WACKER POLYSILICON

Difficult Market for Photovoltaic Industry

As expected, WACKER POLYSILICON’s sales fell in 2012, dropping 21.5 percent to €1.14 billion (2011: €1.45 billion). Although the division increased volumes by 20 percent to 38,000 metric tons in 2012, its sales were lower than a year earlier. The decline was due to significantly reduced hyperpure-polysilicon prices amid a difficult market environment, shaped by excess capacity, high inventories, ongoing consolidation pressures, and the financial problems facing many customers. To align production output with demand, WACKER POLYSILICON decided – as of the third quarter – to partially curb production and to introduce reduced working hours at some Burghausen facilities.

Overall, we sold about 38,000 metric tons of polysilicon last year. Asia, and especially China, was the main sales region. In the Americas and Europe, however, revenues declined appreciably.

EBITDA fell 42.8 percent to €427.5 million (2011: €747.3 million), dampened primarily by significantly reduced price levels. Terminations of supply contracts with customers who exited the solar business and payment of damages added a total of €113.1 million to EBITDA. The EBITDA margin was 37.6 percent (2011: 51.6 percent).

Renewed Rise in Investments

In 2012, WACKER POLYSILICON’s capital expenditures continued to grow – up by 23.2 percent to €698.1 million (2011: €566.5 million). They were used mainly for the construction of the new Charleston site (Tennessee, USA). A smaller sum went into the new Nünchritz facilities, where production officially commenced in April 2012.

Given the current market difficulties and polysilicon overcapacities, WACKER decided to extend the timeline for completing the Tennessee project. Production is now expected to start in mid-2015, some 18 months later than originally planned.

Employee numbers edged up amid new and expanded production capacities. At year-end, the division had 2,349 employees (December 31, 2011: 2,251).