EANS-News: WACKER Increases Sales and Earnings in Q2 2011

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quarterly report

Subtitle: - WACKER Group sales up 10 percent to €1.33 billion in Q2
2011 - Earnings before interest, taxes, depreciation and amortization
grow by 5 percent to €325 million - Net income for Q2 2011 reaches
€143 million - Investments focus on polysilicon expansion and climb
to €208 million, almost 50 percent higher than Q2 2010 - Full-year
sales and earnings forecast for 2011 reaffirmed

Munich (euro adhoc) - August 2, 2011 - Wacker Chemie AG increased its
sales and earnings in Q2 2011 compared with the same period last year
and is well on track to achieve its full-year targets. Q2 2011 sales
at the Munich-based chemical company climbed 10 percent to EUR1.33
billion (Q2 2010: EUR1.20 billion), mainly due to the higher sales
volumes generated by sustained customer demand. In the silicones and
polymers segments, WACKER was able to negotiate higher prices in the
market in some cases. By contrast, the sales trend was held back by
currency exchange-rate effects, primarily due to the weaker US
dollar.

WACKER also enhanced its profitability over the previous year.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) rose by over 5 percent to EUR324.8 million in Q2 2011
compared to a year ago (Q2 2010: EUR308.6 million). The
second-quarter EBITDA margin was 24.5 percent, after 25.7 percent in
Q2 2010. Group earnings before interest and taxes (EBIT) rose by 5
percent to EUR215.1 million in Q2 2011, up from EUR204.7 million in
the prior-year period. The EBIT margin for the period April through
June 2011 was 16.2 percent (Q2 2010: 17.0 percent). Net income for
the period reached EUR142.7 million (Q2 2010: EUR135.4 million),
resulting in earnings per share of EUR2.87 (Q2 2010: EUR2.71).

Substantially higher raw-material costs dampened earnings performance
in Q2 2011. At the start of 2011, WACKER was still able to use some
raw-material inventory from 2010 procured on more favorable terms.
Compared to Q2 2010 prices, silicon metal increased by over 30
percent, ethylene by about 25 percent and methanol by just under 20
percent. WACKER´s second-quarter profitability was also impacted by
the up-front costs for an accelerated production start-up at the new
polysilicon plant at Nünchritz.

WACKER expects full-year sales and earnings to rise in 2011 and has
reaffirmed its previous outlook. Group sales are forecast to top EUR5
billion. EBITDA for fiscal 2011 is expected to exceed the previous
year´s figure of EUR1.19 billion.

"Half-way through 2011, we are well on track to achieve the sales and
earnings targets we set for the full year," said CEO Rudolf Staudigl
in Munich on Tuesday. "We profited in all markets and segments from
the global economy´s enduring strength. Even though economic growth
is likely to slow somewhat in the second half of the year, we remain
well placed to achieve profitable growth - particularly thanks to our
strong polysilicon business."

Regions In Q2 2011, WACKER posted double-digit sales growth in all
key markets, apart from the Americas. From April through June 2011,
the Group generated the largest share of its total sales in Asia -
some 38 percent. At EUR499.8 million, second-quarter Asian sales rose
16 percent (Q2 2010: EUR430.9 million). WACKER also posted
double-digit sales growth in Germany and in the other European
countries during Q2 2011. In Germany, second-quarter sales grew 11
percent to EUR242.8 million (Q2 2010: EUR217.8 million). Sales in the
other European countries reached EUR329.5 million (Q2 2010: EUR296.1
million). In the Americas region, sales were significantly held back
by exchange-rate effects due to the weaker US dollar. As a result,
although sales were higher in US dollar terms, they were slightly
below the prior-year figure when converted into euros. From April
through June 2011, WACKER generated total sales of EUR211.8 million
in the Americas (Q2 2010: EUR213.3 million). In the other regions,
WACKER posted total sales of EUR41.9 million in Q2 2011 (Q2 2010:
EUR43.9 million). Overall, WACKER generated about 82 percent of its
second-quarter sales with customers outside Germany (Q2 2010: 82
percent).

Investments and Net Cash Flow In Q2 2011, WACKER continued its
dynamic investment strategy. At EUR208.3 million, capital
expenditures were significantly higher than in both Q2 2010 (EUR140.9
million) and Q1 2011 (EUR136.6 million). The focus was on expanding
polysilicon-production capacities at Nünchritz and Charleston. Almost
two-thirds of April-through-June investments were for these two key
projects. Further funds were spent on increasing silicon-wafer output
and on eliminating bottlenecks at the plants of other divisions. The
polysilicon facility at Nünchritz is nearing completion and will come
on stream, as planned, in the next few months. At Charleston in the
US State of Tennessee, construction work on WACKER´s new integrated
polysilicon site is also in full swing after the groundbreaking
ceremony in early April. The site, with a nominal capacity of 15,000
metric tons per year, is expected to be completed by the end of 2013.

