Roadshow Presentation Q1 2014
Transcrição
Roadshow Presentation Q1 2014
CREATING TOMORROW`S SOLUTIONS 2014 – A Year of Transformation Wacker Chemie AG, May 2014 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. 2014 – A Year of Transformation 1 Our Business Portfolio is a Foundation for Growth… WACKER BIOSOLUTIONS WACKER SILICONES High potential for future development No. 2 with global footprint Leading positions in key growth segments WACKER POLYMERS No. 1 in dispersible polymer powders No. 1 in VAE dispersions Global footprint *) FY 2013 Sales €4.5 bn WACKER POLYSILICON Siltronic No. 1 Technology leader, ranking as no. 3 Cost and quality leader Enabling industry growth Balanced base of customers Note: Percentages based on external sales per segment *) Others 2014 – A Year of Transformation 2 Strong Track Record: Expecting strong Growth into 2017 Long Term Historic Sales Growth Target 2017: €6 - 6.5 bn €m 7,000 ~6% CAGR 6,000 €4.6 bn €4.5bn 5,000 4,000 3,000 2,000 1,000 0 1997 1999 2001 2014 – A Year of Transformation 2003 2005 2007 2009 2011 2013 2015 2017 3 Mid-term Financial Targets Target 2012 to 2017 Sales EBITDA ROCE €6 - 6.5 bn (~6% CAGR)* €1.2 bn (~20% margin) > 11% * CAGR 2012/2017 2014 – A Year of Transformation 4 Entering the Next Phase: From Asset Growth to Cash Generation Ratio of Capital Spending vs. Depreciation capex between 1.3 and 2.2x depreciation 2005 2012 capex < depreciation 2013 capex >< depreciation 2017 2018 2022 Create Leverage Expand 2005 – 2012 2013 – 2017 2018 – 2022 Focus on capital intensive growth: Focus on profitability and cash: Eight additional sites globally Execute cost roadmaps Focus on selective expansion of production network: Increased capacities 7x in Polysilicon, 3x in VAE dispersions, 2x Siloxane, 6x 300 mm wafer Leverage global asset base The customer dimension: Focus on quality growth, growing specialty sales Selective growth projects Exploring further Verbund and debottlenecking opportunities Invest below depreciation Global presence and market penetration with technical centers and global sales structures 2014 – A Year of Transformation 5 Positioned for Sustained Sales and Earnings Growth WACKER: A Leading Specialty Chemicals Company Advanced Materials Tech-based products ranging from standard to high value added Focus on innovation and customized solutions Compelling Growth Addressing high-growth markets Local presence in all regions Capitalizing on emerging markets growth Strong Cost Position World-scale plants, integrated production, proprietary process know-how Targeted cost reduction programs implemented Significant CapEx program concluded, now leveraging a global asset base Leading Market Positions A global leader in most addressed segments and markets… … particularly at the individual customer level 2014 – A Year of Transformation 6 Create: Global Market Presence Technical Center & WACKER ACADEMY Market Penetration in all Emerging Regions China Local products and services Nünchritz Moscow Canton, OH Chino Adrian Beijing Burghausen Akeno Korea Seoul Dubai Kolkata Shanghai Mumbai Shunde Focus on products for the electronic market Singapore Jandira India Melbourne Focus on textile applications Brazil Expanding Technical Center presence, local products and services 22 Technical Centers worldwide to service customers and develop products & applications South East Asia 9 WACKER ACADEMY sites provide training and product know-how tailored to our customers‘ needs. Mobile technical center Sales 2014 – A Year of Transformation TC Academy Plant 7 Create: Sales Network and Customer Relations Building a Sustainable Competitive Advantage Chemicals: Establishing a global network of technical centers Global sales network to create and develop specialty solutions Leveraging centralized upstream facilities into local growth opportunities Customer focus drives product evolution WACKER POLYSILICON: Addressing the solar opportunity with specialized