices (electricity and gas) were also lower, decreasing 8% from 2008.