Trends: Assets

Fixed Assets Decline Due to Reclassification of Shares in Siltronic

Relative to the end of the previous year, fixed assets (including equity-accounted investments) fell €865.0 million to €2.58 billion (Dec. 31, 2019: €3.44 billion). Property, plant and equipment declined to €2.39 billion (Dec. 31, 2019: €2.64 billion) as a result of depreciation. Current depreciation/amortization amounted to €403.5 million. Capital expenditures decreased to €224.4 million (2019: €379.5 million). Investments were focused on WACKER SILICONES and WACKER POLYMERS, as well as on infrastructure measures. WACKER responded flexibly to the economic risks associated with the coronavirus pandemic by postponing a portion of its capital expenditures. Over half of investment spending was in Germany. Exchange-rate effects decreased the carrying amount of property, plant and equipment by about €100 million. The effects stemmed from the rise in value of the euro against the US dollar in the course of the year.

On the assets side, a total of €110.8 million was recognized in right-of-use assets from leases (Dec. 31, 2019: €119.8 million). At the same time, €122.8 million was recognized in financing liabilities from leases (Dec. 31, 2019: €137.8 million). WACKER’s investment property included right-of-use assets of €1.2 million (Dec. 31, 2019: €7.1 million) for long-term sublease agreements for parts of its Munich headquarters.

On December 9, 2020, Wacker Chemie AG signed an agreement with GlobalWafers Co. Ltd., a Taiwanese competitor of Siltronic AG, to sell WACKER’s stake of 30.83 percent in Siltronic as part of a takeover bid by GlobalWafers. The offer period ended on February 10, 2021, with more than 50 percent of Siltronic’s shareholders accepting the offer price of €145 per share. Effective December 31, 2020, WACKER reclassified its investment of €550.4 million in Siltronic to assets held for sale. As a result, WACKER’s equity-accounted investments are now lower at €49.1 million (Dec. 31, 2019: €640.4 million).

Other Noncurrent Assets

Other noncurrent assets totaled €794.6 million as of December 31, 2020 (Dec. 31, 2019: €700.8 million), up 13 percent year over year. Deferred tax assets rose markedly, from €632.9 million to €770.8 million, reflecting higher provisions for pensions. A repayment of €50.8 million was posted on a loan made to a joint venture.

Working Capital Down 14 Percent

Current assets grew 52 percent year over year and amounted to €3.58 billion (Dec. 31, 2019: €2.35 billion). The increase was due mainly to the build-up of liquid assets. Inventories decreased 10 percent, from €979.8 million to €879.5 million. The decline stemmed chiefly from heightened demand for our products in the second half of 2020 following a steep pandemic-induced drop in sales in Q2 2020.

As of December 31, 2020, working capital was down 14 percent year over year, coming in at €1.08 billion (Dec. 31, 2019: €1.26 billion). The 10 percent reduction in inventories was a factor in this decrease. Trade receivables were almost unchanged at €627.0 million. Trade payables rose 20 percent due to a higher procurement volume in the second half of 2020 and extended payment terms. Prior to that, WACKER had scaled back its procurement volume in Q2 because of a decline in sales and production volumes.

Liquidity Increases to €1.34 Billion

Securities, fixed-term deposits, and cash and cash equivalents are major components of other current assets. Current securities and fixed-term deposits amounted to €712.0 million at the end of Q4 2020 (Dec. 31, 2019: €109.4 million) after WACKER invested liquid assets in funds and fixed-term deposits. Cash and cash equivalents reached €626.0 million as of December 31, 2020 (Dec. 31, 2019: €435.8 million). Total liquid assets (current and noncurrent securities, cash and cash equivalents) thus grew to €1.34 billion year over year (Dec. 31, 2019: €545.2 million). That was a year-over-year increase of 145 percent. The rise resulted primarily from the decline in working capital and from the company scaling back its investing activities. In June, WACKER issued new promissory notes (German Schuldscheine) for €300 million (2019: €200 million). In Q4 2020, on the other hand, the company made a special payment of €73.4 million to the WACKER pension fund (2019: €70.7 million). Wacker Chemie AG’s dividend payment of €24.8 million in Q3 2020 (2019: €124.2 million) also reduced liquid assets. In the previous year, the €112.5 million in insurance compensation received for the damage incurred at the Charleston site in the USA benefited liquidity.