MUNICH – At its annual press conference on March 14, Wacker Chemie AG announced it met its sales target and exceeded its earnings expectations in 2016. On presenting its annual report, the Munich-based chemical company announced that Group sales came in at €5.40 billion, up 2% year over year (2015: €5.30 billion). The rise was mainly due to higher volumes. EBITDA – earnings before interest, taxes, depreciation and amortization – totaled €1,101.4 million in 2016 (2015:€1,048.8 million). This corresponds to an EBITDA margin of 20.4% (2015: 19.8%).

In 2017, WACKER intends to continue its good performance, despite expectations of higher raw material prices. For the full year, WACKER aims to lift its sales by a mid-single-digit percentage. WACKER anticipates a high cash inflow from operating activities again in 2017. At about €400 million, net cash flow should be at a similar level to the year before. Group net income is also projected to reach the year-earlier level.

During the first two months of the current year, WACKER’s business developed positively. In chemicals, and at Siltronic and WACKER POLYSILICON, sales for the first two months were clearly above the comparable values of last year. Overall, WACKER expects to generate sales of some €1.4 billion in the first quarter of 2017 (Q1 2016: €1.31 billion).

“WACKER is in very good shape,” said CEO Rudolf Staudigl. “We expect volumes to rise at every division. In the industry sectors relevant to our business, the trend will be broadly positive in 2017. That is why we are confident of increasing sales by a slightly higher percentage than last year. We are, however, facing headwind from raw-material prices. At present, they are rising significantly, and this could impact earnings. If current market conditions remain unchanged during the year, we definitely see additional upward potential for EBITDA – over and above our present expectations.”

Capital Expenditures

In 2016, the Group’s capital expenditures amounted to €427.6 million (2015: €834.0 million). They dropped by about half versus the year before, as expected. One of the priorities of investing activities last year remained the completion of the new polysilicon site at Charleston, Tennessee. Some €100 million – or about a quarter of total capital spending in 2016 – went toward this project. WACKER finished commissioning the production facilities there on schedule in the third quarter of 2016.

A further investment priority in 2016  was expanding capacities for manufacturing downstream products. For example, WACKER increased production capacity for cyclodextrins by 30% at its site in Eddyville, Iowa. At its Burghausen, Germany, site, it expanded production of functional silicone fluids in several stages. Capital spending for this amounted to some €25 million.

In 2016, WACKER began additional investment projects. These included new facilities for silicone products at sites in Jincheon (South Korea) and Jandira (Brazil). In Burghausen, WACKER is building a new reactor for polymeric dispersions and is expanding a plant for hydrophobicspecialty grades of silica.


Estimates by economic experts indicate that the world economy is on track for moderate growth. But the projections involve major uncertainties. WACKER’s chemical business offers good prospects for further growth in 2017. Sales are projected to continue rising at all three chemical divisions. At WACKER SILICONES and WACKER POLYMERS, sales are expected to grow by a mid-single-digit percentage, with all business units contributing. At WACKER BIOSOLUTIONS, the sales forecast is for a low-singledigit percentage increase, chiefly driven by products for the pharmaceutical and agrochemical industries.

EBITDA at WACKER SILICONES should rise slightly year over year, amid higher raw-material prices in some cases. At WACKER POLYMERS, the EBITDA projection is for a substantial year-over-year decline due to expectations of much higher raw-material prices – with the projected EBITDA margin exceeding the 16 percent targeted for WACKER’s chemical divisions. At WACKER BIOSOLUTIONS, integration costs for a new site in Spain will impact 2017’s EBITDA, which will be significantly lower than last year.

Overall, WACKER expects Group sales to rise by a mid-single-digit percentage in 2017. EBITDA – adjusted on a comparable basis to exclude special income – should be on a par with last year. If current market conditions continue during the year, there will be additional opportunities for the EBITDA trend. The Group’s EBITDA margin is projected to be slightly below the year-earlier level due to generally lower prices for its own products and rising raw-material prices. At around €450 million, capital expenditures will edge up slightly versus last year. Depreciation will be slightly below last year’s level, at around €720 million. Group net income is projected to be at the year-earlier level. Net cash flow should be clearly positive and at a similar level to last year. Net financial debt will decrease significantly.