CREATING TOMORROW`S SOLUTIONS. Factbook

Transcription

1 CREATING TOMORROW`S SOLUTIONS Factbook

2 Disclaimer The information contained in this presentation is for background purposes only and is subject to amendment, revision and updating. Certain statements and information contained in this presentation may relate to future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. In addition to statements which are forward-looking by reason of context, including without limitation, statements referring to risk limitations, operational profitability, financial strength, performance targets, profitable growth opportunities, and risk adequate pricing, other words such as "may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or further", and similar expressions identify forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions which could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These include, among other factors, changing business or other market conditions and the prospects for growth anticipated by the Company's management. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The Company does not undertake any obligation to update or revise any statements contained in this presentation, whether as a result of new information, future events or otherwise. In particular, you should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation. Wacker Chemie AG, Investor Relations, October

3 WACKER: An Overview WACKER POLYSILICON Merchant market leader Cost and quality leader Enabling industry growth WACKER POLYMERS No. 1 in VAE dispersions No. 1 in dispersible polymer powders Global footprint OTHERS WACKER: FY Sales 4.6bn WACKER SILICONES No. 2 with global footprint Leading positions in key growth segments Combining cost leadership with specialty orientation WACKER BIOSOLUTIONS High potential for future development 1) External Sales in %, adjusted according to IFRS 5 2

4 Fact Book 2017: Agenda At a glance_p.4 POLYMERS_p.40 Strategy_p.9 BIOSOLUTIONS_p.52 Sustainability_p.21 POLYSILICON_p.61 SILICONES_p.28 Financials_p.69 3

5 CREATING TOMORROW`S SOLUTIONS WACKER AT A GLANCE 4

6 WACKER AT A GLANCE Over 100 Years of History Foundation of the Dr. Alexander Wacker Ges. für elektrochemische Industrie KG Hoechst AG becomes shareholder in Wacker Chemie; providing 50% of the share capital Start of work in the area of silicones First production of hyperpure silicon for the semiconductor industry Production start of VAC- Ethylene- Copolymer in Burghausen Foundation of the Wacker Siltronic Corporation Portland, Oregon, USA Takeover of wafer site in Freiberg, Saxony Takeover of the silicone site in Nuenchritz, Saxony; JV with APCI: APP/WPS 1 JV with NSCE for wafer business: WNC (55/45) A Wacker family venture acquires Sanofi shares; WACKER becomes a stock corporation Going public; JV with Dow Corning in China; JV Siltronic Samsung Wafer Pte. Ltd. Acquisition of outstanding shares of APP/WPS 1 Decision on new production site for Polysilicon in Nuenchritz, Saxony Takeover of the silicon smelter plant in Holla (Norway) from Fesil Group Siltronic acquires majority ownership of JV with Samsung Going public of Siltronic; Wacker Chemie AG holds majority with 58% Inauguration of the new polysilicon production site at Charleston, Tennessee (USA) Deconsolidation of Siltronic, WACKER moves into minority position holding a 30.8% stake 1) APP/WPS = Air Products Polymers/Wacker Polymer Systems 5

7 WACKER AT A GLANCE Highly-Integrated Operations Based on Five Key Raw Materials Raw Material Upstream Downstream Customers Industries Methanol Silicon metal Siloxane Pyrogenic silica Silicones Construction Automotive suppliers Paints and coatings Textiles, print and paper Personal care Polysilicon Solar wafers, cells and modules Electronic wafers Ethylene Vinyl acetate ethylene (VAE) Engineered fabrics, adhesives, coatings, carpeting Vinyl acetate monomer (VAM) Dispersible polymer powders (DPP) Construction, remodeling, insulation Acetic acid Food, automotive Starch/ dextrose Microb. fermentation Therapeutic proteins / food ingredients Therapeutic proteins/ food, pharma & agro ingredients 6

