Wacker Chemie, a German chemicals maker, has adjusted its full-year expectations due to several factors impacting its business. These include weaker customer demand, inventory-reduction measures, and lower prices of its customers’ products.
The company now expects sales to be in the range of 6.5 billion to 6.8 billion euros ($7.31 billion – $7.64 billion) for 2023. This is a departure from its previous forecast of EUR7 billion to EUR7.5 billion.
Wacker Chemie anticipates its earnings before interest, taxes, depreciation, and amortization (EBITDA) to fall within the range of EUR800 million and EUR1 billion. Previously, the company had projected a higher EBITDA of between EUR1.1 billion and EUR1.4 billion.
Consensus and Projections
Vara Research had estimated sales of EUR7 billion and EBITDA of EUR1.1 billion for Wacker Chemie. The company’s revised forecast indicates a deviation from the consensus.
Return on Capital Employed
The revised forecast suggests that the return on capital employed for Wacker Chemie will be below the cost of capital. However, the EBITDA margin forecast remains unchanged and is expected to be significantly lower than last year.
The weaker performance at Wacker Chemie’s silicones and polysilicon business divisions has contributed to the changes in the forecast. The company highlights that there is currently no sign of an overall recovery in demand and expects the weak demand to persist in the second half of the year.
Second Quarter Expectations
Preliminary figures indicate that Wacker Chemie is likely to achieve sales of EUR1.75 billion and EBITDA of EUR255 million in the second quarter of the year.