Wacker Chemie AG expects further sales growth this year, but lower earnings due to persistently difficult underlying conditions.
Rudolf Staudigl, CEO of the Munich-based chemical company, underscored this point at the 2019 Annual Shareholders’ Meeting.
“We intend to lift our sales this year by a mid-single-digit percentage. For EBITDA, we expect a decline of between 10 and 20 percent,” said Staudigl in his speech to some 1000 shareholders at the International Congress Center in Munich.
He thereby confirmed the annual forecast that the chemical company released in mid-March on publishing its Annual Report for 2018. Reasons for the expected earnings decline include lower average prices for polysilicon, price reductions for standard products, and rising energy costs.
In his speech, Staudigl looked at the company’s current challenges, but also highlighted the major opportunities offered by Wacker’s technology portfolio.
“We are steadily strengthening our specialties portfolio with silicone applications,” said the CEO. “Even though the world economy is slowing at present, demand for many of our chemical products is high.”
Wacker intends to invest some €400M this year, mainly on capacity expansion at its chemical divisions.
According to Staudigl, difficulties lie not only in the global economic slowdown and challenging solar-market conditions but also in Germany’s ever higher energy prices: “Last year alone, we had to cope with an increase of some €35M in electricity prices.
"At present, the electricity price in Germany is more than 5 cents per kilowatt-hour. Our Chinese competitors pay less than 2 cents per kilowatt-hour.
"If we had the same electricity prices as in China, Wacker would be by far the world’s most efficient producer of high-quality polysilicon,” emphasised the CEO.
Staudigl remains optimistic about the company’s long-term future: “The current risks do not alter the fact that we think and act for the long term.
"Wacker has been successful on the market for 105 years. We have taken on challenges time and again, and mastered them well.
"Our actions are supported by our strong foundations. We have the right products, we develop innovative new products and technologies, and we hold leading positions in all of our key markets.”
Wacker is distributing a total of €124.2M in dividends to its shareholders for 2018.
The dividend per dividend-bearing share is €2.50.
The Executive and Supervisory Boards’ other proposals were also adopted by large majorities.