production technologies Supplier of choice, leading in quality and cost Siltronic: Improved global production footprint for 300 mm Repeated Quality Award wins from industry leaders 2014 – A Year of Transformation 8 Leverage: Shifting Focus to Downstream Products Raw Material Upstream Methanol Siloxane Silicon Metal Pyrogenic Silica Downstream Silicones Electronic wafers Vinylacetate ethylene (VAE) Vinylacetate Monomer (VAM) Acetic Acid Starch/ Dextrose Microbiological fermentation 2014 – A Year of Transformation Construction Automotive suppliers Paints and coatings Textiles, print and paper Personal care Solar wafers, cells and modules Polysilicon Ethylene Customers’ Industries Dispersible Polymer Powders (DPP) Polyvinyl Acetate (PVAc) Therapeutic proteins food ingredients Semiconductors Engineered fabrics, coatings, adhesives, carpet Construction, remodeling, insulation Food, automotive Food, life sciences, household 9 Chemicals: The Way Forward Strong and well established global market presence Growth opportunities in emerging markets Addressing global trends with advanced chemical products Leveraging existing upstream capacities will reduce capital intensity of growth Continuous productivity improvements and Verbund production support cost competitiveness Target 2012 to 2017: Sales growth ~7% CAGR / EBITDA margin >16.0% 2014 – A Year of Transformation 10 Chemicals: Enhancing Quality of Life Global Trends BELSIL® Growing population & rising welfare in emerging countries Increasing sales of personal care products Our contribution: BELSIL® for gloss and feel Silicone Fluids & Emulsions in Personal Care ELASTOSIL® LR Living Comfort Urbanization Mobility Airbags in cars = Safety first Silicones used as an airtight coating of woven fabrics Low flammability Our contribution: ELASTOSIL® LR Silicone liquid rubber for the Automotive Industry VINNAPAS® dispersions/dispersible powders Buildings consume 40% of primary energy Need to reduce consumption of heating energy Resource Savings 2014 – A Year of Transformation Our contribution: VINNAPAS® dispersions and dispersible powders for external thermal insulation 11 Reduce Capital Intensity of Growth – Leverage Existing Upstream Capacities Upstream Downstream Global Regional Compounds & Formulations Local Silicon Metal Elastomers Compounds Siloxane Emulsions & Fluids SILMIX® VAM Resins Emulsions VAE dispersions Dispersible Powders Capital Intensity Value Creation 2012 - 2017 growing share of specialties from 2/3 to 3/4 of sales 2014 – A Year of Transformation 12 SILICONES: An Integrated Global Player in a Leading Market Position Sales Development (€m) – 5 years Supply Chain 2 raw materials Methanol Silicon Metal 1,600 Silanes 1,581 1,594 1,648 1,672 2010 2011 2012 2013 1,239 1,200 7 product groups Siloxane Fluids & Emulsions Resins Fumed Silica OF Silanes Elastomers 800 400 > 3000 products & endless applications 0 2009 Competitive Landscape 2013 Market Characteristics Others 14% Reduced cyclicality through broad market penetration and wide customer base WACKER 17% Bluestar 7% 29% Shin Etsu 11% ≈€10* bn Dow Corning 35% Historic growth rates 3% above worldwide GDP High entry barriers (capital and technology) Key drivers spur sustainable market growth Innovations broaden scope of applications Momentive 17% Silane/Siloxane backward integrated suppliers WACKER JV participations fully consolidated WACKER estimates 2014 – A Year of Transformation 13 Customization: Combining a Unique Set of Properties Hydrophobic Formable Adhesive Electrically conducting Broad spectrum of adjustable properties Intrinsic properties Thermal stability UV-resistant Inert, Chemical resistant amongst others Hydrophilic Form stable 2014 – A Year of Transformation Release Insulating Silicones are high performance products, suitable for multiple applications 14 SILICONES: Specialty focus creates Value Standards Exchangeable Specialities Specified properties Price elastic Value based pricing