EANS-News: WACKER's Sales and Earnings Grow Quarter on Quarter in Q2 2012

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quarterly report

Subtitle: - Group sales reach €1.22 billion in Q2 2012, 2 percent
above Q1 2012 and close to 8 percent below the prior-year period - At
€241 million, EBITDA is 14 percent higher than in Q1 2012, but down
26 percent year on year due to price declines - Net income for Q2
2012 amounts to €61 million - Investments of €245 million focus on
strategic polysilicon-production expansion - More cautions full-year
forecast: For 2012, WACKER now targets sales slightly below the
prior-year level, with EBITDA still expected to be well below
prior-year figure amid lower prices

München (euro adhoc) - July 25, 2012 - Wacker Chemie AG continued to
grow its business volume during the second quarter of 2012 thanks to
good customer demand outside Europe. Sales and earnings at the
Munich-based chemical company were both higher than in Q1 2012.
WACKER was, however, unable to match the strong second-quarter
figures of a year earlier. The Group generated sales of EUR1,222.5
million from April through June 2012, up 2 percent on Q1 2012
(EUR1,194.3 million) and 8 percent below the prior-year level
(EUR1,325.8 million). Favorable exchange-rate effects arising from a
stronger US dollar helped lift the Group's sales in the quarter under
review. Sales trends were dampened by significantly lower prices,
especially in the solar-silicon and semiconductor-wafer businesses.
Overall volumes were also slightly down from a year ago.

Capacity at WACKER's production facilities was utilized at higher
rates in the second quarter of 2012 than during the first three
months of the year. This has improved coverage of fixed costs and
helped generate higher earnings for the Group compared with the first
quarter. However, the substantial reduction in polysilicon prices was
the main reason that the Q2 2011 earnings figures could not be
matched in the quarter under review.

In the period from April to June 2012, WACKER achieved earnings
before interest, taxes, depreciation and amortization (EBITDA) of
EUR240.5 million (Q2 2011: EUR324.8 million) - thus down 26 percent
on the strong prior-year period. But when compared with Q1 2012
(EUR211.8 million), EBITDA actually improved by 14 percent. The
EBITDA margin for the second quarter of 2012 was 19.7 percent,
compared with 17.7 percent in the preceding quarter and 24.5 percent
a year ago. The EBITDA reported for the quarter under review contains
EUR19.4 million in advance payments that WACKER retained due to the
termination of polysilicon supply agreements. The Group's Q2 2012
earnings before interest and taxes (EBIT) amounted to EUR110.3
million (Q2 2011: EUR215.1 million), down 49 percent from a year ago,
but up 34 percent on Q1 2012 (EUR82.4 million). This represents an
EBIT margin of 9.0 percent (Q2 2011: 16.2 percent). Net income for
the period amounted to EUR60.6 million (Q2 2011: EUR142.7 million),
which corresponds to earnings per share of EUR1.18 (Q2 2011:
EUR2.87).

For the rest of the year, WACKER anticipates a general economic
environment that will be challenging and marked by uncertainty.
Europe's financial and sovereign-debt crisis is intensifying the
global economic risks. Moreover, ongoing consolidation and
overcapacity in the solar industry are resulting in an extremely
competitive market environment. Growing supply-chain inventories and
financing difficulties among market participants could cause some
polysilicon customers to not take full delivery or to delay taking
delivery, or lead to the termination of contracts. This is why WACKER
does not expect to reach its previous full-year sales projection of
approximately EUR5 billion. 2012 sales for the Group are now expected
to come in slightly below the figure reported for fiscal 2011 (EUR4.9
billion). EBITDA for fiscal 2012 is still likely to fall well short
of the previous year's figure of EUR1.1 billion.

"In the first half of 2012, the WACKER Group successfully handled
both the economic and industry-specific challenges," said CEO Rudolf
Staudigl on Wednesday in Munich. "We counter the increased risks by,
for example, flexibly managing capacity utilization at our production
facilities. By doing so, we ensure that we can respond quickly and
firmly to significant changes in customer demand. It remains our
primary goal to keep WACKER well on track despite the more difficult
underlying conditions."