8 WACKER AT A GLANCE Well Diversified End Market Portfolio Sales 1 Split by End-market Construction Transportation Others 21% 27% Solar Textiles 5% 5% 2016 Energy/Electronics 8% Chemical Industries 8% 9% 20% Adhesives 1) External Sales in %, adjusted according to IFRS 5 7

9 WACKER AT A GLANCE Regional Footprint: Globally Present and Close to Customers Germany Asia The Americas Sales 1 : 777m Employees 2 : 9,770 (Dec. 31, 2016) Sales 1 : 1,752m Employees 2 : 1,588 (Dec. 31, 2016) Sales 1 : 826m Employees 2 : 1,639 (Dec. 31, 2016) Calv ert City, KY Adrian, MI Charleston, TN Burghausen Nünchritz Nanjing Ulsan Zhangjiagang Other Regions Asia 38% 4% Sales % 17% Americas Germany 23% Rest of Europe Rest of Europe Sales 1 : 1,074m Employees 2 : 392 (Dec. 31, 2016) Kolkata Production sites Other Regions Sales 1 : 206m Employees 2 : 59 (Dec. 31, 2016) 1) External Sales, 1) 2) adjusted according to IFRS 5 8

10 CREATING TOMORROW`S SOLUTIONS STRATEGY: Managing for Growth and Cash 9 of 42

11 Targets for the Next Years Growth and Cash 1 Extend Leverage Phase 2 Continue to Grow Above Chemical Production 3 Focus on Sustainability 4 Sustain Attractive Margins Throughout the Cycle 5 Generate Cash 10

12 Target: Leverage Phase Extended to at Least CapEx vs. Depreciation Expense WACKER Group w/o Siltronic ( m) ~360 Ø Create 2013 Leverage e 2018e 2019e 2020e 2021e POLYSILICON OTHER CHEMICALS Depreciation & Amortization Investment focus now on CHEMICALS 11

13 Target: Continue to Grow Above Chemical Production 2 Development of WACKER Group Revenue ( bn) % POLYSILICON Chemical Divisions +6% CAGR Solid growth driven by CHEMICALS 12

14 Target: Focus on Sustainability 3 Our Product Portfolio Adding Value with Sustainable Products Polysilicon for photovoltaics Rheology additives for bonding of wind turbine blades Heat-transfer fluids for concentrated solar power plants Active materials for lithium-ion batteries Very low VOC 1 paints and coatings Thermal insulation materials for construction 1) VOC = Volatile Organic Compounds 13

15 Target: Sustain Attractive Margins Throughout the Cycle 4 Chemicals EBITDA Margin (%) POLYSILICON EBITDA Margin (%) 36% 1 33% 1 29% 1 Target 30% 13.0% 16.1% 19.4% Target 16% e e Internal drivers Product mix Specialties Cost reduction WOS External drivers Supply and Demand Short term impact from raw material prices Internal drivers Cost reduction (Productivity, Technical developments) External drivers Supply and Demand Regulatory changes 1) Operating Margin: (EBITDA - Special Income - Pre Operational Costs - Ramp Costs) / Sales 14

16 Target: Generate Cash 5 Capital Intensity Capital Structure Strong Cash Generation Working Capital Management Dividend Policy Dividend target: 50% of net income 1 (raised from minimum of 25%) 1) based on continuing operations 15

17 OPERATIONAL EXCELLENCE WACKER Operating System (WOS) with Focus on Productivity Continuous Improvements Ambitious Goals Reduction of specific operating costs WACKER Operating System 100 production facilities within WACKER globally Projects Clearly defined responsibilities and projects Tools 900 employees trained Use of state of the art tools Employees Strong employee participation 500 measures and projects per year 16

18 OPERATIONAL EXCELLENCE Evolution of WACKER Operating System WOS 1.0 WOS 2.0 WOS 3.0 WOS 4.0 Germany Global WOS Academy Cost Roadmaps Labor Productivity Six Sigma Specific Targets Digitalization A systematic approach, continuously extending the scope of activities 17

