Wacker Chemie Ag · XETR:WCH
Wacker Chemie — Investor Day (June 2020)
63 slides from Wacker Chemie's investor day presentation, Jun 16, 2020
Slide 1: WACKER – Cash, Growth and Sustainability
CREATING TOMORROW’S SOLUTIONS WACKER – Cash, Growth and Sustainability Wacker Chemie AG, June 16, 2020 Ticker: WCH WACKER Virtual Capital Market Day 2020 www.wacker.com June 16, 2020 0
Slide 2: Disclaimer
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 man
Slide 3: Agenda for Today
Agenda for Today Agenda 10:00 - 12:00 Strategy Update In between Q&A Sessions Our Speakers Rudolf Staudigl Auguste Willems Christian Hartel Tobias Ohler CEO CFO WACKER Virtual Capital Market Day 2020 June 16, 2020 2
Slide 4: CMD Introduction: Progress Report on our Targets
CMD Introduction: Progress Report on our 5 Targets Our Targets Progress Since Last CMD Capitalizing on growth opportunities in Chemicals 1 CapEx – Extend Leverage Phase while maintaining Group CapEx < Depreciation Specialties and demand for applications in smart 2 Grow Above Chemical Production cons
Slide 5: CapEx – Extend Leverage Phase
CapEx – Extend Leverage Phase 1 Group CapEx Below Depreciation while Enabling Growth in Chemicals €bn Group €bn Chemicals 0.6 0.6 6% 4% 6% 8% 7% 0.4 0.4 0.2 0.2 0.0 0.0 Ø2011-15 2016 2017 2018 2019* Ø2011-15 2016 2017 2018 2019 POLYSILICON Others Chemicals Depreciation Depreciation Chems CapEx / Sal
Slide 6: Grow Above Chemical Production
Grow Above Chemical Production 2 Doubling Sales in Chemicals since IPO Group Chemicals €bn CAGR 2006-2019 CAGR 5.0 +6% Asia +11% 4.0 3.0 Americas +7% 2.0 EMEA +3% 1.0 0.0 Global +6% 2007 2009 2011 2013 2015 2017 2019 Global Chemical POLYSILICON CHEMICALS <4% Industry Main Drivers for Chemicals Growt
Slide 7: Focus Even More on Sustainability
Focus Even More on Sustainability 3 Germany CO2e Target Achieved, New Ambitious Group Targets for 2030 Germany Specific CO2e Target Achieved New Group Specific CO2e 2030 Target in 2018 100% 100% -15% -33% 83% 88% 2012 2016 2017 2018 2022 2012 2018 2030 Germany target: 15% reduction in spec. CO2e Gro
Slide 8: Sustain Attractive Margins Throughout the Cycle
Sustain Attractive Margins Throughout the Cycle 4 Profitability of Chemicals Well Above Target EBITDA-Margin Group Chemicals €bn €bn Target 20% 21% 21% 19% 20% 19% 19% 18% 16% 16% 16% 1.0 1.0 . 0.5 0.5 0.0 0.0 2015* 2016 2017 2018 2019 2015 2016 2017 2018 2019 Group EBITDA Chemicals EBITDA EBITDA Ma
Slide 9: Generate Cash
Generate Cash 5 Cash Generation Funds Growth and Dividends while Maintaining Low Net Debt -714 -993 Net debt Gross Investments Siltronic* Dividends Δ Financial Δ Others Net debt 2016 (€m) cashflow Debt 2019 Strong Cash Generation Through Specialty Focus, Budgeting and Cost Discipline Drivers to Gros
Slide 10: “Shape the Future” Efficiency Program to Increase Competitiveness and Profitability
“Shape the Future” Efficiency Program to Increase Competitiveness and Profitability Broad Scope of Program by 2022 Reorganization Positioning business divisions even stronger of business for profitable growth and central Lean central departments, with required scope divisions of services Lean or
Slide 11: “Shape the Future” Setting Ambitious Targets – Substantial Potential Identified
“Shape the Future” Setting Ambitious Targets – Substantial Potential Identified Track Record “Shape the Future” Drive Regionalization Strong Growth Above GDP Even More Customer Focus Good History in Cost Roadmaps (WOS & POLYSILICON) Clear Specialty Focus Cost Reduction & Competitiveness Digitization
