CREATING TOMORROW`S SOLUTIONS
Wacker Chemie AG, November 2013
Disclaimer
The information contained in this presentation is for background purposes only and is subject to
amendment, revision and updating. Certain statements and information contained in this presentation
may relate to future expectations and other forward-looking statements that are based on management's
current views and assumptions and involve known and unknown risks and uncertainties. In addition to
statements which are forward-looking by reason of context, including without limitation, statements
referring to risk limitations, operational profitability, financial strength, performance targets, profitable
growth opportunities, and risk adequate pricing, other words such as "may, will, should, expects, plans,
intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or further", and similar
expressions identify forward-looking statements. By their nature, forward-looking statements involve a
number of risks, uncertainties and assumptions which could cause actual results or events to differ
materially from those expressed or implied by the forward-looking statements. These include, among
other factors, changing business or other market conditions and the prospects for growth anticipated by
the Company's management. These and other factors could adversely affect the outcome and financial
effects of the plans and events described herein. Statements contained in this presentation regarding
past trends or activities should not be taken as a representation that such trends or activities will
continue in the future. The Company does not undertake any obligation to update or revise any
statements contained in this presentation, whether as a result of new information, future events or
otherwise. In particular, you should not place undue reliance on forward-looking statements, which
speak only as of the date of this presentation.
WACKER POLYMERS
No. 1 in dispersible
polymer powders
No. 1 in VAE dispersions
Global footprint
WACKER BIOSOLUTIONS
High potential for future
development
Strong no. 3 with global
footprint
Leading positions in key
growth segments
Siltronic
Technology leader, ranking
as no. 3
Balanced base of
customers
Our Business Portfolio:
A Foundation for Growth
WACKER POLYSILICON
No. 1
Cost and quality leader
Enabling industry growth
FY 2012
Sales
€4.6 bn
Note: Percentages based on external sales per segment *) Others
WACKER SILICONES
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Strong Track Record:
Expecting Strong Growth into 2017
Long Term Historic Sales Growth
€m
Target 2017:
€6 - 6.5 bn
~6% CAGR
€4,635 m
The Next Five Years:
Introducing Financial Targets
Target 2017
Sales
EBITDA
ROCE
€6 - 6.5 bn
(~6% CAGR)*
€1.2 bn
(~20% margin)
> 11%
* CAGR 2012/2017Entering the Next Phase:
From Asset Growth to Cash Generation
Ratio of Capital Spending vs. Depreciation
Create
2005 – 2012
Focus on capital intensive growth:
Eight additional sites globally
Increased capacities 7x in Polysilicon, 3x in VAE dispersions, 2x Siloxane, 6x 300 mm wafer
The customer dimension:
Global presence and market penetration with technical centers and global sales structures
2005 2012 2013 2017 2018 2022
Leverage
2013 – 2017
Focus on profitability and cash:
Execute cost roadmaps
Leverage global asset base
Focus on quality growth, growing specialty sales
Invest below depreciation
Expand
2018 – 2022
Focus on selective expansion of production network:
Selective growth projects
Exploring further Verbund and debottlenecking
opportunities capex between 1.3
Positioned for Sustained Sales and Earnings Growth
WACKER: A Leading Specialty Chemicals Company
Advanced
Materials
Tech-based products ranging from standard to high value added
Focus on innovation and customized solutions
Compelling
Growth
Addressing high-growth markets
Local presence in all regions
Capitalizing on emerging markets growth
Strong
Cost Position
World-scale plants, integrated production, proprietary process know-how
Targeted cost reduction programs implemented
Significant CapEx program concluded, now leveraging a global asset base
Leading
Market
Positions
A global leader in most addressed segments and markets…
… particularly at the individual customer level
Create:
Global Market Presence
Technical Center & WACKER ACADEMY
Market Penetration in all Emerging Regions
Burghausen Adrian Shanghai Dubai Moscow Jandira Melbourne Singapore Nünchritz Akeno Canton, OH Seoul Mumbai Chino 9 WACKER ACADEMY sites provide training and product know-how tailored to our customers‘ needs. 22 Technical Centers
