Managing for Growth and Cash

Transcription

1 CREATING TOMORROW`S SOLUTIONS Fuel Cell Sensor ECU e-motor Display Power Conversion Battery Cables / Connectors Managing for Growth and Cash Wacker Chemie AG, Ticker: WCH 0

2 WACKER: An Attractive Investment Competitive Advantage: Silicon-based integrated sites and operational excellence Market Leading Position: All segments among top 3 with leading technology and costs Superior Growth Opportunities: Innovation, sustainability and emerging markets Transforming Growth: High cash generation funds Chemicals growth and shareholder returns 1

3 WACKER: At a Glance 4,924 Sales 2017 in m 4 Business Segments 23 Production Sites 13,500 Employees 19 Technical centers 1,014 EBITDA 2017 in m 20.6% EBITDA margin

4 Effects of Siltronic Deconsolidation: Chemicals with Higher Share FY 2016 Sales* 5.4bn FY 2017 Sales* 4.9bn Chemicals 2/3 of Sales Chemicals 3/4 of Sales SILICONES BIOSOLUTIONS POLYMERS POLYSILICON Siltronic Others/Consolidation * based on external sales / 2016 not adjusted according to IFRS 5 3

5 WACKER: Well Positioned for Future Growth WACKER POLYSILICON No. 1 in merchant market Cost and quality leader OTHERS WACKER SILICONES No. 2 with global footprint Full portfolio provider with benchmark costs FY 2017 Sales 4.9bn WACKER POLYMERS No. 1 in VAE dispersions and dispersible polymer powders Global footprint WACKER BIOSOLUTIONS Leading in niches with high growth potential 4

6 Targets for the Next Years Confirmed Growth and Cash 1 Extend Leverage Phase 2 Continue to Grow Above Chemical Production 3 Focus on Sustainability 4 Sustain Attractive Margins Throughout the Cycle 5 Generate Cash 5

7 Target: Leverage Phase Extended 1 CapEx vs. Depreciation Expense WACKER Group w/o Siltronic ( m) Ø Create e 2019e Leverage 2020e 2021e POLYSILICON OTHER CHEMICALS Depreciation & Amortization Investment focus on Chemicals 6

8 Target: Continue to Grow Above Chemical Production 2 Development of WACKER Group Revenue ( bn) % POLYSILICON Chemical Divisions +6% CAGR Solid growth driven by Chemicals 7

9 Target: Focus on Sustainability 3 Polysilicon for Photovoltaics (PV) Energy & Climate Targets Germany Target: 50% reduction spec. energy efficiency 100% 80% 60% 100% 78% 64% 50% 40% 20% Avoided Emissions Compared to Coal 1:20 0% Target: 15% reduction spec. CO 2 100% 80% 100% 93% 85% 60% 40% CO2-Emissions from production and raw materials Avoided CO2- emissions: electricity generation through PV 20% 0%

10 Target: Sustain Attractive Margins Throughout the Cycle 4 Chemicals EBITDA Margin (%) POLYSILICON EBITDA Margin (%) 33%* 29%* 26% Target 30% 16.1% 19.4% 18.8% Target 16% e e Internal drivers Product mix Specialties Cost reduction WOS External drivers Supply and Demand Short term impact from raw material prices Internal drivers Cost reduction (Productivity, Technical developments) External drivers Supply and Demand Regulatory changes * Operating Margin: (EBITDA - Special Income - Pre Operational Costs - Ramp Costs) / Sales 9

11 Target: Generate Cash 5 Dividend per share* ( ) Dividend policy ** Dividend target: Around 50% payout of net income from continuing operations Temporary deviations possible, in particular, to reflect new leverage target range of 0.5-1x EBITDA Boundary conditions: Overall business conditions Financial status Approval of AGM Regular dividend Bonus * Payout for previous year ** Dividend proposal 10

12 Hydrophilic Form stable SILICONES Customized Products with Unique Properties Silicones - A Highly Flexible Elementary Building Block Key Market Growth Trends Mobility Typical structure of a linear silicone polymer Broad spectrum of adjustable properties Digitization Hydrophobic Formable Medical High performance products for future growth markets 11

13 SILICONES Grow Specialties with Break-Through Innovations Thermal Interface Materials Adhesives Electronics Batteries Sensors Medical Adhesives Pressure Sensitive Adhesives for Electronics UV-Cure Novel Silicone Resins New Business Fields Electrical Insulation High-Toughness Resins Binders for Composites Additive Manufacturing Electroactive Silicones Reinforced Concrete 12