WACKER´s net cash flow from April through June 2011 amounted to
EUR-53.1 million (Q2 2010: EUR55.5 million). Two factors were mainly
responsible for this decline. Capital expenditures in the second
quarter were about 50 percent higher than in the previous year. At
the same time, the payment of variable salary components to employees
for a highly successful fiscal 2010 decreased gross cash flow in the
period under review. Gross cash flow amounted to EUR138.4 million,
thus down 23 percent over the Q2 2010 figure of EUR180.4 million.

Employees As of June 30, 2011, WACKER had 16,834 employees worldwide
(March 31, 2011: 16,602). The groupwide increase of 232 enables
WACKER to maintain the quality of production, customer service and
administrative processes amid growing customer demand and high plant
utilization. On June 30, 2011, WACKER had 12,572 employees in Germany
(March 31, 2011: 12,414) and 4,262 at its international sites (March
31, 2011: 4,188).

Business Divisions In the second quarter of 2011, WACKER SILICONES
generated total sales of EUR421.1 million - a rise of some 4 percent
year on year (Q2 2010: EUR406.5 million). Customer demand remained
robust in every major business field in Q2. Toward the end of the
quarter, though, orders from some sectors - especially construction -
edged down slightly. Particularly strong Q2 growth was achieved by
organofunctional silanes for the formulation of construction foams
and by silicones for electronic, solar and medical applications. The
steep rise in raw-material costs weighed more heavily on the
division´s profitability in Q2 than at the beginning of the year.
WACKER SILICONES was able to offset the cost rise only in part
through greater volumes and higher sales prices in some sectors.
Second-quarter earnings before interest, taxes, depreciation and
amortization (EBITDA) came in at EUR50.1 million (Q2 2010: EUR73.3
million). The division thus missed the prior-year level by some 32
percent. The EBITDA margin for the second quarter of 2011 was 11.9
percent (Q2 2010: 18.0 percent).

In Q2 2011, WACKER POLYMERS increased its total sales to EUR249.7
million, up 11 percent year on year (Q2 2010: EUR224.6 million). This
growth was primarily due to continuing high demand for dispersible
polymer powders and dispersions. From April through June 2011, WACKER
POLYMERS posted EBITDA of EUR32.0 million (Q2 2010: EUR37.8 million),
a 15-percent decline year on year. Higher raw-material costs, for
example for ethylene, had an appreciable impact on divisional
earnings. The division´s EBITDA margin for Q2 2011 was 12.8 percent
(Q2 2010: 16.8 percent). WACKER POLYMERS raised its prices for
dispersions and dispersible polymer powders several times in recent
months to at least partially offset higher raw-material costs.

From April through June 2011, WACKER BIOSOLUTIONS generated total
sales of EUR39.0 million, up slightly year on year (Q2 2010: EUR38.3
million). Business was particularly strong for pharmaceutical
proteins and other products for the pharmaceutical and agrochemical
sectors. Acetylacetone and gumbase also experienced brisk demand.
Second-quarter EBITDA at WACKER BIOSOLUTIONS amounted to EUR8.6
million (Q2 2010: EUR7.8 million), yielding an EBITDA margin of 22.0
percent (Q2 2010: 20.4 percent) The positive factors here included
higher prices.

In Q2 2011, WACKER POLYSILICON continued to benefit from the high
volumes of hyperpure polycrystalline silicon that could be placed on
the market. At EUR399.2 million, total second-quarter sales were 24
percent higher than a year earlier (Q2 2010: EUR321.5 million). The
amounts of polysilicon sold were significantly higher than a year ago
and all of WACKER POLYSILICON´s production facilities are currently
running at full capacity. In Q2 2011, the average prices achieved for
polysilicon remained broadly stable at about the level seen in both
the comparable prior-year quarter and Q1 2011. WACKER POLYSILICON
generated second-quarter EBITDA of EUR188.2 million (Q2 2010:
EUR174.6 million). That is a rise of 8 percent and equates to an
EBITDA margin of 47.1 percent (Q2 2010: 54.3 percent). Start-up
costs, chiefly for Nünchritz´s new polysilicon plant, served to
constrain earnings.

In the second quarter of 2011, Siltronic generated total sales of
EUR276.9 million (Q2 2010: EUR255.8 million), an increase of 8
percent. Second-quarter sales volumes were higher than in either Q2
2010 or Q1 2011. Volume growth was driven mainly by 300 mm wafers,
where Siltronic was able to boost its output substantially to meet
the demand surge caused by production shortfalls in
earthquake-damaged Japan. As for EBITDA, Siltronic more than doubled
its Q2 2010 figure. EBITDA reached EUR37.3 million from April through
June 2011 (Q2 2010: EUR18.0 million). Earnings growth was due not
only to higher volumes, but also to better average prices compared
with a year ago, especially for 200 mm and smaller-diameter wafers.
The EBITDA margin in Q2 2011 was 13.5 percent (Q2 2010: 7.0 percent).

Outlook According to the latest economic estimates and forecasts, the
global expansion is set to continue, even though the overall pace of
economic growth is likely to slow slightly in the coming months.
WACKER expects its divisions will benefit from the positive outlook
for sales markets and the economy as a whole.