Slide 12: Sustainability
CREATING TOMORROW’S SOLUTIONS Sustainability Sustainability Management – A Matter of Top Priority Auguste Willems – Member of Management Board Ticker: WCH WACKER Virtual Capital Market Day 2020 www.wacker.com June 16, 2020 11
Slide 13: Focus Even More on Sustainability
4 4 Focus Even More on Sustainability Our Comprehensive 3-tiered Approach to Sustainability Value UP Footprint DOWN Collaboration BEYOND Enable our customers to provide Create efficient operations & Strive for a more more sustainable solutions use resources responsibly sustainable value chain Active
Slide 14: WACKER Enables Leading CO2 Abatement Technologies
4 4 WACKER Enables Leading CO2 Abatement Technologies Polysilicon for Photovoltaics (PV) DPP for CTA-Applications Avoiding CO2 with PV Systems Avoiding CO2 with Thin Bed Mortars Generating power based Reference technology: on national grid mixes Thick bed CTA PV system with Thin bed CTA with WACKER
Slide 15: Systematically Improving Sustainability of Product Portfolio
4 4 Systematically Improving Sustainability of Product Portfolio Target: 90% of Products with Positive or Neutral Sustainability* in 2030 2018 Portfolio 2019 Portfolio 2030 Target 10% positive positive 20% 24% 40% 47% 33% 36% neutral neutral 90% neutral Products with positive or neutral sustainabili
Slide 16: Reducing Emissions and Improving Process Efficiency
4 4 Reducing Emissions and Improving Process Efficiency WACKER Upstream with Benchmark Cost and Sustainability Spec. energy Spec. CO2 Lower CO2/kg consumption emissions feedstock 100% 100% 88% -36% Si-metal 73% 67% 50% -33% -33% -50% Target Siloxane Target 2007 2018 2030 2012 2018 2030 WACKER Suppli
Slide 17: High Electrification Paves the Road to Carbon Neutrality
4 4 High Electrification Paves the Road to Carbon Neutrality CO2 Footprint Scope I+II Very High Level of Electrification 100% Si-metal German Purchased Chemical energy Industry Own energy production WACKER 80% of emissions energy related Electrified Process emissions, incl. Si-metal 10% Fossil-based
Slide 18: Striving for a More Sustainable Value Chain
Striving for a More Sustainable Value Chain 90% of Key Suppliers Will Have Positive Sustainability TfS System: Key Supplier One Audit is an Audit for All Assessments 100% Supplier Customer Supplier Customer 72% 90% Audits TfS 66% system 2019 Target 2030 % of suppliers with positive sustainability co
Slide 19: Extending Our Sustainability Aspirations Beyond 2030
Extending Our Sustainability Aspirations Beyond 2030 Our Vision for 2050 Sustainable solutions Value Up 100% of products with neutral or positive sustainability contribution Footprint WACKER is the industry benchmark Down Continued improvements to CO2 neutrality Collaboration Improving sup
Slide 20: SILICONES
CREATING TOMORROW’S SOLUTIONS SILICONES Full portfolio provider with focus on specialties Auguste Willems – Member of Management Board Ticker: WCH WACKER Virtual Capital Market Day 2020 www.wacker.com June 16, 2020 19
Slide 21: SILICONES at a Glance
4 4 SILICONES at a Glance Full Portfolio Supplier with Focus on Specialties 900 2019 Market Position 25% 600 20% 20% 18% WACKER 14% Others 300 #2 Elkem 0 143 223 194 82 89 ShinEtsu 2015 2016 2017 2018 2019 Dow + DuPont EBITDA (€m) EBITDA Margin CapEx (€m) Momentive + KCC Drivers for SILICONES Growth
Slide 22: SILICONES Serve Diversified End Markets
