Dear Shareholders,

WACKER set new records for sales and earnings in 2021. After reporting a decline in the previous year due to the coronavirus pandemic, the company grew strongly.

All four business divisions contributed to this strong organic growth.

This trend demonstrates that WACKER has respected, high-quality products and offers a diverse and unique product portfolio in order to serve customers in all key industrial sectors. We succeeded in leveraging our growth potential in our two chemical divisions. Today, around 70 percent of Group sales are generated by our chemical business – the core business from which the company originated. This strength is reflected above all in the global competitive positions of the two largest business divisions – WACKER SILICONES and WACKER POLYMERS.

WACKER POLYMERS is the global market leader in dispersions and dispersible polymer powders based on vinyl acetate-ethylene. WACKER SILICONES is the world’s second-largest silicone manufacturer. WACKER BIOSOLUTIONS is active in innovative areas with excellent growth potential.

WACKER is the cost and quality leader in the polysilicon segment and also has a strong competitive position globally. In the semiconductor industry, nearly half of the computer chips produced worldwide use our hyperpure polysilicon. We are one of the very few suppliers to the solar sector that can deliver especially high-quality polysilicon for very efficient solar cells.

The Shape the Future program also made a major contribution to the good net result for the year. Even before the coronavirus pandemic took hold, we had decided to ensure that WACKER is well positioned for the future. The program was launched at an opportune point in time and has helped us diligently pursue our cost-savings targets.

WACKER’s employees played a major role in our business success in 2021. The Supervisory Board of Wacker Chemie AG thanks them for all their achievements and high levels of commitment.

We are close to resolving the issue of our high pension obligations. The low interest rates that have persisted for years have forced us to re-evaluate retirement programs. In the future, we plan to offer new employees exclusively direct commitments on a funded basis. These commitments will be secured via a contractual trust arrangement, which will use its assets solely to finance the pension obligations. The advantage is that we can much better leverage the investment opportunities offered by capital markets in order to achieve reasonable returns. In the long run, this innovative pension system will noticeably reduce the strain on the company, providing more leeway for our long-term growth strategy.

Our biggest concern for the future is German energy policy. It is a large burden – especially for an energy-intensive company of our size with a major portion of its production capacity in Germany. A secure and affordable energy supply is essential for our company. In view of the goal of carbon neutrality, we cannot currently see how high energy and electricity consumption can be satisfied with renewable energy. The chemical industry alone will consume more electricity in 2030 than Germany produces today. Added to this are high energy prices that weigh heavily on our global competitive position. We need an industrial electricity price of under 4 cents per kilowatt-hour. If we are to retain our strong manufacturing industry, German policymakers must be more active on this front than in the past.

Continuous Dialogue with the Executive Board

At WACKER, sound corporate governance and control are built on a relationship of trust between the Executive Board and Supervisory Board as they work closely together in the company’s interest. In 2021, the Supervisory Board performed – with great diligence – the duties incumbent upon it under law, the Articles of Association and its own Rules of Procedure. The Supervisory Board was involved at an early stage in every decision of fundamental significance for the company.

In both written and oral reports, the Executive Board regularly provided us with timely and comprehensive information on corporate planning, strategic development, business operations, and the current state of Wacker Chemie AG and the Group, including the risk situation, risk management, and compliance and sustainability issues. Beyond scheduled Supervisory Board meetings, the Chairman of the Supervisory Board remained in close contact with the Executive Board, especially with the CEO, conferring on issues of strategy, business development, risk exposure, risk management and compliance, and was kept informed of current trends, the business situation, and key business transactions. Any deviations from business plans and targets were explained to the Supervisory Board in detail.

Wherever required by statutory provisions or the Articles of Association, the Supervisory Board voted on the reports and proposals of the Executive Board after detailed examination and discussion.

In the reporting year, we paid particularly close attention to investment projects, the current earnings situation, including the risk position and risk management, as well as the company’s liquidity and financial position. Our other points of focus in the reporting year were the company’s sustainability strategy and the new sustainability goals for 2030.