19 CUSTOMER FOCUS WACKER ACADEMY A Global Network for our Customers WACKER ACADEMY Customer & Distributor teach-in Mix between theory and practice Meeting room plus lab Direct customer interaction 15 WACKER ACADEMIES 8,500 Participants worldwide 850 Events Globally 18

20 Market Existing New INNOVATION Innovation is Key to WACKER s Business Strategy Key Facts Our Systematic Approach 3.2% of sales on R&D (2016) WACKER holds around 4,100 active patents and about 1,800 pending patent applications Annually, the Group has applied for inventions over the last 5 years New Solutions New Business Fields BIOSOLUTIONS POLYMERS SILICONES POLYSILICON New Solutions Existing Product New WACKER Consortium, Munich 19

21 INNOVATION Our R&D Pipeline Covers a Diverse Range of Applications Building / Renovation VAE dispersions and silicone based building protection New binders and sealants Building insulation materials Photovoltaic High quality Polysilicon for high efficiency cells Lithium-ion-batteries E-Mobility Active anode materials for lithium-ion-batteries Silicone based thermal interface materials Silicones for Automotive Electronics Household / Personal Care Silicone based antifoam agents for detergents Silicone based materials for property enhanced skin care, hair care and decorative cosmetics Food / Pharma Cyclodextrin complexes for the production of vegetarian, fat and cholesterol reduced food Innovative production systems for Pharma proteins 20

22 CREATING TOMORROW`S SOLUTIONS SUSTAINABILITY 21

23 SUSTAINABILITY Our Contribution to the UN s Sustainable Development Goals Global challenges that WACKER can help overcome Significant opportunities for our operations Our guiding principle for innovations 22

24 SUSTAINABILITY Comprehensive Sustainability Strategy Innovation Customer Focus Specialties Sustainable sourcing Safe and stable operations Experienced and reliable Integrated cycles recycling Product stewardship Adding value to our customers Enable our customers to have a more sustainable product Sustainable production is a core element at WACKER Sustainability focus in product portfolio and innovation 23

25 SUSTAINABILITY We Continuously Work on Clear EHS and Energy Targets Safety Environment Energy & Climate Target: LTIF 1 Target: spec. dust reduction Target: spec. energy efficiency, GER 3 2 2,8 2,6 2,0 1,7 100% 80% 60% 100% 70% 50% 100% 80% 60% 100% 78% 64% 50% 1 40% 20% 40% 20% % % Target: WPSI 2 Target: spec. rel. VOC 3 reduction Target: spec. CO 2 reduction GER 1,5 1 1,3 1,3 1,1 0,7 100% 80% 60% 100% 75% 100% 80% 60% 100% 93% 85% 0,5 40% 20% 40% 20% % % EHS = Environment Health Safety; 1) LTIF = Lost Time Injury Frequency; 2) WPSI = WACKER Process Safety Incident; 3) VOC = Volatile Organic Compounds, 24

26 SUSTAINABILITY Our Products Reduce Material Intensity and CO 2 Emissions Polysilicon for Photovoltaics (PV) DPP 1 for Thin-Bed CTA-Applications Avoided Emissions Compared to Coal Reduced Materials Lowers CO 2 Intensity 1:20 1:6 CO2-Emissions from production and raw materials Avoided CO2- emissions: electricity generation through PV CO2-Emissions from production and raw materials Avoided CO2-emissions: CTA-applications 1) DPP = Dispersible Polymer Powder; Source: WACKER Estimate 25

27 SUSTAINABILITY Our Products Enable Sustainable Applications and Processes Antifoam Agents for Hand Wash Sustainable Cysteine Production Reduction in Water Consumption Reduction in Consumption of HCl 1 2:1 27:1 Laundry rinsed with water SILFOAM reduces water usage by 50% HCl consumption traditional process WACKER process needs less HCl 1) HCl = Hydrochloric acid; Source: WACKER Estimate 26

