Outlook for 2019

WACKER’s main planning assumptions relate to raw-material and energy costs, personnel expenses and exchange rates. For 2019, we anticipate a euro exchange rate of US$1.20 (2018: 1.18). We expect the average prices of our key raw materials to be slightly lower than last year. Prices of natural gas and electricity, particularly electricity procured in Germany, will be well above prior-year levels. Our raw-material and energy supplies are largely secured for 2019. The markets in which we source our raw materials are sufficiently liquid, making bottlenecks unlikely. To date, the insurance compensation payments expected for the loss event at our Charleston site (USA) are not included in our forecast.

Performance Indicators and Value-Based Management

WACKER’s key financial performance indicators are the same as last year.

WACKER’s 2019 Sales Will Reflect Volume Growth

In 2019, WACKER expects to see volume growth in its chemical divisions and average prices that are higher for some of its product lines and lower for others. On balance, average selling prices will be lower year over year. In our business, we anticipate a rise in volumes. Average prices, though, will be substantially below the year-earlier level. Overall, Group sales are projected to climb by a mid-single-digit percentage.

Economic uncertainties may cause the actual performance of the WACKER Group and its divisions to diverge from our assumptions, either positively or negatively. We expect to remain on our growth path in 2019, as long as there are no unforeseen slumps in WACKER’s key regions and industries.

Outlook for Key Performance Indicators at the Group Level

From today’s perspective, the key performance indicators at the Group level will develop as follows.

EBITDA margin and EBITDA: the margin is expected to be clearly lower than last year (2018: 18.7 percent). EBITDA will be 10 to 20 percent below last year’s level. The reasons are lower average prices for polysilicon, price reductions in standard products, and rising energy costs. We expect income from equity investments to be lower than last year. With an effective tax rate of under 20 percent, Group net income is projected to be substantially lower than a year earlier.

ROCE: due to a lower operating result, will be substantially below the prior-year level (2018: 5.9 percent).

Net cash flow: we expect net to be clearly positive in 2019 and substantially higher than last year, due to less usage of working capital.

Outlook for Supplementary Performance Indicators at the Group Level

Capital expenditures: at roughly €400 million, capital expenditures will be lower than last year and remain below depreciation. At around €525 million, depreciation in 2019 will also be below last year’s level. Investment projects include the construction of new facilities for and liquid rubber at Burghausen, the expansion of our capacities for downstream silicone and products, and the construction of a new -metal plant at Holla in Norway.

Net financial debt: net financial debt will be higher than in 2018 (€609.7 million) due to the first-time application of 16.

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Outlook for 2019




Reported for


Outlook for






Key Financial Performance Indicators





EBITDA margin (%)




Substantially lower than a year ago

EBITDA (€ million)




10 to 20% lower than a year ago

ROCE (%)




Substantially below the prior-year level






Net cash flow (€ million)




Clearly positive, substantially higher than last year






Supplementary Financial Performance Indicators





Sales (€ million)




Mid-single-digit percentage increase

Capital expenditures (€ million)




Around 400

Net financial debt (€ million)




Higher than last year






Depreciation (€ million)




Around 525

Divisional Sales and EBITDA Trends

At WACKER SILICONES, we expect to increase sales in 2019 by a low-single-digit percentage versus last year. Sales growth will be fueled by a rise in volumes and by improvements to the product mix. Lower prices for standard products will have the opposite effect. We expect sales to rise in all regions. With capacity utilization high, our aim is for specialty products to account for a higher proportion of our sales volumes. Given the lower prices for standard products, EBITDA is anticipated to be markedly below last year amid lower prices for some raw materials. We expect an margin of about 20 percent.

At WACKER POLYMERS, sales are projected to climb by a mid-single-digit percentage versus last year. and will both contribute to this growth. We anticipate sales gains in all regions. EBITDA is projected to be markedly above last year’s level amid lower raw-material costs and price increases. We forecast an EBITDA margin of about 14 percent.

At WACKER BIOSOLUTIONS, we expect sales to climb by a mid-single-digit percentage in 2019. Growth will be driven by higher capacity utilization at our Amsterdam production site and by higher sales volumes in other areas. EBITDA is likely to be substantially higher than a year ago, as integration costs will be lower. We anticipate EBITDA of more than €30 million.

