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DGAP-News: Wacker Chemie AG / Key word(s): Quarterly / Interim Statement
Munich, April 30, 2021 - Wacker Chemie AG finished Q1 2021 with significant growth in sales and earnings. The Munich-based chemical company generated sales of €1,359.6 million in the reporting quarter. That was 14 percent higher than in the same period last year (€1,197.5 million). Relative to the preceding quarter (€1,239.2 million), sales were up 10 percent, chiefly due to high demand in nearly all divisions. Business in construction materials and polysilicon, for example, was especially strong. Higher prices, particularly for solar-grade polysilicon, also lifted sales. On the other hand, exchange-rate effects resulting from the weaker US dollar year over year slowed sales somewhat.
In Q1 2021, WACKER posted EBITDA (earnings before interest, taxes, depreciation and amortization) of €246.4 million. That was 42 percent higher than in the same period last year (€174.1 million). Relative to the preceding quarter (€196.0 million), EBITDA climbed 26 percent. This strong growth stemmed from higher volumes and, in some segments, better prices, as well as from overall higher plant utilization rates. The Group's ongoing efficiency program reduced costs, which also had a positive impact on EBITDA. The company encountered headwinds, however, from markedly higher raw-material prices both year over year and quarter over quarter. The EBITDA margin for January through March 2021 was 18.1 percent, compared with 14.5 percent in the same period last year. In the prior quarter, the EBITDA margin was 15.8 percent.
Group earnings before interest and taxes (EBIT) also rose markedly year over year due to the factors already mentioned, coming in at €154.9 million (Q1 2020: €69.8 million). This was more than double the year-earlier figure and corresponded to an EBIT margin of 11.4 percent (Q1 2020: 5.8 percent). Net income totaled €106.6 million in the reporting quarter (Q1 2020: €68.9 million), corresponding to earnings per share of €2.06 (Q1 2020: €1.31).
WACKER revised upward the full-year 2021 forecast published in its Annual Report for 2020. Despite the continued risks connected with the coronavirus pandemic which are clearly evident in currently dynamic developments in India and Brazil, for example and even higher raw-material prices which are estimated to have a full-year impact of over €200 million, WACKER now expects to post somewhat stronger numbers than forecast at the beginning of the year. The company expects Group sales to exceed the previous year's figure of €4,692.2 million by a low-double-digit percentage. WACKER had previously expected sales growth in the mid-single-digit percentage range. According to current projections, EBITDA is likely to increase by 15 to 25 percent versus last year's figure (€666.3 million). The company had expected growth of 10 to 20 percent when presenting its 2020 Annual Report.
"WACKER performed very well in Q1 2021," CEO Rudolf Staudigl said in Munich on Friday. "The best defenses against the coronavirus pandemic have proven to be our strong strategic focus on specialty chemical products that provide high added value for our customers, our quality leadership for polysilicon and the expansion of our biotechnology business. In particular, demand for polysilicon for solar and semiconductor applications has been on a very positive trajectory in the past months. Higher prices for solar-grade polysilicon have also helped our business. We expect prices to remain stable in the coming months."
The CEO was also positive about the chemical divisions, which struggled with higher raw-material prices in some cases: "In the silicones market there was strong demand for our products. Here we are benefiting in particular from our business in high-margin specialties, which we have been continuously expanding for several years. In the past months, we were able to achieve significantly higher volumes for polymer products, especially in Asia." Bioengineered products had also performed well, according to Staudigl: "In this area we benefited above all from strong demand for biopharmaceuticals."
Capital Expenditures and Net Cash Flow
Net cash flow increased to €131.1 million in Q1 2021 (Q1 2020: €22.6 million). This was due primarily to earnings growth.
Sales at WACKER POLYMERS totaled €350.1 million in the reporting quarter, 6 percent higher than a year earlier (€330.8 million). Higher volumes for dispersions and dispersible polymer powders, especially in Asia, were the main drivers of this growth. Sales were also up 6 percent relative to the preceding quarter (€329.8 million). The division's EBITDA came in at €49.5 million in Q1 2021, after €61.5 million a year earlier - a decline of 20 percent year over year. Higher raw-material prices were primarily responsible for this decrease. On the other hand, high plant utilization rates had a positive impact on EBITDA. Compared with the preceding quarter (€65.0 million), EBITDA decreased by 24 percent. Again, substantially higher raw-material prices were the main reason for this earnings decline. To counteract this trend, the business division raised its product prices worldwide in mid-March. The EBITDA margin was 14.1 percent in Q1 2021, after 18.6 percent a year earlier and 19.7 percent a quarter ago.
WACKER BIOSOLUTIONS posted total sales of €67.7 million in Q1 2021, up 7 percent over a year earlier (€63.3 million). Compared with the preceding quarter (€62.7 million), sales increased 8 percent. Cyclodextrins, cysteine and biopharmaceuticals performed particularly well during the quarter. WACKER BIOSOLUTIONS posted EBITDA of €6.2 million in the reporting quarter, down 27 percent from a year earlier (€8.5 million). This decline was partly attributable to expenses for integrating the new biopharma site in San Diego that WACKER acquired in February, as well as start-up costs for vaccine production at WACKER's Amsterdam site. Compared with a quarter ago (€5.8 million), EBITDA increased 7 percent. The EBITDA margin was 9.2 percent, after 13.4 percent a year earlier and 9.3 percent in Q4 2020.
WACKER POLYSILICON generated total sales of €298.3 million in the reporting quarter. That was 62 percent more than a year ago (€184.3 million) and 22 percent higher versus the preceding quarter (€244.1 million). This strong growth was due primarily to increased volumes and higher average selling prices for solar-grade polysilicon. Reporting-quarter EBITDA at WACKER POLYSILICON came in at €51.0 million. That was €64.7 million more than in the same period last year (€-13.7 million). This increase was due not only to significantly higher sales, but also to further progress in reducing the cost of goods sold. Compared with a quarter earlier (€45.5 million), EBITDA increased 12 percent. Positive volume and price effects were still dampened in the reporting quarter by the negative impact of inventory reduction. The division's EBITDA margin was 17.1 percent for January through March 2021, after -7.4 percent in Q1 2020 and 18.6 percent in Q4 2020.
Key Figures for the WACKER Group
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 its forward-looking statements, nor does it assume the obligation to do so.
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30.04.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
Wacker Chemie AG
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