28 SUSTAINABILITY Recognition for Sustainability by External Rating Agencies Together for Sustainability (TfS) a global program for responsible procurement Target: >70% of our procurement volume to be evaluated by TfS by 2020 WACKER ranked Gold by Ecovadis among the best in the chemical industry WACKER ranked as Prime rating by Oekom research Key Strengths highlighted: Implementation of a strategy for addressing climate change and related sectorspecific risks Implementation of certified environmental, health and safety management systems WACKER ranked with B in CDP s 2016 ratings. Achieving a disclosure score of 97 out of a possible 100 points WACKER was among the leading companies listed in the MDAX index in

29 CREATING TOMORROW`S SOLUTIONS WACKER SILICONES 28

30 WACKER SILICONES An Integrated Global Player with a Leading Market Position Value Chain Global Footprint 2 Raw materials 7 Product groups Fluids & Emulsions Siloxane Elastomers Methanol Silicon Metal Silanes Resins Fumed Silica OF Silanes Chino Adrian Mexico Holla Nunchritz North Canton Moscow Pilzen Burghausen Jincheon Tsukuba (Akeno) Zhangjiagang Shanghai Dubai Kolkatta Mumbai Singapore > 3,000 Products & endless applications Production Site Jandira Technical Center Melbourne Integrated Production Site Competitive Landscape 2016 Silane/Siloxane backward integrated suppliers Others Bluestar Shin-Etsu Momentive WACKER Dow 1) WACKER JV participations fully consolidated 1 Market Characteristics Historic growth rates above worldwide GDP 2 High entry barriers (capital and technology) Serving diversified end markets through broad market penetration and wide customer base Innovation broadens scope of applications 2) GDP = Gross domestic product 29

31 WACKER SILICONES Silicones are Diversified Across Many Industries Market Structure by Application Automotive 5% 4% Health Care Energy & Electronics 9% 32% Advanced Processing & Performance Additives Manufacturing Machinery 10% Market Portfolio 2016 ~ 12bn 1 Consumer Care Coatings 10% Construction 14% 15% CAGR : ~5% 1) Backward integrated Sx-suppliers only; Source: Market studies, Annual reports, WACKER estimates 30

32 WACKER SILICONES Global Population Will Catch Up with Their Silicone Consumption Silicone Consumption (kg/capita) Mature Markets high silicone consumption Other Asia India Africa China Brazil Other Central & South America CIS Mexico Taiwan France Germany United States South Korea Italy UK Canada Spain Japan Other W. Europe Emerging Markets medium silicone consumption Developing Markets low silicone consumption Developed Emerging Developing 0 10,000 20,000 30,000 40,000 GDP 1 ( /capita) 1) GDP = Gross domestic product; Source: WACKER Estimate 31

33 WACKER SILICONES The World of Silicones is Defined by Two Major Segments Split into Liquid & Solid 45% 60% 60% 40% WACKER 55% Silicone market Liquid Solid Liquid silicones are invisible to the end customer. They are characterized either by a surface effect or as process enhancer. Fluids, Emulsions, Resins, Silanes Solid silicones can be identified easily as they cure to become solid parts for various applications. Elastomers Source: WACKER estimate 32

34 WACKER SILICONES Hightech Segments and Specialty Focus Follow Key Trends Liquid Solid Comfort E-Mobility Hair Care Cosmetics Battery E-Motor Aging Population Paints Concrete Medical Care Wound Care Renewable Energy Urbanization Communication Encapsulation Solar Power Electronics Sensors 33

35 WACKER SILICONES Customized Products with Unique Properties Properties of Liquid Properties of Solid Gloss Softening Defoaming Water Repellent UV stable Insulating Release Lubricating Thermal Stability Long Term Elasticity Adherence Weather Resistant Water Repellent Water Vapor Permeability UV Stable Heat Resistant Chemical Resistant Microbial Resistant Silicones are high performance products, suitable for multiple applications 34

