Wacker Chemie Ag · XETR:WCH
Wacker Chemie — Investor Day (October 2017)
93 slides from Wacker Chemie's investor day presentation, Oct 4, 2017
Slide 1: 2017 Capital Market Day – Wacker Chemie AG
CREATING TOMORROW`S SOLUTIONS 2017 Capital Market Day – Wacker Chemie AG Managing for Growth and Cash London, October 4, 2017 Rudolf Staudigl (CEO), Christian Hartel, Auguste Willems, Capital Market Day 2017 Tobias Ohler Investor(CFO) Presentation 0
Slide 2: Welcome to WACKER's 9th Capital Market Day 2017
Welcome to WACKER’s 9th Capital Market Day 2017 Agenda Wednesday, October 4, 2017 Exec. Board Member 13:00 Strategy, POLYSILICON Rudolf Staudigl (CEO) 13:45 POLYMERS Christian Hartel 14:30 Coffee Break 15:00 SILICONES, BIOSOLUTIONS Auguste Willems 15:45 Financial Performance Tobias Ohler (CFO) 16:30
Slide 3: Strategy, POLYSILICON
CREATING TOMORROW`S SOLUTIONS 2017 Capital Market Day – Wacker Chemie AG Managing for Growth and Cash Strategy, POLYSILICON Rudolf Staudigl (CEO) Capital Market Day 2017 Investor Presentation 2
Slide 4: Targets for the Next Years Confirmed – Growth and Cash
Targets for the Next Years Confirmed – Growth and Cash 1 Extend Leverage Phase 2 Continue to Grow Above Chemical Production 3 Focus on Sustainability 4 Sustain Attractive Margins Throughout the Cycle 5 Generate Cash Capital Market Day 2017 Investor Presentation 3
Slide 5: Our Business Portfolio – Shaped for Future Growth
Our Business Portfolio – Shaped for Future Growth WACKER POLYSILICON OTHERS WACKER SILICONES Merchant market leader No. 2 with global footprint Cost and quality leader Leading positions in Enabling industry growth key growth segments Combining cost leadership WACKER: with specialty orien
Slide 6: Global Asset Base in Place – A Foundation for Growth
Global Asset Base in Place – A Foundation for Growth WACKER – Largest Production Sites Nünchritz Ulsan Adrian Nanjing Burghausen Calvert City Zhangjiagang Tennessee Kolkata Capital Market Day 2017 Investor Presentation 5
Slide 7: Capital Market Day 2017 – Topics Covered
Capital Market Day 2017 – Topics Covered 1 Extend Leverage Phase Continue to Grow Above 2 Chemical Production POLYSILICON 3 Focus on Sustainability Sustain Attractive Margins 4 Through Economic Cycle INNOVATION 5 Generate Cash Capital Market Day 2017 Investor Presentation 6
Slide 8: Overall CapEx Significantly Below Depreciation
Overall CapEx Significantly Below Depreciation CapEx vs. Depreciation Expense WACKER Group w/o Siltronic (€m) 804 759 531 473 338 ~ 360 Ø 2008- 2013 2014 2015 2016 2017e 2018e 2019e 2020e 2021e 2012 Create Leverage POLYSILICON OTHER CHEMICALS Depreciation & Amortization Investment focus on CHEMICA
Slide 9: Chemical Growth with a Strong Downstream CapEx-Pipeline
Chemical Growth with a Strong Downstream CapEx-Pipeline CapEx Landscape – Exemplary projects and GFO* dates EUROPE Silicones Burghausen: ‘16 and ‘18 Downstream Projects VAE Burghausen: ‘17 Projects in the range of ~ €5-60m Fermentation Leon: ‘18 Silicon-Metal-Norway: ‘19 Average ROI > 20
Slide 10: WACKER Historically with Solid Growth Driven by Chemicals
WACKER Historically with Solid Growth Driven by Chemicals Sales CHEMICALS and POLYSILICON (€bn) 5.0 +7% 4.0 3.0 2.0 1.0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 POLYSILICON Chemical Divisions +6% CAGR Capital Market Day 2017 Investor Presentation 9
Slide 11: Continue to Grow Above Chemical Production
In Line with Goal Continue to Grow Above Chemical Production CAGR 2011-2016 Forecast CAGR 2016-2021 GDP < 3% GDP ~ 3% Global Global Chemical < 4% Chemical < 4% Production* Production* WACKER WACKER Chemical > 4% Chemical Divisions Divisions *without Pharma; Sources: IMF, CEFIC, VCI, American Chemist
Slide 12: WACKER POLYSILICON – Generate Cash Flow from Strong Assets
WACKER POLYSILICON Generate Cash Flow from Strong Assets Focus on cost Leveraging our and quality assets Capital Market Day 2017 Investor Presentation 11