4 4 SILICONES Serve Diversified End Markets Broad Market Penetration and a Wide Customer Base Market Drivers Automotive ↔ E-Mobility Advanced Processing & Health Care ↔ Ageing Performance Additives Population Construction ↔ Urbanization Health Care Electronics ↔ Communication Silicones Consu
Slide 23: Balancing Up- and Downstream is a Key Success Factor
Balancing Up- and Downstream is a Key Success Factor Siloxane Resins Basic Organosilicon Upstream Downstream Elastomers Polymers Functional Fluids Fumed Silica HDK® Precursor & Emulsions Intermediates Organofunctional Silanes Electronic Silanes Functionalized HDK® Standard Busine
Slide 24: Silicones – A Basis for Unlimited Applications
Silicones – A Basis for Unlimited Applications Broad Spectrum of Adjustable Customized Products with Unique Customized Products with Unique Properties Properties Properties UV stability Long-term Surface tension elasticity Hydro- Hydro- philic phobic Heat stability / Best-in-class Water-vapor resist
Slide 25: Improved Product Mix Enabled by Specialties Strategy
Improved Product Mix Enabled by Specialties Strategy Growing Specialties Supports Earnings Stability CAGR 19-20% +7% 12-14% 2014 2019 2014 2015 2016 2017 2018 2019 Q1/20 Siloxane consumed by Specialties (kt) SILICONES EBITDA Margin (%) Ø Annual DMC price (RMB) Success Factors for Specialization Driv
Slide 26: SILICONES Full Portfolio Provider with Focus on Specialties
SILICONES Full Portfolio Provider with Focus on Specialties Strategic Focus and Roadmap Focus on downstream projects to support our customers’ Value specialty applications Creation Lower capital intensity with higher return on capital Extend our global competence network and grow local Innovat
Slide 27: POLYMERS
CREATING TOMORROW’S SOLUTIONS POLYMERS Sustainable Binder Solutions Christian Hartel – Member of Management Board Ticker: WCH WACKER Virtual Capital Market Day 2020 www.wacker.com June 16, 2020 26
Slide 28: POLYMERS at a Glance
POLYMERS at a Glance Leading Market Positions & Generating Attractive Earnings on Low Capital Intensity 300 #1 DPP* #1 VAE-Dispersions 200 22% 19% 17% 15% 100 12% 0 47 38 48 71 60 2015 2016 2017 2018 2019 EBITDA (€m) EBITDA Margin CapEx (€m) WACKER Celanese Dairen Others Drivers for POLYMERS Growth
Slide 29: POLYMERS Create Value in a Wide Variety of Applications
POLYMERS Create Value in a Wide Variety of Applications Polymer Binders in Everyday Life Market Drivers DPP ↔ Smart and sustainable Adhesives & construction, urbanization and Others Sealants renovation Dispersions ↔ Growth from key VAE performance benefits Paints & WACKER Coatings Short-term COV
Slide 30: Dispersible Polymer Powders Enable Smart Construction
Dispersible Polymer Powders Enable Smart Construction Adding High Value to Mortar and Concrete Systems in Construction Facades ETICS/EIFS Wet areas Transformation Drivers Renders Tile adhesives & Applicator (labor) productivity Primers grout mortars & material savings Sealing slurries
Slide 31: VAE Dispersions with Performance Advantages
VAE Dispersions with Performance Advantages Adhesives Carpet Balance Cohesion / Very Low Odor / Adhesion Very Low Emission Machinability Low Flammability vs. C3 Chemistry vs. C4 Chemistry Non-Woven Paints Adhesion to cellulose Excellent Scrub fibers Resistance Absorbency Very Low Odo
Slide 32: Tandem Sites and Tech Centers Enhance Global Reach
Tandem Sites and Tech Centers Enhance Global Reach Serving Customers in All Key Markets Tandem = VAE disp. + DPP # of tech centers Global + 16 Americas 5 Asia 7 Tandem Sites (DPP + VAE) Technical center EMEA 4 Addressing Individual Regional Market Requirements Emerging Developing Develop