36 WACKER SILICONES Verbund Enables Highly Competitive Cost Position CH 3 OH + HCl SILICONES Key Competitive Advantages and Strengths WACKER Silicon Verbund Two world-scale upstream sites in Burghausen & Nünchritz Si Metal NaCl electrolysis, HCl-generation HCl Fumed Silica HDK POLYSILICON Operating a third fully integrated upstream site in China in a JV Highest level of integration in the industry with own fumed silica Global footprint in downstream operations Strong focus on production technology & productivity 35

37 WACKER SILICONES Silicon Metal Supply Through Own Smelting Operation in Norway From Quartz to Silicon Metal ~ 1,800 C + = Quartz Coal Silicon Metal WACKER Holla Site in Norway 50kt silicon metal capacity Direct shipping via own dock Certified production acc. to ISO 9001 and ISO

38 WACKER SILICONES WACKER Offers Fumed Silica HDK A Valuable By-Product Properties Applications Unique effects: powder free flow, thermal insulation, rheology control, reinforcement and many more A highly versatile performance enhancer Silicone Elastomers Composites Coatings & Paint A safe and consistent substance, non-hazardous for humans and for the environment Adhesives & Sealants Thermal Insulation Filler Beside industrial use, fumed silica applications include: Cosmetics & Personal care Pharmaceuticals (excipient) Food (direct food additive) & Feed 37

39 WACKER SILICONES Focus on Less Capital Intensive Specialties Standards Specialties Siloxane Intermediates Value Creation Elastomers Fluids & Emulsions High Low CapEx Intensity CapEx Intensity Diversification of products & Diversification of products applications & applications Flexible production units close to markets with low specific invest 38

40 WACKER SILICONES Key Trends and World Class Efficiency Drive Growth Full portfolio provider with benchmark costs Growth with focus on specialties 39

41 CREATING TOMORROW`S SOLUTIONS WACKER POLYMERS 40

42 WACKER POLYMERS Market Leader in VAE Dispersions and Powders Value Chain Raw Material Upstream Downstream Key Markets Ethylene Acetic Acid VAM Dispersions PVAc DPP PVOH Construction Nonwovens & Textiles Adhesives Carpet Coatings & Paints VAE = Vinyl acetate ethylene, VAM = Vinylacetate monomer, PVAc = Polyvinyl acetate, PVOH = Polyvinyl alcohol, DPP = Dispersible Polymer Powders Competitive Landscape 2016 Global VAE Market Global Footprint Moscow Allentown Cologne Suwon Calvert City Burghausen Nanjing Ulsan Dalton Dubai Shanghai Bogota Mexico City Mumbai Singapore Sao Paulo Melbourne Dispersion production Powder production Technical center Market Characteristics Diverse market and customer base Others Dairen VAE powd. WACKER Dairen Others VAE disp. WACKER Historic growth above GDP 1 Moderate capital entry barriers and high technology barriers in most segments Innovation and in-depth formulating expertise broaden scope of applications AkzoNobel Celanese 1) GDP = Gross domestic product 41

43 WACKER POLYMERS Core Applications Outperforming Each Market Segment Market Structure by Application Adhesives Construction Coatings & Paints VAE powders VAE dispersions Nonwovens & Textiles Ceramic Tile Adhesive Thermal Insulation Flooring Wall plasters Carpet Others Source: WACKER Estimate 42

44 WACKER POLYMERS Success Story Based on Combination of Dispersions and Powders POLYMERS with Tandem Approach - #1 in Dispersions and Powders Market World Class Setup Market Leader 1,000,000 tons of VAE globally VAE Dispersions Market #1 VAE Powders Market #1 Tandem approach and market position enable quick loading 43

45 WACKER POLYMERS Answers to Various Needs in Diversified Markets with VAE Dispersions Powders Printing ink Nonwoven & Technical Textile Heat Sealable Lacquer Insulators Tiling Insulating Flooring Adhesives Industrial Coating Carpet Water proofing Render Automotive Paint & Coating Caulks & Sealants Cement admix Repair Mortar Gypsum Concrete 44

