EANS-News: Growing Chemical Business and Consolidation in the Solar Industry Mark WACKER's Business Performance in Q3 2012

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quarterly report

Subtitle: - Group sales reach €1.20 billion in Q3 2012, about 6
percent below the prior-year period - EBITDA comes in at €204
million, down 36 percent year on year due to price declines - Net
income for Q3 2012 amounts to €27 million - Chemical-business revenue
increases by 7 percent thanks to strong demand, with EBITDA up by 20
percent year on year - Polysilicon business shows significant
declines in sales and earnings - Investments of €291 million for
strategic expansion of polysilicon and dispersions capacities -
Annual-forecast specified: Group sales of between €4.6 and €4.7
billion expected for full-year 2012, with EBITDA anticipated at about
€750 million due to price pressure

München (euro adhoc) - October 24, 2012 - In the third quarter of
2012, Wacker Chemie AG's business performance varied across its
individual segments. The chemical divisions had higher sales and
earnings compared with the previous year, thanks to satisfactory
overall customer demand. Sales in the chemical business rose 7
percent, while earnings before interest, taxes, depreciation and
amortization improved by 20 percent year on year. In contrast, sales
and earnings in the polysilicon business decreased significantly
because of sustained pressure on prices and high inventory levels in
the solar industry. The Munich-based chemical group posted total
sales of EUR1,200.9 million between July and September 2012 - down 6
percent from a year earlier (EUR1,280.6 million). WACKER almost
matched its sales level of the preceding quarter (EUR1,222.5
million). Higher volumes than a year ago and favorable exchange-rate
effects stemming from a stronger US dollar helped lift the Group's
sales in the quarter under review.

In the third quarter of 2012, WACKER generated earnings before
interest, taxes, depreciation and amortization (EBITDA) of EUR204.3
million, 36 percent less than a year ago (EUR317.6 million) and 15
percent less than in Q2 2012 (EUR240.5 million). The main reasons for
this downturn are lower prices for solar silicon and semiconductor
wafers. The EBITDA margin for the third quarter of 2012 was 17.0
percent, compared with 24.8 percent a year ago and 19.7 percent in
the preceding quarter. The Group's earnings before interest and taxes
(EBIT) fell to EUR70.7 million in the third quarter of 2012 (Q3 2011:
EUR197.2 million), thereby yielding an EBIT margin of 5.9 percent (Q3
2011: 15.4 percent). Net income for the period amounted to EUR26.9
million (Q3 2011: EUR124.9 million), which corresponds to earnings
per share of EUR0.50 (Q3 2011: EUR2.50).

The WACKER Group has specified its forecast for full-year 2012, and
now expects to generate total sales of between EUR4.6 and EUR4.7
billion. EBITDA for this year is projected at approximately EUR750
million.

"The WACKER Group has performed respectably in a difficult third
quarter despite a number of challenges," said CEO Rudolf Staudigl on
Wednesday in Munich. "Our chemical business developed well, with
higher sales and earnings. However, the continued slowdown in global
economic growth and the particular problems in the solar industry
left their mark on our figures for Q3 2012. Sustained price
competition, high inventories, the difficult financial situation of
many market players and the anti-dumping proceedings against Chinese
solar manufacturers currently characterize our polysilicon business.
But, on the other hand, generating solar power is becoming steadily
less expensive. We are confident that the photovoltaic market will
continue to grow, and that we will ultimately benefit from the
consolidation in the long term, because WACKER is a quality and cost
leader in this business."

Regions During Q3 2012, WACKER profited primarily from good customer
demand for silicone and polymer products in the USA and Asia. In
Europe, chemical business was generally weak compared with the
previous year. Many customers in Europe are currently rather cautious
and hesitant about placing orders, given the economic uncertainties.
From July through September 2012, the WACKER Group generated sales of
EUR481.5 million in Asia, almost matching the prior-year level
(EUR484.7 million).

In Germany and the rest of Europe, business was down significantly
from the previous year. Third-quarter Group sales in Germany totaled
EUR172.2 million - down almost 28 percent from a year earlier
(EUR237.6 million). The ongoing shift of the solar industry to Asia
remains a significant factor for WACKER's lower sales in Germany. In
Europe excluding Germany, sales for the three months from July
through September 2012 fell 6 percent to EUR282.2 million (Q3 2011:
EUR298.7 million).

In the Americas, the growing demand for chemicals completely offset
the decline in polysilicon and semiconductor wafers. At EUR219.9
million, the Group's third-quarter sales in this region exactly
matched the prior-year level.

In the markets combined under "Other regions," third-quarter sales
reached EUR45.1 million, 14 percent higher than a year ago (EUR39.7
million). Overall, WACKER generated about 86 percent of its
third-quarter 2012 sales with customers outside Germany (Q3 2011:81
percent).

