Wacker Chemie reports lower sales for first quarter

Munich, Germany – Wacker Chemie AG closed Q1 2023 with lower sales and earnings. The Munich-based chemical company generated sales of €1.74 billion in the reporting quarter, down 16 percent over a year earlier (€2.08 billion). This decrease was chiefly due to lower volumes. Compared with the previous quarter (€1.83 billion), sales decreased by 5 percent.

In Q1 2023, WACKER posted earnings before interest, taxes, depreciation and amortization (EBITDA) of €281 million, 56 percent lower than in the same period last year (€644 million). Compared with the preceding quarter (€355 million) EBITDA was down 21 percent. The decline was due to lower volumes as well as higher energy prices year over year. Amid an overall decline in plant utilization rates compared with Q1 2022, production costs also rose, dampening the earnings trend. The EBITDA margin was 16.1 percent for the period from January through March 2023, compared with 31.0 percent in Q1 2022 and 19.4 percent in the preceding quarter.
Group earnings before interest and taxes (EBIT) declined markedly year over year due to the factors already mentioned and totaled €178 million in the quarter under review. This was 68 percent less than a year earlier (€550 million) and corresponded to an EBIT margin of 10.2 percent (Q1 2022: 26.5 percent). Net income for the reporting quarter totaled €147 million (Q1 2022: €403 million), putting earnings per share at €2.90 (Q1 2022: €7.92).
WACKER confirmed its forecast for 2023. It expects full-year sales to range between €7 billion and €7.5 billion due to a combination of significantly lower selling prices, volume growth in the course of the year and positive product-mix effects in the chemical divisions. WACKER anticipates EBITDA of between €1.1 billion and €1.4 billion.
“As expected, our figures reflect our customers running down their inventories and exercising caution when ordering in Q1,” said CEO Christian Hartel in Munich on Friday. “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.
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 and reach an EBITDA margin of over 20 percent. 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.