EANS-News: Polysilicon Prices and Stable Chemical Business Shape WACKER's Expectations for 2013

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Subtitle: - Sales of €4.63 billion in 2012 almost 6 percent below
previous year, with EBITDA reaching €787 million - Group aims to
generate full-year 2013 sales at year-earlier level - Chemical
business expected to post further sales and earnings growth in
current year - 2013 Group EBITDA projected below prior year amid
lower polysilicon prices - Capital expenditures in 2013 will be just
under €600 million, after 2012’s record €1.1 billion

Financial Figures/Balance Sheet

Munich (euro adhoc) - March 14, 2013 - Wacker Chemie AG closed 2012
with lower sales and earnings, as already announced. In its annual
report released today, the Munich-based chemical Group recorded sales
of EUR4.63 billion, just under 6 percent below the previous year's
EUR4.91 billion. The decline was chiefly due to weaker prices for
solar-grade silicon and semiconductor wafers. Overall, price effects
reduced last year's Group sales by around EUR700 million or over 14
percent. 2012's EBITDA - earnings before interest, taxes,
depreciation and amortization - came in at EUR787 million (2011:
EUR1.1 billion). The corresponding EBITDA margin was 17.0 percent
(2011: 22.5 percent). EBITDA dropped 29 percent against 2011 mainly
because of excess solar-sector capacity. Solar-silicon prices halved
within one year. WACKER's chemical divisions, conversely, grew their
EBITDA by some 15 percent relative to 2011, primarily due to
accelerating demand for polymer products. WACKER's bottom line for
2012 shows net income of EUR107 million, EUR249 million lower than a
year earlier (EUR356 million).

During the first two months of 2013, WACKER's chemical divisions
continued to perform soundly, reporting satisfactory demand amid the
usual seasonal effects of winter. At its polysilicon division, WACKER
is currently selling much higher volumes than expected - with prices
currently stable at a low level. At Siltronic, there is no indication
yet of any fundamental turnaround. Demand for semiconductor wafers is
still weak, and prices are low. In total, WACKER expects 2013's
first-quarter sales to outperform Q4 2012, but to fall short of the
2012 first-quarter figure, since polysilicon prices back then were
almost twice as high as today.

For full-year 2013, WACKER forecasts sales at the year-earlier level
- providing that no major trade barriers are introduced in the solar
industry and that semiconductor demand picks up in the second half.
Volumes at every division are expected to grow further. In the
chemical divisions, sales and EBITDA are projected to be above 2012.
At the same time, the Group anticipates a year-over-year decline in
average semiconductor prices. Assuming that polysilicon prices remain
at their Q4 2012 level, WACKER expects Group EBITDA in 2013 to be
below last year's figure.

"From today's perspective, 2013 will not be an easy year for WACKER,"
said CEO Rudolf Staudigl in Munich on Thursday. "The semiconductor
market is currently moving sideways. Polysilicon prices are low, but
have bottomed out. At the same time, demand growth is strong among
our solar customers. Capacity utilization at our polysilicon plants
is climbing fast. If this trend continues, there will be
opportunities for higher prices. Our robust chemical business
continues to be a key stabilizing factor for the Group."

Capital Expenditures The Group's capital expenditures grew in 2012,
up by almost 12 percent to EUR1.1 billion (2011: EUR981 million) -
the highest amount in the Group's history. Funding primarily went
toward further capacity expansion for hyperpure polycrystalline
silicon.

In Q2 2012, expansion stage 9 at Nünchritz reached its full capacity
of 15,000 metric tons per year. Last year, WACKER made good progress
with constructing its new polysilicon site at Charleston in the US
state of Tennessee. Numerous buildings are ready or are about to be
completed. Amid the excess capacities currently facing polysilicon,
however, WACKER decided last fall to slow down the pace of this
project. Charleston's production start-up is now planned for
mid-2015. With this decision, the chemical Group is aligning capacity
growth with market demand and, at the same time, easing the burden on
2013's cash flow by a euro amount in the triple-digit-million range.
Due to the longer timescale, investments in Charleston are expected
to climb some 10 percent to around US$2 billion. At the same time,
the site's total capacity will grow at least 10 percent to over
20,000 metric tons per year. WACKER is using the additional time to
optimize production facilities and improve manufacturing processes
there, so that yields are higher.

WACKER is also expanding its capacities for dispersions and polyvinyl
acetate solid resins in Asia and the USA. At Nanjing (China), the
Group is building two new production facilities. It is expanding its
existing dispersions capacities by adding a new reactor with an
annual output of 60,000 metric tons. The new facility is expected to
start up in the middle of this year. At Nanjing, WACKER is also
building a new plant to produce polyvinyl acetate solid resins, with
an annual capacity of 20,000 metric tons. It is scheduled to go into
operation by the end of this year. Early February, WACKER started up
a new dispersions reactor - with an annual capacity of 40,000 metric
tons - at its Ulsan site in South Korea. At its US polymers site in
Calvert City, WACKER is also adding 30,000 metric tons. Capital
expenditures for all four projects totaled some EUR40 million in
2012. These projects will strengthen the Munich-based Group's
position as the world's leading manufacturer of polymers for
dispersions and gumbase.

