Wacker Chemie AG

XETRA:WCH

Earnings Call Transcript 2024-Q1

[Jörg Hoffmann, executive]

Welcome to the Wacker Chemie conference call on the first quarter 2024 results. Dr. Christian Hartel, our CEO; and Dr. Tobias Ohler, our CFO, will take you through our prepared statements for material view. The press release, the IR presentation, and detailed financial tables are available on our web page under the caption Investor Relations. Please note that management's comments during this call include forward-looking statements involving risks and uncertainties. We encourage you to review the safe harbor statement in today's press release, presentation, and '23 annual report regarding risk factors. All documents mentioned are available on our website. Chris?

[Christian Hartel, executive]

Welcome, everyone. As you saw in 2023, economic headwinds at lower prices over last year defined our quarterly results. In 2024, we started with the low exit rates of the previous year 2023. And as a result, sales and EBITDA for the first quarter are markedly lower year-over-year. On the other hand, sequential developments are more processing. When we published our full-year results in March, we provided a trading update on the first quarter of 2024. In line with our expectations, sales came in at EUR 1.5 billion. Group EBITDA, on the other hand, came in at the upper end of our expectations. This was primarily good business development on the one hand and some positive effects in the other segment. Group EBITDA increased by 27% quarter-over-quarter to EUR 172 million. This is up from EUR 135 million in the fourth quarter of last year. The higher earnings were driven by strong growth in the operating sectors. Chemicals EBITDA came in at EUR 137 million, which is up approximately 2x from the EUR 69 million in the preceding quarter. Chemicals demand was clearly higher quarter-on-quarter. This is in part seasonality, but also due to customer restocking from very low levels of inventory. Demand, especially for specialty silicones developed positively in the first quarter. In polymers, we see typical quarter-on-quarter improvements from seasonality. As we discussed on previous calls, Biosolutions is focused on starting up our new mRNA facility in Halle. While the segment continues to see upfront costs weighing on its results, the first quarter EBITDA of EUR 5 million was supported by a better product and contract mix. Polysilicon also showed a strong sequential improvement. EBITDA came in at EUR 43 million, up from EUR 21 million in the previous quarter. The results continue to be defined by low prices for solar-grade polysilicon. While we see some positive effects from lower energy costs, the underlying performance of polysilicon has been constant over the past 2 quarters. Actually, year-end effects held back the previous quarter, and Tobias will give you some more flavor shortly. So all told, our business came in at the upper end of our expectations and some tentative economic indicators show business conditions are improving. Now looking at our businesses, demand was markedly stronger quarter-over-quarter. However, this trajectory has not continued in April. We continue to see overall weak markets, uneven order patterns, and low prices defining our results. As you saw in this morning's press release, we confirmed our full-year guidance. While the first quarter results may point to the top end of the EBITDA range of EUR 600 to 800 million, we remain cautious. We respond to the weak market environment and low prices with consistent cost discipline to continue to pursue a restrictive hiring policy and are focused on streamlining processes to make them more efficient and cutting our material costs. Before highlighting some of our accomplishments on the next page, I would like to congratulate the silicon's team on receiving the Fountain Award at one of China's largest trade fairs for personnel and home care ingredients. Our team has developed a new silicone elastomer gel that contains more than 80% renewable raw materials. And that, of course, is a great opportunity for our specialty silicone business. That product gives you still feel on your skin and also on hair care and is a further proof of our strategy. While I've spoken a lot about lowering our CO2 footprint at Wacker in the past, developing sustainable products is also a core part of our strategy. By 2030, 100% of our products will meet defined sustainability criteria. That's the target. Last year, 94% of our products fulfilled already this criteria, up from 83% in [indiscernible]. We will actively improve our product portfolio and continue to lower our cover footprint to provide our customers with innovative and sustainable solutions. Now looking at our cost-saving and efficiency measures on the next page. A clear focus on cost and efficiencies is essential for Wacker to stay competitive global market. Our efforts are concentrated under our Wacker operating system, WOS, where we focus on reducing our specific operating costs. We awarded several teams at our annual Wacker Operating System Conference earlier this year for their remarkable achievements -- and give you some examples on that. The team was able to sustainably cut the amount of steam required in the destination process. This one project alone saved 83,000 tonnes of steam last year and reduced our CO2 emissions by 26,000 tonnes. In polymers, our colleagues in Nanjing optimized steel production by leveraging waste guard incineration. This project also reduced CO2 emissions substantially. In Biosolutions, our colleagues at Amsterdam increased utilization rates and improved maintenance at the biopharma side. And lastly, in polysilicon, the team in Burghausen was able to drive process improvements, significantly increasing the output in semi-cleaning. Nordic projects are just a few examples of the hundreds implemented last year. So continuous cost reduction is not about big wins, but about addressing every opportunity to become more efficient day by day. Since the inception of our WOS program over 20 years ago, we have addressed thousands of individual projects. These have resulted in over EUR 800 million in savings. And we also offset ourselves ambitious target for '24. If our targets are successfully achieved, we should see further improvements in the cost base. Now before I hand over to Tobias, let me sum up quickly. We saw a good operating performance in Q1 based on higher volumes and customer restocking. Difficult conditions, however, persist. Order intake continues to be uneven and does not provide a stable foundation for an improved outlook. But despite the uncertainties we are currently facing, I'm convinced about the success of our setup and strategies. We are confident about our future performance to continue to make strategic investments for future growth. We do this because we have confidence in our products, in our markets and, of course, in our people. Global megatrends such as renewable energy, electricity, digitalization, and biopharmaceuticals will drive demand for our products and solutions. We remain committed to our growth targets up to 2030. Now to Tobias for further details on our results.