worldwide to service customers and develop products & applications
Shunde Beijing Kolkata
China
Local products and services
Korea
Focus on products for the electronic market
India
Focus on textile applications
Brazil
Expanding Technical Center
presence, local products and services
South East Asia
Mobile technical centerPlant
Create: Sales Network and Customer Relations -
Building a Sustainable Competitive Advantage
Chemicals:
Establishing a global network of technical centers
Global sales network to create and develop specialty solutions
Leveraging centralized upstream facilities into local growth opportunities
Customer focus drives product evolution
WACKER POLYSILICON:
Addressing the solar opportunity with specialized production technologies
Supplier of choice, leading in quality and cost
Siltronic:
Improved global production footprint for 300mm
Repeated Quality Award wins from industry leaders
Leverage:
Shifting Focus to Downstream Products
Raw Material
Upstream
Downstream
Customers’ Industries
Microbiological fermentation Pyrogenic Silica Silicon Metal Polyvinyl Acetate (PVAc) Acetic Acid Therapeutic proteins food ingredients Starch/ Dextrose Polysilicon Siloxane Silicones Dispersible Polymer Powders (DPP) Electronic wafers Methanol Vinylacetate Monomer (VAM)
Food, life sciences, household Food, automotive
Solar wafers, cells and modules
Construction, remodeling, insulation
Engineered fabrics, coatings, adhesives, carpet
Construction
Automotive suppliers Paints and coatings Textiles, print and paper Personal care
Semiconductors
Ethylene
Vinylacetate ethylene (VAE)
Chemicals:
The Way Forward
Strong and well established global market presence
Growth opportunities in emerging markets
Addressing global trends with advanced chemical products
Leveraging existing upstream capacities will reduce capital intensity of growth
Continuous productivity improvements and Verbund production support cost
competitiveness
SILICONES:
An Integrated Global Player in a Leading Market Position
Supply Chain
Sales Development (€m) – 5 years
Competitive Landscape 2012
Market Characteristics
Reduced cyclicality through broad market penetration and wide customer base
Historic growth rates 3% above worldwide GDP
High entry barriers (capital and technology)
Key drivers spur sustainable market growth
Innovations broaden scope of applications Momentive 16% WACKER 16% Bluestar 6% 29% Shin Etsu 12% Evonik 4% Dow Corning 37% €9.9* bn Others 9%
* Silane/Siloxane backward integrated suppliers; WACKER participations fully consolidated 2 raw materials 7 product groups > 3000 products & endless applications
Methanol Silicon Metal Silanes
Resins Fumed Silica OF Silanes Fluids & Emulsions Elastomers Siloxane 1,409 1,239 1,581 1,594 1,648 0 400 800 1,200 1,600 2008 2009 2010 2011 2012
Customization:
Combining a Unique Set of Properties
Hydrophobic Hydrophilic Formable Form stable Adhesive Release Electrically conducting Insulating Intrinsic properties Thermal stability UV-resistant Inert, Chemical resistant amongst others
Broad spectrum of adjustable properties
Silicones are high performance products, suitable for multiple applications
Source: McKinsey’s Global Lighting Market Model, Lighting the Way
Challenge
Outstanding Optical Transparency and Processing ability of
Silicones allow New Applications in Industries like Automotive
Our solution
Advantages of LUMISIL
®LR 7600
Outstanding optical transparency
No yellowing
Highly flexible, heat and
weather-resistant, guiding
Excellent processing
Application: optical elements for LED, lenses
50 25 14 12 2016 58 8 8 1 2010 14 10 HID Halogen LED Incandescent CFL/LFL
Development lighting technologies (in%)
LED lighting technology is the main driver of
growth in the general lighting market
Silicones are the material of choice due to
their unique properties and are superior to
PMMA or PC (esp. non-yellowing)
Specialty Focus Creates Value
Standards Customized solutionsBusiness Strategy
Siloxane Volume
2012 Increase our specialty business to 50% of Siloxane volume within 4 years
Sell standards with low cost to serve
2017
Specialties 33% Specialties 50%
Standards 50%
Standards
Exchangeable Price elastic Low requirement for technical service
Specialities
Specified properties Value based pricing Technical service is a key success factor
SILICONES:
Growth Target 6% with Improved Profitability
Our Roadmap 2017
Cost
We continuously improve our cost position through
operational excellence
We permanently investigate opportunities for organic replacement
