Overall Statement by the Executive Board on Underlying Conditions

The world economy performed well in 2017, despite ongoing conflicts and political uncertainties. Supported by the accommodative monetary policies of leading central banks, capital expenditures increased substantially in key advanced economies. Production rose strongly in both the USA and the eurozone during the year. The Chinese economy is also expanding, due to government incentives. Momentum in these major economies stimulated business in emerging markets. On balance, the global upturn broadened and accelerated during 2017.

Amid these growth trends, WACKER’s business developed well in 2017. We were able to lift our sales, as planned, by a mid-single-digit percentage. This was mostly due to higher volumes at all divisions. Earnings likewise continued to climb. Our positive earnings trend was fueled by high plant utilization, by cost improvements and by income from our equity investment in Siltronic. As a result, we more than compensated for raw-material prices rising versus the year before. The global solar market once again posted strong growth. Our polysilicon business benefited from this, since volumes were substantially higher. Lower average prices for polysilicon, on the other hand, dampened sales and earnings performance.

In 2017, we lifted our sales in every region, even though growth in the Americas was not especially strong due to exchange-rate effects. The Asian region achieved the strongest growth, up 7.7 percent. Business there developed very well in China, India and Southeast Asia. Europe, including Germany, accounted for the largest share in Group sales: 40.0 percent.

WACKER got off to a good start to this year, in the weeks prior to the preparation date of these consolidated financial statements (February 26, 2018).