Low requirement for technical service Technical service is a key success factor Customized solutions Standards Business Strategy Increase our specialty business to 50% of Siloxane volume within 4 years Sell standards with low cost to serve Siloxane Volume Specialties 35% Specialties 50% 2013 Standards 65% 2014 – A Year of Transformation 2017 Standards 50% 15 SILICONES: Growth Target 6% with Improved Profitability Our Roadmap 2017 1 Value creation We push our specialty business by investing in downstream production and service close to our customers 2 Innovation We permanently investigate opportunities for organic replacement to open up new markets for silicones 3 Cost We continuously improve our cost position through operational excellence 2014 – A Year of Transformation 16 POLYMERS: Global Leader in High Growth Markets Sales Development (€m) – 5 years Supply Chain Raw Material Upstream VAE Downstream Dispersions DPP Key Markets Construction Nonwovens & Textiles Acetic Acid & Ethylene Adhesives Carpet VAM PVAc PVOH Coatings & Paints VAE = Vinyl acetate ethylene, VAM = Vinyl acetate monomer, PVAc = Polyvinyl acetate, PVOH = Polyvinyl alcohol DPP = Dispersible Polymer Powders Capacity Landscape 2013 (Capacities) Others WACKER 2nd in the market 900 740 810 2009 2010 928 1,003 979 2011 2012 2013 600 300 0 Market Characteristics Diverse market and customer base Others WACKER Dispersible Polymer Powders 1,200 VAE Dispersions 2nd in the market Historic growth above GDP Key trends, innovation and new applications drive growth Moderate capital entry barriers and high technology barriers in most segments Innovations and in-depth formulating expertise broaden scope of applications Source: WACKER estimates 2014 – A Year of Transformation 17 Solid: Transformation of unmodified to Polymer modified Dry Mortar Market is One of the Key Growth Driver Dry Mortar Market 2012 volume in thousand tons ~3,000 ~80% unmodified ~20% modified Dry mortar market ~50% PVOH* Transformation Resins DPP* market Competition WACKER market share Expansion Source: Kline, Data base, WACKER-estimation / * Dispersible Polymer Powder (DPP), Polyvinyl alcohol (PVOH) 2014 – A Year of Transformation 18 Dispersions: opportunities for substitution based on properties overlap in applications and cost advantages ~1,600 kt ~16,700 kt ~3,900 kt 4% 6% 10% 15% Other* 64% 32% Vinyl Acetate Ethylene 34% 10% 23% 2012 2006 VAE market 2007 Construction 19% Adhesives Styrene Butadiene Latex Total 2009market 2012 2010 2008 Coatings Nonwovens 6% 2% 5% SBL market 2012 2011 2012 Carpet Paper Other Sources: Kline; F&S-study „Strategic Assessment of the World Emulsion Polymer Markets“ 2012; WACKER analysis * Other: Pure acrylics, styrene acrylics, PVAc, vinyl acrylics, VA-copolymers 2014 – A Year of Transformation 19 Polymers Targets Continued Growth of 8% p.a. Our Roadmap 2017 Expansion We invest in downstream production and service close to our customers 2 Innovation We push new solutions beyond our core, working in a global set-up with our R&D activities 3 Substitution We explore new substitution opportunities in the non VAE systems 1 2014 – A Year of Transformation 20 BIOSOLUTIONS: Acquisition SCIL – Bioengineered Pharmaceutical Proteins - 1,500l fermenter capacity for pharmaceutical actives - GMP* certified operations - Protein refolding technology complements WACKER portfolio WACKER BIOSOLUTIONS becomes a full-service provider for the microbial manufacture of biologics *GMP = „Good Manufacturing Practice“, a standard in pharmaceutical manufacturing, 2014 – A Year of Transformation 21 POLYSILICON: The Way Forward Fast cost decrease in Solar PV unlocks growth Polysilicon Market: 14% growth expected (2013 - 2017) Prices expected to rise to reinvestment levels Pricing differentiates between Polysilicon qualities Competitive pressure drives cost and conversion efficiency – WACKER leads in cost and quality Cost reduction roadmaps implemented to maintain