14 SILICONES Key Trends and World Class Efficiency Drive Growth Full portfolio provider with benchmark costs WACKER SILICONES Full portfolio Standards Specialties Backward integrated Cost leadership Growth with focus on specialties Focus on innovation, customers and technical service Relying on know-how and experience 13

15 POLYMERS Creating Added Value in a Wide Variety of Applications Vinyl Acetate Ethylene (VAE) Enabling Tailor-Made Formulations Key Market Growth Trends Building Standards Vinyl acetate Vinyl acetate ethylene (VAE) Ethylene Refurbishment VAE Dispersions Dispersible Polymer Powders (DPP) With ethylene functioning as the internal plasticizer, VAE polymers are waterborne and free of additional solvents Sustainability Environmentally friendly solutions with high functionality and versatility 14

16 POLYMERS Growth in VAE Powders in Mature and Emerging Markets Enabler in Mature Markets Enabler in Emerging Regions Global Ceramic Tiles Market Others Residential Renovation Commercial New Built ~ 50% Thick bed CTA* Thin bed CTA Material Savings Residential New Built Mature markets trending towards higher quality Labor Productivity * CTA = Ceramic Tile Adhesives; Source: Transparency, WACKER Estimate 15

17 POLYMERS Growth with Customer Focus, Substitution and Innovation Push transformation in construction towards higher building standards Success Story: Combination of Dispersions and Powders World Class setup POLYMERS with 1 Million Tons of VAE globally Replacement of non-vae technologies based on value offering POLYMERS with Tandem Approach #1 in dispersions and in powders 16

18 BIOSOLUTIONS Well Positioned for Further Growth Focus on development of biotechnology businesses Continuous Investments in Innovation and Growth Biopharmaceuticals 2014: Acquisition of Scil Proteins Production in Halle 64% Leveraging our know-how, experience and assets Biotransformation 2016 onwards: Investments and debottlenecking of Cyclodextrin plant Fermentation 2016: Acquisition of fermentation assets from Antibioticos de León 17

19 POLYSILICON Competitive PV Power Rates Fuel Growth in Solar Power Rates ( /kwh) USA Germany India UAE China Wind onshore Wind offshore NPP* Coal Gas Solar (Tender Results and PPAs) Alternatives and Conventionals (Range 2016) * Nuclear Power Plant Hinkley Point C UK; Source: SeeNews Renewables, Industry Announcements 18

20 POLYSILICON High Quality Polysilicon Required for Mono Growth Trend PV Share of Electricity Demand 20% PV Installation Growth (in GW per year) CAGR Development of Solar Wafer Capacities (in GW per year) CAGR 15% 78 ~10% >20% 10% 27 <10% 5% 69 0% e e 20% Scenario Base Case Low Case High Case Mono Multi Source: IEA, BNEF, Market Studies, WACKER Estimate 19

21 POLYSILICON Generate Cash Flow from Strong Assets Focus on cost and quality Aggressive Cost Reduction Targets Cash-Cost (Index = 100) % 67 > 30% Leveraging our assets 2012* e Continued cost leadership in high quality polysilicon * without Tennessee 20

22 Guidance FY 2018 m 2017 Outlook 2018 Sales 4,924 Low-single-digit % increase EBITDA 1,014 Mid-single-digit % increase EBITDA margin (%) 20.6 Slightly higher than a year ago Net cash flow 358 Clearly positive, substantially below last year s figure CapEx 327 Around 470 Net financial debt 454 On par with last year Income from continuing operations 250 Substantially higher than last year Depreciation 590 Around 550 ROCE (%) 7.5 Substantially above the prior-year level Tax Rate (cont. operations) (%) 25.3 Stable 21

23 WACKER Group Segment Guidance FY In m / % SALES EBITDA EBITDA Margin Outlook 2018 SILICONES 2, % Low-single-digit % growth in sales and mid-single-digit % growth in EBITDA despite rising raw material costs and FX POLYMERS 1, % Mid-single-digit % increase in sales; Expect FY EBITDA at prior year level despite headwinds from raw materials, FX and planned maintenance in Q2 BIOSOLUTIONS % Mid-single-digit % sales growth; EBITDA just below 30m following start-up costs for fermentation plant in Spain POLYSILICON 1, % Sales high-single-digits % down with volumes at 2017 level; EBITDA slightly above 2017 level, following cost reductions and insurance compensation 22

