Wacker Chemie Ag · XETR:WCH
Wacker Chemie — Investor Day (September 2024)
59 slides from Wacker Chemie's investor day presentation, Sep 19, 2024
Slide 1: Capital Markets Day 2024 CEO & CFO Presentation
19th of September 2024 Burghausen CAPITAL MARKETS DAY 2024 CEO & CFO PRESENTATION Wacker Chemie AG Dr. Christian Hartel, CEO Dr. Tobias Ohler, CFO Bilanzpressekonferenz 2020 16. März 2021 0
Slide 2: Welcome
WELCOME Bilanzpressekonferenz 2020 16. März 2021 1
Slide 3: Key messages for today
KEY MESSAGES FOR TODAY We confirm our 2030 targets Our strategy continues to evolve & adapt: Clear focus on margins & profitable growth Our industry growth trends are firmly intact We invest in specialty growth & efficiency We maintain strong, resilient financials Bilanzpressekonferenz 2020 16. März
Slide 4: Lower chemical production in Europe & volumes shifted to China since CMD 2022
LOWER CHEMICAL PRODUCTION IN EUROPE & VOLUMES SHIFTED TO CHINA SINCE OUR CMD IN 2022 Geopolitical Chemicals Recession DEVELOPMENT OF Tensions CHEMICAL PRODUCTION 1.1 1.0 0.9 Supply Chain Disruptions Biotech Funding Downturn 2021 2022 2023 1H24 North America Europe Asia Source: ACC CPRI (American Che
Slide 5: Despite weak market environment, we executed along our strategy – 3 areas
DESPITE WEAK MARKET ENVIRONMENT, WE EXECUTED ALONG OUR STRATEGY – WE FOCUS ON 3 AREAS We Invested We Improved We Improved In Growth & Our Sustainability Our Resilience Innovation Profile Bilanzpressekonferenz 2020 16. März 2021 4
Slide 6: We invested in growth & innovation
WE INVESTED IN GROWTH & INNOVATION Bilanzpressekonferenz 2020 16. März 2021 5
Slide 7: Reviewing our 2022 modular investment strategy
WE INVESTED IN GROWTH & INNOVATION REVIEWING OUR 2022 MODULAR INVESTMENT STRATEGY We adjusted & adapted our portfolio of growth projects Stopped Completed Postponed €1.7bn CapEx (2022-today) Ongoing Bilanzpressekonferenz 2020 16. März 2021 6
Slide 8: Silicones: strengthen our leading global specialties business
WE INVESTED IN GROWTH & INNOVATION SILICONES: STRENGTHEN OUR LEADING GLOBAL SPECIALTIES BUSINESS Hybrid Silicones, Innovation Center, SICO Performance Nünchritz Ann Arbor Material, Jining New silane modified polymers site High-margin innovations Expanding OFS1 capacity to for a wide range of special
Slide 9: Polymers: strengthen #1 global position
WE INVESTED IN GROWTH & INNOVATION POLYMERS: STRENGTHEN #1 GLOBAL POSITION VAE & DPP1, VAE, PVOH2, Nanjing Calvert City Burghausen Drive transformation of local Drive substitution in construction Increase backward integration construction markets & binder markets in DPP & improve sustainability 1) V
Slide 10: Biosolutions: setting the foundation for future growth
WE INVESTED IN GROWTH & INNOVATION BIOSOLUTIONS: SETTING THE FOUNDATION FOR FUTURE GROWTH Biologics, mRNA, Precision Amsterdam Halle Fermentation, León Capacities with broad technology Large-scale CDMO capacities Large-scale capacities for platform to meet growing CDMO1 (mRNA to formulation) BioIngr
Slide 11: Polysilicon: extend #1 global leadership position in semiconductor
WE INVESTED IN GROWTH & INNOVATION POLYSILICON: EXTEND #1 GLOBAL LEADERSHIP POSITION IN SEMICONDUCTOR Semiconductor, Etching Line Next, Charleston Burghausen Develop innovative production Ensure security of supply by increasing capabilities & processes for future applications capacities for semicond
Slide 12: We improved our sustainability profile
WE IMPROVED OUR SUSTAINABILITY PROFILE Bilanzpressekonferenz 2020 16. März 2021 11
Slide 13: Clear progress towards 2030 targets and net zero by 2045
WE IMPROVED OUR SUSTAINABILITY PROFILE CLEAR PROGRESS TOWARDS 2030 TARGETS AND NET ZERO BY 2045 +13% -24% 100% 100% +39% 100% 94% 83% 76% 79% 50% 57% 2020 2023 2030 2020 2023 2030 2020 2023 2030 100% Sustainable Cut CO2 Emissions1 100% Sustainable Products by 50% Supplier Improved product performanc
