Strategy of the WACKER Group

WACKER’s vision and five overarching strategic goals have not changed. Our strategy is focused on profitable growth and the goal of attaining a leading competitive position in most of our business fields, while observing the principle of sustainable development.

WACKER’s strategic business goals are:

• Expanding our production capacities, with capital expenditures below depreciation
• Generating higher growth than the average rate for the chemical industry
• Focusing even more strongly on sustainability
• Achieving attractive margins throughout the economic cycle
• Increasing our cash inflow from operating activities

Our capital expenditures will remain below depreciation until at least 2020. In our individual regions, we are focusing spending on plants for producing intermediates and downstream products, which have a lower capital intensity than full-scale plants for upstream products.

We want to grow faster than the chemical-sector average by deploying new capacities, by expanding in emerging markets and regions, by innovating, and by substituting competitors’ products with WACKER products. Product innovations will spur momentum, as will raising the percentage of specialty products in our portfolio. Our focal regions and countries for further growth remain unchanged: China, Southeast Asia, India, the Middle East and Brazil. We also see opportunities to expand our chemical business in our established markets in Europe and the USA.

We constantly strive to reduce our raw-material consumption and improve the process efficiency of our plants. The Wacker Operating System (WOS) program helps us boost productivity along the entire supply chain, the goal being to further reduce specific operating costs. In addition, we are developing a wide range of sustainable products for renewable energy, thermal insulation and electromobility that will help reduce CO₂ emissions in the use phase.

Our aim is to achieve attractive margins with our products. Our target EBITDA margin for the chemical divisions is >16 percent.

Capital expenditures that are below the level of depreciation, further efficiency gains and cost improvements, and our planned sales growth will enable us to generate higher cash flow. We want our shareholders to benefit even more from our profitability. The goal is to distribute around half of our Group net income to them.

Digitalization is another topic affecting all our business processes. Our digitalization program, which has been running since 2017, covers all core business processes – ranging from logistics, production control and maintenance through to our distribution systems and new business models. WACKER will vigorously promote the digital transformation in the years ahead, making it a cornerstone of its transformation strategy.