[Tobias Ohler, executive]

Thank you, Chris. Welcome, everybody. Looking at the profit and loss. Sales during the first quarter of 2024 came in at EUR 1.5 billion, down 15% year-over-year. As you can see on the right-hand side of the slide, pricing alone cost us about EUR 300 million in revenues, a large share of this decline is due to polysilicon. Higher volume, particularly in chemicals, somewhat helped to offset lower prices.Compared to the previous quarter, sales were up approximately 10% from customer restocking and seasonality. As Chris mentioned, we saw higher volumes in chemicals quarter-over-quarter and year-over-year. This supported our earnings, but low prices left their mark throughout the figures. First quarter group EBITDA was EUR 172 million, 39% lower year-over-year. Sequentially, it was 27% higher. When looking at the sum of the 4 operating segments, EBITDA, the sequential growth was even higher. The cumulative EBITDA from silicones, polymers, biosolutions, and polysilicon came in at EUR 185 million versus EUR 100 million in the previous quarter. Looking at the other segment, it came in at minus EUR 13 million in the first quarter, including at equity contributions and a stronger utilization of infrastructure, others came in better than expected. The better performance partially offset charges in the connection with the embedded cost of CO2 in our energy builds. As explained on the last call, once we received the CO2 refund for the fourth quarter, the cumulative charges over the first 3 quarters of the year will be reversed. So much for Q1, for the full year 2024, there is no change in our expectations. We expect the other EBITDA will be at about minus EUR 20 million. Now looking at the last line items in the P&L. Including the contribution from Siltronic and some positive effect in silicones, the results from investments was EUR 12 million. Taxes were EUR 14 million and net income was EUR 48 million. This equates to earnings per share of EUR 0.89. Our balance sheet shows strong financials with EUR 1.3 billion in liquidity and EUR 4.7 billion in shareholder equity. Net working capital increased by about EUR 200 million compared to the end of last year. This primarily reflects higher accounts receivables, which follow the development of sales. In addition, we have some inventory buildup ahead of the turnaround in silicones in the second quarter. At Silicon, sales in the first quarter of 2024 decreased by 7% as lower selling prices offset the higher volumes year-over-year. Compared to the seasonally weak fourth quarter, the pickup in specialty volumes drove sales to EUR 710 million in the first quarter. This represents an increase of 16% over the preceding quarter and was mainly due to customer restocking from very low levels. At EUR 81 million, the Silicone EBITDA is well above the past few quarters. Higher specialty volumes, improved utilization rates, lower raw material costs, and equity contribution supported the improved earnings. We have updated our silicon outlook for 2024. We now expect a high single-digit EBITDA margin up from our previous forecast of a mid-single-digit margin. However, we expect prices to continue being low in the short term due to weak end-market dynamics and ample upstream capacities, keeping standard prices in check. Considering that the short-term benefits of customer restocking supported the first quarter, the first quarter EBITDA may not be a good base for forecasting the full year. Also, the turnaround will hold back the second quarter. Sales in polymers were EUR 372 million, 13% below last year, mainly driven by lower prices led by raw materials. Average selling prices were stable compared to the previous quarter and higher volumes underpinned the 9% sequential sales growth. Seasonality and some restocking drove volumes up quarter-over-quarter. Asset utilization improved. EBITDA in the first quarter climbed to EUR 56 million, up from EUR 32 million in the previous quarter. Overall, we see relatively good demand in Asia outside China and the Americas, while Europe and China continue soft. For 2024, our outlook is unchanged. At Biosolutions, sales during the first quarter of 2024 were EUR 72 million, down 6% year-over-year. First-quarter sales were supported by growth in Bioingredients but were held back by Life Science Chemicals. EBITDA during the first quarter came in at EUR 5 million, supported by a better product and contract mix. Our results continue to be held back by upfront costs from our new M&A facility in Halle, Germany. We are making good progress there and the facility will be ready by midyear. For this facility, we expect to receive a reservation