to open up new markets for silicones
1
2
3
Innovation
Value creation
We push our specialty business by investing in downstream
POLYMERS:
Global Leader in High Growth Markets
Supply Chain
Sales Development (€m) – 5 years
Market Characteristics
Diverse market and customer base
Historic growth above GDP
Key trends, innovation and new applications drive growth
Moderate capital entry barriers and high technology barriers in most segments
Innovations and in-depth formulating expertise broaden scope of applications
816 740 810 928 1,003 0 300 600 900 1,200 2008 2009 2010 2011 2012 Acetic Acid & Ethylene VAE Construction Nonwovens & Textiles Adhesives Carpet Coatings & Paints VAM Dispersions DPP PVAc PVOH Dispersible Polymer Powders VAE Dispersions 2nd in the market WACKER Others WACKER 2nd in the market Others
Capacity Landscape 2012 (Capacities)*
VAE = Vinyl acetate ethylene, VAM = Vinyl acetate monomer,PVAc = Polyvinyl acetate, PVOH = Polyvinyl alcohol DPP = Dispersible Polymer Powders
Source: WACKER estimates
Innovation:
In Close Cooperation with Customers
2K water proofing membrane Concrete
Mortar
Concrete
Traditional systemsAsphalt
ETICS* 1K water proofing membrane Shotcrete TransformationTarget: Unique Performance / Cost Ratio
Dispersion Powder
Ceramic Tile Adhessives
Self Levelling
Compounds Skim Coat
* ETICS = External Thermal Insulation Composite Systems
Vinyl Acetate Ethylene
Styrene Butadiene Latex
Transformation
Asphalt Asphalt Blend
2006 2007 2008 2009 2010 2011 2012
Substitution:
Application Overlap as Opportunity for Substitution
Sources: Kline; F&S-study „Strategic Assessment of the World Emulsion Polymer Markets“ 2012; WACKER analysis * Other: Pure acrylics, styrene acrylics, PVAc, vinyl acrylics, VA-copolymers
Adhesives
Construction Coatings Nonwovens Carpet Paper
SBL market 2012 Total market 2012 VAE market 2012 34% 32% 15% 10% 6% ~1,600 kt 5% 6% 19% 64% 4% 2% ~3,900 kt ~16,700 kt 23% 10% Other* Other Vinyl Acetate Ethylene Styrene Butadiene Latex
Polymers Targets Continued Growth of 8% p.a.
Our Roadmap 2017
We invest in downstream production
and service close to our customers
Substitution
We explore new substitution opportunities
in the non VAE systems
We push new solutions beyond our core,
working in a global set-up with our R&D activities
1
2
3
Innovation
Expansion
BIOSOLUTIONS:
Focusing on Attractive Niches
Supply Chain
Business Structure
Biopharmaceuticals 6%
DrugsCustom manufacturing of biologics with strong technology and IP position
Pharma/Agro 35%
Example acetyl acetone & methyl acetate Fine chemicals, building blocks &
silanes for drugs or pesticides
Raw Material Upstream Downstream Key Markets
Life Sciences Food & Flavor/ Pers. & Home Care
Sales 2012: €158 m Biopharmaceuticals Gumbase Cyclodextrins / Cysteine Biologics
Nutrition / Gum 60%
Food and Cosmetics
Cyclodextrins, cystine/cysteine as food ingredient,
encapsulated coenzyme Q10
Gumbase
Gumbase resin for
chewing gum production Ethylene
Stach/Dextrose
Chem. Intermediates Ketene
Chemicals:
Enhancing Quality of Life
ELASTOSIL® LR
BELSIL®
Buildings consume 40% of primary energy
Need to reduce consumption of heating energy Airbags in cars = Safety first
Silicones used as an airtight coating of woven fabrics Low flammability
Growing population & rising welfare in emerging countries Increasing sales of personal care products
Our contribution: BELSIL® for gloss and feel
Silicone Fluids & Emulsions in Personal Care
Our contribution: ELASTOSIL® LR
Silicone liquid rubber for the Automotive Industry
Our contribution: VINNAPAS® dispersions and dispersible
powders for external thermal insulation
Urbanization
Mobility
Resource Savings
Living Comfort
VINNAPAS® dispersions/dispersible powders
G
lob
al
T
Reduce Capital Intensity of Growth –
Leverage Existing Upstream Capacities
Silicon Metal
Siloxane
VAM
Elastomers
Emulsions & Fluids
Resins
VAE dispersions
Dispersible Powders
Compounds
SILMIX
®
Emulsions
Upstream
Downstream
Compounds &
Formulations
Global
Regional
Local
Value Creation
Capital Intensity
Chemicals:
Continuous Productivity Improvements
Chemicals – Burghausen Site
2008 2012
Specific Operating Costs
(€/ton)
-13%
2008 2012
Specific Energy Consumption
(kWh/ton)
Labor Productivity
(kg/h)
2008 2012
-24% +11%
POLYSILICON:
The Way Forward
Fast cost decrease in Solar PV unlocks growth
Polysilicon Market: 12% growth expected (2012- 2017)
Prices expected to rise to reinvestment levels
Pricing differentiates between Polysilicon qualities
Competitive pressure drives cost and conversion efficiency
