Overall Business Expectations

WACKER expects the world economy to grow over the next two years, despite all the economic turbulence and increased risks. Economic momentum will be slower, though, due to the difficult underlying conditions. As in the past, we forecast growth in Asia, especially in China and India. We also anticipate expansion in Brazil and the Middle East. Regarding dispersions, we expect that the paper and carpet industry’s substitution of styrene butadiene with VAE dispersions will translate into increased sales, especially in the USA. Energy and raw-material procurement has an important bearing on WACKER’s profitability. We assume that the prices of our main raw materials will, on the whole, stop rising in 2012, remaining instead at their current level.

In the first few months of 2012, the photovoltaic industry will still face production overcapacity, price pressure along the supply chain, and further consolidation. Despite the current challenges, we see good prospects for photovoltaics as an important energy source of the future. The marked downturn in prices for polysilicon, wafers, cells and modules will make photovoltaics more competitive, opening the way to market expansion in the coming years. Overall, as the cost and quality leader, we expect to emerge from this consolidation process with renewed strength.

Our target in 2012 is to generate some €5 billion in sales revenue. We anticipate that EBITDA in 2012 will clearly fall short of the previous year’s level. This is mainly due to the lower prices obtained from our photovoltaic customers for polysilicon deliveries. From today’s perspective, we expect a rise in sales and EBITDA for 2013. We believe that WACKER is on the right course for continuing its growth trend in 2012 and 2013.

As in previous years, polysilicon-capacity expansion will be the focus of investments, which will remain high over the next two years. Once Poly 11 is on stream in Tennessee, together with the expansion stages in Burghausen and Nünchritz (both by 5,000 metric tons), WACKER’s capacity will reach 70,000 metric tons by 2014.

In the first few weeks of 2012, at the time of preparing the financial statements, we saw volumes rising again and demand for our products gaining momentum after 2011’s very weak fourth quarter.