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

In 2019, WACKER’s operations were characterized by stable chemical business and by persistent price pressure in its solar-grade business. WACKER POLYMERS and WACKER BIOSOLUTIONS generated sales growth, while WACKER SILICONES posted a slight sales decline due to lower average prices for standard . At WACKER POLYSILICON, markedly lower average prices weighed on business, although the division sold more volume.

The Group’s earnings were dampened not only by significantly lower average prices for solar-grade polysilicon and the related effects of inventory valuation adjustments, but also by lower prices for standard silicones and by the steep rise in Germany’s electricity prices. On balance, we did not fulfill our March 2019 projections for sales, , the EBITDA margin, and .

Earnings performance was also influenced by special factors. On the one hand, earnings benefited from the insurance compensation received for the damage incurred at our Charleston site. On the other hand, the impairment charge on WACKER POLYSILICON’s fixed assets weighed on earnings.

Personnel expenses rose slightly, both in absolute terms and as a percentage of sales. Raw-material costs edged down in absolute terms, but remained constant as a percentage of sales. Energy costs rose substantially. Total depreciation/amortization and impairments rose markedly year over year due to the impairment charge on WACKER POLYSILICON’s fixed assets. Adjusted for this effect, the total was slightly higher year over year.

Group equity decreased from €3.15 billion to €2.03 billion compared with the year-earlier reporting date. The main reasons for this decline were the net loss of €-629.6 million and actuarial losses on provisions for pensions caused by the application of lower discount rates. The came in at 31.3 percent. The Group’s net financial debt increased, amounting to €713.7 million as of December 31, 2019. As planned, capital expenditures decreased to €379.5 million year over year. was clearly positive at €184.4 million and substantially higher year over year.

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.
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.
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.
Equity Ratio
The equity ratio is equity as a percentage of a company’s total assets. It is a measure of a company’s economic and financial stability.
Net Cash Flow
Net cash flow is the sum of cash flow from operating activities and cash flow from long-term investing activities (before securities).

todo Vorjahresvergleich