–
WACKER leads in cost and quality
Cost reduction roadmaps implemented to maintain leading cost and quality position
Target 2012 to 2017: Sales growth ~7% CAGR / *EBITDA margin >20.0%
POLYSILICON:
Leading in Cost and Quality
Production Chain
Sales Development (€m) – 5 years
Competitive Landscape 2012
Market Characteristics
Strong market growth driven by increasing competitiveness of PV electricity
Excellent product quality is key to highest conversion efficiencies in solar
Cost and quality are both decisive for market success
Intense competition drives industry consolidation
Capacity surge has stopped 828 1,121 1,369 1,448 1,136 0 600 1,200 1,800 2008 2009 2010 2011 2012
Source: industry announcements; WACKER estimate
Hemlock 17% WACKER 18% MEMC 3% 29% REC 10% Others 14% GCL 19% 211 kt LDK 2% Tokuyama 3% OCI 14%
Production Chain
Raw Material Salt Silicon Metal Hydrogen Polysilicon Upstream Downstream Electronic wafer Key Markets Semicon- ductors Solar Modules Solar waferPOLYSILICON:
Fast Cost Decrease of Solar PV Unlocks Growth
LCOE & Electricity Price
Off-grid Applications
PV becoming very competitive and easy-to-install
PV can be built very fast and in small increments
Steep price decline of storage solutions
Cheap electricity for remote areas with no access to grid
US Germany Module BOS young market mature market
BOS = Balance of System
1000 1400 1800 Germany household pow er pric e
annual solar energy yield(kWh/kWp)
1.5 €/Wp 1.0 €/Wp 0.5 €/Wp size of electricity market
Δ LCOE vs. power price = room for positive NPV (assumes full grid access)
China
TX CA
Roof-top System Prices*
Polysilicon Market:
12% Volume Growth Expected
Global Polysilicon Shipments (kt)
92 162 223 210 370 2009 2010 2011 2012 2017 Electronic Solar CAGR 2012-2017: 12%
Source: WACKER analysis
2012 shipments decreased due to
inventory correction in solar and
lower consumption per watt.
PV now competitive with most other
sources of electricity – both
renewable and fossil fuels
Silicon-based PV enables highest
conversion efficiencies and proven
long-term stability at lowest cost
Assumptions: 2017: 75 GW (incl. 10% thin-film share); Silicon Consumption 5.0 g/Wp in 2017; Shipment figures incl. time-delay
0 50 100 150 200 250 300 350 2010 2011 2012 2013 2014 2015 Capacity Announcements Active Capacities
Total Demand (High Case) Total Demand (Low Case) Electronic Demand
Current Market Price Limits Polysilicon Supply
Global Polysilicon Demand (kt) versus Capacity of still Active Manufacturers
Sources: market surveys, industry announcements, WACKER estimate
Only a limited number of producers
still operating
Further capacity expansion plans
halted / significantly delayed
Pricing sets high entry barrier for new
entrants
PV market:
2013: ~34-40 GW 2014: ~40-50 GW
Different Polysilicon Qualities Sell for Different Prices
Impact of Polysilicon Quality on Prices
Source: WACKER estimates, price data based on import statistics and industry sources
0% 20% 40% 60% 80% 100% 120% 140% High Quality (Fe: 9-10N) Medium Quality (Fe: 8-9N) Low Quality (Fe: 6-7N)
60%
30%
10% Market ShareHigh Quality Polysilicon
Key to improved wafer performance:
Higher charge carrier lifetime
Improved resistivity
Higher ingot yields
Improved recycling of polysilicon
Lower wafer production costs
Precondition for high cell efficiencies,
resulting in:
Reduced BOS Cost per Watt
Lower LCOE
100%
75%
Competitive Pressure Drives Cost and Conversion Efficiency –
WACKER Leads in Cost and Quality
Solar Cell Efficiencies (%)
Cell Efficiency Distribution
60% 70% 80% 90% Production Costs (%) 10 15 20 25 2004 2006 2008 2010 2012 Mainstream Multi Mainstream Mono Ingot Yield
Higher quality
longer usable length
lower cost per wafer
Super Mono
Narrow distribution and
higher mean
lower cost per wafer
Cell efficient cells with
price discount
cells with price premium high-purity Polysilicon low-quality Polysilicon Num ber of c ells
Higher quality supports
greater efficiencies
lower cost per wafer
Source: WACKER estimates
100%
86%
76%
66%
POLYSILICON Expansion Tennessee (Poly 11):
Establishing a Platform for Future Growth in the US
Lower Electricity Cost in the US (indexed)
Planned ramp up of Polysilicon production
in 2015
Currency diversification for the Group
100
38
Germany (Industry High-Voltage)
USA (TN) Germany = Electricity Price + FiT Surcharge (2013) + Grid usage fee
+ Other charges
US = List price TN provider
Assumptions: Data based on Year end 2012, USD/EUR: 1.35 Source: WACKER estimates, market data
Feb. 2013
Tennessee – 20kt p.a.