Slide 13: Competitive PV Power Rates in Sunny Regions Fuel Growth
Competitive PV Power Rates in Sunny Regions Fuel Growth Power Rates (€/kWh) 0.18 0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00 USA Germany India UAE China Wind Wind NPP* Coal Gas onshore offshore Solar (Tender Results and PPAs) Alternatives and Conventionals (Range 2016) *Nuclear Power Plant Hinkley
Slide 14: PV Could Cover at Least 20% of Global Electricity Demand
PV Could Cover at Least 20% of Global Electricity Demand PV Share of Electricity Demand Growth Drivers Competitive costs and further potential 20% All relevant market segments addressable 15% Abundant raw material supply 10% (e.g. silicon) Easy to implement 5% Declining costs of electricit
Slide 15: Mono-Based PV is Growing Faster than Multi-Based PV
Mono-Based PV is Growing Faster than Multi-Based PV Estimated PV End Market Growth Estimated Development of Solar (GW) Wafer Production Capacities (GW) CAGR CAGR Mono Multi ~ 10% > 20% 78 27 < 10% 69 2016 2021e 2016 2021e ~ 2% higher absolute efficiency for mono cells drives growth Source: WACKER
Slide 16: WACKER is the Long Time Leader in Quality and Technology
WACKER is the Long Time Leader in Quality and Technology Technical Benchmarks for Most Important Impurities Dopants Carbon Iron WACKER POLYSILICON WACKER Technology: industry leader Tier 1 Tier 1 Quality: industry leader Tier 1 Fast learning curve Tier 2 Strongest assets Tier 2 Tier 2 Reli
Slide 17: WACKER Quality Reflected in Overproportional Mono Share
WACKER Quality Reflected in Overproportional Mono Share Polysilicon Market Structure by Application Segment Semiconductor Solar Market Split (2016) Mono 20% 20 % 25% Market 75% Portfolio Multi 2016 ~ €6bn 80 % WACKER Split (2016) 80% Multi 45% 55% Mono Source: WACKER Estimate; Semiconductor: Gartner
Slide 18: Continued Cost Leadership in High Quality Polysilicon
Continued Cost Leadership in High Quality Polysilicon Cash Cost (Index = 100) Aggressive Cost Reduction Targets Continuous cost reduction at all sites -33% 100 Reducing energy consumption Optimizing raw materials mix and > 30% resource efficiency 67 Improving labor productivity Higher volu
Slide 19: WACKER – A Long Term Market Leader in a Dynamic Landscape
WACKER – A Long Term Market Leader in a Dynamic Landscape Market Share in % 2006 2011 2016 17 16 18 41 40 8 50 kt 220 kt 16 375 kt 55 28 15 14 13 19 WACKER GCL Hemlock Others OCI Source: Industry announcements; WACKER Estimate Capital Market Day 2017 Investor Presentation 18
Slide 20: WACKER POLYSILICON – Generate Cash Flow from Strong Assets
WACKER POLYSILICON Generate Cash Flow from Strong Assets Focus on cost Leveraging our and quality assets Capital Market Day 2017 Investor Presentation 19
Slide 21: Innovation is Key to WACKER's Business Strategy
INNOVATION Innovation is Key to WACKER’s Business Strategy Key Facts Our Systematic Approach 3.2% of sales on R&D (2016) WACKER holds around 4,100 active patents and about New New New 1,800 pending patent applications Solutions Business Fields Annually, the Group has applied for Market 90-100
Slide 22: Worldwide Capabilities for Innovation – Close to our Customers
INNOVATION Worldwide Capabilities for Innovation – Close to our Customers New pilot New R&D reactor for VAE center for dispersions Silicones (USA) (China) Moscow Nünchritz Tsukuba Ann Arbor Allentown Munich Beijing Adrian Burghausen Kolkata Seoul / Jincheon Dalton Dubai Mexico Shanghai / Zhangjiagan
Slide 23: WACKER: Unique Silicon Know How for Future Growth Fields
INNOVATION WACKER: Unique Silicon Know How for Future Growth Fields LIB* Cell Market ($bn) Silicon-Based Active Materials for LIB Anodes Anode materials account for ~ 7% of cell 36 costs ~ 7% Products for diverse fields of applications in advanced development status 18 Tests at leading cell ma
Slide 24: POLYMERS
CREATING TOMORROW`S SOLUTIONS 2017 Capital Market Day – Wacker Chemie AG Managing for Growth and Cash POLYMERS Christian Hartel, Member of the Executive Board Capital Market Day 2017 Investor Presentation 23
