WACKER continues its growth course

DJ WACKER continues its growth course

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April 30, 2008 - Wacker Chemie AG got off to a good start in 2008, following a 
record-setting 2007. Under challenging conditions, the Munich-based chemical 
company continued to grow its sales and earnings in the first three months of 
the current fiscal year compared to Q1 2007. Higher volumes and prices propelled 
Group sales to EUR1,019.5 million in Q1 2008 (Q1 2007: EUR943.7 million) - an 8 
percent gain. The complete acquisition of the former Air Products Polymers joint 
venture contributed 4.5 percent to this rise. In contrast, the weaker U.S. 
dollar slowed growth by 6 percent. Despite significantly higher raw-material and 
energy costs, as well as significant negative exchange-rate effects, the WACKER 
Group generated earnings before interest, tax, depreciation and amortization 
(EBITDA) of EUR291.1 million for January through March 2008 (Q1 2007: 
EUR265.5m). This represents a year-on-year increase of 10 percent. The EBITDA 
margin thereby grew to 28.6 percent (Q1 2007: 28.1 percent). The polycrystalline 
silicon business played a key role in this earnings rise. WACKER POLYSILICON 
improved its year-on-year EBITDA by EUR37.8 million, thus more than doubling its 
earnings. WACKER POLYMERS also increased EBITDA in Q1 2008 - beating the 
prior-year figure by 11 percent. WACKER SILICONES posted an EBITDA increase of 1 
percent. Siltronic´s contribution to earnings continued at a high level, though 
not matching its strong Q1 2007 figures. The Group´s Q1 2008 earnings before 
interest and tax (EBIT) rose 6 percent to EUR198.7 million (Q1 2007: EUR187.9m), 
with net income climbing 14 percent year on year to EUR130.6 million (Q1 2007: 
EUR114.5m). As a result, earnings per share for the quarter are EUR2.63 (Q1 
2007: EUR2.30) - up 14 percent. The Munich-based chemical company expects higher 
sales and earnings for the full fiscal year 2008 . WACKER continues to see a 
good chance of boosting sales in 2008 by well over 10 percent. EBITDA is also 
expected to continue its upward momentum. 
 
"Despite significant economic turbulence, we are on a solid growth course in 
both sales and earnings," said President & CEO Peter-Alexander Wacker in Munich 
on Wednesday. "We consider ourselves well-prepared to continue successfully 
mastering market challenges. Demand for our products remains strong, fueled by 
global growth trends such as energy efficiency, the progressive digitalization 
of everyday life and increasing prosperity among emerging economies. The ongoing 
expansion of our production capacities is aimed at laying the groundwork for 
future profitable growth." 
 
Regions 
With sales of EUR345.6 million in Q1 2008 (Q1 2007: EUR291.7m), Asia continued 
to account for the largest share in Group growth. That region´s share of total 
global sales rose to 34 percent (Q1 2007: 31 percent). Europe excluding Germany 
took second place with sales of EUR260.8 million (Q1 2007: EUR265.8m). In 
Germany, the Group registered January to March sales of EUR215.3 million (Q1 
2007: EUR180.2m). The regions with strongest growth in Q1 2008 were Germany and 
Asia, with sales gains of 20 percent and 19 percent respectively. In the 
Americas, sales in local country currencies rose 10 percent. Calculated in 
euros, however, sales dropped 4 percent year on year to EUR169.2 million (Q1 
2007: EUR176.5 million). In Other Regions, the Group registered January to March 
revenues of EUR28.6 million (Q1 2007: EUR29.5m). 
 
Net Cash Flow and Investments 
In the period under review, the WACKER Group´s net cash flow was EUR-3.3 million 
(Q1 2007: EUR224.2m). The main reasons for this decline were much higher capital 
expenditures for ongoing Group expansion projects - and particularly the payment 
associated with acquiring shares of the former Air Products Polymers (APP) and 
Wacker Polymer Systems (WPS) joint ventures. Offset with cash and cash 
equivalents from the APP companies consolidated for the first time, expenditures 
for this transaction amounted to EUR173.4 million. In addition, WACKER invested 
EUR145.5 million (Q1 2008: EUR91.0m) in property, plant and equipment, 
intangible assets and financial assets in the period under review. Customer 
prepayments for future polysilicon shipments, on the other hand, had a positive 
net cash flow effect of around EUR67 million in Q1 2008. 
 
WACKER POLYMERS was the main focus of investments in the quarter at EUR185.6 
million. Aside from the expenditures for acquiring APP and WPS, additional 
divisional funds of EUR12.2 million (Q1 2007: EUR9.6m) flowed into the ongoing 
expansion of production facilities such as the Nanjing (China) site. To further 
boost utilization of dispersion capacities acquired from Air Products, WACKER 
POLYMERS intends to concentrate on the Calvert City (KY) site for its production 
expansion in the USA. As a result, the Group plans to close its South Brunswick 
(NJ) site in 2009. WACKER POLYSILICON´s investments in Q1 2008 more than doubled 
to EUR77.7 million (2007: EUR33.4m). Here, funds primarily flowed into ongoing 
expansion of polycrystalline silicon capacity at the division´s production site 
in Burghausen, Germany. 
 
