German chemicals supplier ‘optimistic for this year’ despite Ukraine conflict

Munich, Germany – Wacker Chemie AG has ended 2021 with new all-time highs for sales and earnings, due in part to the strong performance of the group’s silicones business.

The Munich-based chemicals supplier posted group sales of €6.21 billion in 2021, up 32% on 2020, driven by higher selling prices and volume growth across every business division.

At €1.54 billion, earnings (EBITDA) more than doubled year-on-year yielding an earnings margin of 24.8%, compared to 14.2% last year.

Wacker linked the strong operating performance to higher prices and volumes as well as cost savings from the group’s ongoing efficiency programme.

On the other hand, prices for some raw materials and energy were markedly higher, lowering earnings by about €500 million, Wacker said 15 March.

Breaking down the figures, Wacker said its silicones business reported 16% higher year-on-year sales at €2.60 billion. The increase was attributable to higher selling prices, volume growth and product-mix effects.

Segment earnings grew 43% to €553 million due to higher prices and volumes.

For 2022, Wacker expects to post group sales of approximately €7 billion.

Earnings are expected to be between €1.2 billion and €1.5 billion, as energy and raw-material costs are likely to impact operations by around €1 billion.

Wacker said it saw “good opportunities” to continue growing its chemical sales this year, with the silicones unit expected to post a revenue of around €3 billion.

“Although we are exercising due caution in the face of the armed conflict in Ukraine and the ongoing pandemic, we are optimistic about 2022,” said CEO Christian Hartel.

“We expect our chemical business to perform well during the rest of the year, and anticipate higher prices, volume growth and positive product-mix effects in this segment,” he added.

On the war in Ukraine, Hartel said “at this time, there is no way of estimating reliably what additional political and economic consequences could arise from Russia’s invasion.”

But Wacker expects the direct impact on the volumes would be limited, as all of the CIS states combined make up less than 2% of group sales.

“On the other hand, the sharp rise in gas and electricity prices in particular are a source of concern,” Hartel concluded.