46 WACKER POLYMERS Meets Customer Requirements with Tailored Solutions Properties of Dispersions Properties of Powders Gloss Water repellent Color fastness Adhesion Flexibility Leveling/Flow Strength Absorbency Hand feel variety Water repellent Thixotropic Surface Quality Durability Adhesion Processability Durability Workability Dry 45

47 WACKER POLYMERS VAE Outperforms Alternative Polymer Latex Systems Adhesives Paints Broad adhesion Bonding to a wide range of different substrates Fast setting and wet tack No plasticizers needed Formulation of low odor paints Excellent scrub resistance & good hiding characteristics Nonwoven Softness Low odor Wet strength Carpet Good compatibility with PVC, bitumen, etc. Low odor and emissions Low flammability 46

48 WACKER POLYMERS VAE Outgrew Other Polymers in Latex Market in the Last Years Synthetic Polymer Latex Market 1 Volume Growth Global Synthetic Polymer Latex Market 2016 CAGR (%) 10 VAccopo Others VAE 8 SBL 6 PVAc > 20,000 kt VAE PVAc VAc copo SA Pure Acrylics SBL SA Acrylics SA = Styrene Acrylics, VAc-copo = Vinyl Acetate Co-Polymers, PVAc = Polyvinyl Acetate, SBL = Styrene Butadiene Latex 1) Source: Kline

49 WACKER POLYMERS VAE Powders with Many Advantages Ceramic Tile Adhesives High Bonding Strength Allows longer open time Fast tile setting Thermal Insulation Enhance the adhesive and reinforcing mortars Ensures flexibility Optimal shelf life and durability Flooring Adhesion to all substrates Good flexibility Harden without cracking Wall Plasters Improved manual and machine processing Increase flexibility Smooth, crack-free surfaces 48

50 WACKER POLYMERS Growth in VAE Powders in Mature and Emerging Markets Enabler in Mature Markets Enabler in Emerging Regions Global Ceramic Tiles Market Others Residential Renovation Commercial New Built ~ 50% Thick bed CTA 1 Thin bed CTA Material Savings Residential New Built Mature markets trending towards higher quality Labor Productivity 1) CTA = Ceramic Tile Adhesives; Source: Transparency, WACKER Estimate 49

51 WACKER POLYMERS Continuously Expanding Footprint Close to our Customers Latest Capacity Expansions 2015 VAE dispersions + 85 kt USA 2015 Polymer powder + 50 kt Germany 2015 Special monomers kt Germany 2017 VAE dispersions + 60 kt Germany Cologne Burghausen Calvert City Nanjing Ulsan 2013 VAE dispersions + 40 kt South Korea 2013 VAE dispersions + 60 kt China 2014 Polymer powder + 30 kt China 2019 VAE dispersions + >90 kt South Korea 2019 Polymer powder + 80 kt South Korea Production sites are located strategically close to raw materials 50

52 WACKER POLYMERS Growth with Customer Focus, Substitution and Innovation Push transformation in construction towards higher building standards Replacement of non-vae technologies based on value offering 51

53 CREATING TOMORROW`S SOLUTIONS WACKER BIOSOLUTIONS 52

54 WACKER BIOSOLUTIONS Focusing on Fast-Growing Markets Value Chain Raw Materials Upstream Downstream Key Markets Starch/Dextrose Ethylene Biologics Cyclodextrins / Cysteine Gumbase Biopharmaceuticals Key markets Life Sciences Healthcare/ Food & Flavor Acetic Acid Ketene Chem. Intermed. Pharma/Agro Sales Split Food Nutrition Cyclodextrins, Cystine/Cysteine as food ingredient, Cyclodextrin complexes Gumbase Gumbase resin for chewing gum production 2016 Biopharmaceuticals Drugs Custom manufacturing of biologics with strong technology and IP position Pharma/Agro Life Sciences Building blocks for drugs or pesticides, auxiliaries and excipients for pharma 53

