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VINNAPAS® UW 1 FS

From parquet adhesives to automotive body parts – a wide range of applications contain solid resins.

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Executive Board Statement on Business Development and on the Group’s Economic Position

In 2017, WACKER’s operations were characterized by markedly stronger volumes at WACKER SILICONES and WACKER POLYMERS and higher volumes at WACKER POLYSILICON, with product prices decreasing somewhat and raw-material prices, on balance, climbing significantly. Due to the good business trend, WACKER upgraded its forecast for its key financial performance indicators during the course of the year. Overall, the Group met its projected annual targets for all of these performance indicators.

With its sale of Siltronic AG shares to institutional investors on March 15, 2017, WACKER achieved its strategic goal of giving up its majority ownership of the entity. This transaction lowered WACKER’s net financial debt substantially and will make the Group’s future operations less volatile and less capital intensive.

Across all our chemical divisions – except for our smallest, WACKER BIOSOLUTIONS – sales again rose, mainly thanks to volume gains amid high plant utilization. Prices were generally somewhat higher, which also lifted sales. Earnings were dampened by increased raw-material prices and negative exchange-rate effects. At WACKER POLYSILICON, we sold higher quantities, but at lower prices. Throughout the year, production at our Burghausen and Nünchritz sites ran at full capacity. At our new US production site in Charleston, a technical defect caused a hydrogen explosion in September 2017, and production had to be shut down there. This reduced the amount of we had available for sale by around 6,000 metric tons.

Personnel expenses rose, in absolute figures and as a percentage of sales. Raw-material costs were markedly higher than the previous year, both in absolute terms and in relation to sales. Energy costs, on the other hand, were lower than the year before. As projected, depreciation edged down – in absolute figures and as a percentage of sales.

At €3.17 billion, Group equity was up €580 million year over year, primarily due to WACKER’s net income. The climbed from 34.8 percent to 46.4 percent. As expected, the Group’s net financial debt declined significantly. This decrease was prompted by high cash inflows from operating activities coupled with a further drop in investment spending, and by the proceeds from WACKER’s sale of its majority stake in Siltronic AG. Net financial debt was €454.4 million as of December 31, 2017. Capital expenditures continued to decrease year over year. At €326.8 million, they were markedly below depreciation. Net of €358.1 million was on par with the year before.

Polysilicon
Hyperpure polycrystalline silicon from WACKER POLYSILICON is used for manufacturing wafers for the electronics and solar industries. To produce it, metallurgical-grade silicon is converted into liquid trichlorosilane, highly distilled and deposited in hyperpure form at 1,000 ° C.
Equity Ratio
The equity ratio is calculated from the ratio of equity to a company’s total assets. It indicates the level of economic and financial stability at a company.
Cash Flow
Cash flow represents the movement of cash and cash equivalents into or out of a business activity during a finite period. Net cash flow is the sum of cash flow from operating activities (excluding changes in advance payments received) and cash flow from long-term investing activities (before securities), including additions due to finance leases.