Wacker Chemie Q1 Earnings Call Highlights

Key Points

• EBITDA jumped 45% to EUR 173 million in Q1 2026 despite group sales falling 5% to EUR 1.41 billion (mainly FX headwinds), with management crediting the PACE cost program for roughly EUR 40 million of first‑quarter savings.
• Wacker confirmed full‑year EBITDA guidance of EUR 550–700 million and raised its sales outlook to a high single‑digit increase driven by price rises, but warned Q1 included one‑off pull‑forward effects (~EUR 20m pre‑buying; March sales ~EUR 50m higher) and uncertainty from the Middle East conflict and U.S. trade proceedings.
• Operationally, silicones and polymers showed sequential recovery and higher EBITDA (silicones EBITDA EUR 117m; polymers EBITDA up 33% y/y) on cost control and late‑quarter pre‑buying, while polysilicon sales and EBITDA stayed down amid weak solar pricing though semiconductor demand remains strong.

Wacker Chemie ETR: WCH reported what CEO Dr. Christian Hartel described as a “solid start to the year” in the first quarter of 2026, with earnings improving sharply despite weaker demand across many end markets and a year-over-year decline in sales driven largely by currency effects.

Group sales in Q1 2026 were EUR 1.41 billion, down 5% from the prior year, which management attributed “primarily to FX headwinds.” However, EBITDA rose 45% year-over-year to EUR 173 million. Hartel cited the company’s PACE cost program as the main driver, alongside “pull-forward effects from customers” that boosted volumes late in the quarter.

PACE cost program drives earnings improvement

Hartel said the group has made “good progress” on PACE and benefited from lower spending and costs already in Q1. The company’s goal is to achieve annual savings of more than EUR 300 million in 2028, with efforts centered on reducing fixed manufacturing and administrative costs, lowering technical spend, addressing “over-scoping,” optimizing operating structures, and tightening budgets and discretionary spending. He also highlighted procurement initiatives such as new bidding systems to foster greater supplier competition.

CFO Dr. Tobias Ohler said the company remains at “the beginning of this program,” but is targeting EUR 200 million in savings in 2026. In response to a question from Bank of America’s Matthew Yates, Ohler estimated that Wacker realized roughly EUR 40 million of savings in the first quarter. He added that the savings profile is “not linear,” noting that more impactful personnel measures are expected to take effect later, with headcount reductions in Germany anticipated to have “a major impact starting in 2027” as discussions with the workers’ council continue.

Geopolitics triggers order pull-forward; price hikes announced

Management linked late-quarter demand strength in silicones and polymers to supply chain concerns after markets reacted “quickly” in mid-March to the conflict in the Middle East. Hartel said supply disruptions drove raw material and energy prices higher, prompting Wacker’s procurement teams to secure critical materials and the company to announce price increases to counter rising costs.

In the Q&A, management characterized the pre-buying as broad-based within silicones and polymers, with the strongest impetus in Asia. The company said March sales ran “sort of EUR 50 million higher than expected,” spanning both segments. Management said the pull-forward did not materially change the product mix, covering both specialty and standard silicones.

Ohler also cautioned that neither the raw material inflation nor the company’s price increases had meaningfully affected first-quarter results. In response to a Barclays question about potential “windfall gains,” management said the cost impact had not yet hit Q1 and price increases were also not effective in Q1 in most regions, though pricing can adjust more frequently in parts of Asia. Ohler said effects would build through Q2 and the second half of the year.

Segment results: silicones and polymers improve on cost control

Ohler reported that the Chemicals segments collectively delivered EUR 166 million of EBITDA, up from EUR 140 million a year ago, supported by PACE savings, higher gross profit, and lower SG&A, with higher March utilization also contributing.