Slide 14: ESG agencies rank Wacker with top ratings
WE IMPROVED OUR SUSTAINABILITY PROFILE ESG AGENCIES RANK WACKER WITH TOP RATINGS Best practice management of climate related risks & opportunities CDP: ISS ESG: MSCI: Ecovadis: Sustainalytics: A List 2023 Prime, Rating B- BBB rating Top 4% of all “Management of Climate Change, companies rated materi
Slide 15: We improved our resilience
WE IMPROVED OUR RESILIENCE Bilanzpressekonferenz 2020 16. März 2021 14
Slide 16: Sales risk: active price management to capture value of specialty products
WE IMPROVED OUR RESILIENCE SALES RISK: ACTIVE PRICE MANAGEMENT TO CAPTURE VALUE OF SPECIALTY PRODUCTS US$/kg Specialties US$/kg Outside China Solar Solar China Standards 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Focus on specialty silicones Focus on semi & outside China solar SILICONES EBITD
Slide 17: Supply risk: established hedging protects from energy price volatility
WE IMPROVED OUR RESILIENCE SUPPLY RISK: ESTABLISHED HEDGING PROTECTS FROM ENERGY PRICE VOLATILITY 830 650 450 360 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024e Spot electricity prices & hedges Total energy bill trending lower Hedges provide protection, but delay exposure 2024e power bill below
Slide 18: Cost position: strong focus on continuous improvements to drive productivity
WE IMPROVED OUR RESILIENCE COST POSITION: STRONG FOCUS ON CONTINUOUS IMPROVEMENTS TO DRIVE PRODUCTIVITY Annual savings €m ~ 250 2020 2021 2022 2023 “Shape the Future” program completed Wacker Operating System (WOS) Strengthened customer focus & lean cost structure Continuous productivity management
Slide 19: Maintained solid financials in adverse market conditions
WE IMPROVED OUR RESILIENCE MAINTAINED SOLID FINANCIALS IN ADVERSE MARKET CONDITIONS CapEx & acquisitions funded High level of shareholder by gross cash flow 2022-1H24 equity at €4.6bn & low debt 2.5 6 6 52% 2.0 5 5 4 4 1.5 38% 3 3 1.0 20% 2 2 18% 0.5 1 1 €bn €bn €bn Gross cash flow (+) Cash flow fro
Slide 20: Despite volatile markets, we stay the course to our 2030 targets
DESPITE VOLATILE MARKETS, WE STAY THE COURSE TO OUR 2030 TARGETS Bilanzpressekonferenz 2020 16. März 2021 19
Slide 21: Refining our strategy to adapt to changing market conditions
WE CONFIRM OUR 2030 TARGETS REFINING OUR STRATEGY TO ADAPT TO CHANGING MARKET CONDITIONS Group 2030 Targets CHEMICALS Grow high-margin specialties Sales: > €10bn EBITDA margin: > 20% ROCE: > 2x cost of capital Focus on margin/mix over volume POLYSILICON ROCE: 2x cost of capital Expand semi position
Slide 22: Path to €10bn in sales in 2030
PATH TO €10BN IN SALES IN 2030: KEY DRIVERS ALONG 4 FOCUS AREAS Megatrends Portfolio management Pull from: Sustainability, Smart Construction, Focus on high-value-add specialty solutions Health & Wellbeing, Digitalization Innovation Regionalization Bespoke solutions for existing, Global production a
Slide 23: Sustainability drives demand across all segments
MEGATREND: SUSTAINABILITY PULL SUSTAINABILITY DRIVES DEMAND ACROSS ALL SEGMENTS Product portfolio We enable customers to develop sustainable products Innovative solutions that improve the performance 2/3 of sales with resource of key CO2 saving technologies in: saving technologies Smart construction
Slide 24: Silicones: tailor-made specialty solutions for new energy vehicles
MEGATREND: SUSTAINABILITY PULL SILICONES: TAILOR-MADE, SPECIALTY SOLUTIONS FOR NEW ENERGY VEHICLES (NEV) Silicones are essential to a range of key NEV components Great performance under demanding conditions EV’s with up to 4x higher silicone content per vehicle Market outlook Rapid EV growth needed
Slide 25: Polymers: DPP enables dry mix mortar performance & CO2 savings