leading cost and quality position Target 2012 to 2017: Sales growth ~7% CAGR / *EBITDA margin >20.0% * excl. salt and fumed silica 2014 – A Year of Transformation 22 WACKER POLYSILICON Leading in Cost and Quality Sales Development (€m) – 5 years Production Chain Raw Material Upstream Downstream Key Markets 1,800 1,369 Salt Polysilicon Silicon Metal Hydrogen Electronic wafer Semiconductors Solar wafer Solar Modules 1,200 1,448 1,136 1,121 924 600 0 2009 Others 10% WACKER 23% 29% 212 kt Hemlock 12% 2013 PV market growth still intact driven by increasing competitiveness of PV electricity, despite declining subsidies Excellent product quality is key to highest conversion efficiencies in solar Cost and quality are both decisive for market success GCL 23% Prices stabilized, but delayed capacity expansion announced OCI Intense competition further drives industry consolidation 16% Source: Industry announcements; WACKER estimate 2014 – A Year of Transformation 2012 TBEA 2% REC 9% 2011 Market Characteristics Competitive Landscape 2013 DAQO 2% Tokuyama 3% 2010 23 POLYSILICON: Fast Cost Decrease of Solar PV Unlocks Growth Roof-top System Prices* LCOE & Electricity Price Off-grid Applications PV becoming very competitive and easy-to-install mature market household power price Germany young market PV can be built very fast and in small increments CA China TX Steep price decline of storage solutions Cheap electricity for remote areas with no access to grid 1000 1400 1800 annual solar energy yield(kWh/kWp) US Germany Module BOS BOS = Balance of System 1.5 €/Wp 1.0 €/Wp 0.5 €/Wp size of electricity market Δ LCOE vs. power price = room for positive NPV (assumes full grid access) *best practice Q4 2012 2014 – A Year of Transformation 24 Polysilicon Market: Strong Market Growth at 14% CAGR Expected Global Polysilicon Shipments (kt) 360 half, flat due to continued inventory correction and lower consumption per Watt CAGR 2013-2017: 14% 224 211 2013 shipments with stronger 2nd Increasingly competitive C-Si PV 213 drives polysilicon demand Silicon-based PV offers highest 162 conversion efficiencies and proven long-term stability at lowest cost 92 2009 2010 2011 2012 2013 Electronic 2014 – A Year of Transformation 2017e Solar Assumption: 2017: 80 GW (incl. 10% thinfilm share); Silicon consumption < 5 g/Wp in 2017; Shipment figures incl. time-delay shipment/installation 25 Polysilicon Supply & Demand Balanced – High Quality Poly Supply Tightening Global Polysilicon Demand (kt) versus Capacity of Still Active Manufacturers 350 300 Only a limited number of producers still operating after consolidation phase in 2012 & 2013 PV market: 2013: ~40 GW 2014: ~43-52 GW 2015: ~49-65 GW Limited additional capacity to come online in 2014 250 200 Questionable whether new entrants will produce cost-effective 150 Capacity Announcements 100 Active Capacities Total Demand (HIGH CASE) 50 Total Demand (LOW CASE) Electronic Demand 0 2010 2011 2012 2013 2014 2015 Sources: market surveys, industry announcements, WACKER estimate 2014 – A Year of Transformation 26 Decreasing Prices open up New Markets – USA and Asia with highest Growth Potential Country France Germany Italy Europe other Europe total Australia China India Japan USA Rest of World Total 2010 2011 2012 2013 2014e 0.7 1.7 1.1 0.6 7.4 4.0 2.6 14.7 0.4 0.7 0.15 1.0 0.9 0.5 18 GW 7.5 7.4 3.3 19.9 0.8 2.5 0.4 1.3 1.9 1.3 28 GW 7.6 3.6 4.9 17.2 1.0 4.8 0.9 2.5 3.3 2.1 32 GW 3.3 1.1 5.8 10.8 0.9 12.9 1.0 6.8 4.8 2.8 40 GW 1.1 – 1.3 2.3 – 2.7 1.1 – 1.3 4.8 – 6.2 9.3 – 11.5 1.2 – 1.4 13.0 – 15.0 1.4 – 1.8 8.5 – 9.5 6.0 – 6.8 4.0 – 5.8 ~43 – 52 GW Sources: EPIA 05/2010, 02/2012 and 05/2013, Industry announcements, WACKER estimate 2014 – A Year of Transformation 27 Competitive Pressure drives Cost and Conversion Efficiency – WACKER leads in Cost and Quality Usable Ingot Length (%) Solar Cell Efficiencies (%) Cell Efficiency Distribution Mainstream Multi Production Costs (%) high-purity