Wacker Chemie closed the first quarter of 2023 with lower sales and earnings figures. In the quarter under review, the Munich-based chemical group generated sales revenue of €1.74 billion. This is 16 percent less than in the previous year, when €2.08 billion were generated. The main reason for the decline was lower volumes. Compared with the previous quarter's sales of €1.83 billion, sales fell by five percent.
Wacker generated earnings before interest, taxes, depreciation and amortization (Ebitda for short) of €281 million in the first three months of 2023. This is 56 percent less than in the previous year. Compared with the previous quarter's figure of €355 million, earnings were down 21 percent. In addition to lower sales volumes, the year-on-year increase in energy prices was also responsible for the lower operating profit. The overall lower utilization of production facilities compared to the first quarter of 2022 also resulted in an increase in manufacturing costs, which held back the earnings trend. Consolidated earnings before interest and taxes also decreased significantly due to the factors mentioned. It totaled €178 million in the reporting quarter. This is 68 percent less than a year ago, when earnings totaled €550 million. Profit for the reporting quarter totaled €147 million. This corresponds to a decline of over 63 percent.
“As expected, our figures reflect our customers running down their inventories and exercising caution when ordering in Q1,” said CEO Christian Hartel. “For this reason, we sold less across all business divisions than we did a year ago.” At the same time, however, Hartel was confident that the destocking phase could now be over. “In March, all of our business divisions generated higher sales than they did at the beginning of the year,” explained the CEO. “But as of yet there are no clear signals in the market that the second quarter will be substantially stronger, not even from China. Our customers expect business to continue to pick up over the course of the year but are still placing orders at very short notice.” Based on this, Hartel believes that the second half of 2023 is likely to be better overall than the first six months of the year.
The Group's capital expenditures continued to grow in the first quarter of 2023. At €104 million, they increased by 24 percent compared to the previous year. The funds went into expansion projects in all four business units in Europe, Asia and the USA. He was also optimistic about Wacker’s prospects in the medium term: “Our Strategy 2030 provides us with clear goals: faster growth, high profitability and better resilience in times of constant change.” The CEO said Wacker’s goal was to generate sales of over €10 billion by 2030. He added that a key component in achieving these goals would be higher capital expenditures, which would be spread across more than 40 different projects worldwide. In 2023, capex will rise to around €650 million.
In the first quarter of 2023, sales in all regions were lower year-on-year. In Asia, sales totaled €733 million. This is 17 percent less than in the previous year. In the Americas, Group sales fell by nine percent to €278 million in the reporting quarter. In Europe, sales amounted to €649 million, a decrease of 18 percent.
Wacker Silicones generated total sales of €760 million in the first quarter of 2023. This is 17 percent less than the previous year's figure of €921 million. The main reasons for this decline are lower prices for silicones and lower sales volumes. Compared to the previous quarter, however, the business unit's sales grew by eight percent. Total Wacker Polymers sales in the quarter under review were also 17 percent down on the previous year at €428 million. Lower volumes in particular, but also lower prices, were the main reasons for this decline. In contrast, revenue grew by two percent compared to the previous quarter. Wacker Biosolutions generated total revenue of €77 million from January to March 2023, on par with the previous year. Compared to the previous quarter, revenue fell by five percent, partly due to lower sales volumes. Wacker Polysilicon generated total sales of €441 million in the quarter under review. This is 16 percent less than in the previous year and 23 percent less than in the previous quarter. This decline was due to significantly lower sales volumes for solar silicon. Contributing factors were a cautious start to the year on the part of customers due to volatile polysilicon prices and a maintenance-related plant shutdown. Higher prices compared with the previous year could not fully offset this. Sales volumes of polysilicon for semiconductor applications continued to grow both year-on-year and quarter-on-quarter.
Wacker detailed its assessments of the company's likely development in the current year in the forecast report of the 2022 Annual Report. Current economic forecasts assume that global economic output in 2023 will be lower than in the previous year. Wacker has confirmed its forecast for 2023 as a whole. Accordingly, the company expects sales in the range of €7 billion euros to €7.5 billion. Ebitda is expected to be between €1.1 billion and €1.4 billion. At €650 million, capital expenditures will be significantly higher than a year earlier. This is also significantly higher than depreciation, which will amount to around €450 million. Consolidated net income will be significantly lower than a year earlier.