MEGATREND: SUSTAINABILITY PULL POLYMERS: DPP ENABLES DRY MIX MORTAR PERFORMANCE & CO 2 SAVINGS Sustainable solutions needed for cement industry New, lower CO2 emission composite cements affect dry mix mortar performance Additional customer support with formulation know-how required Market outlook Ce
Slide 26: Silicones: broad range of specialties for best-in-class building materials
MEGATREND: SMART CONSTRUCTION PULL SILICONES: BROAD RANGE OF SPECIALTIES FOR BEST-IN-CLASS BUILDING MATERIALS Hybrid silicones Silicone resin emulsion paints Continuous development to address Solutions for long-lasting, new applications energy-saving façades Elastic sealants & adhesives with Water r
Slide 27: Polymers: enabling new construction trends with high performance solutions
MEGATREND: SMART CONSTRUCTION PULL POLYMERS: ENABLING NEW CONSTRUCTION TRENDS WITH HIGH PERFORMANCE SOLUTIONS Tile adhesives Skim coat 3D printing concrete Transformation from thick-bed High quality, long lasting & Printing buildings or to thin-bed CTA1 easy-to-apply finishes construction components
Slide 28: Biosolutions: cutting-edge technologies for next-generation medicines
MEGATREND: HEALTH & WELLBEING PULL BIOSOLUTIONS: CUTTING-EDGE TECHNOLOGIES FOR NEXT-GENERATION MEDICINES CDMO with a proven record: Technologies for recombinant proteins, live microbials, pDNA, mRNA and LNP formulation Part of German Pandemic Preparedness Program Market outlook 1,000’s of advanced t
Slide 29: Biosolutions: precision fermentation for sustainable products
MEGATREND: HEALTH & WELLBEING PULL BIOSOLUTIONS: PRECISION FERMENTATION FOR SUSTAINABLE PRODUCTS From pilot to commercial scale production Serving customers as CDMO and commercializing our own products Addressing multiple end markets (food, personal care, flavors and fragrances) Market outlook 7x in
Slide 30: Silicones: adhesives for healthcare applications
MEGATREND: HEALTH & WELLBEING PULL SILICONES: ADHESIVES FOR HEALTHCARE APPLICATIONS The preferred solution for advanced wound care Skin friendly, breathable & atraumatic removal promotes faster wound healing Solutions for existing, new & emerging healthcare applications Market outlook Ageing populat
Slide 31: Silicones: enabling vibrant displays & advanced chip manufacturing
MEGATREND: DIGITALIZATION PULL SILICONES: ENABLING VIBRANT DISPLAYS & ADVANCED CHIP MANUFACTURING LED mini-LED Dome encapsulants Optical bonding Electronic chemicals New solutions for premium high- Superior optical stability for High-purity chemicals essential resolution mini-LED TVs automotive & we
Slide 32: Polysilicon: benchmark quality & process enable leading edge design rules
MEGATREND: DIGITALIZATION PULL POLYSILICON: BENCHMARK QUALITY & PROCESS ENABLE LEADING EDGE DESIGN RULES Polysilicon requirements constantly higher Very high requirements = very high barriers to entry Etching Line Next Entirely new, smart advanced reactor control approach drives process excellence M
Slide 33: Silicones: differentiated focus on specific, high-priced specialty end markets
STRINGENT PORTFOLIO MANAGEMENT SILICONES: DIFFERENTIATED FOCUS ON SPECIFIC, HIGH-PRICED SPECIALTY END MARKETS Looking within Specialties at a granular level with a focus on market attractiveness & ability to win Growth: Invest in capacities & capabilities Core: Differentiated Core to significantly o
Slide 34: Polymers: focus on profitability & portfolio expansion
STRINGENT PORTFOLIO MANAGEMENT POLYMERS: FOCUS ON PROFITABILITY & PORTFOLIO EXPANSION Regional life cycle for CTA (growth rates) Differentiated strategy to capture specific regional opportunities W. Europe Introduction – Transform via market education & technical support E. Europe Growth – Increase
Slide 35: A global network: projecting R&D into the regions
INNOVATION A GLOBAL NETWORK: PROJECTING R&D INTO THE REGIONS 22 technical competence centers Germany: Consortium close to customers corporate R&D China: Competence center for cement & concrete USA: Regional innovation centers for silicones & polymers Korea: Center of excellence electronics India: Co
