Release Date: October 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Wacker Chemie AG (WKCMF, Financial) achieved a strong result in its specialty business despite challenging market conditions.
- Chemicals EBITDA increased by 23% year-over-year, with specialty silicones sales markedly higher than the previous year.
- The new biopharma site in Halle provides a strong foundation for future growth in the biosolutions segment.
- The company is committed to sustainability, targeting net zero by 2045, and has made progress in reducing CO2 emissions.
- Wacker Chemie AG (WKCMF) maintains a strong balance sheet with EUR1 billion in liquidity and EUR4.6 billion in shareholder equity.
Negative Points
- Group sales decreased by 6% year-over-year, driven by significantly lower solar-grade polysilicon volumes.
- Demand remains weak in key sectors such as construction and automotive, impacting overall performance.
- Polymers EBITDA declined quarter-on-quarter due to a supplier force majeure and sluggish demand in Europe and China.
- The ongoing uncertainty in the solar market, particularly due to antidumping investigations, affects polysilicon sales.
- The company's EBITDA margin targets in chemicals and biosolutions are not yet met, indicating room for improvement.
Q & A Highlights
Q: Are the current silicones margins the maximum achievable given the economic environment, or is there potential for improvement in 2025?
A: Tobias Ohler, CFO, explained that while the third quarter showed improvement, margins are not yet at target levels. The company expects a low double-digit margin for the full year, with potential for further improvement as they focus on specialty volumes and better plant loading.
Q: Can you elaborate on the growth expectations for the semiconductor business as the new plant ramps up?
A: Christian Hartel, CEO, stated that the new plant is progressing well, with significant volumes already under contract. The ramp-up will depend on customer qualification times, but the plant is a key part of their semiconductor growth strategy.
Q: What factors contributed to the better-than-expected performance in silicones during Q3?
A: Christian Hartel, CEO, noted that the improvement was due to a better mix of specialty products and stable pricing. The company is focusing on improving margins within the specialty segment, which offers more customer intimacy and a broader range of products.
Q: How is the company managing the impact of the force majeure event on polymers, and what are the expectations for this segment?
A: Tobias Ohler, CFO, explained that the force majeure event led to higher costs and underutilization of the VAM plant. The company has switched back to its original supplier and expects the polymers segment to recover as they focus on consumer-related binders and regional growth.
Q: What is the outlook for polysilicon sales and production, considering the current market uncertainties?
A: Christian Hartel, CEO, mentioned that the company has reduced production to align with demand and is prepared to adjust based on the outcome of the antidumping investigation. They are running at two-thirds capacity and expect demand to pick up depending on the investigation's results.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