Employees 
Newly commissioned production facilities and integration of new corporate 
entities increased the number of WACKER Group employees as of March 31, 2008 to 
15,660 (Dec. 31, 2007: 15,044). German sites accounted for 11,935 employees 
(Dec. 31, 2007: 11,624). Outside Germany, WACKER employed 3,725 people at the 
end of Q1 2008 (Dec. 31, 2007: 3,420). 
 
Business Divisions 
With total sales of EUR346.1 million (Q1 2007: EUR377.3m), Siltronic wasn´t able 
to match the record figure set in the prior-year quarter, though it did beat 
preceding quarter´s sales of EUR343.2 million. The strong euro was the primary 
drag on revenues. In local-currency terms, Siltronic generated the highest-ever 
divisional quarterly sales in Group history. Whereas demand for 300 mm wafers 
rose slightly in Q1 2008, sales of 200 mm and smaller diameters declined. In 
contrast, contributions from silicon-ingot sales to the solar industry have 
increased in importance and are positively influencing the margin. Siltronic 
generated an EBITDA of EUR114.0 million for January to March 2008 (Q1 2007: 
EUR130.4m) and thus achieved an EBITDA margin of 32.9 percent (Q1 2007: 34.6 
percent). 
 
In Q1 2008, WACKER SILICONES icreased its year-on-year total sales by around 4 
percent to EUR360.3 million (Q1 2007: EUR348.0m), thanks primarily to further 
volume gains, though also to price increases announced in Q4 2007. Adverse 
currency shifts, however, impacted sales growth. Strong increases in the costs 
of raw materials (e.g. methanol and silicon metal) and the effect of the strong 
euro weighed on earnings. In contrast, volume growth and higher prices 
positively impacted earnings. EBITDA for January to March 2008 amounted to 
EUR64.8 million (Q1 2007: EUR64.3m), resulting in an EBITDA margin of 18.0 
percent (Q1 2007: 18.5 percent). 
 
In Q1 2008, WACKER POLYMERS boosted its total sales by 34 percent to EUR198.5 
million (Q1 2007: EUR148.7m). Aside from higher volumes and prices, the primary 
reason for this was the complete acquisition of vinyl acetate ethylene (VAE) 
activities formerly part of the Air Products Polymers (APP) joint venture. These 
activities have been fully consolidated since February 1, 2008 and contributed a 
net sum of around EUR44 million to the division´s external sales. WACKER 
POLYMERS´ EBITDA for the January to March 2008 period totaled EUR38.1 million 
(Q1 2007: EUR34.2m) - up 11 percent year on year. Significantly higher 
raw-material costs and the weaker dollar were major factors in the 
disproportionately lower earnings increase. The EBITDA margin amounted to 19.2 
percent in the period (Q1 2007: 23.0 percent). 
 
WACKER POLYSILICON experienced continued strong polysilicon demand in Q1 2008. 
Total sales set a new record of EUR155.9 million (Q1 2007: EUR92.2m) in the 
period under review - soaring 69 percent year on year. This dynamic growth was 
enabled by significantly higher volumes following the polysilicon-production 
ramp-up of the Burghausen site´s Expansion Stage 6, which reached its full 
annual capacity of 3,500 metric tons in Q4 2007. In addition, higher sales 
prices in supplier agreements with solar and semiconductor-industry customers 
had a notably positive impact on sales and earnings. As a result, WACKER 
POLYSILICON disproportionally boosted its EBITDA in the period to EUR71.3 
million, more than double the figure of Q1 2007 (EUR33.5m). The EBITDA margin 
was 45.7 percent (Q1 2007: 36.3 percent). 
 
WACKER FINE CHEMICALS posted total January to March 2008 sales of EUR27.7 
million (Q1 2007: EUR35.0m), 21 percent below the prior-year figure due to 
consolidation measures. Sales of custom fine chemicals in Q1 2008 clearly 
trailed prior-year figures, as expected, due to reorganization measures. Strong 
demand for biotech products such as cysteine and cyclodextrins continued. The 
division´s biotech pharmaceutical proteins business also remained very 
promising. On the earnings side, last year´s reorganization measures were 
clearly successful. Despite lower sales, EBITDA of EUR3.2 million nearly matched 
the prior year level (Q1 2007: EUR3.6m) and the EBITDA margin correspondingly 
increased to 11.6 percent (Q1 2007: 10.3 percent). 
 
Outlook 
Despite the uncertainties surrounding future global economic and sector-specific 
trends, WACKER has set itself ambitious goals once again. Overall, the Group 
sees a good chance of boosting sales - as in the past few years - by clearly 
more than 10 percent in 2008, too. EBITDA is also expected to further increase. 
 
Information for editorial offices: The Q1 2008 report can be downloaded from 

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April 30, 2008 01:14 ET (05:14 GMT)