Regions WACKER's performance in the second quarter of 2012 varied
rather widely across the individual regions. One of the major reasons
for this divergence is the ongoing shift of the solar industry to
Asia. In Asia, WACKER generated sales of EUR489.3 million between
April and June 2012 - down only slightly from the prior-year figure
(EUR499.8 million).

In Germany and the other European countries, second-quarter sales
were down substantially from their respective prior-year figures. In
Germany, second-quarter Group sales totaled EUR173.0 million - thus
29 percent lower than a year earlier (EUR242.8 million). In Europe
excluding Germany, sales for the three months from April through June
2012 fell 11 percent to EUR292.2 million (Q2 2011: EUR329.5 million).

The Group posted a 6-percent increase in sales in the Americas. The
main contributor here was the polymer business, which benefited from
rising customer demand. Total sales for this region amounted to
EUR224.4 million in the quarter under review (Q2 2011: EUR211.8
million).

In the markets combined under "Other regions," second-quarter 2012
sales totaled EUR43.6 million, also somewhat higher than a year ago
(EUR41.9 million). Overall, WACKER generated about 86 percent of its
second-quarter 2012 sales with customers outside Germany (Q1 2011: 82
percent).

Investments and Net Cash Flow In Q2 2012, WACKER continued on its
path of strategic production-capacity expansion, with a total
investment of EUR244.9 million, 18 percent more than a year earlier
(EUR208.3 million). Over two-thirds of the investments were for
expanding polysilicon capacity, particularly for ongoing construction
of the new production site in Charleston, Tennessee (USA). At the
Nanjing (China) site, construction of the new facilities for vinyl
acetate-ethylene copolymer dispersions and polyvinyl acetate solid
resins progressed as planned in the quarter under review.

WACKER's net cash flow from April through June 2012 totaled EUR-156.9
million, compared with EUR-81.3 million a year ago. The causes of
this decline were increased investments, higher inventories,
restructuring payments for the closure of the Hikari site in Japan,
and the reduced net income for the period.

Employees WACKER's workforce declined in Q2 2012. On June 30, 2012,
WACKER had 16,759 employees worldwide (March 31, 2012: 17,166). As of
the end of the quarter, WACKER had 12,824 employees in Germany (March
31, 2012: 12,847) and 3,935 at its international sites (March 31,
2012: 4,319).

Business Divisions WACKER SILICONES reported total Q2 2012 sales of
EUR422.9 million, essentially matching the prior-year period
(EUR421.1 million). Compared to Q1 2012 (EUR401.0 million), sales
rose 5 percent. Favorable exchange-rate effects compensated for lower
silicone-product prices in the quarter under review. Since WACKER
SILICONES was able to keep second-quarter 2012 plant utilization
high, it achieved higher fixed-cost coverage than in Q1 2012. Despite
persistent price pres¬sures, this significantly contributed to an
increase in the division's EBITDA, which rose to EUR59.9 million in
the quarter under review (Q2 2011: EUR50.1 million). This 20-percent
rise on the prior-year quarter yielded an EBITDA margin of 14.2
percent (Q2 2011: 11.9 percent). The division beat its Q1 2012 EBITDA
of EUR49.4 million by 21 percent.

WACKER POLYMERS further increased its total sales in Q2 2012 mainly
thanks to higher volumes. The division's sales grew 11 percent to
EUR276.1 million (Q2 2011: EUR249.7 million). Compared with Q1 2012
(EUR233.8 million), sales climbed 18 percent. Seasonal effects from a
springtime upturn in construction-related business also contributed
to this gain. Thanks to favorable product-mix effects and high
plant-capacity utilization, WACKER POLYMERS increased its
second-quarter EBITDA to EUR45.3 million - a 42-percent increase from
a year ago (EUR32.0 million). Compared with the preceding quarter
(EUR34.1 million), the division's EBITDA improved 33 percent. The
EBITDA margin rose to 16.4 percent, compared with 14.6 percent in Q1
2012 and 12.8 percent in Q2 2011.