Polysilicon Mainstream Mono 100% Super Mono 86% 76% low-quality Polysilicon Number of cells 25 20 66% cells with price discount cells with price premium 15 Ingot Yield 10 60% 70% 80% 90% Higher quality longer usable length lower cost per wafer 2004 2006 2008 2010 2012 Higher quality supports greater efficiencies lower cost per wafer Cell efficient Narrow distribution and higher mean lower cost per wafer Source: WACKER estimates 2014 – A Year of Transformation 28 POLYSILICON Expansion Tennessee (Poly 11): establishing a Platform for Future Growth in the US Tennessee – 20kt p.a. Lower Electricity Cost in the US (indexed) 100 Germany = Electricity Price + FiT Surcharge (2013) + Grid usage fee + Other charges US = List price TN provider Feb. 2014 38 Planned ramp up of Polysilicon production in 2015 Currency diversification for the Group Growth platform for chemical products in the USA Germany (Industry HighVoltage) USA (TN) Assumptions: Data based on Year end 2012, USD/EUR: 1.35 Source: WACKER estimates, market data 2014 – A Year of Transformation 29 Strong Focus on Cost and Productivity – Process Innovation Specific Energy Consumption (kWh/kg)* Labor Productivity (kg/h)* Index = 100 Index = 100 100 -36% +270% 71 370 292 64 100 2005 2013 2017e 2005 2013 New deposition reactors Economies of scale New conversion reactors Yield improvements New process design Automation * Solar polysilicon process only, indexed weighted ø of all plants. 2014 – A Year of Transformation 2017e * Total average for all sites, direct labor including analytics 30 POLYSILICON: Maintain Leadership in Cost and Quality Our Roadmap 2017 1 Cost Competitive pressure drives module cost and conversion efficiency Cost reduction roadmap implemented to maintain WACKER’s leading cost position C-Si-PV moving towards efficiencies above 20% (module) 2 Quality Pricing differentiates between polysilicon qualities Develop products for all crystallization technologies in close cooperation with our customers 3 Customer Keep broad customer portfolio to react flexibly on market changes Expand capacities according to market demand 2014 – A Year of Transformation 31 Siltronic: The Way Forward Rising demand for 300 mm Continuous cost reduction programs in place Customer focus – recognized for outstanding performance Siltronic strategy - Focus on cash generation Target 2012 to 2017: Sales growth ~2% CAGR / *EBITDA margin >20.0% * pro forma, excluding restructuring 2012 2014 – A Year of Transformation 32 Siltronic: Focusing on 300 mm and Asia Sales Development (€m) – 5 years Value Chain WACKER Siltronic Key Markets 1,600 1,025 1,200 Polysilicon Ingots Wafer Semiconductors 800 992 638 869 743 400 0 2009 2010 2011 Sales Semi 2012 2013 Sales non Semi Competitive Landscape 2012 Market Characteristics Silicon Wafer Market Share (on USD basis) Semi and silicon wafer markets move in tandem Global Wafers 6% Others 5% Siltronic 14% Historic silicon market growth of 8-12% CAGR with last 3 years moving sideways LG / Siltron 10% High volatility both annually and quarterly Sun Edison 10% 300 mm continues to grow while legacy diameter are trending down S.E.H. 28% PC era coming to an end. Market growth increasingly coming from smartphone and tablets SUMCO Group 28% Source: Gartner (June 2013) 2014 – A Year of Transformation Source: Siltronic estimates 33 Leading Wafer Area Growth: Shift from PC to Megatrend Mobility (Smartphones, Tablets, mobile Infrastructure) Wafer Demand 2013, bn. cm² Growth 2014 vs. 2013 Ø ~ 5% Mobility 18.5 PC and periphery 14.0 Living 10.5 Industry 5.5 Automotive 5.0 Storage Others 3.5 1.5 2014 – A Year of Transformation ~ 20% ~ -10% ~ 0% ~ 5% ~ 10% ~ 10% ~ -20% 34 Siltronic: 300 mm continuous Cost Reduction Program Siltronic 300 mm variable Costs, relative per Wafer -9% -12% -16% 2010 2011 2012 2013 Targeting annual cost declines in variable costs of 10% for the next two years 2014 – A Year of Transformation 35 Siltronic Acquires Majority