Investments and Net Cash Flow During Q3 2012, WACKER continued its
expansion of production capacity in international markets, investing
a total of EUR291.4 million, which is 3 percent less than a year ago
(EUR299.1 million) due to project-related reasons, but 19 percent
more than in Q2 2012 (EUR244.9 million). Over two-thirds of
investments in the quarter went to the ongoing construction of
polysilicon production facilities at Charleston in the USA. Another
investment focus was on the expansion of production facilities for
vinyl acetate-ethylene copolymer dispersions and polyvinyl acetate
solid resins. WACKER is currently constructing a second reactor line
for dispersions, with an annual capacity of 40,000 metric tons, at
its site in Ulsan, South Korea. This will almost double WACKER's
South Korean production capacity. At Nanjing in China, construction
of the new facilities for dispersions and polyvinyl acetate solid
resins progressed as planned during the quarter under review.

WACKER's net cash flow for the July-through-September 2012 period was
EUR-90.4 million, compared with EUR23.2 million a year ago. This drop
was mainly due to net income being substantially lower year on year.

Employees WACKER's workforce declined somewhat during the third
quarter of 2012. On September 30, 2012, there were 16,433 employees
worldwide (June 30, 2012, 16,759) at WACKER, 2 percent fewer than at
the end of the preceding quarter. As of September 30, 2012, WACKER
had 12,755 employees in Germany (June 30, 2012: 12,824) and 3,678 at
its international sites (June 30, 2012: 3,935).

Business Divisions WACKER SILICONES increased its total sales in Q3
2012. At EUR432.1 million, the figure was almost 7 percent higher
than a year ago (EUR405.2 million). Higher volumes and favorable
exchange-rate effects offset continuing price pressures on silicone
products. Thanks to good customer demand and high plant-utilization
rates, the division achieved EBITDA of EUR57.4 million in Q3 2012
amid lower prices for some of its products. That is an increase of
over 10 percent from last year (EUR52.0 million), and corresponds to
an EBITDA margin of 13.3 percent (Q3 2011: 12.8 percent).

WACKER POLYMERS increased its total third-quarter sales by over 6
percent to EUR274.0 million (Q3 2011: EUR257.9 million). Thanks to
positive customer demand, sales volumes for dispersions and
dispersible polymer powders were around 5 percent higher in the
period under review than a year earlier. The division's EBITDA grew
29 percent year on year to EUR50.5 million (Q3 2011: EUR39.2
million). This increase was supported by higher volumes and good
production capacity utilization. Earnings also benefited from
favorable exchange-rate effects. The third-quarter EBITDA margin rose
to 18.4 percent (Q3 2011: 15.2 percent).

WACKER BIOSOLUTIONS generated total third-quarter sales of EUR40.1
million, posting a rise of close to 18 percent on the prior-year
period (EUR34.1 million). Strong customer demand for polymers for
gumbase was a key factor behind this growth. WACKER BIOSOLUTIONS
increased its EBITDA to EUR5.5 million (Q3 2011: EUR3.1 million). The
third-quarter EBITDA margin came in at 13.7 percent (Q3 2011: 9.1
percent).

WACKER POLYSILICON posted total sales of EUR269.1 million in Q3 2012,
down about 29 percent from a year ago (EUR378.2 million). The
division's market environment remains challenging. Ongoing
consolidation pressures in the solar industry, high inventory levels
along the entire photovoltaic supply chain, and the financial
difficulties facing many manufacturers of solar cells and modules are
slowing down sales volumes and impacting prices for hyperpure
polysilicon. Third-quarter solar-silicon prices were around 40
percent below their prior-year level. Sales volumes, however, were
slightly higher both year on year and compared with Q2 2012, thanks
to WACKER POLYSILICON's broad-based customer portfolio and helped by
bookings of delayed volumes from Q2. To bring production volumes in
line with customer demand, the division partially curbed production
in the third quarter. Plant utilization was about 80 percent during
the July-through-September 2012 period. The situation in the solar
market has also made its mark on WACKER POLYSILICON's earnings
development. EBITDA amounted to EUR78.8 million in the third quarter
of 2012. That is a decrease of 56 percent from a year ago (EUR179.4
million), yielding an EBITDA margin of 29.3 percent (Q3 2011: 47.4
percent).

Siltronic had total sales of EUR234.7 million from July through
September 2012, 8 percent lower than a year earlier (EUR255.3
million). Lower prices were the main factor behind the decrease.
Third-quarter plant utilization at Siltronic ranged from 70 to 90
percent, depending on wafer diameter. As part of its capacity
consolidation for smaller-diameter wafers, Siltronic closed down the
150 mm wafer production line at the Portland site in the USA in the
third quarter, as announced. The 200 mm wafer plant at Hikari (Japan)
had already been shut down in the preceding quarter. The
consolidation measures benefited capacity utilization at the
remaining facilities for these wafer diameters. Siltronic's EBITDA
was EUR9.9 million in the third quarter of 2012 (Q3 2011: EUR33.6
million). This is equivalent to an EBITDA margin of 4.2 percent (Q3
2011: 13.2 percent).