WACKER BIOSOLUTIONS generated total sales of EUR40.1 million in the
April-through-June quarter (Q2 2011: EUR39.0 million). Thus, sales
were at about the prior-year and preceding-quarter level (EUR41.2
million). The division experienced solid demand for gumbase polymers
and for cyclodextrins and cysteine in the quarter under review.
Product-related sales to the pharmaceutical and agricultural sectors
were slightly lower year over year. Due to these lower sales at its
pharmaceutical and agricultural businesses, WACKER BIOSOLUTIONS'
second-quarter 2012 EBITDA of EUR7.1 million was below the comparable
prior-year figure (EUR8.6 million) and the preceding quarter's figure
(EUR7.9 million). This corresponds to an EBITDA margin of 17.7
percent (Q2 2011: 22.0 percent).

At WACKER POLYSILICON, ongoing consolidation in the solar sector and
significantly lower market prices for solar silicon compared with a
year earlier had their impact on the business trend in the second
quarter of 2012. At EUR286.8 million, total sales were down 28
percent on the comparable prior-year period (EUR399.2 million).
Measured against Q1 2012 (EUR366.6 million), sales were down by close
to 22 percent. In the April-through-June 2012 period, some customers
did not take full delivery of contracted quantities. This
additionally held back the sales trend amid lower prices. Despite
difficult market conditions, WACKER POLYSILICON achieved
second-quarter 2012 EBITDA of EUR120.3 million (Q2 2011: EUR188.2
million). This contains EUR19.4 million in advance payments that
WACKER retained due to the termination of polysilicon supply
agreements. At 41.9 percent (Q2 2011: 47.1 percent), the EBITDA
margin remained at a high level. In Q1 2012, EBITDA had been EUR150.1
million and the EBITDA margin 40.9 percent.

In the second quarter of 2012, Siltronic achieved total sales of
EUR247.4 million (Q2 2011: EUR276.9 million). Although the division's
second-quarter volumes and sales were close to 11 percent lower year
over year, they were, nonetheless, up 23 percent compared with Q1
2012 (EUR201.1 million). In the 300 mm wafer segment, volumes were
some 10 percent higher than a year ago. Smaller diameters were below
the prior-year level. Compared to Q1 2012, volumes rose for all wafer
diameters. Growth by surface area sold was around 25 percent. Prices
remained virtually stable relative to the preceding quarter. As
announced, Siltronic generated positive EBITDA from April through
June 2012. It came in at EUR13.0 million, compared to EUR37.3 million
a year earlier. The EBITDA margin reached 5.3 percent (Q2 2011: 13.5
percent). In Q1 2012, Siltronic had still posted negative EBITDA of
EUR-25.7 million. This included non-recurring expenses of EUR 14.8
million relating to the forthcoming closure of the 150 mm wafer
production line at Siltronic's Portland site.

Outlook For the rest of this year, WACKER anticipates a general
economic environment that will be challenging and marked by
uncertainty. The second quarter saw an intensification of the global
economic risks arising from Europe's financial and sovereign-debt
crisis.

The photovoltaic market is likely to continue to grow worldwide in
the years to come. That means customer demand for the high-quality
solar silicon WACKER makes will continue to rise. But the
solar-sector consolidation currently underway could also put WACKER
customers in economic difficulty. This, in turn, could lead to the
cancellation of individual supply contracts and failure to take full
delivery of, or delayed taking delivery of, contracted quantities.
Given the sustained pressure on prices all along the solar industry's
supply chain, WACKER POLYSILICON's sales at the end of 2012 will fall
short of last year's levels.

In the semiconductor business, the slowdown in consumer activity
could result in stagnant wafer volumes for the second half of 2012.
From today's perspective, the principal areas of growth for the
division are in the 300 mm wafer segment and, regionally, in Asia.
Accordingly, WACKER is proceeding with the announced production
realignment for smaller wafer diameters and continues to concentrate
on further optimizing its 300 mm wafer business.

At its chemical divisions, WACKER sees opportunities for additional
growth this year, in spite of the economic uncertainties and the
endur¬ing high energy and raw-material costs.

WACKER now expects full-year 2012 sales for the Group to be slightly
below the figure reported for fiscal 2011. Achievement of this goal
will largely depend on developments in the world economy, competitive
conditions in the solar industry and demand in the semiconductor
market during the rest of the year. Earnings will be affected by the
lower prices obtained for deliveries of solar silicon and by
persistently high raw-material and energy prices. WACKER therefore
reaffirms its view that earnings before interest, taxes, depreciation
and amortization for full-year 2012 will fall well short of the
previous year's figure.

