Wacker Chemie AG

EANS-News: WACKER's Business Picks Up Noticeably in Q1 2012

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quarterly report

Subtitle: - Group sales reach about €1.19 billion in Q1 2012, down close to 8
percent from Q1 2011, but 18 percent above Q4 2011
- Price declines reduce first-quarter EBITDA by 40 percent to €212 million, with
EBITDA almost double Q4 2011 results
- Net income for Q1 2012 amounts to €40 million
- Investments of €186 million focus on strategic growth projects
- Forecast unchanged: Full-year 2012 sales to reach about €5 billion, EBITDA
expected substantially below prior-year level

Munich (euro adhoc) - May 4, 2012 - After last year's weak fourth quarter,
Wacker Chemie AG recorded higher volumes amid rising demand in the first quarter
of 2012. The Munich-based chemical company's sales and earnings both showed a
marked improvement over Q4 2011. The very strong figures for the prior-year's
first quarter could not be matched, however. The Group generated first-quarter
sales of EUR1,194.3 million, down 8 percent from Q1 2011 (EUR1,291.7 million),
but up 18 percent on Q4 2011 (EUR1,011.6 million). Sales at the Group were
driven mainly by higher volumes in the quarter under review. In contrast,
significantly lower prices held back sales, particularly in the solar-silicon
business, but also in the area of semiconductor wafers. Changes in exchange
rates were only of minor importance.

Lower solar-silicon margins and non-recurring effects impacted WACKER's
profitability in the first quarter of 2012. The Group generated earnings before
interest, taxes, depreciation and amortization (EBITDA) of EUR211.8 million in
the period under review - down 40 percent from a year ago (EUR351.0 million).
Compared with Q4 2011 (EUR110.8 million), however, the Group almost doubled its
EBITDA. The EBITDA margin in the period reached 17.7 percent (Q1 2011: 27.2
percent). The Group's first-quarter earnings before interest and taxes (EBIT)
amounted to EUR82.4 million (Q1 2011: EUR245.9 million), which corresponds to an
EBIT margin of 6.9 percent (Q1 2011: 19.0 percent). In the fourth quarter of
2011, EBIT had been EUR-55.0 million. Net income for the period was EUR40.0
million (Q1 2011: EUR168.0 million), which represents earnings per share of
EUR0.84 (Q1 2011: EUR3.39).

Aside from the effect of lower prices on revenues, the continued high cost of
raw materials and energy was also a key factor holding back earnings in the
quarter. At Siltronic, non-recurring expenses relating primarily to the
announced closure of the 150 mm wafer production line at Portland reduced EBITDA
by some EUR15 million. Furthermore, higher depreciation resulting from additions
to noncurrent assets also had a part in reducing both EBIT and net income for
the period. The new polysilicon plant at Nünchritz was one of the contributing
factors here. During the quarter, WACKER POLYSILICON received around EUR37
million in advance payments and damages from polysilicon customers exiting the
solar business. This had a positive effect on earnings.

For full-year 2012, WACKER's forecast for Group sales remains unchanged at
approximately EUR5 billion. EBITDA for fiscal 2012 is expected to be well below
the previous year's figure of EUR1.1 billion.

"In view of the general situation, WACKER saw a good start into fiscal 2012,"
said CEO Rudolf Staudigl on Friday in Munich. "Encouragingly, customer demand
gained appreciable momentum in many business segments during the first quarter
of 2012. Although the general economic environment remains challenging,
especially in the first half of the year, it seems that the downward trend has
now come to an end - a reassuring signal for the months ahead."

Regions
In the period under review, WACKER's business performance varied across
individual regions. One of the major reasons for this divergence is the strong
solar-industry shift toward Asia, where the Group increased sales by 3 percent.
With first-quarter sales of EUR487.1 million (Q1 2011: EUR471.9 million), Asia
is WACKER's largest sales market.

Europe showed a significantly weaker business performance. Along with declining
solar-sector sales, cautious customer ordering patterns also left their mark. In
Germany, first-quarter sales were EUR184.6 million in 2012 - down 25 percent
from a year ago (EUR247.2 million). Sales in the rest of Europe also contracted.
At EUR276.3 million, they dropped over 11 percent against the prior-year period
(EUR311.9 million).

In the Americas, WACKER's chemical business grew during the quarter under
review. However, semiconductor-wafer and polysilicon sales there posted
declines. Total sales for the region from January through March 2012 amounted to
EUR207.3 million - a drop of 6 percent from a year earlier (EUR220.5 million).
In the markets combined under "Other regions," first-quarter sales totaled
EUR39.0 million (Q1 2011: EUR40.2 million). Overall, WACKER generated about 84
percent of its first-quarter sales with customers outside Germany (Q1 2011: 81
percent).

Investments and Net Cash Flow
WACKER invested a total of EUR186.1 million in January through March 2012 (Q1
2011: EUR136.6 million). Almost three-quarters of this amount related to the
ongoing expansion of polysilicon production capacity, particularly the
construction of the new Charleston site in the US state of Tennessee. Two
expansion projects are underway at the produc¬tion site in Nanjing (China). A
new reactor with an annual capacity of 60,000 metric tons is being added to the
site's existing production facilities for vinyl acetate-ethylene copolymer
dispersions. Moreover, a new plant is being built there for polyvinyl acetate
solid resins, with an annual capacity of 20,000 metric tons. WACKER is investing
a total of about EUR40 million in the two new facilities.

