Overall Statement by the Executive Board on Underlying Conditions

The global economy was influenced in 2015 by the turmoil in Asian financial markets and uncertainty about the state of the Chinese economy. Global economic output was additionally impeded by the conflict between Russia and Ukraine and the related sanctions imposed on Russia by the USA and the EU. It was also affected by the situation in the Middle East and the slower-than-expected pace of economic recovery in Europe. The People’s Republic of China posted its slowest growth rate in six years at just under 7 percent. Germany, on the other hand, continued to be a center of stability in Europe in 2015. In particular, the fall in the price of crude oil and the weak euro had a positive effect on production in the eurozone in the first half of the year. The US economy has also continued to recover.

WACKER’s business developed well in 2015, despite the geopolitical risks. Our three chemical divisions performed well. Thanks to positive exchange-rate effects, volume growth and somewhat higher prices in a number of product segments, all three divisions achieved higher sales and earnings in 2015. The pricing situation for WACKER’s main raw materials has also eased further, as raw-material prices were lower overall than in the previous year. The global solar market had another growth year, but lower prices for polysilicon held back sales and earnings. Overall, WACKER sold more polysilicon in 2015 than ever before. In our semiconductor business, expectations for additional growth were not fulfilled in 2015. Even though demand for chips for mobile end-user devices continued to increase worldwide, sales of PCs and tablets fell short of forecasts. The second half of the year, in particular, saw sales at Siltronic dampened by low prices and weaker order levels.

In 2015, we increased sales in all our regions. We recorded double-digit sales growth in the Americas and Asia, as well as in the regions grouped under “Other.” India, in particular, is increasingly becoming a key market for our chemical products, with sales there rising by 29.3 percent. At 42.5 percent, Asia again accounted for the largest share in Group sales.

Our performance in the first weeks of 2016 was in line with expectations.