In our polysilicon business, we expect to generate strong volume growth in 2019 after the decline reported in 2018. Sales are expected to rise by a low-double-digit percentage. EBITDA is forecast to be balanced, and markedly lower than last year, reflecting substantially lower average prices for solar and a stronger impact from energy prices.

Future Dividends

Our goal is to distribute about half of Group net income to shareholders, provided that the business situation permits this and the decision-making bodies agree.


The main features of our financing policy remain in place. We are confident that we have a strong financial profile with a sound capital structure and healthy maturities for our debt. As of December 31, 2018, WACKER had at its disposal unused lines of credit with residual maturities of over one year totaling €600 million.

Executive Board Statement on Overall Business Expectations

Economic and political risks are significantly higher in 2019 than last year. The world economy is currently experiencing a downturn, the full extent of which cannot be determined at present. In the past two months, economists lowered their growth forecasts for the global economy, though they project it will continue to expand.

As regards our business in 2019, we expect a slight decline in raw-material costs, but a substantial increase in electricity prices in Germany, which will impact WACKER POLYSILICON’s earnings in particular. Given these underlying conditions, Group sales are expected to increase by a mid-single-digit percentage overall. All our business divisions are likely to lift their sales.

EBITDA, on the other hand, will be down substantially versus last year, and we expect the EBITDA margin to be considerably lower as well. The main factors in this decrease are substantially lower average polysilicon prices, lower prices for standard chemical products and rising energy costs. We anticipate a substantial decline in Group net income.

Capital expenditures of around €400 million will again be significantly lower year over year. Depreciation will come in at around €525 million, down slightly from last year. We expect net cash flow in 2019 to be clearly positive and markedly above last year, as a result of less working-capital usage. Net financial debt is expected to be higher than last year.

Solar-silicon overcapacities in China are slowing the earnings trend at WACKER POLYSILICON – and thus at the Group – despite our leading market and quality position. For our chemical divisions, we are confident that our excellent products will keep us on our growth path and that our capital expenditures will support market growth.

At the date on which which these financial statements were prepared, no changes had been made to our forecast.

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.
Earnings before interest, taxes, depreciation and amortization.
Return on Capital Employed (ROCE)
Return on capital employed is the profitability ratio relating to the capital employed. It is defined as earnings before interest and taxes (EBIT) divided by capital employed. Investment income from Siltronic AG and the corresponding carrying amount in equity are not included when calculating ROCE. ROCE is a clear indicator of how profitably the capital required for business operations is being employed. It is influenced not only by profitability, but also by capital intensity with regard to noncurrent assets required for business operations and to working capital. ROCE is reviewed annually as part of our planning process and is a key criterion for managing our capital expenditure budget.
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.
Silica, Pyrogenic
White, synthetic, amorphous silicon dioxide (SiO2) in powder form, made by flame hydrolysis of silicon compounds. Variously used as an additive for silicone rubber grades, sealants, surface coatings, pharmaceuticals and cosmetics.
General term used to describe compounds of organic molecules and silicon. According to their areas of application, silicones can be classified as fluids, resins or rubber grades. Silicones are characterized by a myriad of outstanding properties. Typical areas of application include construction, the electrical and electronics industries, shipping and transportation, textiles and paper coatings.
A polymer is a large molecule made up of smaller molecular units (monomers). It contains between 10,000 and 100,000 monomers. Polymers can be long or ball-shaped.
After oxygen, silicon is the most common element in the earth’s crust. In nature, it occurs without exception in the form of compounds, chiefly silicon dioxide and silicates. Silicon is obtained through energy-intensive reaction of quartz sand with carbon and is the most important raw material in the electronics industry.
The International Financial Reporting Standards (until 2001 International Accounting Standards, IAS) are compiled and published by the London-based International Accounting Standards Board (IASB). Since 2005, publicly listed EU-based companies have been required to use IFRS in accordance with IAS regulations.
Earnings before interest, taxes, depreciation and amortization.
Binary system in which one component is finely dispersed in another. VINNAPAS® dispersions are vinyl-acetate-based copolymers and terpolymers in liquid form. They are mainly used as binders in the construction industry, e. g. for grouts, plasters and primers.
Dispersible Polymer Powders
Created by drying dispersions in spray or disc dryers. VINNAPAS® polymer powders are recommended as binders in the construction industry, e.g. for tile adhesives, self-leveling compounds and repair mortars. They improve adhesion, cohesion, flexibility and flexural strength as well as water-retention and processing properties.
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.

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