payment as part of the German pandemic preparedness program. As disclosed at the beginning of April, the team reported success in winning the first project for this new site. We will supply our customer Pantene with an active ingredient based on mRNA and lipid nanoparticles. They run a development project to combat acute respiratory distress syndrome. Our full-year outlook for Biosolutions is unchanged. Polysilicon reported sales of EUR 300 million during the first quarter, 32% below prior year. The primary driver for this were significantly lower solar prices. Sequentially, sales were flat with ASPs and volumes being comparable. EBITDA increased to EUR 43 million, up from EUR 21 million in the prior quarter with some support from lower energy costs. Year-end effects in Q4, such as provisions and other effects further had to explain the sequential improvement as prices for solar materials stayed challenging. As discussed on the last call, we continue to work on getting the contract price of the Chinese domestic price towards the international price level. These efforts are ongoing and our first quarter results still reflect a significant exposure to the market prices in China. Our full-year outlook for polysilicon sales and EBITDA is unchanged. Now let's look at our net financial position. In the first quarter 2024, we generated a gross cash flow of EUR 56 million. Gross cash flow was held back by investments in working capital following the development of sales. In addition, some inventories were built ahead of the silicone's turnaround in the second quarter.Cash flow from investing activities was EUR 183 million versus the reported CapEx figure of EUR 170 million during the quarter. The difference between the 2 figures is due to the timing of cash payouts for investments. We made payments in the first quarter for investments recorded as CapEx in last year. We ended the quarter with a low net debt of EUR 308 million. So before we start with the Q&A, let me summarize. Wacker is well positioned financially and strategically. Our development work with customers continues as we expand and improve our specialty portfolio. We look to the future with optimism, and we continue to invest in growth to better service our customers once the cycle improves.

[Christian Hartel, executive]

Thank you, Tobias.[Operator Instructions]. Operator, we are now ready for the Q&A.

[Operator]

[Operator Instructions] The first question comes from the line of Sebastian Satz with Citi.

[Sebastian Satz, analyst]

Yes. Two questions then for me, please. First on silicon. Could you please give us just a little bit more color on what you're seeing in your order book for the second quarter so far, in particular, with regards to your specialties business? Just want to better understand how the earnings progression is going to look from here given the point you made around silo playing prices falling. And if you could potentially also remind us where your share of specialties is today compared to where it was in the peak. And then the second question would just be an update on the discussions with your solar customers that you've just alluded to. Should we still expect them to move to the ex-China price by year-end? Or what's the likelihood of some of them being converted a little bit earlier than that? It's patenting starting with the.

[Tobias Ohler, executive]

[indiscernible] As we reported, very solid start into the year. The silicone's up in specialties volumes sequentially and against prior year. We now see that in April, we are still at a good level, but that's not as strong as we saw it in Q1 so far. So there is some element of that restocking of customers that is now not continued into the second quarter. In principle, that is also the reason why we do not want to see you extrapolate from the first quarter for the full year because in addition to that little softer demand volumes that we see, we have a turnaround in the second quarter that will limit us in volumes. And that means that normally, we try everything to sell as much specialties as possible. So in the second quarter, definitely the focus will be on specialties as we are limited on the upstream part of our business. But I caution a bit on the EBITDA development for the second quarter because normally, such a turnaround that we have could have an impact of, say, EUR 20 million. It very much depends now on how demand developed in May and June. And yes, we are doing everything to bring up the specialty share. And I think the key improvement also in the first quarter in comparison to the fourth quarter and in comparison to the prior year was the development in specialty volumes.