Slide 33: POLYMERS Sustainable Binder Solutions
POLYMERS Sustainable Binder Solutions Strategic Focus and Roadmap Global presence with production and technical centers Customer Focus Continuously expanding our production footprint to enable customer’s growth potential Substitution Value based substitution by Innovation Transformation towa
Slide 34: BIOSOLUTIONS
CREATING TOMORROW’S SOLUTIONS BIOSOLUTIONS Leveraging Technology for Biotechnology-Based Growth Christian Hartel – Member of Management Board Ticker: WCH WACKER Virtual Capital Market Day 2020 www.wacker.com June 16, 2020 33
Slide 35: BIOSOLUTIONS at a Glance
4 4 BIOSOLUTIONS at a Glance BIOSOLUTIONS Transitioning to a High Growth Biopharma Business 40 Division Sales 20 18% 18% (Bio)Pharma / Agro 16% 13% 10% 0 9 13 6 16 18 2019 2015 2016 2017 2018 2019 EBITDA (€m) EBITDA Margin CapEx (€m) Nutrition Drivers for Fast Growing Biopharma Unique Technology Pla
Slide 36: Serving a Fast Growing Biopharmaceuticals Business
4 4 Serving a Fast Growing Biopharmaceuticals Business Biopharmaceuticals Sales growth (€m) “The Microbial CDMO” CAGR ESETEC® (E.coli secretion technology) +25% up to 5x >10x higher lower costs output* g/L 2.7 0.2 2015 2019 Conventional ESETEC® Client ESETEC® system system 2.0 (mammalian) Filling
Slide 37: Set up for Growth with a Differentiating CDMO Toolbox
4 4 Set up for Growth with a Differentiating CDMO Toolbox Secretion Technology Refolding Technology Live Microbial Products ESETEC® FOLDTEC® LIBATEC® Correctly folded proteins After cell disruption, Live microorganisms (bacteria are transferred across the aggregated proteins are or yeast) with
Slide 38: Cyclodextrins Enable Technologies to Combat COVID-19
4 4 Cyclodextrins Enable Technologies to Combat COVID-19 Cyclodextrins Protect and Carry Active Ingredients Hydrophobic WACKER Cyclodextrin Interior Knowhow Complex Hydrophilic Hydrophobic Capture / Protect / Exterior Guest Release Carry Anti-Viral Properties Improved Bioavailability Functional tr
Slide 39: BIOSOLUTIONS Leveraging Technology for Biotechnology-Based Growth
BIOSOLUTIONS Leveraging Technology for Biotechnology-Based Growth Strategic Focus and Roadmap Unique Develop fast growing biotechnology businesses Technology Platforms Cutting-edge technologies and strong scientific background Strong global track record: pre-clinical to commercial Customer man
Slide 40: POLYSILICON
CREATING TOMORROW’S SOLUTIONS POLYSILICON Targeting High Performance Products at Low Costs Rudolf Staudigl – CEO Ticker: WCH WACKER Virtual Capital Market Day 2020 www.wacker.com June 16, 2020 39
Slide 41: POLYSILICON at a Glance
4 4 POLYSILICON at a Glance Market and Quality Leader in Semiconductor and High Performance Solar Polysilicon 33% 29% 26% Market Volume WACKER Solar 800 9% Split 2019 Volume Split 2019 -7% 400 0 130 58 62 35 582 2015* 2016* 2017 2018 2019** EBITDA (€m) EBITDA Margin CapEx (€m) Solar Mono Solar Multi
Slide 42: High Quality Polysilicon Required for Growing Semi Segments
4 4 High Quality Polysilicon Required for Growing Semi Segments Growth of Semi Market Driven by Highly Demanding 300mm Wafers bn cm² WACKER is Clear #1 in 125 Semiconductor Polysilicon Consolidation ongoing in semi 100 +5% grade polysilicon market with 3 major suppliers left 75 WACKER leading in
Slide 43: Low Cost CO2-free Power with Polysilicon for Photovoltaics