Growth platform for chemical products
in the USA
POLYSILICON:
Strong Focus on Cost and Productivity
Specific Energy Consumption (kWh/kg)*
Labor Productivity (kg/h)*
10073
64
2005 2012 2017e
New deposition reactors
New conversion reactors
New process design
Index = 100 100 252 370 2005 2012 2017e Index = 100
Economies of scale
Yield improvements
Automation
* total average for all sites, direct labor including analytics * solar polysilicon process only, indexed weighted ø of all plants
-36%
POLYSILICON:
Maintain Leadership in Cost and Quality
Our Roadmap 2017
Competitive pressure drives module cost and conversion
efficiency
Cost reduction roadmap implemented to maintain WACKER’s
leading cost position
Customer
Develop products for all crystallization technologies in close
cooperation with our customers
Keep broad customer portfolio to react flexibly on market changes
Expand capacities according to market demand
C-Si-PV moving towards efficiencies above 20% (module)
Pricing differentiates between polysilicon qualities
1
2
3
Quality
Cost
Siltronic:
The Way Forward
Rising demand for 300 mm
Continuous cost reduction programs in place
Customer focus – recognized for outstanding performance
Siltronic strategy - Focus on cash generation
Target 2012 to 2017: Sales growth ~2% CAGR / *EBITDA margin >20.0%
Siltronic:
Focusing on 300 mm and Asia
Value Chain
Sales Development (€m) – 5 years
Competitive Landscape 2012
Silicon Wafer Market Share (on USD basis)
Market Characteristics
Semi and silicon wafer markets move in tandem
Historic silicon market growth of 8-12% CAGR with last 3 years moving sideways
High volatility both annually and quarterly
300 mm continues to grow while legacy diameter are trending down
PC era coming to an end. Market growth increasingly coming from smartphone and tablets.
SUMCO Group 28% Siltronic 14% LG / Siltron 10% Sun Edison 10% Others 5% S.E.H. 28%
Source: Siltronic estimates
0 400 800 1,200 1,600 2008 2009 2010 2011 2012
Sales Semi Sales non Semi Siltronic
WACKER Key Markets
Wafer
Polysilicon Ingots Semiconductors
1,361
638
1,025 992
869
Source: Gartner (June 2013)
CAGR
2012-22
2015 2017~ 4 %
< 0 %
< 0 %
0 500 1,000 1,500 2,000 2,500 3,000 3,500SD
200 mm
300 mm
Siltronic:
Growing Demand for 300 mm
Wafer Market by Diameter (million cm²)
Source: SEMI; SD = Small Diameter
2000
300 mm volume continues to grow as smaller diameters are substituted
2004 2008 2012
Siltronic:
300 mm Continuous Cost Reduction Program
Siltronic 300 mm Variable Costs, relative per Wafer
2010 2011 2012
-9%
-12%
Siltronic Samsung Wafer Pte. Ltd. (SSW)
Joint Venture with Samsung (50:50)
Siltronic has an option on the majority of
the venture
Further capacity increase from
debottlenecking possible
JV consolidated at-equity: dilutes
Siltronic performance representation
Assuming full consolidation of the JV,
Siltronic pro-forma results*:
Capacity: >300 kw/m (€m) 2011 2012 Sales 1,125 1,030 EBITDA 175 114 EBITDA % 16 11
Siltronic:
Singapore JV with Samsung for 300 mm
Harvest
2013 onwards
Focus on 300 mm in Asia
No 450 mm investment
Continue rationalization outside
of Asia
CapEx below depreciation
Siltronic Strategy:
Focus on Cash Generation
Create
2005 - 2012
High capital intensity
300 mm expansion
Strengthen market position
with JV
Leading edge technology
CapEx above depreciation
WACKER:
The Way Forward
Financial Targets for 2017
Financial Stability & Profitability
Summary: The Path to 2017
WACKER Financial Targets for 2017
Sales of €6.0 – 6.5 bn with Profit Above Costs of Capital
2012 current 2013 guidance 2017 target
Sales 4,635 ~ 4,500 6,000 – 6,500 CAGR ~6% EBITDA 795 lower 1,200 Margin 17% lower ~20% ROCE 5% lower > 11% CapEx
Balance Sheet:
