According to its preliminary calculations, the Munich-based chemical group generated total sales of $6.10 billion in 2013 (2012: $6.30 billion), some three percent down on 2012. The decline was chiefly prompted by lower prices for polysilicon and semiconductor wafers. All in all, price effects reduced Group sales by some $503.68 million or eight percent in 2013. The chemical divisions, though, counterbalanced the price pres- sures with higher volumes, keeping their total sales steady at the prior-year level.
Based on preliminary figures, Group earnings before interest, taxes, depreciation and amor- tization (EBITDA) came in at around $924.32 million (2012: $1.082 billion). This is close to 15 percent less than in the previous year. The preliminary calculation for earnings before inter- est and taxes (EBIT) is $155.19 million for 2013 (2012: $363.47 million). Wacker’s 2013 net in- come amounts to $8.17 million (2012: $156.55 million).
Persistently low solar-silicon prices were the chief factor weighing on earnings. Although more or less stable from the start of 2013, annual solar-silicon prices were about a third low- er on average than in 2012. Exchange-rate effects and the strong euro also played a role. Wacker’s chemical divisions, though, increased their EBITDA by over 11 percent com- pared to the previous year, thanks mainly to higher volumes.
“The figures for 2013 are in line with our expectations and forecasts,” said CEO Rudolf Staudigl in Munich last week. “We are pleased that our final-quarter sales and earnings were better than in 2012. In polysilicon, volumes picked up strongly, even though prices have not improved noticeably in the fourth quarter. In chemicals, demand was very healthy despite the usual slowdown during the winter months. Overall, our fourth-quarter performance offers a good basis for starting the new fiscal year.”
Investments, Net Cash Flow and Net Financial Debt
According to preliminary figures, Wacker’s investments amounted to $686.10 million in 2013 (2012: $1.4887 billion), just under half the level of a year earlier due to project-related factors. Depreciation for 2013 totaled $728.364 million (2012: $705.686 million).
Most capital expenditures went toward the ongoing construction of the new polysilicon site in Charleston, Tennessee (USA). Other investments flowed into expanding production capacity for polymer products and polyvinyl acetate solid resins in China and South Korea.
The Group’s significantly lower capital expenditures were a key positive factor for net cash flow, which improved noticeably. In full-year 2013, it reached $146.74 million (2012: $-715 million). At the same time, the Group’s net financial debt grew much less than expected in early 2013. It amounted to 1.056 billion as of December 31, 2013 (Dec. 31, 2012: $935.1 million).
“Now that we have largely completed, or extended the timeline for, our capital-intensive large-scale investments in new upstream facilities, we want to reap the benefits of these ef- forts in the years ahead,” said CFO Joachim Rauhut. “Last year, our investments were over 50 percent lower than in 2012 and we expect them to remain below the level of depreciation in the coming years. This will have a positive impact on our cash flow.”
Business Performance in Q4 2013
Wacker closed Q4 2013 with solid results despite the usual seasonal effects. Thanks to strong customer demand and stable polysilicon prices, the Group’s fourth-quarter sales rose about 7 percent year on year to $1.45 billion (Q4 2012: $1.36 billion). EBITDA saw even stronger growth. It climbed to $210.77 million in Q4 2013 (Q4 2012: $178 million), a rise of 18 percent compared with the year-earlier period.
Overall, the chemical divisions grew sales moderately and earnings strongly from October through December 2013. Their total fourth-quarter sales came in at $875.1 million (Q4 2012: $863. million). This gain of over one percent chiefly stemmed from higher year-on-year volumes. EBITDA in the chemical divisions almost doubled relative to the final quarter of 2012, in- creasing to some $105.3 million in Q4 2013 (Q4 2012: $58.69 million). Plant utilization was high, especially for silicones, amid solid demand. As a result, the Group’s chemical divisions more than compensated for lower prices and negative exchange-rate effects arising from the stronger euro. The reversal of provisions built up in the past for contingent losses from silox- ane production in China had a positive impact of $18.67 million on chemical-division EBITDA.
Siltronic generated total October-through-December sales of around $233.45 million (Q4 2012: $246.79 million) amid a persistently challenging market environment. This is close to 6 percent less than in the year-earlier period. Conversely, Siltronic improved EBITDA despite ongoing price pressure. Its Q4 2013 EBITDA reached $14.67 million (Q4 2012: $5.33 million).
Wacker Polysilicon generated substantial year-on-year sales growth in Q4 2013 thanks to a strong rise in volumes amid steady prices. The division’s sales totaled $333.5 mil- lion from October through December 2013 (Q4 2012: $284.14 million), up 17 percent. In the same period, EBITDA fell more than nine percent to €71 million (Q4 2012: $104 million). The earnings decline mainly stems from differences in retained advance payments and damages relating to terminated polysilicon contracts. Wacker Polysilicon posted around $10.67 million here in the final quarter of 2013. Its EBITDA of Q4 2012 had included about $73.37 million resulting from retained advance payments and damages received.