Slide 25: Capital Market Day 2017 – Topics Covered
Capital Market Day 2017 – Topics Covered 1 Extend Leverage Phase Customer Focus Continue to Grow Above 2 Chemical Production 3 Focus on Sustainability Operational Excellence Sustain Attractive Margins 4 Through Economic Cycle 5 Generate Cash POLYMERS Capital Market Day 2017 Investor Presentation 24
Slide 26: Close to our Customers with Strong Technical Support
CUSTOMER FOCUS Close to our Customers with Strong Technical Support Our commitment 22 Technical Centers WACKER products and solutions are our customer’s first choice Moscow Adrian Seoul Allentown Burghausen Beijing Value proposition Dalton Dubai Shanghai Mexico Bogota Mumbai Singapore We offer c
Slide 27: WACKER ACADEMY – A Global Network for our Customers
CUSTOMER FOCUS WACKER ACADEMY – A Global Network for our Customers WACKER ACADEMY Customer & Distributor teach-in Mix between theory and practice Meeting room plus lab Direct customer interaction 15 WACKER ACADEMIES 8,500 850 Participants Events worldwide Globally Capital Market Day 2017 Inv
Slide 28: Strong Focus on our Customers' Needs – Around the Globe
CUSTOMER FOCUS Strong Focus on our Customers’ Needs – Around the Globe Supplier Fresenius Medical Care award from and Wacker Biotech Mölnlycke produce antibody fragment Health Care with FOLDTEC® New R&D center for Silicones Opening of International Training Center for Silicones in Japan Unilever sus
Slide 29: WACKER Operating System (WOS) with Focus on Productivity
OPERATIONAL EXCELLENCE WACKER Operating System (WOS) with Focus on Productivity Continuous Improvements WACKER Operating System Ambitious Goals 100 production facilities within WACKER globally Reduction of specific operating costs Projects Clearly defined responsibilities and projects 900 employ
Slide 30: WOS with Proven Track Record and Ambitious Goals
OPERATIONAL EXCELLENCE WOS with Proven Track Record and Ambitious Goals Impact WACKER Operating System Cost Roadmap Example: (€m) Polysilicon Cash Cost (Index = 100) 180 170 135 125 -33% 100 > 30% 67 2013 2014 2015 2016 2017e 2012* 2017 2021e *without Tennessee Capital Market Day 2017 Investor Prese
Slide 31: Evolution of WACKER Operating System
OPERATIONAL EXCELLENCE Evolution of WACKER Operating System WOS 1.0 WOS 2.0 WOS 3.0 WOS 4.0 Germany Global WOS Academy Cost Roadmaps Labor Six Sigma Specific Targets Digitalization Productivity A systematic approach, continuously extending the scope of activities Capital Market Day
Slide 32: Process Development with Essential Contribution
OPERATIONAL EXCELLENCE Process Development with Essential Contribution Pilot plant Asset optimization Develop scale up Production capacities rules and improve technologies Optimization & Debottlenecking + 30-50% CFD* Optimized design of processes and equipment Safety Limit APC* Operati ng Margin Ins
Slide 33: WACKER POLYMERS – Growth with Customer Focus, Substitution and Innovation Push
WACKER POLYMERS Growth with Customer Focus, Substitution and Innovation Push Replacement transformation of non-VAE in construction technologies towards higher based on value building offering standards Capital Market Day 2017 Investor Presentation 32
Slide 34: WACKER is the Market Leader in VAE Dispersions and Powders
WACKER is the Market Leader in VAE Dispersions and Powders Global Synthetic Polymer Latex Global VAE Market 2016 Market 2016 Others WACKER Others VAE #1 VAc- in VAE copo Dairen Dispersions SBL PVAc Celanese > 20,000 kt Others WACKER #1 in VAE SA Acrylics Powders Dairen AkzoNobel SA = Styrene Acrylic
Slide 35: VAE – Tailor Made Products Copolymerized of VAM and Ethylene
VAE – Tailor Made Products Copolymerized of VAM and Ethylene Vinyl acetate Ethylene Rigid Flexible Properties due to Properties due to Vinyl Acetate units Ethylene units Polar Nonpolar, hydrophobic Hard feel Soft feel Rigid High flexibility Strength High chemical resistance Capital M