Financial Stability – Target Capital Structure
Group Balance Sheet – Target Structure 2017
Drivers
Non-current assets Working capital Liquidity Equity Pension provisions Liabilities / other accruals Financial debt incl. prepayments Equity ratio: Historical level ~40%
Dividend policy: in general, minimum 25% of net income
Minimum level for operations
2013-2017: CapEx below depreciation
Depreciation of certain polysilicon assets accelerated from 2012 onwards
DIO: ~50 days and
DSO: ~50 days despite increasing globalization
Drivers
Prepayments almost fully repaid by 2017
Target: Net financial debt = 1x EBITDA
Profit & Loss Statement:
Improving Profitability through 2017
WACKER P&L 2012* (€m)
Targeted Development until 2017:
Gross profit margin
with increase
of up to 300 bps, driven by
Accelerating growth in specialties
Improving market environment
in POLYSILICON
Lower D&A in relation to sales
Limited overhead growth – SG&A
to decrease to less than 7% of sales
EBIT growth
compensates higher interest
expense
Tax rate
well above 50% in 2013, reverting
back to statutory tax rate mid-term (~30%)
Prior to
Poly 11
ramp-up: Tennessee
investment reduces ROCE by up to 150 bps
* adjusted based on the effects of the adoption of IAS 19 (revised)
€m 2012*
Sales 4,635
Cost of goods sold -3,815
Gross profit from sales
Gross profit margin (in %)
820
18%
Selling expenses
Research and development expenses General administrative expenses Other operating income
Other operating expenses
-280 -174 -119 367 -265 Operating result 349 Equity result -83 EBIT 267 Interest result
Other financial result
-10 -53 Income before taxes 204
Income taxes -89
Net income for the period 115
EBIT 267
Depreciation/amortization 529
Aggressive Cost Roadmaps in all Businesses
WOS WACKER Operating System: targeting continuous cost decrease in specific operating costs
Raw material and energy cost: optimized yields, loss reduction, raw material and energy
recovery, process optimization
Labor: reduce set-up times and non-value-added activities
Logistics: lean processes, optimized packaging
Technical spending: optimize inspection cycles, spare part storage
Asset utilization: debottlenecking
Chemicals
Raw Materials: expanded supplier portfolio
Supplies: expanded supplier portfolio
Electricity: reduced consumption
in major process steps (conversion, deposition)
Personnel Expenses: continuous productivity improvement
Maintenance Expenses: stand-ardization, spare parts logistics (sourcing/storage level)
Process yield enhancement
POLYSILICON
Siltronic
Raw materials and energy costs: optimize specific raw material and energy
consumption, increase yield
Supplies: reduce consumption of supplies
Labor: reduce personnel costs, set-up times
Site loading rules
Process optimization across the entire value chain
Mea
sure
s
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Spalte1
Price Decline of ~ €1 bn within Two Years (20% of Sales) –
Mainly in POLYSILICON
WACKER Group: Sales Development (€m)
2013e Currency Volume Price 2012 Currency Volume Price 2011 4,910 703 270 158 4,635 ~350 ~4,500
CapEx:
2013e Reduced by 54% vs. 2012
CapEx vs. Depreciation Expense WACKER Group (€m)
480 529 550 600 876 1,095 500 400 Ø 2008-2011 2012 2013e Ø 2014e-2017e
Depreciation CapEx (asset additions) -54%
~
~
~
Ø 2008-2011 2012 2013e Ø 2014e-2017e
Net Cash Flow*:
2013e Net Cash Flow Significantly Improved vs. 2012
* prepayments not considered
Net Cash Flow* (€m)
Gross cash flow CapEx (cash flow) Net cash flow* 801 830 -29 518 1,054 -536 550 ~ 500 >200
Financial Debt incl. Prepayments
to be Reduced over Leverage Phase
Development of Financial Indebtedness (€m)
-92 -96 700 <900 864 1,203 1,048 772 1,107 1,749 2007 - 2010 2011 2012 2013e 2014 et seqq.
