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Wacker Chemie AG

EANS-News: Wacker Chemie AG
WACKER achieves new record figures in 2008 and prepares for a difficult year in fiscal 2009

Munich (euro adhoc) -

- Net income increases 4 percent in 2008 to €438 million (2007: 
€422m)
 - Earnings per share rise to €8.84 (2007: €8.49), dividend of
€1.80 proposed
 - EBITDA reaches €1.06 billion (2007: €1.00bn)
Sales up 14 percent to €4.30 billion (2007: €3.78bn)
 - For 2009, 
WACKER is expecting sales and EBITDA below prior-year levels
  ots.CorporateNews transmitted by euro adhoc. The issuer is responsible for
  the content of this announcement.
balance
March 18, 2009 - For fiscal 2008, Wacker Chemie
AG posted new records for both sales and net income. The global 
economic crisis did, however, increasingly impede sales and earnings 
in the second half of the year. The result was also impacted by 
higher energy and raw-material costs, and unfavorable exchange-rate 
effects. Nevertheless, EBITDA (earnings before interest, taxes, 
depreciation and amortization) rose by over 5 percent to EUR1.06 
billion (2007: EUR1.00bn). The Group´s net income after taxes totaled
EUR438 million (2007: EUR422m) with a tax rate of 32 percent (2007: 
33 percent). Earnings per share rose to EUR8.84 (2007: EUR8.49). The 
Group´s ROCE (return on capital employed) continued to rise last year
and reached 25.7 percent (2007: 25.3 percent).
Consolidated sales climbed 14 percent to EUR4.30 billion in 2008 
(2007: EUR3.78bn). The increase is due to the complete takeover of 
Air Products Polymers´ dispersion business (a former partner company)
as well as to volume gains and higher prices. EUR3.35 billion (2007: 
EUR3.06bn) of WACKER´s total sales were generated outside Germany. As
a result, international sales accounted for 78 percent of total 
sales.
WACKER is preparing for a global downturn in 2009. The Group sees 
good growth prospects for its polysilicon business this year again, 
as well as at its WACKER FINE CHEMICALS division. The business trend 
at the three other divisions will be more difficult. From today´s 
vantage point, WACKER will not reach prior-year sales or EBITDA 
levels. A reliable forecast of the decline´s extent is currently not 
possible due to economic uncertainties. WACKER already decided on, 
and implemented, a series of measures to limit the impact of the 
economic crisis on the company. Measures include short-time work, 
temporary plant shutdowns, budget cuts, investment-plan modifications
and secure operational financing.
"Following a record year in 2008, we are going to experience 
significantly rougher waters," said CEO Rudolf Staudigl in Munich on 
Wednesday. "Although 2009 won´t be an easy year, we will continue our
long-term growth strategy. We intend to maintain our high level of 
investments in 2009 so that we can tap into growth potential, 
especially in the solar sector. The major megatrends from which we 
profit remain unchanged. WACKER has a unique product portfolio, 
particularly for energy conservation and sustainable energy 
generation. The same goes for WACKER´s myriad cutting-edge products 
that help to raise the standard of living in emerging economies. This
is why I am optimistic that WACKER will resume its growth path once 
the global economy has come out of recession."
Investments The Group´s investments grew markedly in fiscal 2008. 
Asset additions reached EUR916 million (2007: EUR699m) - up 31 
percent. Most of the funding flowed into production facilities for 
polysilicon, siloxane, silicon wafers and dispersible polymer 
powders.
EUR171 million was spent on the complete acquisition of the two 
partner companies Air Products Polymers (APP) and Wacker Polymer 
Systems (WPS). Full consolidation of these activities within the 
WACKER Group took effect from February 1, 2008. WACKER´s integration 
of APP sites was successfully completed by year-end 2008.
In October, WACKER decided to further expand its polysilicon 
production capacity. With a nominal capacity of 10,000 metric tons 
per year, "Expansion Stage 9" is to be built at the company´s 
Nünchritz (Saxony) site. Capital expenditures amount to around EUR760
million. Burghausen´s (Bavaria) "Expansion Stage 8" - already under 
construction - is to be extended from 7,000 to 10,000 metric tons per
year. WACKER is investing around EUR100 million for this.
Employees At year-end 2008, WACKER had 15,922 employees worldwide, 
878 more than the prior-year number. The main reason for this 
increase was the integration of former APP employees. On the 
reporting date, WACKER´s German sites had 12,110 employees and 
international sites 3,812.
Net Cash Flow, Net Financial Debt and Equity Ratio Net cash flow 
reached EUR22 million in fiscal 2008 (2007: EUR644m). This decline of
EUR622 million is essentially based on two factors: whereas 
investment-activity outflows were some EUR400 million higher than in 
the prior year, received prepayments dropped by over EUR200 million 
compared to 2007. 2008 prepayments reached EUR198 million, thus 
