Munich — Benefiting from higher selling prices and a positive exchange rate from a strong U.S. dollar, silicone maker Wacker Chemie AG saw record overall sales of $8.93 billion in 2022, according to preliminary financial results released Jan. 23 by the company.
The high mark for the German chemical company compares to $6.74 billion in net sales in 2021, a 32 percent jump.
"All of our business divisions contributed to last year's strong sales growth," CEO Christian Hartel said in a release accompanying the 2022 preliminary financial results. "Although demand slowed noticeably in some customer sectors in the second half of the year, we achieved substantially higher prices for our products than in 2021. That also helped us to offset sharp cost increases, especially for energy, but also for raw materials and logistics."
According to Wacker's preliminary report, EBITDA in 2022 came in at $2.27 billion, an increase of about 35 percent over 2021's EBITDA of $1.67 billion.
Net income in 2022 came in at $1.4 billion, according to Wacker, compared to about $900 million in 2021.
Sales numbers were negatively impacted by overall volumes, which were down in 2022, especially in the fourth quarter as the international construction space slowed.
The group was led in 2022 by Wacker Silicones, which saw $3.75 billion in net sales, according to the preliminary results.
"In numerous application areas, the weakening economy is already affecting customer order trends," Hartel said. "We see signs of a slowdown, particularly in the construction industry, but also with silicones in other industries.
"In general, many customers are running down their inventories and currently remain cautious, even though they expect demand to pick up again in the course of the year."
In addition to a global reduction in inventory in silicones, demand fell in China — the largest global consumer of silicones — due to COVID restrictions.
"Outside of China, that has resulted in growing import pressure and falling prices," Hartel said.
Specialty silicones remained cost-stable, according to Wacker.
"In the past three years we have generated total net cash flow of about ($2.17 billion), we have high liquidity, and are free of debt," Hartel said. "That is why I am confident Wacker will remain successful even amid the tougher economic conditions to come."
Capital expenditures for Wacker were 58 percent higher in 2022 than 2021, at about $592 million last year against about $374 million in 2021.
A vast majority of the expenditures went toward capacity expansions in all four business segments, including HCR and LSR capacity expansions in the U.S., India and China, among other locations.