Ownership of Singapore JV in 2014 Siltronic Silicon Wafer Pte. Ltd. (SSW) Capital increase and other funds to pay off external debt (~€210m) Ownership: Siltronic 78%, Samsung 22%; Samsung remains an important customer to the fab Total cash layout: €150m Leveraging efficiency measures Siltronic moves further to Asia Global 300 mm integration benefits Full consolidation pro-forma results: Capacity: >300 kw/m (€m) 2011* 2012* 2013 Sales 1,134 1,029 876 130 100 110 11 10 13 EBITDA EBITDA % * incl. restructuring 2014 – A Year of Transformation 36 Siltronic Strategy: Focus on Cash Generation Create Harvest 2005 - 2012 2013 onwards High capital intensity Focus on 300 mm in Asia 300 mm expansion No 450 mm investment Strengthen market position with JV Continue rationalization outside of Asia Leading edge technology CapEx below depreciation CapEx above depreciation Strategy: Focus on low capex and 300 mm in Asia 2014 – A Year of Transformation 37 WACKER: The Way Forward Financial Targets for 2017 Financial Stability & Profitability Summary: The Path to 2017 Outlook 2014 2014 – A Year of Transformation 38 WACKER Financial Targets for 2017 Sales of €6.0 – 6.5 bn with Profit above Costs of Capital Sales 2012 2013 guidance 2013 2014 guidance 2017 target 4,635 ~ 4,500 4,479 Mid-single-digit % increase 6,000 – 6,500 ~6% CAGR EBITDA 795 Lower 679 At least 10 percent higher 1,200 Margin 17% Lower 15% Slight increase ~20% ROCE 5% lower 2.2% Slight increase > 11% 24% ~ 500 11%; 504 Approx. 550 Below depreciation CapEx (% of sales) 2014 – A Year of Transformation 39 Balance Sheet: Financial Stability – Target Capital Structure Group Balance Sheet – Target Structure 2017 Drivers Drivers Equity ratio: Historical level ~40% Non-current assets Equity 2013-2017: CapEx below depreciation Depreciation of certain polysilicon assets accelerated from 2012 onwards Financial debt incl. prepayments Pension provisions DIO: ~50 days and DSO: ~50 days despite increasing globalization Working capital Minimum level for operations Liquidity 2014 – A Year of Transformation Dividend policy: in general, minimum 25% of net income Prepayments almost fully repaid by 2017 Target: Net financial debt = 1x EBITDA Impact of IAS 19 considered Liabilities / other accruals 40 Profit & Loss Statement: Improving Profitability through 2017 WACKER P&L 2013 (€m) €m Sales Cost of goods sold Gross profit from sales Gross profit margin (in %) Selling expenses Research and development expenses General administrative expenses Other operating income Other operating expenses Targeted Development until 2017: 2013 4,479 -3,815 664 15% -272 -174 -112 255 -210 Gross profit margin with increase of up to 550 bps, driven by Accelerating growth in specialties Improving market environment in POLYSILICON Lower D&A in relation to sales Operating result Equity result EBIT Interest result Other financial result Income before taxes Income taxes Net income for the period 151 -36 114 -27 -57 31 -89 6 Limited overhead growth – SG&A to decrease to less than 7% of sales EBIT Depreciation/amortization EBITDA 114 564 679 Prior to Poly 11 ramp-up: Tennessee investment reduces ROCE by up to 150 bps 2014 – A Year of Transformation EBIT growth compensates higher interest expense Tax rate > 50% in 2014, reverting back to statutory tax rate mid-term (~30%) 41 Aggressive Cost Roadmaps: Targeting > €100m in 2014 Measures Chemicals POLYSILICON WOS WACKER Operating System: targeting continuous cost decrease in specific operating costs Raw Materials: expanded supplier portfolio Raw material and energy cost: optimized yields, loss reduction, raw material and energy recovery, process optimization Electricity: reduced consumption in major process steps (conversion, deposition) Labor: reduce set-up times and non-value-added activities Personnel Expenses: continuous productivity improvement Logistics: lean processes, optimized packaging Technical spending: optimize inspection cycles, spare part