WACKER lowers annual forecast

Preliminary figures for Q2 2023

20-Jul-2023 - Germany

Wacker Chemie AG published its preliminary figures for Q2 2023. The company now expects to post second-quarter Group sales of €1.75 billion. EBITDA amounts to €255 million. Based on current estimations, WACKER has modified its forecast for 2023. Accordingly, the company expects that Group sales are likely to come in between €6.5 billion and €6.8 billion (previous guidance: between €7 billion and €7.5 billion). Full-year EBITDA for 2023 is now expected to be between €800 million and €1.0 billion (previous guidance: between €1.1 billion and €1.4 billion). These figures are below current average market expectations, with Group sales reaching €7.0 billion and EBITDA €1.1 billion (source: Vara Research, July 12, 2023). ROCE is projected to be below the cost of capital (previous guidance: above the cost of capital, substantially lower than last year).

“Our expectations have declined primarily due to ongoing weak customer demand in a large number of industries, continuing inventory-reduction measures by customers and the lower year-over-year prices for many of our products,” said Christian Hartel, President and CEO of WACKER. “Numerous market experts anticipated stronger demand in the second half-year – an assumption that was reflected in our previous forecast.” However, WACKER, like so many other chemical companies, has yet to see a recovery.

Changes to the forecast for 2023 are mainly driven by performance at the WACKER SILICONES and WACKER POLYSILICON business divisions.

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According to preliminary figures, sales at WACKER SILICONES came in at €700 million, down by 25 percent year over year. Second-quarter EBITDA is expected to amount to €50 million (previous year: €277 million). WACKER expects full-year sales for the division to come in between €2.7 billion and 2.9 billion (previous guidance: between €3.1 billion and €3.3 billion). The EBITDA margin is projected to be around 10 percent (previous guidance: approximately 15 percent).

Based on preliminary figures, WACKER POLYMERS generated sales of €415 million in the second quarter, down 25 percent compared with the same period last year. EBITDA is anticipated to come in at €75 million, down 17 percent year over year. WACKER now projects full-year sales for the division to range between €1.6 billion and €1.7 billion (previous guidance: €1.8 billion). The EBITDA margin is expected to be approximately 17 percent (previous guidance: slightly above the prior-year level).

According to preliminary figures, WACKER POLYSILICON achieved sales of €515 million during the second quarter. Although sales declined by 10 percent year over year, growth of 16 percent was registered compared with the first quarter. Second-quarter EBITDA is expected to amount to €155 million (previous year: €214 million). WACKER expects full-year sales for the division to range between €1.6 billion and €1.7 billion (previous guidance: between €1.6 billion and €1.8 billion). EBITDA is likely to come in between €300 million and €400 million (previous guidance: between €300 million and €500 million).

Based on preliminary figures, WACKER BIOSOLUTIONS generated sales in the amount of €90 million during the second quarter, a slight increase year over year. EBITDA is likely to come in at €0.5 million (previous year: €8.1 million). WACKER now expects full-year sales for the division to grow by high-single-digit percentage (previous gui-dance: sales growth by low-double-digit percentage). EBITDA is pro-jected to be below the prior-year level (previous guidance: significantly higher than last year).

WACKER will publish its interim report for the first half of 2023 on July 27, 2023.

https://www.chemeurope.com/en/news/1181113/wacker-lowers-annual-forecast.html