WACKER BOOSTS SALES AND EARNINGS BY 20 PERCENT IN Q3 2006
München (euro adhoc) -
- EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) REACH 217.9 MILLION - EBITDA MARGIN AT 25.4 PERCENT - GROUP SALES CLIMB TO 857.3 MILLION - EARNINGS PER SHARE RISE TO 1.91 - FULL-YEAR 2006 SALES AND EARNINGS FORECAST CONFIRMED
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In Q3 2006, Wacker Chemie AG boosted year-on-year sales and earnings by 20 percent respectively, thanks particularly to continued strength of the companys semiconductor business. The Munich-based chemical company achieved a EUR217.9 million EBITDA (Q3 2005: EUR181.7m). Q3s EBITDA margin was 25.4 percent. Playing a key role in the Groups earnings rise was its semiconductor division, Siltronic - whose EBITDA increased by EUR42.6 million against the prior-year third quarter. WACKER POLYSILICON, too, enhanced its EBITDA by almost 50 percent year-on-year. The Groups Q3 earnings before interest and taxes (EBIT) climbed to EUR139.5 million (Q3 2005: EUR96.9m). Q3 Group net profit rose by EUR40.3 million year-on-year to EUR95.1 million, resulting in earnings per share of EUR1.91 (2005: EUR1.12). Driven by the ongoing economic upturn and particularly strong volume gains, Group sales climbed to EUR857.3 million in Q3 2006 (Q3 2005: EUR714.8m). The Munich-based chemical company confirmed its full-year sales and earnings expectations, which project consolidated sales of about EUR3.3 billion in 2006. EBITDA is forecast at slightly above the previously announced EUR730-750 million target range.
"Our third-quarter figures yet again underscore the Groups operational strength and growth potential," said CEO Peter-Alexander Wacker. "In fact, we are well on the way to somewhat exceed our earnings target for 2006."
Regionally, growth was especially strong in Asia. In the "Asia / Other Countries" region, sales rose 43 percent to EUR279.8 million (Q3 2005: EUR195.8m). China again played a key role, with above-average growth of 53 percent. At EUR163.5 million, sales in the Americas reached the level of the prior-year period (Q3 2005: EUR162.7m), reflecting the U.S. dollars weakness compared to a year ago. In European markets (excluding Germany), WACKER posted sales of EUR240.7 million for Q3 2006 (Q3 2005: EUR215.3m), a year-on-year increase of over 12 percent. In Germany, the Group reported sales of EUR173.3 million for July to September, up 23 percent (Q3 2005: EUR141.0m).
In Q3 2006, net cash flow rose 28 percent to EUR134.8 million (Q3 2005: EUR105.4m), despite much higher capital expenditures in the period under review. From July to September 2006, investments in intangible assets and property, plant, and equipment amounted to EUR103.2 million, 60 percent higher than the prior-year period (Q3 2005: EUR64.3m). The rise was largely due to investments in strategic growth projects, which proceeded on track during the period under review. The main focus was WACKERs ongoing expansion of polycrystalline silicon capacity at its production site in Burghausen (Germany). WACKER also continued to increase 300-mm silicon wafer capacity at Freiberg (Germany) and Burghausen (Germany), and to expand its silicone facilities in Nünchritz (Germany) and Zhangjiagang (China).
On September 30, 2006, WACKER had 14,654 employees worldwide (June 30, 2006: 14,555), a slight increase due mainly to strategic projects to expand polysilicon production capacity and operations in China.
Business Divisions Sales at WACKER SILICONES rose 13 percent to EUR321.2 million in Q3 2006 (Q3 2005: EUR284.6m). This growth was primarily driven by significantly higher sales volumes. EBITDA totaled EUR63.2 million from July to September 2006 (Q3 2005: EUR68.4m) - around 8 percent below the prior-year period. Firstly, this was due to much higher energy and raw-material costs. Further expenditures related to the ramp-up of additional siloxane capacities at Nünchritz (Germany). Secondly, the effects of the weaker U.S. dollar (compared to the prior-year period) also had an impact.
WACKER POLYMERS generated sales of EUR152.8 million from July to September 2006 (Q3 2005: EUR130.7m), a 17 percent rise compared to the prior-year period. Key contributing factors were significant volume gains and product-mix effects, particularly for dispersible polymer powders. As for earnings, WACKER POLYMERS generated EBITDA of EUR31.0 million in Q3 2006 (Q3 2005: EUR35.8m). This 13-percent decline was primarily due to strong rises in energy and raw-material costs, especially for ethylene. Product price increases have been set to balance this development, though the increases did not yet impact earnings in the quarter under review.
WACKER FINE CHEMICALS achieved Q3 2006 sales of EUR26.3 million (Q3 2005: EUR26.4m). The divisions biotech pharmaceutical proteins business performed well. Strong demand for cyclodextrins and cysteine continued in the period under review. However, custom synthesis posted a sales decline. WACKER FINE CHEMICALS Q3 EBITDA fell to EUR-0.2 million (Q3 2005: EUR4.0m), due to increasing price pressure for custom synthesis and a related adjustment in inventory value. Also impacting results were higher raw-material costs, which could not be fully offset by the good profitability of biotech products. A restructuring of the "Exclusive Synthesis" business unit is currently under way to cope with these effects.