Low Cost CO2-free Power with Polysilicon for Photovoltaics Installed Power Generation Capacity 2000-2040 GW 3,500 Market Drivers 3,000 PV is the fastest growing source of new power generation 2,500 globally 2,000 Annual PV installations represent ~35% of total yearly 1,500 global power capacity
Slide 44: Benchmark Quality and Aggressive Cost Reductions
Benchmark Quality and Aggressive Cost Reductions Lowest Metal Impurities Essential for Cost Roadmap for Solar Materials Next Generation Cells N-Type Continues Iron (ppbw) Cash costs (Index = 100) 5.0 -33% 2.5 +3,900% -30% 0 -20% WACKER China Tier 1 China Tier 2 Light and elevated Temperature Induc
Slide 45: POLYSILICON Targeting High Performance Products at Low Costs
POLYSILICON Targeting High Performance Products at Low Costs Strategic Focus and Roadmap Operational Continuous cost reductions at all sites Excellence Sustainable production with low CO2 footprint Serving Focus on semiconductors and high performance solar High-End Markets Cost and quality l
Slide 46: Financials
CREATING TOMORROW’S SOLUTIONS Financials Maintaining Sound Financial Stability Tobias Ohler – CFO Ticker: WCH WACKER Virtual Capital Market Day 2020 www.wacker.com June 16, 2020 45
Slide 47: Strong Cash Generation
Focus on Cash Generation to Support Company Growth Capital Capital Intensity Structure Strong Cash Generation Working Capital Dividend Management Policy WACKER Virtual Capital Market Day 2020 June 16, 2020 46
Slide 48: Leverage Phase Extended – Focus on Growth in Chemicals
Leverage Phase Extended – Focus on Growth in Chemicals Strong Growth Opportunities in Chemicals 312 269 207 136 135 2015 2016 2017 2018 2019 Target 2020 Chemicals Depreciation Chemicals CapEx Significant Flexibility in Spending 2020 Leverage Phase Target 2020 Leverage phase: CapEx < Depreciation
Slide 49: Working Capital Tightly Managed
Working Capital Tightly Managed Strong Focus on Working Capital Productivity DIO** DSO** 52 53 54 60 54 54 57 56 57 53 (Chemicals) (Chemicals) 682 656 682 632 579 1,011 980 705 784 642 2015 2016 2017 2018 2019 Target 2015 2016 2017 2018 2019 Target 2020 2020 Inventories* Trade Receivables* Optimizat
Slide 50: Provisions for Pensions Fluctuate with Interest Rates
Provisions for Pensions Fluctuate with Interest Rates Development of Interest Rates and Provisions for Pensions 2,275 2,108 1,795 1,612 1,618 2015** 2016** 2017 2018 2019 Interest Rate Development Provisions for Pensions (€m) Main Drivers for Pension Provisions Development of Discount Rate Effect on
Slide 51: Financial Leverage Consistently Within Target Range
Financial Leverage Consistently Within Target Range Target Range Defined by Net Financial Debt* and EBITDA 1.0 1.0 0.9 Target 0.7 Range 0.4 2015** 2016 2017 2018 2019 Net Financial Debt / EBITDA Target Range Confirmed Target Range Update 2020 Leverage target range set at 0.5-1.0x EBITDA Target n
Slide 52: Dividend Proposal Underlines Commitment to Shareholders
Dividend Proposal Underlines Commitment to Shareholders Dividend (€) Payout to Shareholders 4.50 2.50 2.00 2.00 1.50 2.50 0.50 2014 2015 2016 2017 2018 2019* Bonus Regular Dividend Dividend Policy Based on Net Income Dividend Policy Update 2020 Target: around 50% payout of net income Dividend pa
Slide 53: Becoming Faster and Leaner – Targeting Savings of €250m
“Shape the Future” Becoming Faster and Leaner – Targeting Savings of €250m Scope WOS vs. Shape the Future Target: Sustainable savings of €250m p.a. WACKER Operating System (WOS): Long-running cost-improvement program Addressing all indirect and non-operative functions focused on operations (di
