The Group's earnings before interest, taxes, depreciation and amortization (EBITDA) in the first quarter of 2018 amounted to €254.5 million, an increase of 11% compared to the same period of the previous year (€229.3 million) and 9% compared to the previous quarter (€233.4 million). The significant increase in achievements is mainly due to higher prices for chemical products and increased earnings from Wacker's equity investment in Siltronic AG. Wacker was able to significantly offset the losses caused by the significant increase in raw material prices compared to the same period of the previous year and the previous quarter. In addition, the high capacity utilization during the reporting period also contributed to the increase in profit. Wacker Group's EBITDA margin for January to March 2018 was 20.9% (first quarter of 2017: 18.8%), and 19.9% in the previous quarter. The Group's earnings before interest and taxes (EBIT) in the reporting period amounted to €121.7 million (€73.2 million in the first quarter of 2017), an increase of 66% year-on-year, with an EBIT margin of 10.0% (first quarter of 2017: 6.0%).

Wacker reported net income of €79.1 million in the reporting period (€665.9 million in the first quarter of 2017); Wacker's profit in the same period of the previous year was very high because it included a profit of €634.7 million from discontinued operations due to the deconsolidation of Siltronic AG. Profits from continuing operations more than doubled to €79.1 million (€31.2 million in the first quarter of 2017). Earnings per share in the reporting period were €1.52 (€13.19 in the first quarter of 2017).

Wacker's forecast for the full year 2018 remains unchanged from the forward-looking statements published in Wacker's 2017 annual report. Wacker expects its group sales to continue to grow in 2018 compared to the previous year (€4.9242 billion), with a growth rate in the low single-digit percentage range. EBITDA is expected to grow in the mid-single-digit percentage range compared to the previous year (€1.0141 billion). Wacker expects significant growth in the Group's full-year net income from continuing operations.

“Wacker achieved good results in the first quarter of 2018,” said Dr. Rudolf Staudigl, President and CEO of the Group, on Thursday in Munich. “Despite very unfavorable exchange rate effects, our sales still reached the excellent level of last year. At the same time, our EBITDA increased significantly – despite significantly higher raw material prices and the fact that we had to bear the operating costs of the Charleston production site in the first quarter of this year even though we could not produce. We are now gradually resuming production at the Charleston site, and the Charleston site will provide marketable polysilicon in the second quarter of this year. Our chemicals business performed very well in the reporting period, with particularly strong market demand for Wacker silicones, allowing us to significantly increase product prices. If this trend continues and there are no unexpected events affecting economic development, we are very likely to exceed our current target for full-year profits.”

Region

Wacker achieved sales growth in Europe in the first quarter of 2018, with sales reaching €520.3 million, a 5% increase compared to the same period last year (€497.2 million). In the reporting period, Wacker Group achieved sales of €432.7 million in Asia, a decrease of 3% compared to the same period last year (€444.6 million). Due to exchange rate effects, Wacker's sales in the Americas decreased by 8% to €201.7 million (€219.8 million in the first quarter of 2017).

Investments and net cash flow

Wacker Group invested a total of €69.2 million in the first quarter of 2018 (€46.7 million in the first quarter of 2017), an increase of 48% compared to the same period of the previous year. The investments were mainly used for capacity expansion of silicone and polymer products.

The Group's net cash flow from continuing operations in the first quarter of 2018 amounted to €168 million (€53.2 million in the first quarter of 2017); the significant increase is mainly due to good business development and advance insurance payments received due to the accident at the Charleston production site.

Employees

Wacker's global workforce increased slightly during the reporting period. As of March 31, 2018, Wacker had a total of 13,983 employees (December 31, 2017: 13,811). As of the end of the reporting period, Wacker Group had 10,076 employees in Germany (December 31, 2017: 9,984) and 3,907 employees outside Germany (December 31, 2017: 3,827).