[Sebastian Satz, analyst]

And when you talk about the restocking not having continued that applies to your overall portfolio for both the standard part as well as the specialties part of it?

[Tobias Ohler, executive]

I think it mainly applies to the specialty because on Dana, we don't have significant availability anyhow because of the turnaround. But it is like, yes, to sort of both. But we are limited on the standard significantly from the turnaround situation. Coming to the second question, maybe you add as to the first question because I think you also have asked on the Chinese standard pricing and the impact on our standards in specialties. And that's something which we commented also in the past. So there is definitely no one-to-one relation between standards and specialties. And there is always a kind of a time delay. Typically, our customers use it as an argument. And typically, we don't accept that as an argument because with our specialties, which is a very high dominating share today, these products are tailor-made for our customers. And therefore, a one-to-one linked to an index price on a sale product is not viable in our view. Now on your second question on the solar customers. As we stated in the last call and also in the call before, and you recall, until the end of '22, essentially, there was only 1 polyindex, and that was based on the material in China. Now since the end of Q4 of 2022, then the second index developed, which we then call the so-called outside China index. And we did some, I think, successful work in 2023, we can say, and we moved a significant volume towards linking these to the outside China pricing, which in our view also reflects more the value of our material. And we also stated as a kind of rule of thumb that this is around 50-50, the exposure. Now we also commented that latest by the end of this year, we expect that all of the solar poly volumes won't be related to the inside China price anymore. And again, really rest assured that we work diligently and with high priority on this topic. But at the moment, there's really not much more to provide or details on that.

[Operator]

The next question comes from the line of Jaideep Pandya with On Field Research.

[Jaideep Pandya, analyst]

Could you just tell us what is really happening in your Tennessee plant? What exactly has caused these issues linked to production? And where do you actually expect the production to come back to running in a normal state? And whilst you're offline, what is actually happening in the German plant in a sense, how much solar volume do you have to sacrifice to service your semi-customers? Or are you not servicing all your semi-customers? That's the first question. And also, if you can just give us an update of when is the etching capacity coming in the sunny situation in the second half this year? The second question is a real quick one for Tobias. Could you tell us what do you expect for the rest of the year with regards to your raw materials bill and your energy bill? So just Q1, what was the year-on-year impact for Ross and energy? And for the rest of the year, how should we model growth in energy?

[Christian Hartel, executive]

I would like to start with the first question on the slide in Charleston, Tennessee. There is a larger maintenance activity, which is end of Q1 and which will also be in the beginning of the second quarter. And this is part of upgrading -- a program to upgrade the facility also in respect to having more capacity on the semi side. And this maintenance activity will also limit volumes for the first half of 2024. But overall, we expect for the total year for 2024 to have higher volumes than the previous year. The second part of the question, you said about -- you asked about the hedging capacity. And yes, we are ramping up the capacity with the new facility in [indiscernible] and we expect volumes to be available in 2025. And that will be a significant share of the market. And a lot of this capacity is already under contract. So a clear focus here for our polysilicon business on the semi-hedging highest-quality material.

[Jaideep Pandya, analyst]

Just to clarify on the semi side, then what you're saying, Chris, is that you were offline in Tennessee in Q1. But once the plant comes online, you still expect to grow volumes year-on-year in your semi-grade material? Did I understand that correct?

[Christian Hartel, executive]

Absolutely, correct. That's right. Correct. On the promises and Energy, as we reported full-year financials for '23, I told you that about EUR 500 million, we had lower raw material energy costs, I mean we haven't provided a figure for 24%, I think, so far. But I could say it's a bit more than half. We don't reach the same magnitude as the biggest step down was already in last year. And if you look at the sequential development, I don't see big changes throughout the year. So quarter-over-quarter, I think the biggest step down was from Q4 to Q1. We all know that energy costs are now lower. But given our hedging policy, where we have 80% hedged for this year and some 60 for next year. It comes more with the fiscal year changes than over the quarters. So I hope that helps you a little bit modeling your spreads.