24 Appendix: Full Year Results 2017 FY and Q4 P&L in m FY 2017 FY 2016* % YoY Q Q4 2016* % YoY Sales 4, , , , EBITDA 1, EBITDA margin 20.6% 20.6% % 19.2% - EBIT EBIT margin 8.6% 7.3% - 7.9% 5.3% - Income from continuing operations Income from discontinued operations > Net income for the period > EPS from continuing operations in EPS in > * Adjusted according to IFRS 5 23

25 Appendix: Full Year Results 2017 Breakdown by Business FY 2017 FY 2016* Q Q4 2016* In m / % SALES EBITDA EBITDA Margin SALES EBITDA EBITDA Margin SALES EBITDA SALES EBITDA CHEMICALS 3, % 3, % SILICONES 2, % 2, % POLYMERS 1, % 1, % BIOSOLUTIONS % % POLYSILICON 1, % 1, % Others % % Consolidation WACKER Group 4,924 1, % 4, % 1, , * Adjusted according to IFRS 5 24

26 Appendix: Further PV Growth Expected in 2018 Country e 2018e France Germany Europe other Europe total Australia China* India Japan South Korea USA Rest of World Total 44 GW 56 GW 78 GW GW GW * China official data adjusted for installed/not connected capacity; Sources: SPE, IHS, Industry announcements, WACKER estimates 25

27 Appendix: Raw Material Prices With Volatile Development Si-Metal ( /MT) 2,750 2,500 2,250 2,000 1,750 2,620 High 1,591 Low Source: CRU, Si-Metal Spot FD Europe Ethylene ( /MT) 1,400 1,300 1,200 1,100 1, ,345 High 810 Low Source: ICIS, EN Contract FD NWE Methanol ( /MT) High VAM ( /MT) 1,400 1,370 High , , Low Source: ICIS, MeOH Contract, FOB RDM 800 Low Source: ICIS, VAM Contract FD NWE 26

28 Appendix: Highly-Integrated Operations Based on Five Key Raw Materials Raw Material Upstream Downstream Customers Industries Methanol Siloxane Silicon metal Fumed silica (HDK ) Polysilicon Ethylene Silicones Vinyl acetate ethylene (VAE) Chemicals, textiles, consumer care, construction, coatings, manufacturing machinery, energy & electronics, automotive, health care Solar and semiconductor wafers, cells and modules Adhesives, paints & coatings, carpets, nonwovens & textiles Vinyl acetate monomer (VAM) Dispersible polymer powders (DPP) Construction, renovation, insulation Acetic acid Food, automotive Starch/ dextrose Microbial fermentation Therapeutic proteins, food ingredients Food, pharma & agro, biopharmaceuticals 27

29 Appendix: Market Leading Positions POLYMERS Global DPP and VAE Market Others CCP AkzoNobel DPP WACKER Dairen Others Celanese VAE disp. WACKER SILICONES Silane/Siloxane backward integrated suppliers Bluestar (Elkem) Shin-Etsu Others Momentive WACKER Dow 1) WACKER JV participations fully consolidated 1 POLYSILICON BIOSOLUTIONS Others WACKER Others WACKER* WACKER* Tokuyama DAQO REC Xinte/TBEA Hemlock OCI GCL Cysteine Competitor #1 Cyclodextrins Chinese animal grade Competitor veg. grade * Food only; Source: Industry Announcements; WACKER; Year:

30 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. 29

31 WACKER: Issuer, Contact and Additional Information Issuer and Contact Additional Information Wacker Chemie AG Hanns-Seidel-Platz 4 D Munich Investor Relations contacts Joerg Hoffmann, CFA Tel joerg.hoffmann@wacker.com ISIN: WKN: Deutsche Börse: DE000WCH8881 WCH888 WCH Scott McCollister Tel scott.mccollister@wacker.com Monika Stadler Tel monika.stadler.ir@wacker.com WACKER Publications Financial Calendar 04/26/18 Q1 Results /09/18 Annual Shareholders' Meeting 07/26/18 Q2 Results /25/18 Q3 Results

32 CREATING TOMORROW`S SOLUTIONS 31