Net financial debt Prepayments (Group) Ø
Prepayments:
~€1 bn in Balance Sheet – Reduction of €200 m p.a. Expected
Retained prepayments and damages from cancelled contracts to continue with effects on earnings
as market consolidation takes place
Expecting prepayments to decline by ~€200 m p.a.
POLYSILICON Prepayments (€m)
817 874 1,012 1,176 1,021 2008 2009 2010 2011 2012 2013 2014e et seqq. -€200 m p.a.The Path to 2017:
WACKER Is an Attractive Investment
Leading market shares
and global presence
Lower CapEx
Growing share of chemicals
specialty products
Well defined cost roadmaps
Well positioned to harvest
the solar opportunity
Sales
€6 - 6.5 bn
(~6% CAGR)
EBITDA
€1.2 bn
(~20% margin)
ROCE
>11%
Advanced
Materials
Compelling
Growth
Strong
Cost Position
Leading
Market
Positions
2017Outlook 2013 unchanged:
FY Sales about €4.5bn, Net Income slightly positive
Group
Expecting Group sales at €4.5 bn for the full year 2013
FY EBITDA below last Year
Chemicals
All segments with positive outlook and solid trend
FY 2013 slightly better than yoy in sales and EBITDA
Siltronic
FY sales below 2012
Cost roadmap for 300 mm on track
POLYSILICON
FY sales below 2012
Substantial contribution to Group EBITDA but below 2012
Investments
CapEx of €500 m
Net Cash Flow
NCF positive
Net financial debt below €900 m
Net income slightly positive
CREATING TOMORROW`S SOLUTIONS
3
rd
Quarter 2013 – Call Note
Wacker Chemie AG, November 2013
WACKER: Sales Growth Restrained by Price Pressure
*Adjusted based on the effects of the adoption of IAS 19 (revised), more details under changes in accounting and evaluation methods in the notes (quarterly report)
in €m
Q3 2013
Q2 2013
% QoQ
Q3 2012*
% YoY
Sales
1,165.4
1,150.3
1.3
1,200.9
-3.0
EBITDA
167.9
188.2
-10.8
206.1
-18.5
EBITDA margin
14.4%
16.4%
-
17.2%
-EBIT
35.1
52.5
-33.1
72.5
-51.6
EBIT margin
3.0%
4.6%
-
6.0%
-Result for the period
5.4
15.1
-64.2
28.8
-81.3
WACKER
Strong Cash Flow Generation in Q3: NCF Increases to €165m
Q3 2013 Comments
Lower growth in chemicals than
expected due to weaker economies
Negative FX effect yoy (USD, YEN) in
Chemicals and Siltronic
Pricing pressure leads to negative
effect of about €109 m yoy
Savings in material, energy and
personnel expenses
Lower inventory effect in
POLYSILICON damped EBITDA margin
Strong NCF of €165 m
Capex of €98 m with focus on
POLYSILICON (USA)
2013 Challenges and Opportunities
Lower ASP’s than in 2012
FY sales dampened by some €350 m
price decline, thereof €50 m in Q4
expected
Impacts of Special Effects on EBITDA in Q3 2013 vs. Q3 2012
Division (€m) Special Effects Q1 Q2 Q3 Q1 Q2 Q3
Siltronic Execution "Lead site strategy" -14.8 - - - -
-WACKER POLYSILICON
Retained prepayments & damages from cancelled contracts
36.6 19.4 2.1 32.2 23.8 13.2
Net Effect on EBITDA 21.8 19.4 2.1 32.2 23.8 13.2
Balance Sheet (%)
FY 2013 Net Debt now Expected below €900m
2012: Adjusted based on the effects of the adoption of IAS 19 (revised), more details under changes in accounting and evaluation methods in the notes (quarterly report)
Characteristics 09/30/13
Noncurrent assets: €4,431m
Securities, cash and cash
equivalents: €788 m
Provisions for pensions: €1,172 m
Net financial debt: €688 m
Equity: €2,167 m
Prepayments received per
09/30/13: €893 m
Capex: €351 m (Q3: €98 m)
€6.6 bn €6.5 bn
Assets
Total
€6.6 bn €6.5 bn
Liabilities
Total
22% 18% 13% 14% 14% 16% 18% 19% 33% 33% 09/30/1312/31/12 Equity Pension Accruals Prepayments Accruals & Liabilities Financial Debt 66% 69% 22% 23% 12% 8% 09/30/1312/31/12 Securities,Cash & Cash E.
