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Wacker Chemie AG set new sales and earnings records in fiscal 2022. According to preliminary calculations, the total sales of the Munich-based chemical company in the past fiscal year amounted to around €8.21bn. That is 32% more than in 2021 (€6.21bn). The main reason for the yr-on-yr increase was higher prices. Effects from exchange rate changes due to the stronger US dollar also had a positive impact on sales. On the other hand, the slightly lower overall sales volumes compared to the previous year slowed down the development of sales.
According to preliminary figures, consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) for the 2022 financial year amounted to €2.09bn (2021: €1.54bn). That is an increase of 35%. In addition to the higher prices, savings from the Group’s ongoing efficiency programs also had a positive impact on earnings in the operating business. On the other hand, the sharp rise in costs for energy, raw materials and logistics reduced EBITDA by around €1.3bn yr-on-yr.
Earnings before interest and taxes (EBIT) grew by 49% to around €1.69bn (2021: €1.13bn) due to the effects described above. Depreciation amounts to around €400M and is thus at the level of the previous year (€404M). The annual result for 2022 amounts to around €1.29bn (2021: €828M).
"All of our business areas contributed to the strong increase in sales in the past year," said CEO Christian Hartel. "It is true that demand in individual customer sectors slowed noticeably in the second half of the year. At the same time, however, we achieved significantly better prices for our products than in 2021. This also helped us to compensate for the sharp rise in costs, especially for energy, but also for raw materials and logistics.”
With a view to the current course of business, Hartel was cautious: "We are now feeling the effects of the weakening economy on the ordering behaviour of our customers in numerous fields of application. We see skid marks in the construction business in particular, but also with silicones for other industries. In general, many customers are reducing their inventories and remain cautious at first, even if they expect demand to pick up over the course of the year.”
Hartel explained that in the fourth quarter, as in the chemical industry as a whole, customers’ inventory reductions had a noticeable impact on WACKER’s sales and earnings. This was particularly noticeable in the silicone business. In addition, domestic demand in China remained below potential due to the restrictions imposed by the pandemic. "This has led to increased import pressure and falling prices outside of China," Hartel said. The prices for specialties, on the other hand, have remained largely stable.
Thanks to the efficiency measures implemented in recent years, WACKER is in a very solid position, emphasised the CEO: "Over the past three years, we have generated net cash flow totalling around €2bn, we have high liquidity and we are debt-free. I am therefore confident that WACKER will be able to assert itself successfully even under the increasingly difficult economic conditions.” In addition, it is quite possible that after the Chinese New Year celebrations, depending on the development of the infection situation, there could be a gradual recovery in the global economy, said Hartel .
Investments, net cash flow and net financial assets
According to preliminary figures, WACKER’s investments in fiscal 2022 totalled €545M (2021: €344M). That is 58% more than a year ago. The funds went primarily to expanding the capacities of all four business areas.
Net cash flow totalled around €435M in fiscal year 2022 (2021: €761M). This is 43% less than in the previous year due to the sales-related increase in working capital and higher investments.
As of December 31, 2022, WACKER reported net financial assets of around €410M (December 31, 2021: €547M).
Business areas
In 2022, WACKER recorded significant sales growth in all of its divisions thanks to better prices. The increase in the polysilicon business was particularly strong.
WACKER SILICONES generated annual sales of €3.45bn, exceeding the prior-year figure (€2.60bn) by 33%. WACKER POLYMERS generated sales of €2.00bn in 2022 (2021: €1.67bn). That’s an increase of 20%. Sales at WACKER BIOSOLUTIONS grew by 11% to €330M in the past fiscal year (2021: €296M). At €2.28bn, WACKER POLYSILICON increased its annual sales by 49% compared to the previous year (€1.53bn).
The EBITDA of the individual business areas developed differently in 2022. The Munich-based chemicals group posted significant growth in the polysilicon, silicones and polymer products business. By contrast, operating earnings at WACKER BIOSOLUTIONS were down significantly on the previous year. Cost savings from the Group’s ongoing efficiency programs had a positive impact on EBITDA in all business areas.
WACKER SILICONES achieved EBITDA of €875M in 2022 (2021: €553M). That’s an increase of 56%. In addition to the better prices for silicones, the division benefited from the increasing proportion of high-margin specialties in its overall portfolio. In addition, a write-up recorded in the fourth quarter at an equity-accounted affiliated company in China increased WACKER SILICONES’ EBITDA by around €70M.
WACKER POLYMERS’ EBITDA amounted to €285M (2021: €253M). The main reason for this plus of 13% was the significantly better prices compared to the previous year. Product mix effects and currency changes also had a positive impact on the division’s operating result.
WACKER BIOSOLUTIONS generated EBITDA of €15M in the past fiscal year (2021: €39M). That is 61% less than a year ago. The main reasons for this decline are the failure of a production facility at the Burghausen site during the first few months of last year, non-payment by a customer who failed to meet its contractual obligations, and integration and start-up costs at the San Diego and Halle sites.
In fiscal 2022, WACKER POLYSILICON benefited from the very good prices for solar-grade silicon. The division increased its EBITDA by 25% to €820M (2021: €657M). Semiconductor silicon prices are also up year over year. At the same time, the share of silicon for semiconductor applications in total sales volumes continued to increase.
The figures and trend statements on the business results for 2022 contained in this press release are preliminary and unaudited. Wacker Chemie AG will publish its report for fiscal 2022 on March 14, 2023.