The Supervisory Board held four ordinary meetings in 2021, two in the first half of the year and two in the second. Between meetings, the Executive Board informed us in detail by means of written reports about all projects and plans of particular importance to the Group. At its full meetings and in its committees, the Supervisory Board discussed in detail business transactions of importance to the company and referred to the reports submitted by the Executive Board. The full meetings were prepared by shareholder and employee representatives in their own separate sessions.

The Supervisory Board’s Main Areas of Deliberation

The development of sales, earnings and employment at the Group and its individual segments were the subject of regular consultations in the full meetings of the Supervisory Board. At each meeting, the Supervisory Board evaluated the Executive Board’s performance – on the basis of the reports submitted by the Executive Board – and discussed strategic development opportunities and other key topics with the Executive Board. There was no need for additional monitoring measures, such as the inspection of corporate documents or the appointment of experts.

The major areas of deliberation for the Supervisory Board were:

• Global market challenges, particularly the high raw-material and energy costs
• Disruptions in global trade and supply chains and their effects on world markets in general, and on WACKER in particular
• The effects of the coronavirus pandemic and the countermeasures needed
• Status of regulatory approval of GlobalWafers’ bid to acquire WACKER’s remaining shares in Siltronic
• Various M&A projects, especially the acquisition of China’s SICO company
• The reorganization of the company pension systems
• Goals for 2030 and the new sustainability goals
• Financing activities
• Implementation of the German act to strengthen financial market integrity (the “FISG”)

The Supervisory Board discussed the WACKER Group’s plans for 2022 at its meeting of December 8, 2021. On that occasion, the Supervisory Board also dealt with medium-term corporate plans for 2022 – 2026. In addition, it discussed and approved the capital-expenditure budget for 2022.

Work in the Committees

The Supervisory Board is assisted in its work by the committees it has constituted. WACKER’s Supervisory Board has created three committees – an Audit Committee, an Executive Committee, and a Mediation Committee (the latter in accordance with Section 27 (3) of the German Co-Determination Act (MitbestG)). The tasks and the members of these committees are detailed in the Declaration on Corporate Management on page 185.

The Audit Committee met four times in the last fiscal year. Its work included the audit of the annual financial statements of Wacker Chemie AG and the Group for 2021 and of the consolidated interim financial statements for the first half-year. It also discussed the Group’s quarterly financial figures, CSR reporting, and issues relating to risk management, accounting processes, the internal control systems, compliance and auditing. It monitored the audit, especially regarding quality, as well as the independence of the auditors and the additional services they performed. Moreover, the Audit Committee submitted a recommendation to the Supervisory Board for the latter’s proposal to the Annual Shareholders’ Meeting for appointing an auditor for 2021. It then awarded the auditing contract for 2021 and determined the focus of auditing.

The Executive Committee met once in 2021, discussing personnel matters in relation to the Executive Board (e.g. determining its total compensation for 2020, its performance goals for variable compensation in 2021, and its compensation system).

The Mediation Committee did not need to be convened in the reporting year.

The Supervisory Board was regularly informed about the committees’ work.

Initial and Advanced Training

The members of the Supervisory Board are called upon to take part in training courses at regular intervals. The company supports the members in their educational endeavors, in particular by granting them generous expense allowances, which can and should be used for further training, among other things. When they take office, new Supervisory Board members receive an information package about their rights and obligations; it also includes information sheets on insider-trading bans and on personal transactions by managers. In addition, Supervisory Board members are regularly informed about court rulings and key changes in laws that have an impact on their work. Last year, information was provided on the German act to strengthen financial market integrity (the “FISG”) and the new requirements involved.

Personalized Disclosure of Attendance at Meetings

A member was excused from each of the two Supervisory Board meetings in 2021. All committee members attended their respective committee meetings in 2021. Members’ attendance at meetings of the Supervisory Board and at their respective committee meetings is disclosed in personalized form in the following table:

Corporate Governance

Last year, the Supervisory Board again looked closely at corporate governance standards. At its meeting of December 8, 2021, the Supervisory Board dealt with application of the German Corporate Governance Code and adopted the annual Declaration of Conformity that must be submitted jointly by the Executive and Supervisory Boards in accordance with Section 161 of the German Stock Corporation Act (AktG). The Declaration is available to shareholders on the company’s website and is also included in the Declaration on Corporate Management on page 185.