Slide 36: VAE Outgrew Other Polymers in Latex Market in the Last Years
VAE Outgrew Other Polymers in Latex Market in the Last Years Synthetic Polymer Latex Market* Volume Growth 2011-2016 CAGR in % 10 8 6 Chemical 4 Production: < 4% GDP: < 3% 2 0 VAE PVAc VAc-copo SA Pure Acrylics SBL PVAc = Polyvinyl Acetate, VAc-copo = Vinyl Acetate Co-Polymers, SA = Styrene Acrylics
Slide 37: Core Applications Outperforming Each Market Segment
Core Applications Outperforming Each Market Segment Market Structure by Application Adhesives Construction Coatings & Paints VAE VAE Powder Dispersions Nonwovens & Textiles Ceramic Tile Adhesive Thermal Insulation Flooring Carpet Wall plasters Others Source: WACKER Estimate Capital Market Da
Slide 38: Success Story Based on Combination of Dispersions and Powders
Success Story Based on Combination of Dispersions and Powders POLYMERS with “Tandem Approach”- #1 in Dispersions and Powders Market World Class Setup Market Leader 1,000,000 tons of VAE globally VAE Dispersions Market #1 VAE Powders Market #1 Tandem approach and market position enable quick loadin
Slide 39: VAE Powders with Many Advantages
VAE Powders with Many Advantages Ceramic Tile Adhesives Thermal Insulation High Bonding Strength Enhance the adhesive and reinforcing mortars Allows longer open time Ensures flexibility Fast tile setting Optimal shelf life and durability Flooring Wall Plasters Adhesion to all substrate
Slide 40: Growth in VAE Powders in Mature and Emerging Markets
Growth in VAE Powders in Mature and Emerging Markets Enabler in Mature Markets Enabler in Emerging Regions Global Ceramic Tiles Market Others Residential Renovation Commercial New Built ~ 50% Thick bed CTA* Thin bed CTA Material Savings Residential New Built Labor Productivity Mature markets trend
Slide 41: VAE Outperforms Alternative Polymer Latex Systems
VAE Outperforms Alternative Polymer Latex Systems Adhesives Paints Broad adhesion No plasticizers needed Bonding to a wide Formulation of low odor range of different paints substrates Excellent scrub Fast setting and wet resistance & good tack hiding characteristics Nonwoven Carpet Sof
Slide 42: Continuously Expanding Footprint – Close to our Customers
Continuously Expanding Footprint – Close to our Customers Latest Capacity Expansions 2015 2015 2017 Polymer powder Special mono- VAE dispersions + 50 kt mers + 3.8 kt + 60 kt Germany Germany Germany 2015 VAE dispersions + 85 kt USA Cologne Burghausen Calvert City Nanjing Ulsan 2013 2013 2014 2019 20
Slide 43: WACKER POLYMERS – Growth with Customer Focus, Substitution and Innovation Push
WACKER POLYMERS Growth with Customer Focus, Substitution and Innovation Push Replacement transformation of non-VAE in construction technologies towards higher based on value building offering standards Capital Market Day 2017 Investor Presentation 42
Slide 44: SILICONES, BIOSOLUTIONS
CREATING TOMORROW`S SOLUTIONS 2017 Capital Market Day – Wacker Chemie AG Managing for Growth and Cash SILICONES, BIOSOLUTIONS Auguste Willems, Member of the Executive Board Capital Market Day 2017 Investor Presentation 43
Slide 45: Capital Market Day 2017 – Topics Covered
Capital Market Day 2017 – Topics Covered 1 Extend Leverage Phase SILICONES Continue to Grow Above 2 Chemical Production 3 Focus on Sustainability BIOSOLUTIONS Sustain Attractive Margins 4 Through Economic Cycle 5 Generate Cash SUSTAINABILITY Capital Market Day 2017 Investor Presentation 44
Slide 46: WACKER SILICONES – Key Trends and World Class Efficiency Drive Growth
WACKER SILICONES Key Trends and World Class Efficiency Drive Growth Full portfolio Growth with provider with focus on benchmark specialties costs Capital Market Day 2017 Investor Presentation 45
Slide 47: Diversified Across Industries, Customers and Applications