Current Assets
Noncurrent Assets
Raw Materials: Slight Relief Expected in 2013
Ethylene Contract (€/MT)
Si-Metal Contract (€/MT)
Raw Materials 2012 (€m)
Chemicals
Source: ICIS, Ethylene Market Price Europe, free delivered
Source: Source: CRU-Provider,
Si-Metal Contract Price Europe free delivered *VAM = Vinylacetate monomer
Costs of top 4 raw materials
21% of chemicals segment
sales
Si Metal
Ethylene
Methanol
VAM*
Others
900
1,000
1,100
1,200
1,300
1,400
09/1
1
01/1
2
05/1
2
09/1
2
01/1
3
05/1
3
09/1
3
1,800
2,000
2,200
2,400
2,600
2,800
09/1
1
01/1
2
05/1
2
09/1
2
01/1
3
05/1
3
09/1
3
USD/EURO Development
1 Cent Change in USD/€ Exchange Rate had an Impact of €4.4 m
on FY-EBITDA in 2012, Unhedged*
External Sales and Net USD Exposure
Source: www.x-rates.com/d/USD/EUR/hist2013.html *Standard Hedging policy = 50% of net exposure, 12 months rolling forward
2,827
949
858
157
410
Chemicals
Polysilicon
Siltronic
External Sales FY 2012
Net USD Exposure FY 2012
1.20
1.25
1.30
1.35
1.40
09/1
1
11/1
1
01/1
2
03/1
2
05/1
2
07/1
2
09/1
2
11/1
2
01/1
3
03/1
3
05/1
3
07/1
3
09/1
3
Chemicals Impacted by FX and lower Prices
*Adjusted based on the effects of the adoption of IAS 19 (revised), more details under changes in accounting and evaluation methods in the notes (quarterly report)
Sales in €m
Q3 2013
Q2 2013
%QoQ
Q3 2012*
%YoY
CHEMICALS
732.9
751.1
-2.4
746.2
-1.8
WACKER SILICONES
429.4
437.2
-1.8
432.1
-0.6
WACKER POLYMERS
265.4
273.4
-2.9
274.0
-3.1
WACKER BIOSOLUTIONS
38.1
40.5
-5.9
40.1
-5.0
WACKER POLYSILICON
235.7
203.3
15.9
269.1
-12.4
Siltronic
197.1
200.1
-1.5
234.7
-16.0
Others
48.1
46.1
4.3
41.1
17.0
Consolidation
-48.4
-50.3
-3.8
-90.2
-46.3
1,165.4
1,150.3
1.3
1,200.9
-3.0
Polysilicon Influenced by Inventory Decrease
*Adjusted based on the effects of the adoption of IAS 19 (revised), more details under changes in accounting and evaluation methods in the notes (quarterly report)
EBITDA in €m
Q3 2013
Q2 2013
%QoQ
Q3 2012*
%YoY
CHEMICALS
109.6
116.6
-6.0
113.4
-3.4
WACKER SILICONES
59.2
66.3
-10.7
57.4
3.1
WACKER POLYMERS
45.1
44.4
1.6
50.5
-10.7
WACKER BIOSOLUTIONS
5.3
5.9
-10.2
5.5
-3.6
WACKER POLYSILICON
46.6
64.0
-27.2
78.8
-40.9
Siltronic
5.2
9.1
-42.9
9.9
-47.5
Others
5.2
-3.0
n.a.
4.6
13.0
Consolidation
1.3
1.5
-13.3
-0.6
n.a.
167.9
188.2
-10.8
206.1
-18.5
WACKER: Issuer, Contact and Additional Information
Issuer and Contact
WACKER CHEMIE AG Hanns-Seidel-Platz 4 D-81737 Munich
Investor Relations contacts Mr. Joerg Hoffmann, CFA Tel. +49 89 6279 1633 [email protected] Mrs. Judith Distelrath Tel. +49 89 6279 1560 [email protected] Mrs. Manuela Ellmerer Tel. +49 89 6279 2769 [email protected]
Additional Information
ISIN: DE000WCH8881 WKN: WCH888 Deutsche Börse: WCH Ticker Bloomberg: CHM/WCH:GR Ticker Reuters: CHE/WCHG.DE Listing: Frankfurt StockExchange
Prime Standard
03/18/14 – FY Results 2013 05/05/14 – Q1 Results 2014
05/15/14 – Annual Shareholders’ Meeting 07/31/14 – Q2 Results 2014
10/30/14 – Q3 Results 2014