Slide 36: A global network: Wacker academies close to customers
INNOVATION A GLOBAL NETWORK: WACKER ACADEMIES CLOSE TO CUSTOMERS 14 academies 500+ experts/trainers 2,300+ 33,000+ Since 2021: events participants The ACADEMY is a key differentiator Drive value-based substitution, transformation Combining product, application & service to keep and SILICONES: Accele
Slide 37: Silicones: catch up drives growth in China & India
REGIONALIZATION: TRANSFORMING MARKETS WITH SPECIALTIES IN THE REGIONS SILICONES: CATCH UP DRIVES GROWTH IN CHINA & INDIA Silicones Consumption China India €/capita1 Market driven by economic growth Up and coming market driven & higher purchasing power by rise of the middle-class 13.7 Strong focus on
Slide 38: Polymers: capture catch-up opportunity in China & India
REGIONALIZATION: TRANSFORMING MARKETS WITH SPECIALTY PRODUCTS IN THE REGIONS POLYMERS: CAPTURE CATCH-UP OPPORTUNITY IN CHINA & INDIA Polymer-modified CTA China India penetration1 100% Growth driven by growing middle- Growth driven by urbanization, class, higher building standards & high building rat
Slide 39: In summary
IN SUMMARY We confirm our 2030 targets Our strategy continues to evolve & adapt: Clear focus on margins & profitable growth Our industry growth trends are firmly intact We invest in specialty growth & efficiency We maintain strong, resilient financials Bilanzpressekonferenz 2020 16. März 2021 38
Slide 40: We maintain strong, resilient financials
WE MAINTAIN STRONG, RESILIENT FINANCIALS Bilanzpressekonferenz 2020 16. März 2021 39
Slide 41: Refining our strategy to adapt to changing market conditions
WE CONFIRM OUR 2030 TARGETS REFINING OUR STRATEGY TO ADAPT TO CHANGING MARKET CONDITIONS Group 2030 Targets Sales: > €10bn Focus on margin/mix over volume ROCE: 2x Cost of Capital EBITDA Margin: > 20% CO2e: -50% Emissions Bilanzpressekonferenz 2020 16. März 2021 40
Slide 42: EBITDA: drive group margins to >20% by 2030
EBITDA: DRIVE GROUP MARGINS TO >20% BY 2030 CHEMICALS BIOSOLUTIONS POLYSILICON Grow high-margin specialties & Leverage technology and Continue semi expansion & capitalize on regional opportunities fill new capacities capitalize on regional solar prices EBITDA margin: > 20% EBITDA margin: > 25% EBITD
Slide 43: Well positioned for dynamic markets: clear focus on 4 areas
MAINTAINING RESILIENCE WELL POSITIONED FOR DYNAMIC MARKETS: CLEAR FOCUS ON 4 AREAS Sales Risk Supply Risk Cost Risk Financial Position Bilanzpressekonferenz 2020 16. März 2021 42
Slide 44: Sales risk: addressed by pricing initiatives and portfolio management
MAINTAINING RESILIENCE SALES RISK: ADDRESSED BY PRICING INITIATIVES AND PORTFOLIO MANAGEMENT Successful pricing initiatives Stringent Portfolio Management POLYMERS Core Established playbook to address volatility in raw Growth material prices Clauses protecting against inflation SILICONES specialties
Slide 45: Supply risk: sourcing initiatives to mitigate price volatility & risks
MAINTAINING RESILIENCE SUPPLY RISK: SOURCING INITIATIVES TO MITIGATE PRICE VOLATILITY & RISKS Long-term strategies Short-term actions LTAs, selective backward integration Tactical buying to exploit pricing volatility Diversified supplier portfolio Further expanding supplier portfolio Staggered contr
Slide 46: Supply risk: mitigating CO2 emission risks from silicon metal in Norway
MAINTAINING RESILIENCE SUPPLY RISK: MITIGATING CO 2 EMISSION RISKS FROM SILICON METAL IN NORWAY Growing financial risk1 due to higher CO2 prices €30m The Challenge The Solution Silicon metal smelter generates €15m Secured green electricity unavoidable CO2 emissions of with long-term PPAs ~ 400,000t
Slide 47: Cost risk: clear focus on cost & efficiency measures