Diversified Across Industries, Customers and Applications Market Structure by Application Market Volume/Shares (€bn, %) Health Care +5% 16 Automotive Advanced Energy & 5% 4% +5% Processing 12 Electronics 9% & Perform. 33% Additives 9 35% Mftg. Market 10% Portfolio 36% Machinery 16% 2016 ~ €12bn 17%
Slide 48: Global Population Will Catch Up with Their Silicone Consumption
Global Population Will Catch Up with Their Silicone Consumption Silicone Consumption (kg/capita) 2.5 Mature Markets high silicone consumption Taiwan France Germany United States South Korea Italy UK Canada 1.0 Spain Japan Other W. Europe Brazil Mexico Emerging Markets China medium silicone Other Cen
Slide 49: Key Trends Drive SILICONES' Growth
Key Trends Drive SILICONES’ Growth E-Mobility and Renewable Energy Communication Urbanization Standard of Living Capital Market Day 2017 Investor Presentation 48
Slide 50: From Silicon Metal to Multiple Markets
From Silicon Metal to Multiple Markets Quartz + Quartz + Coal + Hydro Power Coal 2 Silicon Metal Methanol Raw Materials by-product Siloxane Fumed Silica usage e.g. 2 Major Product Fluids & Groups Elastomers Emulsions „Solid“ „Liquid“ > 3,000 products and > 15,000 direct and indirect customers Capi
Slide 51: WACKER's Strategy: Full Portfolio Provider with Global Footprint
WACKER’s Strategy: Full Portfolio Provider with Global Footprint Business Models WACKER SILICONES ‚Standards only‘ ‚in between‘ ‚Full portfolio‘ ‚Focus Specialties‘ ‚Specialties only‘ Backward integrated Cost leadership Focus on innovation, customers and technical service Standards Relying o
Slide 52: Focus on Less Capital Intensive Specialties
Focus on Less Capital Intensive Specialties Standards Specialties Value Creation Elastomers Siloxane Intermediates Fluids & Emulsions High Diversification of products & Diversification of products applications & applications CapEx Intensity Low CapEx Intensity Flexible production units close to mark
Slide 53: Hightech Segments and Specialty Focus Follow Key Trends
Hightech Segments and Specialty Focus Follow Key Trends „Liquid“ „Solid“ Comfort E-Mobility Hair Care Cosmetics Battery E-Motor Urbani- Aging zation Population Paints Concrete Medical Care Wound Care Renewable Communi- Energy cation Encapsulation Solar power Electronics Sensors Capital Market Day 20
Slide 54: Specialties Meet Increasing Performance Requirements
Specialties Meet Increasing Performance Requirements Automotive Wound Care Hair Care Automated processes Advanced wound care Premium touch & feel and scar treatment Encapsulating Durability of effects extremely sensitive Meeting highest medical Ease of formulation electronic devices st
Slide 55: Operational Excellence is Key
Operational Excellence is Key Siloxane Fumed Silica Index 2012 = 100% Index 2012 = 100% Output Specific OPEX Output Specific OPEX +5% +4% -5% -3% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Capital Market Day 2017 Investor Presentation 54
Slide 56: WACKER SILICONES – Key Trends and World Class Efficiency Drive Growth
WACKER SILICONES Key Trends and World Class Efficiency Drive Growth Full portfolio Growth with provider with focus on benchmark specialties costs Capital Market Day 2017 Investor Presentation 55
Slide 57: WACKER BIOSOLUTIONS – Well Positioned for Further Growth
WACKER BIOSOLUTIONS Well Positioned for Further Growth Focus on Leveraging our development of know-how, biotechnology experience and businesses assets Capital Market Day 2017 Investor Presentation 56
Slide 58: Focus on Innovation and Growth
Focus on Innovation and Growth Microbials Metabolic Engineering Proprietary technology with key benefits Market leader in the cysteine food market in productivity and purification Compliant with all major food and Largest dedicated microbial CMO* pharmaceutical standards in Europe Vegetari
Slide 59: Time and Cost-Efficient Manufacturing of Biopharmaceuticals
