WACKER achieves strong sales growth in Q3 2022 and confirms full-year forecast

Munich, Germany – Wacker Chemie AG finished Q3 2022 with significant sales growth. From July through September, the Munich-based chemical company generated sales of €2,132.2 million. That was 29 percent higher than in the same period last year (€1,658.6 million). Relative to a quarter earlier (€2,174.2 million), sales declined by 2 percent due to reduced demand. Higher selling prices were the main growth driver compared with a year earlier. Sales also benefited from positive exchange-rate effects due to the stronger US dollar. On the other hand, volumes that were somewhat lower overall compared with a year earlier had a dampening effect on sales.
In Q3 2022, WACKER posted EBITDA (earnings before interest, taxes, depreciation and amortization) of €456.6 million (Q3 2021: €449.5 million), up 2 percent year over year. However, surging energy and raw-material prices in particular held back earnings growth, reducing EBITDA by more than €300 million year over year. Compared with a quarter earlier (€625.8 million), EBITDA decreased 27 percent. The Group’s EBITDA margin was 21.4 percent for the three months from July through September 2022. A year earlier, the figure was 27.1 percent, while the prior quarter’s EBITDA margin was 28.8 percent.
Group earnings before interest and taxes (EBIT) came to €350.7 million in the reporting quarter, down 2 percent from a year earlier (€358.4 million). The EBIT margin was 16.4 percent (Q3 2021: 21.6 percent). Compared with Q2 2022 (€528.5 million), EBIT declined 34 percent. Net income for the quarter amounted to €258.9 million (Q3 2021: €264.5 million) and earnings per share came in at €5.08 (Q3 2021: €5.22).
WACKER confirmed its full-year forecast of July 28 in the upper half of the range. EBITDA is now expected to come in between €2.1 billion and €2.3 billion (previous guidance: between €1.8 billion and €2.3 billion). Higher energy, raw-material and logistics costs are likely to impact EBITDA by around €1.3 billion to €1.4 billion (previous guidance: €1.5 billion). The current forecast takes this into account. WACKER continues to expect full-year sales to come in between €8 billion and €8.5 billion.

Given the potential for major restrictions in natural gas supplies and the knock-on effects for production, WACKER had previously taken the precaution of factoring in a further €200–250 million in additional costs at the lower end of its EBITDA forecast, on top of the energy and raw-material price increases already taken into account. As the levels in German gas reservoirs are now high, the company considers the risk of gas supply shortages for its own production facilities to be low. Continuing high polysilicon prices are a further reason for WACKER’s updated earnings forecast.
“Against a backdrop of rising macroeconomic and geopolitical challenges, WACKER fared very well in the third quarter,” said CEO Christian Hartel in Munich on Thursday. “Despite even higher energy costs, we once again succeeded in growing both our sales and EBITDA year over year. I see this as clear proof of our competitive-ness amid the current, more difficult environment and of the resilience of our business model.”
At the same time, Hartel underscored that ever higher inflation rates across the globe, rising interest rates, extremely high energy prices in Europe and slowing consumer spending would not be without conse-quences for WACKER. “In summer already, we noted a drop in or-ders in a number of segments, especially in the construction industry. I assume this trend will continue throughout the fourth quarter and into early next year,” Hartel said. He added that WACKER would not be able to completely decouple itself in the long term from the effects of a recession that more and more economic analysts are expecting to impact Germany and Europe.
In his words, it is essential that politicians make the right decisions without delay in order to mitigate the effects of high energy prices on companies and consumers and ensure supply security. “As long as the energy crisis persists, we will need all available fuels to power the grid – renewables just as much as coal and the nuclear power still on stream,” emphasized Hartel.
Hartel remained optimistic as regards WACKER’s medium-term prospects: “Our strategic focus on specialty chemical products with high value-added for our customers, on highest-quality polysilicon for semiconductors and solar applications, and on the active expansion of our biotechnological activities contributes substantially to strength-ening WACKER’s resilience and ensuring the company remains robust.” The goal is to increase Group sales to over €10 billion by 2030, while still maintaining high profitability.