[Jaideep Pandya, analyst]

Yes, just why I was asking I suppose you are still holding some of the expensive raw material inventory as of Q1. So I was thinking, as you progress through the year in Q2, Q3, and Q4, at least on the silicon metal side, you would see lower raw material prices. But I guess what you're saying is that sequentially, it will stay stable.

[Christian Hartel, executive]

That is absolutely -- it's a fair point. We have those lagging effects in the P&L. On the other hand, as you just mentioned, silicon metal, that material has just moved up a bit again from Q4 into Q1. So we see the lagging effect of that also in Q2. So market prices for taken metal in Europe and the U.S. has been trending up a bit.

[Operator]

The next question comes from the line of Chetan Udeshi with JPMorgan.

[Chetan Udeshi, analyst]

The first question I had was just going back to the discussion on polysilicon. Given where the Chinese prices are, can you confirm whether you're actually participating in that market at all? And if you really make money at those prices because you said 50% of your volumes are still on China index pricing. And I don't know if you actually can make money on those prices. So what is the strategy that you are adopting at the moment in the short run? Are you shipping to China? Are you stopping? And if that's the case, should we be thinking about any impact you might have on the numbers in Q2 and Q3 from what we see in the Chinese solar market? And just beyond that, I was just curious, you're spending about $700 million or so in CapEx this year. Given what we've seen in the industry over the last 3, 4 years, does it not sort of push you to question your assumptions on mid- to long-term growth of high single digits that you talked about at the Capital Markets Day in 2022 because it just seems quite a bit off the charts compared to what we've seen for the whole industry, not just for Wacker from, let's say, 2019 to now from Precoat now?

[Christian Hartel, executive]

I will start with your first question, again on the Chinese polysilicon market, I mean when you look at the development of the pricing of inside China pricing index, I think it's fair to say that it's not much fun for everybody that participates in that market, including -- and I really want to stress this, including the Chinese players. So I guess that nobody is willing to spend too much volume in this unless necessary. And as we said, and as Tobias also mentioned, we continue to work on getting more on the inside, the outside China pricing -- sorry, the outside China pricing, and that will be done latest by end of this year. And to your question, did you sell? I mean, our efforts are ongoing. And if you look at our first quarter results, they still reflect a significant exposure to the market prices, and we gave you that roughly number 50-50 on that.

[Tobias Ohler, executive]

On the CapEx question, yes, our volume expectations going forward. I think the guidance for this year to be slightly below prior year numbers with respect to capital is very much driven by the large projects that we have in biopharma and in polysilicon for the semiconductors. And as soon as those are completed, we could also cool down a bit on CapEx, but it all depends on the market environment. And as we know, we had seen a very tight market in chemicals for 2 years. Now we have had a 2-year correction, which was super long, and no end market recovery yet. And for that reason, I think it's far too early also to speculate about our 2030 targets. We will definitely give you some updates when we have the Capital Markets Day in September. But we are convinced that we are well positioned with our portfolio with megatrends driving growth going forward, and we will adjust our CapEx program in a professional way in order to time the next increases to the market demand.So very much about -- it's very much about the timing. It's not about the if, but it's about the when. And let me add this as well. So we remain committed to our growth and profitability targets of 2030.

[Operator]

The next question is from Andreas Heine with Stifel.

[Andreas Heine, analyst]

Yes, I actually have two. The first is on silicones. Could you provide some more insights on what you see in the different end markets? You have many, many different grades for different end markets and regions. I understand that on the whole silicon segment, the order pattern is very uneven and very difficult to extrapolate. But are there some end markets where you really see a recovery and others where it is less the case? That's the first question. And then second, on polysilicon, I obviously do understand what your incentive is to switch from the Chinese spot prices to the international prices. But what should be an incentive for your customers to accept for, let's say, the second half or 4x higher price by moving from the Chinese spot prices to the international one?