Time and Cost-Efficient Manufacturing of Biopharmaceuticals Simplified ESETEC Process ® (E.coli Superior Yields secretion technology) Lower Cost of Goods Fermentation Harvest Homogenization up to 5x lower IB preparation Refolding Filtration Chromatography I Chromatography II Chromatography III Conve
Slide 60: We Established a Fast Growing Biopharmaceuticals Business
We Established a Fast Growing Biopharmaceuticals Business Established by R&D and Acquisitions Business Model Drug Drug Substance Formu- Marketing Development Manu- lation & Sales facturing 2005: Prothera 2014: Scil Proteins Outsourcing GmbH Jena Production Halle Double Digit Sales Growth Continu
Slide 61: Continuous Investments Ensure Further Growth
Continuous Investments Ensure Further Growth Biopharmaceuticals 2014: Acquisition of Scil Proteins Production in Halle Gumbase Biotransformation 2015: New food-grade 2016 onwards: PVAc production site in Investments and Nanjing debottlenecking of CD- plant Fermentation 2016: Acquisition of fermentat
Slide 62: WACKER BIOSOLUTIONS – Well Positioned for Further Growth
WACKER BIOSOLUTIONS Well Positioned for Further Growth Focus on Leveraging our development of know-how, biotechnology experience and businesses assets Capital Market Day 2017 Investor Presentation 61
Slide 63: Comprehensive Sustainability Strategy
SUSTAINABILITY Comprehensive Sustainability Strategy Innovation Specialties Customer Focus Sustainable sourcing Product stewardship Safe and stable operations Adding value to our customers Experienced and reliable Enable our customers to have a more sustainable product Integrated cycle
Slide 64: Integrated Production Reduces CO2-Footprint by 15-35%
SUSTAINABILITY Integrated Production Reduces CO2-Footprint by 15-35% 4-7% Source: WACKER Estimate Capital Market Day 2017 Investor Presentation 63
Slide 65: WACKER Generates Value for Customers and Society
SUSTAINABILITY WACKER Generates Value for Customers and Society Polysilicon for Photovoltaics (PV) 1:20 PV prevents coal-based electricity generation CO2-Emissions Avoided CO2- from production emissions: electricity and raw materials generation through PV Source: WACKER Estimate Capital Market Day
Slide 66: WACKER Products Reduce Material Intensity and CO2 Emissions
SUSTAINABILITY WACKER Products Reduce Material Intensity and CO2 Emissions DPP* for Thin-Bed CTA-Applications 1:6 Thin-bed ceramic tile adhesives (CTA) application reduces cement usage versus conventional thick-bed CO2-Emissions Avoided CO2- from production emissions: CTA- and raw materials applic
Slide 67: WACKER Products Enable Sustainable Applications
SUSTAINABILITY WACKER Products Enable Sustainable Applications Antifoam Agents for Hand Wash 2:1 Antifoam agents reduce water consumption in handwashed laundry, saving 20 liters of water per rinse Laundry rinsed SILFOAM® reduces with water water usage by 50% Source: WACKER Estimate Capital Market
Slide 68: WACKER Products Enable Resource Saving Processes
SUSTAINABILITY WACKER Products Enable Resource Saving Processes Sustainable Cysteine Production 27:1 WACKER’s process consumes less kg of hydrochloric acid (HCl) compared to the traditional process (cysteine derived from feathers or hair) Traditional process WACKER process based on HCl needs less
Slide 69: Financial Performance
CREATING TOMORROW`S SOLUTIONS 2017 Capital Market Day – Wacker Chemie AG Managing for Growth and Cash Financial Performance Tobias Ohler (CFO) Capital Market Day 2017 Investor Presentation 68
Slide 70: Capital Market Day 2017 – Topics Covered
Capital Market Day 2017 – Topics Covered 1 Extend Leverage Phase Selected Financial Drivers Continue to Grow Above 2 Chemical Production Margin Development 3 Focus on Sustainability Sustain Attractive Margins Capital Structure 4 Through Economic Cycle 5 Generate Cash Dividend Policy Capital Market D
Slide 71: Raw Material Prices 2017 Substantially Above Previous Year