In light of continued strong demand, WACKER POLYSILICON increased Q3 sales by 19 percent to EUR80.4 million (Q3 2005: EUR67.3m). Higher average revenues and measures to enhance process yields greatly contributed to this rise. Earnings grew much faster than sales. WACKER POLYSILICONs EBITDA from July to September reached EUR32.2 million (Q3 2005: EUR21.7m) - a year-on-year rise of 48 percent. In addition to volume gains, the division successfully increased prices which had a particularly positive effect.
Polysilicon capacity expansion is progressing on schedule. Total nominal capacity is expected to virtually triple in several stages to 14,500 tons per year by the end of 2009. In the period under review, more than 50 percent of the polysilicon scheduled to come from the 4.500 tons expansion stage announced end of June was already assigned to customers under multi-year contracts involving related prepayments.
In Q3 2006, Siltronic yet again generated year-on-year sales growth and even stronger earnings. Siltronics July-September sales jumped 30 percent to EUR330.7 million (Q3 2005: EUR254.7m) - a rise fueled especially by higher sales volumes as well as product mix shifts and increased average revenues. These more than compensated negative exchange-rate effects from the weaker U.S. dollar. All wafer diameters contributed to sales growth - with the 300-mm segment posting the largest gains. Siltronics Q3 EBITDA reached EUR98.2 million (Q3 2005: EUR55.6m) - up 77 percent. The EBITDA margin of 30 percent is a significant profitability increase - compared to both the preceding quarter and the prior-year period. Higher average revenues and volume gains, alongside continued high capacity utilization and effective cost control, were among the contributors to this positive development. Activities continued on track for expanding existing 300-mm wafer production facilities at Burghausen and Freiberg. On July 19, Siltronic and Samsung signed a joint venture agreement for constructing a new 300-mm fab at Singapore. Construction of the new facility has already started.
Outlook WACKER is expecting good business conditions to continue through the remainder of 2006. In Q4, the Groups chemical divisions will probably experience the normal seasonal slowdown, with start-up costs for new facilities and higher methanol prices also affecting results. For all of fiscal 2006, the Group expects to generate sales of some EUR3.3 billion and to slightly beat its EBITDA target of EUR730-750 million.
Information for editorial offices: The full Q3 2006 report can be downloaded from WACKERs website (www.wacker.com) under Investor Relations.
This press release contains forward-looking statements based on assumptions and estimates of WACKERs Executive Board. Although we assume the expectations in these forward-looking statements are realistic, we cannot guarantee they will prove to be correct. The assumptions may harbor risks and uncertainties that may cause the actual figures to differ considerably from the forward-looking statements. Factors that may cause such discrepancies include, among other things, changes in the economic and business environment, variations in exchange and interest rates, the introduction of competing products, lack of acceptance for new products or services, and changes in corporate strategy. WACKER does not plan to update the forward-looking statements, nor does it assume the obligation to do so.
Key Group Figures
|EUR million |Q3 2006 |Q3 2005 |% | |9M 2006 |9M 2005 |% | | | | |change | | | |change | |Sales |857.3 |714.8 |20 | |2,486.2 |2,024.5 |23 | |EBITDA(1) |217.9 |181.7 |20 | |597.2 |456.4 |31 | |EBITDA |25.4% |25.4% |0 | |24.0% |22.5% |7 | |margin(2) | | | | | | | | |EBIT(3) |139.5 |96.9 |44 | |357.0 |193.1 |85 | |EBIT margin(2) |16.3% |13.6% |20 | |14.4% |9.5% |51 | | | | | | | | | | |Financial |-7.4 |-15.4 |-52 | |-36.3 |-45.8 |-21 | |result | | | | | | | | |Pre-tax result |132.1 |81.5 |62 | |320.7 |147.3 |>100 | |Net profit/loss|95.1 |54.8 |74 | |227.8 |65.4 |>100 | | | | | | | | | | |Net profit/loss|1.91 |1.12 |72 | |4.77 |1.28 |>100 | |per share inEUR| | | | | | | | | | | | | | | | | |Investment in |103.2 |64.3 |60 | |274.3 |197.2 |39 | |intagibles and | | | | | | | | |property, plant| | | | | | | | |and equipment | | | | | | | | |Net cash flow |134.8 |105.4 |28 | |172.5 |35.3 |>100 | | | | | | | | | | |EUR million |Sep. 30,|Sep. 30, |Dec. 31,| | | | | | |2006 |2005 | | | | | | | | | |2005 | | | | | |Equity |1,503.0 |850.2 |934.4 | | | | | |Financial |437.0 |1,047.7 |946.2 | | | | | |liabilities | | | | | | | | |Provisions |362.6 |350.0 |352.1 | | | | | |for pensions | | | | | | | | |Net financial |382.4 |1,021.7 |911.5 | | | | | |debt | | | | | | | | |Total assets |3,110.4 |2,916.1 |2,922.9 | | | | | | | | | | | | | | |Employees |14,654 |14,433 |14,434 | | | | | |(number at end | | | | | | | | |of period) | | | | | | | | | | | | | | | | | |(1) EBITDA is EBIT before depreciation and amortization. | |(2) Margins are calculated based on sales. | |(3) EBIT is the result of continuing operations for the period before | |interest and other financial results, limited partnership interests and | |income tax. |
end of announcement euro adhoc 10.11.2006 08:25:34
Further inquiry note:
Christof Bachmair
+49 (0)89 6279 1830
christof.bachmair@wacker.com
Branche: Chemicals
ISIN: DE000WCH8881
WKN: WCH888
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