Executive Board Statement on Business Development and on the Group’s Economic Position
In 2020, WACKER’s operations were characterized by the worldwide economic impact of the coronavirus pandemic. Sales were down substantially in the second quarter, but picked up again overall in the second half of 2020. Among our chemical divisions, WACKER SILICONES posted the steepest decline in sales, due to reduced volumes and to lower average prices for standard silicones. Sales at WACKER POLYMERS came in only slightly lower than in the previous year, while WACKER BIOSOLUTIONS managed to grow its sales slightly. WACKER POLYSILICON also recorded a slight increase in sales, underpinned by volume growth.
Earnings in the chemical divisions were depressed by lower average sales prices for some product groups, as well as by reduced volumes and negative exchange-rate effects. Positive effects on EBITDA, on the other hand, came from lower raw-material costs and from measures to improve productivity. ROCE improved significantly year over year. WACKER POLYSILICON’s EBITDA was slightly positive in 2020, primarily due to successful cost-cutting measures and volume growth.
Personnel expenses rose, both in absolute terms and as a percentage of sales, due to higher expenses for pensions and variable compensation. Raw-material costs declined in absolute terms and as a proportion of sales. Energy costs were lower year over year, especially because of the decline in natural-gas prices. Depreciation and amortization were substantially lower, both in absolute terms and as a percentage of sales.
At €1.69 billion, Group equity was down €337.2 million year over year. This was mainly caused by the recognition in other comprehensive income of changes in provisions for pensions. The equity ratio declined from 31.3 percent to 24.3 percent. The Group’s net financial debt decreased significantly. Substantial reductions in current assets, coupled with significantly reduced investment spending, were among the causes of that decline. Net financial debt amounted to €67.5 million as of December 31, 2020. Capital expenditures decreased significantly year over year. At €224.4 million, they were clearly below depreciation/amortization. Net cash flow of €697.7 million was substantially higher than in the previous year.
Given the coronavirus pandemic’s severe impact on the global economy, WACKER performed well overall in 2020. The composition of the portfolio once again proved its worth in the present crisis, enabling the company to at least partially offset weaknesses in specific industries.