AccessMyLibrary provides FREE access to millions of articles from top publications available through your library.
Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good afternoon, ladies and gentlemen, and welcome to the Wacker Chemie AG conference call regarding the Q1 results 2008. (OPERATOR INSTRUCTIONS).
Let me now turn the floor over to your host, Mr. Jorg Hoffmann.
JORG HOFFMANN, HEAD OF IR, WACKER CHEMIE AG: Thank you, operator. Ladies and gentlemen, welcome to the first quarter 2008 conference call on Wacker Chemie AG. My name is Jorg Hoffmann, Head of Investor Relations.
I've the pleasure to have with me today on the call Dr. Peter Wacker, our CEO, and Dr. Joachim Rauhut, our CFO.
As a reminder, let me state that during this call we may make forward-looking statements based on current assumptions and estimates of Wacker's executive board. Although we assume that the expectations in these forward-looking statements are realistic, we cannot guarantee that they will prove to be correct. These assumptions may harbor risks and uncertainties that could cause actual results to differ considerably from the forward-looking statements. Wacker may not update those risk factors or the forward-looking statements made during this call; nor does it assume any obligation to do so.
We published today our quarterly report, press release, and Excel file detailing our quarterly data, and a short presentation on Q1 to accompany this call. All these files, as well as our fact book, can be found on our Website, www.wacker.com, under Investor Relations.
With this, let me hand the call over to Dr. Wacker.
DR. PETER WACKER, CEO, WACKER CHEMIE AG: Thank you, Jorg, and thank you all for joining us at this call. First, I would like to speak about the economic environment, the status of our growth projects, our core competencies, and we'll add some remarks on poly. Then Joachim will give you more detail on the numbers and signals. I will wrap up with confirming our outlook for 2008.
Wacker achieved record results once again, despite a comparison to our strongest earnings quarter ever, which was Q1 2007. I'm proud of this achievement, especially in light of a difficult environment marked by a general economic slowdown, coupled with slower demand [SiMe], a weaker dollar, and rising raw material costs.
Group sales in Q1 increased to over EUR 1 billion, which is 8% above Q1 last year and 11% over Q4.
EBITDA went up to EUR 291 million, making this our best quarter ever achieved.
An overriding scene this quarter was a sharp decline in the value of the U.S. dollar. To put things in a perspective, about 40% of our sales are denominated in U.S. dollars. Compared to Q1 last year, the U.S. dollar exchange rate worsened from $1.31 by 90% to $1.50 per euro. This means our sales had to absorb this quarter an additional EUR 57 million in various currencies versus Q1 2007 alone. Without the dollar effect, our sales growth would have been 6% higher compared to Q1 2007. In this tough environment, Wacker Chemie is well positioned. Our strong Group-wide focus on pricing and productivity supports it.
We achieved an outstanding EBITDA margin of over 28% this quarter, despite many headwinds.
Our growth projects are taking hold. We have a number of projects underway that will help to increase our available capacity substantially over the next few years. I am pleased to report that all our strategic growth projects are well on track.
Our Polysilicon project, Poly 7, is progressing better than planned.
The Solar joint venture with Schott will reach 120 megawatts of capacity at the end of this year already. We just opened the new fab in Jena, as you may have seen.
The integration of the newly acquired APP business should help our Polymers business achieve close to EUR 1 billion in sales this year.
The Singapore Samsung joint venture is shipping qualification wafers, and it's testing its line. I can tell you today that the first reports on these wafer tests are excellent. And the official inauguration of the plant will take place on June 19.
The Dow Corning joint venture in Zhangjiagang is on track with its siloxane production.
Wacker is steadily building on its core competencies. These are advanced process and production technologies as well as an integrated approach to our businesses and a dedicated commitment to productivity. Coupled with a strong background in chemistry and a proven internal engineering capability, we have demonstrated that we can manage demanding chemical operations with difficult materials and that we are able to get these things done on time and on budget. This gives us strength and defines our portfolio well.
Please remember Wacker is the only company globally with a [verbund] structure in silicon ranging from polysilicon to silicates and silicones. Productivity improvement in our silicones and silicates production have helped to mitigate the effect of increasing raw material costs in silicone by increasing yields.
A culture of permanent optimization and a strong engineering focus will allow us to accelerate the completion of our Poly 7 plan. We are now working to advance our Poly 7 ramp, similar to the accelerated start of the Poly 6 unit, which came in three months early. And I'm confident that we can achieve this acceleration.
Also, I would like to confirm today that we are not going to stop building world-class, cost-leading polysilicon units after reaching 22,000 tons. We have started the site selection process for a new polysilicon facility. Decisions on size and exact timing are expected within the next 12 months.
Now let me touch on the question of polysilicon supply and demand again. Many have asked us if metallurgical silicon in our view is a viable substitute for polysilicon in solar applications. Let me put it this way. The samples of metallurgical silicon that we have received have not been satisfactory. The material may be used in plants, but what we have seen is not a full-fledged alternative to hyper-pure polysilicon. High cell efficiency requires hyper-pure material. After all, it's about the generation of electricity.
Another question is - Will this material or other capacity additions impact the supply/demand ratio for polysilicon. We think no. We would, actually, welcome a loosening of the very tight supply/demand balance. Also, we don't see it happening before 2012. In our view, additional materials …