storage Supplies: expanded supplier portfolio Maintenance Expenses: standardization, spare parts logistics (sourcing/storage level) Siltronic Raw materials and energy costs: optimize specific raw material and energy consumption, increase yield Supplies: reduce consumption of supplies Labor: reduce personnel costs, set-up times Site loading rules Process optimization across the entire value chain Process yield enhancement Asset utilization: debottlenecking Total expected cost savings 2013: €200m reached €225m 2014 – A Year of Transformation 42 Price Decline over €1 bn within Two Years (22% of Sales) – Mainly in POLYSILICON WACKER Group: Sales Development (€m) 5,000 4,910 158 703 4,500 4,635 270 366 301 Price Volume 91 4,479 Currency 2013 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2011 Price Volume 2014 – A Year of Transformation Currency Spalte1 2012 43 2014 CapEx determined by Tennessee Project CapEx vs. Depreciation Expense WACKER Group (€m) 886 ~ 600 564 504 489 ~ 550 ~ 600 ~ 400 Ø 2008-2012 2013 Depreciation 2014 – A Year of Transformation 2014e Ø 2015e-2017e CapEx (asset additions) 44 Financial Debt incl. Prepayments to be Reduced over Leverage Phase Development of Financial Indebtedness (€m) 1,749 1,639 1,107 1,048 847 772 reduction 1,203 864 -92 Ø 2007 - 2010 792 2012 2013 -96 2011 Net financial debt 2014 – A Year of Transformation 701 2014 et seqq. Prepayments (Group) 45 Annual Prepayment Reduction of about €200m expected POLYSILICON Prepayments (€m) 1,176 1,021 1,012 817 2008 874 2009 836 2010 2011 2012 2013 -€200m p.a. 2014e et seqq. Retained prepayments and damages from cancelled contracts to continue with effects on earnings as market consolidation takes place Expecting prepayments to decline by ~€200 m p.a. 2014 – A Year of Transformation 46 The Path to 2017: WACKER Is an Attractive Investment Advanced Materials 2017 Leading market shares and global presence Compelling Growth Lower CapEx Growing share of chemicals specialty products Strong Cost Position Sales €6 - 6.5 bn (~6% CAGR) EBITDA €1.2 bn (~20% margin) Well defined cost roadmaps Well positioned to harvest the solar opportunity ROCE >11% Leading Market Positions 2014 – A Year of Transformation 47 WACKER: Guidance FY 2014 2013 Outlook 2014 4,478.9 Mid-single-digit % increase 678.7 At least 10 percent higher 15.2 Slight increase 6.3 Improve Net cash flow (€m) 109.7 Balanced net cash flow CapEx (€m) 503.7 Approx. 550 Net financial debt (€m) 792.2 Increase of between 300 and 400 Depreciation 564.4 Approx. 600 2.2 Slight increase Sales (€m) EBITDA (€m) EBITDA margin (%) Group net income (€m) ROCE 2014 – A Year of Transformation 48 CREATING TOMORROW`S SOLUTIONS 1st Quarter 2014 – Conference Call Note Wacker Chemie AG, May 2014 WACKER: Strong Demand Supports Sales and Earnings in €m Q1 2014 Q4 2013 % QoQ Q1 2013 % YoY Sales 1,157.4 1,086.9 6.5 1,076.3 7.5 285.2 158.1 80.4 164.5 73.4 24.6% 14.5% - 15.3% - 133.8 -5.5 n.a. 32.2 >100 11.6% -0.5% - 3.0% - Result for the period 64.2 -19.3 n.a. 5.1 >100 EPS in € 1.35 -0.40 n.a. 0.08 >100 EBITDA EBITDA margin EBIT EBIT margin 2014 – A Year of Transformation 50 One-Off Events mask good underlying Performance WACKER Q1 2014 Comments 2014 Challenges and Opportunities Increasing volumes in all divisions Volume growth in all segments Negative FX effect in Chemicals and Siltronic Further focus on cost roadmap One-offs of around €114m Capex €89m, mostly for Tennessee, POLYSILICON Sales slightly above 2013 (single digit %) EBITDA at least 10% yoy Net Cash Flow of €105m Net debt €900m, increase driven by the refinancing of the former JV-project financing Net income of €64m 2014 – A Year of Transformation 51 Special Effect on EBITDA in Polysilicon of €114m Q1 2014 Sales1 Q1 2014 EBITDA 1% 5% 3% 17% 20% 3% 17% Total: €1,157.4m 63% Total: €285.2m 12% 36% 20% 2% Siltronic WACKER SILICONES WACKER POLYMERS WACKER BIOSOLUTIONS WACKER POLYSILICON Others 1based 2014 – A Year of Transformation on