Additional funding flowed into expanding capacity at Siltronic
Samsung Wafer, WACKER's Singapore joint venture for making 300 mm
wafers for the semiconductor industry, as well as into financing its
siloxane joint venture with Dow Corning in China.

Employees At the end of 2012, WACKER had 16,292 employees worldwide,
876 fewer than a year earlier (17,168). The decline stems from
structural measures in semiconductors. Last year, Siltronic closed
Hikari - its Japanese production site for 200 mm wafers - and stopped
producing 150 mm wafers at Portland. At year-end, WACKER's German
sites had 12,635 employees (2011: 12,813) and its international sites
3,657 (2011: 4,355).

Net Cash Flow, Net Financial Liabilities and Equity Ratio As
announced, 2012's net cash flow was clearly in negative territory due
to the high investment levels. It amounted to EUR-536 million (2011:
EUR-158 million). WACKER financed about one third of its investments
from its own cash flow. In addition, it drew on borrowed funds for
its strategic investment program. Consequently, net financial
liabilities increased, as planned, to EUR701 million on the reporting
date (2011: net financial receivables of EUR96 million).

WACKER's total assets rose by EUR93 million last year. On December
31, 2012, they amounted to EUR6.3 billion (2011: EUR6.2 billion).
Increases were primarily in property, plant and equipment, in loans
to associated companies, and in trade receivables. On the reporting
date, Group equity amounted to EUR2.62 billion (2011: EUR2.63
billion), yielding an equity ratio of 41.4 percent (2011: 42.2
percent).

Business Divisions Lagging demand for silicon wafers and lower prices
weighed on sales at Siltronic. Sales decreased almost 13 percent to
EUR867.9 million (2011: EUR992.1 million). Business for 300 mm
silicon wafers grew during full-year 2012, but there was a slowdown
for 200 mm wafers and, above all, for even smaller diameters. EBITDA
of EUR0.7 million was much lower than a year earlier (2011: EUR49.2
million). It included non-recurring expenses of around EUR15 million
for closing the 150 mm wafer line at Portland. The EBITDA decline was
due mainly to negative price effects and to reduced volumes for
smaller-wafer diameters.

In 2012, WACKER SILICONES increased its sales by over 3 percent to
EUR1.65 billion (2011: EUR1.59 billion). Higher volumes and positive
exchange-rate effects offset the price pressure on silicone products.
EBITDA also edged up to EUR189.3 million (2011: EUR182.9 million),
climbing some 4 percent on the year-earlier period. Raw-material and
energy costs remained high overall, although pricing factors
prevented them from climbing further relative to the previous year.
Price pressure, especially on standard products, dampened the
division's earnings performance. Conversely, earnings were supported
by the US dollar's strength compared with a year earlier.

WACKER POLYMERS continued its upward trend in 2012. For the first
time ever, its sales surpassed the billion-euro mark. At EUR1.0
billion (2011: EUR928.1 million), sales were 8 percent higher than in
the previous year. Business was lifted by increased dispersion and
polymer-powder volumes, by partially better product prices, and by
positive exchange-rate effects. Raw-material costs stayed at the
prior-year level. EBITDA grew even more strongly than sales, climbing
32 percent year-over-year to EUR147.4 million (2011: EUR111.8
million). This increase stemmed from higher volumes, rationalization,
and positive product-mix and exchange-rate effects.

WACKER BIOSOLUTIONS also posted strong sales growth, with sales up 9
percent to EUR157.6 million (2011: EUR144.5 million). Higher volumes
and positive exchange-rate effects fueled the increase. With the
exception of biopharmaceuticals, every business area generated
growth. EBITDA advanced strongly, too, climbing 20 percent to EUR24.5
million (2011: EUR20.4 million) amid higher volumes and exchange-rate
effects.

As expected, WACKER POLYSILICON's sales declined in 2012, down almost
22 percent to EUR1.14 billion (2011: EUR1.45 billion). Al¬though the
division grew volumes 20 percent to 38,000 metric tons in 2012,
year-over-year sales were lower amid significantly reduced
hyperpure-polysilicon prices. This decline was due to the difficult
market environment, marked by excess capacity, high inventories and
ongoing consolidation. To align production output with customer
demand, WACKER POLYSILICON decided - as of the third quarter - to
partially curb production and to introduce reduced working hours at
some Burghausen facilities. EBITDA dropped 43 percent to EUR427.5
million (2011: EUR747.3 million), dampened primarily by significantly
lower price levels. EBITDA contained income from terminated supply
contracts. Here, the division retained advance payments and received
damages totaling EUR113.1 million.

Proposal on Appropriation of Profits In accordance with German
Commercial Code accounting rules, Wacker Chemie AG posted a retained
profit of EUR654.3 million in 2012. At the Annual Shareholders'
Meeting, the Executive and Supervisory Boards will propose a dividend
of 60 cents per share (2011: EUR2.20). Based on the number of
dividend-bearing shares as per December 31, 2012, the cash dividend
corresponds to a payout of EUR29.8 million. The resultant
distribution ratio - based on the net income allocable to Wacker
Chemie AG shareholders - is 26 per¬cent.