The Group's net cash flow for January through March 2012 was EUR-41.5 million,
compared with EUR97.5 million a year ago. The decline was due to lower
first-quarter net income and to the high level of investment spending.
Additionally, starting fiscal 2012, WACKER no longer reports advance payments
for polysilicon deliveries within net cash flow. The Group has thus adapted its
presentation of net cash flow to the method used by financial analysts, who
consider these payments to be a form of financing. Applying this method to Q1
2011, WACKER would have had net cash flow of EUR97.5 million back then instead
of the EUR286.3 million actually reported for that prior-year quarter.
 
Employees
Employee numbers at WACKER are changing as production capacity is transferred or
shut down, and new production facilities and sites are constructed. On March 31,
2012, WACKER had 17,166 employees (Dec. 31, 2011: 17,168) worldwide, up by over
3 percent compared with the end of Q1 2011. There was no change in the Group's
total workforce compared with year-end 2011. As of March 31, 2012, WACKER had
12,847 employees in Germany (Dec. 31, 2011: 12,813) and 4,319 at its
international sites (Dec. 31, 2011: 4,355).

Business Divisions
WACKER SILICONES generated total sales of EUR401.0 million in the first quarter
of 2012, compared with EUR410.5 million a year earlier. Thus, the division did
not quite match (-2 percent) the prior-year quarter's very high level. This was
mainly due to a slight drop in year-on-year volumes in Europe and to lower
prices. Compared with the pre¬vious quarter (EUR357.0 million), however, sales
rose 12 percent. WACKER SILICONES' EBITDA for January through March 2012 mainly
reflected the influence of two factors when compared with Q1 2011. Pricing for
the division's products was weaker, and fixed-cost coverage was not quite as
high as in Q1 2011, due to slightly lower capacity utilization than in the
prior-year period. At EUR49.4 million, EBITDA for Q1 2012 was down 34 percent
from the prior-year figure (EUR75.1 million), but many times higher than in the
previous quarter (EUR5.7 million). The EBITDA margin in the period under review
reached 12.3 percent (Q1 2011: 18.3 percent).

In Q1 2012, WACKER POLYMERS benefited from a robust market environment and
continuing high customer demand, especially for dispersions. Total sales climbed
14 percent to EUR233.8 million, compared with EUR205.4 million in Q1 2011.
Influenced by seasonal effects, sales were almost 9 percent up on the preceding
quarter (EUR215.1 million). Sales growth was driven by both higher volumes and
better prices. These two factors - coupled with the high fixed-cost coverage
achieved through well-utilized plant capacity - have also helped lift WACKER
POLYMERS' profitability. The division improved its EBITDA to EUR34.1 million in
the three months from January through March 2012 - a rise of around 31 percent
on the prior-year period (EUR26.0 million). The first-quarter EBITDA margin
climbed to 14.6 percent (Q1 2011: 12.7 percent).

WACKER BIOSOLUTIONS' first-quarter sales totaled EUR41.2 million (Q1 2011:
EUR37.7 million). Every product group contributed to this 9-percent increase.
Sales rose 22 percent compared with Q4 2011 (EUR33.7 million). WACKER
BIOSOLUTIONS also improved its EBITDA, which climbed to EUR7.9 million in the
first quarter of 2012 (Q1 2011: EUR5.2 million). The corresponding EBITDA margin
was 19.2 percent (Q1 2011: 13.8 percent).

WACKER POLYSILICON posted total sales of EUR366.6 million in Q1 2012, as against
EUR414.4 million in Q1 2011 - a year-on-year decrease of almost 12 percent.
However, the selling prices of hyperpure polysilicon fell much more considerably
during the same period. The division has been supplying its contract customers
with additional quantities. In this way, it has compensated somewhat for the
price-driven decline by pushing up volumes. WACKER POLYSILICON sold almost 50
percent more hyperpure polysilicon in Q1 2012 than in the corresponding
prior-year period. Compared with Q4 2011 (EUR255.9 million), sales were up 43
percent in the quarter under review. WACKER POLYSILICON is currently running all
its production facilities at full capacity in order to meet its customers'
demand for polysilicon. The price decline in polysilicon for the solar industry,
which takes around 90 percent of WACKER POLYSILICON's volume, has had a major
impact on the division's profitability. First-quarter EBITDA reached EUR150.1
million (Q1 2011: EUR214.7 million), down some 30 percent year on year. Measured
against Q4 2011 (EUR165.0 million), EBITDA was down by 9 percent. The EBITDA
margin for WACKER POLYSILICON reached 40.9 percent in the quarter under review
(Q1 2011: 51.8 percent). It is important to remember that the figures both for
the quarter under review and for the final quarter of 2011 include special
income from advance payments and damages from customers withdrawing from the
solar business. These effects amounted to around EUR37 million in the first
quarter of 2012, and to some EUR66 million in Q4 2011.
Siltronic achieved total sales of EUR201.1 million in Q1 2012, down 28 percent
from the prior-year quarter's EUR280.2 million. This drop was mainly due to the
lower volumes sold, although weaker prices also played a role. Compared with Q4
2011 (EUR179.7 million), however, sales were up by approximately 12 percent. 