external sales 52 First-Time Consolidation of Singapore 300 mm and S Protein increase Total Assets Balance Sheet (%) Characteristics 03/31/14 Assets Total €6.6bn €6.3bn Liabilities Total €6.6bn €6.3bn 33% Non current assets: €4,571m Securities, cash and cash equivalents: €548m Provisions for pensions: €1,227m 35% Net financial debt: €900m 67% 65% 19% Equity: €2,156m 17% Equity 13% 13% Pension Accruals Noncurrent Assets 24% Current Assets 22% 22% Prepayments 22% Financial Debt Securities, Cash & Cash E. 8% 9% 03/31/14 12/31/13 2014 – A Year of Transformation 14% 13% Prepayments received per 03/31/14: €881m CapEx: €89m Capital employed: €5,175m Accruals & Liabilities 03/31/14 12/31/13 53 EBITDA and EBIT Impact of Special Effects 2013 Special Effects 2014 Q1 Q2 Q3 Q4 FY Q1 Silicones: Siloxane JV effects - - - 13.7 13.7 - 0 Polysilicon: Retained prepayments & damages from cancelled contracts 32.2 23.8 13.2 8.4 77.6 114.0 114.0 EBITDA 32.2 23.8 13.2 22.1 91.3 114.0 114.0 - - - - 0 32.2 23.8 13.2 114.0 114.0 Siltronic: Special depreciation for disused assets EBIT 2014 – A Year of Transformation -31.1 -31.1 -9.0 60.2 Q2 Q3 Q4 FY 54 Raw Materials: Methanol and VAM* trending upwards Ethylene Contract (€/MT) Si-Metal Contract (€/MT) 1,400 Raw Materials 2013 (€m) Chemicals 2,100 Others Si Metal VAM* Ethylene 1,300 2,050 1,200 2,000 1,100 1,950 1,000 Source: ICIS, Ethylene Market Price Europe, free delivered 2014 – A Year of Transformation 03/14 11/13 07/13 03/13 11/12 07/12 1,900 03/12 03/14 11/13 07/13 03/13 11/12 07/12 03/12 900 Methanol Source: Source: CRU-Provider, Si-Metal Contract Price Europe free delivered Costs of top 4 raw materials 21% of chemicals segment sales *VAM = Vinylacetate monomer 55 1 Cent Change in USD/€ Exchange Rate had an Impact of €4.4m on FY-EBITDA in 2013, unhedged* USD/EURO Development External Sales and Net USD Exposure 1.40 2,909 Chemicals 202 1.35 845 1.30 Polysilicon 1.25 736 Siltronic 03/14 01/14 11/13 09/13 07/13 05/13 03/13 01/13 11/12 09/12 07/12 05/12 1.20 03/12 385 Source: www.x-rates.com/d/USD/EUR/hist2013.html 2014 – A Year of Transformation External Sales FY 2013 Net USD Exposure FY 2013 *Standard Hedging policy = 50% of net exposure, 12 months rolling forward 56 WACKER: Issuer, Contact and Additional Information Issuer and Contact Additional Information WACKER CHEMIE AG Hanns-Seidel-Platz 4 D-81737 Munich ISIN: DE000WCH8881 WKN: WCH888 Investor Relations contacts Mr. Joerg Hoffmann, CFA Tel. +49 89 6279 1633 [email protected] Deutsche Börse: WCH Ticker Bloomberg: CHM/WCH:GR Ticker Reuters: CHE/WCHG.DE Listing: Frankfurt Stock Exchange Prime Standard Mrs. Judith Distelrath Tel. +49 89 6279 1560 [email protected] Mrs. Manuela Ellmerer Tel. +49 89 6279 2769 [email protected] Financial Calendar 05/15/14 – Annual Shareholders’ Meeting 08/01/14 – Q2 Results 2014 (CHANGE) 10/30/14 – Q3 Results 2014 2014 – A Year of Transformation 57 WACKER: Higher Volumes in all Segments led to an increase in Sales YoY and QoQ Sales in €m Q1 2014 Q4 2013 %QoQ Q1 2013 %YoY CHEMICALS 704.7 656.0 7.4 669.3 5.3 WACKER SILICONES 425.3 403.5 5.4 402.1 5.8 WACKER POLYMERS 238.7 213.2 12.0 226.7 5.3 40.7 39.3 3.6 40.5 0.5 WACKER POLYSILICON 262.0 249.8 4.9 235.4 11.3 Siltronic 203.8 174.6 16.7 171.2 19.0 40.4 51.6 -21.7 46.9 -13.9 -53.5 -45.1 18.6 -46.5 15.1 1,157.4 1,086.9 6.5 1,076.3 7.5 WACKER BIOSOLUTIONS Others Consolidation 2014 – A Year of Transformation 58 WACKER: Q1 14 EBITDA rises by a strong 73 Percent due to Non-Recurring Effects of €114m compared to previous Year EBITDA in €m Q1 2014 Q4 2013 %QoQ Q1 2013 %YoY CHEMICALS 88.7 79.1 12.1 96.3 -7.9 WACKER SILICONES 49.1 51.0 -3.7 53.7 -8.6 WACKER POLYMERS 34.2 22.6 51.3 35.7 -4.2 5.4 5.5 -1.8 6.9 -21.7 180.0 70.8 >100 52.5 >100 15.0 11.5 30.4 0.7 >100 3.5 -2.7 n.a. 15.2 -77.0 -2.0 -0.6 >-100 -0.2 >-100 285.2 158.1 80.4 164.5 73.4 WACKER BIOSOLUTIONS WACKER POLYSILICON Siltronic Others Consolidation 2014 – A Year of Transformation 59