Comparing Actual with Forecast Performance

WACKER did not quite achieve the target it had set in early 2013, namely to reach its prior-year sales level. EBITDA, as predicted in March 2013 and forecast in our Annual Report, remained below the 2012 level. This was mainly due to a decline in prices for polysilicon and semiconductor wafers compared with the previous year. In addition, both a sluggish economy and exchange-rate effects stemming from the weaker US dollar and yen held back sales and earnings. Cost savings, also supported by higher production output, of approximately € 225 million were unable to compensate for these effects.

At WACKER POLYSILICON, prices for solar silicon remained largely unchanged since the beginning of the year. However, they are still at a very low level. Due to the price declines in 2012, they were some 30 percent lower on average in 2013. Siltronic’s business did not experience the revival in demand for silicon wafers in the second half of the year that many market experts had expected. At the same time, semiconductor-wafer prices fell noticeably during 2013. Overall, prices were more than 10 percent lower on average than in 2012. Amid adverse economic conditions, business at our three chemical divisions – WACKER SILICONES, WACKER POLYMERS and WACKER BIOSOLUTIONS – developed satisfactorily. Significantly higher volumes as well as savings due to efficiency projects and personnel cost savings offset increasing price pressure, especially on standard products, and negative exchange-rate effects. Taken together, these three business divisions maintained the prior-year sales level and managed to increase EBITDA. This, however, could not make up for the lower sales figures at WACKER POLYSILICON and the earnings decline in the semiconductor and solar business. Raw-material and energy costs stayed within expectations. On the other hand, the exchange rates of the US dollar and the yen against the euro developed somewhat weaker than we had assumed in our projections at the beginning of 2013.

Sales Projections Specified after Second Quarter

With the publication of the Q2 Interim Report in July 2013, WACKER specified and adjusted slightly downward its forecast that sales would be maintained at the prior-year level. This revision was mainly prompted by indications that the semiconductor-wafer business would be weaker in the second half of 2013 and by the increasing price pressure in the chemical business. As of that point, sales were anticipated to total € 4.5 billion for the full year, while the EBITDA projection remained unchanged at below the prior-year level. WACKER still expected its net income to be in slightly positive territory. In addition, WACKER announced in the Q2 report its intention to save approximately € 200 million, including volume effects, at all business divisions and corporate departments in 2013 by means of a wide-ranging initiative, with about half of the savings to be generated at WACKER POLYSILICON. When we published our third-quarter figures, we confirmed this revised sales and earnings forecast. Group sales in 2013 amounted to € 4.48 billion, meeting the forecast target of approximately € 4.5 billion. The WACKER Group’s 2013 EBITDA amounted to € 678.7 million, down from the prior-year figure, as expected. We retained € 77.6 million in advance payments and received damages relating to terminated supply contracts for polysilicon. This income is included in 2013 EBITDA.

Investments – excluding acquisitions – were initially projected at just under € 600 million for 2013. We revised this projection for investment spending to € 550 million in our Q2 2013 report. In the Q3 2013 Interim Report’s “Outlook” section, we lowered this projection to € 500 million. At € 503.7 million, investments were within our target corridor. The largest share of the funding went toward ongoing expansion of our polysilicon production facilities.

Comparing Actual with Forecast Performance

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€ million


Results in 2012


Forecast March 2013


Forecast July 2013


Forecast Oct. 2013


Results in 2013
















at prior-year level


approx. 4,500


approx. 4,500







below prior year


below prior year


below prior year



Net income for the year




slightly positive


slightly positive


slightly positive



Investments (incl. Financial assets)




approx. 600







Net financial debt




over 1,000


under 1,000


under 900



Net cash flow




slightly negative


slightly negative
















Net financial debt and net cash flow developed more favorably than expected at the beginning of the year. Lower investments and reduced working capital substantially improved net financial debt and net cash flow. In March 2013, we had forecast that net financial debt would surpass € 1 billion by the end of 2013. At that point, we had expected negative net cash flow. The gap would, however, turn out to be much smaller than in 2012. In the Q2 report, our target was to stay below the one-billion-euro mark for net financial debt by the end of the year. In our Q3 report, we forecast that net financial debt would be under € 900 million by year’s end, and that net cash flow would be positive. As of December 31, 2013, net financial debt of € 792.2 million and net cash flow of € 109.7 million were both in line with our expectations.

R&D expenditures for the development of future products and solutions amounted to € 173.8 million for full-year 2013, thus corresponding to the expenditures for R&D of approximately € 175 million forecast at the beginning of the year.

The slight increase in the workforce anticipated at the start of the year did not materialize. As per the reporting date, WACKER had 16,009 employees, 283 fewer than the year before. This shows that WACKER adopted a conservative hiring policy in 2013.

The Executive and Supervisory Boards are proposing a dividend of € 0.50 per share for 2013 (dividend for 2012: € 0.60) at this year’s annual shareholders’ meeting.

Deviations from Projected Expenses

Personnel expenses, as a percentage of sales, edged down compared with the previous year. They declined 5 percent in absolute terms. We did not quite reach our target for 2013. Reasons for our lower personnel expenses included our conservative hiring policy and wide-ranging cost-saving measures, such as programs to increase productivity at our operating divisions and corporate departments. Employee numbers decreased in 2013. Medium term, we expect personnel expenses (excluding non-recurring effects) to be about 25 percent of sales.

Raw-material costs were down slightly year on year, both as a percentage of sales and in absolute terms. This reflected the impact of lower sales and more favorable prices for some raw materials. We were one percentage point below our target for 2013. Medium term, we expect raw-material costs to be flat.

Energy costs came in below our target, the result of more favorable procurement conditions and a lower regulatory cost burden.

Depreciation in absolute figures was slightly above our target. This was due to an impairment at Siltronic at year-end. In total, depreciation amounted to € 564.4 million, with some 40 percent of this sum being accounted for by our polysilicon facilities. Depreciation will rise further in the medium term owing to our investments in polysilicon-capacity expansion.

Expenses by Cost Types

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% of sales




Forecast 2013


Reported 2013








Personnel expenses







Raw-material costs







Energy costs