Outlook The risks of the economy remaining weak during 2013 are still
present. The ongoing sovereign-debt crisis in Europe is weighing on
EU economies. WACKER, though, anticipates that economic output in EU
countries will not decrease very much further. In line with most
economic experts, the Group expects the world economy to expand
slightly in 2013. Growth will again be strongest in Asia.

In 2013, WACKER's polysilicon business will remain difficult. The
consolidation process in the industry is not yet over, there is still
excess capacity, and polysilicon prices are currently low.
Additionally, the market faces the burden of anti-dumping
investigations by the European Union and the Chinese Ministry of
Commerce. If both sides impose punitive tariffs, the global
photovoltaic market could suffer. At WACKER POLYSILICON, sales in
2013 are expected to be below the prior year. Downward pressure is
chiefly due to average polysilicon prices being lower than a year
earlier. Moreover, salt sales are now reported under "Other" and
product responsibility for pyrogenic silicas has been transferred to
WACKER SILICONES. These two structural changes will reduce WACKER
POLYSILICON's total sales by some EUR100 million.

According to market researchers, the semiconductor sector will grow,
chiefly in the second half of 2013. The year has started off
sluggishly, though. WACKER expects Siltronic's sales to decline in
full-year 2013 amid persistent price pressures. Market expansion will
be driven mainly by 300 mm business.

The Group's chemical divisions offer good prospects for further
growth in 2013. Sales at WACKER SILICONES are expected to increase,
though the price squeeze on standard products will remain. Additional
demand will primarily come from Asia. WACKER POLYMERS is targeting
sales growth, too. The regions with the highest sales gains are
likely to be China, India and the Americas. In Europe, projections
are for only a slight sales increase. WACKER BIOSOLUTIONS also
anticipates higher sales in 2013. The division sees its major growth
opportunities in Asia, and also in Germany.

Overall, WACKER expects sales in 2013 to be at the prior-year level -
providing that trade barriers are not introduced in the solar
industry and that semiconductor demand picks up in the second half.
WACKER has planned for an average US dollar/euro exchange rate of
1.35 in 2013. EBITDA is likely to be below the prior-year level,
primarily due to the lower prices for polysilicon and semiconductor
wafers.

WACKER intends to invest some EUR600 million both in 2013 and 2014,
with the focus on completing its Charleston site (Tennessee, USA).
Investments are unlikely to be covered fully by the anticipated cash
flow from operating activities. Depreciation will amount to around
EUR550 million in 2013 and also in 2014.

"Over the next two years, we will manage capital expenditures
dynamically, aligning them with our earnings strength," said CFO
Joachim Rauhut. "Our goal is that financial liabilities do not exceed
EUR1 billion this year."

WACKER's Key Figures

| |2012 |2011 |Change |
| | | |in % |
|Results/Return | | | |
|Sales EUR m |4,634.9 |4,909.7|-5.6 |
|EBITDA1 EUR m |786.8 |1,104.2|-28.7 |
|EBITDA margin2 % |17.0 |22.5 |- |
|EBIT3 EUR m |258.0 |603.2 |-57.2 |
|EBIT margin2 % |5.6 |12.3 |- |
| | | | |
|Financial result EUR m |-64.8 |-35.8 |81.0 |
|Income before taxes EUR m |193.2 |567.4 |-65.9 |
|Net income for the year EUR m |106.8 |356.1 |-70.0 |
| | | | |
|Earnings per share EUR |2.27 |7.10 |-68.0 |
|ROCE % |5.2 |13.9 |- |
| | | | |
|Financial Position/Cash Flows | | | |
|Total assets EUR m |6,329.9 |6,237.0|1.5 |
|Equity EUR m |2,617.8 |2,629.7|-0.5 |
|Equity ratio % |41.4 |42.2 |- |
|Financial liabilities EUR m |1,197.2 |777.9 |53.9 |
|Net financial liabilities/net financial |-700.5 |95.7 |n.a. |
|receivables4 EUR m | | | |
|Capital expenditures (incl. financial |1,095.4 |981.2 |11.6 |
|assets) EUR m | | | |
|Depreciation (incl. financial assets) |528.8 |501.0 |5.5 |
|EUR m | | | |
|Net cash flow5 EUR m |-536.2 |-157.7 |>100 |
| | | | |
|Research and Development | | | |
|Research and development expenses EUR m |174.5 |172.9 |0.9 |
| | | | |
|Employees | | | |
|Personnel expenses EUR m |1,205.3 |1,282.5|-6.0 |
|Employees (December 31) Number |16,292 |17,168 |-5.1 |

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 and cash
equivalents, noncurrent and current securities, and noncurrent and
current financial liabilities. 5 Sum of cash flow from operating
activities (excluding changes in advance payments received) and cash
flow from noncurrent investment activities (before securities),
including additions due to finance leases.

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
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