remaining on a high level. For net financial liabilities - taking 
account of liquidity of EUR305 million - this results in a credit 
balance of EUR33 million as per the December 31, 2008 reporting date.
Moreover, WACKER has sufficient unused credit lines. Effective 
December 31, 2008, the WACKER Group´s balance-sheet total made clear 
gains of 18 percent - up EUR707 million to EUR4.63 billion (2007: 
EUR3.92bn). Primarily due to the high net income, the Group´s equity 
on the reporting date rose EUR217 million to EUR2.08 billion (2007: 
EUR1.87bn) - an increase of 12 percent. This results in an equity 
ratio of 45.0 percent (2007: 47.6 percent).
Business Divisions Siltronic´s 2008 sales amounted to EUR1.36 billion
(2007: EUR1.45bn) - a 6.3 percent decline. The reason for the sales 
drop was weak semiconductor-sector demand, which particularly 
impacted Siltronic´s Q4 business. By selling monocrystals and other 
materials to the solar industry, Siltronic partially offset its lower
semiconductor-sector sales. The division´s EBITDA equaled EUR357 
million in 2008 (2007: EUR478m) - down 25 percent. Key factors for 
the earnings trend included declining average wafer prices and high 
average euro/dollar exchange rates. In contrast, sales of silicon 
monocrystals substantially bolstered Siltronic´s profitability.
WACKER SILICONES´ total sales rose to EUR1.41 billion in fiscal 2008 
(2007: EUR1.36bn) - up 4 percent. Sales volumes grew thanks to 
increasing demand for silicone products. At the same time, the 
division achieved higher market prices. Exchange-rate effects, 
however, impeded its sales development. EBITDA was lower compared to 
the prior year. At EUR168 million (2007: EUR227m), it was 26 percent 
lower year on year. Raw-material costs, particularly for silicon 
metal, were significantly higher on average in 2008 compared to the 
prior-year period. The same applies to energy and transport 
expenditures.
At WACKER POLYMERS, total 2008 sales rose appreciably. They increased
37 percent to EUR868 million (2007: EUR633m), primarily due to 
consolidation of APP´s dispersion business effective February 1, 
2008. The construction-sector downturn, in contrast, dampened the 
sales trend. At WACKER POLYMERS, EBITDA amounted to EUR109 million 
(2007: EUR107m) - up 2 percent. High raw-material and energy prices, 
as well as the unfavorable euro/dollar exchange rate restrained the 
division´s profitability.
In 2008, WACKER POLYSILICON forged ahead, building on its prior-year 
successes. Total sales climbed 81 percent to EUR828 million (2007: 
EUR457m). Higher volumes stemming from production-capacity expansion 
fueled sales, as did higher prices. Polysilicon output rose over 40 
percent compared to 2007, reaching 11,900 metric tons. Uncontracted 
volumes available at short notice were sold at attractive terms 
throughout 2008. For the first time, growth was bolstered by the 
WACKER SCHOTT Solar joint venture, which - thanks to its new 
Jena-based production facility for multicrystalline silicon wafers - 
generated sales in the double-digit millions. Despite higher energy 
and raw-material costs, EBITDA grew even more than sales. It jumped 
132 percent to EUR422 million (2007: EUR182m).
WACKER FINE CHEMICALS generated total 2008 sales of EUR98 million 
(2007: EUR112m) - down 13 percent year on year due to consolidation 
measures. WACKER stopped making some of its custom fine chemicals and
catalog products. Higher sales of biotech products, such as 
biologics, cyclodextrins and cysteine, did not quite compensate for 
the shortfall. WACKER FINE CHEMICALS´ EBITDA was EUR9 million in 2008
(2007: EUR10m), nearly matching the previous year´s level.
Proposal on Appropriation of Profits In accordance with German 
Commercial Code accounting rules, Wacker Chemie AG posted a retained 
profit of EUR576.9 million in 2008. The Executive and Supervisory 
Boards will propose a dividend of EUR1.80 at the Annual General 
Meeting. This proposal lets shareholders participate in the good 
result that WACKER achieved in 2008, while simultaneously allowing 
for the expected decline in business in 2009. The payout for fiscal 
2007 was EUR2.25, plus there was a special bonus of EUR0.75. Based on
the number of dividend-entitled shares as per December 31, 2008, the 
cash dividend corresponds to a payout of EUR89.4 million. Calculated 
in relation to WACKER´s average share price in 2008, the dividend 
yield is 1.5 percent. The Executive and Supervisory Boards will 
propose to shareholders at the Annual General Meeting that the 
remaining profit be credited to retained earnings.
Outlook WACKER expects a significant economic downturn in 2009. 
Global GDP will rise by less than 1 percent. Despite this figure, it 
is currently very difficult to estimate the effects of the financial 
crisis on the real economy, since various scenarios could occur. 
WACKER estimates that its silicon-wafer business will have a 
particularly difficult time in fiscal 2009. Currently, no reliable 
forecast is possible for WACKER SILICONES or WACKER POLYMERS. Despite