Siltronic's first-quarter EBITDA came in at EUR-25.7 million (Q1 2011: EUR36.8
million). This fall of almost EUR63 million mainly stemmed from the weaker
market prices for silicon wafers and the poorer fixed-cost coverage due to lower
year-on-year production capacity utilization. Non-recurring expenses - incurred
mainly in connection with the announced closure of Portland's 150 millimeter
wafer line - reduced EBITDA by around EUR15 million. The EBITDA margin for the
quarter under review was -12.8 percent, compared with 13.1 percent in Q1 2011
and -32.6 percent in Q4 2011.
 
Outlook
The global economy appears to have overcome the weak phase of the second half of
2011. Initial signs of a recovery emerged since the start of 2012, and
economists believe the trend will gain momentum in the second half of the year,
even if marked regional differences are likely. However, the risks stemming
essentially from Europe's financial and sovereign-debt crisis have not gone
away.

From today's perspective, the photovoltaic market will grow further this year.
WACKER expects that newly installed photovoltaic capacity will reach between 30
and 35 gigawatts. Volumes and plant utilization will thus remain high, but
prices for solar silicon will not reach last year's levels. For semiconductors,
the Group anticipates that customer demand will rise over the next few months.
In the chemical divisions, WACKER expects sales to grow during the current
fiscal year as a result of higher volumes.

For 2012 as a whole, the Group targets sales of around EUR5 billion. Full-year
earnings before interest, taxes, depreciation and amortization are expected to
be well below the prior-year level, mainly due to the lower prices obtained from
photovoltaic customers for polysilicon deliveries.

Note to editors: The Q1 2012 report is available for download on the WACKER
website (www.wacker.com) under Investor Relations.

Key Figures of the WACKER Group

|EUR million                |Q1 2012    |Q1 2011  |Change     |
|                           |           |         |in %       |
|Sales                      |1,194.3    |1,291.7  |-7.5       |
|EBITDA1                    |211.8      |351.0    |-39.7      |
|EBITDA margin2 (%)         |17.7       |27.2     |-          |
|EBIT3                      |82.4       |245.9    |-66.5      |
|EBIT margin2 (%)           |6.9        |19.0     |-          |
|                           |           |         |           |
|Financial result           |-13.7      |-7.9     |73.4       |
|Income before taxes        |68.7       |238.0    |-71.1      |
|Net income for the period  |40.0       |168.0    |-76.2      |
|                           |           |         |           |
|Earnings per share (EUR)   |0.84       |3.39     |-75.2      |
|                           |           |         |           |
|Investments (incl.         |186.1      |136.6    |36.2       |
|financial assets)          |           |         |           |
|Net cash flow4             |-41.5      |97.5     |n.a.       |
|                           |           |         |           |
|EUR million                |March 31,  |March 31,|December   |
|                           |2012       |2011     |31, 2011   |
|                           |           |         |           |
|Equity                     |2,668.0    |2,617.9  |2,629.7    |
|Financial liabilities      |1,097.3    |541.9    |777.9      |
|Net financial              |19.1       |559.5    |95.7       |
|receivables/liabilities5   |           |         |           |
|Total assets               |6,596.8    |5,932.9  |6,237.0    |
|                           |           |         |           |
|Employees (number at end of|17,166     |16,602   |17,168     |
|period)                    |           |         |           |
|                           |           |         |           |

1 EBITDA is EBIT before depreciation and amortization
2 Margins are calculated based on sales
3 EBIT is the result from continuing operations for the period before interest
and other financial results, and income taxes
4 Sum of cash flow from operating activities (excluding changes in advance
payments received from polysilicon contracts) and cash flow from noncurrent
investment activities (before securities), including additions due to finance
leases
5 Sum of cash and cash equivalents, noncurrent and current securities, and
noncurrent and current financial liabilities

This press release contains forward-looking statements based on assumptions and
estimates of WACKER's 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.


Further inquiry note:
Christof Bachmair
Media Relations & Information
Tel.: +49 (0)89 6279 1830
E-Mail: christof.bachmair@wacker.com

end of announcement                               euro adhoc 
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company:     Wacker Chemie AG
             Hanns-Seidel-Platz 4
             D-81737 München
phone:       +49 (0) 89 6279 01
FAX:         +49 (0) 89 6279 1770
mail:     info@wacker.com
WWW:      http://www.wacker.com
sector:      Chemicals
ISIN:        DE000WCH8881
indexes:     MDAX, CDAX, Prime All Share
stockmarkets: free trade: Hannover, München, Hamburg, Düsseldorf, Stuttgart,
             regulated dealing: Berlin, regulated dealing/prime standard:
             Frankfurt 
language:   English
 



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