• Silicones: Q1 sales were EUR 708 million, down 5% year-over-year on FX but up 17% quarter-over-quarter due to seasonality. EBITDA rose 13% to EUR 117 million on PACE and higher volumes, with pull-forward demand late in the quarter. Wacker announced price increases to address raw material inflation and updated its 2026 outlook to low single-digit sales growth, while keeping its EBITDA margin view “essentially unchanged” and “slightly above prior year.”
• Polymers: Sales were EUR 333 million, down 8% year-over-year (FX, softer pricing, and lower volumes) but up 7% sequentially. EBITDA increased 33% year-over-year on cost control and lower raw material costs, with pull-forward improving orders at quarter-end. Wacker updated its 2026 sales outlook to low double-digit growth, driven largely by higher prices from raw material pass-through, partly offset by FX. Management said higher sales would not materially lift absolute EBITDA given inflation.
• Biosolutions: Sales increased 9% to EUR 100 million due to project timing. EBITDA was EUR 13 million on higher sales and cost management. In Q&A, management said Q1 benefited from projects shifting in from Q4 2025 and others completed early from Q2 2026, and it expects a “step down” in Q2. Full-year guidance was unchanged: high single-digit sales growth and EBITDA around EUR 30 million, with the CDMO market described as challenging.
• Polysilicon: Q1 sales were EUR 226 million, down 8% year-over-year due to lower solar pricing and continued weak solar demand. Semiconductor-grade demand remained strong, with management saying volumes are growing and the new etching line is performing “very well.” EBITDA was EUR 23 million, with mix and cost performance offsetting higher energy costs.

On polysilicon, management reiterated that its outlook does not assume significant impacts from trade policy changes. Discussing U.S. Section 232 proceedings, the company said the U.S. Department of Commerce filed its report to the president at the end of March and the president has 90 days to make a decision, with customers in a “wait-and-see mood.”

Guidance: EBITDA range maintained; sales outlook raised

Hartel said Wacker is confirming its full-year 2026 EBITDA guidance of EUR 550 million to EUR 700 million while raising its sales expectation. The company now anticipates sales to increase by a high single-digit percentage, reflecting price increases in chemicals intended to counter higher raw material costs. Hartel emphasized that uncertainty remains elevated due to the Middle East conflict and the unresolved U.S. trade proceedings on polysilicon and derivatives.

Ohler added that Q1 benefited from a one-off pull-forward and suggested Q2 could be lower. In response to a BNP Paribas question about April trends, he said the March spike in order entry “has come down now again in April,” returning to January and February levels. He also said Q1 EBITDA included roughly EUR 20 million of pre-buying effects, while Q1 had not yet reflected cost inflation or the company’s pricing measures, and Q2 typically includes maintenance activity.

Below EBITDA, Wacker reported EBIT of EUR 52 million after EUR 120 million of depreciation, and net income of EUR 15 million, equating to EUR 0.21 earnings per share. The company ended the quarter with EUR 1.44 billion in liquidity and net debt of EUR 964 million. Gross cash flow was EUR 77 million, while investing cash flow fell to EUR 109 million from EUR 197 million a year earlier as major investments concluded. Ohler said 2026 CapEx is expected to be about EUR 300 million, down from EUR 466 million last year.

Hartel also highlighted a newly commissioned production line in Japan for thermally conductive silicones, aimed at specialty silicone demand in battery applications for e-mobility. He said the new asset positions the company to serve thermal interface materials used in EV battery packs.

Wacker’s next conference call to discuss second-quarter 2026 results is scheduled for July 30, 2026, according to Head of Investor Relations Joerg Hoffmann.

About Wacker Chemie ETR: WCH

Wacker Chemie AG, together with its subsidiaries, provides chemical products worldwide. It operates through four divisions: Wacker Silicones, Wacker Polymers, Wacker Biosolutions, and Wacker Polysilicon. The Wacker Silicones division offers silanes, siloxanes, silicone fluids, silicone emulsions, silicone elastomers, silicone resins, and pyrogenic silica. The Wacker Polymers division provides binders and polymeric additives, such as dispersible polymer powder and vinyl acetate-ethylene dispersions, which are used in construction, paper, adhesive, paint, coating, and basic chemical industries.

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