the difficult economic environment, the Group sees growth potential 
in 2009 at its WACKER POLYSILICON and WACKER FINE CHEMICALS 
divisions, which will profit from the expansion of plants and product
lines. From today´s vantage point, WACKER expects an overall drop in 
sales and EBITDA in the current fiscal year. The Group anticipates 
positive effects from raw-material and energy costs, which will 
probably be lower than in 2008.
WACKER already decided on a catalog of measures in Q4 2008 to counter
and thereby limit the downturn´s impact. Measures include budget 
cuts, hiring restraints, modified investment planning and secure 
operational financing. As regards financing, WACKER already extended 
a EUR300 million syndicated credit facility in 2008 by another year 
to 2013, among other measures. Furthermore, the Group has secured new
three-year credit lines this year, totaling almost EUR200 million.
Due to the difficult global economic situation in 2009, WACKER 
applied for short-time work in January for Siltronic AG and in 
February for Wacker Chemie AG. The measure will initially last six 
months in each case. This means that individual production facilities
can adjust employee numbers flexibly to reflect their specific order 
and capacity-utilization levels. Some 6,000 production employees work
at WACKER in Germany.
Regardless of the currently difficult economic situation worldwide, 
WACKER´s products, global presence, high level of production and 
plant expertise, employees and seasoned customer relationships 
represent strengths that will continue to ensure the company´s 
long-term success in the future. WACKER´s product portfolio 
outstandingly serves key megatrends. Thanks to its strong 
international positioning, the Group sees good opportunities to 
significantly boost its market share in tomorrow´s key growth regions
over the coming years. WACKER also has growth opportunities through 
production-capacity expansion. Consequently, WACKER expects to show 
further significant growth in the medium term.
WACKER's Key Figures
|EUR million        |2008    |2007     |change  |                  |
|                   |        |         |in %    |                  |
|Sales              |4,298.1 |3,781.3  |13.7    |                  |
|EBITDA             |1,055.2 |1,001.5  |5.4     |                  |
|EBIT               |647.9   |649.6    |-0.3    |                  |
|Net income         |438.3   |422.2    |3.8     |                  |
|Earnings per share |8.84    |8.49     |4.1     |                  |
|EUR                |        |         |        |                  |
|ROCE               |25.7%   |25.3%    |-       |                  |
|                   |        |         |        |                  |
|Balance Sheet/Cash |        |         |        |                  |
|Flow               |        |         |        |                  |
|                   |        |         |        |                  |
|Total assets       |4,625.1 |3,918.1  |18.0    |                  |
|Equity             |2,082.8 |1,865.6  |11.6    |                  |
|Equity ratio       |45.0%   |47.6%    |-       |                  |
|Investments (incl. |        |         |        |                  |
|financial assets)  |916.3   |699.3    |31.0    |                  |
|Payments for       |171.2   |-        |-       |                  |
|acquisitions       |        |         |        |                  |
|Depreciation (incl.|        |         |        |                  |
|financial assets)  |407.3   |351.9    |15.7    |                  |
|Net cash flow      |21.7    |643.7    |-96.6   |                  |
|                   |        |         |        |                  |
|Research and       |        |         |        |                  |
|Development        |        |         |        |                  |
|                   |        |         |        |                  |
|Research and       |163.2   |152.5    |7.0     |                  |
|Development        |        |         |        |                  |
|expenses           |        |         |        |                  |
|                   |        |         |        |                  |
|Employees          |        |         |        |                  |
|                   |        |         |        |                  |
|Personnel expenses |1,086.0 |1,014.9  |7.0     |                  |
|Employees (December|15,922  |15,044   |5.8     |                  |
|31) Number         |        |         |        |                  |
|                   |        |         |        |                  |
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.
end of announcement                               euro adhoc

Further inquiry note:

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

Branche: Chemicals
ISIN: DE000WCH8881
WKN: WCH888
Index: Midcap Market Index, MDAX, CDAX, Classic All Share, HDAX,
Prime All Share
Börsen: Börse Frankfurt / regulated dealing/prime standard

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