WACKER's Key Figures

|EUR million |Q2 2012 |Q2 2011 |Change | |6M 2012|6M 2011|Change |
| | | |in % | | | |in % |
|Sales |1,222.5 |1,325.8 |-7.8 | |2,416.8|2,617.5|-7.7 |
|EBITDA1 |240.5 |324.8 |-26.0 | |452.3 |675.8 |-33.1 |
|EBITDA margin2 (%) |19.7 |24.5 |- | |18.7 |25.8 |- |
|EBIT3 |110.3 |215.1 |-48.7 | |192.7 |461.0 |-58.2 |
|EBIT margin2 (%) |9.0 |16.2 |- | |8.0 |17.6 |- |
| | | | | | | | |
|Financial result |-15.5 |-9.7 |59.8 | |-29.2 |-17.6 |65.9 |
|Income before taxes |94.8 |205.4 |-53.8 | |163.5 |443.4 |-63.1 |
|Net income for the |60.6 |142.7 |-57.5 | |100.6 |310.7 |-67.6 |
|period | | | | | | | |
| | | | | | | | |
|Earnings per share (EUR)|1.18 |2.87 |-58.8 | |2.02 |6.26 |-67.7 |
| | | | | | | | |
|Investments (incl. |244.9 |208.3 |17.6 | |431.0 |344.9 |25.0 |
|financial assets) | | | | | | | |
|Net cash flow4 |-156.9 |-81.3 |93.0 | |-204.5 |17.9 |n.a. |
| | | | | |
|EUR million |June 30,|June 30,|Dec. 31,| |
| |2012 |2011 |2011 | |
|Equity |2,630.4 |2,599.7 |2,629.7 | |
|Financial liabilities |1,114.0 |547.4 |777.9 | |
|Net financial |-316.0 |348.3 |95.7 | |
|receivables/liabilities5| | | | |
|Total assets |6,477.6 |5,843.0 |6,237.0 | |
| | | | | |
|Employees (number at end|16,759 |16,834 |17,168 | |
|of period | | | | |

1 EBITDA is EBIT before depreciation and amortization. 2 Margins are
calculated based on sales 3 EBIT is the result from continuing
operations for the period before interest and other financial
results, and income taxes 4 Sum of cash flow from operating
activities (excluding changes in advance payments) and cash flow from
noncurrent investment activities (before securities), including
additions due to finance leases. 5 Sum of cash and cash equivalents,
noncurrent and current securities, and noncurrent and current
financial liabilities.

Information for editorial offices: The Q2 2012 report is available
for download on the WACKER website (www.wacker.com) under Investor
Relations.

This press release contains forward-looking statements based on
assumptions and estimates of WACKER's Executive Board. Although we
assume the expectations in these forwardlooking statements are
realistic, we cannot guarantee they will prove to be correct. The
assumptions may harbor risks and uncertainties that may cause the
actual figures to differ considerably from the forward-looking
statements. Factors that may cause such discrepancies include, among
other things, changes in the economic and business environment,
variations in exchange and interest rates, the introduction of
competing products, lack of acceptance for new products or services,
and changes in corporate strategy. WACKER does not plan to update the
forwardlooking statements, nor does it assume the obligation to do
so.

Further inquiry note:
Christof Bachmair
Media Relations & Information
Tel.: +49 (0)89 6279 1830
E-Mail: christof.bachmair@wacker.com

end of announcement euro adhoc
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company: Wacker Chemie AG
Hanns-Seidel-Platz 4
D-81737 München
phone: +49 (0) 89 6279 01
FAX: +49 (0) 89 6279 1770
mail: info@wacker.com
WWW: http://www.wacker.com
sector: Chemicals
ISIN: DE000WCH8881
indexes: MDAX, CDAX, Prime All Share
stockmarkets: free trade: Hannover, München, Hamburg, Düsseldorf, Stuttgart,
regulated dealing: Berlin, regulated dealing/prime standard:
Frankfurt
language: English