Wacker Chemie AG: Chemical and biotechnology divisions performed in a weak market environment in 2024
Preliminary figures
Wacker Chemie AG achieved good results in 2024 given a persistently weak market environment. Overall, sales and earnings were below the previous year's figures. This development was driven primarily by lower prices and much lower volumes at POLYSILICON. Despite headwinds, the chemical divisions achieved sales at the previous year's level and earnings in total even exceeded the previous year's figure. Sales and earnings in the biotechnology division were up year over year.
According to preliminary figures, the company’s sales totaled around €5.72 billion last year, 11 percent less than in 2023 (€6.40 billion). The Group’s preliminary earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to €770 million (2023: €824 million), down 7 percent. This is due to lower prices, particularly for solar-grade polysilicon, but also to persistently high energy costs in Germany, coupled with lower plant-utilization rates in some cases as a result of the decline in volumes.
Due to the factors described above, preliminary earnings before interest and taxes (EBIT) dropped 26 percent to around €300 million (2023: €405 million). Depreciation and amortization amounted to around €475 million, up considerably on the previous year (€419 million). Net income for the year was approximately €265 million (2023: €327 million).
“The economic environment in 2024 was challenging. We faced persistent weak demand in many of our customer sectors, with many of our customers in the construction and automotive industries, in particular, curbing their production,” said WACKER CEO Christian Hartel as he presented the preliminary figures. “Our chemical divisions performed very well in this weak environment,” continued Hartel. He added that the biotechnology business had also shown good performance, closing the year ahead of the prior-year figures. “In this area, the opening of our new mRNA competence center in Halle in the middle of the year marked an important milestone that set the foundation for further growth.”
“In POLYSILICON, on the other hand, our business was hit by the slump in demand for solar-grade polysilicon and by the sustained excess capacity in China,” explained Hartel, adding that the debate surrounding US anti-dumping tariffs on solar imports from some Southeast Asian countries also unsettled the markets. By contrast, the hyperpure semiconductor-grade polysilicon business performed well. “This confirms that we are on the right track strategically in this area,” stressed Hartel. WACKER is aiming to increase the share of hyperpure polysilicon for the semiconductor industry going forward. According to the company’s CEO, it is progressing well towards this goal.
WACKER has been meeting the challenges of the ongoing weak market environment by increasingly focusing on efficiency and cost discipline. Earnings in 2024 benefited from ongoing efficiency measures. “We will not ease off now. We are continually striving to cut our costs further and become even more efficient,” commented Hartel.
The CEO remains optimistic about the company’s long-term prospects: “Despite the weak economic environment, WACKER is well positioned for the future in both financial and strategic terms. In the medium and long term, we will continue to benefit from global megatrends. Digitalization, renewable energies, electromobility and energy conservation are among the key drivers of our business,” he emphasized. “Our strategy is intact, which is why we confirmed our 2030 growth and sustainability targets at our Capital Markets Day in September.”
Capital expenditures, net cash flow and net financial debt
According to preliminary figures, WACKER’s capital expenditures came in at €665 million in 2024 (2023: €710 million), a year-over-year decline of 6 percent. WACKER’s investment focus was on expanding capacity in its four business divisions.
Net cash flow was negative in the 2024 fiscal year at €-325 million (2023: €166 million). The marked drop reflected lower earnings and the planned increase in working capital.
As of December 31, 2024, WACKER reported net financial debt of approximately €690 million (December 31, 2023: €84 million).
Business divisions
According to preliminary figures, SILICONES generated annual sales of €2.81 billion, up 2 percent on the previous year (€2.74 billion). EBITDA is scheduled to come in at €345 million, marking a 46 percent increase year over year (€236 million). This positive development was driven by an improved product mix, with a significantly higher proportion of specialty products, and better plant utilization rates.
The preliminary figures for POLYMERS point to sales of €1.46 billion (2023: €1.58 billion), down 8 percent. EBITDA is expected to total €195 million (2023: €253 million). This decrease of 23 percent was chiefly due to the year-over-year decline in selling prices. The division was able to increase sales volumes in a weak market environment.
According to preliminary figures, BIOSOLUTIONS generated sales of €375 million, up 11 percent on the previous year (2023: €337 million). At €35 million, EBITDA looks set to be up considerably on 2023 (€7 million). The positive trend was bolstered primarily by growth in its biopharmaceutical business.
According to preliminary calculations, the POLYSILICON division closed the financial year with sales of €950 million. This was a decrease of 41% compared to the previous year (€1.60 billion). EBITDA is expected to have contracted 39 percent to €195 million (2023: €321 million) due to lower prices and volumes for solar-grade polysilicon. Ongoing high energy prices in Germany also had a negative impact. The total share of hyperpure polysilicon volumes for the semiconductor industry grew further in 2024.
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