55 WACKER BIOSOLUTIONS Focus on Innovation and Growth Microbials Proprietary technology with key benefits in productivity and purification Largest dedicated microbial CMO 1 in Europe - Globally active Metabolic Engineering Market leader in the cysteine food market Compliant with all major food and pharmaceutical standards Vegetarian production process by fermentation with E.Coli Cyclodextrins Enables unique product properties: Protect and Carry Remove, Diminish Delayed Release Gumbase #1 supplier of resins to the global chewing gum industry Novel technology opens new opportunities for flavors and ingredients 1) CMO = Contract Manufacturing Organization 54

56 WACKER BIOSOLUTIONS Cyclodextrins: A Universal Tool for New Product Properties Food Applications Agro and Industrial Applications Example: Insect repellents Curcumin complex Soluble fiber Emulsifier Whip-it Vegetarian sausages Taste masking Fat-binding fiber Bakery Insect repellents form a protective shield around treated areas Small amounts of Cyclodextrins extend the protection time 55

57 WACKER BIOSOLUTIONS Leveraging Our Leading Global Market Position in Gumbase WACKER VINNAPAS Gumbase Resins Leading supplier of PVAc 1) to the chewing gum industry with over 60 years of experience Two world-scale sites in Germany and China with highest food quality standards Innovations CAPIVA platform for next generation chewing gums: CAPIVA S Simplified gum base formulation replacing elastomers and resins S 64% Burghausen Nanjing CAPIVA C New kind of gum made in a simple cooking process featuring unique mouthfeel and new ingredients 1) PVAc = Polyvinyl acetate 56

58 WACKER BIOSOLUTIONS We Established a Fast Growing Biopharmaceuticals Business Established by R&D and Acquisitions Business Model Drug Development Drug Substance Manufacturing Formulation Marketing & Sales 2005: Prothera GmbH Jena 2014: Scil Proteins Production Halle Outsourcing Double Digit Sales Growth Continues ( m) CAGR +30% Outlook WACKER is the largest dedicated microbial contract manufacturer in Europe Target to strengthen position as #5 microbial contract manufacturer globally Well positioned for further growth with more than 20% CAGR possible 57

59 WACKER BIOSOLUTIONS Time and Cost-Efficient Manufacturing of Biopharmaceuticals ESETEC Simplified (E.coli Process secretion technology) Superior Yields Lower Cost of Goods Fermentation Harvest Homogenization IB preparation up to 5x lower Refolding Filtration Chromatography I Chromatography II Chromatography III UF/DF Bulk filling Example: Antibody Fragments Conventional system ESETEC ESETEC reduces the number of process steps ESETEC significantly increases yields ESETEC reduces production costs 58

60 WACKER BIOSOLUTIONS Continuous Investments Ensure Further Growth Biopharmaceuticals 2014: Acquisition of Scil Proteins Production in Halle Biotransformation 2016 onwards: Investments and debottlenecking of CDplant Fermentation 2016: Acquisition of fermentation assets from Antibióticos de León Gumbase 2015: New food-grade PVAc production site in Nanjing 59

61 WACKER BIOSOLUTIONS Well Positioned for Further Growth Focus on development of biotechnology businesses Leveraging our know-how, experience and assets 60

62 CREATING TOMORROW`S SOLUTIONS WACKER POLYSILICON 61

63 WACKER POLYSILICON A Market Leader in Cost and Quality Value Chain Global Footprint Raw Material Upstream Downstream Key Markets Salt Silicon Metal Hydrogen Polysilicon Electronic wafer Solar wafer Semiconductors Solar Modules San Jose Charleston, Tennessee Nünchritz Seoul Burghausen Tokyo Shanghai Production site and head office Sales and application representatives Production site Competitive Landscape 2016 WACKER Others Tokuyama ~375kt Daqo GCL REC Xinte/TBEA Hemlock OCI Market Characteristics PV market growth driven by increasing competitiveness of solar as a source of power Excellent product quality is key to highest conversion efficiencies in solar Cost and quality are decisive for market success Intense competition further drives industry consolidation Source: Industry announcements; WACKER estimate 62

