At the beginning of 2009, WACKER’s share price dropped to well under the low final quote of December 31, 2008. This was due to the ongoing global demand slump in almost all markets and product segments, to profit warnings from major chemical companies and to uncertainty about the global economic outlook. Chemical-industry capacity utilization ranged from 50% to 80% in the first three months of the year. The semiconductor sector was particularly hard hit by the crisis. Gartner Dataquest, the market research institute, predicted that silicon-wafer sales (by surface area sold) would decline 35% in 2009. The downturn was also seen in business at WACKER subsidiary Siltronic, where capacity utilization started the year at under 50%.
WACKER decided on measures as early as 2008 to prepare for the crisis. These included restructuring, closing down production facilities, not renewing temp-agency contracts, and introducing short-time work at German sites. During the second quarter, the global economy stabilized at a low level and demand for WACKER products grew slightly once again. This was due to government stimulus and incentive programs in key industrial nations, such as the USA, China, Japan and Germany. In China, for example, WACKER profited from incentive programs for environmentally-friendly construction methods. This led to robust demand for dispersions and dispersible polymer powder. Plus, German government support in the automotive sector (via its version of the “cash for clunkers” program) propped up demand in an area where WACKER products are well represented.
Continuing into the third quarter, the upward trend fueled WACKER’s share price rise. The capital market responded well to our key financial indicators and our Capital Market Day in London. September 18’s quote of €104.00 was the first time in 2009 that our share price surpassed the 100-euro mark again. At the end of September, it showed a renewed upward trend, which was nevertheless constrained by Dubai’s financial problems in late November.
Photovoltaic-market developments also caused WACKER stock to fluctuate. Negative news about declining polysilicon and solar-wafer spot prices led to a slide in German solar stocks in February and again in October. The capital market was also unsettled by news that planned changes to the German “EEG” Renewable Energy Act entailed cuts in the country’s incentive program. The photovoltaic market nevertheless continued to grow despite the economic crisis, price pressure and incentive-price discussions.
Overall, WACKER stock rose 56% during 2009, outpacing Germany’s two major index averages. Over the same period, the MDAX was up 33% and the DAX 20%. The WACKER stock’s high for the year was €122.64 and its low €46.60.
