“We closed Q1 2020, with generally good figures, as we expected,” said Rudolf Staudigl, Wacker’s CEO, in Munich, recently. “Despite persistently difficult economic conditions and the additional challenges of the coronavirus pandemic in China, our sales were almost on par with Q1 2019 and EBITDA was substantially higher. In silicones and dispersible polymer powders, we benefited from higher volumes and, in bioengineered products, from a better product mix. On the other hand, volumes in our solar business fell due to the corona pandemic and prices were lower for standard silicones and polysilicon. That slowed sales and earnings. Looking ahead to the next few months, we expect the corona pandemic’s economic impact to become very much more noticeable. We will counter this trend with short-time work arrangements. We have already decided to introduce short-time work as of May 1 in several production-related and administrative units in Germany and at our German polysilicon production plants. In our other business divisions, such arrangements can be implemented on short notice if declining order intake requires action. We have pared back this year’s capital expenditure budget substantially to bolster liquidity, which rose to €750 million at the end of the first quarter. We also have undrawn credit lines of around €600 million. At present, it is not possible to reliably estimate how strongly COVID-19 will slow our business. If the pandemic is successfully contained over the next few months, it could well be that the global economy gathers momentum in the second half-year and we experience catch-up effects.”
Current situation
Commenting on Wacker’s current situation, Staudigl said: “Crisis management teams at our sites, divisions and corporate departments are working together quickly, pragmatically and reliably to keep Wacker operational amid very challenging conditions. Our top priorities are the health of our employees and keeping production running so that we can ensure supply continuity for our customers. That is why Wacker introduced binding regulations and measures early on – including hygiene and social-distancing rules, and a ban on business trips to risk areas. Every employee whose job allows it is working from home. In areas that are vital for integrated production and where due to work-related requirements the prescribed distance cannot be kept, our employees wear protective masks. These measures have proved very successful so far. The number of Group employees infected by the coronavirus remains very low. That is a great help as we strive to keep production high at this critical time. Safeguarding production is particularly important because many of our products are used in key applications for medical care and hygiene. Our silicones for the medical sector are found, for example, in masks, tubes and seals for ventilators. Our dispersions’ wide-ranging applications include hygienic wet-wipes and Wacker’s cyclodextrins are used as additives in antiviral substances. I would like to take this opportunity to greatly thank our employees for their outstanding commitment in these difficult times.”