Statement of Income

Wacker Chemie AG’s overall earnings performance improved significantly, whereas the operating result was on par with the prior year. The positive impact of non-recurring effects was somewhat lower in the reporting year than in 2014. A higher net interest loss weighed on pre-tax income, causing net income to fall slightly, from € 349.2 million to € 335.8 million.

The operating result amounted to € 551.1 million (2014: € 552.0 million). The chemical divisions, in particular, substantially enhanced their contribution to earnings. At WACKER POLYSILICON, income from advanced payments retained and damages received in connection with terminated contracts was lower at € 137.6 million than in 2014 (€ 206.3 million). The profit-and-loss transfer agreement with Wacker-Chemie Dritte Venture GmbH had a positive impact on the result from investments in joint ventures and associates, which amounted to € 71.5 million (2014: € 56.8 million). This figure includes the proceeds from the IPO of Siltronic AG shares. Net interest income was impacted in particular by interest expenses from provisions for pensions. Tax expense was lower, mainly due to slightly lower pre-tax income.

Overall, pre-tax income decreased to € 515.6 million (2014: € 540.8 million) and net income to € 335.8 million (2014: € 349.2 million).

Wacker Chemie AG’s sales rose by 7 percent to € 3.59 billion (2014: € 3.34 billion). All of the business divisions contributed toward this growth. Sales at WACKER POLYMERS climbed by 10 percent to € 739.5 million (2014: € 673.5 million) and at WACKER SILICONES by 9 percent to € 1.44 billion (2014: € 1.33 billion). WACKER BIOSOLUTIONS’ sales rose by 9 percent as well, reaching € 136.5 million (2014: € 124.8 million). WACKER POLYSILICON more than compensated for lower polysilicon prices with higher volumes, increasing sales by 2 percent to € 1.07 billion (2014: € 1.05 billion). Wacker Chemie AG’s overall operating performance thus increased by € 230.3 million to € 3.62 billion overall.

At € 1.50 billion, the cost of materials in 2015 roughly matched the prior-year level (2014: € 1.47 billion). Of this total, outlays for energy declined slightly. Price trends for strategic raw materials were not uniform. Lower prices for ethylene, methanol and vinyl acetate monomer partially offset higher average prices for silicon metal. Overall, the material-to-sales ratio decreased to 41.5 percent (2014: 43.4 percent).

Personnel expenses rose to € 825.4 million (2014: € 768.3 million), up 7 percent from the previous year and thus in proportion to sales gains. The reasons for this were wage increases achieved under collective bargaining agreements and somewhat higher variable compensation than in 2014. Wacker Chemie AG had 9,519 employees as of December 31, 2015 (Dec. 31, 2014: 9,435). The employee-expense ratio remained constant at 22.7 percent (2014: 22.6 percent).

Depreciation and amortization decreased slightly to € 312.1 million (2014: € 319.6 million).

The other operating result, consisting of other operating income less other operating expenses, declined by € 149.3 million to € –431.7 million (2014: € –282.4 million). This decrease was largely due to a reduction in income from advance payments retained and damages received in connection with terminated polysilicon contracts. In 2015, these payments amounted to € 137.6 million (2014: € 206.3 million). In addition to exchange-rate effects, other operating expenses comprised selling expenses, maintenance, other contractor work, rents, servicing costs, R&D costs and the assumption of costs of subsidiaries. In particular, the company incurred higher freight costs due to volume growth and posted a foreign-currency loss of € –21.1 million (2014: € 6.7 million). Income from the reversal of provisions led to an increase of € 5.2 million in the other operating result (2014: € 8.4 million).

The operating result came in at € 551.1 million and thus virtually matched the prior-year level of € 552.0 million.

The result from investments in joint ventures and associates comprised income from profit-and-loss transfer agreements and dividend payments amounting to € 81.7 million (2014: € 61.2 million). Also included was a € 10-million impairment of the stake in a WACKER subsidiary.

The negative net interest result declined further and amounted to € –104.7 million (2014: € –71.2 million). This was mainly due to the lower discount rate used for pension obligations, which led to interest expenses in the amount of € 91.0 million (2014: € 56.1 million). Interest expenses for financial liabilities were once again slightly lower year over year, as was interest income from securities and fixed-term deposits, while interest income from receivables owed by subsidiaries rose slightly.

Income tax expenses amounted to € 179.8 million (2014: € 191.6 million) and comprised current taxes paid by Wacker Chemie AG as well as taxes paid on behalf of those domestic subsidiaries with which it has profit-and-loss transfer agreements.

Net income came to € 335.8 million. Retained profit for 2015 – calculated as the profit carried forward from the prior year less € 74.5 million in dividends paid – totaled € 1.22 billion (2014: € 960.5 million).