Overall Statement by the Executive Board on Underlying Conditions

Economic and political risks rose considerably in 2019, weighing on the global economy. Growth slowed markedly during the year, especially in the second half. The last time global expansion had been so weak was during the financial crisis of 2009. A dominant factor in this trend was the continuing trade dispute between the USA and China. The growth trend was also impeded by the problems surrounding the United Kingdom’s exit from the European Union.

Given the underlying conditions, WACKER’s chemical business performed satisfactorily in 2019. At WACKER SILICONES, sales in 2019 were down slightly after a strong rise of 14 percent in 2018. The other two chemical divisions, WACKER POLYMERS and WACKER BIOSOLUTIONS, lifted both volumes and sales. The operating result for our chemical divisions was lower year over year. The decline was due chiefly to the fall in average prices for standard silicone products, which dampened EBITDA at WACKER SILICONES. EBITDA at WACKER POLYMERS and WACKER BIOSOLUTIONS rose. In our polysilicon business, the situation remained difficult. Sales dropped as average prices continued to fall amid excess capacity. We were also impacted by high energy costs. In combination, these factors clearly weighed on our earnings performance, which was much weaker than planned.

Trends diverged in the individual regions. In Europe, sales declined. Sales in Asia were on par with the prior-year level. In the Americas, we grew sales by a mid-single-digit percentage.