64 WACKER POLYSILICON Competitive Power Rates from PV in Sunny Regions Fuel Growth Benchmark PV Power Rates ( /kwh) Others 2016 ( /kwh) Climate-neutral: Wind: 5-14 ct NPP*: 13 ct Conventional: Coal: 4-5 ct Gas: 8-10 ct PV New Installation (GW) e * Nuclear Power Plant Hinkley Point C UK, Sources: SeeNews Renewables, Industry Announcements, WACKER Estimates 63

65 Cell Efficiency WACKER POLYSILICON High Quality Polysilicon Required for Mono Growth Trend Mono Yields Highest Power Output 28 % c-si Technology Roadmap 100% 26 80% Mono % 40% 20% Multi 16 0% e 2027e e 2027e n-type mono p-type mono p-type HP multi p-type multi About 2% higher absolute efficiency for mono cells drives growth Mono-based PV is growing faster than multi-based PV Source: ITRPV 2017 = International Technology Roadmap for PV Initiative of Semi, 64

66 WACKER POLYSILICON WACKER Quality Reflected in Overproportional Mono Share Polysilicon Market Structure by Application Segment Semiconductor 20% % Solar Market Split (2016) 25% Mono Market Portfolio 2016 ~ 6bn 80 % Multi 75% WACKER Split (2016) 80% Multi 45% 55% Mono Source: WACKER Estimate; Semiconductor: Gartner 65

67 WACKER POLYSILICON Solutions for All Silicon-Crystal-Pulling- and Wafer-Technologies Product Groups Polysilicon rods Various Chip Sizes For Optimized Crucible Filling And Recharging Polysilicon chunks Granular polysilicon 66

68 WACKER POLYSILICON Continued Cost Leadership in High Quality Polysilicon Cash Cost (Index = 100) Aggressive Cost Reduction Targets % 67 > 30% Continuous cost reduction at all sites Reducing energy consumption Optimizing raw materials mix and resource efficiency Improving labor productivity Higher volumes by process optimization 2012* 2017e 2021e *without Tennessee 67

69 WACKER POLYSILICON Generate Cash Flow from Strong Assets Focus on cost and quality Leveraging our assets 68

70 FINANCIALS 69

71 FINANCIALS Business Review by Segment H FY In m / % SALES EBITDA EBITDA Margin SALES EBITDA EBITDA Margin CHEMICALS 1, % 3, % SILICONES 1, % 2, % POLYMERS % 1, % BIOSOLUTIONS % % POLYSILICON % 1, % Others % % Consolidation % n.a WACKER Group 2, % 4, % 1) Adjusted according to IFRS 5 70

72 FINANCIALS Key Figures in m H Sales 2,473 4,634 5,296 4,826 4,479 4,635 EBITDA ,049 1, EBITDA margin 19.8% 20.6% 19.8% 21.6% 15.2% 17.2% EBIT EBIT margin 7.2% 7.3% 8.9% 9.2% 2.6% 5.8% Net income for the period From continuing operations From discontinued operations Net cash flow Return on capital employed - 5.6% 8.1% 8.4% 2.2% 5.2% EPS in Dividend per share Dividend yield - 2.6% 2.2% 1.7% 0.8% 1.0% 1) Adjusted according to IFRS 5 2) Net cash flow from continuing operations = CF from operating activities + CF from investing activities - additions from finance leases 71

73 Imprint Investor Relations contacts Joerg Hoffmann, CFA Tel Scott McCollister Tel Monika Stadler Tel Team IR: Issuer Wacker Chemie AG Hanns-Seidel-Platz 4 D Munich Additional Information ISIN: WKN: Deutsche Börse: DE000WCH8881 WCH888 WCH 72