Raw Material Prices 2017 Substantially Above Previous Year Si-Metal (€/MT) VAM (€/MT) 2,000 1,200 2017 2017 1,900 1,100 1,800 2016 1,000 1,700 1,600 900 2016 100 0 Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Source: CRU, Si-Metal Spot FD Europe Source: ICIS, VAM Contract FD NWE Methanol (€/MT) E
Slide 72: Regional Dynamics Impact Raw Material Pricing
Regional Dynamics Impact Raw Material Pricing Market Characteristics Share of Total Raw Material Cost* Global market, restricted by duties in EU and US Si-Metal Regional price differences caused by duties, Chinese ~ 20% VAT and transportation cost Global market Methanol Regional price differ
Slide 73: Value Add as the Dominant Pricing Model
Value Add as the Dominant Pricing Model Pricing Models – Chemical Divisions Formula Commodity Value Add POLYMERS SILICONES SILICONES POLYMERS Price Regularly/Ongoing Regularly following Adjustment of Adjustments supply and demand annual contracts Product High volume products High raw material conten
Slide 74: Proven Track Record – 2017 Again Significant Cost Savings
Proven Track Record – 2017 Again Significant Cost Savings Impact WACKER Operating System Cost Saving Levers (€m) 180 Savings from cost roadmaps and 170 efficiency programs (WACKER Operating System – WOS) 135 125 Effects from growth in sales volumes included Cost savings required to offset gene
Slide 75: USD Sensitivity Less Than €5m EBITDA per Cent Before Hedging
USD Sensitivity Less Than €5m EBITDA per Cent Before Hedging US-$/€ Development FX Sensitivity 1.25 Impact of 1 cent change in annual average exchange rate US-$/€: 1.20 < €15m in Sales 1.15 < €5m in EBITDA (unhedged)* Ongoing growth of sales 1.10 denominated in USD 1.05 1.00 Jan Feb Mrz Apr
Slide 76: WACKER SILICONES EBITDA Margin 2017 Substantially Above Target
WACKER SILICONES EBITDA Margin 2017 Substantially Above Target Sales (€m), EBITDA Margin (%) Margin Development 2,500 Robust growth, strong demand Globally tight supplies 2,000 Good product mix and cost performance 1,500 2017e: Sales with high-single-digit growth 1,000 EBITDA margin abov
Slide 77: WACKER POLYMERS Margin Above Target Despite Headwinds from Raw Materials
WACKER POLYMERS Margin Above Target Despite Headwinds from Raw Materials Sales (€m), EBITDA Margin (%) Margin Development Strong volumes 1,500 Significant headwinds from raw material inflation, partly offset by price increases 1,000 2017e:EBITDA-Marge 2010-2015 Sales with mid-single-digit %
Slide 78: WACKER BIOSOLUTIONS Margin Slightly Below Target due to León Integration
WACKER BIOSOLUTIONS Margin Slightly Below Target due to León Integration Sales (€m), EBITDA Margin (%) Margin Development H1/2017 with solid performance 250 H2/2017 with integration cost from 200 acquisition in Spain EBITDA-Marge 2010-2015 Umsatz CAGR (10-16) 2017e: 150 Low-single-digit % sa
Slide 79: WACKER POLYSILICON Ongoing Cost Reduction Supports Margin
WACKER POLYSILICON Ongoing Cost Reduction Supports Margin Sales (€m), EBITDA Margin* (%) Margin Development Global PV market growth continues, demand increase for high performance 1,100 solar wafers (mono applications) ASP below previous year 900 2017e: Sales at prior-year level 35.6% 33.3%
Slide 80: Strong Margins Confirm '2016 CMD' Target Setting
Strong Margins Confirm ‘2016 CMD’ Target Setting Chemicals – EBITDA Margin (%) POLYSILICON – EBITDA Margin (%) 36%* 33%* Target 29%* 30% 19.4% Target 16.1% 13.0% 16% 2014 2015 2016 2017e 2014 2015 2016 2017e Internal drivers Internal drivers Product mix – Specialties Cost reduction (Producti
Slide 81: Target: Generate Cash
Target: Generate Cash Capital Capital Intensity Structure Strong Cash Generation Working Capital Dividend Management Policy Capital Market Day 2017 Investor Presentation 80
Slide 82: CapEx 2017 at ~ €360m – Substantially Below Depreciation
CapEx 2017 at ~ €360m – Substantially Below Depreciation CapEx vs. Depreciation* (€m) Leverage Phase 759 Focus on Downstream Chemicals Major Projects 531 473 Fumed Silica Tennessee ~ 360 Si-metal Holla 338 2013 2014 2015 2016 2017e 2021e Leverage POLYSILICON CHEMICALS Other Depreciation & Am