[Tobias Ohler, executive]

I would start with the first question. As you know, our telecom business is a GDP-driven segment. And I would say that from our end markets, we have seen a rather broad-based activity mainly, as I said, restocking from very low levels. And there was even in construction, which is part of silicon, some higher activity sequentially, while we, in general, stay very cautious on the construction industry in Europe and in China. But overall, there was a good recovery in order intake from automotive, industrial, and consumer applications as well. So it is broad-based. So there's not one single industry just driving it and going into the lead. But on the other hand, we also see from that lower order intake in April, and that fits to the picture that we also conveyed 6 weeks ago that customers don't talk about the second half of the year. And so it's difficult really to get a longer-term view on their end market estimates.

[Christian Hartel, executive]

Let me try to answer your second question on the polysilicon pricing inside and outside China and what's in for the customers. And I would love to answer it in a more general framework. I mean, if you look today at these 2 markets, and these are 2 really distinct markets. And the main difference between these markets is the supply-demand balance. On the one hand, you have a Chinese market, which is heavily oversupplied resulting in low prices for the end product. And on the other hand, you have a rather balanced market and from our view, a more fair pricing on that. And the higher-priced market is mainly driven by U.S. regulation at the moment. I mean that's the fact we have to see. And on the other hand, the end market for solar modules also in the U.S. has a different pricing than in China and also in the rest of the world. And therefore, it does make sense to provide an outside China polysilicon and to make modules, which are produced outside of China at a higher cost, but also getting a higher price, and that's the incentive for everybody in the value chain.

[Operator]

The next question is from Sebastian Bray with Berenberg.

[Sebastian Bray, analyst]

I would have 2, please. The first is, I'd like to probe for comments on restocking effect, assisting Q1 results, and is starting to unwind in Q2. When things were going badly in 2023, a lot of chemical companies had difficulty identifying stocking patterns and end customers. What makes the company sure this time is different? And more particularly, why -- when we talk about the environment still being solid but not quite as good as in Q1, are we talking about absolute terms, i.e., sequential basis trading or the comparison on a year-on-year basis becoming less positive? And my second question is just on the China volume uncoupling with China price on coupling in polysilicon, are you feeling better or worse directionally relative to 3 months ago on the speed at which this uncoupling can occur?

[Christian Hartel, executive]

Sebastian, really on the restocking question and the sequential development -- for sure, it is an experience that everyone made last year that after a decent start in Q1, Q2 was worse and then it continued throughout the year, and there was destocking continuing at the customers. What we see now, I think, is slightly different. We had seen a restocking from a very low level into the first quarter. And now if I look at April numbers, these are lower than the average of the first quarter months, but they're still above the prior year, if I take silicons, for example. And that makes me look at those numbers differently to last year. But I mean, as all chemical peers reported on a decent start into the year Q1, and no one changed estimates, I think it's an overall pattern that we are not hearing from customers about the second half. So we stay on the cautious side. But I think it's different sort of to last year.

[Tobias Ohler, executive]

Okay. Sebastian, on your second question, do I feel better or worse with the possibility of decoupling on the pricing side? Let me say I feel confident that we will achieve it latest by the end of the year, and we work diligently on that. But it's not about what I feel better or worse. We will achieve it, and we work on it.

[Operator]

We have a follow-up question from Jaideep Pandya with On Field Research.

[Jaideep Pandya, analyst]

Just on your polysilicon guidance, right, for 1,300 to 1,600. So if I -- for garment take 75 Kt as your volume size, I get a blended price of around EUR 70 per kilo. And I guess semi-grade material, although you don't comment on prices remains relatively stable. So I think $500 million sales for semi-grade leaves me $800 million sales for solar grade. So I'm just trying to understand, are you baking in some degree of improvement in prices in China because you still have decent exposure to China? Or are you expecting as you progress the year, you will probably sell, I don't know, say, call it, 60%, 70% volume in the second half on international prices, and therefore, the blended price goes up because otherwise, I can't really square this how you're guiding for basically flat sales on the lower end versus last year when prices in China were significantly higher.

[Tobias Ohler, executive]

Jaideep, this is a complex question. As we said in the last conference call, our guidance, and I'd rather refer to the EUR 200 million to EUR 400 million in EBITDA is for sure, driven by the mix and the progression through the year. And as you know, we started with an EBITDA below EUR 50 million for the first quarter. And Christian also talked about maintenance that is going to improve our Tennessee availability in the second half that is holding us back in the first quarter, end of the first quarter, and the start of second quarter. So if you then equate that yes, we assume a stronger second half, and that is driven by an improvement in mix, say, price mix and product mix, and that is driven by an improvement in product availability and with product availability there also comes the cost specific cost improvement. And then if you put all together, we feel confident that we can also reach midpoint of the guidance. And yes, it all depends on the assumptions. But I don't like to comment too much on how you equate on our split in volumes and what the average price for obvious reasons, we don't talk about that.

