Strategy at Each Business Division

In the chemical divisions WACKER SILICONES and WACKER POLYMERS, sales are to grow by a factor of 1.5-2 annually. At the same time, profitability is to continue rising. The EBITDA margin is planned to surpass 20 percent by 2030. The previous target for the chemical divisions was 16 percent. ROCE is to be more than twice the cost of capital. To intensify growth in specialties, capacity will be expanded in the local regions and markets where customers do business. Investment spending is to double to over €400 million annually.

WACKER SILICONES is scaling up its efforts to to establish customer proximity in the regions. This strategy is underscored by the investment in the Chinese specialty silane manufacturer SICO Performance Material. With its new plant in Panagarh (India), which specializes in silicone end products, the division is continuing to strengthen its market leadership in India. It also plans to create additional new capacity for specialties at Charleston, Tennessee (USA).

WACKER POLYMERS will significantly expand its capacities in Europe and Asia in the coming years – the plan is to double them by 2030. The portfolio for sustainable product solutions will be expanded, including those based on renewable raw materials. The same applies to customer-specific solutions.

WACKER BIOSOLUTIONS will reach new dimensions by 2030. By that point in time, annual sales are planned to rise to around €1 billion, driven by organic growth and targeted acquisitions, while the EBITDA margin is to reach around 25 percent. One pillar of this strategy is biologics – in particular, advanced medicines. The second pillar is fermentation-based manufacturing of ingredients for nutritional supplements based on renewable raw materials. The plan is to expand the division’s product portfolio with internal innovation, partnerships and further acquisitions. Annual investment spending is to exceed €80 million.

At WACKER POLYSILICON, the EBITDA margin is to exceed 30 percent by 2030. ROCE is to be more than twice the cost of capital. The division wants to continue strengthening its position, particularly in the semiconductor business. The share of electronic-grade hyperpure silicon in the division’s total output will continue to rise. Investment spending should reach around €100 million annually.

EBITDA

Earnings before interest, taxes, depreciation and amortization.

Fermentation

In biotechnology, fermentation means the conversion of biological materials by means of bacterial, fungal and cell cultures, or by the addition of enzymes. For example, products such as insulin, many different antibiotics and amino acids (e.g. cysteine) can be synthesized on an industrial scale in bioreactors using microorganisms.

Return on Capital Employed (ROCE)

Return on capital employed is the profitability ratio relating to the capital employed. ROCE 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 ROCE is calculated. 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.

Silanes

Silanes are used as monomers for the synthesis of siloxanes or sold directly as reagents or raw materials. Typical applications include surface treatment, agents (medically active substances) in pharmaceutical synthesis, and coupling agents for coatings.

Silicon

After oxygen, silicon is the most common element in the Earth’s crust. In nature, it occurs without exception in the form of compounds, chiefly silicon dioxide and silicates. Silicon is obtained through energy-intensive reaction of quartz sand with carbon and is the most important raw material in the electronics industry.

Silicones

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.

Annual Report 2022

Strategy at Each Business Division

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