Slide 83: M&A Activities Becoming More Frequent
M&A Activities Becoming More Frequent M&A Transactions 2010-2017 M&A Transaction Criteria 2016 Antibióticos de León (Spain), Strategic fit Fermentation plant New Technology 2014 SCIL Proteins Production Diversify product portfolio (Germany), Biopharmaceuticals Strengthen Market position 2010
Slide 84: H1/17 Inventory Build Poly – Strict Working Capital Management
H1/17 Inventory Build Poly – Strict Working Capital Management Inventories* (€m) Trade Receivables* (€m) DIO** 39 64 66 52 54 56 56 60 DSO** 43 49 53 50 52 50 54 53 800 800 600 600 400 400 200 200 0 0 2010 2011 2012 2013 2014 2015 2016 H1 2010 2011 2012 2013 2014 2015 2016 H1 2017 2017 *excl. Siltro
Slide 85: Substantially Positive Net Cash Flow in 2017
Substantially Positive Net Cash Flow in 2017 Gross-Cash Flow* (€m) Development 2017 incl. excl. Siltronic Siltronic Gross Cash Flow 2017 with some impact 838 from inventories 781 665 713 CapEx level in line with ‘Leverage’ phase Gross 420 Cash Net cash flow expected to be clearly 497 Flow posi
Slide 86: Deconsolidation and Operational Performance Reduce Leverage
Deconsolidation and Operational Performance Reduce Leverage Development of Total Leverage* (€m) excl. Siltronic incl. Siltronic 3,528 3,371 3,139 2,984 2,719 1,758 2,403 1,236 1,612 2,108 1,079 1,634 1,244 1,528 527 689 475 1,048 847 453 271 203 1,032 1,203 1,081 1,074 993 701 792 671 -264 -96 2010
Slide 87: High Flexibility – €1.5bn in Liquidity and Undrawn Facilities
High Flexibility – €1.5bn in Liquidity and Undrawn Facilities Measures in 2016 and 2017 Status as of June 30, 2017 2016: Liquidity: €691m Bilateral US loans 5x $50m = $250m Drawn Facilities: €1,362m EIB (Europäische Investitionsbank) loan €200m, based on R&D projects Undrawn Facilities:
Slide 88: Target Net Debt Further Specified: Range 0.5 - 1x EBITDA
Target Net Debt Further Specified: Range 0.5 - 1x EBITDA Net Financial Debt* / EBITDA Leverage Target Range excl. Siltronic incl. Siltronic Leverage target range set at 1.2 0.5 - 1x EBITDA 1.0 1.0 Net Financial Debt H1 2017 at €671m 0.9 0.9 Target Based on EBITDA consensus of €934m 0.7** Range
Slide 89: Dividend Target: 50% Net Income, Temporary Deviations Possible
Dividend Target: 50% Net Income, Temporary Deviations Possible Dividend per share* (€) Dividend policy Dividend target: 3.2 50% payout of net income from continuing operations Temporary deviations possible, 2.2 2.0 2.0 in particular, to reflect new target range of 0.5 - 1x EBITDA 1.5 1.2 Bound
Slide 90: Profit and Loss Statement
PROFIT AND LOSS STATEMENT Declining Depreciation, Strict Cost Control and Lower Tax Rate H1 2017 (€m) Targeted Development until 2021: €m H1 2017 Sales 2,437 Gross profit margin: Cost of goods sold -1,985 Gross profit from sales 452 Influenced by product mix, F/X and Gross profit margin (in %) 1
Slide 91: Balance Sheet – Maintaining Financial Stability and Efficient Capital Structure
BALANCE SHEET Maintaining Financial Stability and Efficient Capital Structure Target Structure Drivers Drivers Equity ratio partly fluctuating with provisions for pensions Non-current Equity (historical level ~ 40%) assets Dividend policy: 50% of Net Income CapEx below depreciation Financial d
Slide 92: Update FY 2017 – Confirmed Outlook in EBITDA
GUIDANCE Update FY 2017 – Confirmed Outlook in EBITDA 2016* Outlook 2017 Sales (€m) 4,634 Mid-single-digit % increase EBITDA excl. special income (€m) 935 Between 900 and 935 EBITDA margin (%) 20.6 Somewhat lower than last year Net cash flow (€m) 361 Substantially lower than last year CapEx (€m) 338
Slide 93: 2017 Capital Market Day – Wacker Chemie AG
CREATING TOMORROW`S SOLUTIONS 2017 Capital Market Day – Wacker Chemie AG Managing for Growth and Cash London, October 4, 2017 Rudolf Staudigl (CEO), Christian Hartel, Auguste Willems, Capital Market Day 2017 Tobias Ohler Investor(CFO) Presentation 92