Outlook WACKER believes that the economic situation will continue to
be challenging in the months ahead. The extent to which the world
economy will slow remains uncertain. Nevertheless, the Group sees
growth prospects, especially for its chemical business, in markets
outside Europe.

In the polysilicon business, there are particular challenges and
risks arising from the ongoing consolidation process in the solar
industry and from the unpredictable political climate. WACKER expects
that new photovoltaic capacity will exceed 30 gigawatts this year,
and that this upward trend will continue next year toward 40
gigawatts. Inventory levels are very high at every stage of the
supply chain, however. These inventories will first have to be
reduced, which is likely to affect the solar industry's demand for
polysilicon. WACKER is adapting to this market environment, and has
therefore made the decision to delay the completion of the
polysilicon facility at its US site in Charleston, Tennessee. At this
time, the company expects to start production at Charleston by
mid-2015, some 18 months later than originally planned. Lower volumes
and lower prices will keep WACKER POLYSILICON's full-year 2012
revenues below the levels of the previous year, in line with the
trend reported for the first nine months.

In the semiconductor industry, the prospects for the coming months
have deteriorated. Important customers have in recent weeks reduced
their own outlooks through the end of the year. Supply-chain
inventories are high, and weak demand is further pushing down
silicon-wafer prices. At Siltronic, this is expected to result in
significantly weaker wafer sales volumes for the fourth quarter of
2012, with revenues also substantially lower during the remainder of
2012.

In its chemical divisions, WACKER sees good opportunities for further
growth in the remaining months of 2012 and beyond, even though
raw-material and energy costs remain relatively high. Rising living
standards, particularly in Asia, are fueling demand for high-quality
products containing silicones. In its polymer business, WACKER
anticipates higher volumes for full-year 2012, with growth for
construction applications driven by the markets of Asia and South
America. Dispersions are experiencing additional demand, especially
from the carpeting and packaging industries in the USA. The WACKER
BIOSOLUTIONS division is also anticipating higher sales for 2012.
WACKER intends to continue strengthening this division's market
leadership in polyvinyl acetate solid resins for use in gumbase.

For full-year 2012, the WACKER Group expects to generate total sales
of between EUR4.6 and EUR4.7 billion. Earnings performance will be
affected especially by the lower prices obtained for deliveries of
solar silicon. As a result, the Group's earnings before interest,
taxes, depreciation and amortization in 2012 will fall well short of
the 2011 figure and, from today's perspective, are estimated to come
in at EUR750 million.

WACKER's Key Figures

|EUR million |Q3 2012 |Q3 2011 |Change | |9M 2012|9M 2011|Change|
| | | |in % | | | |in % |
|Sales |1,200.9 |1,280.6 |-6.2 | |3,617.7|3,898.1|-7.2 |
|EBITDA1 |204.3 |317.6 |-35.7 | |656.6 |993.4 |-33.9 |
|EBITDA margin2 (%) |17.0 |24.8 |- | |18.1 |25.5 |- |
|EBIT3 |70.7 |197.2 |-64.1 | |263.4 |658.2 |-60.0 |
|EBIT margin2 (%) |5.9 |15.4 |- | |7.3 |16.9 |- |
| | | | | | | | |
|Financial result |-15.3 |-9.3 |64.5 | |-44.5 |-26.9 |65.4 |
|Income before taxes |55.4 |187.9 |-70.5 | |218.9 |631.3 |-65.3 |
|Net income for the |26.9 |124.9 |-78.5 | |127.5 |435.6 |-70.7 |
|period | | | | | | | |
| | | | | | | | |
|Earnings per share (EUR)|0.50 |2.50 |-80.0 | |2.52 |8.76 |-71.2 |
| | | | | | | | |
|Investments (incl. |291.4 |299.1 |-2.6 | |722.4 |644.0 |12.2 |
|financial assets) | | | | | | | |
|Net cash flow4 |-90.4 |23.2 |n.a. | |-294.9 |41.1 |n.a. |
| | | | | |
|EUR million |Sept.30,|Sept.30,|Dec. 31,| |
| |2012 |2011 |2011 | |
|Equity |2,651.5 |2,698.9 |2,629.7 | |
|Financial liabilities |1,177.4 |593.1 |777.9 | |
|Net financial |-411.3 |364.0 |95.7 | |
|receivables/liabilities5| | | | |
|Total assets |6,563.4 |6,125.7 |6,237.0 | |
| | | | | |
|Employees (number at end|16,433 |17,133 |17,168 | |
|of period) | | | | |

1 EBITDA is EBIT before depreciation/appreciation of noncurrent
assets. 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 received from
polysilicon contracts) 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.

Note to editors: The Q3 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 forward-looking 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
forward-looking 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