Strategy of the WACKER Group
WACKER’s five overarching strategic goals have not changed. The focus is on profitable growth and on holding a leading competitive position in the majority of our business fields, with an eye to sustainability. WACKER will publish new strategic growth targets in 2022.
WACKER made its new sustainable development goals public in mid-December 2021. They are substantially more ambitious than the previous targets. We want to halve our greenhouse gas emissions by 2030 by means of specific projects and measures. Our target is to achieve a net zero carbon footprint by 2045. Absolute greenhouse gas emissions are to be reduced to 50 percent of 2020 levels by the year 2030. It is our goal to ensure that our entire product portfolio complies with defined sustainability criteria by 2030. We also expect all key suppliers to fulfill defined sustainability standards by 2030. Emissions of upstream products used by WACKER are to be reduced by 25 percent by 2030. WACKER has set a new specific target for water withdrawal, aiming to achieve a reduction of 15 percent by 2030. At the same time, we believe that the measures for counteracting climate change will provide great opportunities for WACKER’s business. Today, about two-thirds of WACKER’s product portfolio provides customers with resource-efficient and climate-friendly solutions. Because demand for these products is constantly growing, WACKER expects to see a substantial contribution to sales and earnings in the next few years.
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Until new strategic growth targets are published, the WACKER Group’s other strategic business goals remain as follows:
- Expand our production capacities, with capital expenditures below depreciation/amortization
- Generate higher growth than the average rate for the chemical industry
- Achieve attractive margins throughout the economic cycle
- Increase our cash inflow from operating activities
Investment spending is focused on region-specific plants for intermediate and downstream production. They have a lower capital intensity than full-scale plants for upstream products.
We want to grow faster than the chemical-sector average by deploying new capacities, by expanding in emerging markets and regions, by innovating, and by substituting competitors’ products with WACKER products. In doing so, we intend to increase the proportion of specialty products in our portfolio. Our focal regions and countries for further growth remain unchanged: China, Southeast Asia, India, the Middle East and Brazil. We also see opportunities to expand our chemical business in our established markets in Europe and the USA.
Our aim is to achieve attractive margins with our products, with a target EBITDA margin for the chemical divisions of >16 percent.
To finance investments ourselves, we aim to generate positive cash flow and steadily increase cash inflows from operating activities.
With its Shape the Future program, WACKER is aiming to save a total of €250 million annually in personnel and non-personnel costs from the end of 2022.