At its WACKER SILICONES and WACKER POLYMERS chemical divisions,
vibrant economic growth - especially in the emerging markets of Asia
and Latin America - will keep demand for their products and services
high in the months ahead. At WACKER POLYSILICON, the Group has
contractually secured virtually its entire output until the end of
2015. This ensures high capacity utilization, but also limits
opportunities for generating extra business in the short term. At
Siltronic, the order-book situation will depend, in the medium term,
on how well global silicon-wafer production keeps pace with demand.
Japan´s wafer manufacturers, for instance, have resumed production
sooner than originally expected, which means Siltronic´s sales-volume
growth will be less dynamic in the second half of 2011 than in the
first half.

The future price trends for raw materials and energy will greatly
influence the Group´s business profitability. WACKER will keep its
focus firmly on countering the heavier cost burden with improved
efficiency. Wherever market conditions and customer contracts allow,
it aims to cushion the impact of higher raw-material costs, at least
to some extent, by raising product prices. The Group expects that the
costs of starting up its new polysilicon plant at Nünchritz and
building the polysilicon site at Charleston (Tennessee, USA) will
constrain earnings somewhat in the second half of 2011.

Overall, WACKER reaffirms its full-year guidance that 2011´s sales
will exceed EUR5 billion. It currently anticipates that EBITDA will
be above last year´s figure of EUR1.19 billion.

Note to editors: The Q2 2011 report is available for download on the
WACKER website (www.wacker.com) under Investor Relations.

Key Figures of the WACKER Group
|EUR million |Q2 2011 |Q2 2010 |Change | |6M 2011|6M 2010|Change|
| | | |in % | | | |in % |
|Sales |1,325.8 |1,202.0 |10.3 | |2,617.5|2,269.0|15.4 |
|EBITDA1 |324.8 |308.6 |5.2 | |675.8 |562.3 |20.2 |
|EBITDA margin2 |24.5% |25.7% |-4.6 | |25.8% |24.8% |4.0 |
|EBIT3 |215.1 |204.7 |5.1 | |461.0 |358.4 |28.6 |
|EBIT margin2 |16.2% |17.0% |-4.7 | |17.6% |15.8% |11.4 |
| | | | | | | | |
|Financial result |-9.7 |-9.0 |7.8 | |-17.6 |-12.3 |43.1 |
|Income before taxes |205.4 |195.7 |5.0 | |443.4 |346.1 |28.1 |
|Net income for the period|142.7 |135.4 |5.4 | |310.7 |241.3 |28.8 |
| | | | | | | | |
|Earnings per share (EUR) |2.87 |2.71 |6.0 | |6.26 |4.85 |29.0 |
| | | | | | | | |
|Investments (incl. |208.3 |140.9 |47.8 | |344.9 |239.2 |44.2 |
|financial assets) | | | | | | | |
|Net cash flow4 |-53.1 |55.5 |n.a. | |233.2 |110.1 |>100 |
| | | | | |
|EUR million |June 30,|June 30,|Dec.31,| |
| |2011 |2010 |2010 | |
| | | | | |
|Equity |2,599.7 |2,169.0 |2,446.8| |
|Financial liabilities |547.4 |499.1 |533.4 | |
|Net financial |348.3 |-58.1 |264.0 | |
|receivables/ liabilities5| | | | |
|Total assets |5,843.0 |4,962.6 |5,501.2| |
| | | | | |
|Employees (number at end |16,834 |15,901 |16,314 | |
|of period) | | | | |

1 EBITDA is EBIT before depreciation and amortization
2 Margins are calculated based on sales

3 EBIT is the result from continuing operations for the period before
interest and other financial results, and income taxes 4 Sum of cash
flow from operating activities and noncurrent investment activities
before securities, including additions from finance leases 5 Sum of
cash and cash equivalents, noncurrent and current securities, and
noncurrent and current financial liabilities

This press release contains forward-looking statements based on
assumptions and estimates of WACKER´s Executive Board. Although we
assume the expectations in these forward-looking statements are
realistic, we cannot guarantee they will prove to be correct. The
assumptions may harbor risks and uncertainties that may cause the
actual figures to differ considerably from the forward-looking
statements. Factors that may cause such discrepancies include, among
other things, changes in the economic and business environment,
variations in exchange and interest rates, the introduction of
competing products, lack of acceptance for new products or services,
and changes in corporate strategy. WACKER does not plan to update the
forward-looking statements, nor does it assume the obligation to do
so.

Further inquiry note:
Christof Bachmair
Media Relations & Information
Tel.: +49 (0)89 6279 1830
E-Mail: christof.bachmair@wacker.com

end of announcement euro adhoc
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company: Wacker Chemie AG
Hanns-Seidel-Platz 4
D-81737 München
phone: +49 (0) 89 6279 01
FAX: +49 (0) 89 6279 1770
mail: info@wacker.com
WWW: http://www.wacker.com
sector: Chemicals
ISIN: DE000WCH8881
indexes: Midcap Market Index, MDAX, CDAX, Classic All Share, HDAX, Prime All
Share
stockmarkets: regulated dealing/prime standard: Frankfurt
language: English