Group Equity Virtually Unchanged
Equity fell marginally to €2.62 billion as of December 31, 2012 (2011: €2.63 billion). Because of the increase in total assets, the equity ratio declined somewhat. As of December 31, 2012, it was 41.4 percent (2011: 42.2 percent). The Group’s 2012 net income was recognized in equity in the amount of €106.8 million (2011: €356.1 million). Dividend payouts and distribution of dividends reduced equity by a total of €110.7 million (2011: €160.1 million). The effects reported as other equity items totaled €-8.0 million (2011: €-13.1 million).
The WACKER Group’s liabilities edged up, climbing 3 percent to €3.71 billion (2011: €3.61 billion). At 59 percent (2011: 58 percent), their share of total equity and liabilities rose slightly on the previous year.
Noncurrent liabilities amounted to €2.55 billion at year-end 2012, €64.8 million higher than in 2011 (€2.49 billion). As in the prior year, they still accounted for about 40 percent of total equity and liabilities. Noncurrent provisions dropped 3 percent to €762.7 million (2011: €782.3 million). As anticipated, provisions for pensions were higher in 2012. They rose by €42.2 million or 8 percent to €569.3 million (2011: €527.1 million). Other provisions were 17 percent lower at €161.3 million. Aside from the reversal of the noncurrent portion (€30.4 million) of the provision for contingent losses from obligations under contracts to purchase siloxane from the associated company with Dow Corning, this decline was mainly due to the reclassification of previously noncurrent tax provisions totaling €29.2 million as current. Noncurrent provisions for personnel include provisions for phased early retirement and for anniversary payments. Phased-early-retirement provisions were reduced as claims were paid out. Anniversary-payment provisions have risen because of lower interest rates.
As of the reporting date, noncurrent financial liabilities were up 45 percent to €958.5 million (2011: €662.1 million). On February 23, 2012, WACKER issued four promissory notes (German Schuldscheine) totaling €300 million, as part of its multiyear financing strategy. They have terms of three and five years, and contain standard market credit terms. In addition, long-term loans each totaling 5 billion Japanese yen were raised in Q3 and Q4 2012, respectively. Noncurrent financial liabilities account for 15 percent of total equity and liabilities (2011: 11 percent).
There also were changes in other noncurrent liabilities, which declined by a substantial 20 percent year over year, to €829.6 million (2011: €1.04 billion). This was mostly the result of the reduction in long-term advance payments for polysilicon received, which fell by €197.5 million to €803.4 million (2011: €1.0 billion). Long-term advance payments received accounted for 13 percent of total equity and liabilities (2011: 16 percent).
There was a slight increase in current liabilities. At €1.16 billion as of the reporting date, they rose 4 percent (2011: €1.12 billion). Their share of total equity and liabilities was 18 percent.
Current financial liabilities increased by €115.8 million to €238.7 million, up 106 percent. Trade payables sank to €379.8 million (2011: €402.6 million), partly as a consequence of reduced capacity utilization in Q4 2012. They represent an unchanged 6 percent of total equity and liabilities.
Other current provisions and liabilities totaled €542.8 million (2011: €602.9 million). This figure is the result of a combination of different effects. €35.1 million was added to provisions for taxes. Certain noncurrent provisions for taxes were reclassified as current. The current portion of the provision for contingent losses from obligations to purchase siloxane from the associated company with Dow Corning was partially reversed. Unlike the provisions, other liabilities fell to €382.6 million (2011: €458.3 million). This reduction mainly stemmed from payments of variable compensation and payments made in relation to the closure of the Hikari (Japan) site. Current advance payments received were higher than a year earlier.
Unrecognized Assets and Off-Balance-Sheet Financial Instruments
An important asset that does not appear on our statement of financial position is the value of the WACKER brand and other Group trademarks. We consider the high profile and reputation of our trademarks to be a key factor influencing customer acceptance of our products and solutions. Moreover, there are other intangible assets that are vital for success and positively impact our business – for example, long-standing customer relationships and customer trust in our product and solution-related expertise. Just as important are our employees’ in-depth skills and experience, and our many years of expertise not only in R&D and project management, but also in designing production and business-process structures. In particular, our integrated production system gives us a competitive edge over our rivals. Another key success factor is WACKER’s sales network, which has evolved over many years and enables the Group to market and sell its range of products and services locally to customers. The statement of financial position also does not include various German legal forms of rented and leased goods reported on in . Additionally, other self-constructed assets are not included. WACKER does not use any off-balance-sheet financing instruments.