Business segments

Wacker's silicone business segment achieved sales of €605.8 million in the first quarter of 2018, a 9% increase compared to the previous year (€555.6 million). The main reasons for the growth were higher silicone product prices and further optimization of the product portfolio. The segment's sales in the current quarter increased by 13% compared to the previous quarter (€536.6 million), and Wacker Silicones' EBITDA in the reporting period reached €148.5 million, a 38% increase compared to the same period of the previous year (€107.4 million) and a 50% increase compared to the previous quarter (€98.7 million). In addition to increased sales, portfolio effects and high production volumes also had a positive impact on the segment's profitability, with the EBITDA margin in the first quarter of 2018 increasing to 24.5% compared to 19.3% in the same period of the previous year and 18.4% in the previous quarter.

Wacker Polysilicon's total sales in the reporting period amounted to €301.9 million, a 2% decrease compared to the same period of the previous year (€306.8 million) but a 6% increase compared to the previous quarter (€285.1 million); the rise in the euro resulted in an unfavorable exchange rate effect, which was the main reason for the slight decline in performance compared to the same period of the previous year. Increased sales volumes of redispersible polymer powders and higher polymer product Prices could not fully compensate for the losses from the unfavorable exchange rate effect. Wacker Polysilicon's EBITDA in the reporting period amounted to €41.9 million (€52.3 million in the first quarter of 2017). The significant increase in raw material Prices compared to the same period of the previous year was the main reason for the 20% decline in performance. To counteract this development, the segment increased product Prices. Compared to the previous quarter (€33.9 million), the segment's EBITDA increased by 24%; seasonal factors also played a role here. The segment's EBITDA margin in the reporting period was 13.9%, compared to 17.0% in the same period of the previous year and 11.9% in the previous quarter.

Wacker's Biotech segment achieved total sales of €54.3 million from January to March 2018, representing a 6% increase compared to the same period last year (€51.4 million). This growth is mainly attributed to increased sales volume and higher prices for some products. The segment's first-quarter 2018 sales also showed a 9% increase compared to the fourth quarter of 2017 (€49.9 million). Wacker Biotech's EBITDA for the reporting period reached €10.1 million, a 5% decrease compared to the same period last year (€10.6 million). This was influenced by product portfolio effects and integration costs for the new production facility in León, Spain. Compared to the previous quarter (€7.5 million), Wacker Biotech's EBITDA increased by 35%. The EBITDA margin was 18.6%, compared to 20.6% in the same period last year and 15.0% in the fourth quarter of 2017.

Wacker's polysilicon segment achieved total sales of €219.3 million in the reporting period, an 18% decrease compared to the same period last year (€268.1 million) and the previous quarter (€267.5 million). The significant decline in Achievements is primarily due to reduced sales volume. The temporary shutdown of the Charleston production facility resulted in significantly lower quantities of marketable polysilicon compared to the same period last year. Wacker's polysilicon segment achieved EBITDA of €48.2 million in the reporting period, a 32% decrease compared to the same period last year (€70.5 million) and a 24% decrease compared to the previous quarter (€63.6 million). In addition to the decline in sales, the operating costs of the Charleston production facility also contributed to the decline in Achievements. The segment did not yet receive insurance compensation for the temporary shutdown of the Charleston production facility during the reporting period. The segment's EBITDA margin for the reporting period was 22.0%, compared to 26.3% in the first quarter of 2017 and 23.8% in the previous quarter.

Outlook

Wacker's 2017 annual report detailed predictions for this year's business development, and the predictions regarding Wacker's development remain unchanged in this reporting period.

Wacker anticipates that the fiscal year 2018 will be negatively impacted by persistently rising raw material Prices and the strong euro-dollar exchange rate. Given these circumstances, Wacker Group's sales growth is expected to be in the low single-digit percentage range. EBITDA is expected to exceed the previous year and grow by a moderate single-digit percentage. Wacker expects the EBITDA margin to be slightly higher than last year. Capital expenditures will significantly exceed the previous year, at approximately €470 million, mainly to meet the growth needs of Wacker's silicones business segment. Depreciation will amount to approximately €550 million, significantly lower than the previous year. Wacker expects a significant increase in the Group's full-year net profit from continuing operations. Net cash flow is expected to show a significant surplus but will be significantly lower than the previous year due to increased capital expenditures. Net financial debt will remain essentially unchanged compared to the previous year.