Wacker Chemie AG increased its sales slightly for full-year 2018, as projected. According to preliminary figures, the Munich-based chemical group posted total sales of €4.98 billion last year (2017: €4.92 billion). That was a rise of 1 percent, which was mainly due to higher volumes and prices in chemicals. Silicones saw especially strong growth. As a result, the company more than compensated for year-over-year euro appreci¬ation and the market-driven decline in polysilicon volumes and prices.
The Group’s preliminary EBITDA for 2018 amounted to €930 million (2017: €1,014 million). That was 8 percent less than the year before. The EBITDA trend was dampened not only by the insurance com-pensation still outstanding for the incident at Charleston and the solar market’s weakness, but also by significantly higher raw-material costs. EBIT (earnings before interest and taxes) came in at €390 million, down 8 percent year-over-year (2017: €424 million). A positive factor for EBIT was the continuing decline in depreciation, to €540 million in 2018 (2017: €590 million).
Group income from continuing operations reached €260 million in 2018 (2017: €250 million), 4 percent higher than the previous year. Net income for 2018 also totaled to €260 million. 2017’s net income of €885 million included income of €635 million from discontinued operations.
“Our chemical business – which we are expanding through invest-ments – continued its very robust trend in the final quarter of 2018,” said CEO Rudolf Staudigl. “Sales and EBITDA in chemicals were markedly higher in the fourth quarter than in the comparable year-earlier period. WACKER POLYSILICON’s performance, on the other hand, was dampened by persistently difficult market conditions in the solar industry and by business interruption costs at our Charleston site. We returned to full capacity there in early December 2018. But, as a result, there was not enough time left to conclude our talks with the insurer for fiscal 2018. We continue to expect that insurance compensation will fully cover the repair work at the site and the business interruption loss. We expect this during 2019.”
Investments, Net Cash Flow and Net Financial Debt
According to preliminary figures, WACKER’s capital expenditures in 2018 reached €460 million (2017: €327 million). That was 41 percent more than the year before. Capital spending focused on capacity expansion at our chemical divisions. Net cash flow for 2018 totaled some €120 million (2017: €358 million). Cash inflows were thus clearly positive and substantially below the year-earlier figure, as projected. They decreased 66 percent. Net financial debt was somewhat above €600 million at year-end 2018 (Dec. 31, 2017: €454 million).
Business Divisions
In 2018, WACKER benefited above all from the robust demand for its chemical products. WACKER SILICONES lifted its annual sales to €2.50 billion (2017: €2.20 billion), beating its year-earlier figure by 14 percent. WACKER POLYMERS posted sales of €1.28 billion for 2018 (2017: €1.25 billion). That was a gain of 3 percent. Sales at WACKER BIOSOLUTIONS climbed 10 percent last year to €225 mil-lion (2017: €206 million).
The chemical divisions’ total EBITDA also grew in 2018. The main factors lifting EBITDA for chemicals were volume gains and better prices. WACKER SILICONES generated EBITDA of €615 million in 2018 (2017: €445 million). That was 38 percent higher. The increase was driven by better prices for standard products and by strong volume growth in specialties coupled with a related product-mix improvement. EBITDA at WACKER POLYMERS amounted to €150 million (2017: €206 million). The main reason for the 27 percent decline was markedly higher raw-material prices versus the year before. WACKER BIOSOLUTIONS posted EBITDA of €25 million last year (2017: €38 million). This 34 percent decrease was chiefly due to the integration costs for the new biologics site in the Netherlands.
In 2018, WACKER POLYSILICON generated sales of €825 million (2017: €1.12 billion). The decline of 27 percent was prompted by market-driven pressure on volumes and prices, by the production shutdown at Charleston in the first months of last year and by the gradual ramp-up of production, which was concluded only in early December. China’s decision to curb the amount of new photovoltaic installations slowed demand for solar modules, starting late May 2018. WACKER POLYSILICON used this market situation for inventory rebuilding so that it can supply customers promptly in the future.
EBITDA at WACKER POLYSILICON totaled €70 million (2017: €290 million), decreasing 76 percent versus the year before. Along-side lower sales, earnings were impacted by business interruption costs at Charleston which have not yet been compensated for by insurance.