Slide 54: “Shape the Future” Comprehensive Approach to Sustainable Cost Savings
“Shape the Future” Comprehensive Approach to Sustainable Cost Savings Organization Governance / Culture Reorganization within Business Divisions Lean and agile decision-making and Central Departments Strong cost discipline; gatekeeping Even more customer-centric Streamline global processes
Slide 55: “Shape the Future” Identified Measures Confirm Savings Target
“Shape the Future” Identified Measures Confirm Savings Target Savings From Personnel Cost and Indirect Spend Reduction of >1,000 FTEs globally Reduction of > €100m EUR >1,000 FTE 2020 Target 2020 2021 2022 direct (operators) indirect and non-operative Annual savings (run rate at year end) Developmen
Slide 56: Trading Update: Significant Impact from COVID-19 in Q2, Varying by Segment
Trading Update Significant Impact from COVID-19 in Q2, Varying by Segment SILICONES POLYMERS Significant impact starting in April, May weak, Significant impact starting in April, May weak, stabilization in June June with some recovery Diverse impact by market segment and region Clear upward
Slide 57: Trading Update: Strict Cost Control to Mitigate COVID-19 Impact
Trading Update Strict Cost Control to Mitigate COVID-19 Impact Implemented Cost Reductions Short-time work in affected areas started in April Personnel Costs To be adjusted at short notice following order entry trends in individual segments Tight control implemented Indirect Spend Reduction
Slide 58: Trading Update: Significant Mitigation (>€100m) from Raw Material Prices in 2020
Trading Update Significant Mitigation (>€100m) from Raw Material Prices in 2020 2,600 Si-Metal (€/mt) Ethylene (€/mt) 1,200 2,400 2,200 1,000 2,000 1,800 1,600 800 0 0 2017 2018 2019 2020 2017 2018 2019 2020 Source: CRU, Si-Metal Spot FD Europe Source: ICIS, EN Contract FD NWE Methanol (€/mt) VAM (€
Slide 59: Trading Update: Maintaining Sound Financial Stability
Trading Update Maintaining Sound Financial Stability Strong Focus on Liquidity Management Close monitoring, so far only limited increase in overdues Accounts Receivable Heterogeneous situation depending on region Program for increase in DPOs started in 2019 Accounts Payable Significant exten
Slide 60: Outlook
4 4 CREATING TOMORROW’S SOLUTIONS Outlook Cash, Growth and Sustainability Rudolf Staudigl – CEO Ticker: WCH WACKER Virtual Capital Market Day 2020 59 www.wacker.com June 16, 2020
Slide 61: Outlook: Our Targets and Key Initiatives
4 4 Outlook Our Targets Key Initiatives Pivoting towards more and smaller downstream 1 CapEx – Extend Leverage Phase projects Drive regionalization close to customers and 2 Grow Above Chemical Production continue with mix improvements 3 Focus on Sustainability Continued improvements to CO2 neutralit
Slide 62: WACKER: Introducing a Virtual CMD Series
4 4 WACKER: Introducing a Virtual CMD Series TODAY WACKER Strategy Update Q4 2020 SILICONES & POLYMERS Q2 2021 R&D and BIOSOLUTIONS Q4 2021 Sustainability, ESG & POLYSILICON We are looking forward to welcoming you to our next event! WACKER Virtual Capital Market Day 2020 61 June 16, 2020
Slide 63: WACKER: Issuer, Contact and Additional Information
WACKER: Issuer, Contact and Additional Information Issuer and contact Additional information INVESTOR RELATIONS CONTACTS ISIN Deutsche Börse DE000WCH8881 WCH Joerg Hoffmann, CFA Monika Stadler Tel. +49 89 6279 1633 Tel. +49 89 6279 2769 WKN joerg.hoffmann@wacker.com monika.stadler.IR@wacker.com WCH8