On July 18, Wacker Group announced preliminary data for the second fiscal quarter of 2023 and lowered its full-year forecast.
Based on this latest result, WACKER has adjusted its forecast for the 2023 fiscal year. After adjustment, WACKER Group’s full-year sales are expected to be between 6.5 billion and 6.8 billion euros (previous forecast: 7 billion to 7.5 billion euros), and EBITDA will be between 800 million and 1 billion euros (previous forecast: 11 billion euros). 100 million-1.4 billion euros), thus lower than the capital market’s current average expectations for these two values.
The market expects WACKER Group’s full-year sales to be 7 billion euros and EBITDA to be 1.1 billion euros (source: Vara Research, July 12, 2023). The return on capital employed (ROCE) is expected to be below the cost of capital (previous forecast: above the cost of capital, but well below the previous year’s level).
Demand continues to weaken
Dr. Christian Hartel, President and CEO of WACKER Group, analyzed the main reasons for the forecast reduction and said: “The reason for lowering the full-year forecast is mainly due to the continued weak demand from customers in many application industries and the continuous decrease in customers . Inventory, and the price level of a large number of WACKER products is relatively low year-on-year. Many market experts had expected demand to pick up in the second half of this year-this is our previous forecast. But as of now, WACKER’s business and many other chemical companies Again, no signs of recovery yet.”
The developments in the performance of WACKER SEGMENTS SILICONES and WACKER POLYSILICON are the main reasons for the revision of the forecast for fiscal year 2023.
Silicone Business Unit
According to preliminary figures, second-quarter sales at WACKER’s Silicones business unit amounted to 700 million euros, down 25 percent from the same period a year earlier. EBITDA for the period is expected to be EUR 50 million (prior year: EUR 277 million).
For the full year, the business unit’s sales are expected to be between EUR 2.7 billion and EUR 2.9 billion (previous forecast: EUR 3.1 billion to 3.3 billion), with an EBITDA margin of around 10% (previous forecast: around 15%).
Polymer Business Unit
According to preliminary figures, WACKER Polymers’ sales in the second quarter amounted to 415 million euros, a decrease of 25 percent compared to the same period of the previous year. EBITDA is expected to be 75 million euros, down 17 percent compared to the prior-year quarter.
For the full year, the business unit is expected to generate sales of between EUR 1.6 billion and EUR 1.7 billion (previous forecast: EUR 1.8 billion), with an EBITDA margin of around 17 percent (previous forecast: slightly higher than the previous year).
Polysilicon Business Unit
According to preliminary figures, second-quarter sales of WACKER’s polysilicon business unit amounted to 515 million euros, down 10 percent from a year earlier but up 16 percent from the first quarter. EBITDA for the period is expected to be EUR 155 million (prior year: EUR 214 million).
For the full year, the business unit’s sales are expected to be between 1.6 billion and 1.7 billion euros (previous forecast: 1.6 billion to 1.8 billion euros), and EBITDA is expected to be between 300 million and 400 million euros (previous forecast: 300 million euros). billion-500 million euros).
Biotechnology Business Unit
According to preliminary figures, WACKER’s Biotechnology business unit posted sales of 90 million euros in the second quarter, a slight increase compared to the same period of the previous year. EBITDA is expected to be EUR 0.5 million (prior year: EUR 8.1 million).
WACKER currently expects high single-digit sales growth for the business unit for the full year (previous forecast: low double-digit sales growth), and EBITDA is expected to be lower than the previous year (previous forecast: well above the previous year).