[Jaideep Pandya, analyst]

And just a second follow-up on the same topic, apologies. But we've seen some announcements from the big players in China for CapEx outside China, be it in the Middle East. There's also an announcement for the U.S. market. So I suppose you guys are striving very hard to switch contracts to international prices. But on a 3-, or 4-year view, and you're not adding any capacity. So what is then the thought process really? Because it seems like you may have 2 years window of enjoying maybe this $20, $22 price, but as capacity grows outside China, you probably will end up in the same scenario. So what is your thought process? And what are your discussions with your customers who probably are asking you, well, you want higher prices, but you're not committed to these markets outside China.

[Christian Hartel, executive]

Yes, that's a good question. This is Chris. Well, there are a lot of announcements of capacity outside of China. I think the first thing to keep in mind is this takes time. It takes time, and my assumption would also be that it probably takes longer time for Chinese players also investing outside of China because it's a more -- it's a different surrounding and a different environment. And therefore, I think we easily talk about a couple of years. I would be surprised to see a 2-year time frame. I would see it rather a 3- to 4-year time frame. At the same time, the demand for material outside of China, especially in the U.S., I would see us growing with PV installations growing all over the world, and also the expectations for the U.S. are big. And therefore, I think also the U.S. market needs more polysilicon. And so therefore, I don't see that kind of immediate risk or what you are referring to. And third, don't forget, our key strategy for polysilicon is the semiconductor market, where we today have a very strong market share, which we want to defend and grow. And also, if you talk about new technologies, new capabilities, AI, a lot of new services needed in the world that is all super pure polysilicon, which you need for this equipment. So therefore, it does give me a big headache.

[Operator]

The next follow-up question is from Sebastian Satz with Citi.

[Sebastian Satz, analyst]

The first one would be on Polymers, where your pricing must have been down in the mid-teens, if I'm not mistaken, based on your revenue performance and your comment that volumes were up. I was just wondering because your margins declined as well, that means that your net pricing must have been down quite a bit as well. I just wondered what has caused that and how we should think about that dynamic going forward, please? And then the second follow-up was really just on the timing of the IRA payments. When do you expect to hear about them? And if the outcome was positive, when would you book them, please?

[Tobias Ohler, executive]

First, on polymers, you're about right with your estimate on price decline. But we always said that after that net positive spread in last year that this would turn negative. I can confirm that year-over-year prices are down, but sequentially, quarter-over-quarter, they are rather stable, not entirely stable, but there's only a smaller negative headwind. And for the full year, we assume that raw materials continue rather flattish. And the price deviation against the prior year will also narrow, and with volume seasonality, we feel confident that with the start of the year of the 15% margin that we reached a 15% margin for the full year as well. The second question on the IRA topic. There's no news from last call. As I said, we have not baked into the guidance, and we have not filed for taxes in the U.S. And as soon as we get into this, we want to talk about the amount. But yes, no news today.

[Operator]

We have a follow-up question from Sebastian Bray with Berenberg.

[Sebastian Bray, analyst]

I'd like to touch on the comments that you made with regards to April trading being lower than the average of the first quarter of the year but above the prior year. Can I please check 2 things? Does this refer to the silicone segment or the group as a whole? And is it a reference to volume, EBITDA, or both? And just to double check, this is -- if it does refer to silicones of a group in either case, is it adjusted for the impact of a shutdown in April? Or is it just an underlying business development?

[Tobias Ohler, executive]

To put it simply, Sebastian, it was on silicones and it was on order intake. That was not guiding on sales or EBITDA. And the order intake was on revenue and volume, so both. So thank you all for joining us today and for your interest in Wacker Chemie. Our next conference call on the Q2 results is scheduled for July 26. Our Capital Markets Day will be held in September at our main site in Boca in Germany. As always, so don't hesitate to contact the IR department if you have further questions. Thank you for your interest in Wacker Chemie.