At its meeting in December 2021, the Supervisory Board conducted a self-assessment and found that it works efficiently – for example, due to the regular preliminary discussions regarding the Supervisory Board meetings, the comprehensive reports provided by the Executive Board and the documents received well in advance of the meetings. Further information on the Supervisory Board’s regular self-assessments can be found in the Declaration on Corporate Management on page 185.

Audit of the Annual Financial Statements of Wacker Chemie AG and the WACKER Group

KPMG AG Wirtschaftsprüfungsgesellschaft, Munich, audited the annual financial statements of Wacker Chemie AG for 2021, the consolidated financial statements and the combined management report (as of Dec. 31, 2021), as prepared by the Executive Board.

The Supervisory Board’s Audit Committee had awarded the auditing contract in accordance with the resolution of the Annual Shareholders’ Meeting of May 12, 2021. The auditors conducted their audit in accordance with Section 317 of the German Commercial Code (HGB) and the EU Audit Regulation, and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW). They issued an unqualified audit report.

The auditors also carried out a voluntary review of the combined non-financial report for Wacker Chemie AG and the Group. Their review confirmed that this report, too, meets the legal requirements.

The financial-statement documents (including the auditors’ reports, the combined management report and the Executive Board’s proposal for the distribution of profits) were submitted to all the Supervisory Board members in good time.

At its meeting of February 22, 2022, the Audit Committee examined and discussed in detail the financial statements, the combined management report, the combined non-financial report for Wacker Chemie AG and the Group (as per Sections 289b and 315b of the German Commercial Code – HGB) as well as the auditors’ reports. At its meeting of March 3, 2022, the full Supervisory Board closely examined and discussed the relevant annual accounting documents – including the combined non-financial report for Wacker Chemie AG and the Group – with knowledge and in consideration of both the report of the Audit Committee and the auditors’ reports. The auditors took part in the deliberations at both meetings. They reported on the main results of the audit – in particular the key audit matters described in the auditors’ report – and were available to answer questions and provide supplementary information.

After concluding our own examination, we have no objections to raise to the annual financial statements of Wacker Chemie AG, the consolidated financial statements, the combined management report, the combined non-financial report for Wacker Chemie AG and the Group, or the auditors’ reports.

We therefore approve the annual financial statements of Wacker Chemie AG and the consolidated financial statements as of December 31, 2021 as prepared by the Executive Board. The annual financial statements of Wacker Chemie AG are hereby adopted. We concur with the Executive Board’s proposal for the distribution of retained profit.

The compensation report pursuant to Section 162 of the German Stock Corporation Act (AktG) underwent a separate audit. In addition to the formal, legally mandated audit, the auditors also carried out a material review of the compensation report.

Changes in the Composition of the Supervisory and Executive Boards

There were no changes to the Supervisory Board in 2021.

As announced, WACKER’s long-serving president and CEO, Dr. Rudolf Staudigl, retired at the end of last year’s Annual Shareholders’ Meeting on May 12, 2021. He was at the helm for 13 years, during which he made a strong contribution to the company. The Supervisory Board thanks Dr. Rudolf Staudigl for his outstanding performance and successful service to the benefit of WACKER. In December 2020, the Supervisory Board had already appointed Dr. Christian Hartel as his successor and Angela Wörl as new Executive Board member and Personnel Director. Both assumed their posts on May 12, 2021.

The Supervisory Board thanks the Executive Board and the company’s employees and employee representatives for their dedication in helping make 2021 one of the most successful years in the company’s history.

Munich, March 3, 2022
The Supervisory Board

Dr. Peter-Alexander Wacker
Chairman of the Supervisory Board of Wacker Chemie AG