MAINTAINING RESILIENCE COST RISK: CLEAR FOCUS ON COST & EFFICIENCY MEASURES SAVINGS SAVINGS SAVINGS > €100m p.a. > €75m p.a. > €25m p.a. Digitalization & automatization Specific initiatives 2024-26 Regionalization as cost & efficiency driver Automation of production Focus on maintenance processes sp
Slide 48: Financial position: maintain solid capital structure
MAINTAINING RESILIENCE FINANCIAL POSITION: MAINTAIN SOLID CAPITAL STRUCTURE Group balance sheet – target structure Equity Non-current assets Equity ratio ~ 50% CapEx > depreciation Dividend policy: ~ 50% of net income Financial debt: NFD/EBITDA: Working capital allowing for flexibility around ~ 1.0x
Slide 49: Capital allocation priorities
CAPITAL ALLOCATION PRIORITIES Bilanzpressekonferenz 2020 16. März 2021 48
Slide 50: Solid financial foundation supports growth & shareholder returns
CAPITAL ALLOCATION PRIORITIES SOLID FINANCIAL FOUNDATION SUPPORTS GROWTH & SHAREHOLDER RETURNS 1. Growth 2. Shareholder returns CapEx: CapEx > Depreciation Dividend policy unchanged ~ 50% of net income from continuing operations M&A: Earnings-accretive / early-stage bolt-ons Foundation: Strong balan
Slide 51: Low financial leverage allows for flexibility in executing our growth strategy
CAPITAL ALLOCATION PRIORITIES LOW FINANCIAL LEVERAGE ALLOWS FOR FLEXIBILITY IN EXECUTING OUR GROWTH STRATEGY Financial leverage (net financial debt/EBITDA) 1.2 Target at ~ 1.0x – allowing for flexibility 0.4 0.1 -0.2 -0.4 2013 2017 2021 2022 2023 Bilanzpressekonferenz 2020 16. März 2021 50
Slide 52: CapEx with focus on highly profitable growth
CAPITAL ALLOCATION PRIORITIES CAPEX WITH FOCUS ON HIGHLY PROFITABLE GROWTH Target CapEx split 2025-26 Flexible CapEx program €500-800m p.a. 709 <700 Sustainability/MoB 547 344 Growth 2021 2022 2023 2024e Going Forward Investments according to market environment Cost/efficiency Diversified portfolio
Slide 53: Clear investment focus 2024-2026
CAPITAL ALLOCATION PRIORITIES CLEAR INVESTMENT FOCUS 2024-2026 CHEMICALS BIOSOLUTIONS POLYSILICON INFRASTRUCTURE Focus on high-value add Upgrade facilities & Expand semi technology Optimize site specialties & regionalization capabilities leadership & capabilities infrastructure & logistics Earnings-
Slide 54: Significant progress on diversified CapEx portfolio since 2022
CAPITAL ALLOCATION PRIORITIES SIGNIFICANT PROGRESS ON DIVERSIFIED CAPEX PORTFOLIO SINCE 2022 Update on 40 projects highlighted at last CMD Postponed: 15% Completed: 25% On-going: 50% Stopped: 10% New projects BIOSOLUTIONS (Halle) POLYSILICON (BGH) SILICONES (ZJG) POLYMERS SILICONES (BGH) mRNA Etchin
Slide 55: Consistent dividend policy: payout matches performance
CAPITAL ALLOCATION PRIORITIES CONSISTENT DIVIDEND POLICY: PAYOUT MATCHES PERFORMANCE Dividend (€) Dividend policy: ∑ 23.00 Unchanged: ~ 50% of net income from continuing operations 12.00 Tied to market conditions 8.00 Boundary conditions: Overall business conditions 4.50 2.00 3.00 Financial status 2
Slide 56: Q3 trading update: Group EBITDA at Q2 level – no FY guidance change
Q3 TRADING UPDATE GROUP EBITDA AT Q2 LEVEL – NO FY GUIDANCE CHANGE SILICONES POLYMERS Sales similar to Q2, EBITDA slightly higher Sales slightly weaker than Q2, EBITDA flat Order intake softer during summer Consumer with good demand No turnaround in Q3 Construction markets stay weak BIOSOLUTIONS POL
Slide 57: Thank you for your attention!
THANK YOU FOR YOUR ATTENTION! Bilanzpressekonferenz 2020 16. März 2021 56
Slide 58: 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 59: Issuer, contact and additional information
WACKER: ISSUER, CONTACT AND ADDITIONAL INFORMATION Issuer and Contact Financial Calendar INVESTOR RELATIONS CONTACTS Joerg Hoffmann, CFA 09/18+19/24 CMD Burghausen Tel. +49 89 6279 1633 | joerg.hoffmann@wacker.com 10/29/24 Q3 2024 Results Scott McCollister Tel. +49 89 6279 1560 | scott.mccollister@w